Avidbank Holdings, Inc. Announces Net Income of $6.4 Million for the First Quarter of 2023

SAN JOSE, CA / ACCESSWIRE / April 25, 2023 / Avidbank Holdings, Inc. (OTC PINK:AVBH) announced net income for the first quarter of 2023 of $6.4 million, or $0.85 per diluted share, compared to $8.4 million, or $1.13 per diluted share, for the fourth quarter of 2022 and $4.3 million, or $0.71 per diluted share, for the first quarter of 2022. Operating net income,(1) excluding the loss on sale of securities, totaled $7.0 million, or $0.93 per diluted share for the first quarter of 2023.

First Quarter 2023 Financial Highlights

  • Book value per share of $19.57 on March 31, 2023, compared to $17.99 on December 31, 2022 and $19.20 on March 31, 2022.
  • Return on average assets was 1.19%, compared to 1.61% in the fourth quarter of 2022 and 0.83% in the first quarter of 2022.
  • Taxable equivalent net interest margin(1) was 3.92% in the first quarter of 2023, compared to 4.41% in the fourth quarter of 2022 and 3.05% in the first quarter of 2022.
  • Annualized net charge-offs to average loans totaled 0.00% for the first quarter of 2023, the fourth quarter of 2022 and the first quarter of 2022.

Liquidity Update

  • Total deposits were $1.62 billion on March 31, 2023, a decrease of $205 million, or 11%, compared to December 31, 2022. This included a $198 million, or 26%, net decrease in Venture Lending deposits. Excluding our Venture Lending division, deposits decreased $7 million, or 1%, from December 31, 2022.
  • Uninsured deposits represented 59% of total deposits on March 31, 2023 compared to 85% on December 31, 2022. This decrease in uninsured deposits included an increase in ICS reciprocal deposits of $308 million.
  • We took proactive steps to improve liquidity, including pledging investment securities to the Federal Reserve Bank Term Funding Program, increasing borrowing capacity to the Federal Reserve Discount Window, and issuing $53 million in brokered CDs. Our net available borrowing capacity totaled approximately $1.1 billion as of April 21, 2023.
  • We sold a total of $57 million securities for an $815,000 loss in late March to reduce our reliance on borrowings and to improve profitability. This included the sale of $25 million in available for sale mortgage-backed securities and the sale of all $32 million in held to maturity municipal securities.

"While the banking industry has begun to adjust to additional turmoil due to the failure of Silicon Valley Bank ("SVB"), we are proud of the relationships we have with our clients and our ability to adapt and meet their needs. The impact of this quarter's deposit activity on our cost of funds no doubt slowed the expansion of our profitability. That being said, I am very pleased with the resilience of our balance sheet and our ability to continue to operate with sufficient liquidity and borrowing capacity, if needed," said Mark Mordell, Chairman and Chief Executive Officer.

"The Venture Banking space has received a lot of negative press and it is our opinion that the failure of SVB was not due to the Venture Banking business model, but more about prudent balance sheet and risk management. The Venture Banking business is an important line of business for Avidbank, but it is only one of our five verticals. We remain fully committed to that space, have a strong pipeline of new activity and believe recent events have and will continue to open doors to new growth opportunities. As we always have, we continue to remain focused on liquidity, credit quality and profitability," added Mr. Mordell.

Income Statement
Taxable equivalent net interest income(1) totaled $19.9 million for the first quarter of 2023, a decrease of $1.9 million, or 9%, from the fourth quarter of 2022, and an increase of $4.7 million, or 31%, from the first quarter of 2022. The taxable equivalent net interest margin was 3.92% in the first quarter of 2023, a decrease of 49 basis points compared to the fourth quarter of 2022, and an increase of 87 basis points compared to the first quarter of 2022. The decrease in taxable equivalent net interest income and net interest margin compared to the prior quarter was primarily driven by an increase in high-cost short term borrowings replacing lower-cost deposits and an overall increase in deposit costs. In addition, the downgrade of a $14.1 million construction loan represented approximately $515,000 in reversed and lost interest income during the first quarter of 2023, or a 10 basis point reduction in the taxable equivalent net interest margin. The increase in taxable equivalent net interest income and net interest margin compared to the same period one year ago was primarily driven by higher interest rates and average loan balances.

