Recent Quotes View Full List My Watchlist Create Watchlist Indicators DJI Nasdaq Composite SPX Gold Crude Oil EL&P Market Index Markets Stocks ETFs Tools Overview News Currencies International Treasuries Avidbank Holdings, Inc. Announces Net Income for the Second Quarter of 2024 By: ACCESSWIRE July 22, 2024 at 02:30 AM EDT SAN JOSE, CA / ACCESSWIRE / July 22, 2024 / Avidbank Holdings, Inc. (OTC Pink:AVBH) announced net income for the second quarter of 2024 of $3.5 million, or $0.46 per diluted share, compared to $5.2 million, or $0.69 per diluted share, for the first quarter of 2024 and $4.7 million, or $0.63 per diluted share, for the second quarter of 2023. Second Quarter 2024 Highlights Book value per share was $21.77, an increase of $0.36, or 2%, from March 31, 2024, and an increase of $2.22, or 11%, from June 30, 2024. Loans increased $23.6 million, or 5% annualized, from March 31, 2024, and $66.0 million, or 4%, from December 31, 2023. Average deposits increased $32.5 million, or 8% annualized, from the first quarter of 2024, and $128.3 million, or 8%, from the second quarter of 2023. Period end deposits (excluding brokered deposits)(1) increased $39.6 million, or 10% annualized, from March 31, 2024, and $99.7 million, or 6%, from December 31, 2023. The efficiency ratio improved to 59.92% from 61.62% in the first quarter of 2024. Annualized net charge-offs to average loans totaled 0.0% for the second quarter and first quarter of 2024. Nonperforming assets to total assets was 0.16% as of June 30, 2024, compared to 0.06% as of March 31, 2024. Net income totaled $3.5 million, a decrease of $1.8 million from the first quarter of 2024, and a decrease of $1.3 million from the second quarter of 2023. A $3.0 million increase in the provision for credit losses was a primary contributor to the decrease. "We continue to make solid progress on our overall goal for this year of strengthening our balance sheet. This included another quarter of the growth in core deposits outpacing our growth in loans. Total deposits, excluding brokered, increased approximately $40 million while loans grew approximately $24 million in the second quarter. Net income in the second quarter was negatively impacted by a $2.4 million specific reserve on a nonperforming venture-backed loan. Pre-tax, pre-provision income(1) in the second quarter was $7.9 million, compared to $7.8 million in the first quarter. Overall credit quality remains solid with criticized and classified loans representing 2.0% of total loans," said Mark Mordell, Chairman and Chief Executive Officer. "Our new clients as well as existing clients continue to move deposits from noninterest bearing accounts to interest earning accounts. This shift was elevated in the second quarter, which negatively impacted our net interest margin," added Mr. Mordell. Income Statement Taxable equivalent net interest income(1) totaled $18.5 million for the second quarter of 2024, a decrease of $360,000, or 2%, from the first quarter of 2024, and an increase of $857,000, or 5%, from the second quarter of 2023. The taxable equivalent net interest margin was 3.39% in the second quarter of 2024, a decrease of 15 basis points compared to the first quarter of 2024, and a decrease of 3 basis points compared to the second quarter of 2023. The decrease in taxable equivalent net interest income and net interest margin compared to the prior quarter was primarily driven by a decrease in noninterest bearing