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Avidbank Holdings, Inc. Announces Record Levels of Loans, Deposits and Total Assets for the Year Ended December 31, 2013

  Avidbank Holdings, Inc. Announces Record Levels of Loans, Deposits and Total   Assets for the Year Ended December 31, 2013  Business Wire  PALO ALTO, Calif. -- April 2, 2014  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 that record levels of loans, deposits and total assets were achieved in 2013.  Full Year and Fourth Quarter 2013 Financial Highlights:  Full Year 2013    *Net income was $2,508,000 for 2013, compared to $2,745,000 for 2012   *Diluted earnings per common share were $0.64 for 2013, compared to $0.91     for 2012   *Total assets grew by 20% over the past twelve months, ending the fourth     quarter at $501 million   *Total loans outstanding grew by 4%, ending the fourth quarter at $257     million   *Total deposits grew by 20%, ending the fourth quarter at $450 million  Fourth Quarter of 2013    *Net income was $635,000 for the fourth quarter of 2013, compared to     $665,000 for the fourth quarter of 2012   *Diluted earnings per common share were $0.15 for the fourth quarter of     2013, compared to $0.22 for the fourth quarter of 2012   *The Bank continues to be well capitalized with a Tier 1 Leverage Ratio of     9.7% and a Total Risk Based Capital Ratio of 13.7%  Mark D. Mordell, Chairman and Chief Executive Officer, stated, "The past year has been one of significant milestones which included the achievement of record levels of loans, deposits and total assets with liquidity at an all-time high. We completed a capital raise in June that netted $15 million and used those funds to repurchase the preferred stock and related warrants issued through the TARP Capital Purchase Program. In November our shareholders approved an increase in the number of common shares authorized for issuance which will provide us greater flexibility as we continue to execute our growth strategies which may include future acquisitions and other market opportunities. Our shareholders also approved an incentive compensation plan designed to align management and shareholder interests and maximize shareholder value. During the year we added eight relationship managers, business development officers and support staff to our lending team."  "We are pleased to have recorded consistent earnings for the quarter ended December 31, 2013 even as our loans grew 16% on an annualized basis. We have made significant investments in our lending infrastructure with several key hires in 2013. We have tripled the size of our San Jose office and have significant plans for that market. Our credit quality remains strong with loan recoveries exceeding charge offs in 2013. Our core deposits are at an all-time high giving us significant capacity to lend and grow our franchise," noted Mr. Mordell.  Results for the year ended December 31, 2013  Net interest income before provision for loan losses was $15.2 million in 2013, an increase of $34,000 or 0.2% over the prior year. Higher outstanding loan balances and reductions in the rates paid on deposits were offset by lower loan yields. Average earning assets were $418 million in 2013, a 15% increase over the prior year. Net interest margin was 3.63% for 2013, compared to 4.16% in 2012. The decline in net interest margin was primarily caused by a decline in loan yields due to the current interest rate environment and a change in the mix of earning assets due to a significant increase in liquid funds. A loan loss provision of $245,000 was recorded in 2013, while a $480,000 provision was recognized in 2012. We have experienced net recoveries of $63,000 in 2013 compared to net charge-offs of $376,000 in 2012. Non-accrual loans totaled $2.0 million or 0.8% of total loans on December 31, 2013 compared to $0.9 million or 0.4% of total loans for the previous year-end. "Our high credit standards have led to a low level of problem loans and to net recoveries in 2013 and resulted in a lower loan loss provision for the year," observed Mr. Mordell.  Non-interest income, excluding gains on sales of securities, was $716,000 in 2013, an increase of $249,000 or 53% over 2012. The increase in non-interest income was due to an increase in service charges and other fee generation activities as well as an increase in earnings on bank owned life insurance. Gains on sales of securities were $748,000 in 2013 and $337,000 in 2012.  Non-interest expense grew by $1.7 million or 16% in 2013 to $12.4 million compared to $10.7 million in 2012. This growth was due to investments in loan production personnel and facilities as we continue to expand our footprint and grow our loan portfolio.  Results for the quarter ended December 31, 2013  For the three months ended December 31, 2013, net interest income before provision for loan losses was $3.7 million, a decrease of $306,000 or 8% compared to the fourth quarter of 2012. The drop in net interest income was primarily the result of a drop in loan yields. Average earning assets were $449 million in the fourth quarter of 2013, a 15% increase over the fourth quarter of the prior year. Net interest margin was 3.30% for the 2013 fourth quarter, compared to 4.03% for the fourth quarter of 2012. No loan loss provision was made in the fourth quarter of 2013 while a loan loss provision of $380,000 was made in the fourth quarter of 2012.  Non-interest income, excluding gains on sales of securities, was $258,000 in the fourth quarter of 2013, an increase of $136,000 or 111% over the fourth quarter of 2012. The increase was due to the previously mentioned increases in service charges and other fee generation activities as well as an increase in earnings on bank owned life insurance.  Non-interest expense grew by $259,000 in the fourth quarter of 2013 to $3.1 million compared to $2.9 million for the fourth quarter of 2012. This growth was due to investments in loan production personnel and facilities mentioned previously.  