AVBH Avidbank Holdings Inc (PK)

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 equivalents 143,212 168,845 113,451   Investment securities - available for sale 58,397 58,983 54,767   Loans, net of deferred loan fees 254,375 257,434 242,225 Allowance for loan losses   (4,795 )     (4,788 )     (4,736 ) Loans, net of allowance for loan losses 249,580 252,646 237,489   Bank owned life insurance 11,694 11,607 3,445 Premises and equipment, net 1,287 1,175 1,334 Accrued interest receivable & other assets   8,950       7,420       6,756   Total assets $ 473,120     $ 500,676     $ 417,242    

Liabilities

Non-interest-bearing demand deposits $ 151,538 $ 158,364 $ 101,386 Interest bearing transaction accounts 18,041 18,991 15,990 Money market and savings accounts 205,237 222,324 197,639 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 paid-in capital 44,774 44,531 29,647 Retained earnings 3,877 3,469 1,598 Accumulated other comprehensive income   194       32       1,204   Total shareholders' equity 48,845 48,032 38,412   Total liabilities and shareholders' equity $ 473,120     $ 500,676     $ 417,242     Bank Capital ratios Tier 1 leverage ratio 9.72 % 9.66 % 8.87 % Tier 1 risk-based capital ratio 12.89 % 12.45 % 11.01 % Total risk-based capital ratio 14.14 % 13.70 % 12.26 %   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 deposits

35.9

%

35.2

%

27.0

%

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 losses

3,631 3,862   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 %

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