Avidbank Holdings, Inc. Announces Record Total Assets for the Third Quarter of 2013

  Avidbank Holdings, Inc. Announces Record Total Assets for the Third Quarter
  of 2013

Business Wire

PALO ALTO, Calif. -- November 1, 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 total assets of $483 million
at the end of the third quarter of 2013, compared to $415 million one year
earlier.

3^rd Quarter 2013 Financial Highlights

  *Net income was $1,873,000 for the first nine months of 2013, compared to
    $2,080,000 for the first nine months of 2012.
  *Diluted earnings per common share were $0.52 for the first nine months of
    2013, compared to $0.65 for the first nine months of 2012.
  *Net income was $436,000 for the third quarter of 2013, compared to
    $656,000 for the third quarter of 2012.
  *Diluted earnings per common share were $0.09 for the third quarter of
    2013, compared to $0.20 for the third quarter of 2012.
  *Total assets grew by 16% over the past twelve months, ending the third
    quarter at $483 million.
  *Total loans outstanding grew by 5%, ending the third quarter at $245
    million.
  *Total deposits grew by 16% over the past twelve months, ending the third
    quarter at $434 million and non-interest bearing deposits as a percent of
    total deposits grew to 37% at September 2013 compared to 32% at September
    2012.
  *Other assets increased by 66% from twelve months ago to $19 million as a
    result of our investment in bank owned life insurance policies on our
    management team of which the Bank is the sole beneficiary.
  *The bank continues to be well capitalized with a Tier 1 Leverage Ratio of
    10.2% and a Total Risk Based Capital Ratio of 14.0%.

Mark D. Mordell, Chairman and Chief Executive Officer, stated, "One of our
main objectives for 2013 has been to grow our market footprint and our
franchise value, and we are pleased that in the third quarter we recorded the
highest asset level since the Bank was founded. A continuing high level of
payoffs due to the robust economy has caused our loans outstanding to contract
slightly in the quarter. We look forward to the additional results that will
be generated from the investments we have made in our lending infra-structure
in Corporate Banking, Corporate Finance and Commercial Real Estate."

For the three months ended September 30, 2013, net interest income before
provision for loan losses was $3.8 million, an increase of more than $90,000
or 2% compared to the third quarter of 2012. The growth in net interest income
was primarily the result of a reduction in interest rates paid on deposits.
Average earning assets were $429 million in the third quarter of 2013, an 11%
increase over the third quarter of the prior year. The net interest margin was
3.60% for the third quarter, compared to 3.87% for the third quarter of 2012.
The decline in net interest margin was primarily caused by the decline in loan
yields due to the current interest rate environment and a change in the mix of
earning assets whereby the growth in lower yielding fed funds comprised a
greater percentage of total earning assets. This was partially offset by
continued declines in our cost of funds. For the three and nine months ended
September 30, 2013 the Bank’s average cost of interest bearing liabilities was
0.42% and 0.44%, respectively, compared to 0.72% and 0.80% for the comparative
2012 periods. A loan loss provision of $245,000 was made in the third quarter
of 2013 while no loan loss provision was made in the third quarter of 2012.

For the first nine months of 2013 net interest income before provision was
$11.5 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 $54 million
or 15% over 2012. The net interest margin decreased from 4.23% in 2012 to
3.79% in 2013, primarily as a result of a drop in loan yields partially offset
by a decrease in the Bank's cost of funds.

A loan loss provision of $245,000 has been recorded to date in 2013, while a
$100,000 loan loss provision was recognized in the first nine months of 2012.
We have experienced net recoveries of $29,000 for the first nine months of
2013 compared to net charge-offs of $186,000 for the first nine months of
2012. Non-accrual loans totaled $685,000 on September 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 coming quarters,"
stated Mr. Mordell.

Non-interest expense grew by $435,000 in the third quarter of 2013 to $3.1
million compared to $2.7 million for the third 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 $1.4 million for the first nine months of 2013 to
$9.3 million compared to $7.8 million for the first nine months of 2012. This
growth is due to the previously mentioned investments in loan production
personnel and facilities. The number of full time equivalent employees
increased to 52 in September 2013 compared to 47 in September 2012.

Non-interest income excluding gains on sale of investment securities was
$174,000 in the third quarter of 2013, an increase of $49,000 or 39% over the
third quarter of 2012.