deposits and an overall increase in the cost of deposits and borrowings. The increase in borrowing costs included the renewal of $244.0 million in borrowings from the Bank Term Funding Program during the first quarter of 2024. The yield on loans in the second quarter of 2024 was 7.37%, an increase of 9 basis points from the first quarter of 2024 and an increase of 63 basis points from the second quarter of 2023. The overall increase in loan yields compared to prior periods was primarily due to higher rates on new loans. The cost of deposits in the second quarter of 2024 was 3.09%, an increase of 28 basis points from the first quarter of 2024 and an increase of 112 basis points from the second quarter of 2023. The cost of interest-bearing deposits in the second quarter of 2024 was 4.11% compared to 3.90% in the first quarter of 2024 and 3.18% in the second quarter of 2023. The provision for credit losses was $3.0 million in the second quarter of 2024, compared to $319,000 in the first quarter of 2024 and $1.5 million in the second quarter of 2023. The provision increased in the current quarter primarily due to the addition of a $2.3 million nonaccrual loan. The provision for credit losses in the second quarter of 2024 included a $3.1 million provision for credit losses on loans offset by a $(70,000) provision for unfunded commitments. Noninterest income was $1.1 million in the second quarter of 2024 compared to $1.3 million in the first quarter of 2024 and $902,000 in the second quarter of 2023. Noninterest expense totaled $11.8 million for the second quarter of 2024, a decrease of $669,000 compared to the first quarter of 2024 primarily due to a lower incentive accrual and seasonally higher FICA taxes in the previous quarter. There were 144 full-time equivalent employees on June 30, 2024, compared to 141 on March 31, 2024. Balance Sheet Total assets were $2.29 billion as of June 30, 2024, compared to $2.26 billion as of March 31, 2024, and $2.21 billion at June 30, 2023. Cash and cash equivalents were $111.7 million on June 30, 2024, compared to $90.2 million on March 31, 2024, and $104.2 million on June 30, 2023. Period end loans on June 30, 2024, totaled $1.81 billion, an increase of $23.6 million, or 5% annualized, from March 31, 2024, and an increase of $156.3 million, or 9%, from June 30, 2023. The growth in loans during the second quarter of 2024 included an increase of $38.5 million in commercial loans, partially offset by a decrease of $16.6 million in construction loans. Quarterly average loans for the second quarter of 2024 increased $56.7 million, or 3%, from the first quarter of 2024 and $224.1 million, or 14%, from the second quarter of 2023. The allowance for credit losses on loans was $22.4 million on June 30, 2024, representing an increase of $3.1 million from March 31, 2024. The allowance for credit losses on loans to total loans was 1.24% on June 30, 2024, compared to 1.08% on March 31, 2024. Nonperforming loans to total loans was 0.20% on June 30, 2024, compared to 0.08% on March 31, 2024. The increase was due to the addition of one nonperforming venture-backed loan totaling $2.3 million. Investment securities were $308.7 million as of June 30, 2024, compared to $314.8 million on March 31, 2024, and $371.8 million at June 30, 2023. Period end deposits were $1.74 billion on June 30, 2024, a decrease of $19.4 million, or 1%, from March 31, 2024. The change in deposits during the second quarter