Avidbank Holdings, Inc. Announces Pre-Tax Income of $4.8 Million for 2012, an Increase of 47% Over 2011

  Avidbank Holdings, Inc. Announces Pre-Tax Income of $4.8 Million for 2012,
  an Increase of 47% Over 2011

Business Wire

PALO ALTO, Calif. -- March 12, 2013

Avidbank Holdings, Inc. ("the Company") (OTCBB: AVBH), the holding company for
Avidbank ("the Bank"), an independent full-service commercial bank serving
businesses and consumers in Northern California, announced its financial
results for the year ended December 31, 2012.

Financial Highlights

  *Pre-tax income of $4.8 million for 2012, a 47% increase from 2011 pre-tax
    income of $3.3 million
  *Net income for 2012 was $2,745,000, a 28% decrease from 2011 net income of
    $3,837,000 which included a one-time benefit of $1,975,000 from the
    recognition of the deferred tax asset
  *Diluted earnings per common share were $0.91 for 2012, compared to $1.26
    in 2011
  *Net income was $665,000 for the fourth quarter of 2012, a 53% decrease
    over the fourth quarter of 2011 due to recognition of the deferred tax
    asset in the prior year
  *Diluted earnings per common share were $0.22 for the fourth quarter,
    compared to $0.51 for the fourth quarter of 2011 which benefited from the
    recognition of the deferred tax asset
  *Total assets grew by 21% in 2012, ending the year at $416 million as
    compared to $342 million at the end of the prior year
  *Total loans outstanding grew by 19% in 2012, ending the year at $247
    million as compared to $204 million at December 31, 2011
  *Total deposits grew by 22% in 2012, ending the year at $375 million as
    compared to $307 million at December 31, 2011
  *The Bank continues to be well capitalized with a leverage ratio of 8.9%, a
    Tier 1 capital ratio of 10.8%, and a total risk-based capital ratio of
    12.0%

"We are pleased to announce that Avidbank Holdings, Inc. achieved record
pre-tax earnings of $4.8 million in 2012,” stated Mark D. Mordell, Chairman
and Chief Executive Officer. “We added key personnel to our team in 2012 and
opened new loan production offices in San Jose and Redwood City. These
additions along with our existing staff contributed to strong growth in both
loans and deposits, which grew by 19% and 22%, respectively. Net interest
income before the provision for loan losses also improved, as reflected in the
21% increase over the prior year. Excluding gains on the sale of securities,
the Bank grew non-interest income by 30%. We are pleased with the progress
we’ve made in our financial performance as well as our increased market
visibility.”

Net interest income before provision for loan losses was $15.2 million in
2012, a $2.6 million increase over the prior year. The growth in net interest
income was the result of both growth in earning assets and an increase in net
interest margin. Earning assets grew by $42 million or 13% over 2011. Net
interest margin increased from 4.09% in 2011 to 4.16% in 2012, as a result of
both an increase in loans outstanding and a decrease in the Bank's cost of
funds. The provision for loan loss was $480,000 in 2012, a $45,000 increase
over 2011. Net loan charge-offs for 2012 totaled $376,000 compared to $480,000
in 2011. Non-accrual loans totaled $876,000 at December 31, 2012 compared to
$975,000 for the end of the previous year.

"It is important to maintain strong underwriting standards as we grow and
expand into other markets along the Peninsula and the South Bay," stated Mr.
Mordell. "We finished 2012 with the lowest level of problem loans we have had
since the beginning of the financial crisis."

Non-interest income, excluding gain on sale of securities was $467,000 in
2012, an increase of more than $108,000 or 30% over 2011. Gain on sale of
securities was $337,000 in 2012, a 394% increase from the $68,000 in gains
recorded in 2011.

Non-interest expense grew by $1.2 million over 2011 to $10.7 million for 2012.
The majority of this growth was attributable to increased staff, benefits and
occupancy expense as the Bank seeks to maintain high levels of customer
service while continuing to grow and expand its market presence.

For the three months ended December 31, 2012, net interest income before
provision for loan loss was $4.0 million, an increase of more than $725,000 or
22% compared to the fourth quarter of 2011. The growth in net interest income
was the result of an increase in loans outstanding. Average earning assets
were $391 million in the fourth quarter of 2012, a 23% increase over the prior
year. Net interest margin was 4.03% for the fourth quarter, compared to 4.17%
for the prior year. The decrease in net interest margin resulted from a
decrease in loan yields and an increase in liquid funds. The provision for
loan loss was $380,000 in the fourth quarter of 2012 compared to $386,000 in
the fourth quarter of 2011.

