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 of $5.4 Million for the Third Quarter of 2023 By: ACCESSWIRE October 24, 2023 at 16:30 PM EDT SAN JOSE, CA / ACCESSWIRE / October 24, 2023 / Avidbank Holdings, Inc. (OTC Pink:AVBH) announced net income for the third quarter of 2023 of $5.4 million, or $0.72 per diluted share, compared to $4.7 million, or $0.63 per diluted share, for the second quarter of 2023 and $7.0 million, or $0.95 per diluted share, for the third quarter of 2022. Third Quarter 2023 Highlights Loans increased $19.6 million, or 5% annualized, from June 30, 2023, and $115.7 million, or 7%, from December 31, 2022. Average deposits increased $53.4 million, or 13% annualized, from the second quarter of 2023. Return on average assets improved to 0.99% from 0.87% in the second quarter of 2023. Uninsured deposits represented 35% of total deposits on September 30, 2023, compared to 40% on June 30, 2023, and 85% at December 31, 2022. Net available borrowing capacity totaled approximately $1.4 billion as of September 30, 2023. Annualized net charge-offs to average loans totaled 0.0% for the third quarter of 2023, compared to 0.03% for the second quarter of 2023. Nonperforming assets to total assets was unchanged at 0.70% on September 30, 2023 compared to June 30, 2023. "Despite the continued challenges in today's banking environment, we are pleased with our performance and outlook as we look toward 2024. Loan demand has moderated compared to historical average growth, but there remain excellent opportunities to add quality relationships. We continue to add new deposit accounts regularly after losing a very limited number of relationships since March of this year. Based on our commercial banking focus, it is not uncommon to have sizeable daily and seasonal fluctuations in our deposit balances, so we prefer to focus on growth in average balances. For the third quarter, average deposit balances increased $53.4 million compared to the second quarter. Our deposit pipeline remains robust in our venture lending and corporate banking divisions," said Mark Mordell, Chairman and Chief Executive Officer. "Credit quality remains solid, including the potential resolution of the $14.1 million nonperforming construction loan. We foreclosed on the loan during the third quarter and are currently in contract to sell. We expect to close on the sale of the property in the fourth quarter," added Mr. Mordell. Income Statement Taxable equivalent net interest income(1) totaled $17.3 million for the third quarter of 2023, a decrease of $177,000, or 1%, from the second quarter of 2023, and a decrease of $2.3 million, or 12%, from the third quarter of 2022. The taxable equivalent net interest margin was 3.34% in the third quarter of 2023, a decrease of 5 basis points compared to the second quarter of 2023, and a decrease of 73 basis points compared to the third quarter of 2022. The decrease in taxable equivalent net interest income and net interest margin compared to the prior quarter was primarily driven by an overall increase in deposit costs. The decrease in taxable equivalent net interest margin compared to the same period one year ago was primarily driven by an increase in high-cost short-term borrowings replacing lower-cost deposits, interest bearing deposits replacing no-cost demand deposits, and an overall increase in deposit costs, partially offset by an increase in loan yields and average loan balances. The yield on loans in the third quarter of 2023 was 7.04 %, an increase of 30 basis points from the second quarter of 2023 and an increase of 154 basis points from the third quarter of 2022. The overall increase in loan yields compared to prior periods was primarily due to increases in the Prime rate. The cost of deposits in the third quarter of 2023 was 2.52%, an increase of 55 basis points from the second quarter of 2023 and an increase of 210 basis points from the third quarter of 2022. The cost of interest-bearing deposits in the third quarter of 2023 was 3.66% compared to 3.18% in the second quarter of 2023 and 0.77% in the third quarter of 2022. The provision for credit losses was $120,000 in the third quarter of 2023, compared to $1.5 million in the second quarter of 2023 and $925,000 in the third quarter of 2022. The provision decreased in the current quarter primarily due to lower loan growth of $19.6 million in the third quarter of 2023, compared to $85.8 million in the second quarter of 2023. The provision for credit losses in the third quarter of 2023 included a $164,000 provision for loan losses offset by a $(44,000) provision for unfunded commitments. Noninterest income was $1.2 million in the third quarter of 2023 compared to $1.1 million in the second quarter of 2023 and $1.1 million in the third quarter of 2022. The third quarter of 2023 included a $105,000 increase in other investment income. Noninterest expense totaled $10.9 million for the third quarter of 2023, an increase of $484,000 compared to the second quarter of 2023. Salaries and benefits expense for the third quarter of 2023 included an increase from the hiring of the treasury management team on August 3rd. Salaries and benefits expense for the previous quarter included a reduction in incentive compensation expense. There were 147 full-time equivalent employees on September 30, 2023, compared to 145 on June 30, 2023. Balance Sheet Total assets were $2.20 billion as of September 30, 2023, compared to $2.21 billion on June 30, 2023, and $1.98 billion at September 30, 2022. Cash and cash equivalents were $80.0 million on September 30, 2023, compared to $104.2 million on June 30, 2023, and $37.2 million on September 30, 2022. Period end loans on September 30, 2023, totaled $1.67 billion, which represented an increase of $19.6 million, or 5% annualized, from June 30, 2023, and an increase of $277.4 million, or 20%, from September 30, 2022. The growth in loans during the third quarter of 2023 included an increase of $14.9 million in commercial loans and $5.2 million in commercial real estate loans, partially offset by a decrease of $1.4 million in construction loans. Quarterly average loans for the third quarter of 2023 increased $50.7 million, or 3%, from the second quarter of 2023 and $283.0 million, or 21%, from the third quarter of 2022. The allowance for credit losses on loans was $17.8 million on September 30, 2023, representing an increase of $164,000 from June 30, 2023. The allowance for credit losses on loans to total loans was 1.07% on September 30, 2023, compared to 1.07% on June 30, 2023. Nonperforming loans to total loans was 0.08% on September 30, 2023, compared to 0.94% on June 30, 2023. The decrease was due to the foreclosure of one nonperforming loan totaling $14.1 million. Investment securities were $345.6 million as of September 30, 2023, compared to $371.8 million on June 30, 2023, and $468.2 million at September 30, 2022. In the first quarter of 2023, we sold $57 million of securities for a loss of $815,000. This included the sale of $25 million in available for sale mortgage-backed securities and the sale of all $32 million in held to maturity municipal securities. Period end deposits were $1.70 billion on September 30, 2023, a decrease of $40.5 million, or 2%, from June 30, 2023. This included a $2.3 million, or 2% annualized, increase in Venture Lending deposits. Deposits in our Venture Lending division totaled $608.3 million at September 30, 2023, and included $396.9 million in reciprocal deposits. Short-term borrowings on September 30, 2023, totaled $300.0 million, an increase of $36.0 million, or 14%, compared to June 30, 2023. The short-term borrowings on September 30, 2023 included $35.0 million in FHLB borrowings and $224.0 million in borrowings from the Bank Term Funding Program (BTFP). The average rate on the BTFP on September 30, 2023 was 4.64%. Book value per share was $18.83 on September 30, 2023, a decrease of $0.72 compared to $19.55 on June 30, 2023. Total shareholders' equity totaled $145.6 million on September 30, 2023, a decrease of $5.2 million compared to June 30, 2023. This included an increase in retained earnings of $5.4 million offset by an increase in accumulated other comprehensive loss of $11.2 million. (1) A Non-GAAP performance measure. We provide detailed reconciliations in the "Non-GAAP Performance and Financial Measures Reconciliation" table. About Avidbank Avidbank Holdings, Inc. (OTC Pink: AVBH), headquartered in San Jose, California, offers innovative financial solutions and services. We specialize in commercial & industrial lending, venture lending, structured finance, asset-based lending, sponsor finance, fund finance, and real estate construction and commercial real estate lending. Avidbank provides a different approach to banking. We do what we say. Forward-Looking Statement: This news release contains statements that are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts, and generally include the words "believes," "plans," "intends," "expects," "opportunity," "anticipates," "targeted," "continue," "remain," "will," "should," "may," or words of similar meaning. While we believe that our forward-looking statements and the assumptions underlying them are reasonably based, such statements and assumptions, are, by their nature subject to risks and uncertainties, and thus could later prove to be inaccurate or incorrect. Accordingly, actual results could materially differ from forward-looking statements for a variety of reasons, including, but not limited to local, regional, national and international economic conditions and events and the impact they may have on us and our customers, and in particular in our market areas; ability to attract deposits and other sources of liquidity; oversupply of property inventory and deterioration in values of California real estate, both residential and commercial; a prolonged slowdown or decline in construction activity; changes in the financial performance and/or condition of our borrowers; changes in the level of nonperforming 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 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)(in thousands, except share and per share amounts) For the nine months ended 2023 2022 September 30, Third Second First Fourth Third Quarter Quarter Quarter Quarter Quarter 2023 2022 INCOME HIGHLIGHTS Net income $ 5,408 $ 4,726 $ 6,364 $ 8,415 $ 7,046 $ 16,498 $ 16,608 Loss on sale of securities, net of tax - - 595 295 - 595 - Operating net income (1) $ 5,408 $ 4,726 $ 6,959 $ 8,710 $ 7,046 $ 17,093 $ 16,608 PER SHARE DATA Basic earnings per share $ 0.74 $ 0.65 $ 0.87 $ 1.16 $ 0.97 $ 2.26 $ 2.48 Diluted earnings per share 0.72 0.63 0.85 1.13 0.95 2.21 2.42 Diluted earnings per share - operating (1) 0.72 0.63 0.93 1.17 0.95 2.29 2.42 Book value per share 18.83 19.55 19.57 17.99 16.58 18.83 16.58 PERFORMANCE MEASURES Return on average assets 0.99 % 0.87 % 1.19 % 1.61 % 1.38 % 1.02 % 1.07 % Return on average equity 14.01 % 12.32 % 17.87 % 25.48 % 19.36 % 14.66 % 16.15 % Taxable equivalent net interest margin 3.34 % 3.39 % 3.92 % 4.41 % 4.07 % 3.55 % 3.57 % Efficiency ratio 58.75 % 56.05 % 55.21 % 45.42 % 48.00 % 56.64 % 54.43 % Average loans to average deposits 97.49 % 97.57 % 88.70 % 76.98 % 74.61 % 94.51 % 67.81 % CAPITAL Tier 