of 2024 included a $76.1 million and $43.1 million increase in interest-bearing checking and time deposits, respectively, offset by a $72.1 million decrease in non-interest bearing and a $58.9 million decrease in brokered deposits. Quarterly average deposits for the second quarter of 2024 were $1.76 billion, an increase of $32.5 million from the first quarter of 2024, and an increase of $128.3 million from the second quarter of 2023. Short-term borrowings on June 30, 2024, totaled $330.0 million, an increase of $40.0 million, or 14%, compared to March 31, 2024. The short-term borrowings on June 30, 2024 included $244.0 million in borrowings from the Bank Term Funding Program (BTFP). Book value per share was $21.77 on June 30, 2024, an increase of $0.36 compared to $21.41 on March 31, 2024. Total shareholders' equity was $171.4 million on June 30, 2024, an increase of $4.4 million compared to March 31, 2024. This included an increase in retained earnings of $3.5 million. (1) A Non-GAAP performance measure. We provide detailed reconciliation 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. Non-GAAP Financial Measures This news release contains certain non-GAAP (Generally Accepted Accounting Principles) financial measures in addition to results presented in accordance with GAAP. Management has presented these non-GAAP financial measures in this earnings release because it believes that they provide useful and comparative information to assess trends in the Company's current quarter and year-to-date results and facilitate comparison of our performance with the performance of our peers. Where applicable, the Company has also presented comparable earnings information using GAAP financial measures. These non-GAAP measures have inherent limitations, are not required to be uniformly applied and are not audited. They should not be considered in isolation or as a substitute for operating results determined in accordance with GAAP. These non-GAAP measures may not be comparable to similarly titled measures reported by other companies. Forward-Looking Statements 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 six months ended 2024 2023 June 30, Second First Fourth Third Second Quarter Quarter Quarter Quarter Quarter 2024 2023 INCOME HIGHLIGHTS Net income $ 3,466 $ 5,246 $ 303 $ 5,408 $ 4,726 $ 8,712 $ 11,090 Loss on sale of securities, net of tax - - 3,888 - - - 595 Severance, net of income tax - - 233 - - - - BOLI surrender tax expense - - 478 - - - - Adjusted net income (1) $ 3,466 $ 5,246 $ 4,902 $ 5,408 $ 4,726 $ 8,712 $ 11,685 PER SHARE DATA Basic earnings per share $ 0.47 $ 0.71 $ 0.04 $ 0.74 $ 0.65 $ 1.18 $ 1.52 Diluted earnings per share 0.46 0.69 0.04 0.72 0.63 1.15 1.49 Diluted earnings per share - adjusted (1) 0.46 0.69 0.65 0.72 0.63 1.15 1.57 Book value per share 21.77 21.41 21.27 18.83 19.55 21.77 19.55 PERFORMANCE MEASURES Return on average assets 0.62 % 0.95 % 0.05 % 0.99 % 0.87 % 0.78 % 1.03 % Return on average assets - adjusted (1) 0.62 % 0.95 % 0.89 % 0.99 % 0.87 % 0.78 % 1.09 % Return on average equity 8.35 % 12.64 % 0.81 % 14.01 % 12.32 % 10.50 % 14.99 % Taxable equivalent net interest margin 3.39 % 3.54 % 3.49 % 3.36 % 3.42 % 3.46 % 3.68 % Efficiency ratio 59.92 % 61.62 % 83.68 % 58.75 % 56.05 % 60.78 % 55.62 % Average loans to average deposits 103.19 % 101.85 % 99.41 % 97.49 % 97.57 % 102.53 % 93.00 % CAPITAL Tier 1 leverage ratio 9.64 % 9.88 % 9.77 % 9.84 % 9.55 % 9.64 % 9.55 % Common