The yield on loans in the first quarter of 2023 was 6.67%, an increase of 34 basis points from the fourth quarter of 2022 and an increase of 194 basis points from the first quarter of 2022. The previously mentioned downgrade of a $14.1 million construction loan represented a decrease of 13 basis points in the loan yield during the first quarter of 2023. The overall increase in loan yields compared to prior periods was primarily due to increases in the Prime rate.

The cost of deposits in the first quarter of 2023 was 1.39%, an increase of 49 basis points from the fourth quarter of 2022 and an increase of 126 basis points from the first quarter of 2022. The cost of interest-bearing deposits in the first quarter of 2023 was 2.38% compared to 1.59% in the fourth quarter of 2022 and 0.26% in the first quarter of 2022.

The provision for credit losses was $185,000 in the first quarter of 2023, compared to $993,000 in the fourth quarter of 2022 and no provision in the first quarter of 2022. The provision decreased in the current quarter primarily due to loan growth of $10.3 million in the first quarter of 2023, compared to $162 million in the fourth quarter of 2022. The provision for credit losses in the first quarter of 2023 included a $157,000 provision for loan losses and a $28,000 provision for unfunded commitments.

Non-interest income was $168,000 in the first quarter of 2023 compared to $1.3 million in the fourth quarter of 2022 and $1.1 million in the first quarter of 2022. The first quarter of 2023 included a loss on sale of securities of $815,000 related to the sale of $57 million in investment securities. The fourth quarter of 2022 included $119,000 in warrant and success fee income, $521,000 in other investment income and a loss of $404,000 on the sale of investment securities.

Non-interest expense totaled $11.0 million in the first quarter of 2023, an increase of $583,000 compared to the fourth quarter of 2022. This linked quarter increase included a $362,000 increase in salaries and benefits expense, primarily due to a seasonal increase in benefits costs. There were 142 full-time equivalent employees on March 31, 2023 and December 31, 2022.

Balance Sheet
Total assets were $2.17 billion as of March 31, 2023, compared to $2.13 billion on December 31, 2022 and $2.11 billion at March 31, 2022. Cash and cash equivalents were $134 million on March 31, 2023, compared to $47 million on December 30, 2022, and $367 million on March 31, 2022.

Period end loans on March 31, 2023, totaled $1.56 billion, which represented an increase of $10 million from December 31, 2022, and an increase of $363 million, or 30%, from $1.20 billion at March 31, 2022. The growth in loans during the first quarter of 2023 included an increase of $64 million in commercial real estate loans, partially offset by a decrease of $57 million in commercial loans. Quarterly average loans for the first quarter of 2023 increased $105 million, or 7%, from the fourth quarter of 2022 and $342 million, or 28%, from the first quarter of 2022.

Commercial real estate ("CRE") loans, particularly office loans in urban markets, have received increased scrutiny recently. Our non-owner occupied commercial real estate portfolio is broadly diversified by property type with office loans totaling 9% of the total loan portfolio and an average loan size of $2.9 million as of March 31, 2023. Our office loans are all located in the Bay Area with nine loans in San Francisco totaling $24.1 million, for an average size of $2.7 million.

On January 1, 2023, we adopted the Current Expected Credit Loss ("CECL") accounting standard, which resulted in a day one reduction of $249,000 to the allowance for credit losses on loans offset by an increase of $1.6 million to the allowance for credit losses on unfunded commitments. The allowance for credit losses on loans totaled $16.5 million as of December 31, 2022, was reduced by $249,000 due to CECL adoption, was increased by $157,000 related to the first quarter 2023 provision and ended the quarter at $16.4 million. The allowance for credit losses on unfunded commitments totaled $449,000 at December 31, 2022, was increased by $1.6 million due to CECL adoption, was increased by $28,000 related to the first quarter 2023 provision and ended the quarter at $2.0 million.

The allowance for credit losses on loans to total loans was 1.05% on March 31, 2023, compared to 1.06% on December 31, 2022. The decrease reflects the impact of the economic forecast used in the estimation of expected credit losses. Nonperforming loans to total loans was 0.91% on March 31, 2023 compared to 0.92% on December 31, 2022.

Investment securities were $386.9 million as of March 31, 2023, compared to $444.7 million on December 31, 2022 and $468.9 million at March 31, 2022. In the first quarter of 2023, we sold $57 million of securities for a loss of $815,000. This included the sale of $25 million in available for sale mortgage-backed securities and the sale of all $32 million in held to maturity municipal securities.