1 leverage ratio 9.84 % 9.55 % 9.33 % 9.46 % 9.22 % 9.84 % 9.22 % Common equity tier 1 capital ratio 9.95 % 9.88 % 10.14 % 9.82 % 10.24 % 9.95 % 10.24 % Tier 1 risk-based capital ratio 9.95 % 9.88 % 10.14 % 9.82 % 10.24 % 9.95 % 10.24 % Total risk-based capital ratio 11.89 % 11.87 % 12.16 % 11.76 % 12.31 % 11.89 % 12.31 % Tangible common equity ratio 6.61 % 6.83 % 6.95 % 6.45 % 6.38 % 6.61 % 6.38 % SHARES OUTSTANDING Number of common shares outstanding 7,731,404 7,712,278 7,703,748 7,645,428 7,629,767 7,731,404 7,629,767 Average common shares outstanding - basic 7,327,197 7,321,246 7,299,006 7,281,343 7,274,617 7,315,920 6,639,567 Average common shares outstanding - diluted 7,511,373 7,457,906 7,452,254 7,432,670 7,410,062 7,472,158 6,790,554 ASSET QUALITY Allowance for credit losses to total loans 1.19 % 1.20 % 1.18 % 1.09 % 1.14 % 1.19 % 1.14 % Nonperforming assets to total assets 0.70 % 0.70 % 0.66 % 0.67 % 0.01 % 0.70 % 0.01 % Nonperforming loans to total loans 0.08 % 0.94 % 0.91 % 0.92 % 0.01 % 0.08 % 0.01 % Net charge-offs to average loans (2) 0.00 % 0.03 % 0.00 % 0.00 % 0.02 % 0.01 % 0.01 % AVERAGE BALANCES Loans, net of deferred loan fees $ 1,640,080 $ 1,589,372 $ 1,555,207 $ 1,450,014 $ 1,357,090 $ 1,595,197 $ 1,277,760 Investment securities 365,244 382,860 443,870 459,057 505,849 397,037 476,858 Total assets 2,168,443 2,171,559 2,164,441 2,072,887 2,028,320 2,168,162 2,073,023 Deposits 1,682,329 1,628,975 1,753,295 1,883,640 1,819,008 1,687,940 1,884,434 Shareholders' equity 153,099 153,877 144,402 131,046 144,402 150,491 137,456 (1) A Non-GAAP performance measure. We provide detailed reconciliations in the "Non-GAAP Performance and Financial Measures Reconciliation" table.(2) Annualized AVIDBANK HOLDINGS, INC.Consolidated Balance Sheets (Unaudited)(in thousands) September 30, June 30, March 31, December 31, September 30, Assets 2023 2023 2023 2022 2022 Cash and due from banks $ 21,157 $ 33,849 $ 19,452 $ 17,435 $ 23,766 Due from Federal Reserve Bank and fed funds sold 58,885 70,364 114,615 29,853 13,476 Total cash and cash equivalents 80,042 104,213 134,067 47,288 37,242 Investment securities - available for sale 345,547 371,753 386,947 412,993 436,535 Investment securities - held to maturity - - - 31,671 31,704 Total investment securities 345,547 371,753 386,947 444,664 468,239 Loans, net of deferred loan fees 1,669,914 1,650,265 1,564,501 1,554,222 1,392,546 Allowance for loan losses (17,800 ) (17,636 ) (16,389 ) (16,481 ) (15,488 ) Loans, net of allowance for loan losses 1,652,114 1,632,629 1,548,112 1,537,741 1,377,058 Bank owned life insurance 33,440 33,202 32,972 32,747 32,522 Premises and equipment, net 3,558 3,774 4,037 4,163 4,318 Other real estate owned 14,095 - - - - Accrued interest receivable and other assets 73,104 62,234 63,916 66,665 64,443 Total assets $ 2,201,900 $ 2,207,805 $ 2,170,051 $ 2,133,268 $ 1,983,822 Liabilities and Shareholders' Equity Deposits: Non-interest-bearing demand $ 490,289 $ 593,246 $ 605,093 $ 765,079 $ 804,383 Interest-bearing checking 784,757 717,116 335,410 41,701 46,852 Money market and savings 322,983 316,991 563,097 948,731 890,836 Time 30,880 46,794 61,645 67,724 72,301 Brokered 79,291 74,566 52,823 - - Total deposits 1,708,200 1,748,713 1,618,068 1,823,235 1,814,372 Subordinated debt, net 21,881 21,855 21,830 21,805 21,779 Short-term borrowings 300,000 264,000 359,000 130,000 - Accrued interest payable and other liabilities 26,250 22,432 20,414 20,690 21,188 Total liabilities 2,056,331 2,057,000 2,019,312 1,995,730 1,857,339 Shareholders' Equity Common stock 104,018 103,420 102,718 102,359 101,679 Retained earnings 109,386 103,979 99,252 93,824 85,409 Accumulated other comprehensive (loss) (67,835 ) (56,594 ) (51,231 ) (58,645 ) (60,605 ) Total shareholders' equity 145,569 150,805 150,739 137,538 126,483 Total liabilities and shareholders' equity $ 2,201,900 $ 2,207,805 $ 2,170,051 $ 2,133,268 $ 1,983,822 AVIDBANK HOLDINGS, INC.Consolidated Statements of Income (Unaudited)(in thousands, except share and per share amounts) Three Months Ended Year-to-Date Sept. 30, June 30, March 31, Dec. 31, Sept. 30, 2023 2023 2023 2022 2022 2023 2022 Interest and fees on loans $ 29,125 $ 26,713 $ 25,577 $ 23,160 $ 18,853 $ 81,416 $ 48,653 Interest on investment securities 2,009 2,058 2,612 2,751 2,794 6,679 7,126 Other interest income 662 1,196 628 526 307 2,486 816 Total interest income 31,796 29,967 28,817 26,437 21,954 90,581 56,595 Deposit interest expense 10,704 7,989 6,030 4,269 1,948 24,722 3,244 Interest on short-term borrowings 3,480 4,189 2,673 114 126 10,342 125 Interest on long-term debt 300 300 300 300 300 901 901 Total interest expense 14,484 12,478 9,003 4,683 2,374 35,965 4,270 Net interest income 17,312 17,489 19,814 21,754 19,580 54,616 52,325 Provision for credit losses 120 1,471 185 993 925 1,776 2,517 Net interest income after provision for credit losses 17,192 16,018 19,629 20,761 18,655 52,840 49,808 Service charges and bank fees 613 611 573 660 725 1,798 2,211 Federal Home Loan Bank dividends 171 185 163 118 91 519 250 Income from bank owned life insurance 238 230 225 224 219 693 647 Gain/(loss) on sale of securities - - (815 ) (404 ) - (815 ) - Warrant and success fee income 8 - - 119 12 8 162 Other investment income 142 37 (6 ) 521 (1 ) 173 84 Other income 62 24 28 17 30 112 61 Total noninterest income 1,234 1,087 168 1,255 1,076 2,488 3,415 Salaries and benefit expenses 7,460 7,021 7,954 7,592 7,069 22,435 21,510 Occupancy and equipment expenses 1,002 1,005 961 911 946 2,967 2,741 Data processing 538 477 528 456 447 1,542 1,281 Regulatory assessments 478 555 226 221 421 1,260 1,595 Legal and professional fees 483 394 431 364 269 1,308 604 Other operating expenses 935 960 933 906 761 2,829 2,609 Total noninterest expense 10,896 10,412 11,033 10,450 9,913 32,341 30,340 Income before income taxes 7,530 6,693 8,764 11,566 9,818 22,987 22,883 Provision for income taxes 2,122 1,967 2,400 3,151 2,772 6,489 6,275 Net income $ 5,408 $ 4,726 $ 6,364 $ 8,415 $ 7,046 $ 16,498 $ 16,608 Basic earnings per common share $ 0.74 $ 0.65 $ 0.87 $ 1.16 $ 0.97 $ 2.26 $ 2.48 Diluted earnings per common share 0.72 0.63 0.85 1.13 0.95 2.21 2.42 Weighted average shares - basic 7,327,197 7,321,246 7,299,006 7,281,343 7,274,617 7,315,920 6,639,567 Weighted average shares - diluted 7,511,373 7,457,906 7,452,254 7,432,670 7,410,062 7,472,158 6,790,554 AVIDBANK HOLDINGS, INC.Average Balance Sheets and Net Interest Margin Analysis (Unaudited)(dollars in thousands; taxable equivalent) Three Months Ended September 30, 2023 June 30, 2023 Interest Yields Interest Yields Average Income/ or Average Income/ or Balance Expense Rates Balance Expense Rates Assets Interest earning assets: Loans (1) $ 1,641,475 $ 29,125 7.04 % $ 1,590,758 $ 26,713 6.74 % Fed funds sold/interest bearing deposits 48,350 662 5.36 % 93,001 1,196 5.09 % Taxable Investment securities 365,244 2,009 2.18 % 382,860 2,058 2.16 % Total interest-earning assets 2,055,069 31,796 6.14 % 2,066,619 29,967 5.82 % Noninterest-earning assets: Cash and due from banks 22,556 23,515 All other assets (2) 90,818 81,425 Total assets $ 2,168,443 $ 2,171,559 Liabilities and Shareholders' Equity Interest-bearing liabilities: Deposits Demand $ 748,016 $ 7,306 3.88 % $ 486,367 $ 4,100 3.38 % Money market and savings 296,865 2,193 2.93 % 389,036 2,659 2.74 % Time 41,455 264 2.53 % 48,650 198 1.63 % Brokered 75,420 941 4.95 % 83,319 1,032 4.97 % Total interest-bearing deposits 1,161,756 10,704 3.66 % 1,007,372 7,989 3.18 % Short-term borrowings 285,326 3,480 4.84 % 343,341 4,189 4.89 % Subordinated debt 21,867 300 5.44 % 21,842 300 5.51 % Total interest-bearing liabilities 1,468,949 14,484 3.91 % 1,372,555 12,478 3.65 % Noninterest-bearing liabilities: Demand deposits 520,573 621,603 Accrued expenses and other liabilities 25,822 23,524 Shareholders' equity 153,099 153,877 Total liabilities and shareholders' equity $ 2,168,443 $ 2,171,559 Net interest spread 2.23 % 2.17 % Net interest income and margin (3) $ 17,312 3.34 % $ 17,489 3.39 % Non-taxable equivalent net interest margin 3.34 % 3.39 % Cost of deposits $ 1,682,329 $ 10,704 2.52 % $ 1,628,975 $ 7,989 1.97 % (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 $441 thousand and $347 thousand, respectively.(2) Average allowance for loan losses of $17.6 million and $16.8 million, respectively, is included as a contra asset.(3) Net interest margin is net interest income divided by total interest-earning assets. AVIDBANK HOLDINGS, INC.Average Balance Sheets and Net Interest Margin Analysis (Unaudited)(dollars in thousands; taxable equivalent) Three months ended September 30, 2023 September 30, 2022 Interest Yields Interest Yields Average Income/ or Average Income/ or Balance Expense Rates Balance Expense Rates Assets Interest earning assets: Loans (1) $ 1,641,475 $ 29,125 7.04 % $ 1,358,934 $ 18,852 5.50 % Fed funds sold/interest bearing deposits 48,350 662 5.36 % 52,626 307 2.31 % Investment securities Taxable investment securities 365,244 2,009 2.18 % 475,086 2,530 2.11 % Non-taxable investment securities (2) - - 0.00 % 30,763 334 4.31 % Total investment securities 365,244 2,009 2.18 % 505,849 2,864 2.25 % Total interest-earning assets 2,055,069 31,796 6.14 % 1,917,409 22,023 4.56 % Noninterest-earning assets: Cash and due from banks 22,556 34,984 All other assets (3) 90,818 75,927 Total assets $ 2,168,443 $ 2,028,320 Liabilities and Shareholders' Equity Interest-bearing liabilities: Deposits Demand $ 748,016 $ 7,306 3.88 % $ 46,145 $ 38 0.33 % Money market and savings 296,865 2,193 2.93 % 867,113 1,768 0.81 % Time 41,455 264 2.53 % 85,703 142 0.66 % Brokered 75,420 941 4.95 % - - - Total interest-bearing deposits 1,161,756 10,704 3.66 % 998,961 1,948 0.77 % Short-term borrowings 285,326 3,480 4.84 % 22,011 126 2.27 % Subordinated debt 21,867 300 5.44 % 21,766 300 5.47 % Total interest-bearing liabilities 1,468,949 14,484 3.91 % 1,042,738 2,374 0.90 % Noninterest-bearing liabilities: Demand deposits 520,573 820,047 Accrued expenses and other liabilities 25,822 21,133 Shareholders' equity 153,099 144,402 Total liabilities and shareholders' equity $ 2,168,443 $ 2,028,320 Net interest spread 2.23 % 3.66 % Net interest income and margin (4) $ 17,312 3.34 % $ 19,649 4.07 % Non-taxable equivalent net interest margin 3.34 % 4.05 % Cost of deposits $ 1,682,329 $ 10,704 2.52 % $ 1,819,008 $ 1,948 0.42 % (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 $441 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 $17.6 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 (Unaudited)(dollars in thousands; taxable equivalent) Nine months ended September 30, 2023 September 30, 2022 Interest Yields Interest Yields Average Income/ or Average Income/ or Balance Expense Rates Balance Expense Rates Assets Interest earning assets: Loans (1) $ 1,596,660 $ 81,416 6.82 % $ 1,279,579 $ 48,653 5.08 % Fed funds sold/interest bearing deposits 65,855 2,486 4.98 % 205,199 816 0.53 % Investment securities Taxable investment securities 387,315 6,415 2.21 % 462,326 6,749 1.95 % Non-taxable investment securities (2) 9,722 334 4.59 % 14,532 473 4.69 % Total investment securities 397,037 6,749 2.27 % 476,858 7,222 2.03 % Total interest-earning assets 2,059,552 90,651 5.88 % 1,961,636 56,691 3.86 % Noninterest-earning assets: Cash and due from banks 23,019 41,173 All other assets (3) 85,591 70,214 Total assets $ 2,168,162 $ 2,073,023 Liabilities and Shareholders' Equity Interest-bearing liabilities: Deposits Demand $ 442,948 $ 11,899 3.59 % $ 47,184 $ 69 0.20 % Money market and savings 513,961 10,008 2.60 % 838,354 2,630 0.42 % Time 51,889 684 1.76 % 92,410 486 0.70 % Brokered 57,534 2,131 4.95 % 16,965 59 0.46 % Total interest-bearing deposits 1,066,332 24,722 3.10 % 994,913 3,244 0.44 % Short-term borrowings 282,980 10,342 4.89 % 7,418 125 2.25 % Subordinated debt 21,842 901 5.52 % 21,666 901 5.56 % Total interest-bearing liabilities 1,371,154 35,965 3.51 % 1,023,997 4,270 0.56 % Noninterest-bearing liabilities: Demand deposits 621,608 889,521 Accrued expenses and other liabilities 24,909 22,049 Shareholders' equity 150,491 137,456 Total liabilities and shareholders' equity $ 2,168,162 $ 2,073,023 Net interest spread 2.38 % 3.30 % Net interest income and margin (4) $ 54,686 3.55 % $ 52,421 3.57 % Non-taxable equivalent net interest margin 3.55 % 3.57 % Cost of deposits $ 1,687,940 $ 24,722 1.96 % $ 1,884,434 $ 3,244 0.23 % (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 $1.3 million and $1.6 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 $16.9 million and $13.7 million, respectively, is included as a contra asset.