For the first nine months of 2013, non-interest income excluding gains on
sales of securities was $458,000, an increase of $113,000 or 33% 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)

Assets                           9/30/2013      12/31/2012      9/30/2012
Cash and due from banks         $ 22,113        $ 21,493         $ 13,057
Fed funds sold                   134,965      85,510        97,250    
Total cash and cash               157,078         107,003          110,307
equivalents
                                                                 
Investment securities -           66,147          55,343           63,487
available for sale
                                                                 
Loans, net of deferred loan       244,501         247,269          233,352
fees
Allowance for loan losses        (4,754    )   (4,480     )   (4,290    )
Loans, net of allowance for       239,747         242,789          229,062
loan losses
                                                                 
Premises and equipment, net       1,171           1,291            1,108
Accrued interest receivable &    19,090       9,296         11,495    
other assets
Total assets                    $ 483,234     $ 415,721      $ 415,459   
                                                                 
Liabilities
Non-interest-bearing demand     $ 161,517       $ 105,518        $ 119,180
deposits
Interest bearing transaction      15,226          17,293           13,760
accounts
Money market and savings          198,731         185,664          175,795
accounts
Time deposits                    58,081       66,520        65,115    
Total deposits                    433,555         374,994          373,849
                                                                 
Other liabilities                2,311        2,864         4,254     
Total liabilities                 435,867         377,858          378,103
                                                                 
Shareholders' equity
Preferred stock                   -               5,952            5,940
Common stock                      44,417          29,556           29,502
Retained earnings                 2,834           1,171            592
Accumulated other                116          1,184         1,322     
comprehensive income
Total shareholders' equity        47,367          37,863           37,356
                                                                 
Total liabilities and           $ 483,234     $ 415,721      $ 415,459   
shareholders' equity
                                                                 
Bank Capital ratios
Tier 1 leverage ratio             10.22     %     8.85       %     8.84      %
Tier 1 risk-based capital         12.76     %     10.72      %     10.76     %
ratio
Total risk-based capital          14.01     %     11.98      %     12.01     %
ratio
Book value per common share     $ 11.06         $ 12.20          $ 12.02
Total shares outstanding          4,281,482       2,614,655        2,613,655
                                                                             

                                                            
Avidbank Holdings, Inc.
Condensed Statements of Operations (Unaudited) ($000, except per share
amounts)
                                                                             
                Quarter Ended                   Year to Date
                  9/30/2013       9/30/2012       9/30/2013       9/30/2012
Interest and     $ 3,630         $ 3,602         $ 11,014        $ 10,949
fees on loans
Interest on
investment         393             518             1,196           1,574
securities
Other interest    72           55           184          92        
income
Total interest     4,096           4,175           12,393          12,615
income
Interest          280          449          887          1,451     
expense
Net interest       3,816           3,726           11,506          11,164
income
                                                                             
Provision for     245          -            245          100       
loan losses
Net interest
income after       3,571           3,726           11,261          11,064
provision for
loan losses
                                                                             
Service
charges, fees      174             125             458             345
and other
income
Gain on sale of
investment        67           -            748          -         
securities
Total
non-interest       241             125             1,206           345
income
                                                                             
Compensation
and benefit        1,885           1,572           5,525           4,625
expenses
Occupancy and
equipment          537             481             1,688           1,347
expenses
Other operating   666          599          2,043        1,860     
expenses
Total
non-interest       3,088           2,653           9,257           7,832
expense
                                                                             
Income before      723             1,198           3,210           3,578
income taxes
Provision for     287          542          1,337        1,498     
income taxes
Net income       $ 436         $ 656         $ 1,873       $ 2,080     
                                                                             
Preferred
dividends &       38           84           206          252       
warrant
amortization
Net income
applicable to    $ 398         $ 572         $ 1,667       $ 1,828     
common
shareholders
                                                                             
                                                                             
Basic earnings   $ 0.09          $ 0.22          $ 0.52          $ 0.70
per share
Diluted
earnings per     $ 0.09          $ 0.22          $ 0.51          $ 0.70
share
                                                                             
Average shares     4,274,420       2,613,655       3,214,230       2,609,884
outstanding
Average fully      4,315,848       2,624,655       3,257,599       2,620,884
diluted shares
                                                                             
Annualized
returns:
Return on          0.38      %     0.64      %     0.58      %     0.74      %
average assets
Return on
average common     4.13      %     7.86      %     6.57      %     8.31      %
equity
                                                                             
Net interest       3.60      %     3.87      %     3.79      %     4.23      %
margin
Cost of funds      0.28      %     0.49      %     0.31      %     0.58      %
Efficiency         76        %     69        %     73        %     68        %
ratio

Contact:

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