Avidbank Holdings, Inc. Announces Net Income of $923,000 for the Second Quarter of 2013

  Avidbank Holdings, Inc. Announces Net Income of $923,000 for the Second
  Quarter of 2013

Business Wire

PALO ALTO, Calif. -- July 24, 2013

Avidbank Holdings, Inc. (“the Company”) (OTCBB: AVBH), sole owner of Avidbank
(“the Bank”), an independent full-service commercial bank serving businesses
and consumers in Northern California, announced net income of $923,000 for the
second quarter of 2013 compared to $653,000 during the same period in 2012.

2^nd Quarter 2013 Financial Highlights

  *Net income was $1,437,000 for the first six months of 2013, compared to
    $1,424,000 for the first six months of 2012
  *Diluted earnings per common share were $0.47 for the first six months of
    2013, compared to $0.48 for the first six months of 2012
  *Net income was $923,000 for the second quarter of 2013. Excluding gains
    from the sale of investment securities net income from core operations was
    $528,000 for the quarter.
  *Diluted earnings per common share were $0.30 for the quarter, compared to
    $0.22 for the second quarter of 2012
  *Total assets grew annually by 11% to $433 million
  *Total loans outstanding grew by 4% to $248 million
  *Total deposits grew by 8% to $377 million
  *The Company continues to be well capitalized with a Tier 1 Leverage Ratio
    of 12.7% and a Total Risk Based Capital Ratio of 17.2%

Mark D. Mordell, Chairman and Chief Executive Officer, stated, “We are pleased
that net income for the second quarter of 2013 increased by 41% compared to
the second quarter of 2012 as gains from investment security sales more than
offset an increase in expenses from expanding our business development and
loan generation capacity. The Bank’s loans, deposits and total assets all
showed growth over the second quarter of the previous year. Loan growth was 4%
in spite of some large construction loan payoffs. Our loan production offices
in San Jose and Redwood City are starting to gain traction in the marketplace
and our capacity for generating earning assets is continually improving. All
of our capital ratios have dramatically improved with the $16 million capital
raise we recently completed and announced in June.”

For the three months ended June 30, 2013, net interest income before provision
for loan losses was $3.8 million, an increase of more than $91,000 or 2%
compared to the second quarter of 2012. The growth in net interest income was
the result of growth in loans outstanding. Average earning assets were $402
million in the second quarter of 2013, a 14% increase over the second quarter
of the prior year. Net interest margin was 3.82% for the second quarter,
compared to 4.34% for the second quarter of 2012. No loan loss provision was
made in the second quarter of 2013 while a $100,000 loan loss provision was
made in the second quarter of 2012.

For the first six months of 2013 net interest income before provision was $7.7
million, a $0.3 million increase over the prior year. The growth in net
interest income was the result of growth in earning assets partially offset by
a decrease in net interest margin. Average earning assets grew by $59 million
or 17% over 2012. Net interest margin decreased from 4.41% in 2012 to 3.88% in
2013, primarily as a result of a drop in loan yields partially offset by a
decrease in the Bank’s cost of funds. No provision for loan losses has been
recorded to date in 2013, while a $100,000 loan loss provision was recognized
in the first half of 2012. We have experienced net recoveries of $285,000 for
the first half of 2013 compared to net charge-offs of $14,000 for the first
six months of 2012. Non-accrual loans totaled $699,000 on June 30, 2013
compared to $975,000 for the end of the previous year. “Our high underwriting
standards continue to serve us well as we prepare for growth in the second
half of the year,” stated Mr. Mordell.

Non-interest expense grew by $433,000 in the second quarter of 2013 to $3.1
million compared to $2.6 million for the second quarter of 2012. This growth
is due to investments in loan production personnel and facilities as we
continue to expand our footprint and grow our loan portfolio.

Non-interest expense grew by $990,000 for the first six months of 2013 to $6.2
million compared to $5.2 million for the first six months of 2012. This growth
is due to the previously mentioned investments in loan production personnel
and facilities.

Non-interest income was $840,000 in the second quarter of 2013, an increase of
$727,000 or 644% over the second quarter of 2012. Non-interest income in the
second quarter of 2013 reflected $681,000 of gains from investment securities
sales.

For the first six months of 2013, non-interest income, excluding gains on
sales of securities was $284,000, an increase of more than $64,000 or 29% over
the comparable period in 2012.

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.
These statements are based on current expectations, estimates and projections
about Avidbank’s business based, in part, on assumptions made by management.
These statements are not guarantees of future performance and involve risks,
uncertainties and assumptions that are difficult to predict. Therefore, actual
outcomes and results may differ materially from what is expressed or
forecasted in such forward-looking statements due to numerous factors,
including those described above and the following: Avidbank’s timely
implementation of new products and services, technological changes, changes in
consumer spending and savings habits and other risks discussed from time to
time in Avidbank’s reports and filings with banking regulatory agencies. In
addition, such statements could be affected by general industry and market
conditions and growth rates, and general domestic and international economic
conditions. Such forward-looking statements speak only as of the date on which
they are made, and Avidbank does not undertake any obligation to update any
forward-looking statement to reflect events or circumstances after the date of
this release.