Period end deposits were $1.62 billion on March 31, 2023, a decrease of $205 million, or 11%, from December 31, 2022. This included a $198 million decrease, or 26%, in Venture Lending deposits. Deposits in our Venture Lending division totaled $557 million at March 31, 2023 and included $248 million in reciprocal deposits.

Short term borrowings on March 31, 2023 totaled $359 million and included $265 million in FHLB borrowings and $94 million in borrowings from the Bank Term Funding Program.

Book value per share was $19.57 on March 31, 2023, an increase of $1.58 compared to $17.99 on December 31, 2022. Total shareholders' equity totaled $150.7 million on March 31, 2023, an increase of $13.2 million compared to December 31, 2022. This included an increase in retained earnings of $5.4 million and a decrease in accumulated other comprehensive loss of $7.4 million.

(1) A Non-GAAP performance measure. We provide detailed reconciliations in the "Non-GAAP Performance and Financial Measures Reconciliation" table.

About Avidbank
Avidbank Holdings, Inc. (OTC Pink: AVBH), headquartered in San Jose, California, offers innovative financial solutions and services. We specialize in commercial & industrial lending, venture lending, structured finance, asset-based lending, sponsor finance, fund finance, and real estate construction and commercial real estate lending. Avidbank provides a different approach to banking. We do what we say.

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. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts, and generally include the words "believes," "plans," "intends," "expects," "opportunity," "anticipates," "targeted," "continue," "remain," "will," "should," "may," or words of similar meaning. While we believe that our forward-looking statements and the assumptions underlying them are reasonably based, such statements and assumptions, are, by their nature subject to risks and uncertainties, and thus could later prove to be inaccurate or incorrect. Accordingly, actual results could materially differ from forward-looking statements for a variety of reasons, including, but not limited to local, regional, national and international economic conditions and events and the impact they may have on us and our customers, and in particular in our market areas; ability to attract deposits and other sources of liquidity; oversupply of property inventory and deterioration in values of California real estate, both residential and commercial; a prolonged slowdown or decline in construction activity; changes in the financial performance and/or condition of our borrowers; changes in the level of non-performing assets and charge-offs; the cost or effect of acquisitions we may make; the effect of changes in laws and regulations (including laws, regulations and judicial decisions concerning financial reform, capital requirements, taxes, banking, securities, employment, executive compensation, insurance, and information security) with which we and our subsidiaries must comply; changes in estimates of future reserve requirements and minimum capital requirements based upon the periodic review thereof under relevant regulatory and accounting requirements; ability to adequately underwrite for our asset based and corporate finance lending business lines; our ability to raise capital; inflation, interest rate, securities market and monetary fluctuations; cyber-security threats including loss of system functionality or theft or loss of data; political instability; acts of war or terrorism, or natural disasters, such as earthquakes, or the effects of a pandemic; destabilization in international economies resulting from the European sovereign debt crisis; the effects of the Tax Cuts and Jobs Act; the timely development and acceptance of new banking products and services and perceived overall value of these products and services by users; changes in consumer spending, borrowing and savings habits; technological changes; the ability to increase market share, retain customers and control expenses; ability to retain and attract key management and personnel; changes in the competitive environment among financial and bank holding companies and other financial service providers; continued volatility in the credit and equity markets and its effect on the general economy; the effect of changes in accounting policies and practices, as may be adopted by the regulatory agencies, as well as the Public Company Accounting Oversight Board, the Financial Accounting Standards Board and other accounting standard setters; changes in our organization, management, compensation and benefit plans, and our ability to retain or expand our management team; the costs and effects of legal and regulatory developments including the resolution of legal proceedings or regulatory or other governmental inquiries and the results of regulatory examinations or reviews; our success at managing the risks involved in the foregoing items. We do not undertake, and specifically disclaim any obligation to update any forward-looking statements to reflect occurrences or unanticipated events or circumstances after the date of such statements except as required by law.