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 share and per share amounts) (Unaudited)                                                            Assets                       12/31/2013        9/30/2013         12/31/2012 Cash and due from banks      $ 16,905          $ 22,113          $ 21,493 Fed funds sold                151,940       134,965       85,510     Total cash and cash            168,845           157,078           107,003 equivalents                                                                   Investment securities -        58,983            66,147            55,343 available for sale                                                                   Loans, net of deferred         257,434           244,501           247,269 loan fees Allowance for loan            (4,788    )    (4,754    )    (4,480    ) losses Loans, net of allowance        252,646           239,747           242,789 for loan losses                                                                   Bank owned life                11,607            11,517            3,420 insurance Premises and equipment,        1,175             1,171             1,291 net Accrued interest receivable & other            7,420         7,574         5,875      assets Total assets                 $ 500,676      $ 483,234      $ 415,721                                                                      Liabilities Non-interest-bearing         $ 158,364         $ 161,517         $ 105,518 demand deposits Interest bearing               18,991            15,226            17,293 transaction accounts Money market and savings       222,324           198,731           185,663 accounts Time deposits                 50,625        58,081        66,520     Total deposits                 450,304           433,555           374,994                                                                   Other liabilities             2,340         2,312         2,864      Total liabilities              452,644           435,867           377,858                                                                   Shareholders' equity Preferred stock                -                 -                 5,952 Common stock/additional        44,531            44,417            29,556 paid-in capital Retained earnings              3,469             2,834             1,171 Accumulated other             32            116           1,184      comprehensive income Total shareholders'            48,032            47,367            37,863 equity                                                                   Total liabilities and        $ 500,676      $ 483,234      $ 415,721    shareholders' equity                                                                   Bank Capital ratios Tier 1 leverage ratio          9.66      %       10.22     %       8.86      % Tier 1 risk-based              12.45     %       12.76     %       10.75     % capital ratio Total risk-based capital       13.70     %       14.01     %       12.00     % ratio                                                                   Book value per common        $ 11.21           $ 11.06           $ 12.20 share Total shares outstanding       4,283,494         4,281,482         2,614,655                                                                                 Avidbank Holdings, Inc. Condensed Statements of Operations ($000, except share and per share amounts) (Unaudited)                                                                                 Quarter Ended                       Year Ended                  12/31/2013        12/31/2012        12/31/2013        12/31/2012 Interest and fees on          $ 3,485           $ 3,836           $ 14,498          $ 14,787 loans Interest on investment         408               505               1,605             2,081 securities Other interest          85            52            268           142        income Total interest           3,978             4,393             16,371            17,010 income Interest          280           389           1,167         1,840      expense Net interest       3,698             4,004             15,204            15,170 income                                                                         Provision for loan          -             380           245           480        losses Net interest income after provision          3,698             3,624             14,959            14,690 for loan losses                                                                         Service charges,           258               122               716               467 fees and other income Gain on sale of                -             337           748           337        investment securities Total non-interest       258               459               1,464             804 income                                                                         Compensation and benefit        1,813             1,656             7,339             6,289 expenses Occupancy and                493               480               2,241             1,882 equipment expenses Other operating         811           722           2,795         2,520      expenses Total non-interest       3,117             2,858             12,375            10,691 expense                                                                         Income before             839               1,225             4,048             4,803 income taxes Provision for income        204           560           1,540         2,058      taxes Net income       $ 635          $ 665          $ 2,508        $ 2,745                                                                              Preferred dividends &       -             86            210           345        warrant amortization Net income applicable       $ 635          $ 579          $ 2,298        $ 2,400      to common shareholders                                                                                                                                                 Basic earnings per     $ 0.15            $ 0.22            $ 0.66            $ 0.92 share Diluted earnings per     $ 0.15            $ 0.22            $ 0.64            $ 0.91 share  Average shares             4,283,109         2,614,318         3,474,788         2,610,998 outstanding Average fully              4,344,871         2,614,655         3,565,490         2,630,084 diluted shares                                                                         Annualized returns: Return on average            0.52      %       0.64      %       0.57      %       0.72      % assets Return on average            5.29      %       8.34      %       6.23      %       9.05      % common equity                                                                         Net interest       3.30      %       4.03      %       3.63      %       4.16      % margin Cost of            0.26      %       0.41      %       0.30      %       0.54      % funds Efficiency         78.8      %       64.0      %       74.2      %       66.9      % ratio  Contact:  Avidbank Holdings, Inc. Steve Leen, 650-843-2204 Executive Vice President and Chief Financial Officer sleen@avidbank.com avidbank.com