Recent Quotes View Full List My Watchlist Create Watchlist Indicators DJI Nasdaq Composite SPX Gold Crude Oil EL&P Market Index Markets Stocks ETFs Tools Overview News Currencies International Treasuries Avidbank Holdings, Inc. Announces Net Income for the Third Quarter of 2022 By: ACCESSWIRE October 19, 2022 at 06:00 AM EDT SAN JOSE, CA / ACCESSWIRE / October 19, 2022 / Avidbank Holdings, Inc. (OTC PINK:AVBH) announced income for the third quarter of 2022 of $7.0 million, or $0.95 per diluted share, compared to $5.2 million, or $0.76 per diluted share, for the second quarter of 2022 and $3.6 million, or $0.59 per diluted share, for the third quarter of 2021. Third Quarter 2022 Financial Highlights Diluted earnings per share of $0.95, an increase of $0.19, or 100% annualized, compared to the second quarter of 2022, and increased $0.36, or 61%, compared to the third quarter of 2021. Return on average assets improved to 1.38%, compared to 1.02% in the second quarter of 2022 and 0.80% in the third quarter of 2021. Return on average equity improved to 19.36%, compared to 16.18% in the second quarter of 2022 and 10.45% in the third quarter of 2021. Taxable equivalent net interest margin increased to 4.07% in the third quarter of 2022, compared to 3.62% in the second quarter of 2022 and 2.98% in the third quarter of 2021. Efficiency ratio improved to 48.00%, compared to 53.43% in the second quarter of 2022 and 61.91% in the third quarter of 2021. Loans increased $56 million, or 17% annualized, from June 30, 2022 and increased $319 million, or 30%, from September 30, 2021. Annualized net charge-offs to average loans totaled 0.02% and 0.01% for the third quarter and year-to-date 2022, respectively. Non-performing assets to total assets were 0.01% on September 30, 2022, remaining flat from June 30, 2022 and decreased from 0.18% on September 30, 2021. "Our strong performance for 2022 continued in the third quarter with another quarter of solid loan growth along with expanding profitability metrics," said Mark Mordell, Chairman and Chief Executive Officer. "Although overall deposit balances were down slightly in the third quarter, our growth in new deposits from new client acquisition was solid. Overall balances were down slightly in the third quarter as the strong growth in new deposits was offset by another quarter of elevated decreases in existing client balances due to the dynamic characteristics of many of our clients. We continue to be optimistic about the remainder of 2022 as our pipeline for new business is very encouraging along with the additional benefits we will see from further increases in the fed funds rate," added Mr. Mordell. Income Statement Taxable equivalent net interest income totaled $19.6 million for the third quarter of 2022, an increase of $2.1 million, or 48% annualized, from the second quarter of 2022, and an increase of $7.0 million, or 55%, from the third quarter of 2021. The net interest margin was 4.07% in the third quarter of 2022, an increase of 0.49% compared to the second quarter of 2022, and an increase of 1.09% compared to the third 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 and investment securities. The yield on loans in the third quarter of 2022 was 5.50%, an increase of 54 basis points from the second quarter of 2022 and an increase of 66 basis points from the third quarter of 2021. 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 third quarter of 2022 was 0.42%, an increase of 28 basis points from the second quarter of 2022 and an increase of 25 basis points from the third quarter of 2021. The cost of interest-bearing deposits in the third quarter of 2022 was 0.77% compared to 0.26% in the second quarter of 2022 and 0.34% in the third quarter of 2021. In the third quarter of 2022, we recorded a provision for loan losses of $0.9 million, compared to $1.6 million in the second quarter of 2022 and $0.2 million in the third quarter of 2021. The third quarter provision was primarily attributable to the $56 million increase in loan balances. Non-interest income was $1.1 million in the third quarter of 2022 compared to $1.2 million in the second quarter of 2022 and $1.0 million in the third quarter of 2021. Service charge income totaled $643,000 in the third quarter of 2022, a decrease of $38,000, or 22% annualized, compared to the second quarter of 2022 and an increase of $91,000, or 16% from the third quarter of 2021. Non-interest expense totaled $9.9 million in the third quarter of 2022 compared to $10.0 million in the second quarter of 2022 and $8.5 million in the third quarter of 2021. 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 September 30, 2022 totaled 134 compared to 130 on June 30, 2022. Balance Sheet Total assets were $1.98 billion as of September 30, 2022, compared to $2.01 billion on June 30, 2022 and $1.83 billion at September 30, 2021. Cash and cash equivalents were $37 million on September 30, 2022, compared to $87 million on June 30, 2022 and $413 million on September 30, 2021. Period end loans on September 30, 2022 totaled $1.39 billion, which represented an increase of $56 million, or 17% annualized, from June 30, 2022, and an increase of $319 million, or 30%, from $1.07 billion at September 30, 2021. Quarterly average loans for the third quarter of 2022 increased $96 million, or 30% annualized, from the second quarter of 2022 and $330 million, or 32%, from the third quarter of 2021. The allowance for loan losses on September 30, 2022 was $15.5 million, representing an increase of $0.8 million from June 30, 2022. The Allowance for Loan Losses to total loans was 1.11% on September 30, 2022, compared to 1.09% on June 30, 2022. Nonperforming loans to total loans was 0.01% on September 30, 2022 and June 30, 2022. Period end deposits were $1.81 billion on September 30, 2022 compared to $1.83 billion at June 30, 2022 and an increase of $167 million, or 10%, compared to $1.65 billion at September 30, 2021. Quarterly average deposits for the third quarter of 2022 increased $230 million, or 14%, compared to the third quarter of 2021 and decreased $69 million, or 15% annualized, from the second quarter of 2022. Noninterest bearing deposits represented 44.3% of total deposits on September 30, 2022, compared to 45.9% on June 30, 2022 and 53.0% at September 30, 2021. The quarterly average loan to deposit ratio was 74.6% in the third quarter of 2022 compared to 66.8% in the second quarter of 2022 and 64.6% in the third quarter of 2021. Book value per share was $16.58 on September 30, 2022, compared to $18.27 on June 30, 2022, a decrease of $1.69 primarily from an increase in the investment portfolio unrealized loss. Total shareholders' equity totaled $126.5 million on September 30, 2022, a decrease of $12.2 million compared to June 30, 2022. This decrease included an increase in retained earnings of $7.0 million offset by an increase in accumulated other comprehensive loss of $19.6 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, 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 OakesExecutive Vice President and Chief Financial Officer408-200-7390IR@avidbank.com AVIDBANK HOLDINGS, INC.Selected Financial Data (Unaudited)($000, except share and per share amounts) For the nine months ended 2022 2021 September 30, ThirdQuarter SecondQuarter FirstQuarter FourthQuarter ThirdQuarter 2022 2021 INCOME AND PER SHARE HIGHLIGHTS Net income $ 7,045 $ 5,214 $ 4,349 $ 2,534 $ 3,574 $ 16,608 $ 9,730 Basic earnings per share 0.97 0.78 0.73 0.43 0.60 2.48 1.65 Diluted earnings per share 0.95 0.76 0.71 0.42 0.59 2.42 1.61 Book value per share 16.58 18.27 19.20 21.91 21.55 PERFORMANCE MEASURES Return on average assets 1.38 % 1.02 % 0.83 % 0.49 % 0.80 % 1.07 % 0.81 % Return on average equity 19.36 % 16.18 % 12.72 % 7.25 % 10.45 % 16.15 % 9.86 % Taxable equivalent net interest margin 4.07 % 3.62 % 3.05 % 2.90 % 2.98 % 3.57 % 3.22 % Efficiency ratio 48.00 % 53.43 % 63.72 % 58.31 % 61.91 % 54.43 % 65.22 % Average loans to average deposits 74.61 % 66.88 % 62.31 % 61.75 % 64.60 % 67.81 % 71.76 % CAPITAL Tier 1 leverage ratio 9.22 % 8.72 % 6.85 % 6.89 % 7.81 % Common equity tier 1 capital ratio 10.24 % 10.17 % 9.09 % 8.90 % 9.94 % Tier 1 risk-based capital ratio 