Avidbank : Annouces Net Income for the Second Quarter of 2022

FOR IMMEDIATE RELEASE

PRESS RELEASE

Avidbank Holdings, Inc. Announces Net Income for the Second Quarter of 2022

SAN JOSE, CA (Accesswire) - 7/20/22 - Avidbank Holdings, Inc. (OTC Pink: AVBH) announced income for the second quarter of 2022 of $5.2 million, or $0.76 per diluted share, compared to $3.6 million, or $0.60 per diluted share, for the second quarter of 2021 and $4.3 million, or $0.71 per diluted share, for the first quarter of 2022.

Second Quarter 2022 Financial Highlights

• Diluted earnings per share of $0.76, an increase of $0.16, or 27%, compared to the second quarter of 2021, and increased $0.05, or 28% annualized, compared to the first quarter of 2022.
• Return on average assets was 1.02%, compared to 0.94% in the second quarter of 2021 and 0.83% in the first quarter of 2022.
• Return on average equity was 16.18%, compared to 11.15% in the second quarter of 2021 and 12.72% in the first quarter of 2022.
• Taxable equivalent net interest margin was 3.62% in the second quarter of 2022, compared to 3.28% in the second quarter of 2021 and 3.05% in the first quarter of 2022.
• Loans increased $322 million, or 32%, from June 30, 2021 and increased $135 million, or 45% annualized, from March 31,2022.
• Annualized net charge-offs to average loans totaled 0.00% for the second quarter and year-to-date 2022. Non- performing assets to total assets were 0.01% on June 30, 2022, a decrease from 0.22% on June 30, 2021 and 0.15% on March 31, 2022.
• On May 11, 2022, completed a $28.6 million private offering of 1.27 million common shares at $22.50 per share bringing total common shares outstanding to 7,585,924.

"We continued our solid performance in the second quarter with earnings of $0.76 per diluted share including strong loan growth from a combination of less payoffs, an increase in line utilization, and another quarter of solid new originations," said Mark Mordell, Chairman and Chief Executive Officer. "We are cautiously optimistic about the remainder of 2022 as our pipeline for new business is very encouraging along with the additional benefits we will see from each increase in the fed funds rate," added Mr. Mordell.

Income Statement

Taxable equivalent net interest income totaled $17.5 million for the second quarter of 2022, an increase of $5.4 million, or 44%, from the second quarter of 2021, and an increase of $2.3 million, or 60% annualized, from the first quarter of 2022. This was primarily driven by an increase in interest income from higher interest rates and the growth in average balance of loans and investment securities.

The yield on loans in the second quarter of 2022 was 4.97%, an increase of 17 basis points from the second quarter of 2021 and an increase of 24 basis points from the first quarter of 2022. The linked quarter increase was primarily due to increases in the Prime rate. Approximately 53% of loans are Prime-based floating rate loans.

The cost of deposits in the second quarter of 2022 was 0.14%, a decrease of 5 basis points from the second quarter of 2021 and an increase of 1 basis point from the first quarter of 2022. The cost of interest-bearing deposits in the second quarter of 2022 was 0.26%, remaining flat from the first quarter of 2022.

In the second quarter of 2022, we recorded a provision for loan losses of $1.6 million. No loan provision was required in the first quarter of 2022 and the second quarter of 2021. The second quarter provision was primarily attributable to the $135 million increase in loan balances.

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Avidbank Holdings, Inc. Second Quarter 2022 Financial Results Press Release

Non-interest income was $1.2 million in the second quarter of 2022 compared to $1.5 million in the second quarter of 2021 and $1.1 million in the first quarter of 2022. Service charge income totaled $681,000 in the second quarter of 2022, an increase of $159,000, or 30% from the second quarter of 2021, and an increase of $45,000, or 28% annualized, compared to the first quarter of 2022.

Non-interest expense totaled $10.0 million in the second quarter of 2022 compared to $8.6 million in the second quarter of 2021 and $10.4 million in the first quarter of 2022. This linked quarter decrease was primarily due to higher capitalized loan origination costs and a decrease in the FDIC regulatory assessment. The number of full-time equivalent employees on June 30, 2022 totaled 132 compared to 130 on March 31, 2022.