                                                                             
Avidbank Holdings, Inc.
Balance Sheet ($000, except per share amounts)
                                                             
                                 Unaudited       Audited         Unaudited
Assets                             6/30/13         12/31/12        6/30/12
Cash and due from banks          $ 13,718        $ 21,493        $ 11,870
Fed funds sold                    115,575       85,510        57,171    
Total cash and cash                129,293         107,003         69,041
equivalents
                                                                             
Investment securities -            50,541          55,343          74,114
available for sale
                                                                             
Loans, net of deferred loan        247,964         247,269         237,341
fees
Allowance for loan losses         (4,764    )    (4,480    )    (4,462    )
Loans, net of allowance for        243,200         242,789         232,879
loan losses
                                                                             
Premises and equipment, net        1,269           1,291           708
Accrued interest receivable &     8,212         9,296         11,222    
other assets
Total assets                     $ 432,515      $ 415,721      $ 387,965   
                                                                             
Liabilities
Non-interest-bearing demand      $ 115,115       $ 105,518       $ 109,522
deposits
Interest bearing transaction       16,177          17,293          14,549
accounts
Money market and savings           186,885         185,664         158,042
accounts
Time deposits                     58,901        66,520        67,083    
Total deposits                     377,078         374,994         349,195
                                                                             
Other liabilities                 2,332         2,864         3,019     
Total liabilities                  379,410         377,858         352,215
                                                                             
Shareholders' equity
Preferred stock                    5,974           5,952           5,929
Common stock                       44,579          29,556          29,448
Retained earnings                  2,436           1,171           23
Accumulated other                 116           1,184         350       
comprehensive income
Total shareholders' equity         53,105          37,863          35,750
                                                                             
Total liabilities and            $ 432,515      $ 415,721      $ 387,965   
shareholders' equity
                                                                             
                                                                             
Tier 1 leverage ratio              12.66     %     8.88      %     9.72      %
Tier 1 risk-based capital          15.92     %     10.78     %     10.84     %
ratio
Total risk-based capital ratio     17.17     %     12.03     %     12.09     %
Book value per common share      $ 11.03         $ 12.20         $ 11.41
Total shares outstanding           4,274,014       2,614,655       2,613,655
                                                                             


Avidbank Holdings, Inc.
Condensed Statements of Operations
(Unaudited) ($000, except per share amounts)

               Quarter Ended                         Year to Date
                  6/30/13        6/30/12          6/30/13        6/30/12
Interest and    $ 3,661         $ 3,692          $ 7,383         $ 7,347
fees on loans
Interest on
investment        399             528              803             1,056
securities
Other
interest         57            17             111           37        
income
Total
interest          4,117           4,237            8,297           8,440
income
Interest         289           500            607           1,002     
expense
Net interest      3,828           3,736            7,690           7,438
income
                                                                 
Provision for    -             100            -             100       
loan losses
Net interest
income after      3,828           3,636            7,690           7,338
provision for
loan losses
                                                                 
Service
charges, fees     159             113              284             220
and other
income
Gain on sale
of investment    681           -              681           -         
securities
Total
non-interest      840             113              965             220
income
                                                                 
Compensation
and benefit       1,802           1,559            3,640           3,052
expenses
Occupancy and
equipment         441             296              1,413           1,088
expenses
Other
operating        829           785            1,116         1,038     
expenses
Total
non-interest      3,072           2,639            6,168           5,178
expense
                                                                 
Income before     1,596           1,110            2,487           2,380
income taxes
Provision for    673           457             1,050         956       
income taxes
Net income      $ 923          $ 653           $ 1,437        $ 1,424     
                                                                 
Preferred
dividends &      84            84             168           168       
warrant
amortization
Net income
applicable to
common          $ 839          $ 569           $ 1,269        $ 1,256     

shareholders
                                                                 
                                                                 
Basic
earnings per    $ 0.31          $ 0.22           $ 0.47          $ 0.48
share
Diluted
earnings per    $ 0.30          $ 0.22           $ 0.47          $ 0.48
share
                                                                 
Average
shares            2,733,948       2,612,127        2,675,349       2,607,977
outstanding
Average fully
diluted           2,773,900       2,623,127        2,715,301       2,618,977
shares
                                                                 
Annualized
returns:
Return on
average           0.88      %     0.70      %      0.69      %     0.79      %
assets
Return on
average           9.87      %     8.81      %      8.25      %     9.73      %
common equity
                                                                 
Net interest      3.82      %     4.34      %      3.88      %     4.41      %
margin
Cost of funds     0.31      %     0.62      %      0.33      %     0.63      %
Efficiency        66        %     69        %      71        %     68        %
ratio
                                                                             

Contact:

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