(4) Tax equivalent net interest income divided by total interest-earning assets. AVIDBANK HOLDINGS, INC.Loans and Credit Data (Unaudited)(dollars in thousands) Sept. 30, June 30, March 31, Dec. 31, Sept. 30, Current Quarter Year over Year 2023 2023 2023 2022 2022 Change Change Commercial loans $ 731,206 $ 716,355 $ 642,826 $ 700,022 $ 566,105 $ 14,851 $ 165,101 Commercial real estate Multi-family 184,147 193,014 188,411 169,048 159,384 (8,867 ) 24,763 Owner Occupied 135,950 132,078 137,118 128,790 120,951 3,872 14,999 Non-Owner Occupied 386,629 376,467 350,730 314,284 299,176 10,162 87,453 Construction and land 214,474 215,865 233,162 227,869 234,157 (1,391 ) (19,683 ) Residential 17,311 16,220 11,969 13,394 11,991 1,091 5,320 Total real estate loans 938,511 933,644 921,390 853,385 825,659 4,867 112,852 Other loans 197 266 285 815 782 (69 ) (585 ) Total loans $ 1,669,914 $ 1,650,265 $ 1,564,501 $ 1,554,222 $ 1,392,546 $ 19,649 $ 277,368 Allowance for Loan Losses Balance, beginning of quarter $ 17,636 $ 16,389 $ 16,481 $ 15,488 $ 14,646 Adoption of ASU 2016-13 - - (249 ) - - Provision for loan losses 164 1,347 157 993 925 Charge-offs - (100 ) - - (83 ) Recoveries - - - - - Balance, end of quarter $ 17,800 $ 17,636 $ 16,389 $ 16,481 $ 15,488 Allowance for Credit Losses on Unfunded Commitments Balance, beginning of quarter $ 2,169 $ 2,045 $ 449 $ 422 $ 422 Adoption of ASU 2016-13 - - 1,568 - - Provision for unfunded commitments (44 ) 124 28 27 - Balance, end of quarter $ 2,125 $ 2,169 $ 2,045 $ 449 $ 422 Total allowance for credit losses - loans and unfunded commitments $ 19,925 $ 19,805 $ 18,434 $ 16,930 $ 15,910 Provision for credit losses under CECL Provision for loan losses $ 164 $ 1,347 $ 157 $ 993 $ 925 Provision for unfunded commitments (1) (44 ) 124 28 - - Total provision for credit losses $ 120 $ 1,471 $ 185 $ 993 $ 925 Nonperforming Assets Loans accounted for on a non-accrual basis $ 1,385 $ 15,485 $ 14,240 $ 14,245 $ 154 Loans past due 90 days or more and still accruing - - - - - Nonperforming loans 1,385 15,485 14,240 14,245 154 Other real estate owned 14,095 - - - - Nonperforming assets $ 15,480 $ 15,485 $ 14,240 $ 14,245 $ 154 Nonperforming Loans by Type: Commercial $ 1,385 $ 1,390 $ 145 $ 150 $ 154 Commercial real estate loans - - - - - Construction and land - 14,095 14,095 14,095 - Total Nonperforming loans $ 1,385 $ 15,485 $ 14,240 $ 14,245 $ 154 Asset Quality Ratios Allowance for loan losses to total loans 1.07 % 1.07 % 1.05 % 1.06 % 1.11 % Allowance for credit losses to total loans 1.19 % 1.20 % 1.18 % 1.09 % 1.14 % Allowance for loan losses to nonperforming loans 1285.20 % 113.89 % 115.09 % 115.70 % 10057.14 % Nonperforming assets to total assets 0.70 % 0.70 % 0.66 % 0.67 % 0.01 % Nonperforming loans to total loans 0.08 % 0.94 % 0.91 % 0.92 % 0.01 % Net quarterly charge-offs to average loans (2) 0.00 % 0.03 % 0.00 % 0.00 % 0.02 % (1) Prior to the adoption of ASU 2016-13, the provision for unfunded commitments was included in other expense and totaled $27 thousand and $0 for the fourth and third quarters of 2022, respectively(2) Annualized AVIDBANK HOLDINGS, INC.Deposits (Unaudited)(dollars in thousands) Sept. 30, June 30, March 31, Dec. 31, Sept. 30, Current Quarter Year over Year Period End Deposits 2023 2023 2023 2022 2022 Change Change Non-interest-bearing demand $ 490,289 $ 593,246 $ 605,093 $ 765,079 $ 804,383 $ (102,957 ) $ (314,094 ) Interest-bearing checking 784,757 717,116 335,410 41,701 46,852 67,641 737,905 Money market and savings 322,983 316,991 563,097 948,731 890,836 5,992 (567,853 ) Time 30,880 46,794 61,645 67,724 72,301 (15,914 ) (41,421 ) Brokered 79,291 74,566 52,823 - - 4,725 79,291 Total deposits $ 1,708,200 $ 1,748,713 $ 1,618,068 $ 1,823,235 $ 1,814,372 $ (40,513 ) $ (106,172 ) Sept. 30, June 30, March 31, Dec. 31, Sept. 30, Current Quarter Year over Year Average Deposits 2023 2023 2023 2022 2022 Change Change Non-interest-bearing demand $ 520,573 $ 621,603 $ 724,894 $ 815,222 $ 820,047 $ (101,030 ) $ (299,474 ) Interest-bearing checking 748,016 486,367 87,198 44,344 46,145 261,649 701,871 Money market and savings 296,865 389,036 862,195 953,665 867,113 (92,171 ) (570,248 ) Time 41,455 48,650 65,830 70,409 85,703 (7,195 ) (44,248 ) Brokered 75,420 83,319 13,178 - - (7,899 ) 75,420 Total deposits $ 1,682,329 $ 1,628,975 $ 1,753,295 $ 1,883,640 $ 1,819,008 $ 53,354 $ (136,679 ) AVIDBANK HOLDINGS, INC.Non-GAAP performance and Financial Measures Reconciliation (Unaudited)(in thousands, except share and per share amounts) For the nine months ended 2023 2022 September 30, Third Second First Fourth Third Operating net income reconciliation Quarter Quarter Quarter Quarter Quarter 2023 2022 Net income - GAAP $ 5,408 $ 4,726 $ 6,364 $ 8,415 $ 7,046 $ 16,498 $ 16,608 Loss on sale of securities, net of income tax - - 595 295 - 595 - Operating net income $ 5,408 $ 4,726 $ 6,959 $ 8,710 $ 7,046 $ 17,093 $ 16,608 Operating diluted earnings per share reconciliation Diluted earnings per share - GAAP $ 0.72 $ 0.63 $ 0.85 $ 1.13 $ 0.95 $ 2.21 $ 2.42 Loss on sale of securities, net of income tax - - 0.08 0.04 - 0.08 - Diluted earnings per share - operating $ 0.72 $ 0.63 $ 0.93 $ 1.17 $ 0.95 $ 2.29 $ 2.42 Venture lending deposits reconciliation Total deposits $ 1,708,200 $ 1,748,713 $ 1,618,068 $ 1,823,235 $ 1,814,372 $ 1,708,200 $ 1,814,372 Venture lending deposits 608,331 606,022 557,479 754,997 800,930 608,331 800,930 Total deposits excluding venture lending $ 1,099,869 $ 1,142,691 $ 1,060,589 $ 1,068,238 $ 1,013,442 $ 1,099,869 $ 1,013,442 Taxable equivalent net interest income reconciliation Net interest income - GAAP $ 17,312 $ 17,489 $ 19,814 $ 21,754 $ 19,580 $ 54,616 $ 52,325 Taxable equivalent adjustment - - 70 75 69 70 96 Net interest income - taxable equivalent $ 17,312 $ 17,489 $ 19,884 $ 21,829 $ 19,649 $ 54,686 $ 52,421 Taxable equivalent net interest margin reconciliation Net interest margin - GAAP 3.34 % 3.39 % 3.91 % 4.40 % 4.05 % 3.55 % 3.57 % Impact of taxable equivalent adjustment - - 0.01 0.01 0.02 - - Net interest margin - taxable equivalent 3.34 % 3.39 % 3.92 % 4.41 % 4.07 % 3.55 % 3.57 % SOURCE: Avidbank Holdings, Inc. 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Avidbank Holdings, Inc. Announces Net Income of $5.4 Million for the Third Quarter of 2023 By: ACCESSWIRE October 24, 2023 at 16:30 PM EDT SAN JOSE, CA / ACCESSWIRE / October 24, 2023 / Avidbank Holdings, Inc. (OTC Pink:AVBH) announced net income for the third quarter of 2023 of $5.4 million, or $0.72 per diluted share, compared to $4.7 million, or $0.63 per diluted share, for the second quarter of 2023 and $7.0 million, or $0.95 per diluted share, for the third quarter of 2022. Third Quarter 2023 Highlights Loans increased $19.6 million, or 5% annualized, from June 30, 2023, and $115.7 million, or 7%, from December 31, 2022. Average deposits increased $53.4 million, or 13% annualized, from the second quarter of 2023. Return on average assets improved to 0.99% from 0.87% in the second quarter of 2023. Uninsured deposits represented 35% of total deposits on September 30, 2023, compared to 40% on June 30, 2023, and 85% at December 31, 2022. Net available borrowing capacity totaled approximately $1.4 billion as of September 30, 2023. Annualized net charge-offs to average loans totaled 0.0% for the third quarter of 2023, compared to 0.03% for the second quarter of 2023. Nonperforming assets to total assets was unchanged at 0.70% on September 30, 2023 compared to June 30, 2023. "Despite the continued challenges in today's banking environment, we are pleased with our performance and outlook as we look toward 2024. Loan demand has moderated compared to historical average growth, but there remain excellent opportunities to add quality relationships. We continue to add new deposit accounts regularly after losing a very limited number of relationships since March of this year. Based on our commercial banking focus, it is not uncommon to have sizeable daily and seasonal fluctuations in our deposit balances, so we prefer to focus on growth in average balances. For the third quarter, average deposit balances increased $53.4 million compared to the second quarter. Our deposit pipeline remains robust in our venture lending and corporate banking divisions," said Mark Mordell, Chairman and Chief Executive Officer. "Credit quality remains solid, including the potential resolution of the $14.1 million nonperforming construction loan. We foreclosed on the loan during the third quarter and are currently in contract to sell. We expect to close on the sale of the property in the fourth quarter," added Mr. Mordell. Income Statement Taxable equivalent net interest income(1) totaled $17.3 million for the third quarter of 2023, a decrease of $177,000, or 1%, from the second quarter of 2023, and a decrease of $2.3 million, or 12%, from the third quarter of 2022. The taxable equivalent net interest margin was 3.34% in the third quarter of 2023, a decrease of 5 basis points compared to the second quarter of 2023, and a decrease of 73 basis points compared to the third quarter of 2022. The decrease in taxable equivalent net interest income and net interest margin compared to the prior quarter was primarily driven by an overall increase in deposit costs. The decrease in taxable equivalent net interest margin compared to the same period one year ago was primarily driven by an increase in high-cost short-term borrowings replacing lower-cost deposits, interest bearing deposits replacing no-cost demand deposits, and an overall increase in deposit costs, partially offset by an increase in loan yields and average loan balances. The yield on loans in the third quarter of 2023 was 7.04 %, an increase of 30 basis points from the second quarter of 2023 and an increase of 154 basis points from the third quarter of 2022. The overall increase in loan yields compared to prior periods was primarily due to increases in the Prime rate. The