Non-interest income, excluding gain on sale of securities of $337,000, was
$122,000 in the fourth quarter of 2012, compared to $98,000 in the fourth
quarter of 2011. There were no gains on sale of securities in the fourth
quarter of 2011. Non-interest expense in the fourth quarter of 2012 grew by
more than $408,000 or 17% over 2011, primarily due to an increase in staff and
our expansion into two new locations.

About Avidbank

Avidbank Holdings, Inc., headquartered in Palo Alto, California offers
innovative financial solutions and services. We specialize in the following
markets: commercial & industrial, corporate finance, asset-based lending, real
estate construction and commercial real estate lending, and real estate bridge
financing. Avidbank advances the success of our clients by providing them with
financial opportunities and serving them as we wish to be served – with mutual
effort, ingenuity and trust – creating long-term banking relationships.

Forward-Looking Statement:

This news release contains statements that are forward-looking statements
within the meaning of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements can be identified by the fact that they do not
relate strictly to historical or current facts, and generally include the
words “believes”, “plans”, “intends”, “expects”, “anticipates”, “targeted”,
“continue”, “remain”, “will”, “should,”, “may” or words of similar meaning.
While we believe that our forward-looking statements and the assumptions
underlying them are reasonably based, such statements and assumptions, are by
their nature subject to risks and uncertainties, and thus could later prove to
be inaccurate or incorrect. Accordingly, actual results could materially
differ from forward-looking statements for a variety of reasons, including,
but not limited to local, regional, national and international economic
conditions and events and the impact they may have on us and our customers,
and in particular in our market areas; ability to attract deposits and other
sources of liquidity; oversupply of property inventory and deterioration in
values of California real estate, both residential and commercial; a prolonged
slowdown or decline in construction activity; changes in the financial
performance and/or condition of our borrowers; changes in the level of
non-performing assets and charge-offs; the cost or effect of acquisitions we
may make; the effect of changes in laws and regulations (including laws,
regulations and judicial decisions concerning financial reform, capital
requirements, taxes, banking, securities, employment, executive compensation,
insurance, and information security) with which we and our subsidiaries must
comply; changes in estimates of future reserve requirements and minimum
capital requirements based upon the periodic review thereof under relevant
regulatory and accounting requirements; ability to adequately underwrite for
our asset based and corporate finance lending business lines; our ability to
utilize all or part of any deferred tax asset; the impact of our participation
in the United States Treasury’s Capital Purchase Program (TARP); our ability
to raise capital; inflation, interest rate, securities market and monetary
fluctuations; cyber-security threats including loss of system functionality or
theft or loss of data; political instability; acts of war or terrorism, or
natural disasters, such as earthquakes, or the effects of pandemic flu;
destabilization in international economies resulting from the European
sovereign debt crisis; the timely development and acceptance of new banking
products and services and perceived overall value of these products and
services by users; changes in consumer spending, borrowing and savings habits;
technological changes; the ability to increase market share, retain customers
and control expenses; ability to retain and attract key management and
personnel; changes in the competitive environment among financial and bank
holding companies and other financial service providers; continued volatility
in the credit and equity markets and its effect on the general economy; the
effect of changes in accounting policies and practices, as may be adopted by
the regulatory agencies, as well as the Public Company Accounting Oversight
Board, the Financial Accounting Standards Board and other accounting standard
setters; changes in our organization, management, compensation and benefit
plans, and our ability to retain or expand our management team; the costs and
effects of legal and regulatory developments including the resolution of legal
proceedings or regulatory or other governmental inquiries and the results of
regulatory examinations or reviews; our success at managing the risks involved
in the foregoing items. We do not undertake, and specifically disclaim any
obligation to update any forward-looking statements to reflect occurrences or
unanticipated events or circumstances after the date of such statements except
as required by law.