Contact: Patrick Oakes
Executive Vice President and Chief Financial Officer
408-200-7390
IR@avidbank.com

AVIDBANK HOLDINGS, INC.
Selected Financial Data (Unaudited)
(in thousands, except share and per share amounts)


2023 2022

First Fourth Third Second First

Quarter Quarter Quarter Quarter Quarter
INCOME HIGHLIGHTS





Net income
$ 6,364 $ 8,415 $ 7,045 $ 5,214 $ 4,349
Loss on sale of securities, net of tax
595 295 - - -
Operating net income (1)
$ 6,959 $ 8,710 $ 7,045 $ 5,214 $ 4,349

PER SHARE DATA
Basic earnings per share
$ 0.87 $ 1.16 $ 0.97 $ 0.78 $ 0.73
Diluted earnings per share
0.85 1.13 0.95 0.76 0.71
Diluted earnings per share - operating (1)
0.93 1.17 0.95 0.76 0.71
Book value per share
19.57 17.99 16.58 18.27 19.20

PERFORMANCE MEASURES
Return on average assets
1.19 % 1.61 % 1.38 % 1.02 % 0.83 %
Return on average equity
17.87 % 25.48 % 19.36 % 16.18 % 12.72 %
Taxable equivalent net interest margin
3.92 % 4.41 % 4.07 % 3.62 % 3.05 %
Efficiency ratio
55.21 % 45.42 % 48.00 % 53.43 % 63.72 %
Average loans to average deposits
88.70 % 76.98 % 74.61 % 66.88 % 62.31 %

CAPITAL
Tier 1 leverage ratio
9.33 % 9.46 % 9.22 % 8.72 % 6.85 %
Common equity tier 1 capital ratio
10.14 % 9.82 % 10.24 % 10.17 % 9.09 %
Tier 1 risk-based capital ratio
10.14 % 9.82 % 10.24 % 10.17 % 9.09 %
Total risk-based capital ratio
12.16 % 11.76 % 12.31 % 12.25 % 11.28 %
Tangible common equity ratio
6.95 % 6.45 % 6.38 % 6.90 % 5.75 %

SHARES OUTSTANDING
Number of common shares outstanding
7,703,748 7,645,428 7,629,767 7,585,924 6,316,573
Average common shares outstanding - basic
7,299,006 7,281,343 7,274,617 6,687,448 5,935,948
Average common shares outstanding - diluted
7,452,254 7,432,670 7,410,062 6,821,245 6,116,306

ASSET QUALITY
Allowance for credit losses on loans to total loans
1.05 % 1.06 % 1.11 % 1.09 % 1.08 %
Nonperforming assets to total assets
0.66 % 0.67 % 0.01 % 0.01 % 0.15 %
Nonperforming loans to total loans
0.91 % 0.92 % 0.01 % 0.01 % 0.27 %
Net charge-offs to average loans (2)
0.00 % 0.00 % 0.01 % 0.00 % 0.00 %

AVERAGE BALANCES
Loans, net of deferred loan fees
$ 1,555,207 $ 1,450,014 $ 1,357,090 $ 1,261,255 $ 1,213,353
Investment securities
443,870 459,057 505,849 487,535 436,427
Total assets
2,164,441 2,072,887 2,028,320 2,060,297 2,131,587
Deposits
1,753,295 1,883,640 1,819,008 1,888,494 1,947,208
Shareholders' equity
144,402 131,046 144,402 129,235 138,668

(1) A Non-GAAP performance measure. We provide detailed reconciliations in the "Non-GAAP Performance and Financial Measures Reconciliation" table.
(2) Annualized

AVIDBANK HOLDINGS, INC.
Consolidated Balance Sheets (Unaudited)
(in thousands)


March 31, December 31, September 30, June 30, March 31,
Assets
2023 2022 2022 2022 2022
Cash and due from banks
$ 19,452 $ 17,435 $ 23,766 $ 50,907 $ 47,091
Due from Federal Reserve Bank and fed funds sold
114,615 29,853 13,476 35,913 320,336
Total cash and cash equivalents
134,067 47,288 37,242 86,820 367,427

Investment securities - available for sale
386,947 412,993 436,535 477,646 468,917
Investment securities - held to maturity
- 31,671 31,704 30,180 -
Total investment securities
386,947 444,664 468,239 507,826 468,917

Loans, net of deferred loan fees
1,564,501 1,554,222 1,392,546 1,336,786 1,201,934
Allowance for loan losses
(16,389) (16,481) (15,488) (14,646) (13,054)
Loans, net of allowance for loan losses
1,548,112 1,537,741 1,377,058 1,322,140 1,188,880

Bank owned life insurance
32,972 32,747 32,522 32,303 32,087
Premises and equipment, net
4,037 4,163 4,318 4,314 4,331
Accrued interest receivable and other assets
63,916 66,665 64,443 56,853 48,449
Total assets
$ 2,170,051 $ 2,133,268 $ 1,983,822 $ 2,010,256 $ 2,110,091