cost of deposits in the third quarter of 2023 was 2.52%, an increase of 55 basis points from the second quarter of 2023 and an increase of 210 basis points from the third quarter of 2022. The cost of interest-bearing deposits in the third quarter of 2023 was 3.66% compared to 3.18% in the second quarter of 2023 and 0.77% in the third quarter of 2022. The provision for credit losses was $120,000 in the third quarter of 2023, compared to $1.5 million in the second quarter of 2023 and $925,000 in the third quarter of 2022. The provision decreased in the current quarter primarily due to lower loan growth of $19.6 million in the third quarter of 2023, compared to $85.8 million in the second quarter of 2023. The provision for credit losses in the third quarter of 2023 included a $164,000 provision for loan losses offset by a $(44,000) provision for unfunded commitments. Noninterest income was $1.2 million in the third quarter of 2023 compared to $1.1 million in the second quarter of 2023 and $1.1 million in the third quarter of 2022. The third quarter of 2023 included a $105,000 increase in other investment income. Noninterest expense totaled $10.9 million for the third quarter of 2023, an increase of $484,000 compared to the second quarter of 2023. Salaries and benefits expense for the third quarter of 2023 included an increase from the hiring of the treasury management team on August 3rd. Salaries and benefits expense for the previous quarter included a reduction in incentive compensation expense. There were 147 full-time equivalent employees on September 30, 2023, compared to 145 on June 30, 2023. Balance Sheet Total assets were $2.20 billion as of September 30, 2023, compared to $2.21 billion on June 30, 2023, and $1.98 billion at September 30, 2022. Cash and cash equivalents were $80.0 million on September 30, 2023, compared to $104.2 million on June 30, 2023, and $37.2 million on September 30, 2022. Period end loans on September 30, 2023, totaled $1.67 billion, which represented an increase of $19.6 million, or 5% annualized, from June 30, 2023, and an increase of $277.4 million, or 20%, from September 30, 2022. The growth in loans during the third quarter of 2023 included an increase of $14.9 million in commercial loans and $5.2 million in commercial real estate loans, partially offset by a decrease of $1.4 million in construction loans. Quarterly average loans for the third quarter of 2023 increased $50.7 million, or 3%, from the second quarter of 2023 and $283.0 million, or 21%, from the third quarter of 2022. The allowance for credit losses on loans was $17.8 million on September 30, 2023, representing an increase of $164,000 from June 30, 2023. The allowance for credit losses on loans to total loans was 1.07% on September 30, 2023, compared to 1.07% on June 30, 2023. Nonperforming loans to total loans was 0.08% on September 30, 2023, compared to 0.94% on June 30, 2023. The decrease was due to the foreclosure of one nonperforming loan totaling $14.1 million. Investment securities were $345.6 million as of September 30, 2023, compared to $371.8 million on June 30, 2023, and $468.2 million at September 30, 2022. In the first quarter of 2023, we sold $57 million of securities for a loss of $815,000. This included the sale of $25 million in available for sale mortgage-backed securities and the sale of all $32 million in held to maturity municipal securities. Period end deposits were $1.70 billion on September 30, 2023, a decrease of $40.5 million, or 2%, from June 30, 2023. This included a $2.3 million, or 2% annualized, increase in Venture Lending deposits. Deposits in our Venture Lending division totaled $608.3 million at September 30, 2023, and included $396.9 million in reciprocal deposits. Short-term borrowings on September 30, 2023, totaled $300.0 million, an increase of $36.0 million, or 14%, compared to June 30, 2023. The short-term borrowings on September 30, 2023 included $35.0 million in FHLB borrowings and $224.0 million in borrowings from the Bank Term Funding Program (BTFP). The average rate on the BTFP on September 30, 2023 was 4.64%. Book value per share was $18.83 on September 30, 2023, a decrease of $0.72 compared to $19.55 on June 30, 2023. Total shareholders' equity totaled $145.6 million on September 30, 2023, a decrease of $5.2 million compared to June 30, 2023. This included an increase in retained earnings of $5.4 million offset by an increase in accumulated other comprehensive loss of $11.2 million. (1) A Non-GAAP performance measure. We provide detailed reconciliations in the "Non-GAAP Performance and Financial Measures Reconciliation" table. About Avidbank Avidbank Holdings, Inc. (OTC Pink: AVBH), headquartered in San Jose, California, offers innovative financial solutions and services. We specialize in commercial & industrial lending, venture lending, structured finance, asset-based lending, sponsor finance, fund finance, and real estate construction and commercial real estate lending. Avidbank provides a different approach to banking. We do what we say. Forward-Looking Statement: This news release contains statements that are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts, and generally include the words "believes," "plans," "intends," "expects," "opportunity," "anticipates," "targeted," "continue," "remain," "will," "should," "may," or words of similar meaning. While we believe that our forward-looking statements and the assumptions underlying them are reasonably based, such statements and assumptions, are, by their nature subject to risks and uncertainties, and thus could later prove to be inaccurate or incorrect. Accordingly, actual results could materially differ from forward-looking statements for a variety of reasons, including, but not limited to local, regional, national and international economic conditions and events and the impact they may have on us and our customers, and in particular in our market areas; ability to attract deposits and other sources of liquidity; oversupply of property inventory and deterioration in values of California real estate, both residential and commercial; a prolonged slowdown or decline in construction activity; changes in the financial performance and/or condition of our borrowers; changes in the level of nonperforming 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 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)(in thousands, except share and per share amounts) For the nine months ended 2023 2022 September 30, Third Second First Fourth Third Quarter Quarter Quarter Quarter Quarter 2023 2022 INCOME HIGHLIGHTS Net income $ 5,408 $ 4,726 $ 6,364 $ 8,415 $ 7,046 $ 16,498 $ 16,608 Loss on sale of securities, net of tax - - 595 295 - 595 - Operating net income (1) $ 5,408 $ 4,726 $ 6,959 $ 8,710 $ 7,046 $ 17,093 $ 16,608 PER SHARE DATA Basic earnings per share $ 0.74 $ 0.65 $ 0.87 $ 1.16 $ 0.97 $ 2.26 $ 2.48 Diluted earnings per share 0.72 0.63 0.85 1.13 0.95 2.21 2.42 Diluted earnings per share - operating (1) 0.72 0.63 0.93 1.17 0.95 2.29 2.42 Book value per share 18.83 19.55 19.57 17.99 16.58 18.83 16.58 PERFORMANCE MEASURES Return on average assets 0.99 % 0.87 % 1.19 % 1.61 % 1.38 % 1.02 % 1.07 % Return on average equity 14.01 % 12.32 % 17.87 % 25.48 % 19.36 % 14.66 % 16.15 % Taxable equivalent net interest margin 3.34 % 3.39 % 3.92 % 4.41 % 4.07 % 3.55 % 3.57 % Efficiency ratio 58.75 % 56.05 % 55.21 % 45.42 % 48.00 % 56.64 % 54.43 % Average loans to average deposits 97.49 % 97.57 % 88.70 % 76.98 % 74.61 % 94.51 % 67.81 % CAPITAL Tier 1 leverage ratio 9.84 % 9.55 % 9.33 % 9.46 % 9.22 % 9.84 % 9.22 % Common equity tier 1 capital ratio 9.95 % 9.88 % 10.14 % 9.82 % 10.24 % 9.95 % 10.24 % Tier 1 risk-based capital ratio 9.95 % 9.88 % 10.14 % 9.82 % 10.24 % 9.95 % 10.24 % Total risk-based capital ratio 11.89 % 11.87 % 12.16 % 11.76 % 12.31 % 11.89 % 12.31 % Tangible common equity ratio 6.61 % 6.83 % 6.95 % 6.45 % 6.38 % 6.61 % 6.38 % SHARES OUTSTANDING Number of common shares outstanding 7,731,404 7,712,278 7,703,748 7,645,428 7,629,767 7,731,404 7,629,767 Average common shares outstanding - basic 7,327,197 7,321,246 7,299,006 7,281,343 7,274,617 7,315,920 6,639,567 Average common shares outstanding - diluted 7,511,373 7,457,906 7,452,254 7,432,670 7,410,062 7,472,158 6,790,554 ASSET QUALITY Allowance for credit losses to total loans 1.19 % 1.20 % 1.18 % 1.09 % 1.14 % 1.19 % 1.14 % Nonperforming assets to total assets 0.70 % 0.70 % 0.66 % 0.67 % 0.01 % 0.70 % 0.01 % Nonperforming loans to total loans 0.08 % 0.94 % 0.91 % 0.92 % 0.01 % 0.08 % 0.01 % Net charge-offs to average loans (2) 0.00 % 0.03 % 0.00 % 0.00 % 0.02 % 0.01 % 0.01 % AVERAGE BALANCES Loans, net of deferred loan fees $ 1,640,080 $ 1,589,372 $ 1,555,207 $ 1,450,014 $ 1,357,090 $ 1,595,197 $ 1,277,760 Investment securities 365,244 382,860 443,870 459,057 505,849 397,037 476,858 Total assets 2,168,443 2,171,559 2,164,441 2,072,887 2,028,320 2,168,162 2,073,023 Deposits 1,682,329 1,628,975 1,753,295 1,883,640 1,819,008 1,687,940 1,884,434 Shareholders' equity 153,099 153,877 144,402 131,046 144,402 150,491 137,456 (1) A Non-GAAP performance measure. We provide detailed reconciliations in the "Non-GAAP Performance and Financial Measures Reconciliation" table.(2) Annualized AVIDBANK HOLDINGS, INC.Consolidated Balance Sheets (Unaudited)(in thousands) September 30, June 30, March 31, December 31, September 30, Assets 2023 2023 2023 2022 2022 Cash and due from banks $ 21,157 $ 33,849 $ 19,452 $ 17,435 $ 23,766 Due from Federal Reserve Bank and fed funds sold 58,885 70,364 114,615 29,853 13,476 Total cash and cash equivalents 80,042 104,213 134,067 47,288 37,242 Investment securities - available for sale 345,547 371,753 386,947 412,993 436,535 Investment securities - held to maturity - - - 31,671 31,704 Total investment securities 345,547 371,753 386,947 444,664 468,239 Loans, net of deferred loan fees 1,669,914 1,650,265 1,564,501 1,554,222 1,392,546 Allowance for loan losses (17,800 ) (17,636 ) (16,389 ) (16,481 ) (15,488 ) Loans, net of allowance for loan losses 1,652,114 1,632,629 1,548,112 1,537,741 1,377,058 Bank owned life insurance 33,440 33,202 32,972 32,747 32,522 Premises and equipment, net 3,558 3,774 4,037 4,163 4,318 Other real estate owned 14,095 - - - - Accrued interest receivable and other assets 73,104 62,234 63,916 66,665 64,443 Total assets $ 2,201,900 $ 2,207,805 $ 2,170,051 $ 2,133,268 $ 1,983,822 Liabilities and Shareholders' Equity Deposits: Non-interest-bearing demand $ 490,289 $ 593,246 $ 605,093 $ 765,079 $ 804,383 Interest-bearing checking 784,757 717,116 335,410 41,701 46,852 Money market and savings 322,983 316,991 563,097 948,731 890,836 Time 30,880 46,794 61,645 67,724 72,301 Brokered 79,291 74,566 52,823 - - Total deposits 1,708,200 1,748,713 1,618,068 1,823,235 1,814,372 Subordinated debt, net 21,881 21,855 21,830 21,805 21,779 Short-term borrowings 300,000 264,000 359,000 130,000 - Accrued interest payable and other liabilities 26,250 22,432 20,414 20,690 21,188 Total liabilities 2,056,331 2,057,000 2,019,312 1,995,730 1,857,339 Shareholders' Equity Common stock 104,018 103,420 102,718 102,359 101,679 Retained earnings 109,386 103,979 99,252 93,824 85,409 Accumulated other comprehensive (loss) (67,835 ) (56,594 ) (51,231 ) (58,645 ) (60,605 ) Total