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 total assets of $483 million at the end of the third quarter of 2013, compared to $415 million one year earlier.

3rd Quarter 2013 Financial Highlights

• Net income was $1,873,000 for the first nine months of 2013, compared to $2,080,000 for the first nine months of 2012.
• Diluted earnings per common share were $0.52 for the first nine months of 2013, compared to $0.65 for the first nine months of 2012.
• Net income was $436,000 for the third quarter of 2013, compared to $656,000 for the third quarter of 2012.
• Diluted earnings per common share were $0.09 for the third quarter of 2013, compared to $0.20 for the third quarter of 2012.
• Total assets grew by 16% over the past twelve months, ending the third quarter at $483 million.
• Total loans outstanding grew by 5%, ending the third quarter at $245 million.
• Total deposits grew by 16% over the past twelve months, ending the third quarter at $434 million and non-interest bearing deposits as a percent of total deposits grew to 37% at September 2013 compared to 32% at September 2012.
• Other assets increased by 66% from twelve months ago to $19 million as a result of our investment in bank owned life insurance policies on our management team of which the Bank is the sole beneficiary.
• The bank continues to be well capitalized with a Tier 1 Leverage Ratio of 10.2% and a Total Risk Based Capital Ratio of 14.0%.

Mark D. Mordell, Chairman and Chief Executive Officer, stated, "One of our main objectives for 2013 has been to grow our market footprint and our franchise value, and we are pleased that in the third quarter we recorded the highest asset level since the Bank was founded. A continuing high level of payoffs due to the robust economy has caused our loans outstanding to contract slightly in the quarter. We look forward to the additional results that will be generated from the investments we have made in our lending infra-structure in Corporate Banking, Corporate Finance and Commercial Real Estate."

For the three months ended September 30, 2013, net interest income before provision for loan losses was $3.8 million, an increase of more than $90,000 or 2% compared to the third quarter of 2012. The growth in net interest income was primarily the result of a reduction in interest rates paid on deposits. Average earning assets were $429 million in the third quarter of 2013, an 11% increase over the third quarter of the prior year. The net interest margin was 3.60% for the third quarter, compared to 3.87% for the third quarter of 2012. The decline in net interest margin was primarily caused by the decline in loan yields due to the current interest rate environment and a change in the mix of earning assets whereby the growth in lower yielding fed funds comprised a greater percentage of total earning assets. This was partially offset by continued declines in our cost of funds. For the three and nine months ended September 30, 2013 the Bank’s average cost of interest bearing liabilities was 0.42% and 0.44%, respectively, compared to 0.72% and 0.80% for the comparative 2012 periods. A loan loss provision of $245,000 was made in the third quarter of 2013 while no loan loss provision was made in the third quarter of 2012.

For the first nine months of 2013 net interest income before provision was $11.5 million, a $0.3 million increase over the prior year. The growth in net interest income was the result of growth in earning assets partially offset by a decrease in net interest margin. Average earning assets grew by $54 million or 15% over 2012. The net interest margin decreased from 4.23% in 2012 to 3.79% in 2013, primarily as a result of a drop in loan yields partially offset by a decrease in the Bank's cost of funds.

A loan loss provision of $245,000 has been recorded to date in 2013, while a $100,000 loan loss provision was recognized in the first nine months of 2012. We have experienced net recoveries of $29,000 for the first nine months of 2013 compared to net charge-offs of $186,000 for the first nine months of 2012. Non-accrual loans totaled $685,000 on September 30, 2013 compared to $975,000 for the end of the previous year. "Our high underwriting standards continue to serve us well as we prepare for growth in the coming quarters," stated Mr. Mordell.

Non-interest expense grew by $435,000 in the third quarter of 2013 to $3.1 million compared to $2.7 million for the third quarter of 2012. This growth is due to investments in loan production personnel and facilities as we continue to expand our footprint and grow our loan portfolio.

Non-interest expense grew by $1.4 million for the first nine months of 2013 to $9.3 million compared to $7.8 million for the first nine months of 2012. This growth is due to the previously mentioned investments in loan production personnel and facilities. The number of full time equivalent employees increased to 52 in September 2013 compared to 47 in September 2012.

Non-interest income excluding gains on sale of investment securities was $174,000 in the third quarter of 2013, an increase of $49,000 or 39% over the third quarter of 2012.

