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

Rhea-AI Summary

Avidbank Holdings, Inc. (OTC PINK:AVBH) reported a net income of $6.4 million for Q1 2023, down from $8.4 million in Q4 2022 but up from $4.3 million in Q1 2022. Operating net income was $7.0 million. Book value per share rose to $19.57, while return on average assets dropped to 1.19%.

Total deposits fell by 11%, amounting to $1.62 billion. The bank took steps to bolster liquidity, including increased borrowing capacity and selling securities for a loss of $815,000. Loan growth was notable with a 30% year-over-year increase, totaling $1.56 billion. The net interest margin experienced a decrease to 3.92%. The CEO expressed confidence in Avidbank's resilience amidst industry volatility.

Positive

• Net income increased 49% year-over-year to $6.4 million.
• Book value per share rose to $19.57 from $17.99 in Q4 2022.
• Total assets grew to $2.17 billion, up from $2.13 billion in Q4 2022.
• Loans increased 30% year-over-year to $1.56 billion.
• Total liquidity available reached approximately $1.1 billion.

Negative

• Net income decreased from $8.4 million in Q4 2022 to $6.4 million in Q1 2023.
• Total deposits dropped by 11%, primarily due to a 26% decrease in Venture Lending deposits.
• Net interest margin declined to 3.92% from 4.41% in Q4 2022.
• Non-interest income fell significantly to $168,000 from $1.3 million in Q4 2022.

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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https://www.accesswire.com/750966/Avidbank-Holdings-Inc-Announces-Net-Income-of-64-Million-for-the-First-Quarter-of-2023

FAQ

What was Avidbank's net income for Q1 2023?

Avidbank reported a net income of $6.4 million for the first quarter of 2023.

How did Avidbank's book value per share change in Q1 2023?

The book value per share increased to $19.57 on March 31, 2023.

What were the total deposits for Avidbank at the end of Q1 2023?

Avidbank's total deposits were $1.62 billion as of March 31, 2023.

What is the significance of Avidbank's liquidity update in Q1 2023?

Avidbank improved liquidity and increased its net available borrowing capacity to approximately $1.1 billion.

Did Avidbank see growth in loans in Q1 2023?

Yes, Avidbank experienced a 30% increase in total loans year-over-year, reaching $1.56 billion.