Liabilities and Shareholders' Equity
Deposits:
Non-interest-bearing demand
$ 605,093 $ 765,079 $ 804,383 $ 838,666 $ 952,035
Interest bearing checking
27,150 41,701 46,852 45,179 47,711
Money market and savings
871,357 948,731 890,836 848,748 812,701
Time
61,645 67,724 72,301 96,159 134,831
Brokered
52,823 - - - -
Total deposits
1,618,068 1,823,235 1,814,372 1,828,752 1,947,278

Subordinated debt, net
21,830 21,805 21,779 21,754 21,729
Federal Home Loan Bank and
other short-term borrowings
359,000 130,000 - - -
Accrued interest payable and other liabilities
20,414 20,690 21,188 21,139 19,802
Total liabilities
2,019,312 1,995,730 1,857,339 1,871,645 1,988,809

Shareholders' Equity
Common stock
102,718 102,359 101,679 101,244 72,920
Retained earnings
99,252 93,824 85,409 78,364 73,149
Accumulated other comprehensive (loss)
(51,231) (58,645) (60,605) (40,997) (24,787)
Total shareholders' equity
150,739 137,538 126,483 138,611 121,282

Total liabilities and shareholders' equity
$ 2,170,051 $ 2,133,268 $ 1,983,822 $ 2,010,256 $ 2,110,091

AVIDBANK HOLDINGS, INC.
Consolidated Statements of Income (Unaudited)
(in thousands, except share and per share amounts)


Three months ended

March 31, December 31, September 30, June 30, March 31,

2023 2022 2022 2022 2022
Interest and fees on loans
$ 25,577 $ 23,160 $ 18,853 $ 15,639 $ 14,163
Interest on investment securities
2,612 2,751 2,794 2,477 1,855
Other interest income
628 526 307 356 153
Total interest income
28,817 26,437 21,954 18,472 16,171

Deposit interest expense
6,030 4,269 1,948 657 640
Interest on fed funds purchased and
short-term borrowings
2,673 114 126 - -
Interest on long-term debt
300 300 300 300 300
Total interest expense
9,003 4,683 2,374 957 940
Net interest income
19,814 21,754 19,580 17,515 15,231

Provision for credit losses
185 993 925 1,592 -
Net interest income after provision for
credit losses
19,629 20,761 18,655 15,923 15,231

Service charges and bank fees
573 660 725 761 725
Federal Home Loan Bank dividends
163 118 91 81 78
Income from bank owned life insurance
225 224 219 215 212
Gain/(loss) on sale of securities
(815 ) (404 ) - - -
Warrant and success fee income
- 119 12 65 86
Other investment income
(6 ) 521 (1 ) 90 (6 )
Other income
28 17 30 15 18
Total non-interest income
168 1,255 1,076 1,227 1,113

Salaries and benefit expenses
7,954 7,592 7,069 7,129 7,312
Occupancy and equipment expenses
961 911 946 901 894
Data processing
528 456 447 423 411
Regulatory assessments
226 221 421 509 664
Legal and professional fees
431 364 269 192 195
Other operating expenses
933 906 761 859 939
Total non-interest expense
11,033 10,450 9,913 10,013 10,415

Income before income taxes
8,764 11,566 9,818 7,137 5,929
Provision for income taxes
2,400 3,151 2,772 1,923 1,580
Net income
$ 6,364 $ 8,415 $ 7,046 $ 5,214 $ 4,349

Basic earnings per common share
$ 0.87 $ 1.16 $ 0.97 $ 0.78 $ 0.73
Diluted earnings per common share
$ 0.85 $ 1.13 $ 0.95 $ 0.76 $ 0.71

Weighted average shares - basic
7,299,006 7,281,343 7,274,617 6,687,448 5,935,948
Weighted average shares - diluted
7,452,254 7,432,670 7,410,062 6,821,245 6,116,306

AVIDBANK HOLDINGS, INC.
Average Balance Sheets and Net Interest Margin Analysis (Unaudited)
(dollars in thousands; taxable equivalent)


Three months ended

March 31, 2023 December 31, 2022


Interest Yields
Interest Yields

Average Income/ or Average Income/ or

Balance Expense Rates Balance Expense Rates
Assets






Interest earning assets:






