Avidbank Holdings, Inc. Announces Unaudited Net Income of $408,000 for the First Quarter of 2014

  Avidbank Holdings, Inc. Announces Unaudited Net Income of $408,000 for the
  First Quarter of 2014

Business Wire

PALO ALTO, Calif. -- May 6, 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 unaudited net income of
$408,000 for the first quarter of 2014 compared to $514,000 for the same
period in 2013.

First Quarter 2014 Financial Highlights

  *Net income was $408,000 for the first quarter of 2014, compared to
    $514,000 for the first quarter of 2013
  *Diluted earnings per common share were $0.09 for the first quarter of
    2014, compared to $0.16 for the first quarter of 2013
  *Total assets increased by 13% over the past twelve months, ending the
    first quarter at $473 million
  *Total loans outstanding increased by 5% from the prior year, ending the
    first quarter at $254 million
  *Total deposits increased by 12% from a year ago, ending the first quarter
    at $422 million
  *The Bank continues to be well capitalized with a Tier 1 Leverage Ratio of
    9.7% and a Total Risk Based Capital Ratio of 14.1%

Mark D. Mordell, Chairman and Chief Executive Officer, stated, “We continued
to execute our strategic plan and build lending infrastructure in the first
quarter of 2014 and we are starting to see the results of our investments. Our
team originated over $40 million in new commitments that resulted in over $20
million in new loan outstandings for the quarter. At the same time, we
experienced over $20 million in anticipated construction loan payoffs causing
a slight decrease in our loans outstanding. We are continuing to attract top
talent as we have hired another senior commercial relationship manager with a
network that spans from San Francisco to San Jose, as well as an experienced
cash management sales officer to enhance our offerings to the business
community. These efforts, along with last year's increase in lending staff,
are starting to have a positive impact on our business development
opportunities. We believe these investments will enhance the Bank's long term
profitability.”

“Deposits declined by $28 million as several large accounts with expected
seasonality drew down on the balances they had accumulated at the end of 2013.
The reductions do not reflect the closure of any major relationships. Our
credit quality remains strong with no charge-offs to date in 2014 as we
continue to maintain our high lending standards,” noted Mr. Mordell.

Results for the quarter ended March 31, 2014

For the three months ended March 31, 2014, net interest income after provision
for loan losses was $3.6 million, a decrease of $231,000 or 6% compared to the
first quarter of 2013. The decrease in net interest income was primarily the
result of a decline in loan yields due to the low interest rate environment
being experienced nationwide. Average earning assets were $451 million in the
first quarter of 2014, a 13% increase over the first quarter of the prior
year. Earning assets increased due to growth in overnight fed funds resulting
from higher deposits. Net interest margin was 3.32% for the first quarter of
2014, compared to 3.93% for the first quarter of 2013. Net interest margin
declined due to lower loan yields and the above mentioned increase in
overnight funds. No provision for loan losses was taken in the first quarter
of 2014 or 2013.

Non-interest income, excluding gains on sales of securities, was $278,000 in
the first quarter of 2014, an increase of $153,000 or 122% over the first
quarter of 2013. The increase was due to 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 $133,000 in the first quarter of 2014 to $3.2
million compared to $3.1 million for the first quarter of 2013. This growth
was due to the 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                            3/31/2014       12/31/2013       3/31/2013
Cash and due from banks         $ 15,427        $ 16,905         $ 11,381
Fed funds sold                   127,785      151,940       102,070   
Total cash and cash               143,212         168,845          113,451
equivalents
                                                                 
Investment securities -           58,397          58,983           54,767
available for sale
                                                                 
Loans, net of deferred loan       254,375         257,434          242,225
fees
Allowance for loan losses        (4,795    )   (4,788     )   (4,736    )
Loans, net of allowance for       249,580         252,646          237,489
loan losses
                                                                 
Bank owned life insurance         11,694          11,607           3,445
Premises and equipment, net       1,287           1,175            1,334
Accrued interest receivable &    8,950        7,420         6,756     
other assets
Total assets                    $ 473,120     $ 500,676      $ 417,242   
                                                                 
Liabilities
Non-interest-bearing demand     $ 151,538       $ 158,364        $ 101,386
deposits
Interest bearing transaction      18,041          18,991           15,990
accounts
Money market and savings          205,237         222,324          197,639
accounts
Time deposits                    47,250       50,625        60,931    
Total deposits                    422,066         450,304          375,946
                                                                 
Other liabilities                2,209        2,340         2,884     
Total liabilities                 424,275         452,644          378,830
                                                                 
Shareholders' equity
Preferred stock                   -               -                5,963
Common stock/additional           44,774          44,531           29,647
paid-in capital
Retained earnings                 3,877           3,469            1,598
Accumulated other                194          32            1,204     
comprehensive income
Total shareholders' equity        48,845          48,032           38,412
                                                                 
Total liabilities and           $ 473,120     $ 500,676      $ 417,242   
shareholders' equity
                                                                 
Bank Capital ratios
Tier 1 leverage ratio             9.72      %     9.66       %     8.87      %
Tier 1 risk-based capital         12.89     %     12.45      %     11.01     %
ratio
Total risk-based capital          14.14     %     13.70      %     12.26     %
ratio
                                                                 
Book value per common share     $ 11.34         $ 11.21          $ 12.37
Total shares outstanding          4,308,756       4,283,494        2,623,852
                                                                 
Other Ratios
Non-interest bearing/total        35.9      %     35.2       %     27.0      %
deposits
Loan to deposit ratio             60.3      %     57.2       %     64.4      %
Allowance/Total loans             1.88      %     1.85       %     1.96      %
                                                                 

                                                              
Avidbank Holdings, Inc.
Condensed Statements of Income
($000, except share and per share amounts)(Unaudited)
                                                                 
                                                 Quarter Ended
                                                   3/31/2014       3/31/2013
Interest and fees on loans                       $ 3,412         $ 3,722
Interest on investment securities                  375             404
Other interest income                             88           54        
Total interest income                              3,875           4,180
Interest expense                                  244          318       
Net interest income                                3,631           3,862
                                                                 
Provision for loan losses                         -            -         
Net interest income after provision for loan       3,631           3,862
losses
                                                                 
Service charges, fees and other income             278             125
Gain on sale of investment securities             -            -         
Total non-interest income                          278             125
                                                                 
Compensation and benefit expenses                  2,052           1,838
Occupancy and equipment expenses                   569             567
Other operating expenses                          608          691       
Total non-interest expense                         3,229           3,096
                                                                 
Income before income taxes                         680             891
Provision for income taxes                        272          377       
Net income                                       $ 408         $ 514       
                                                                 
Preferred dividends & warrant amortization        -            84        
Net income applicable to common shareholders     $ 408         $ 430       
                                                                 
                                                                 
Basic earnings per share                         $ 0.10          $ 0.16
Diluted earnings per share                       $ 0.09          $ 0.16
                                                                 
Average shares outstanding                         4,294,697       2,616,099
Average fully diluted shares                       4,374,997       2,695,340
Total shares outstanding at period end             4,308,756       2,623,852
                                                                 
Annualized returns:
Return on average assets                           0.34      %     0.49      %
Return on average common equity                    3.35      %     6.37      %
                                                                 
Net interest margin                                3.32      %     3.93      %
Cost of funds                                      0.22      %     0.34      %
Efficiency ratio                                   82.6      %     77.7      %

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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