Balance Sheet

Total assets were $2.01 billion as of June 30, 2022, compared to $2.11 billion on March 31, 2022 and $1.60 billion at June 30, 2021. Cash balances held at the Federal Reserve decreased $284 million in the second quarter of 2022 while investments increased $39 million due to the purchase of tax-exempt municipal and mortgage-backed securities.

Period end loans on June 30, 2022 totaled $1.34 billion, which represented an increase of $135 million, or 45% annualized, from March 31, 2022, and an increase of $322 million, or 32%, from $1.01 billion at June 30, 2021. Quarterly average loans for the second quarter of 2022 increased $239 million, or 23%, from the second quarter of 2021 and $48 million, or 16% annualized, from the first quarter of 2022.

The allowance for loan losses on June 30, 2022 was $14.6 million, representing an increase of $1.6 million from March 31, 2022. The Allowance for Loan Losses to total loans was 1.09% on June 30, 2022, compared to 1.08% on March 31,

2022. Nonperforming loans to total loans was 0.01% on June 30, 2022, a decrease from 0.27% on March 31, 2022. The decrease was primarily attributable to the payoff of a single relationship of approximately $3 million.

Period end deposits were $1.83 billion on June 30, 2022 compared to $1.95 billion at March 31, 2022 and an increase of $402 million, or 28%, compared to $1.43 billion at June 30, 2021. Quarterly average deposits for the second quarter of 2022 increased $512 million, or 37%, compared to the second quarter of 2021 and decreased $59 million, or 12% annualized, from the first quarter of 2022.

Noninterest bearing deposits represented 45.9% of total deposits on June 30, 2022, compared to 48.9% on March 31, 2022 and 51.0% at June 30, 2021. The loan to deposit ratio was 73.1% on June 30, 2022 compared to 61.7% at March 31, 2022 and 71.1% at June 30, 2021.

About Avidbank

Avidbank Holdings, Inc. (OTC Pink: AVBH), headquartered in Palo Alto, California, offers innovative financial solutions and services. We specialize in commercial & industrial lending, technology and asset-based lending, specialty finance, 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,

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Avidbank Holdings, Inc. Second Quarter 2022 Financial Results Press Release

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 408-831-5653

[e-mail]

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Avidbank Holdings, Inc. Second Quarter 2022 Financial Results Press Release

AVIDBANK HOLDINGS, INC.
Selected Financial Data (Unaudited)
($000, except share and per share amounts)
												For the six months ended
		2022			2021				June 30,
	Second			First		Fourth		Third		Second
	Quarter			Quarter		Quarter		Quarter		Quarter	2022	2021
INCOME AND PER SHARE HIGHLIGHTS
Net income	$ 5,214	$ 4,349	$ 2,534	$ 3,574	$ 3,649	$ 9,563	$ 6,156
Basic earnings per share	0.78	0.73	0.43	0.60	0.62	1.51	1.05
Diluted earnings per share	0.76	0.71	0.42	0.59	0.60	1.47	1.02
Book value per share	18.27	19.20	21.91	21.55	21.26
PERFORMANCE MEASURES
Return on average assets	1.02%	0.83%	0.49%	0.80%	0.94%	0.92%	0.82%
Return on average equity	16.18%	12.72%	7.25%	10.45%	11.15%	14.40%	9.54%
Net interest margin	3.62%	3.05%	2.90%	2.98%	3.28%	3.33%	3.36%
Efficiency ratio	53.43%	63.72%	58.31%	61.91%	62.61%	58.22%	66.94%
Average loans to average deposits	66.88%	62.40%	61.83%	64.69%	74.37%	64.62%	76.19%
CAPITAL
Tier 1 leverage ratio	8.72%	6.85%	6.89%	7.81%	8.64%
Common equity tier 1 capital ratio	10.17%	9.09%	8.90%	9.94%	10.57%
Tier 1 risk-based capital ratio	10.17%	9.09%	8.90%	9.94%	10.57%
Total risk-based capital ratio	12.25%	11.28%	11.11%	12.44%	13.30%
SHARES OUTSTANDING
Number of common shares outstanding	7,585,924	6,316,573	6,256,682	6,255,752	6,220,872
Average common shares
outstanding - basic	6,687,448	5,935,948	5,904,446	5,898,208	5,892,713	6,316,780	5,878,921
Average common shares
outstanding - diluted	6,821,245	6,116,306	6,101,778	6,072,085	6,051,243	6,474,959	6,036,233
ASSET QUALITY
Allowance for loan losses (ALLL)
to total loans	1.09%	1.08%	1.07%	1.19%	1.24%
ALLL to nonperforming loans	9211.32%	407.43%	402.40%	388.89%	377.59%
Nonperforming assets to total assets	0.01%	0.15%	0.15%	0.18%	0.21%
Nonperforming loans to total loans	0.01%	0.27%	0.27%	0.31%	0.33%
Net quarterly charge-offs to total loans	0.00%	0.00%	0.25%	0.00%	0.00%
AVERAGE BALANCES
Gross loans	$1,263,071	$1,215,153	$1,154,254	$1,028,098	$1,023,932	$1,239,245	$1,016,796
Investment securities	487,535	436,427	287,915	231,526	200,016	462,122	184,066
Total assets	2,060,297	2,131,587	2,054,545	1,771,292	1,554,049	2,095,745	1,511,559
Deposits	1,888,494	1,947,208	1,866,704	1,589,384	1,376,736	1,917,689	1,334,487
Shareholders' equity	129,235	138,668	138,589	135,721	131,300	133,925	130,079
AT PERIOD END
Gross loans	$1,338,687	$1,203,657	$1,225,187	$1,074,436	$1,016,200
Investment securities	507,826	468,917	380,170	276,670	208,482
Total assets	2,010,256	2,110,091	2,162,478	1,828,021	1,604,273
Deposits	1,828,752	1,947,278	1,979,410	1,647,613	1,427,177
Shareholders' equity	138,611	121,282	137,100	134,797	132,231