shareholders' equity 145,569 150,805 150,739 137,538 126,483 Total liabilities and shareholders' equity $ 2,201,900 $ 2,207,805 $ 2,170,051 $ 2,133,268 $ 1,983,822 AVIDBANK HOLDINGS, INC.Consolidated Statements of Income (Unaudited)(in thousands, except share and per share amounts) Three Months Ended Year-to-Date Sept. 30, June 30, March 31, Dec. 31, Sept. 30, 2023 2023 2023 2022 2022 2023 2022 Interest and fees on loans $ 29,125 $ 26,713 $ 25,577 $ 23,160 $ 18,853 $ 81,416 $ 48,653 Interest on investment securities 2,009 2,058 2,612 2,751 2,794 6,679 7,126 Other interest income 662 1,196 628 526 307 2,486 816 Total interest income 31,796 29,967 28,817 26,437 21,954 90,581 56,595 Deposit interest expense 10,704 7,989 6,030 4,269 1,948 24,722 3,244 Interest on short-term borrowings 3,480 4,189 2,673 114 126 10,342 125 Interest on long-term debt 300 300 300 300 300 901 901 Total interest expense 14,484 12,478 9,003 4,683 2,374 35,965 4,270 Net interest income 17,312 17,489 19,814 21,754 19,580 54,616 52,325 Provision for credit losses 120 1,471 185 993 925 1,776 2,517 Net interest income after provision for credit losses 17,192 16,018 19,629 20,761 18,655 52,840 49,808 Service charges and bank fees 613 611 573 660 725 1,798 2,211 Federal Home Loan Bank dividends 171 185 163 118 91 519 250 Income from bank owned life insurance 238 230 225 224 219 693 647 Gain/(loss) on sale of securities - - (815 ) (404 ) - (815 ) - Warrant and success fee income 8 - - 119 12 8 162 Other investment income 142 37 (6 ) 521 (1 ) 173 84 Other income 62 24 28 17 30 112 61 Total noninterest income 1,234 1,087 168 1,255 1,076 2,488 3,415 Salaries and benefit expenses 7,460 7,021 7,954 7,592 7,069 22,435 21,510 Occupancy and equipment expenses 1,002 1,005 961 911 946 2,967 2,741 Data processing 538 477 528 456 447 1,542 1,281 Regulatory assessments 478 555 226 221 421 1,260 1,595 Legal and professional fees 483 394 431 364 269 1,308 604 Other operating expenses 935 960 933 906 761 2,829 2,609 Total noninterest expense 10,896 10,412 11,033 10,450 9,913 32,341 30,340 Income before income taxes 7,530 6,693 8,764 11,566 9,818 22,987 22,883 Provision for income taxes 2,122 1,967 2,400 3,151 2,772 6,489 6,275 Net income $ 5,408 $ 4,726 $ 6,364 $ 8,415 $ 7,046 $ 16,498 $ 16,608 Basic earnings per common share $ 0.74 $ 0.65 $ 0.87 $ 1.16 $ 0.97 $ 2.26 $ 2.48 Diluted earnings per common share 0.72 0.63 0.85 1.13 0.95 2.21 2.42 Weighted average shares - basic 7,327,197 7,321,246 7,299,006 7,281,343 7,274,617 7,315,920 6,639,567 Weighted average shares - diluted 7,511,373 7,457,906 7,452,254 7,432,670 7,410,062 7,472,158 6,790,554 AVIDBANK HOLDINGS, INC.Average Balance Sheets and Net Interest Margin Analysis (Unaudited)(dollars in thousands; taxable equivalent) Three Months Ended September 30, 2023 June 30, 2023 Interest Yields Interest Yields Average Income/ or Average Income/ or Balance Expense Rates Balance Expense Rates Assets Interest earning assets: Loans (1) $ 1,641,475 $ 29,125 7.04 % $ 1,590,758 $ 26,713 6.74 % Fed funds sold/interest bearing deposits 48,350 662 5.36 % 93,001 1,196 5.09 % Taxable Investment securities 365,244 2,009 2.18 % 382,860 2,058 2.16 % Total interest-earning assets 2,055,069 31,796 6.14 % 2,066,619 29,967 5.82 % Noninterest-earning assets: Cash and due from banks 22,556 23,515 All other assets (2) 90,818 81,425 Total assets $ 2,168,443 $ 2,171,559 Liabilities and Shareholders' Equity Interest-bearing liabilities: Deposits Demand $ 748,016 $ 7,306 3.88 % $ 486,367 $ 4,100 3.38 % Money market and savings 296,865 2,193 2.93 % 389,036 2,659 2.74 % Time 41,455 264 2.53 % 48,650 198 1.63 % Brokered 75,420 941 4.95 % 83,319 1,032 4.97 % Total interest-bearing deposits 1,161,756 10,704 3.66 % 1,007,372 7,989 3.18 % Short-term borrowings 285,326 3,480 4.84 % 343,341 4,189 4.89 % Subordinated debt 21,867 300 5.44 % 21,842 300 5.51 % Total interest-bearing liabilities 1,468,949 14,484 3.91 % 1,372,555 12,478 3.65 % Noninterest-bearing liabilities: Demand deposits 520,573 621,603 Accrued expenses and other liabilities 25,822 23,524 Shareholders' equity 153,099 153,877 Total liabilities and shareholders' equity $ 2,168,443 $ 2,171,559 Net interest spread 2.23 % 2.17 % Net interest income and margin (3) $ 17,312 3.34 % $ 17,489 3.39 % Non-taxable equivalent net interest margin 3.34 % 3.39 % Cost of deposits $ 1,682,329 $ 10,704 2.52 % $ 1,628,975 $ 7,989 1.97 % (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 $441 thousand and $347 thousand, respectively.(2) Average allowance for loan losses of $17.6 million and $16.8 million, respectively, is included as a contra asset.(3) Net interest margin is net interest income divided by total interest-earning assets. AVIDBANK HOLDINGS, INC.Average Balance Sheets and Net Interest Margin Analysis (Unaudited)(dollars in thousands; taxable equivalent) Three months ended September 30, 2023 September 30, 2022 Interest Yields Interest Yields Average Income/ or Average Income/ or Balance Expense Rates Balance Expense Rates Assets Interest earning assets: Loans (1) $ 1,641,475 $ 29,125 7.04 % $ 1,358,934 $ 18,852 5.50 % Fed funds sold/interest bearing deposits 48,350 662 5.36 % 52,626 307 2.31 % Investment securities Taxable investment securities 365,244 2,009 2.18 % 475,086 2,530 2.11 % Non-taxable investment securities (2) - - 0.00 % 30,763 334 4.31 % Total investment securities 365,244 2,009 2.18 % 505,849 2,864 2.25 % Total interest-earning assets 2,055,069 31,796 6.14 % 1,917,409 22,023 4.56 % Noninterest-earning assets: Cash and due from banks 22,556 34,984 All other assets (3) 90,818 75,927 Total assets $ 2,168,443 $ 2,028,320 Liabilities and Shareholders' Equity Interest-bearing liabilities: Deposits Demand $ 748,016 $ 7,306 3.88 % $ 46,145 $ 38 0.33 % Money market and savings 296,865 2,193 2.93 % 867,113 1,768 0.81 % Time 41,455 264 2.53 % 85,703 142 0.66 % Brokered 75,420 941 4.95 % - - - Total interest-bearing deposits 1,161,756 10,704 3.66 % 998,961 1,948 0.77 % Short-term borrowings 285,326 3,480 4.84 % 22,011 126 2.27 % Subordinated debt 21,867 300 5.44 % 21,766 300 5.47 % Total interest-bearing liabilities 1,468,949 14,484 3.91 % 1,042,738 2,374 0.90 % Noninterest-bearing liabilities: Demand deposits 520,573 820,047 Accrued expenses and other liabilities 25,822 21,133 Shareholders' equity 153,099 144,402 Total liabilities and shareholders' equity $ 2,168,443 $ 2,028,320 Net interest spread 2.23 % 3.66 % Net interest income and margin (4) $ 17,312 3.34 % $ 19,649 4.07 % Non-taxable equivalent net interest margin 3.34 % 4.05 % Cost of deposits $ 1,682,329 $ 10,704 2.52 % $ 1,819,008 $ 1,948 0.42 % (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 $441 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 $17.6 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 (Unaudited)(dollars in thousands; taxable equivalent) Nine months ended September 30, 2023 September 30, 2022 Interest Yields Interest Yields Average Income/ or Average Income/ or Balance Expense Rates Balance Expense Rates Assets Interest earning assets: Loans (1) $ 1,596,660 $ 81,416 6.82 % $ 1,279,579 $ 48,653 5.08 % Fed funds sold/interest bearing deposits 65,855 2,486 4.98 % 205,199 816 0.53 % Investment securities Taxable investment securities 387,315 6,415 2.21 % 462,326 6,749 1.95 % Non-taxable investment securities (2) 9,722 334 4.59 % 14,532 473 4.69 % Total investment securities 397,037 6,749 2.27 % 476,858 7,222 2.03 % Total interest-earning assets 2,059,552 90,651 5.88 % 1,961,636 56,691 3.86 % Noninterest-earning assets: Cash and due from banks 23,019 41,173 All other assets (3) 85,591 70,214 Total assets $ 2,168,162 $ 2,073,023 Liabilities and Shareholders' Equity Interest-bearing liabilities: Deposits Demand $ 442,948 $ 11,899 3.59 % $ 47,184 $ 69 0.20 % Money market and savings 513,961 10,008 2.60 % 838,354 2,630 0.42 % Time 51,889 684 1.76 % 92,410 486 0.70 % Brokered 57,534 2,131 4.95 % 16,965 59 0.46 % Total interest-bearing deposits 1,066,332 24,722 3.10 % 994,913 3,244 0.44 % Short-term borrowings 282,980 10,342 4.89 % 7,418 125 2.25 % Subordinated debt 21,842 901 5.52 % 21,666 901 5.56 % Total interest-bearing liabilities 1,371,154 35,965 3.51 % 1,023,997 4,270 0.56 % Noninterest-bearing liabilities: Demand deposits 621,608 889,521 Accrued expenses and other liabilities 24,909 22,049 Shareholders' equity 150,491 137,456 Total liabilities and shareholders' equity $ 2,168,162 $ 2,073,023 Net interest spread 2.38 % 3.30 % Net interest income and margin (4) $ 54,686 3.55 % $ 52,421 3.57 % Non-taxable equivalent net interest margin 3.55 % 3.57 % Cost of deposits $ 1,687,940 $ 24,722 1.96 % $ 1,884,434 $ 3,244 0.23 % (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 $1.3 million and $1.6 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 $16.9 million and $13.7 million, respectively, is included as a contra asset.(4) Tax equivalent net interest income divided by total interest-earning assets. AVIDBANK HOLDINGS, INC.Loans and Credit Data (Unaudited)(dollars in thousands) Sept. 30, June 30, March 31, Dec. 31, Sept. 30, Current Quarter Year over Year 2023 2023 2023 2022 2022 Change Change Commercial loans $ 731,206 $ 716,355 $ 642,826 $ 700,022 $ 566,105 $ 14,851 $ 165,101 Commercial real estate Multi-family 184,147 193,014 188,411 169,048 159,384 (8,867 ) 24,763 Owner Occupied 135,950 132,078 137,118 128,790 120,951 3,872 14,999 Non-Owner Occupied 386,629 376,467 350,730 314,284 299,176 10,162 87,453 Construction and land 214,474 215,865 233,162 227,869 234,157 (1,391 ) (19,683 ) Residential 17,311 16,220 11,969 13,394 11,991 1,091 5,320 Total real estate loans 938,511 933,644 921,390 853,385 825,659 4,867 112,852 Other loans 197 266 285 815 782 (69 ) (585 ) Total loans $ 1,669,914 $ 1,650,265 $ 1,564,501 $ 1,554,222 $ 1,392,546 $ 19,649 $ 277,368 Allowance for Loan Losses Balance, beginning of quarter $ 17,636 $ 16,389 $ 16,481 $ 15,488 $ 14,646 Adoption of ASU 2016-13 - - (249 ) - - Provision for loan losses 164 1,347 157 993 925 Charge-offs - (100 ) - - (83 ) Recoveries - - - - - Balance, end of quarter $ 17,800 $ 17,636 $ 16,389 $ 16,481 $ 15,488 Allowance for Credit Losses on Unfunded Commitments Balance, beginning of quarter $ 2,169 $ 2,045 $ 449 $ 422 $ 422 Adoption of ASU 2016-13 - - 1,568 - - Provision for unfunded commitments (44 ) 124 28 27 - Balance, end of quarter $ 2,125 $ 2,169 $ 2,045 $ 449 $ 422 Total allowance for credit losses - loans and unfunded commitments $ 19,925 $ 19,805 $ 18,434 $ 16,930 $ 15,910 Provision for credit losses under CECL Provision for loan losses $ 164 $ 1,347 $ 157 $ 993 $ 925 Provision for unfunded commitments (1) (44 ) 124 28 - - Total provision for credit losses $ 120 $ 1,471 $ 185 $ 993 $ 925 Nonperforming Assets Loans accounted for on a non-accrual basis $ 1,385 $ 15,485 $ 14,240 $ 14,245 $ 154 Loans past due 90 days or more and still accruing - - - - - Nonperforming loans 1,385 15,485 14,240 14,245 154 Other real estate owned 14,095 - - - - Nonperforming assets $ 15,480 $ 15,485 $ 14,240 $ 14,245 $ 154 Nonperforming Loans by Type: Commercial $ 1,385 $ 1,390 $ 145 $ 150 $ 154 Commercial real estate loans - - - - - Construction and land - 14,095 14,095 14,095 - Total Nonperforming loans $ 1,385 $ 15,485 $ 14,240 $ 14,245 $ 154 Asset Quality Ratios Allowance