10.24 % 10.17 % 9.09 % 8.90 % 9.94 % Total risk-based capital ratio 12.31 % 12.25 % 11.28 % 11.11 % 12.44 % Tangible common equity ratio 6.38 % 6.90 % 5.75 % 6.34 % 7.37 % SHARES OUTSTANDING Number of common shares outstanding 7,629,767 7,585,924 6,316,573 6,256,682 6,255,752 Average common shares outstanding - basic 7,274,617 6,687,448 5,935,948 5,904,446 5,898,208 6,639,567 5,885,421 Average common shares outstanding - diluted 7,410,062 6,821,245 6,116,306 6,101,778 6,072,085 6,790,554 6,048,748 ASSET QUALITY Allowance for loan losses (ALLL) to total loans 1.11 % 1.09 % 1.08 % 1.07 % 1.19 % ALLL to nonperforming loans 10057.14 % 9211.32 % 407.43 % 402.40 % 388.88 % Nonperforming assets to total assets 0.01 % 0.01 % 0.15 % 0.15 % 0.18 % Nonperforming loans to total loans 0.01 % 0.01 % 0.27 % 0.27 % 0.31 % Net quarterly charge-offs to total loans 0.01 % 0.00 % 0.00 % 0.25 % 0.00 % AVERAGE BALANCES Loans, net of deferred loan fees $ 1,357,090 $ 1,261,255 $ 1,213,353 $ 1,152,641 $ 1,026,812 $ 1,277,760 $ 1,019,253 Investment securities 505,849 487,535 436,427 287,915 231,526 476,858 200,060 Total assets 2,028,320 2,060,297 2,131,587 2,054,545 1,771,292 2,073,023 1,599,088 Deposits 1,819,008 1,888,494 1,947,208 1,866,704 1,589,384 1,884,434 1,420,386 Shareholders' equity 144,402 129,235 138,668 138,589 135,721 137,456 131,980 AT PERIOD END Loans, net of deferred loan fees $ 1,392,546 $ 1,336,786 $ 1,201,934 $ 1,223,344 $ 1,073,132 Investment securities 468,239 507,826 468,917 380,170 276,670 Total assets 1,983,822 2,010,256 2,110,091 2,162,478 1,828,021 Deposits 1,814,372 1,828,752 1,947,278 1,979,410 1,647,613 Shareholders' equity 126,483 138,611 121,282 137,100 134,797 Avidbank Holdings, Inc.Consolidated Balance Sheets (Unaudited)($000) September 30, June 30, March 31, December 31, September 30, Assets 2022 2022 2022 2021 2021 Cash and due from banks $ 23,766 $ 50,907 $ 47,091 $ 29,616 $ 34,864 Due from Federal Reserve Bank 13,476 35,913 320,336 463,727 378,380 Total cash and cash equivalents 37,242 86,820 367,427 493,343 413,244 Investment securities - available for sale 436,535 477,646 468,917 308,170 276,670 Investment securities - held to maturity 31,704 30,180 - - - Total investment securities 468,239 507,826 468,917 380,170 276,670 Loans, net of deferred loan fees 1,392,546 1,336,786 1,201,934 1,223,344 1,073,132 Allowance for loan losses (15,488 ) (14,646 ) (13,054 ) (13,054 ) (12,775 ) Loans, net of allowance for loan losses 1,377,058 1,322,140 1,188,880 1,210,290 1,060,357 Bank owned life insurance 32,522 32,303 32,087 31,875 31,663 Premises and equipment, net 4,318 4,314 4,331 4,565 4,913 Accrued interest receivable & other assets 64,443 56,853 48,449 42,235 41,174 Total assets $ 1,983,822 $ 2,010,256 $ 2,110,091 $ 2,162,478 $ 1,828,021 Liabilities Non-interest-bearing demand deposits $ 804,383 $ 838,666 $ 952,035 $ 993,156 $ 872,972 Interest bearing transaction accounts 46,852 45,179 47,711 50,674 49,722 Money market and savings accounts 890,836 848,748 812,701 845,718 614,992 Time deposits 72,301 96,159 134,831 89,862 109,927 Total deposits 1,814,372 1,828,752 1,947,278 1,979,410 1,647,613 Subordinated debt, net 21,779 21,754 21,729 21,703 21,671 Other liabilities 21,188 21,139 19,802 24,265 23,940 Total liabilities 1,857,339 1,871,645 1,988,809 2,025,378 1,693,224 Shareholders' equity Common stock/additional paid-in capital 101,679 101,244 72,920 72,799 72,124 Retained earnings 85,409 78,364 73,149 68,801 66,267 Accumulated other comprehensive (loss) (60,605 ) (40,997 ) (24,787 ) (4,500 ) (3,594 ) Total shareholders' equity 126,483 138,611 121,282 137,100 134,797 Total liabilities and shareholders' equity $ 1,983,822 $ 2,010,256 $ 2,110,091 $ 2,162,478 $ 1,828,021 Avidbank Holdings, Inc.Consolidated Statements of Income (Unaudited)($000, except share and per share amounts) Three months ended Year-to-Date September 30, June 30, September 30, September 30, September 30, 2022 2022 2021 2022 2021 Interest and fees on loans $ 18,852 $ 15,639 $ 12,533 $ 48,653 $ 36,896 Interest on investment securities 2,794 2,477 946 7,126 2,453 Other interest income 307 356 156 816 263 Total interest income 21,954 18,472 13,635 56,595 39,612 Deposit interest expense 1,948 657 671 3,244 1,963 Other interest expense 426 300 310 1,026 931 Total interest expense 2,374 957 981 4,270 2,894 Net interest income 19,580 17,515 12,654 52,325 36,718 Provision for loan losses 925 1,592 217 2,517 293 Net interest income after provision for loan losses 18,655 15,923 12,437 49,808 36,425 Service charges and bank fees 725 761 621 2,211 1,695 Income from bank owned life insurance 219 215 103 647 238 Gain/(loss) on sale of assets - - - - 734 Warrant income 12 64 - 162 22 Other income 120 187 273 395 558 Total non-interest income 1,076 1,227 997 3,415 3,247 Compensation and benefit expenses 7,069 7,129 5,860 21,510 18,336 Occupancy and equipment expenses 946 901 1,066 2,741 3,154 Data processing 447 423 413 1,281 1,254 Regulatory assessments 421 509 284 1,595 842 Professional fees 217 192 152 604 483 Other operating expenses 813 859 677 2,609 1,997 Total non-interest expense 9,913 10,013 8,452 30,340 26,066 Income before income taxes 9,818 7,137 4,982 22,883 13,606 Provision for income taxes 2,772 1,923 1,408 6,275 3,876 Net income $ 7,046 $ 5,214 $ 3,574 $ 16,609 $ 9,730 Basic earnings per common share $ 0.97 $ 0.78 $ 0.60 $ 2.48 $ 1.65 Diluted earnings per common share $ 0.95 $ 0.76 $ 0.59 $ 2.43 $ 1.61 Average common shares outstanding 7,274,617 6,687,448 5,898,208 6,639,567 5,885,421 Average common fully diluted shares 7,410,062 6,821,245 6,072,085 6,790,554 6,048,748 Avidbank Holdings, Inc.Average Balance Sheets and Net Interest Margin AnalysisSelected Financial Information (Unaudited)($000) Three months ended September 30, 2022 June 30, 2022 AverageBalance YieldsorRates InterestIncome/Expense AverageBalance YieldsorRates InterestIncome/Expense Assets Interest earning assets: Loans (1) $ 1,358,934 5.50 % $ 18,852 $ 1,263,071 4.97 % $ 15,638 Fed funds sold 52,626 2.31 % 307 191,861 0.74 % 353 Investment securities Taxable investment securities 475,086 2.11 % 2,530 475,039 2.00 % 2,364 Non-taxable investment securities (2) 30,763 4.31 % 334 12,496 4.59 % 143 Total investment securities 505,849 2.25 % 2,864 487,535 2.06 % 2,507 Total interest-earning assets 1,917,409 4.56 % 22,023 1,942,467 3.82 % 18,498 Noninterest-earning assets: Cash and due from banks 34,984 46,334 All other assets (3) 75,927 71,496 Total assets $ 2,028,320 $ 2,060,297 Liabilities and Shareholders' Equity Interest-bearing liabilities: Deposits Demand $ 46,145 0.33 % $ 38 $ 46,242 0.13 % $ 15 Money market and savings 867,113 0.81 % 1,768 835,058 0.21 % 440 Time 85,703 0.66 % 142 121,923 0.66 % 202 Total interest-bearing deposits 998,961 0.77 % 1,948 1,003,223 0.26 % 657 FHLB Advances 22,011 2.27 % 126 - 0.00 % - Subordinated debt 21,766 5.47 % 300 21,518 5.59 % 300 Total interest-bearing liabilities 1,042,738 0.90 % 2,374 1,024,741 0.37 % 957 Noninterest-bearing liabilities: Demand deposits 820,047 885,271 Accrued expenses and other liabilities 21,133 21,050 Shareholders' equity 144,402 129,235 Total liabilities and shareholders' equity $ 2,028,320 $ 2,060,297 Net interest income and margin (4) 4.07 % $ 19,649 3.62 % $ 17,541 Non-taxable equivalent net interest margin 4.05 % 3.62 % Cost of deposits 1,819,008 0.42 % 1,948 1,888,494 0.14 % 657 (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 $513 thousand and $460 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) Allowance for loan losses of $14.7 million and $13.2 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 AnalysisSelected Financial Information (Unaudited)($000) Three months ended September 30, 2022 September 30, 2021 AverageBalance YieldsorRates InterestIncome/Expense AverageBalance YieldsorRates InterestIncome/Expense Assets Interest earning assets: Loans (1) $ 1,358,934 5.50 % $ 18,852 $ 1,028,098 4.84 % $ 12,533 Fed funds sold 52,626 2.31 % 307 425,568 0.15 % 156 Investment securities Taxable investment securities 475,086 2.11 % 2,530 231,526 1.62 % 946 Non-taxable investment securities (2) 30,763 4.31 % 334 - 0.00 % - Total investment securities 505,849 2.25 % 2,864 231,526 1.62 % 946 Total interest-earning assets 1,917,409 4.56 % 22,023 1,685,192 3.21 % 13,635 Noninterest-earning assets: Cash and due from banks 34,984 38,286 All other assets (3) 75,927 47,814 Total assets $ 2,028,320 $ 1,771,292 Liabilities and Shareholders' Equity Interest-bearing liabilities: Deposits Demand $ 46,145 0.33 % $ 38 $ 47,400 0.16 % $ 19 Money market and savings 867,113 0.81 % 1,768 622,844 0.29 % 452 Time 85,703 0.66 % 142 116,806 0.68 % 200 Total interest-bearing deposits 998,961 0.77 % 1,948 787,050 0.34 % 671 FHLB Advances 22,011 2.27 % 126 - 0.00 % - Subordinated debt 21,766 5.47 % 300 21,653 5.68 % 310 Total interest-bearing liabilities 1,042,738 0.90 % 2,374 808,703 0.48 % 981 Noninterest-bearing liabilities: Demand deposits 820,047 802,334 Accrued expenses and other liabilities 21,133 24,534 Shareholders' equity 144,402 135,721 Total liabilities and shareholders' equity $ 2,028,320 $ 1,771,292 Net interest income and margin (4) 4.07 % $ 19,649 2.98 % $ 12,654 Non-taxable equivalent net interest margin 4.05 % 2.98 % Cost of deposits 1,819,008 0.42 % 1,948 1,589,384 0.17 % 671 (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 $513 thousand and $798 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) Allowance for loan losses of $14.7 million and $12.6 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 AnalysisSelected Financial Information (Unaudited)($000) Nine months ended September 30, 2022 September 30, 2021 AverageBalance YieldsorRates InterestIncome/Expense AverageBalance YieldsorRates InterestIncome/Expense Assets Interest earning assets: Loans (1) $ 1,279,579 5.08 % $ 48,653 $ 1,020,605 4.83 % $ 36,896 Fed funds sold 205,199 0.53 % 816 305,379 0.12 % 263 Investment securities Taxable investment securities 462,326 1.95 % 6,749 200,060 1.64 % 2,453 Non-taxable investment securities (2) 14,532 4.39 % 477 - 0.00 % - Total investment securities 476,858 2.03 % 7,226 200,060 1.64 % 2,453 Total interest-earning assets 1,961,636 3.86 % 56,695 1,526,044 3.47 % 39,612 Noninterest-earning assets: Cash and due from banks 41,173 28,671 All other assets (3) 70,214 44,373 Total assets $ 2,073,023 $ 1,599,088 Liabilities and Shareholders' Equity Interest-bearing liabilities: Deposits Demand $ 47,184 0.20 % $ 69 $ 34,052 0.18 % $ 46 Money market and savings 838,354 0.42 % 2,630 529,575 0.30 % 1,204 Time 109,375 0.67 % 545 127,579 0.75 % 713 Total interest-bearing deposits 994,913 0.44 % 3,244 691,206 0.38 % 1,963 FHLB Advances 7,418 2.25 % 125 - 0.00 % - Subordinated debt 21,666 5.56 % 901 21,618 5.76 % 931 Total interest-bearing liabilities 1,023,997 0.56 % 4,270 712,824 0.54 % 2,894 Noninterest-bearing liabilities: Demand deposits 889,521 729,180 Accrued expenses and other liabilities 22,049 25,104 Shareholders' equity 137,456 131,980 Total liabilities and shareholders' equity $ 2,073,023 $ 1,599,088 Net interest income and margin (4) 3.57 % $ 52,425 3.22 % $ 36,718 Non-taxable equivalent net interest margin 3.57 % 3.22 % Cost of deposits 1,884,434 0.23 % 3,244 1,420,386 0.18 % 1,963 (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 $1.6 and $1.9 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) Allowance for loan losses of $13.7 million and $12.6 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) Sept. 30,2022 June 30,2022 March 31,2022 Dec. 31,2021 Sept. 30,2021 Current QuarterChange Year over YearChange Commercial loans $ 566,105 $ 558,908 $ 481,522 $ 517,747 $ 415,986 $ 7,197 $ 150,119 Real Estate Commercial real estate Multi-family 159,384 165,818 141,954 139,646 128,672 (6,434 ) 30,712 CRE Owner Occupied 131,649 108,045 109,502 99,728 89,832 23,604 41,817 Non-Owner Occupied 288,478 280,397 258,365 258,507 239,272 8,081 49,206 Construction and land 234,157 209,941 195,388 190,887 182,556 24,216 51,601 Residential 11,991 12,830 13,726 14,484 14,800 (839 ) (2,809 ) Total real estate loans 825,659 777,031 718,935 703,252 655,132 48,628 170,527 Other loans 782 847 1,477 2,345 2,014 (65 ) (1,232 ) Total loans $ 1,392,546 $ 1,336,786 $ 1,201,934 $ 1,223,344 $ 1,073,132 $ 55,760 $ 319,414 Avidbank Holdings, Inc.Credit Trends (Unaudited)($000) 9/30/22 6/30/22 3/31/22 12/31/21 9/30/21 Allowance for Loan Losses Balance, beginning of quarter $ 14,646 $ 13,054 $ 13,054 $ 12,775 $ 12,558 Provision for loan losses, quarterly 925 1,592 - 3,279 217 Charge-offs, quarterly (83 ) - - (3,000 ) - Recoveries, quarterly - - - - - Balance, end of quarter $ 15,488 $ 14,646 $ 13,054 $ 13,054 $ 12,775 Nonperforming Assets Loans accounted for on a non-accrual basis $ 154 $ 159 $ 3,204 $ 3,244 $ 3,285 Loans with principal or interest contractually past due 90 days or more and still accruing interest - - - - - Nonperforming loans 154 159 3,204 3,244 3,285 Other real estate owned - - - - - Nonperforming assets $ 154 $ 159 $ 3,204 $ 3,244 $ 3,285 Loans restructured and in compliance with modified terms - - - - - Nonperforming assets & restructured loans $ 154 $ 159 $ 3,204 $ 3,244 $ 3,285 Nonperforming Loans by Type: Commercial $ 154 $ 159 $ 441 $ 448 $ 456 Commercial Real Estate Loans - - 2,763 2,796 2,829 Total Nonperforming loans $ 154 $ 159 $ 3,204 $ 3,244 $ 3,285 Asset Quality Ratios Allowance for loan losses (ALLL) to total loans 1.11 % 1.09 % 1.08 % 1.07 % 1.19 % ALLL to nonperforming loans 10057.14 % 9211.32 % 407.43 % 402.40 % 388.89 % Nonperforming assets to total assets 0.01 % 0.01 % 0.15 % 0.00 % 0.18 % Nonperforming loans to total loans 0.01 % 0.01 % 0.27 % 0.27 % 0.31 % Net quarterly charge-offs to total loans 0.01 % 0.00 % 0.00 % 0.25 % 0.00 % SOURCE: Avidbank Holdings, Inc. 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Avidbank Holdings, Inc. Announces Net Income for the Third Quarter of 2022 By: ACCESSWIRE October 19, 2022 at 06:00 AM EDT SAN JOSE, CA / ACCESSWIRE / October 19, 2022 / Avidbank Holdings, Inc. (OTC PINK:AVBH) announced income for the third quarter of 2022 of $7.0 million, or $0.95 per diluted share, compared to $5.2 million, or $0.76 per diluted share, for the second quarter of 2022 and $3.6 million, or $0.59 per diluted share, for the third quarter of 2021. Third Quarter 2022 Financial Highlights Diluted earnings per share of $0.95, an increase of $0.19, or 100% annualized, compared to the second quarter of 2022, and increased $0.36, or 61%, compared to the third quarter of 2021. Return on average assets improved to 1.38%, compared to 1.02% in the second quarter of 2022 and 0.80% in the third quarter of 2021. Return on average equity improved to 19.36%, compared to 16.18% in the second quarter of 2022 and 10.45% in the third quarter of 2021. Taxable equivalent net interest margin increased to 4.07% in the third quarter of 2022, compared to 3.62% in the second quarter of 2022 and 2.98% in the third quarter of 2021. Efficiency ratio improved to 48.00%, compared to 53.43% in the second quarter of 2022 and 61.91% in the third quarter of 2021. Loans increased $56 million, or 17% annualized, from June 30, 2022 and increased $319 million, or 30%, from September 30, 2021. Annualized net charge-offs to average loans totaled 0.02% and 0.01% for the third quarter and year-to-date 2022, respectively. Non-performing assets to total assets were 0.01% on September 30, 2022, remaining flat from June 30, 2022 and decreased from 0.18% on September 30, 2021. "Our strong performance for 2022 continued in the third quarter with another quarter of solid loan growth along with expanding profitability metrics," said Mark Mordell, Chairman and Chief Executive Officer. "Although overall deposit balances were down slightly in the third quarter, our growth in new deposits from new client acquisition was solid. Overall balances were down slightly in the third quarter as the strong growth in new deposits was offset by another quarter of elevated decreases in existing client balances due to the dynamic characteristics of many of our clients. We continue to be optimistic about the remainder of 2022 as our pipeline for new business is very encouraging along with the additional benefits we will see from further increases in the fed funds rate," added Mr. Mordell. Income Statement Taxable equivalent net interest income totaled $19.6 million for the third quarter of 2022, an increase of $2.1 million, or 48% annualized, from the second quarter of 2022, and an increase of $7.0 million, or 55%, from the third quarter of 2021. The net interest margin was 4.07% in the third quarter of 2022, an increase of 0.49% compared to the second quarter of 2022, and an increase of 1.09% compared to the third 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 and investment securities. The yield on loans in the third quarter of 2022 was 5.50%, an increase of 54 basis points from the second quarter of 2022 and an increase of 66 basis points from the third quarter of 2021. 