Loans (1)
$ 1,555,207 $ 25,577 6.67% $ 1,451,724 $ 23,160 6.33%
Fed funds sold/interest bearing deposits
56,303 628 4.52% 52,321 526 3.99%
Investment securities
Taxable investment securities
414,380 2,348 2.30% 428,520 2,481 2.30%
Non-taxable investment securities (2)
29,490 334 4.59% 30,537 345 4.48%
Total investment securities
443,870 2,682 2.45% 459,057 2,826 2.44%

Total interest-earning assets
2,055,380 28,887 5.70% 1,963,102 26,512 5.36%

Noninterest-earning assets:
Cash and due from banks
22,992 25,494
All other assets (3)
86,069 84,291

Total assets
$ 2,164,441 $ 2,072,887

Liabilities and Shareholders' Equity
Interest-bearing liabilities:
Deposits
Demand
$ 30,101 $ 56 0.75% $ 44,344 $ 60 0.54%
Money market and savings
919,292 5,593 2.47% 953,665 4,027 1.68%
Time
65,830 223 1.37% 70,409 182 1.03%
Brokered
13,178 158 4.86% - - 0.00%
Total interest-bearing deposits
1,028,401 6,030 2.38% 1,068,418 4,269 1.59%

FHLB and other short-term borrowings
219,550 2,673 4.94% 11,772 114 3.84%
Subordinated debt
21,816 300 5.58% 21,792 300 5.46%
Total interest-bearing liabilities
1,269,767 9,003 2.88% 1,101,982 4,683 1.69%

Noninterest-bearing liabilities:
Demand deposits
724,894 815,222
Accrued expenses and other liabilities
25,378 24,637
Shareholders' equity
144,402 131,046

Total liabilities and
shareholders' equity
$ 2,164,441 $ 2,072,887

Net interest spread
2.82% 3.67%
Net interest income and margin (4)
$ 19,884 3.92% $ 21,829 4.41%

Non-taxable equivalent net interest margin
3.91% 4.40%

Cost of deposits
1,753,295 6,030 1.39% 1,883,640 4,269 0.90%

(1) Nonperforming loans are included in average loan balances. No adjustment has been made for these loans in the calculation of yields. Interest income on loans includes net amortization of deferred loan fees / (costs) of $530 thousand and $556 thousand, respectively.
(2) Interest income on tax-exempt securities has been increased to reflect comparable interest on taxable securities. The rate used was 21%, reflecting the statutory federal income tax rate.
(3) Average allowance for loan losses of $16.2 million and $15.6 million, respectively, is included as a contra asset.
(4) Net interest margin is net interest income divided by total interest-earning assets.

AVIDBANK HOLDINGS, INC.
Average Balance Sheets and Net Interest Margin Analysis
Selected Financial Information (Unaudited)
($000) (Unaudited)


Three months ended

March 31, 2023 March 31, 2022


Interest Yields
Interest Yields

Average Income/ or Average Income/ or

Balance Expense Rates Balance Expense Rates
Assets






Interest earning assets:






Loans (1)
$ 1,555,207 $ 25,577 6.67% $ 1,215,153 $ 14,163 4.73%
Fed funds sold/interest bearing deposits
56,303 628 4.52% 374,648 153 0.17%
Investment securities
Taxable investment securities
414,380 2,348 2.30% 436,427 1,855 1.72%
Non-taxable investment securities (2)
29,490 334 4.59% - - 0.00%
Total investment securities
443,870 2,682 2.45% 436,427 1,855 1.72%

Total interest-earning assets
2,055,380 28,887 5.70% 2,026,228 16,171 3.24%

Noninterest-earning assets:
Cash and due from banks
22,992 42,282
All other assets (3)
86,069 63,077

Total assets
$ 2,164,441 $ 2,131,587

Liabilities and Shareholders' Equity
Interest-bearing liabilities:
Deposits
Demand
$ 30,101 $ 56 0.75% $ 49,199 $ 15 0.12%
Money market and savings
919,292 5,593 2.47% 812,289 422 0.21%
Time
65,830 223 1.37% 120,886 203 0.68%
Brokered
13,178 158 4.86% - - -
Total interest-bearing deposits
1,028,401 6,030 2.38% 982,374 640 0.26%

FHLB and other short-term borrowings
219,550 2,673 4.94% - - 0.00%
Subordinated debt
21,816 300 5.58% 21,714 300 5.60%
Total interest-bearing liabilities
1,269,767 9,003 2.88% 1,004,088 940 0.38%

