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Avidbank Holdings, Inc. Announces Net Income of $8.4 Million for the Fourth Quarter of 2022

SAN JOSE, CA / ACCESSWIRE / January 30, 2023 / Avidbank Holdings, Inc. (OTC PINK:AVBH) announced income for the fourth quarter of 2022 of $8.4 million, or $1.13 per diluted share, compared to $7.0 million, or $0.95 per diluted share, for the third quarter of 2022 and $2.5 million, or $0.42 per diluted share, for the fourth quarter of 2021.

Fourth Quarter 2022 Financial Highlights

  • Diluted earnings per share of $1.13 increased $0.18, or 76% annualized, compared to the third quarter of 2022, and increased $0.71, or 169%, compared to the fourth quarter of 2021.
  • Return on average assets improved to 1.61%, compared to 1.38% in the third quarter of 2022 and 0.49% in the fourth quarter of 2021.
  • Taxable equivalent net interest margin increased to 4.41% in the fourth quarter of 2022, compared to 4.07% in the third quarter of 2022 and 2.90% in the fourth quarter of 2021.
  • Efficiency ratio improved to 45.42%, compared to 48.00% in the third quarter of 2022 and 58.31% in the fourth quarter of 2021.
  • Loans increased $162 million, or 46% annualized, from September 30, 2022.
  • Annualized net charge-offs to average loans totaled 0.00% for the fourth quarter.

2022 Full Year Financial Highlights

  • Diluted earnings per share of $3.55, increased 76% compared to 2021. Net income totaled $25.0 million, an increase of 104% compared to 2021.
  • Return on average assets improved to 1.21%, compared to 0.72% in 2021.
  • Taxable equivalent net interest margin increased to 3.78% compared to 3.12% in 2021.
  • Efficiency ratio improved to 51.80%, compared to 63.21% in 2021.
  • Loans increased $331 million, or 27%, from December 31, 2021.
  • Annualized net charge-offs to average loans totaled 0.01% for the full year of 2022.

"Our strong performance for 2022 continued in the fourth quarter with solid loan growth and continued improvement in our overall profitability," said Mark Mordell, Chairman and Chief Executive Officer. "The growth we have achieved along with our increased profitability have us well positioned for 2023," added Mr. Mordell.

Income Statement

Taxable equivalent net interest income totaled $21.8 million for the fourth quarter of 2022, an increase of $2.2 million, or 44% annualized, from the third quarter of 2022, and an increase of $7.5 million, or 53%, from the fourth quarter of 2021. The tax-equivalent net interest margin was 4.41% in the fourth quarter of 2022, an increase of 34 basis points compared to the third quarter of 2022, and an increase of 151 basis points compared to the fourth quarter of 2021. The increase in net interest income and net interest margin were primarily driven by higher interest rates and the growth in average balance of loans.

The yield on loans in the fourth quarter of 2022 was 6.33%, an increase of 83 basis points from the third quarter of 2022 and an increase of 154 basis points from the fourth quarter of 2021. The increase in loan yields was primarily due to increases in the Prime rate. Additionally, to help stabilize our loan yield, we hedged $125 million of our Prime loan portfolio in the fourth quarter of 2022 with receive-fixed interest rate swaps.

The cost of deposits in the fourth quarter of 2022 was 0.90%, an increase of 48 basis points from the third quarter of 2022 and an increase of 76 basis points from the fourth quarter of 2021. The cost of interest-bearing deposits in the fourth quarter of 2022 was 1.59% compared to 0.77% in the third quarter of 2022 and 0.30% in the fourth quarter of 2021.

In the fourth quarter of 2022, we recorded a provision for loan losses of $1.0 million, compared to $0.9 million in the third quarter of 2022 and $3.3 million in the fourth quarter of 2021. The provision in the fourth quarter of 2022 was primarily attributable to the $162 million increase in loan balances.