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 third quarter of 2022 was 0.42%, an increase of 28 basis points from the second quarter of 2022 and an increase of 25 basis points from the third quarter of 2021. The cost of interest-bearing deposits in the third quarter of 2022 was 0.77% compared to 0.26% in the second quarter of 2022 and 0.34% in the third quarter of 2021. In the third quarter of 2022, we recorded a provision for loan losses of $0.9 million, compared to $1.6 million in the second quarter of 2022 and $0.2 million in the third quarter of 2021. The third quarter provision was primarily attributable to the $56 million increase in loan balances. Non-interest income was $1.1 million in the third quarter of 2022 compared to $1.2 million in the second quarter of 2022 and $1.0 million in the third quarter of 2021. Service charge income totaled $643,000 in the third quarter of 2022, a decrease of $38,000, or 22% annualized, compared to the second quarter of 2022 and an increase of $91,000, or 16% from the third quarter of 2021. Non-interest expense totaled $9.9 million in the third quarter of 2022 compared to $10.0 million in the second quarter of 2022 and $8.5 million in the third quarter of 2021. 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 September 30, 2022 totaled 134 compared to 130 on June 30, 2022. Balance Sheet Total assets were $1.98 billion as of September 30, 2022, compared to $2.01 billion on June 30, 2022 and $1.83 billion at September 30, 2021. Cash and cash equivalents were $37 million on September 30, 2022, compared to $87 million on June 30, 2022 and $413 million on September 30, 2021. Period end loans on September 30, 2022 totaled $1.39 billion, which represented an increase of $56 million, or 17% annualized, from June 30, 2022, and an increase of $319 million, or 30%, from $1.07 billion at September 30, 2021. Quarterly average loans for the third quarter of 2022 increased $96 million, or 30% annualized, from the second quarter of 2022 and $330 million, or 32%, from the third quarter of 2021. The allowance for loan losses on September 30, 2022 was $15.5 million, representing an increase of $0.8 million from June 30, 2022. The Allowance for Loan Losses to total loans was 1.11% on September 30, 2022, compared to 1.09% on June 30, 2022. Nonperforming loans to total loans was 0.01% on September 30, 2022 and June 30, 2022. Period end deposits were $1.81 billion on September 30, 2022 compared to $1.83 billion at June 30, 2022 and an increase of $167 million, or 10%, compared to $1.65 billion at September 30, 2021. Quarterly average deposits for the third quarter of 2022 increased $230 million, or 14%, compared to the third quarter of 2021 and decreased $69 million, or 15% annualized, from the second quarter of 2022. Noninterest bearing deposits represented 44.3% of total deposits on September 30, 2022, compared to 45.9% on June 30, 2022 and 53.0% at September 30, 2021. The quarterly average loan to deposit ratio was 74.6% in the third quarter of 2022 compared to 66.8% in the second quarter of 2022 and 64.6% in the third quarter of 2021. Book value per share was $16.58 on September 30, 2022, compared to $18.27 on June 30, 2022, a decrease of $1.69 primarily from an increase in the investment portfolio unrealized loss. Total shareholders' equity totaled $126.5 million on September 30, 2022, a decrease of $12.2 million compared to June 30, 2022. This decrease included an increase in retained earnings of $7.0 million offset by an increase in accumulated other comprehensive loss of $19.6 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, 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 OakesExecutive Vice President and Chief Financial Officer408-200-7390IR@avidbank.com AVIDBANK HOLDINGS, INC.Selected Financial Data (Unaudited)($000, except share and per share amounts) For the nine months ended 2022 2021 September 30, ThirdQuarter SecondQuarter FirstQuarter FourthQuarter ThirdQuarter 2022 2021 INCOME AND PER SHARE HIGHLIGHTS Net income $ 7,045 $ 5,214 $ 4,349 $ 2,534 $ 3,574 $ 16,608 $ 9,730 Basic earnings per share 0.97 0.78 0.73 0.43 0.60 2.48 1.65 Diluted earnings per share 0.95 0.76 0.71 0.42 0.59 2.42 1.61 Book value per share 16.58 18.27 19.20 21.91 21.55 PERFORMANCE MEASURES Return on average assets 1.38 % 1.02 % 0.83 % 0.49 % 0.80 % 1.07 % 0.81 % Return on average equity 19.36 % 16.18 % 12.72 % 7.25 % 10.45 % 16.15 % 9.86 % Taxable equivalent net interest margin 4.07 % 3.62 % 3.05 % 2.90 % 2.98 % 3.57 % 3.22 % Efficiency ratio 48.00 % 53.43 % 63.72 % 58.31 % 61.91 % 54.43 % 65.22 % Average loans to average deposits 74.61 % 66.88 % 62.31 % 61.75 % 64.60 % 67.81 % 71.76 % CAPITAL Tier 1 leverage ratio 9.22 % 8.72 % 6.85 % 6.89 % 7.81 % Common equity tier 1 capital ratio 10.24 % 10.17 % 9.09 % 8.90 % 9.94 % Tier 1 risk-based capital ratio 10.24 % 10.17 % 9.09 % 8.90 % 9.94 % Total risk-based capital ratio 12.31 % 12.25 % 11.28 % 11.11 % 12.44 % Tangible common equity ratio 6.38 % 6.90 % 5.75 % 6.34 % 7.37 % SHARES OUTSTANDING Number of common shares outstanding 7,629,767 7,585,924 6,316,573 6,256,682 6,255,752 Average common shares outstanding - basic 7,274,617 6,687,448 5,935,948 5,904,446 5,898,208 6,639,567 5,885,421 Average common shares outstanding - diluted 7,410,062 6,821,245 6,116,306 6,101,778 6,072,085 6,790,554 6,048,748 ASSET QUALITY Allowance for loan losses (ALLL) to total loans 1.11 % 1.09 % 1.08 % 1.07 % 1.19 % ALLL to nonperforming loans 10057.14 % 9211.32 % 407.43 % 402.40 % 388.88 % Nonperforming assets to total assets 0.01 % 0.01 % 0.15 % 0.15 % 0.18 % Nonperforming loans to total loans 0.01 % 0.01 % 0.27 % 0.27 % 0.31 % Net quarterly charge-offs to total loans 0.01 % 0.00 % 0.00 % 0.25 % 0.00 % AVERAGE BALANCES Loans, net of deferred loan fees $ 1,357,090 $ 1,261,255 $ 1,213,353 $ 1,152,641 $ 1,026,812 $ 1,277,760 $ 1,019,253 Investment securities 505,849 487,535 436,427 287,915 231,526 476,858 200,060 Total assets 2,028,320 2,060,297 2,131,587 2,054,545 1,771,292 2,073,023 1,599,088 Deposits 1,819,008 1,888,494 1,947,208 1,866,704 1,589,384 1,884,434 1,420,386 Shareholders' equity 144,402 129,235 138,668 138,589 135,721 137,456 131,980 AT PERIOD END Loans, net of deferred loan fees $ 1,392,546 $ 1,336,786 $ 1,201,934 $ 1,223,344 $ 1,073,132 Investment securities 468,239 507,826 468,917 380,170 276,670 Total assets 1,983,822 2,010,256 2,110,091 2,162,478 1,828,021 Deposits 1,814,372 1,828,752 1,947,278 1,979,410 1,647,613 Shareholders' equity 126,483 138,611 121,282 137,100 134,797 Avidbank Holdings, Inc.Consolidated Balance Sheets (Unaudited)($000) September 30, June 30, March 31, December 31, September 30, Assets 2022 2022 2022 2021 2021 Cash and due from banks $ 23,766 $ 50,907 $ 47,091 $ 29,616 $ 34,864 Due from Federal Reserve Bank 13,476 35,913 320,336 463,727 378,380 Total cash and cash equivalents 37,242 86,820 367,427 493,343 413,244 Investment securities - available for sale 436,535 477,646 468,917 308,170 276,670 Investment securities - held to maturity 31,704 30,180 - - - Total investment securities 468,239 507,826 468,917 380,170 276,670 Loans, net of deferred loan fees 1,392,546 1,336,786 1,201,934 1,223,344 1,073,132 Allowance for loan losses (15,488 ) (14,646 ) (13,054 ) (13,054 ) (12,775 ) Loans, net of allowance for loan losses 1,377,058 1,322,140 1,188,880 1,210,290 1,060,357 Bank owned life insurance 32,522 32,303 32,087 31,875 31,663 Premises and equipment, net 4,318 4,314 4,331 4,565 4,913 Accrued interest receivable & other assets 64,443 56,853 48,449 42,235 41,174 Total assets $ 1,983,822 $ 2,010,256 $ 2,110,091 $ 2,162,478 $ 1,828,021 Liabilities