for loan losses to total loans 1.07 % 1.07 % 1.05 % 1.06 % 1.11 % Allowance for credit losses to total loans 1.19 % 1.20 % 1.18 % 1.09 % 1.14 % Allowance for loan losses to nonperforming loans 1285.20 % 113.89 % 115.09 % 115.70 % 10057.14 % Nonperforming assets to total assets 0.70 % 0.70 % 0.66 % 0.67 % 0.01 % Nonperforming loans to total loans 0.08 % 0.94 % 0.91 % 0.92 % 0.01 % Net quarterly charge-offs to average loans (2) 0.00 % 0.03 % 0.00 % 0.00 % 0.02 % (1) Prior to the adoption of ASU 2016-13, the provision for unfunded commitments was included in other expense and totaled $27 thousand and $0 for the fourth and third quarters of 2022, respectively(2) Annualized AVIDBANK HOLDINGS, INC.Deposits (Unaudited)(dollars in thousands) Sept. 30, June 30, March 31, Dec. 31, Sept. 30, Current Quarter Year over Year Period End Deposits 2023 2023 2023 2022 2022 Change Change Non-interest-bearing demand $ 490,289 $ 593,246 $ 605,093 $ 765,079 $ 804,383 $ (102,957 ) $ (314,094 ) Interest-bearing checking 784,757 717,116 335,410 41,701 46,852 67,641 737,905 Money market and savings 322,983 316,991 563,097 948,731 890,836 5,992 (567,853 ) Time 30,880 46,794 61,645 67,724 72,301 (15,914 ) (41,421 ) Brokered 79,291 74,566 52,823 - - 4,725 79,291 Total deposits $ 1,708,200 $ 1,748,713 $ 1,618,068 $ 1,823,235 $ 1,814,372 $ (40,513 ) $ (106,172 ) Sept. 30, June 30, March 31, Dec. 31, Sept. 30, Current Quarter Year over Year Average Deposits 2023 2023 2023 2022 2022 Change Change Non-interest-bearing demand $ 520,573 $ 621,603 $ 724,894 $ 815,222 $ 820,047 $ (101,030 ) $ (299,474 ) Interest-bearing checking 748,016 486,367 87,198 44,344 46,145 261,649 701,871 Money market and savings 296,865 389,036 862,195 953,665 867,113 (92,171 ) (570,248 ) Time 41,455 48,650 65,830 70,409 85,703 (7,195 ) (44,248 ) Brokered 75,420 83,319 13,178 - - (7,899 ) 75,420 Total deposits $ 1,682,329 $ 1,628,975 $ 1,753,295 $ 1,883,640 $ 1,819,008 $ 53,354 $ (136,679 ) AVIDBANK HOLDINGS, INC.Non-GAAP performance and Financial Measures Reconciliation (Unaudited)(in thousands, except share and per share amounts) For the nine months ended 2023 2022 September 30, Third Second First Fourth Third Operating net income reconciliation Quarter Quarter Quarter Quarter Quarter 2023 2022 Net income - GAAP $ 5,408 $ 4,726 $ 6,364 $ 8,415 $ 7,046 $ 16,498 $ 16,608 Loss on sale of securities, net of income tax - - 595 295 - 595 - Operating net income $ 5,408 $ 4,726 $ 6,959 $ 8,710 $ 7,046 $ 17,093 $ 16,608 Operating diluted earnings per share reconciliation Diluted earnings per share - GAAP $ 0.72 $ 0.63 $ 0.85 $ 1.13 $ 0.95 $ 2.21 $ 2.42 Loss on sale of securities, net of income tax - - 0.08 0.04 - 0.08 - Diluted earnings per share - operating $ 0.72 $ 0.63 $ 0.93 $ 1.17 $ 0.95 $ 2.29 $ 2.42 Venture lending deposits reconciliation Total deposits $ 1,708,200 $ 1,748,713 $ 1,618,068 $ 1,823,235 $ 1,814,372 $ 1,708,200 $ 1,814,372 Venture lending deposits 608,331 606,022 557,479 754,997 800,930 608,331 800,930 Total deposits excluding venture lending $ 1,099,869 $ 1,142,691 $ 1,060,589 $ 1,068,238 $ 1,013,442 $ 1,099,869 $ 1,013,442 Taxable equivalent net interest income reconciliation Net interest income - GAAP $ 17,312 $ 17,489 $ 19,814 $ 21,754 $ 19,580 $ 54,616 $ 52,325 Taxable equivalent adjustment - - 70 75 69 70 96 Net interest income - taxable equivalent $ 17,312 $ 17,489 $ 19,884 $ 21,829 $ 19,649 $ 54,686 $ 52,421 Taxable equivalent net interest margin reconciliation Net interest margin - GAAP 3.34 % 3.39 % 3.91 % 4.40 % 4.05 % 3.55 % 3.57 % Impact of taxable equivalent adjustment - - 0.01 0.01 0.02 - - Net interest margin - taxable equivalent 3.34 % 3.39 % 3.92 % 4.41 % 4.07 % 3.55 % 3.57 % SOURCE: Avidbank Holdings, Inc. View source version on accesswire.com: https://www.accesswire.com/796041/avidbank-holdings-inc-announces-net-income-of-54-million-for-the-third-quarter-of-2023
SAN JOSE, CA / ACCESSWIRE / October 24, 2023 / Avidbank Holdings, Inc. (OTC Pink:AVBH) announced net income for the third quarter of 2023 of $5.4 million, or $0.72 per diluted share, compared to $4.7 million, or $0.63 per diluted share, for the second quarter of 2023 and $7.0 million, or $0.95 per diluted share, for the third quarter of 2022. Third Quarter 2023 Highlights Loans increased $19.6 million, or 5% annualized, from June 30, 2023, and $115.7 million, or 7%, from December 31, 2022. Average deposits increased $53.4 million, or 13% annualized, from the second quarter of 2023. Return on average assets improved to 0.99% from 0.87% in the second quarter of 2023. Uninsured deposits represented 35% of total deposits on September 30, 2023, compared to 40% on June 30, 2023, and 85% at December 31, 2022. Net available borrowing capacity totaled approximately $1.4 billion as of September 30, 2023. Annualized net charge-offs to average loans totaled 0.0% for the third quarter of 2023, compared to 0.03% for the second quarter of 2023. Nonperforming assets to total assets was unchanged at 0.70% on September 30, 2023 compared to June 30, 2023. "Despite the continued challenges in today's banking environment, we are pleased with our performance and outlook as we look toward 2024. Loan demand has moderated compared to historical average growth, but there remain excellent opportunities to add quality relationships. We continue to add new deposit accounts regularly after losing a very limited number of relationships since March of this year. Based on our commercial banking focus, it is not uncommon to have sizeable daily and seasonal fluctuations in our deposit balances, so we prefer to focus on growth in average balances. For the third quarter, average deposit balances increased $53.4 million compared to the second quarter. Our deposit pipeline remains robust in our venture lending and corporate banking divisions," said Mark Mordell, Chairman and Chief Executive Officer. "Credit quality remains solid, including the potential resolution of the $14.1 million nonperforming construction loan. We foreclosed on the loan during the third quarter and are currently in contract to sell. We expect to close on the sale of the property in the fourth quarter," added Mr. Mordell. Income Statement Taxable equivalent net interest income(1) totaled $17.3 million for the third quarter of 2023, a decrease of $177,000, or 1%, from the second quarter of 2023, and a decrease of $2.3 million, or 12%, from the third quarter of 2022. The taxable equivalent net interest margin was 3.34% in the third quarter of 2023, a decrease of 5 basis points compared to the second quarter of 2023, and a decrease of 73 basis points compared to the third quarter of 2022. The decrease in taxable equivalent net interest income and net interest margin compared to the prior quarter was primarily driven by an overall increase in deposit costs. The decrease in taxable equivalent net interest margin compared to the same period one year ago was primarily driven by an increase in high-cost short-term borrowings replacing lower-cost deposits, interest bearing deposits replacing no-cost demand deposits, and an overall increase in deposit costs, partially offset by an increase in loan yields and average loan balances. The yield on loans in the third quarter of 2023 was 7.04 %, an increase of 30 basis points from the second quarter of 2023 and an increase of 154 basis points from the third quarter of 2022. The overall increase in loan yields compared to prior periods was primarily due to increases in the Prime rate. The cost of deposits in the third quarter of 2023 was 2.52%, an increase of 55 basis points from the second quarter of 2023 and an increase of 210 basis points from the third quarter of 2022. The cost of interest-bearing deposits in the third quarter of 2023 was 3.66% compared to 3.18% in the second quarter of 2023 and 0.77% in the third quarter of 2022. The provision for credit losses was $120,000 in the third quarter of 2023, compared to $1.5 million in the second quarter of 2023 and $925,000 in the third quarter of 2022. The provision decreased in the current quarter primarily due to lower loan growth of $19.6 million in the third quarter of 2023, compared to $85.8 million in the second quarter of 2023. The provision for credit losses in the third quarter of 2023 included a $164,000 provision for loan losses offset by a $(44,000) provision for unfunded commitments. Noninterest income was $1.2 million in the third quarter of 2023 compared to $1.1 million in the second quarter of 2023 and $1.1 million in the third quarter of 2022. The third quarter of 2023 included a $105,000 increase in other investment income. Noninterest expense totaled $10.9 million for the third quarter of 2023, an increase of $484,000 compared to the second quarter of 2023. Salaries and benefits expense for the third quarter of 2023 included an increase from the hiring of the treasury management team on August 3rd. Salaries and benefits expense for the previous quarter included a reduction in incentive compensation expense. There were 147 full-time equivalent employees on September 30, 2023, compared to 145 on June 30, 2023. Balance Sheet Total assets were $2.20 billion as of September 30, 2023, compared to $2.21 billion on June 30, 2023, and $1.98 billion at September 30, 2022. Cash and cash equivalents were $80.0 million on September 30, 2023, compared to $104.2 million on June 30, 2023, and $37.2 million on September 30, 2022. Period end loans on September 30, 2023, totaled $1.67 billion, which represented an increase of $19.6 million, or 5% annualized, from June 30, 2023, and an increase of $277.4 million, or 20%, from September 30, 2022. The growth in loans during the third quarter of 2023 included an increase of $14.9 million in commercial loans and $5.2 million in commercial real estate loans, partially offset by a decrease of $1.4 million in construction loans. Quarterly average loans for the third quarter of 2023 increased $50.7 million, or 3%, from the second quarter of 2023 and $283.0 million, or 21%, from the third quarter of 2022. The allowance for credit losses on loans was $17.8 million on September 30, 2023, representing an increase of $164,000 from June 30, 2023. The allowance for credit losses on loans to total loans was 1.07% on September 30, 2023, compared to 1.07% on June 30, 2023. Nonperforming loans to total loans was 0.08% on September 30, 2023, compared to 0.94% on June 30, 2023. The decrease was due to the foreclosure of one nonperforming loan totaling $14.1 million. Investment securities were $345.6 million as of September 30, 2023, compared to $371.8 million on June 30, 2023, and $468.2 million at September 30, 2022. In the first quarter of 2023, we sold $57 million of securities for a loss of $815,000. This included the sale of $25 million in available for sale mortgage-backed securities and the sale of all $32 million in held to maturity municipal securities. Period end deposits were $1.70 billion on September 30, 2023, a decrease of $40.5 million, or 2%, from June 30, 2023. This included a $2.3 million, or 2% annualized, increase in Venture Lending deposits. Deposits in our Venture Lending division totaled $608.3 million at September 30, 2023, and included $396.9 million in reciprocal deposits. Short-term borrowings on September 30, 