Non-interest income was $1.3 million in the fourth quarter of 2022 compared to $1.1 million in the third quarter of 2022 and $2.1 million in the fourth quarter of 2021. The fourth quarter of 2022 included $119,000 in warrant and success fee income and $521,000 in other investment income, which was offset by a $404,000 loss on the sale of $15 million in investment securities.

Non-interest expense totaled $10.5 million in the fourth quarter of 2022 compared to $10.0 million in the third quarter of 2022 and $9.5 million in the fourth quarter of 2021. This linked quarter increase was primarily due to an increase in salary and incentive expense, offset by a decrease in the FDIC regulatory assessment. The number of full-time equivalent employees on December 31, 2022, totaled 142 compared to 134 on September 30, 2022.

Balance Sheet

Total assets were $2.13 billion as of December 30, 2022, compared to $1.98 billion on September 30, 2022 and $2.16 billion at December 30, 2021. Cash and cash equivalents were $47 million on December 31, 2022, compared to $37 million on September 30, 2022, and $493 million on December 31, 2021.

Period end loans on December 31, 2022, totaled $1.55 billion, which represented an increase of $162 million, or 46% annualized, from September 30, 2022, and an increase of $331 million, or 27%, from $1.22 billion at December 31, 2021. The growth in loans during the fourth quarter of 2022 included an increase of $134 million in commercial loans. Quarterly average loans for the fourth quarter of 2022 increased $93 million, or 27% annualized, from the third quarter of 2022 and $297 million, or 26%, from the fourth quarter of 2021.

The allowance for loan losses on December 31, 2022, was $16.5 million, representing an increase of $1.0 million from September 30, 2022. The allowance for loan losses to total loans was 1.06% on December 31, 2022, compared to 1.11% on September 30, 2022. Nonperforming loans to total loans was 0.92% on December 31, 2022, compared to 0.01% on September 30, 2022. The increase was due to a downgrade of one $14.1 million construction loan credit relating to a completed condominium project which we have been closely monitoring over the last 18 months. We believe that we are well-collateralized to protect the Bank's position with respect to this credit.

Period end deposits were $1.82 billion on December 31, 2022, compared to $1.81 billion at September 30, 2022 and $1.98 billion at December 31, 2021. Quarterly average deposits for the fourth quarter of 2022 increased $65 million, or 14% annualized, compared to the third quarter of 2022, and increased $17 million, or 1%, from the fourth quarter of 2021.

Noninterest bearing deposits represented 42% of total deposits on December 31, 2022, compared to 44% on September 30, 2022, and 50% on December 31, 2021. The quarterly average loan to deposit ratio was 77% in the fourth quarter of 2022 compared to 75% in the third quarter of 2022 and 62% in the fourth quarter of 2021.

Book value per share was $17.99 on December 31, 2022, an increase of $1.41 compared to $16.58 on September 30, 2022. Total shareholders' equity totaled $137.5 million on December 31, 2022, an increase of $11.1 million compared to September 30, 2022. This included an increase in retained earnings of $8.4 million and a decrease in accumulated other comprehensive loss of $2.0 million.

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)
($000, except share and per share amounts)







For the twelve months ended

2022 2021 December 31,

Fourth Third Second First Fourth


Quarter Quarter Quarter Quarter Quarter 2022 2021
INCOME AND PER SHARE HIGHLIGHTS




Net income
$ 8,415 $ 7,045 $ 5,214 $ 4,349 $ 2,534 $ 25,023 $ 12,264
Basic earnings per share
1.16 0.97 0.78 0.73 0.43 3.64 2.08
Diluted earnings per share
1.13 0.95 0.76 0.71 0.42 3.55 2.02
Book value per share
17.99 16.58 18.27 19.20 21.91 17.99 21.91

