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
 
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