Non-interest-bearing demand deposits $ 804,383 $ 838,666 $ 952,035 $ 993,156 $ 872,972 Interest bearing transaction accounts 46,852 45,179 47,711 50,674 49,722 Money market and savings accounts 890,836 848,748 812,701 845,718 614,992 Time deposits 72,301 96,159 134,831 89,862 109,927 Total deposits 1,814,372 1,828,752 1,947,278 1,979,410 1,647,613 Subordinated debt, net 21,779 21,754 21,729 21,703 21,671 Other liabilities 21,188 21,139 19,802 24,265 23,940 Total liabilities 1,857,339 1,871,645 1,988,809 2,025,378 1,693,224 Shareholders' equity Common stock/additional paid-in capital 101,679 101,244 72,920 72,799 72,124 Retained earnings 85,409 78,364 73,149 68,801 66,267 Accumulated other comprehensive (loss) (60,605 ) (40,997 ) (24,787 ) (4,500 ) (3,594 ) Total shareholders' equity 126,483 138,611 121,282 137,100 134,797 Total liabilities and shareholders' equity $ 1,983,822 $ 2,010,256 $ 2,110,091 $ 2,162,478 $ 1,828,021 Avidbank Holdings, Inc.Consolidated Statements of Income (Unaudited)($000, except share and per share amounts) Three months ended Year-to-Date September 30, June 30, September 30, September 30, September 30, 2022 2022 2021 2022 2021 Interest and fees on loans $ 18,852 $ 15,639 $ 12,533 $ 48,653 $ 36,896 Interest on investment securities 2,794 2,477 946 7,126 2,453 Other interest income 307 356 156 816 263 Total interest income 21,954 18,472 13,635 56,595 39,612 Deposit interest expense 1,948 657 671 3,244 1,963 Other interest expense 426 300 310 1,026 931 Total interest expense 2,374 957 981 4,270 2,894 Net interest income 19,580 17,515 12,654 52,325 36,718 Provision for loan losses 925 1,592 217 2,517 293 Net interest income after provision for loan losses 18,655 15,923 12,437 49,808 36,425 Service charges and bank fees 725 761 621 2,211 1,695 Income from bank owned life insurance 219 215 103 647 238 Gain/(loss) on sale of assets - - - - 734 Warrant income 12 64 - 162 22 Other income 120 187 273 395 558 Total non-interest income 1,076 1,227 997 3,415 3,247 Compensation and benefit expenses 7,069 7,129 5,860 21,510 18,336 Occupancy and equipment expenses 946 901 1,066 2,741 3,154 Data processing 447 423 413 1,281 1,254 Regulatory assessments 421 509 284 1,595 842 Professional fees 217 192 152 604 483 Other operating expenses 813 859 677 2,609 1,997 Total non-interest expense 9,913 10,013 8,452 30,340 26,066 Income before income taxes 9,818 7,137 4,982 22,883 13,606 Provision for income taxes 2,772 1,923 1,408 6,275 3,876 Net income $ 7,046 $ 5,214 $ 3,574 $ 16,609 $ 9,730 Basic earnings per common share $ 0.97 $ 0.78 $ 0.60 $ 2.48 $ 1.65 Diluted earnings per common share $ 0.95 $ 0.76 $ 0.59 $ 2.43 $ 1.61 Average common shares outstanding 7,274,617 6,687,448 5,898,208 6,639,567 5,885,421 Average common fully diluted shares 7,410,062 6,821,245 6,072,085 6,790,554 6,048,748 Avidbank Holdings, Inc.Average Balance Sheets and Net Interest Margin AnalysisSelected Financial Information (Unaudited)($000) Three months ended September 30, 2022 June 30, 2022 AverageBalance YieldsorRates InterestIncome/Expense AverageBalance YieldsorRates InterestIncome/Expense Assets Interest earning assets: Loans (1) $ 1,358,934 5.50 % $ 18,852 $ 1,263,071 4.97 % $ 15,638 Fed funds sold 52,626 2.31 % 307 191,861 0.74 % 353 Investment securities Taxable investment securities 475,086 2.11 % 2,530 475,039 2.00 % 2,364 Non-taxable investment securities (2) 30,763 4.31 % 334 12,496 4.59 % 143 Total investment securities 505,849 2.25 % 2,864 487,535 2.06 % 2,507 Total interest-earning assets 1,917,409 4.56 % 22,023 1,942,467 3.82 % 18,498 Noninterest-earning assets: Cash and due from banks 34,984 46,334 All other assets (3) 75,927 71,496 Total assets $ 2,028,320 $ 2,060,297 Liabilities and Shareholders' Equity Interest-bearing liabilities: Deposits Demand $ 46,145 0.33 % $ 38 $ 46,242 0.13 % $ 15 Money market and savings 867,113 0.81 % 1,768 835,058 0.21 % 440 Time 85,703 0.66 % 142 121,923 0.66 % 202 Total interest-bearing deposits 998,961 0.77 % 1,948 1,003,223 0.26 % 657 FHLB Advances 22,011 2.27 % 126 - 0.00 % - Subordinated debt 21,766 5.47 % 300 21,518 5.59 % 300 Total interest-bearing liabilities 1,042,738 0.90 % 2,374 1,024,741 0.37 % 957 Noninterest-bearing liabilities: Demand deposits 820,047 885,271 Accrued expenses and other liabilities 21,133 21,050 Shareholders' equity 144,402 129,235 Total liabilities and shareholders' equity $ 2,028,320 $ 2,060,297 Net interest income and margin (4) 4.07 % $ 19,649 3.62 % $ 17,541 Non-taxable equivalent net interest margin 4.05 % 3.62 % Cost of deposits 1,819,008 0.42 % 1,948 1,888,494 0.14 % 657 (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 $513 thousand and $460 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) Allowance for loan losses of $14.7 million and $13.2 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 AnalysisSelected Financial Information (Unaudited)($000) Three months ended September 30, 2022 September 30, 2021 AverageBalance YieldsorRates InterestIncome/Expense AverageBalance YieldsorRates InterestIncome/Expense Assets Interest earning assets: Loans (1) $ 1,358,934 5.50 % $ 18,852 $ 1,028,098 4.84 % $ 12,533 Fed funds sold 52,626 2.31 % 307 425,568 0.15 % 156 Investment securities Taxable investment securities 475,086 2.11 % 2,530 231,526 1.62 % 946 Non-taxable investment securities (2) 30,763 4.31 % 334 - 0.00 % - Total investment securities 505,849 2.25 % 2,864 231,526 1.62 % 946 Total interest-earning assets 1,917,409 4.56 % 22,023 1,685,192 3.21 % 13,635 Noninterest-earning assets: Cash and due from banks 34,984 38,286 All other assets (3) 75,927 47,814 Total assets $ 2,028,320 $ 1,771,292 Liabilities and Shareholders' Equity Interest-bearing liabilities: Deposits Demand $ 46,145 0.33 % $ 38 $ 47,400 0.16 % $ 19 Money market and savings 867,113 0.81 % 1,768 622,844 0.29 % 452 Time 85,703 0.66 % 142 116,806 0.68 % 200 Total interest-bearing deposits 998,961 0.77 % 1,948 787,050 0.34 % 671 FHLB Advances 22,011 2.27 % 126 - 0.00 % - Subordinated debt 21,766 5.47 % 300 21,653 5.68 % 310 Total interest-bearing liabilities 1,042,738 0.90 % 2,374 808,703 0.48 % 981 Noninterest-bearing liabilities: Demand deposits 820,047 802,334 Accrued expenses and other liabilities 21,133 24,534 Shareholders' equity 144,402 135,721 Total liabilities and shareholders' equity $ 2,028,320 $ 1,771,292 Net interest income and margin (4) 4.07 % $ 19,649 2.98 % $ 12,654 Non-taxable equivalent net interest margin 4.05 % 2.98 % Cost of deposits 1,819,008 0.42 % 1,948 1,589,384 0.17 % 671 (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 $513 thousand and $798 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) Allowance for loan losses of $14.7 million and $12.6 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 AnalysisSelected Financial Information (Unaudited)($000) Nine months ended September 30, 2022 September 30, 2021 AverageBalance YieldsorRates InterestIncome/Expense AverageBalance YieldsorRates InterestIncome/Expense Assets Interest earning assets: Loans (1) $ 1,279,579 5.08 % $ 48,653 $ 1,020,605 4.83 % $ 36,896 Fed funds sold 205,199 0.53 % 816 305,379 0.12 % 263 Investment securities Taxable investment securities 462,326 1.95 % 6,749 200,060 1.64 % 2,453 Non-taxable investment securities (2) 14,532 4.39 % 477 - 0.00 % - Total investment securities 476,858 2.03 % 7,226 200,060 1.64 % 2,453 Total interest-earning assets 1,961,636 3.86 % 56,695 1,526,044 3.47 % 39,612 Noninterest-earning assets: Cash and due from banks 41,173 28,671 All other assets (3) 70,214 44,373 Total assets $ 2,073,023 $ 1,599,088 Liabilities and Shareholders' Equity Interest-bearing liabilities: Deposits Demand $ 47,184 0.20 % $ 69 $ 34,052 0.18 % $ 46 Money market and savings 838,354 0.42 % 2,630 529,575 0.30 % 1,204 Time 109,375 0.67 % 545 127,579 0.75 % 713 Total interest-bearing deposits 994,913 0.44 % 3,244 691,206 0.38 % 1,963 FHLB Advances 7,418 2.25 % 125 - 0.00 % - Subordinated debt 21,666 5.56 % 901 21,618 5.76 % 931 Total interest-bearing liabilities 1,023,997 0.56 % 4,270 712,824 0.54 % 2,894 Noninterest-bearing liabilities: Demand deposits 889,521 729,180 Accrued expenses and other liabilities 22,049 25,104 Shareholders' equity 137,456 131,980 Total