PERFORMANCE MEASURES
Return on average assets
1.61 % 1.38 % 1.02 % 0.83 % 0.49 % 1.21 % 0.72 %
Return on average equity
25.48 % 19.36 % 16.18 % 12.72 % 7.25 % 18.42 % 9.18 %
Taxable equivalent net interest margin
4.41 % 4.07 % 3.62 % 3.05 % 2.90 % 3.78 % 3.12 %
Efficiency ratio
45.42 % 48.00 % 53.43 % 63.72 % 58.31 % 51.80 % 63.21 %
Average loans to average deposits
76.98 % 74.61 % 66.88 % 62.31 % 61.75 % 70.12 % 68.68 %

CAPITAL
Tier 1 leverage ratio
9.46 % 9.22 % 8.72 % 6.85 % 6.89 % 9.46 % 6.89 %
Common equity tier 1 capital ratio
9.82 % 10.24 % 10.17 % 9.09 % 8.90 % 9.82 % 8.90 %
Tier 1 risk-based capital ratio
9.82 % 10.24 % 10.17 % 9.09 % 8.90 % 9.82 % 8.90 %
Total risk-based capital ratio
11.76 % 12.31 % 12.25 % 11.28 % 11.11 % 11.76 % 11.11 %
Tangible common equity ratio
6.45 % 6.38 % 6.90 % 5.75 % 6.34 % 6.45 % 6.34 %

SHARES OUTSTANDING
Number of common shares outstanding
7,645,428 7,629,767 7,585,924 6,316,573 6,256,682 7,645,428 6,256,682
Average common shares
outstanding - basic
7,281,343 7,274,617 6,687,448 5,935,948 5,904,446 6,801,330 5,890,216
Average common shares
outstanding - diluted
7,432,670 7,410,062 6,821,245 6,116,306 6,101,778 6,952,758 6,062,482

ASSET QUALITY
Allowance for loan losses (ALLL)
to total loans
1.06 % 1.11 % 1.09 % 1.08 % 1.07 % 1.06 % 1.07 %
ALLL to nonperforming loans
115.70 % 10057.14 % 9211.32 % 407.43 % 402.40 % 115.70 % 402.40 %
Nonperforming assets to total assets
0.67 % 0.01 % 0.01 % 0.15 % 0.15 % 0.67 % 0.15 %
Nonperforming loans to total loans
0.92 % 0.01 % 0.01 % 0.27 % 0.27 % 0.92 % 0.27 %
Net charge-offs to total loans
0.00 % 0.01 % 0.00 % 0.00 % 0.25 % 0.01 % 0.25 %

AVERAGE BALANCES
Loans, net of deferred loan fees
$ 1,450,014 $ 1,357,090 $ 1,261,255 $ 1,213,353 $ 1,152,641 $ 1,321,177 $ 1,052,779
Investment securities
459,057 505,849 487,535 436,427 287,915 472,371 222,204
Total assets
2,072,887 2,028,320 2,060,297 2,131,587 2,054,545 2,072,989 1,713,888
Deposits
1,883,640 1,819,008 1,888,494 1,947,208 1,866,704 1,884,233 1,532,883
Shareholders' equity
131,046 144,402 129,235 138,668 138,589 135,841 133,646

AT PERIOD END
Loans, net of deferred loan fees
$ 1,554,222 $ 1,392,546 $ 1,336,786 $ 1,201,934 $ 1,223,344 $ 1,554,222 $ 1,223,344
Investment securities
444,664 468,239 507,826 468,917 380,170 444,664 380,170
Total assets
2,133,268 1,983,822 2,010,256 2,110,091 2,162,478 2,133,268 2,162,478
Deposits
1,823,235 1,814,372 1,828,752 1,947,278 1,979,410 1,823,235 1,979,410
Shareholders' equity
137,538 126,483 138,611 121,282 137,100 137,538 137,100


Avidbank Holdings, Inc.
Consolidated Balance Sheets (Unaudited)
($000)