2023, totaled $300.0 million, an increase of $36.0 million, or 14%, compared to June 30, 2023. The short-term borrowings on September 30, 2023 included $35.0 million in FHLB borrowings and $224.0 million in borrowings from the Bank Term Funding Program (BTFP). The average rate on the BTFP on September 30, 2023 was 4.64%. Book value per share was $18.83 on September 30, 2023, a decrease of $0.72 compared to $19.55 on June 30, 2023. Total shareholders' equity totaled $145.6 million on September 30, 2023, a decrease of $5.2 million compared to June 30, 2023. This included an increase in retained earnings of $5.4 million offset by an increase in accumulated other comprehensive loss of $11.2 million. (1) A Non-GAAP performance measure. We provide detailed reconciliations in the "Non-GAAP Performance and Financial Measures Reconciliation" table. About Avidbank Avidbank Holdings, Inc. (OTC Pink: AVBH), headquartered in San Jose, California, offers innovative financial solutions and services. We specialize in commercial & industrial lending, venture lending, structured finance, asset-based lending, sponsor finance, fund finance, and real estate construction and commercial real estate lending. Avidbank provides a different approach to banking. We do what we say. Forward-Looking Statement: This news release contains statements that are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts, and generally include the words "believes," "plans," "intends," "expects," "opportunity," "anticipates," "targeted," "continue," "remain," "will," "should," "may," or words of similar meaning. While we believe that our forward-looking statements and the assumptions underlying them are reasonably based, such statements and assumptions, are, by their nature subject to risks and uncertainties, and thus could later prove to be inaccurate or incorrect. Accordingly, actual results could materially differ from forward-looking statements for a variety of reasons, including, but not limited to local, regional, national and international economic conditions and events and the impact they may have on us and our customers, and in particular in our market areas; ability to attract deposits and other sources of liquidity; oversupply of property inventory and deterioration in values of California real estate, both residential and commercial; a prolonged slowdown or decline in construction activity; changes in the financial performance and/or condition of our borrowers; changes in the level of nonperforming 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 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)(in thousands, except share and per share amounts) For the nine months ended 2023 2022 September 30, Third Second First Fourth Third Quarter Quarter Quarter Quarter Quarter 2023 2022 INCOME HIGHLIGHTS Net income $ 5,408 $ 4,726 $ 6,364 $ 8,415 $ 7,046 $ 16,498 $ 16,608 Loss on sale of securities, net of tax - - 595 295 - 595 - Operating net income (1) $ 5,408 $ 4,726 $ 6,959 $ 8,710 $ 7,046 $ 17,093 $ 16,608 PER SHARE DATA Basic earnings per share $ 0.74 $ 0.65 $ 0.87 $ 1.16 $ 0.97 $ 2.26 $ 2.48 Diluted earnings per share 0.72 0.63 0.85 1.13 0.95 2.21 2.42 Diluted earnings per share - operating (1) 0.72 0.63 0.93 1.17 0.95 2.29 2.42 Book value per share 18.83 19.55 19.57 17.99 16.58 18.83 16.58 PERFORMANCE MEASURES Return on average assets 0.99 % 0.87 % 1.19 % 1.61 % 1.38 % 1.02 % 1.07 % Return on average equity 14.01 % 12.32 % 17.87 % 25.48 % 19.36 % 14.66 % 16.15 % Taxable equivalent net interest margin 3.34 % 3.39 % 3.92 % 4.41 % 4.07 % 3.55 % 3.57 % Efficiency ratio 58.75 % 56.05 % 55.21 % 45.42 % 48.00 % 56.64 % 54.43 % Average loans to average deposits 97.49 % 97.57 % 88.70 % 76.98 % 74.61 % 94.51 % 67.81 % CAPITAL Tier 1 leverage ratio 9.84 % 9.55 % 9.33 % 9.46 % 9.22 % 9.84 % 9.22 % Common equity tier 1 capital ratio 9.95 % 9.88 % 10.14 % 9.82 % 10.24 % 9.95 % 10.24 % Tier 1 risk-based capital ratio 9.95 % 9.88 % 10.14 % 9.82 % 10.24 % 9.95 % 10.24 % Total risk-based capital ratio 11.89 % 11.87 % 12.16 % 11.76 % 12.31 % 11.89 % 12.31 % Tangible common equity ratio 6.61 % 6.83 % 6.95 % 6.45 % 6.38 % 6.61 % 6.38 % SHARES OUTSTANDING Number of common shares outstanding 7,731,404 7,712,278 7,703,748 7,645,428 7,629,767 7,731,404 7,629,767 Average common shares outstanding - basic 7,327,197 7,321,246 7,299,006 7,281,343 7,274,617 7,315,920 6,639,567 Average common shares outstanding - diluted 7,511,373 7,457,906 7,452,254 7,432,670 7,410,062 7,472,158 6,790,554 ASSET QUALITY Allowance for credit losses to total loans 1.19 % 1.20 % 1.18 % 1.09 % 1.14 % 1.19 % 1.14 % Nonperforming assets to total assets 0.70 % 0.70 % 0.66 % 0.67 % 0.01 % 0.70 % 0.01 % Nonperforming loans to total loans 0.08 % 0.94 % 0.91 % 0.92 % 0.01 % 0.08 % 0.01 % Net charge-offs to average loans (2) 0.00 % 0.03 % 0.00 % 0.00 % 0.02 % 0.01 % 0.01 % AVERAGE BALANCES Loans, net of deferred loan fees $ 1,640,080 $ 1,589,372 $ 1,555,207 $ 1,450,014 $ 1,357,090 $ 1,595,197 $ 1,277,760 Investment securities 365,244 382,860 443,870 459,057 505,849 397,037 476,858 Total assets 2,168,443 2,171,559 2,164,441 2,072,887 2,028,320 2,168,162 2,073,023 Deposits 1,682,329 1,628,975 1,753,295 1,883,640 1,819,008 1,687,940 1,884,434 Shareholders' equity 153,099 153,877 144,402 131,046 144,402 150,491 137,456 (1) A Non-GAAP performance measure. We provide detailed reconciliations in the "Non-GAAP Performance and Financial Measures Reconciliation" table.(2) Annualized AVIDBANK HOLDINGS, INC.Consolidated Balance Sheets (Unaudited)(in thousands) September 30, June 30, March 31, December 31, September 30, Assets 2023 2023 2023 2022 2022 Cash and due from banks $ 21,157 $ 33,849 $ 19,452 $ 17,435 $ 23,766 Due from Federal Reserve Bank and fed funds sold 58,885 70,364 114,615 29,853 13,476 Total cash and cash equivalents 80,042 104,213 134,067 47,288 37,242 Investment securities - available for sale 345,547 371,753 386,947 412,993 436,535 Investment securities - held to maturity - - - 31,671 31,704 Total investment securities 345,547 371,753 386,947 444,664 468,239 Loans, net of deferred loan fees 1,669,914 1,650,265 1,564,501 1,554,222 1,392,546 Allowance for loan losses (17,800 ) (17,636 ) (16,389 ) (16,481 ) (15,488 ) Loans, net of allowance for loan losses 1,652,114 1,632,629 1,548,112 1,537,741 1,377,058 Bank owned life insurance 33,440 33,202 32,972 32,747 32,522 Premises and equipment, net 3,558 3,774 4,037 4,163 4,318 Other real estate owned 14,095 - - - - Accrued interest receivable and other assets 73,104 62,234 63,916 66,665 64,443 Total assets $ 2,201,900 $ 2,207,805 $ 2,170,051 $ 2,133,268 $ 1,983,822 Liabilities and Shareholders' Equity Deposits: Non-interest-bearing demand $ 490,289 $ 593,246 $ 605,093 $ 765,079 $ 804,383 Interest-bearing checking 784,757 717,116 335,410 41,701 46,852 Money market and savings 322,983 316,991 563,097 948,731 890,836 Time 30,880 46,794 61,645 67,724 72,301 Brokered 79,291 74,566 52,823 - - Total deposits 1,708,200 1,748,713 1,618,068 1,823,235 1,814,372 Subordinated debt, net 21,881 21,855 21,830 21,805 21,779 Short-term borrowings 300,000 264,000 359,000 130,000 - Accrued interest payable and other liabilities 26,250 22,432 20,414 20,690 21,188 Total liabilities 2,056,331 2,057,000 2,019,312 1,995,730 1,857,339 Shareholders' Equity Common stock 104,018 103,420 102,718 102,359 101,679 Retained earnings 109,386 103,979 99,252 93,824 85,409 Accumulated other comprehensive (loss) (67,835 ) (56,594 ) (51,231 ) (58,645 ) (60,605 ) Total shareholders' equity 145,569 150,805 150,739 137,538 126,483 Total liabilities and shareholders' equity $ 2,201,900 $ 2,207,805 $ 2,170,051 $ 2,133,268 $ 1,983,822 AVIDBANK HOLDINGS, INC.Consolidated Statements of Income (Unaudited)(in thousands, except share and per share amounts) Three Months Ended Year-to-Date Sept. 30, June 30, March 31, Dec. 31, Sept. 30, 2023 2023 2023 2022 2022 2023 2022 Interest and fees on loans $ 29,125 $ 26,713 $ 25,577 $ 23,160 $ 18,853 $ 81,416 $ 48,653 Interest on investment securities 2,009 2,058 2,612 2,751 2,794 6,679 7,126 Other interest income 662 1,196 628 526 307 2,486 816 Total interest income 31,796 29,967 28,817 26,437 21,954 90,581 56,595 Deposit interest expense 10,704 7,989 6,030 4,269 1,948 24,722 3,244 Interest on short-term borrowings 3,480 4,189 2,673 114 126 10,342 125 Interest on long-term debt 300 300 300 300 300 901 901 Total interest expense 14,484 12,478 9,003 4,683 2,374 35,965 4,270 Net interest income 17,312 17,489 19,814 21,754 19,580 54,616 52,325 Provision for credit losses 120 1,471 185 993 925 1,776 2,517 Net interest income after provision for credit losses 17,192 16,018 19,629 20,761 18,655 52,840 49,808 Service charges and bank fees 613 611 573 660 725 1,798 2,211 Federal Home Loan Bank dividends 171 185 163 118 91 519 250 Income from bank owned life insurance 238 230 225 224 219 693 647 Gain/(loss) on sale of securities - - (815 ) (404 ) - (815 ) - Warrant and success fee income 8 - - 119 12 8 162 Other investment income 142 37 (6 ) 521 (1 ) 173 84 Other income 62 24 28 17 30 112 61 Total noninterest income 1,234 1,087 168 1,255 1,076 2,488 3,415 Salaries and benefit expenses 7,460 7,021 7,954 7,592 7,069 22,435 21,510 Occupancy and equipment expenses 1,002 1,005 961 911 946 2,967 2,741 Data processing 538 477 528 456 447 1,542 1,281 Regulatory assessments 478 555 226 221 421 1,260 1,595 Legal and professional fees 483 394 431 364 269 1,308 604 Other operating expenses 935 960 933 906 761 2,829 2,609 Total noninterest expense 10,896 10,412 11,033 10,450 9,913 32,341 30,340 Income before income taxes 7,530 6,693 8,764 11,566 9,818 22,987 22,883 Provision for income taxes 2,122 1,967 2,400 3,151 2,772 6,489 6,275 Net income $ 5,408 $ 4,726 $ 6,364 $ 8,415 $ 7,046 $ 16,498 $ 16,608 Basic earnings per common share $ 0.74 $ 0.65 $ 0.87 $ 1.16 $ 0.97 $ 2.26 $ 2.48 Diluted earnings per common share 0.72 0.63 0.85 1.13 0.95 2.21 2.42 Weighted average shares - basic 7,327,197 7,321,246 7,299,006 7,281,343 7,274,617 7,315,920 6,639,567 Weighted average shares - diluted 7,511,373 7,457,906 7,452,254 7,432,670 7,410,062 7,472,158 6,790,554 AVIDBANK HOLDINGS, INC.Average Balance Sheets and Net Interest Margin Analysis (Unaudited)(dollars in thousands; taxable equivalent) Three Months Ended September 30, 2023 June 30, 2023 Interest Yields Interest Yields Average Income/ or Average Income/ or Balance Expense Rates Balance Expense Rates Assets Interest earning assets: Loans (1) $ 1,641,475 $ 29,125 7.04 % $ 1,590,758 $ 26,713 6.74 % Fed funds sold/interest bearing deposits 48,350 662 5.36 % 93,001 1,196 5.09 % Taxable Investment securities 365,244 2,009 2.18 % 382,860 2,058 2.16 % Total interest-earning assets 2,055,069 31,796 6.14 % 2,066,619 29,967 5.82 % Noninterest-earning assets: Cash and due from banks 22,556 23,515 All other assets (2) 90,818 81,425 Total assets $ 2,168,443 $ 2,171,559 Liabilities and Shareholders' Equity Interest-bearing liabilities: Deposits Demand $ 748,016 $ 7,306 3.88 % $ 486,367 $ 4,100 3.38 % Money market and savings 296,865 2,193 2.93 % 389,036 2,659 2.74 % Time 41,455 264 2.53 % 48,650 198 1.63 % Brokered 75,420 941 4.95 % 83,319 1,032 4.97 % Total interest-bearing deposits 1,161,756 10,704 3.66 % 1,007,372 7,989 3.18 % Short-term borrowings 285,326 3,480 4.84 % 343,341 4,189 4.89 % Subordinated debt 21,867 300 5.44 % 21,842 300 5.51 % Total interest-bearing liabilities 1,468,949 14,484 3.91 % 1,372,555 12,478 3.65 % Noninterest-bearing liabilities: Demand deposits 520,573 621,603 Accrued expenses and other liabilities 25,822 23,524 Shareholders' equity 153,099 153,877 Total liabilities and shareholders' equity $ 2,168,443 $ 2,171,559 Net interest spread 2.23 % 2.17 % Net interest income and margin (3) $ 17,312 3.34 % $ 17,489 3.39 % Non-taxable equivalent net interest margin 3.34 % 3.39 % Cost of deposits $ 1,682,329 $ 10,704 2.52 % $ 1,628,975 $ 7,989 1.97 % (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 $441 thousand and $347 thousand, respectively.