liabilities and shareholders' equity $ 2,073,023 $ 1,599,088 Net interest income and margin (4) 3.57 % $ 52,425 3.22 % $ 36,718 Non-taxable equivalent net interest margin 3.57 % 3.22 % Cost of deposits 1,884,434 0.23 % 3,244 1,420,386 0.18 % 1,963 (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 $1.6 and $1.9 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) Allowance for loan losses of $13.7 million and $12.6 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) Sept. 30,2022 June 30,2022 March 31,2022 Dec. 31,2021 Sept. 30,2021 Current QuarterChange Year over YearChange Commercial loans $ 566,105 $ 558,908 $ 481,522 $ 517,747 $ 415,986 $ 7,197 $ 150,119 Real Estate Commercial real estate Multi-family 159,384 165,818 141,954 139,646 128,672 (6,434 ) 30,712 CRE Owner Occupied 131,649 108,045 109,502 99,728 89,832 23,604 41,817 Non-Owner Occupied 288,478 280,397 258,365 258,507 239,272 8,081 49,206 Construction and land 234,157 209,941 195,388 190,887 182,556 24,216 51,601 Residential 11,991 12,830 13,726 14,484 14,800 (839 ) (2,809 ) Total real estate loans 825,659 777,031 718,935 703,252 655,132 48,628 170,527 Other loans 782 847 1,477 2,345 2,014 (65 ) (1,232 ) Total loans $ 1,392,546 $ 1,336,786 $ 1,201,934 $ 1,223,344 $ 1,073,132 $ 55,760 $ 319,414 Avidbank Holdings, Inc.Credit Trends (Unaudited)($000) 9/30/22 6/30/22 3/31/22 12/31/21 9/30/21 Allowance for Loan Losses Balance, beginning of quarter $ 14,646 $ 13,054 $ 13,054 $ 12,775 $ 12,558 Provision for loan losses, quarterly 925 1,592 - 3,279 217 Charge-offs, quarterly (83 ) - - (3,000 ) - Recoveries, quarterly - - - - - Balance, end of quarter $ 15,488 $ 14,646 $ 13,054 $ 13,054 $ 12,775 Nonperforming Assets Loans accounted for on a non-accrual basis $ 154 $ 159 $ 3,204 $ 3,244 $ 3,285 Loans with principal or interest contractually past due 90 days or more and still accruing interest - - - - - Nonperforming loans 154 159 3,204 3,244 3,285 Other real estate owned - - - - - Nonperforming assets $ 154 $ 159 $ 3,204 $ 3,244 $ 3,285 Loans restructured and in compliance with modified terms - - - - - Nonperforming assets & restructured loans $ 154 $ 159 $ 3,204 $ 3,244 $ 3,285 Nonperforming Loans by Type: Commercial $ 154 $ 159 $ 441 $ 448 $ 456 Commercial Real Estate Loans - - 2,763 2,796 2,829 Total Nonperforming loans $ 154 $ 159 $ 3,204 $ 3,244 $ 3,285 Asset Quality Ratios Allowance for loan losses (ALLL) to total loans 1.11 % 1.09 % 1.08 % 1.07 % 1.19 % ALLL to nonperforming loans 10057.14 % 9211.32 % 407.43 % 402.40 % 388.89 % Nonperforming assets to total assets 0.01 % 0.01 % 0.15 % 0.00 % 0.18 % Nonperforming loans to total loans 0.01 % 0.01 % 0.27 % 0.27 % 0.31 % Net quarterly charge-offs to total loans 0.01 % 0.00 % 0.00 % 0.25 % 0.00 % SOURCE: Avidbank Holdings, Inc. View source version on accesswire.com: https://www.accesswire.com/720969/Avidbank-Holdings-Inc-Announces-Net-Income-for-the-Third-Quarter-of-2022
SAN JOSE, CA / ACCESSWIRE / October 19, 2022 / Avidbank Holdings, Inc. (OTC PINK:AVBH) announced income for the third quarter of 2022 of $7.0 million, or $0.95 per diluted share, compared to $5.2 million, or $0.76 per diluted share, for the second quarter of 2022 and $3.6 million, or $0.59 per diluted share, for the third quarter of 2021. Third Quarter 2022 Financial Highlights Diluted earnings per share of $0.95, an increase of $0.19, or 100% annualized, compared to the second quarter of 2022, and increased $0.36, or 61%, compared to the third quarter of 2021. Return on average assets improved to 1.38%, compared to 1.02% in the second quarter of 2022 and 0.80% in the third quarter of 2021. Return on average equity improved to 19.36%, compared to 16.18% in the second quarter of 2022 and 10.45% in the third quarter of 2021. Taxable equivalent net interest margin increased to 4.07% in the third quarter of 2022, compared to 3.62% in the second quarter of 2022 and 2.98% in the third quarter of 2021. Efficiency ratio improved to 48.00%, compared to 53.43% in the second quarter of 2022 and 61.91% in the third quarter of 2021. Loans increased $56 million, or 17% annualized, from June 30, 2022 and increased $319 million, or 30%, from September 30, 2021. Annualized net charge-offs to average loans totaled 0.02% and 0.01% for the third quarter and year-to-date 2022, respectively. Non-performing assets to total assets were 0.01% on September 30, 2022, remaining flat from June 30, 2022 and decreased from 0.18% on September 30, 2021. "Our strong performance for 2022 continued in the third quarter with another quarter of solid loan growth along with expanding profitability metrics," said Mark Mordell, Chairman and Chief Executive Officer. "Although overall deposit balances were down slightly in the third quarter, our growth in new deposits from new client acquisition was solid. Overall balances were down slightly in the third quarter as the strong growth in new deposits was offset by another quarter of elevated decreases in existing client balances due to the dynamic characteristics of many of our clients. We continue to be optimistic about the remainder of 2022 as our pipeline for new business is very encouraging along with the additional benefits we will see from further increases in the fed funds rate," added Mr. Mordell. Income Statement Taxable equivalent net interest income totaled $19.6 million for the third quarter of 2022, an increase of $2.1 million, or 48% annualized, from the second quarter of 2022, and an increase of $7.0 million, or 55%, from the third quarter of 2021. The net interest margin was 4.07% in the third quarter of 2022, an increase of 0.49% compared to the second quarter of 2022, and an increase of 1.09% compared to the third 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 and investment securities. The yield on loans in the third quarter of 2022 was 5.50%, an increase of 54 basis points from the second quarter of 2022 and an increase of 66 basis points from the third quarter of 2021. 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 third quarter of 2022 was 0.42%, an increase of 28 basis points from the second quarter of 2022 and an increase of 25 basis points from the third quarter of 2021. The cost of interest-bearing deposits in the third quarter of 2022 was 0.77% compared to 0.26% in the second quarter of 2022 and 0.34% in the third quarter of 2021. In the third quarter of 2022, we recorded a provision for loan losses of $0.9 million, compared to $1.6 million in the second quarter of 2022 and $0.2 million in the third quarter of 2021. The third quarter provision was primarily attributable to the $56 million increase in loan balances. Non-interest income was $1.1 million in the third quarter of 2022 compared to $1.2 million in the second quarter of 2022 and $1.0 million in the third quarter of 2021. Service charge income totaled $643,000 in the third quarter of 2022, a decrease of $38,000, or 22% annualized, compared to the second quarter of 2022 and an increase of $91,000, or 16% from the third quarter of 2021. Non-interest expense totaled $9.9 million in the third quarter of 2022 compared to $10.0 million in the second quarter of 2022 and $8.5 million in the third quarter of 2021. 