December 31, September 30, June 30, March 31, December 31,
Assets
2022 2022 2022 2022 2021
Cash and due from banks
$ 17,435 $ 23,766 $ 50,907 $ 47,091 $ 29,616
Due from Federal Reserve Bank
29,853 13,476 35,913 320,336 463,727
Total cash and cash equivalents
47,288 37,242 86,820 367,427 493,343

Investment securities - available for sale
412,993 436,535 477,646 468,917 308,170
Investment securities - held to maturity
31,671 31,704 30,180 - -
Total investment securities
444,664 468,239 507,826 468,917 380,170

Loans, net of deferred loan fees
1,554,222 1,392,546 1,336,786 1,201,934 1,223,344
Allowance for loan losses
(16,481 ) (15,488 ) (14,646 ) (13,054 ) (13,054 )
Loans, net of allowance for loan losses
1,537,741 1,377,058 1,322,140 1,188,880 1,210,290

Bank owned life insurance
32,747 32,522 32,303 32,087 31,875
Premises and equipment, net
4,163 4,318 4,314 4,331 4,565
Accrued interest receivable & other assets
66,665 64,443 56,853 48,449 42,235
Total assets
$ 2,133,268 $ 1,983,822 $ 2,010,256 $ 2,110,091 $ 2,162,478

Liabilities and Shareholders' Equity
Deposits:
Non-interest-bearing demand
$ 765,079 $ 804,383 $ 838,666 $ 952,035 $ 993,156
Interest bearing checking
41,701 46,852 45,179 47,711 50,674
Money market and savings
948,731 890,836 848,748 812,701 845,718
Time
67,724 72,301 96,159 134,831 89,862
Total deposits
1,823,235 1,814,372 1,828,752 1,947,278 1,979,410

Subordinated debt, net
21,805 21,779 21,754 21,729 21,703
Federal Home Loan Bank and other borrowings
130,000 - - - -
Accrued interest payable and other liabilities
20,690 21,188 21,139 19,802 24,265
Total liabilities
1,995,730 1,857,339 1,871,645 1,988,809 2,025,378

Shareholders' Equity
Common stock
102,359 101,679 101,244 72,920 72,799
Retained earnings
93,824 85,409 78,364 73,149 68,801
Accumulated other comprehensive (loss)
(58,645 ) (60,605 ) (40,997 ) (24,787 ) (4,500 )
Total shareholders' equity
137,538 126,483 138,611 121,282 137,100

Total liabilities and shareholders' equity
$ 2,133,268 $ 1,983,822 $ 2,010,256 $ 2,110,091 $ 2,162,478


Avidbank Holdings, Inc.
Consolidated Statements of Income (Unaudited)
($000, except share and per share amounts)

Three Months Ended Year-to-Date


Dec. 31,
2022
Sept. 30,
2022
Dec. 31,
2021
Dec. 31,
2022
Dec. 31,
2021
Interest and fees on loans
$ 23,160 $ 18,853 $ 13,927 $ 71,813 $ 50,823
Interest on investment securities
2,751 2,794 1,154 9,877 3,606
Other interest income
526 307 193 1,342 456
Total interest income
26,437 21,954 15,274 83,032 54,885

Deposit interest expense
4,269 1,948 655 7,513 2,618
Other interest expense
414 426 307 1,440 1,238
Total interest expense
4,683 2,374 962 8,953 3,856
Net interest income
21,754 19,580 14,312 74,079 51,029

Provision for loan losses
993 925 3,279 3,510 3,572
Net interest income after provision for
loan losses
20,761 18,655 11,033 70,569 47,457

Service charges and bank fees
660 725 621 2,871 2,366
Income from bank owned life insurance
224 219 213 871 451
Gain/(loss) on sale of assets
- - (113 ) - (113 )
Gain/(loss) on sale of securities
(404 ) - - (404 ) 735
Warrant and success fee income
119 12 456 281 477
Other investment income
521 (1 ) 757 605 1,069
Other income
135 121 131 446 328
Total non-interest income
1,255 1,076 2,065 4,670 5,313