(2) Average allowance for loan losses of $17.6 million and $16.8 million, respectively, is included as a contra asset.(3) Net interest margin is net interest income divided by total interest-earning assets. AVIDBANK HOLDINGS, INC.Average Balance Sheets and Net Interest Margin Analysis (Unaudited)(dollars in thousands; taxable equivalent) Three months ended September 30, 2023 September 30, 2022 Interest Yields Interest Yields Average Income/ or Average Income/ or Balance Expense Rates Balance Expense Rates Assets Interest earning assets: Loans (1) $ 1,641,475 $ 29,125 7.04 % $ 1,358,934 $ 18,852 5.50 % Fed funds sold/interest bearing deposits 48,350 662 5.36 % 52,626 307 2.31 % Investment securities Taxable investment securities 365,244 2,009 2.18 % 475,086 2,530 2.11 % Non-taxable investment securities (2) - - 0.00 % 30,763 334 4.31 % Total investment securities 365,244 2,009 2.18 % 505,849 2,864 2.25 % Total interest-earning assets 2,055,069 31,796 6.14 % 1,917,409 22,023 4.56 % Noninterest-earning assets: Cash and due from banks 22,556 34,984 All other assets (3) 90,818 75,927 Total assets $ 2,168,443 $ 2,028,320 Liabilities and Shareholders' Equity Interest-bearing liabilities: Deposits Demand $ 748,016 $ 7,306 3.88 % $ 46,145 $ 38 0.33 % Money market and savings 296,865 2,193 2.93 % 867,113 1,768 0.81 % Time 41,455 264 2.53 % 85,703 142 0.66 % Brokered 75,420 941 4.95 % - - - Total interest-bearing deposits 1,161,756 10,704 3.66 % 998,961 1,948 0.77 % Short-term borrowings 285,326 3,480 4.84 % 22,011 126 2.27 % Subordinated debt 21,867 300 5.44 % 21,766 300 5.47 % Total interest-bearing liabilities 1,468,949 14,484 3.91 % 1,042,738 2,374 0.90 % Noninterest-bearing liabilities: Demand deposits 520,573 820,047 Accrued expenses and other liabilities 25,822 21,133 Shareholders' equity 153,099 144,402 Total liabilities and shareholders' equity $ 2,168,443 $ 2,028,320 Net interest spread 2.23 % 3.66 % Net interest income and margin (4) $ 17,312 3.34 % $ 19,649 4.07 % Non-taxable equivalent net interest margin 3.34 % 4.05 % Cost of deposits $ 1,682,329 $ 10,704 2.52 % $ 1,819,008 $ 1,948 0.42 % (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 $441 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 $17.6 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 (Unaudited)(dollars in thousands; taxable equivalent) Nine months ended September 30, 2023 September 30, 2022 Interest Yields Interest Yields Average Income/ or Average Income/ or Balance Expense Rates Balance Expense Rates Assets Interest earning assets: Loans (1) $ 1,596,660 $ 81,416 6.82 % $ 1,279,579 $ 48,653 5.08 % Fed funds sold/interest bearing deposits 65,855 2,486 4.98 % 205,199 816 0.53 % Investment securities Taxable investment securities 387,315 6,415 2.21 % 462,326 6,749 1.95 % Non-taxable investment securities (2) 9,722 334 4.59 % 14,532 473 4.69 % Total investment securities 397,037 6,749 2.27 % 476,858 7,222 2.03 % Total interest-earning assets 2,059,552 90,651 5.88 % 1,961,636 56,691 3.86 % Noninterest-earning assets: Cash and due from banks 23,019 41,173 All other assets (3) 85,591 70,214 Total assets $ 2,168,162 $ 2,073,023 Liabilities and Shareholders' Equity Interest-bearing liabilities: Deposits Demand $ 442,948 $ 11,899 3.59 % $ 47,184 $ 69 0.20 % Money market and savings 513,961 10,008 2.60 % 838,354 2,630 0.42 % Time 51,889 684 1.76 % 92,410 486 0.70 % Brokered 57,534 2,131 4.95 % 16,965 59 0.46 % Total interest-bearing deposits 1,066,332 24,722 3.10 % 994,913 3,244 0.44 % Short-term borrowings 282,980 10,342 4.89 % 7,418 125 2.25 % Subordinated debt 21,842 901 5.52 % 21,666 901 5.56 % Total interest-bearing liabilities 1,371,154 35,965 3.51 % 1,023,997 4,270 0.56 % Noninterest-bearing liabilities: Demand deposits 621,608 889,521 Accrued expenses and other liabilities 24,909 22,049 Shareholders' equity 150,491 137,456 Total liabilities and shareholders' equity $ 2,168,162 $ 2,073,023 Net interest spread 2.38 % 3.30 % Net interest income and margin (4) $ 54,686 3.55 % $ 52,421 3.57 % Non-taxable equivalent net interest margin 3.55 % 3.57 % Cost of deposits $ 1,687,940 $ 24,722 1.96 % $ 1,884,434 $ 3,244 0.23 % (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 $1.3 million and $1.6 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 $16.9 million and $13.7 million, respectively, is included as a contra asset.(4) Tax equivalent net interest income divided by total interest-earning assets. AVIDBANK HOLDINGS, INC.Loans and Credit Data (Unaudited)(dollars in thousands) Sept. 30, June 30, March 31, Dec. 31, Sept. 30, Current Quarter Year over Year 2023 2023 2023 2022 2022 Change Change Commercial loans $ 731,206 $ 716,355 $ 642,826 $ 700,022 $ 566,105 $ 14,851 $ 165,101 Commercial real estate Multi-family 184,147 193,014 188,411 169,048 159,384 (8,867 ) 24,763 Owner Occupied 135,950 132,078 137,118 128,790 120,951 3,872 14,999 Non-Owner Occupied 386,629 376,467 350,730 314,284 299,176 10,162 87,453 Construction and land 214,474 215,865 233,162 227,869 234,157 (1,391 ) (19,683 ) Residential 17,311 16,220 11,969 13,394 11,991 1,091 5,320 Total real estate loans 938,511 933,644 921,390 853,385 825,659 4,867 112,852 Other loans 197 266 285 815 782 (69 ) (585 ) Total loans $ 1,669,914 $ 1,650,265 $ 1,564,501 $ 1,554,222 $ 1,392,546 $ 19,649 $ 277,368 Allowance for Loan Losses Balance, beginning of quarter $ 17,636 $ 16,389 $ 16,481 $ 15,488 $ 14,646 Adoption of ASU 2016-13 - - (249 ) - - Provision for loan losses 164 1,347 157 993 925 Charge-offs - (100 ) - - (83 ) Recoveries - - - - - Balance, end of quarter $ 17,800 $ 17,636 $ 16,389 $ 16,481 $ 15,488 Allowance for Credit Losses on Unfunded Commitments Balance, beginning of quarter $ 2,169 $ 2,045 $ 449 $ 422 $ 422 Adoption of ASU 2016-13 - - 1,568 - - Provision for unfunded commitments (44 ) 124 28 27 - Balance, end of quarter $ 2,125 $ 2,169 $ 2,045 $ 449 $ 422 Total allowance for credit losses - loans and unfunded commitments $ 19,925 $ 19,805 $ 18,434 $ 16,930 $ 15,910 Provision for credit losses under CECL Provision for loan losses $ 164 $ 1,347 $ 157 $ 993 $ 925 Provision for unfunded commitments (1) (44 ) 124 28 - - Total provision for credit losses $ 120 $ 1,471 $ 185 $ 993 $ 925 Nonperforming Assets Loans accounted for on a non-accrual basis $ 1,385 $ 15,485 $ 14,240 $ 14,245 $ 154 Loans past due 90 days or more and still accruing - - - - - Nonperforming loans 1,385 15,485 14,240 14,245 154 Other real estate owned 14,095 - - - - Nonperforming assets $ 15,480 $ 15,485 $ 14,240 $ 14,245 $ 154 Nonperforming Loans by Type: Commercial $ 1,385 $ 1,390 $ 145 $ 150 $ 154 Commercial real estate loans - - - - - Construction and land - 14,095 14,095 14,095 - Total Nonperforming loans $ 1,385 $ 15,485 $ 14,240 $ 14,245 $ 154 Asset Quality Ratios Allowance for loan losses to total loans 1.07 % 1.07 % 1.05 % 1.06 % 1.11 % Allowance for credit losses to total loans 1.19 % 1.20 % 1.18 % 1.09 % 1.14 % Allowance for loan losses to nonperforming loans 1285.20 % 113.89 % 115.09 % 115.70 % 10057.14 % Nonperforming assets to total assets 0.70 % 0.70 % 0.66 % 0.67 % 0.01 % Nonperforming loans to total loans 0.08 % 0.94 % 0.91 % 0.92 % 0.01 % Net quarterly charge-offs to average loans (2) 0.00 % 0.03 % 0.00 % 0.00 % 0.02 % (1) Prior to the adoption of ASU 2016-13, the provision for unfunded commitments was included in other expense and totaled $27 thousand and $0 for the fourth and third quarters of 2022, respectively(2) Annualized AVIDBANK HOLDINGS, INC.Deposits (Unaudited)(dollars in thousands) Sept. 30, June 30, March 31, Dec. 31, Sept. 30, Current Quarter Year over Year Period End Deposits 2023 2023 2023 2022 2022 Change Change Non-interest-bearing demand $ 490,289 $ 593,246 $ 605,093 $ 765,079 $ 804,383 $ (102,957 ) $ (314,094 ) Interest-bearing checking 784,757 717,116 335,410 41,701 46,852 67,641 737,905 Money market and savings 322,983 316,991 563,097 948,731 890,836 5,992 (567,853 ) Time 30,880 46,794 61,645 67,724 72,301 (15,914 ) (41,421 ) Brokered 79,291 74,566 52,823 - - 4,725 79,291 Total deposits $ 1,708,200 $ 1,748,713 $ 1,618,068 $ 1,823,235 $ 1,814,372 $ (40,513 ) $ (106,172 ) Sept. 30, June 30, March 31, Dec. 31, Sept. 30, Current Quarter Year over Year Average Deposits 2023 2023 2023 2022 2022 Change Change Non-interest-bearing demand $ 520,573 $ 621,603 $ 724,894 $ 815,222 $ 820,047 $ (101,030 ) $ (299,474 ) Interest-bearing checking 748,016 486,367 87,198 44,344 46,145 261,649 701,871 Money market and savings 296,865 389,036 862,195 953,665 867,113 (92,171 ) (570,248 ) Time 41,455 48,650 65,830 70,409 85,703 (7,195 ) (44,248 ) Brokered 75,420 83,319 13,178 - - (7,899 ) 75,420 Total deposits $ 1,682,329 $ 1,628,975 $ 1,753,295 $ 1,883,640 $ 1,819,008 $ 53,354 $ (136,679 ) AVIDBANK HOLDINGS, INC.Non-GAAP performance and Financial Measures Reconciliation (Unaudited)(in thousands, except share and per share amounts) For the nine months ended 2023 2022 September 30, Third Second First Fourth Third Operating net income reconciliation Quarter Quarter Quarter Quarter Quarter 2023 2022 Net income - GAAP $ 5,408 $ 4,726 $ 6,364 $ 8,415 $ 7,046 $ 16,498 $ 16,608 Loss on sale of securities, net of income tax - - 595 295 - 595 - Operating net income $ 5,408 $ 4,726 $ 6,959 $ 8,710 $ 7,046 $ 17,093 $ 16,608 Operating diluted earnings per share reconciliation Diluted earnings per share - GAAP $ 0.72 $ 0.63 $ 0.85 $ 1.13 $ 0.95 $ 2.21 $ 2.42 Loss on sale of securities, net of income tax - - 0.08 0.04 - 0.08 - Diluted earnings per share - operating $ 0.72 $ 0.63 $ 0.93 $ 1.17 $ 0.95 $ 2.29 $ 2.42 Venture lending deposits reconciliation Total deposits $ 1,708,200 $ 1,748,713 $ 1,618,068 $ 1,823,235 $ 1,814,372 $ 1,708,200 $ 1,814,372 Venture lending deposits 608,331 606,022 557,479 754,997 800,930 608,331 800,930 Total deposits excluding venture lending $ 1,099,869 $ 1,142,691 $ 1,060,589 $ 1,068,238 $ 1,013,442 $ 1,099,869 $ 1,013,442 Taxable equivalent net interest income reconciliation Net interest income - GAAP $ 17,312 $ 17,489 $ 19,814 $ 21,754 $ 19,580 $ 54,616 $ 52,325 Taxable equivalent adjustment - - 70 75 69 70 96 Net interest income - taxable equivalent $ 17,312 $ 17,489 $ 19,884 $ 21,829 $ 19,649 $ 54,686 $ 52,421 Taxable equivalent net interest margin reconciliation Net interest margin - GAAP 3.34 % 3.39 % 3.91 % 4.40 % 4.05 % 3.55 % 3.57 % Impact of taxable equivalent adjustment - - 0.01 0.01 0.02 - - Net interest margin - taxable equivalent 3.34 % 3.39 % 3.92 % 4.41 % 4.07 % 3.55 % 3.57 % SOURCE: Avidbank Holdings, Inc. 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