Noninterest-bearing liabilities:
Demand deposits
724,894 964,834
Accrued expenses and other liabilities
25,378 23,997
Shareholders' equity
144,402 138,668

Total liabilities and
shareholders' equity
$ 2,164,441 $ 2,131,587

Net interest spread
2.82% 2.86%
Net interest income and margin (4)
$ 19,884 3.92% $ 15,231 3.05%

Non-taxable equivalent net interest margin
3.91% 3.05%

Cost of deposits
1,753,295 6,030 1.39% 1,947,208 640 0.13%

(1) Nonperforming loans are included in average loan balances. No adjustment has been made for these loans in the calculation of yields. Interest income on loans includes net amortization of deferred loan fees / (costs) of $530 thousand and $628 thousand, respectively.
(2) Interest income on tax-exempt securities has been increased to reflect comparable interest on taxable securities. The rate used was 21%, reflecting the statutory federal income tax rate.
(3) Average allowance for loan losses of $16.2 million and $13.1 million, respectively, is included as a contra asset.
(4) Net interest margin is net interest income divided by total interest-earning assets.

AVIDBANK HOLDINGS, INC.
Loans and Credit Data (Unaudited)
(dollars in thousands)


March 31, Dec. 31, Sept. 30, June 30, March 31, Current Quarter Year over

2023 2022 2022 2022 2022 Change Year Change








Commercial loans
$ 642,826 $ 700,022 $ 566,105 $ 558,908 $ 481,522 $ (57,196) $ 161,304
Commercial real estate
Multi-family
188,411 169,048 159,384 165,818 141,954 19,363 46,457
Owner Occupied
137,118 128,790 120,951 97,275 98,660 8,328 38,458
Non-Owner Occupied
350,730 314,284 299,176 291,167 269,207 36,446 81,523
Construction and land
233,162 227,869 234,157 209,941 195,388 5,293 37,774
Residential
11,969 13,394 11,991 12,830 13,726 (1,425) (1,757)
Total real estate loans
921,390 853,385 825,659 777,031 718,935 68,005 202,455

Other loans
285 815 782 847 1,477 (530) (1,192)

Total loans
$ 1,564,501 $ 1,554,222 $ 1,392,546 $ 1,336,786 $ 1,201,934 $ 10,279 $ 362,567

Allowance for Credit Losses on Loans
Balance, beginning of quarter
$ 16,481 $ 15,488 $ 14,646 $ 13,054 $ 13,054
Adoption of ASU 2016-13
(249) - - - -
Provision for loan losses
157 993 925 1,592 -
Charge-offs
- - (83) - -
Recoveries
- - - - -
Balance, end of quarter
$ 16,389 $ 16,481 $ 15,488 $ 14,646 $ 13,054

Allowance for Credit Losses on
Unfunded Commitments
Balance, beginning of quarter
$ 449 $ 422 $ 422 $ 392 $ 392
Adoption of ASU 2016-13
1,568 - - - -
Provision for unfunded commitments
28 27 - 30 -
Balance, end of quarter
$ 2,045 $ 449 $ 422 $ 422 $ 392

Total allowance for credit losses -
loans and unfunded commitments
$ 18,434 $ 16,930 $ 15,910 $ 15,068 $ 13,446

Provision for credit losses under CECL
Provision for loan losses
$ 157 $ 993 $ 925 $ 1,592 $ -
Provision for unfunded commitments (1)
28 - - - -
Total provision for credit losses
$ 185 $ 993 $ 925 $ 1,592 $ -

Nonperforming Assets
Loans accounted for on a non-accrual basis
$ 14,240 $ 14,245 $ 154 $ 159 $ 3,204
Loans past due 90 days or more and still accruing
- - - - -
Nonperforming loans
14,240 14,245 154 159 3,204
Other real estate owned
- - - - -
Nonperforming assets
$ 14,240 $ 14,245 $ 154 $ 159 $ 3,204

Nonperforming Loans by Type:
Commercial
$ 145 $ 150 $ 154 $ 159 $ 441
Commercial real estate loans
- - - - 2,763
Construction and land
14,095 14,095 - - -
Total Nonperforming loans
$ 14,240 $ 14,245 $ 154 $ 159 $ 3,204