Compensation and benefit expenses
7,592 7,069 6,920 29,102 25,256
Occupancy and equipment expenses
911 946 924 3,652 4,078
Data processing
456 447 394 1,737 1,647
Regulatory assessments
221 421 384 1,816 1,226
Legal and professional fees
364 269 187 1,290 897
Other operating expenses
906 761 740 3,193 2,512
Total non-interest expense
10,450 9,913 9,549 40,790 35,616

Income before income taxes
11,566 9,818 3,549 34,449 17,154
Provision for income taxes
3,151 2,772 1,015 9,426 4,890
Net income
$ 8,415 $ 7,046 $ 2,534 $ 25,023 $ 12,264

Basic earnings per common share
$ 1.16 $ 0.97 $ 0.43 $ 3.64 $ 2.08
Diluted earnings per common share
$ 1.13 $ 0.95 $ 0.42 $ 3.55 $ 2.02

Average common shares outstanding
7,281,343 7,274,617 5,904,446 6,801,330 5,890,216
Average common fully diluted shares
7,432,670 7,410,062 6,101,778 6,952,758 6,062,482


Avidbank Holdings, Inc.
Average Balance Sheets and Net Interest Margin Analysis
Selected Financial Information (Unaudited)
($000)



Three months ended


December 31, 2022 September 30, 2022


Average
Balance
Yields
or
Rates
Interest
Income/
Expense
Average
Balance
Yields
or
Rates
Interest
Income/
Expense
Assets












Interest earning assets:












Loans (1)
$ 1,451,724 6.33 % $ 23,160 $ 1,358,934 5.50 % $ 18,853
Fed funds sold/interest bearing deposits
52,321 3.99 % 526 52,626 2.31 % 307
Investment securities
Taxable investment securities
428,520 2.30 % 2,481 475,086 2.11 % 2,530
Non-taxable investment securities (2)
30,537 4.48 % 345 30,763 4.31 % 333
Total investment securities
459,057 2.44 % 2,826 505,849 2.25 % 2,863

Total interest-earning assets
1,963,102 5.36 % 26,512 1,917,409 4.56 % 22,023

Noninterest-earning assets:
Cash and due from banks
25,494 34,984
All other assets (3)
84,291 75,927

Total assets
$ 2,072,887 $ 2,028,320

Liabilities and Shareholders' Equity
Interest-bearing liabilities:
Deposits
Demand
$ 44,344 0.54 % $ 60 $ 46,145 0.33 % $ 38
Money market and savings
953,665 1.68 % 4,027 867,113 0.81 % 1,768
Time
70,409 1.03 % 182 85,703 0.66 % 142
Total interest-bearing deposits
1,068,418 1.59 % 4,269 998,961 0.77 % 1,948

FHLB and other borrowings
11,772 3.84 % 114 22,011 2.27 % 126
Subordinated debt
21,792 5.46 % 300 21,766 5.47 % 300
Total interest-bearing liabilities
1,101,982 1.69 % 4,683 1,042,738 0.90 % 2,374

Noninterest-bearing liabilities:
Demand deposits
815,222 820,047
Accrued expenses and other liabilities
24,637 21,133
Shareholders' equity
131,046 144,402

Total liabilities and
shareholders' equity
$ 2,072,887 $ 2,028,320

Net interest income and margin (4)
4.41 % $ 21,829 4.07 % $ 19,649
Non-taxable equivalent net interest margin
4.40 % 4.05 %

Cost of deposits
1,883,640 0.90 % 4,269 1,819,008 0.42 % 1,948

(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 $556 thousand and $513 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 $15.6 million and $14.7 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)


Three months ended

December 31, 2022 December 31, 2021

Average
Balance
Yields
or
Rates
Interest
Income/
Expense
Average
Balance
Yields
or
Rates
Interest
Income/
Expense