equity tier 1 capital ratio 10.08 % 10.03 % 9.88 % 9.95 % 9.88 % 10.08 % 9.88 % Tier 1 risk-based capital ratio 10.08 % 10.03 % 9.88 % 9.95 % 9.88 % 10.08 % 9.88 % Total risk-based capital ratio 12.17 % 12.01 % 11.86 % 11.89 % 11.87 % 12.17 % 11.87 % Tangible common equity ratio 7.50 % 7.40 % 7.41 % 6.61 % 6.83 % 7.50 % 6.83 % SHARES OUTSTANDING Number of common shares outstanding 7,876,082 7,803,900 7,770,439 7,731,404 7,712,278 7,876,082 7,712,278 Average common shares outstanding - basic 7,426,949 7,386,639 7,344,693 7,327,197 7,321,246 7,406,794 7,310,188 Average common shares outstanding - diluted 7,578,613 7,551,406 7,543,616 7,511,373 7,457,906 7,565,065 7,454,643 ASSET QUALITY Allowance for credit losses to total loans 1.36 % 1.21 % 1.22 % 1.19 % 1.20 % 1.36 % 1.20 % Nonperforming assets to total assets 0.16 % 0.06 % 0.06 % 0.70 % 0.70 % 0.16 % 0.70 % Nonperforming loans to total loans 0.20 % 0.08 % 0.08 % 0.08 % 0.94 % 0.20 % 0.94 % Net charge-offs to average loans (2) 0.00 % 0.00 % 0.00 % 0.00 % 0.03 % 0.00 % 0.01 % AVERAGE BALANCES Loans, net of deferred loan fees $ 1,813,422 $ 1,756,770 $ 1,698,690 $ 1,640,080 $ 1,589,372 $ 1,785,096 $ 1,572,384 Investment securities 307,294 319,440 337,808 365,244 382,860 313,367 413,197 Total assets 2,265,583 2,222,778 2,191,198 2,168,443 2,171,559 2,244,180 2,168,020 Deposits 1,757,320 1,724,845 1,708,789 1,682,329 1,628,975 1,741,082 1,690,792 Shareholders' equity 166,874 166,907 148,723 153,099 153,877 166,890 149,166 (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) June 30, March 31, December 31, September 30, June 30, Assets 2024 2024 2023 2023 2023 Cash and due from banks $ 14,062 $ 10,268 $ 9,754 $ 21,157 $ 33,849 Due from Federal Reserve Bank and interest-bearing deposits in banks 97,662 79,911 71,642 58,885 70,364 Total cash and cash equivalents 111,724 90,179 81,396 80,042 104,213 Investment securities - available for sale 308,661 314,793 325,320 345,547 371,753 Total investment securities 308,661 314,793 325,320 345,547 371,753 Loans, net of deferred loan fees 1,806,607 1,783,024 1,740,647 1,669,914 1,650,265 Allowance for credit losses on loans (22,410 ) (19,342 ) (19,131 ) (17,800 ) (17,636 ) Loans, net of allowance for credit losses on loans 1,784,197 1,763,682 1,721,516 1,652,114 1,632,629 Bank owned life insurance 12,490 12,401 12,315 33,440 33,202 Premises and equipment, net 2,810 3,061 3,297 3,558 3,774 Other real estate owned - - - 14,095 - Accrued interest receivable and other assets 67,139 72,395 86,992 73,104 62,234 Total assets $ 2,287,021 $ 2,256,511 $ 2,230,836 $ 2,201,900 $ 2,207,805 Liabilities and Shareholders' Equity Deposits: Non-interest-bearing demand $ 405,644 $ 477,728 $ 472,517 $ 490,289 $ 593,246 Interest-bearing checking 840,839 764,766 740,902 784,757 717,116 Money market and savings 312,162 319,692 298,117 322,983 316,991 Time 99,239 56,140 46,676 30,880 46,794 Brokered 80,608 139,532 96,117 79,291 74,566 Total deposits 1,738,492 1,757,858 1,654,329 1,708,200 1,748,713 Subordinated debt, net 21,957 21,931 21,906 21,881 21,855 Short-term borrowings 330,000 290,000 360,000 300,000 264,000 Accrued interest payable and other liabilities 25,123 19,638 29,289 26,250 22,432 Total liabilities 2,115,572 2,089,427 2,065,524 2,056,331 2,057,000 Shareholders' Equity Common stock 105,487 104,771 104,499 104,018 103,420 Retained earnings 118,400 114,934 109,688 109,386 103,979 Accumulated other comprehensive (loss) (52,438 ) (52,621 ) (48,875 ) (67,835 ) (56,594 ) Total shareholders' equity 171,449 167,084 165,312 145,569 150,805 Total liabilities and shareholders' equity $ 2,287,021 $ 2,256,511 $ 2,230,836 $ 2,201,900 $ 2,207,805 AVIDBANK HOLDINGS, INC.Consolidated Statements of Income (Unaudited)(in thousands, except share and per share amounts) Three months ended For the six months ended June 30, March 31, Dec. 31, Sept. 30, June 30, 2024 2024 2023 2023 2023 2024 2023 Interest and fees on loans $ 33,255 $ 31,828 $ 31,078 $ 29,125 $ 26,713 $ 65,083 $ 52,290 Interest on investment securities 1,801 1,824 1,979 2,009 2,058 3,624 4,670 Federal Home Loan Bank dividends (1) 193 190 172 171 185 384 348 Other interest income 951 819 654 662 1,196 1,770 1,824 Total interest income 36,200 34,661 33,883 31,967 30,152 70,861 59,132 Deposit interest expense 13,494 12,034 11,692 10,704 7,989 25,528 14,019 Interest on short-term borrowings 3,880 3,442 3,467 3,480 4,189 7,322 6,862 Interest on long-term debt 300 300 300 300 300 601 600 Total interest expense 17,674 15,776 15,459 14,484 12,478 33,451 21,481 Net interest income 18,526 18,885 18,424 17,483 17,674 37,410 37,651 Provision for credit losses 2,998 319 1,266 120 1,471 3,317 1,656 Net interest income after provision for credit losses 15,528 18,566 17,158 17,363 16,203 34,093 35,995 Service charges and bank fees 658 618 613 560 545 1,275 1,036 Foreign exchange income 208 251 210 53 66 460 149 Income from bank owned life insurance 137 187 201 238 230 324 455 Gain/(loss) on sale of securities - - (5,399 ) - - - (815 ) Warrant and success fee income - - 15 8 - - - Other investment income 59 155 (116 ) 142 37 214 30 Loss on sale of ORE - - (165 ) - - - - Other income 36 72 19 62 24 108 51 Total noninterest income 1,098 1,283 (4,622 ) 1,063 902 2,381 906 Salaries and benefit expenses 7,980 8,794 8,137 7,460 7,021 16,774 14,975 Occupancy and equipment expenses 1,039 1,028 986 1,002 1,005 2,067 1,965 Data processing 597 564 499 538 477 1,161 1,004 Regulatory assessments 568 446 403 478 555 1,014 781 Legal and professional fees 541 611 531 483 394 1,152 825 Other operating expenses 1,033 984 994 935 960 2,016 1,894 Total noninterest expense 11,758 12,427 11,550 10,896 10,412 24,184 21,444 Income before income taxes 4,868 7,422 986 7,530 6,693 12,290 15,457 Provision for income taxes 1,402 2,176 683 2,122 1,967 3,578 4,367 Net income $ 3,466 $ 5,246 $ 303 $ 5,408 $ 4,726 $ 8,712 $ 11,090 Basic earnings per common share $ 0.47 $ 0.71 $ 0.04 $ 0.74 $ 0.65 $ 1.18 $ 1.52 Diluted earnings per common share 0.46 0.69 0.04 0.72 0.63 1.15 1.49 Weighted average shares - basic 7,426,949 7,386,639 7,344,693 7,327,197 7,321,246 7,406,794 7,310,188 Weighted average shares - diluted 7,578,613 7,551,406 7,543,616 7,511,373 7,457,906 7,565,065 7,454,643 (1) Federal Home Loan Bank dividends have been reclassified from total noninterest income to total interest income for all periods presented. AVIDBANK HOLDINGS, INC.Average Balance Sheets and Net Interest Margin Analysis (Unaudited)(dollars in thousands; taxable equivalent) Three months ended June 30, 2024 March 31, 2024 Interest Yields Interest Yields Average Income/ or Average Income/ or Balance Expense Rates Balance Expense Rates Assets Interest earning assets: Loans (1) $ 1,814,803 $ 33,255 7.37% $ 1,758,201 $ 31,828 7.28% Fed funds sold/interest bearing deposits 70,491 951 5.43% 59,391 819 5.46% Investment securities Taxable investment securities 305,492 1,778 2.34% 