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 September 30, 2022 totaled 134 compared to 130 on June 30, 2022. Balance Sheet Total assets were $1.98 billion as of September 30, 2022, compared to $2.01 billion on June 30, 2022 and $1.83 billion at September 30, 2021. Cash and cash equivalents were $37 million on September 30, 2022, compared to $87 million on June 30, 2022 and $413 million on September 30, 2021. Period end loans on September 30, 2022 totaled $1.39 billion, which represented an increase of $56 million, or 17% annualized, from June 30, 2022, and an increase of $319 million, or 30%, from $1.07 billion at September 30, 2021. Quarterly average loans for the third quarter of 2022 increased $96 million, or 30% annualized, from the second quarter of 2022 and $330 million, or 32%, from the third quarter of 2021. The allowance for loan losses on September 30, 2022 was $15.5 million, representing an increase of $0.8 million from June 30, 2022. The Allowance for Loan Losses to total loans was 1.11% on September 30, 2022, compared to 1.09% on June 30, 2022. Nonperforming loans to total loans was 0.01% on September 30, 2022 and June 30, 2022. Period end deposits were $1.81 billion on September 30, 2022 compared to $1.83 billion at June 30, 2022 and an increase of $167 million, or 10%, compared to $1.65 billion at September 30, 2021. Quarterly average deposits for the third quarter of 2022 increased $230 million, or 14%, compared to the third quarter of 2021 and decreased $69 million, or 15% annualized, from the second quarter of 2022. Noninterest bearing deposits represented 44.3% of total deposits on September 30, 2022, compared to 45.9% on June 30, 2022 and 53.0% at September 30, 2021. The quarterly average loan to deposit ratio was 74.6% in the third quarter of 2022 compared to 66.8% in the second quarter of 2022 and 64.6% in the third quarter of 2021. Book value per share was $16.58 on September 30, 2022, compared to $18.27 on June 30, 2022, a decrease of $1.69 primarily from an increase in the investment portfolio unrealized loss. Total shareholders' equity totaled $126.5 million on September 30, 2022, a decrease of $12.2 million compared to June 30, 2022. This decrease included an increase in retained earnings of $7.0 million offset by an increase in accumulated other comprehensive loss of $19.6 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, 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 OakesExecutive Vice President and Chief Financial Officer408-200-7390IR@avidbank.com AVIDBANK HOLDINGS, INC.Selected Financial Data (Unaudited)($000, except share and per share amounts) For the nine months ended 2022 2021 September 30, ThirdQuarter SecondQuarter FirstQuarter FourthQuarter ThirdQuarter 2022 2021 INCOME AND PER SHARE HIGHLIGHTS Net income $ 7,045 $ 5,214 $ 4,349 $ 2,534 $ 3,574 $ 16,608 $ 9,730 Basic earnings per share 0.97 0.78 0.73 0.43 0.60 2.48 1.65 Diluted earnings per share 0.95 0.76 0.71 0.42 0.59 2.42 1.61 Book value per share 16.58 18.27 19.20 21.91 21.55 PERFORMANCE MEASURES Return on average assets 1.38 % 1.02 % 0.83 % 0.49 % 0.80 % 1.07 % 0.81 % Return on average equity 19.36 % 16.18 % 12.72 % 7.25 % 10.45 % 16.15 % 9.86 % Taxable equivalent net interest margin 4.07 % 3.62 % 3.05 % 2.90 % 2.98 % 3.57 % 3.22 % Efficiency ratio 48.00 % 53.43 % 63.72 % 58.31 % 61.91 % 54.43 % 65.22 % Average loans to average deposits 74.61 % 66.88 % 62.31 % 61.75 % 64.60 % 67.81 % 71.76 % CAPITAL Tier 1 leverage ratio 9.22 % 8.72 % 6.85 % 6.89 % 7.81 % Common equity tier 1 capital ratio 10.24 % 10.17 % 9.09 % 8.90 % 9.94 % Tier 1 risk-based capital ratio 10.24 % 10.17 % 9.09 % 8.90 % 9.94 % Total risk-based capital ratio 12.31 % 12.25 % 11.28 % 11.11 % 12.44 % Tangible common equity ratio 6.38 % 6.90 % 5.75 % 6.34 % 7.37 % SHARES OUTSTANDING Number of common shares outstanding 7,629,767 7,585,924 6,316,573 6,256,682 6,255,752 Average common shares outstanding - basic 7,274,617 6,687,448 5,935,948 5,904,446 5,898,208 6,639,567 5,885,421 Average common shares outstanding - diluted 7,410,062 6,821,245 6,116,306 6,101,778 6,072,085 6,790,554 6,048,748 ASSET QUALITY Allowance for loan losses (ALLL) to total loans 1.11 % 1.09 % 1.08 % 1.07 % 1.19 % ALLL to nonperforming loans 10057.14 % 9211.32 % 407.43 % 402.40 % 388.88 % Nonperforming assets to total assets 0.01 % 0.01 % 0.15 % 0.15 % 0.18 % Nonperforming loans to total loans 0.01 % 0.01 % 0.27 % 0.27 % 0.31 % Net quarterly charge-offs to total loans 0.01 % 0.00 % 0.00 % 0.25 % 0.00 % AVERAGE BALANCES Loans, net of deferred loan fees $ 1,357,090 $ 1,261,255 $ 1,213,353 $ 1,152,641 $ 1,026,812 $ 1,277,760 $ 1,019,253 Investment securities 505,849 487,535 436,427 287,915 231,526 476,858 200,060 Total assets 2,028,320 2,060,297 2,131,587 2,054,545 1,771,292 2,073,023 1,599,088 Deposits 1,819,008 1,888,494 1,947,208 1,866,704 1,589,384 1,884,434 1,420,386 Shareholders' equity 144,402 129,235 138,668 138,589 135,721 137,456 131,980 AT PERIOD END Loans, net of deferred loan fees $ 1,392,546 $ 1,336,786 $ 1,201,934 $ 1,223,344 $ 1,073,132 Investment securities 468,239 507,826 468,917 380,170 276,670 Total assets 1,983,822 2,010,256 2,110,091 2,162,478 1,828,021 Deposits 1,814,372 1,828,752 1,947,278 1,979,410 1,647,613 Shareholders' equity 126,483 138,611 121,282 137,100 134,797 Avidbank Holdings, Inc.Consolidated Balance Sheets (Unaudited)($000) September 30, June 30, March 31, December 31, September 30, Assets 2022 2022 2022 2021 2021 Cash and due from banks $ 23,766 $ 50,907 $ 47,091 $ 29,616 $ 34,864 Due from Federal Reserve Bank 13,476 35,913 320,336 463,727 378,380 Total cash and cash equivalents 37,242 86,820 367,427 493,343 413,244 Investment securities - available for sale 436,535 477,646 468,917 308,170 276,670 Investment securities - held to maturity 31,704 30,180 - - - Total investment securities 468,239 507,826 468,917 380,170 276,670 Loans, net of deferred loan fees 1,392,546 1,336,786 1,201,934 1,223,344 1,073,132 Allowance for loan losses (15,488 ) (14,646 ) (13,054 ) (13,054 ) (12,775 ) Loans, net of allowance for loan losses 1,377,058 1,322,140 1,188,880 1,210,290 1,060,357 Bank owned life insurance 32,522 32,303 32,087 31,875 31,663 Premises and equipment, net 4,318 4,314 4,331 4,565 4,913 Accrued interest receivable & other assets 64,443 56,853 48,449 42,235 41,174 Total assets $ 1,983,822 $ 2,010,256 $ 2,110,091 $ 2,162,478 $ 1,828,021 Liabilities Non-interest-bearing demand deposits $ 804,383 $ 838,666 $ 952,035 $ 993,156 $ 872,972 Interest bearing transaction accounts 46,852 45,179 47,711 50,674 49,722 Money market and savings accounts 890,836 848,748 812,701 845,718 614,992 Time deposits 72,301 96,159 134,831 89,862 109,927 Total deposits 1,814,372 1,828,752 1,947,278 1,979,410 1,647,613 Subordinated debt, net 21,779 21,754 21,729 21,703 21,671 Other liabilities 21,188 21,139 19,802 24,265 23,940 Total liabilities 1,857,339 1,871,645 1,988,809 2,025,378 1,693,224 Shareholders' equity Common stock/additional paid-in capital 101,679 101,244 72,920 72,799 72,124 Retained earnings 85,409 78,364 73,149 68,801 66,267 Accumulated other comprehensive (loss) (60,605 ) (40,997 ) (24,787 ) (4,500 ) (3,594 ) Total shareholders' equity 126,483 138,611 121,282 137,100 134,797 Total liabilities and shareholders' equity $ 1,983,822 $ 2,010,256 $ 2,110,091 $ 2,162,478 $ 1,828,021 Avidbank Holdings, Inc.Consolidated Statements of Income (Unaudited)($000, except share and per share amounts) Three months ended Year-to-Date September 30, June 30, September 30, September 30, September 30, 2022 2022 2021 2022 2021 Interest and fees on loans $ 18,852 $ 15,639 $ 12,533 $ 48,653 $ 36,896 Interest on investment securities 2,794 2,477 946 7,126 2,453 Other interest income 307 356 156 816 263 Total interest income 21,954 18,472 13,635 56,595 39,612 Deposit interest expense 1,948 657 671 3,244 1,963 Other interest expense 426 300 310 1,026 931 Total interest expense 2,374 957 981 4,270 2,894 Net interest income 19,580 17,515 12,654 52,325 36,718 Provision for loan losses 925 1,592 217 2,517 293 Net interest income after provision for loan losses 18,655 15,923 12,437 49,808 36,425 Service charges and bank fees 725 761 621 2,211 1,695 Income from bank owned life insurance 219 215 103 647 238 Gain/(loss) on sale of assets - - - - 734 Warrant income 12 64 - 162 22 Other income 120 187 273 395 558 Total non-interest income 1,076 1,227 997 3,415 3,247 Compensation and benefit expenses 7,069 7,129 5,860 21,510 18,336 Occupancy and equipment expenses 946 901 1,066 2,741 3,154 Data processing 447 423 413 1,281 1,254 Regulatory assessments 421 509 284 1,595 842 Professional fees 217 192 152 604 483 Other operating expenses 813 859 677 2,609 1,997 Total non-interest expense 9,913 10,013 8,452 30,340 26,066 Income before income taxes 9,818 7,137 4,982 22,883 13,606 Provision for income taxes 2,772 1,923 1,408 6,275 3,876 Net income $ 7,046 $ 5,214 $ 3,574 $ 16,609 $ 9,730 Basic earnings per common share $ 0.97 $ 0.78 $ 0.60 $ 2.48 $ 1.65 Diluted earnings per common share $ 0.95 $ 0.76 $ 0.59 $ 2.43 $ 1.61 Average common shares outstanding 7,274,617 6,687,448 5,898,208 6,639,567 5,885,421 Average common fully diluted shares 7,410,062 6,821,245 6,072,085 6,790,554 6,048,748 