Assets






Interest earning assets:






Loans (1)
$ 1,451,724 6.33 % $ 23,160 $ 1,154,254 4.79 % $ 13,927
Fed funds sold/interest bearing deposits
52,321 3.99 % 526 515,430 0.15 % 193
Investment securities
Taxable investment securities
428,520 2.30 % 2,481 287,915 1.59 % 1,154
Non-taxable investment securities (2)
30,537 4.48 % 345 - 0.00 % -
Total investment securities
459,057 2.44 % 2,826 287,915 1.59 % 1,154

Total interest-earning assets
1,963,102 5.36 % 26,512 1,957,599 3.10 % 15,274

Noninterest-earning assets:
Cash and due from banks
25,494 35,750
All other assets (3)
84,291 61,196

Total assets
$ 2,072,887 $ 2,054,545

Liabilities and Shareholders' Equity
Interest-bearing liabilities:
Deposits
Demand
$ 44,344 0.54 % $ 60 $ 50,045 0.16 % $ 20
Money market and savings
953,665 1.68 % 4,027 715,540 0.26 % 465
Time
70,409 1.03 % 182 99,550 0.68 % 170
Total interest-bearing deposits
1,068,418 1.59 % 4,269 865,135 0.30 % 655

FHLB and other borrowings
11,772 3.84 % 114 - 0.00 % -
Subordinated debt
21,792 5.46 % 300 21,689 5.62 % 307
Total interest-bearing liabilities
1,101,982 1.69 % 4,683 886,824 0.43 % 962

Noninterest-bearing liabilities:
Demand deposits
815,222 1,001,568
Accrued expenses and other liabilities
24,637 27,564
Shareholders' equity
131,046 138,589

Total liabilities and
shareholders' equity
$ 2,072,887 $ 2,054,545

Net interest income and margin (4)
4.41 % $ 21,829 2.90 % $ 14,312
Non-taxable equivalent net interest margin
4.40 % 2.90 %

Cost of deposits
1,883,640 0.90 % 4,269 1,866,703 0.14 % 655

(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 $556 thousand and $864 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 $15.6 million and $13.8 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)



Twelve months ended


December 31, 2022 December 31, 2021


Average
Balance
Yields
or
Rates
Interest
Income/
Expense
Average
Balance
Yields
or
Rates
Interest
Income/
Expense
Assets












Interest earning assets:












Loans (1)
$ 1,322,969 5.43 % $ 71,813 $ 1,054,292 4.82 % $ 50,823
Fed funds sold/interest bearing deposits
166,665 0.81 % 1,342 358,324 0.13 % 456
Investment securities
Taxable investment securities
453,805 2.03 % 9,230 222,204 1.62 % 3,606
Non-taxable investment securities (2)
18,566 4.42 % 820 - 0.00 % -
Total investment securities
472,371 2.13 % 10,050 222,204 1.62 % 3,606

Total interest-earning assets
1,962,005 4.24 % 83,205 1,634,820 3.36 % 54,885

Noninterest-earning assets:
Cash and due from banks
37,221 30,455
All other assets (3)
73,763 48,613

Total assets
$ 2,072,989 $ 1,713,888

Liabilities and Shareholders' Equity
Interest-bearing liabilities:
Deposits
Demand
$ 46,468 0.28 % $ 129 $ 38,084 0.17 % $ 66
Money market and savings
867,419 0.77 % 6,656 576,448 0.29 % 1,668
Time including brokered
99,553 0.73 % 728 120,514 0.73 % 884
Total interest-bearing deposits
1,013,440 0.74 % 7,513 735,046 0.36 % 2,618

FHLB and other borrowings
8,515 2.81 % 239 - 0.00 % -
Subordinated debt
21,698 5.54 % 1,201 21,636 5.72 % 1,238
Total interest-bearing liabilities
1,043,653 0.86 % 8,953 756,682 0.51 % 3,856