For the first nine months of 2013, non-interest income excluding gains on sales of securities was $458,000, an increase of $113,000 or 33% over the comparable period in 2012.

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 per share amounts) (Unaudited)  

Assets

 

9/30/2013

 

12/31/2012

 

9/30/2012

Cash and due from banks $ 22,113 $ 21,493 $ 13,057 Fed funds sold   134,965       85,510       97,250   Total cash and cash equivalents 157,078 107,003 110,307   Investment securities - available for sale 66,147 55,343 63,487   Loans, net of deferred loan fees 244,501 247,269 233,352 Allowance for loan losses   (4,754 )     (4,480 )     (4,290 ) Loans, net of allowance for loan losses 239,747 242,789 229,062   Premises and equipment, net 1,171 1,291 1,108 Accrued interest receivable & other assets   19,090       9,296       11,495   Total assets $ 483,234     $ 415,721     $ 415,459    

Liabilities

Non-interest-bearing demand deposits $ 161,517 $ 105,518 $ 119,180 Interest bearing transaction accounts 15,226 17,293 13,760 Money market and savings accounts 198,731 185,664 175,795 Time deposits   58,081       66,520       65,115   Total deposits 433,555 374,994 373,849   Other liabilities   2,311       2,864       4,254   Total liabilities 435,867 377,858 378,103  

Shareholders' equity

Preferred stock - 5,952 5,940 Common stock 44,417 29,556 29,502 Retained earnings 2,834 1,171 592 Accumulated other comprehensive income   116       1,184       1,322   Total shareholders' equity 47,367 37,863 37,356   Total liabilities and shareholders' equity $ 483,234     $ 415,721     $ 415,459     Bank Capital ratios Tier 1 leverage ratio 10.22 % 8.85 % 8.84 % Tier 1 risk-based capital ratio 12.76 % 10.72 % 10.76 % Total risk-based capital ratio 14.01 % 11.98 % 12.01 % Book value per common share $ 11.06 $ 12.20 $ 12.02 Total shares outstanding 4,281,482 2,614,655 2,613,655           Avidbank Holdings, Inc. Condensed Statements of Operations (Unaudited) ($000, except per share amounts)  

 

Quarter Ended

Year to Date

 

9/30/2013

9/30/2012

9/30/2013

9/30/2012

Interest and fees on loans $ 3,630 $ 3,602 $ 11,014 $ 10,949 Interest on investment securities 393 518 1,196 1,574 Other interest income   72       55       184       92   Total interest income 4,096 4,175 12,393 12,615 Interest expense   280       449       887       1,451   Net interest income 3,816 3,726 11,506 11,164   Provision for loan losses   245       -       245       100  

Net interest income after provision for loan losses

3,571 3,726 11,261 11,064   Service charges, fees and other income 174 125 458 345 Gain on sale of investment securities   67       -       748       -   Total non-interest income 241 125 1,206 345   Compensation and benefit expenses 1,885 1,572 5,525 4,625 Occupancy and equipment expenses 537 481 1,688 1,347 Other operating expenses   666       599       2,043       1,860   Total non-interest expense 3,088 2,653 9,257 7,832   Income before income taxes 723 1,198 3,210 3,578 Provision for income taxes   287       542       1,337       1,498   Net income $ 436     $ 656     $ 1,873     $ 2,080     Preferred dividends & warrant amortization   38       84       206       252  

Net income applicable to common shareholders

$ 398     $ 572     $ 1,667     $ 1,828       Basic earnings per share $ 0.09 $ 0.22 $ 0.52 $ 0.70 Diluted earnings per share $ 0.09 $ 0.22 $ 0.51 $ 0.70   Average shares outstanding 4,274,420 2,613,655 3,214,230 2,609,884 Average fully diluted shares 4,315,848 2,624,655 3,257,599 2,620,884   Annualized returns: Return on average assets 0.38 % 0.64 % 0.58 % 0.74 % Return on average common equity 4.13 % 7.86 % 6.57 % 8.31 %   Net interest margin 3.60 % 3.87 % 3.79 % 4.23 % Cost of funds 0.28 % 0.49 % 0.31 % 0.58 % Efficiency ratio 76 % 69 % 73 % 68 %

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