Avidbank Holdings, Inc. Balance Sheet ($000)

(Unaudited)
                                                            
Assets                          12/31/2012     9/30/2012     12/31/2011 
Cash and due from banks        $ 21,493         $ 13,057        $ 12,377
Fed funds sold                  85,510         97,250        33,660     
Total cash and cash              107,003          110,307         46,037
equivalents
                                                                
Investment securities -          55,343           63,487          82,178
available for sale
                                                                
Loans, net of deferred loan      247,269          233,352         207,966
fees
Allowance for loan losses       (4,480     )    (4,290    )    (4,376     )
Loans, net of allowance for      242,789          229,062         203,590
loan losses
                                                                
Premises and equipment, net      1,291            1,108           696
Accrued interest receivable     9,295          11,495        9,704      
& other assets
Total assets                   $ 415,721       $ 415,459      $ 342,205    
                                                                          
Liabilities
Non-interest-bearing demand    $ 105,518        $ 119,180       $ 73,277
deposits
Interest bearing                 17,293           13,760          16,008
transaction accounts
Money market and savings         185,663          175,794         154,134
accounts
Time deposits                   66,520         65,115        63,271     
Total deposits                   374,994          373,849         306,690
                                                              
Other liabilities               2,864          4,254         1,820      
Total liabilities                377,858          378,103         308,510
                                                                
Shareholders' equity
Preferred stock                  5,952            5,940           5,906
Common stock                     29,556           29,502          29,246
Retained earnings               1,171            592             (1,228     )
(accumulated deficit)
Accumulated other               1,184          1,322         (229       )
comprehensive income (loss)
Total shareholders' equity       37,863           37,356          33,695
                                                                
Total liabilities and          $ 415,721       $ 415,459      $ 342,205    
shareholders' equity
                                                                
Tier 1 leverage ratio            8.88       %     8.86      %     10.37      %
Tier 1 risk-based capital        10.78      %     10.75     %     11.51      %
ratio
Total risk-based capital         12.03      %     12.00     %     12.84      %
ratio
Book value per share           $ 12.19          $ 12.05         $ 10.59
(excluding TARP)
                                                                             

Avidbank Holdings, Inc.
Statements of Operations ($000)

(Unaudited)
              For the Years Ended              Three Months Ended
                 12/31/2012      12/31/2011       12/31/2012      12/31/2011
Interest and
fees on        $ 14,787         $ 12,850         $ 3,836          $ 3,210
loans
Interest on
investment       2,080            1,903            505              544
securities
Other
interest        142            98             52             22         
income
Total
interest         17,009           14,851           4,393            3,776
income
Interest        1,840          2,279          389            495        
expense
Net interest     15,169           12,572           4,004            3,281
income
                                                                  
Provision
for loan        480            435            380            385        
losses
Net interest
income after
provision        14,689           12,137           3,624            2,896
for loan
losses
                                                                  
Service
charges,         467              358              122              98
fees and
other income
Income from
stock                             217
warrants
Gain on sale
of              337            68             337            -          
investment
securities
Total
non-interest     804              643              459              98
income
                                                                  
Compensation
and benefit      6,289            5,274            1,656            1,312
expenses
Occupancy
and              1,882            1,571            480              367
equipment
expenses
Other
operating       2,519          2,671          722            771        
expenses
Total
non-interest     10,690           9,516            2,858            2,450
expense
                                                                  
Income
before           4,803            3,264            1,225            544
income taxes
Provision
for (benefit    2,058          (573       )    560            (872       )
from) income
taxes
Net income     $ 2,745         $ 3,837         $ 665           $ 1,416      
                                                                  
Preferred
dividends &     346            556            86             86         
warrant
amortization
Net income
applicable     $ 2,399         $ 3,281         $ 579           $ 1,330      
to common
shareholders
                                                                  
Basic
earnings per   $ 0.92           $ 1.26           $ 0.22           $ 0.51
common share
Diluted
earnings per   $ 0.91           $ 1.26           $ 0.22           $ 0.51
common share
                                                                  
Average
shares           2,610,998        2,602,276        2,614,318        2,602,276
outstanding
Average
fully            2,630,084        2,605,586        2,633,404        2,605,586
diluted
shares
Total shares
outstanding      2,614,655        2,602,276        2,614,655        2,602,276
at period
end
                                                                  
Return on
average          0.72       %     1.16       %     0.64       %     1.69       %
assets
Return on
average          9.34       %     14.61      %     8.75       %     20.74      %
common
equity
                                                                  
Net interest     4.16       %     4.09       %     4.03       %     4.17       %
margin
Cost of          0.54       %     0.78       %     0.41       %     0.66       %
funds
Efficiency       67         %     72         %     64         %     73         %
ratio

Contact:

Avidbank Holdings, Inc.
Steve Leen, 650-843-2204
Executive Vice President and Chief Financial Officer
sleen@avidbank.com
avidbank.com