Avidbank Holdings, Inc.Average Balance Sheets and Net Interest Margin AnalysisSelected Financial Information (Unaudited)($000) Three months ended September 30, 2022 June 30, 2022 AverageBalance YieldsorRates InterestIncome/Expense AverageBalance YieldsorRates InterestIncome/Expense Assets Interest earning assets: Loans (1) $ 1,358,934 5.50 % $ 18,852 $ 1,263,071 4.97 % $ 15,638 Fed funds sold 52,626 2.31 % 307 191,861 0.74 % 353 Investment securities Taxable investment securities 475,086 2.11 % 2,530 475,039 2.00 % 2,364 Non-taxable investment securities (2) 30,763 4.31 % 334 12,496 4.59 % 143 Total investment securities 505,849 2.25 % 2,864 487,535 2.06 % 2,507 Total interest-earning assets 1,917,409 4.56 % 22,023 1,942,467 3.82 % 18,498 Noninterest-earning assets: Cash and due from banks 34,984 46,334 All other assets (3) 75,927 71,496 Total assets $ 2,028,320 $ 2,060,297 Liabilities and Shareholders' Equity Interest-bearing liabilities: Deposits Demand $ 46,145 0.33 % $ 38 $ 46,242 0.13 % $ 15 Money market and savings 867,113 0.81 % 1,768 835,058 0.21 % 440 Time 85,703 0.66 % 142 121,923 0.66 % 202 Total interest-bearing deposits 998,961 0.77 % 1,948 1,003,223 0.26 % 657 FHLB Advances 22,011 2.27 % 126 - 0.00 % - Subordinated debt 21,766 5.47 % 300 21,518 5.59 % 300 Total interest-bearing liabilities 1,042,738 0.90 % 2,374 1,024,741 0.37 % 957 Noninterest-bearing liabilities: Demand deposits 820,047 885,271 Accrued expenses and other liabilities 21,133 21,050 Shareholders' equity 144,402 129,235 Total liabilities and shareholders' equity $ 2,028,320 $ 2,060,297 Net interest income and margin (4) 4.07 % $ 19,649 3.62 % $ 17,541 Non-taxable equivalent net interest margin 4.05 % 3.62 % Cost of deposits 1,819,008 0.42 % 1,948 1,888,494 0.14 % 657 (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 $513 thousand and $460 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) Allowance for loan losses of $14.7 million and $13.2 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 AnalysisSelected Financial Information (Unaudited)($000) Three months ended September 30, 2022 September 30, 2021 AverageBalance YieldsorRates InterestIncome/Expense AverageBalance YieldsorRates InterestIncome/Expense Assets Interest earning assets: Loans (1) $ 1,358,934 5.50 % $ 18,852 $ 1,028,098 4.84 % $ 12,533 Fed funds sold 52,626 2.31 % 307 425,568 0.15 % 156 Investment securities Taxable investment securities 475,086 2.11 % 2,530 231,526 1.62 % 946 Non-taxable investment securities (2) 30,763 4.31 % 334 - 0.00 % - Total investment securities 505,849 2.25 % 2,864 231,526 1.62 % 946 Total interest-earning assets 1,917,409 4.56 % 22,023 1,685,192 3.21 % 13,635 Noninterest-earning assets: Cash and due from banks 34,984 38,286 All other assets (3) 75,927 47,814 Total assets $ 2,028,320 $ 1,771,292 Liabilities and Shareholders' Equity Interest-bearing liabilities: Deposits Demand $ 46,145 0.33 % $ 38 $ 47,400 0.16 % $ 19 Money market and savings 867,113 0.81 % 1,768 622,844 0.29 % 452 Time 85,703 0.66 % 142 116,806 0.68 % 200 Total interest-bearing deposits 998,961 0.77 % 1,948 787,050 0.34 % 671 FHLB Advances 22,011 2.27 % 126 - 0.00 % - Subordinated debt 21,766 5.47 % 300 21,653 5.68 % 310 Total interest-bearing liabilities 1,042,738 0.90 % 2,374 808,703 0.48 % 981 Noninterest-bearing liabilities: Demand deposits 820,047 802,334 Accrued expenses and other liabilities 21,133 24,534 Shareholders' equity 144,402 135,721 Total liabilities and shareholders' equity $ 2,028,320 $ 1,771,292 Net interest income and margin (4) 4.07 % $ 19,649 2.98 % $ 12,654 Non-taxable equivalent net interest margin 4.05 % 2.98 % Cost of deposits 1,819,008 0.42 % 1,948 1,589,384 0.17 % 671 (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 $513 thousand and $798 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) Allowance for loan losses of $14.7 million and $12.6 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 AnalysisSelected Financial Information (Unaudited)($000) Nine months ended September 30, 2022 September 30, 2021 AverageBalance YieldsorRates InterestIncome/Expense AverageBalance YieldsorRates InterestIncome/Expense Assets Interest earning assets: Loans (1) $ 1,279,579 5.08 % $ 48,653 $ 1,020,605 4.83 % $ 36,896 Fed funds sold 205,199 0.53 % 816 305,379 0.12 % 263 Investment securities Taxable investment securities 462,326 1.95 % 6,749 200,060 1.64 % 2,453 Non-taxable investment securities (2) 14,532 4.39 % 477 - 0.00 % - Total investment securities 476,858 2.03 % 7,226 200,060 1.64 % 2,453 Total interest-earning assets 1,961,636 3.86 % 56,695 1,526,044 3.47 % 39,612 Noninterest-earning assets: Cash and due from banks 41,173 28,671 All other assets (3) 70,214 44,373 Total assets $ 2,073,023 $ 1,599,088 Liabilities and Shareholders' Equity Interest-bearing liabilities: Deposits Demand $ 47,184 0.20 % $ 69 $ 34,052 0.18 % $ 46 Money market and savings 838,354 0.42 % 2,630 529,575 0.30 % 1,204 Time 109,375 0.67 % 545 127,579 0.75 % 713 Total interest-bearing deposits 994,913 0.44 % 3,244 691,206 0.38 % 1,963 FHLB Advances 7,418 2.25 % 125 - 0.00 % - Subordinated debt 21,666 5.56 % 901 21,618 5.76 % 931 Total interest-bearing liabilities 1,023,997 0.56 % 4,270 712,824 0.54 % 2,894 Noninterest-bearing liabilities: Demand deposits 889,521 729,180 Accrued expenses and other liabilities 22,049 25,104 Shareholders' equity 137,456 131,980 Total liabilities and shareholders' equity $ 2,073,023 $ 1,599,088 Net interest income and margin (4) 3.57 % $ 52,425 3.22 % $ 36,718 Non-taxable equivalent net interest margin 3.57 % 3.22 % Cost of deposits 1,884,434 0.23 % 3,244 1,420,386 0.18 % 1,963 (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 $1.6 and $1.9 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) Allowance for loan losses of $13.7 million and $12.6 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) Sept. 30,2022 June 30,2022 March 31,2022 Dec. 31,2021 Sept. 30,2021 Current QuarterChange Year over YearChange Commercial loans $ 566,105 $ 558,908 $ 481,522 $ 517,747 $ 415,986 $ 7,197 $ 150,119 Real Estate Commercial real estate Multi-family 159,384 165,818 141,954 139,646 128,672 (6,434 ) 30,712 CRE Owner Occupied 131,649 108,045 109,502 99,728 89,832 23,604 41,817 Non-Owner Occupied 288,478 280,397 258,365 258,507 239,272 8,081 49,206 Construction and land 234,157 209,941 195,388 190,887 182,556 24,216 51,601 Residential 11,991 12,830 13,726 14,484 14,800 (839 ) (2,809 ) Total real estate loans 825,659 777,031 718,935 703,252 655,132 48,628 170,527 Other loans 782 847 1,477 2,345 2,014 (65 ) (1,232 ) Total loans $ 1,392,546 $ 1,336,786 $ 1,201,934 $ 1,223,344 $ 1,073,132 $ 55,760 $ 319,414 Avidbank Holdings, Inc.Credit Trends (Unaudited)($000) 9/30/22 6/30/22 3/31/22 12/31/21 9/30/21 Allowance for Loan Losses Balance, beginning of quarter $ 14,646 $ 13,054 $ 13,054 $ 12,775 $ 12,558 Provision for loan losses, quarterly 925 1,592 - 3,279 217 Charge-offs, quarterly (83 ) - - (3,000 ) - Recoveries, quarterly - - - - - Balance, end of quarter $ 15,488 $ 14,646 $ 13,054 $ 13,054 $ 12,775 Nonperforming Assets Loans accounted for on a non-accrual basis $ 154 $ 159 $ 3,204 $ 3,244 $ 3,285 Loans with principal or interest contractually past due 90 days or more and still accruing interest - - - - - Nonperforming loans 154 159 3,204 3,244 3,285 Other real estate owned - - - - - Nonperforming assets $ 154 $ 159 $ 3,204 $ 3,244 $ 3,285 Loans restructured and in compliance with modified terms - - - - - Nonperforming assets & restructured loans $ 154 $ 159 $ 3,204 $ 3,244 $ 3,285 Nonperforming Loans by Type: Commercial $ 154 $ 159 $ 441 $ 448 $ 456 Commercial Real Estate Loans - - 2,763 2,796 2,829 Total Nonperforming loans $ 154 $ 159 $ 3,204 $ 3,244 $ 3,285 Asset Quality Ratios Allowance for loan losses (ALLL) to total loans 1.11 % 1.09 % 1.08 % 1.07 % 1.19 % ALLL to nonperforming loans 10057.14 % 9211.32 % 407.43 % 402.40 % 388.89 % Nonperforming assets to total assets 0.01 % 0.01 % 0.15 % 0.00 % 0.18 % Nonperforming loans to total loans 0.01 % 0.01 % 0.27 % 0.27 % 0.31 % Net quarterly charge-offs to total loans 0.01 % 0.00 % 0.00 % 0.25 % 0.00 % SOURCE: Avidbank Holdings, Inc. 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