317,572 1,802 2.28% Non-taxable investment securities (2) 1,802 28 6.25% 1,868 28 5.93% Total investment securities 307,294 1,806 2.36% 319,440 1,830 2.30% FHLB stock (3) 8,409 193 9.23% 8,409 190 9.11% Total interest-earning assets 2,200,997 36,205 6.62% 2,145,441 34,667 6.50% Noninterest-earning assets: Cash and due from banks 12,188 13,038 All other assets (4) 52,398 64,299 Total assets $ 2,265,583 $ 2,222,778 Liabilities and Shareholders' Equity Interest-bearing liabilities: Deposits Demand $ 783,048 $ 8,031 4.12% $ 746,916 $ 7,439 4.01% Money market and savings 304,392 2,598 3.43% 303,593 2,270 3.01% Time 97,430 1,035 4.27% 56,783 555 3.93% Brokered 135,952 1,830 5.41% 134,453 1,770 5.29% Total interest-bearing deposits 1,320,822 13,494 4.11% 1,241,745 12,034 3.90% Short-term borrowings 295,220 3,880 5.29% 282,066 3,442 4.91% Subordinated debt 21,944 300 5.50% 21,917 300 5.51% Total interest-bearing liabilities 1,637,986 17,674 4.34% 1,545,728 15,776 4.10% Noninterest-bearing liabilities: Demand deposits 436,498 483,100 Accrued expenses and other liabilities 24,225 27,043 Shareholders' equity 166,874 166,907 Total liabilities and shareholders' equity $ 2,265,583 $ 2,222,778 Net interest spread 2.28% 2.40% Net interest income and margin (5) $ 18,531 3.39% $ 18,891 3.54% Non-taxable equivalent net interest margin 3.39% 3.54% Cost of deposits $ 1,757,320 $ 13,494 3.09% $ 1,724,845 $ 12,034 2.81% (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 $409 thousand and $455 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) Federal Home Loan Bank dividends have been reclassified from total noninterest income to total interest income for all periods presented. (4) Average allowance for credit losses on loans of $19.8 million and $19.1 million, respectively, is included as a contra asset. (5) 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 June 30, 2024 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) $ 1,814,803 $ 33,255 7.37% $ 1,590,758 $ 26,713 6.74% Fed funds sold/interest bearing deposits 70,491 951 5.43% 93,001 1,196 5.09% Investment securities Taxable investment securities 305,492 1,778 2.34% 382,860 2,058 2.16% Non-taxable investment securities (2) 1,802 28 6.25% - - 0.00% Total investment securities 307,294 1,806 2.36% 382,860 2,058 2.16% FHLB stock (3) 8,409 193 9.23% 8,361 185 8.87% Total interest-earning assets 2,200,997 36,205 6.62% 2,074,980 30,152 5.83% Noninterest-earning assets: Cash and due from banks 12,188 23,515 All other assets (4) 52,398 73,064 Total assets $ 2,265,583 $ 2,171,559 Liabilities and Shareholders' Equity Interest-bearing liabilities: Deposits Demand $ 783,048 $ 8,031 4.12% $ 25,854 $ 60 0.93% Money market and savings 304,392 2,598 3.43% 849,549 6,699 3.16% Time 97,430 1,035 4.27% 48,650 198 1.63% Brokered 135,952 1,830 5.41% 83,319 1,032 4.97% Total interest-bearing deposits 1,320,822 13,494 4.11% 1,007,372 7,989 3.18% Short-term borrowings 295,220 3,880 5.29% 343,341 4,189 4.89% Subordinated debt 21,944 300 5.50% 21,842 300 5.51% Total interest-bearing liabilities 1,637,986 17,674 4.34% 1,372,555 12,478 3.65% Noninterest-bearing liabilities: Demand deposits 436,498 621,603 Accrued expenses and other liabilities 24,225 23,524 Shareholders' equity 166,874 153,877 Total liabilities and shareholders' equity $ 2,265,583 $ 2,171,559 Net interest spread 2.28% 2.18% Net interest income and margin (5) $ 18,531 3.39% $ 17,674 3.42% Non-taxable equivalent net interest