Asset Quality Ratios
Allowance credit losses on loans to total loans
1.05% 1.06% 1.11% 1.09% 1.08%
Allowance for credit losses on loans and
unfunded commitments to total loans
1.18% 1.09% 1.14% 1.13% 1.12%
Allowance for credit losses on loans to
nonperforming loans
115.09% 115.70% 10057.14% 9211.32% 407.43%
Nonperforming assets to total assets
0.66% 0.67% 0.01% 0.01% 0.15%
Nonperforming loans to total loans
0.91% 0.92% 0.01% 0.01% 0.27%
Net quarterly charge-offs to average loans (2)
0.00% 0.00% 0.01% 0.00% 0.00%

(1) Prior to the adoption of ASU 2016-13, the provision for unfunded commitments was included in other expense and totaled $27 thousand, $0, $30 thousand, and $0 for the fourth, third, second and first quarters of 2022, respectively.
(2) Annualized

AVIDBANK HOLDINGS, INC.
Deposits (Unaudited)
(dollars in thousands)


March 31, Dec. 31, Sept. 30, June 31, March 31, Current Quarter Year over
Period End Deposits
2023 2022 2022 2022 2022 Change Year Change








Non-interest-bearing demand
$ 605,093 $ 765,079 $ 804,383 $ 838,666 $ 952,035 $ (159,986) $ (346,942)
Interest bearing checking
27,150 41,701 46,852 45,179 47,711 (14,551) (20,561)
Money market and savings
871,357 948,731 890,836 848,748 812,701 (77,374) 58,656
Time
61,645 67,724 72,301 96,159 134,831 (6,079) (73,186)
Brokered
52,823 - - - - 52,823 52,823
Total deposits
$ 1,618,068 $ 1,823,235 $ 1,814,372 $ 1,828,752 $ 1,947,278 $ (205,167) $ (329,210)

March 31, Dec. 31, Sept. 30, June 30, March 31, Current Quarter Year over
Average Deposits
2023 2022 2022 2022 2022 Change Year Change

Non-interest-bearing demand
$ 724,894 $ 815,222 $ 820,047 $ 885,271 $ 964,834 $ (90,328) $ (239,940)
Interest bearing checking
30,101 44,344 46,145 46,242 49,199 (14,243) (19,098)
Money market and savings
919,292 953,665 867,113 835,058 812,289 (34,373) 107,003
Time
65,830 70,409 85,703 121,923 120,886 (4,579) (55,056)
Brokered
13,178 - - - - 13,178 13,178
Total deposits
$ 1,753,295 $ 1,883,640 $ 1,819,008 $ 1,888,494 $ 1,947,208 $ (130,345) $ (193,913)

AVIDBANK HOLDINGS, INC.
Non-GAAP performance and Financial Measures Reconciliation (Unaudited)
(in thousands, except share and per share amounts)


2023 2022

First Fourth Third Second First
Operating net income reconciliation
Quarter Quarter Quarter Quarter Quarter
Net income - GAAP
$ 6,364 $ 8,415 $ 7,045 $ 5,214 $ 4,349
Loss on sale of securities, net of income tax
595 295 - - -
Operating net income
$ 6,959 $ 8,710 $ 7,045 $ 5,214 $ 4,349

Operating diluted earnings per share reconciliation
Diluted earnings per share - GAAP
$ 0.85 $ 1.13 $ 0.95 $ 0.76 $ 0.71
Loss on sale of securities, net of income tax
0.08 0.04 - - -
Diluted earnings per share - operating
$ 0.93 $ 1.17 $ 0.95 $ 0.76 $ 0.71

Venture lending deposits reconciliation
Total deposits
$ 1,618,068 $ 1,823,235 $ 1,814,372 $ 1,828,752 $ 1,947,278
Venture lending deposits
557,479 754,997 800,930 778,953 766,338
Total deposits excluding venture lending
$ 1,060,589 $ 1,068,238 $ 1,013,442 $ 1,049,799 $ 1,180,940

Taxable equivalent net interest income reconciliation
Net interest income - GAAP
$ 19,814 $ 21,754 $ 19,580 $ 17,515 $ 15,231
Taxable equivalent adjustment
70 75 69 26 -
Net interest income - taxable equivalent
$ 19,884 $ 21,829 $ 19,649 $ 17,541 $ 15,231

Taxable equivalent net interest margin reconciliation
Net interest margin - GAAP
3.91% 4.40% 4.05% 3.62% 3.05%
Impact of taxable equivalent adjustment
0.01 0.01 0.02 - -
Net interest margin - taxable equivalent
3.92% 4.41% 4.07% 3.62% 3.05%

SOURCE: Avidbank Holdings, Inc.



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