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Avidbank Holdings, Inc. Second Quarter 2022 Financial Results Press Release

Avidbank Holdings, Inc.

Consolidated Balance Sheets (Unaudited) ($000)

		June 30,		March 31,		Dec. 31,		Sept. 31,		June 30,
Assets		2022			2022			2021			2021			2021
Cash and due from banks	$	50,907	$	47,091	$	29,616	$	34,864	$	27,977
Due from Federal Reserve Bank		35,913			320,336			463,727			378,380			308,596
Total cash and cash equivalents		86,820			367,427			493,343			413,244			336,573
Investment securities - available for sale		477,646			468,917			308,170			276,670			208,482
Investment securities - held to maturity		30,180			-			-			-			-
Total investment securities		507,826			468,917			380,170			276,670			208,482
Loans, net of deferred loan fees		1,336,786			1,201,934			1,223,344			1,073,132			1,014,750
Allowance for loan losses		(14,646)			(13,054)			(13,054)			(12,775)			(12,558)
Loans, net of allowance for loan losses		1,322,140			1,188,880			1,210,290			1,060,357			1,002,192
Bank owned life insurance		32,303			32,087			31,875			31,663			11,559
Premises and equipment, net		4,314			4,331			4,565			4,913			5,138
Other real estate owned		-			-			-			-			-
Accrued interest receivable & other assets		56,853			48,449			42,235			41,174			40,329
Total assets	$	2,010,256	$	2,110,091	$	2,162,478	$	1,828,021	$	1,604,273
Liabilities
Non-interest-bearing demand deposits	$	838,666	$	952,035	$	993,156	$	872,972	$	728,522
Interest bearing transaction accounts		45,179			47,711			50,674			49,722			30,538
Money market and savings accounts		848,748			812,701			845,718			614,992			541,145
Time deposits		96,159			134,831			89,862			109,927			126,972
Total deposits		1,828,752			1,947,278			1,979,410			1,647,613			1,427,177
FHLB advances		-			-			-			-			-
Subordinated debt, net		21,754			21,729			21,703			21,671			21,636
Other liabilities		21,139			19,802			24,265			23,940			23,229
Total liabilities		1,871,645			1,988,809			2,025,378			1,693,224			1,472,042
Shareholders' equity
Common stock/additional paid-in capital		101,244			72,920			72,799			72,124			71,542
Retained earnings		78,364			73,149			68,801			66,267			62,693
Accumulated other comprehensive (loss)		(40,997)			(24,787)			(4,500)			(3,594)			(2,004)
Total shareholders' equity		138,611			121,282			137,100			134,797			132,231
Total liabilities and shareholders' equity	$	2,010,256	$	2,110,091	$	2,162,478	$	1,828,021	$	1,604,273

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