Noninterest-bearing liabilities:
Demand deposits
870,793 797,837
Accrued expenses and other liabilities
22,702 25,723
Shareholders' equity
135,841 133,646

Total liabilities and
shareholders' equity
$ 2,072,989 $ 1,713,888

Net interest income and margin (4)
3.78 % $ 74,252 3.12 % $ 51,029
Non-taxable equivalent net interest margin
3.78 % 3.12 %

Cost of deposits
1,884,233 0.40 % 7,513 1,532,883 0.17 % 2,618

(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 amortization of deferred loan fees / (costs) of $2.2 million and $2.7 million, 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 $14.2 million and $12.9 million, respectively, is included as a contra asset.
(4) Tax equivalent net interest income divided by total interest-earning assets.


Avidbank Holdings, Inc.
Period End Loans (Unaudited)
($000)







Current Year over

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

2022 2022 2022 2022 2021 Change Change








Commercial loans
$ 700,022 $ 566,105 $ 558,908 $ 481,522 $ 517,747 $ 133,917 $ 182,275
Commercial real estate
Multi-family
169,048 159,384 165,818 141,954 139,646 9,664 29,402
Owner Occupied
139,414 131,649 108,045 109,502 99,728 7,765 39,686
Non-Owner Occupied
303,660 288,478 280,397 258,365 258,507 15,182 45,153
Construction and land
227,869 234,157 209,941 195,388 190,887 (6,288 ) 36,982
Residential
13,394 11,991 12,830 13,726 14,484 1,403 (1,090 )
Total real estate loans
853,385 825,659 777,031 718,935 703,252 27,726 150,133

Other loans
815 782 847 1,477 2,345 33 (1,530 )

Total loans
$ 1,554,222 $ 1,392,546 $ 1,336,786 $ 1,201,934 $ 1,223,344 $ 161,676 $ 330,878


Avidbank Holdings, Inc.
Credit Trends (Unaudited)
($000)


Dec. 31, Sept. 30, June 30, March 31, Dec. 31,

2022 2022 2022 2022 2021
Allowance for Loan Losses





Balance, beginning of quarter
$ 15,488 $ 14,646 $ 13,054 $ 13,054 $ 12,775
Provision for loan losses, quarterly
993 925 1,592 - 3,279
Charge-offs, quarterly
- (83 ) - - (3,000 )
Recoveries, quarterly
- - - - -
Balance, end of quarter
$ 16,481 $ 15,488 $ 14,646 $ 13,054 $ 13,054


Nonperforming Assets
Loans accounted for on a non-accrual basis
$ 14,245 $ 154 $ 159 $ 3,204 $ 3,244
Loans with principal or interest contractually past
due 90 days or more and still accruing interest
- - - - -
Nonperforming loans
14,245 154 159 3,204 3,244
Other real estate owned
- - - - -
Nonperforming assets
$ 14,245 $ 154 $ 159 $ 3,204 $ 3,244


Nonperforming Loans by Type:
Commercial
$ 150 $ 154 $ 159 $ 441 $ 448
Commercial Real Estate Loans
- - - 2,763 2,796
Construction and Land
14,095 - - - -
Total Nonperforming loans
$ 14,245 $ 154 $ 159 $ 3,204 $ 3,244


Asset Quality Ratios
Allowance for loan losses (ALLL) to total loans
1.06 % 1.11 % 1.09 % 1.08 % 1.07 %
ALLL to nonperforming loans
115.70 % 10057.14 % 9211.32 % 407.43 % 402.40 %
Nonperforming assets to total assets
0.67 % 0.01 % 0.01 % 0.15 % 0.15 %
Nonperforming loans to total loans
0.92 % 0.01 % 0.01 % 0.27 % 0.27 %
Net quarterly charge-offs to total loans
0.00 % 0.01 % 0.00 % 0.00 % 0.25 %

SOURCE: Avidbank Holdings, Inc.



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