margin 3.39% 3.42% Cost of deposits $ 1,757,320 $ 13,494 3.09% $ 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 $409 thousand and $347 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) Federal Home Loan Bank dividends have been reclassified from total noninterest income to total interest income for all periods presented. (4) Average allowance for credit losses on loans of $19.8 million and $16.8 million, respectively, is included as a contra asset. (5) 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) Six months ended June 30, 2024 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) $ 1,786,502 $ 65,083 7.33 % $ 1,573,881 $ 52,290 6.70 % Fed funds sold/interest bearing deposits 64,941 1,770 5.48 % 74,753 1,824 4.85 % Investment securities Taxable investment securities 311,532 3,580 2.31 % 398,533 4,406 2.23 % Non-taxable investment securities (2) 1,835 56 6.14 % 14,664 334 4.59 % Total investment securities 313,367 3,636 2.33 % 413,197 4,740 2.31 % FHLB stock (3) 8,409 384 9.18 % 7,986 348 8.79 % Total interest-earning assets 2,173,219 70,873 6.56 % 2,069,817 59,202 5.77 % Noninterest-earning assets: Cash and due from banks 12,613 23,255 All other assets (4) 58,348 74,948 Total assets $ 2,244,180 $ 2,168,020 Liabilities and Shareholders' Equity Interest-bearing liabilities: Deposits Demand $ 764,981 $ 15,470 4.07 % $ 27,966 $ 116 0.84 % Money market and savings 303,992 4,868 3.22 % 884,228 12,292 2.80 % Time 77,107 1,590 4.15 % 57,193 421 1.48 % Brokered 135,203 3,600 5.35 % 48,442 1,190 4.95 % Total interest-bearing deposits 1,281,283 25,528 4.01 % 1,017,829 14,019 2.78 % Short-term borrowings 288,643 7,322 5.10 % 281,787 6,862 4.91 % Subordinated debt 21,931 601 5.51 % 21,829 600 5.54 % Total interest-bearing liabilities 1,591,857 33,451 4.23 % 1,321,445 21,481 3.28 % Noninterest-bearing liabilities: Demand deposits 459,799 672,963 Accrued expenses and other liabilities 25,634 24,446 Shareholders' equity 166,890 149,166 Total liabilities and shareholders' equity $ 2,244,180 $ 2,168,020 Net interest spread 2.33 % 2.49 % Net interest income and margin (5) $ 37,422 3.46 % $ 37,721 3.68 % Non-taxable equivalent net interest margin 3.46 % 3.67 % Cost of deposits $ 1,741,082 $ 25,528 2.95 % $ 1,690,792 $ 14,019 1.67 % (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 $864 thousand and $877 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) Federal Home Loan Bank dividends have been reclassified from total noninterest income to total interest income for all periods presented. (4) Average allowance for loan losses of $19.5 million and $16.5 million, respectively, is included as a contra asset. (5) Tax equivalent net interest income divided by total interest-earning assets. AVIDBANK HOLDINGS, INC.Loans and Credit Data (Unaudited)(dollars in thousands) June 30, March 31, Dec. 31, Sept. 30, June 30, Current Quarter Year over Year 2024 2024 2023 2023 2023 Change Change Commercial loans $ 821,623 $ 783,171 $ 758,552 $ 731,206 $ 716,355 $ 38,452 $ 105,268 Commercial real estate Multi-family 198,366 198,017 194,981 184,147 193,014 349 5,352 Owner Occupied 136,357 137,426 139,059 135,950 132,078 (1,069 ) 4,279 Non-Owner Occupied 390,461 388,141 393,809 386,629 376,467 2,320 13,994 Construction and land 242,966 259,562 237,124 214,474 215,865 (16,596 ) 27,101 Residential 15,717 16,187 16,816 17,311 16,220 (470 ) (503 ) Total real estate loans 983,867 999,333 981,789 938,511 933,644 (15,466 ) 50,223 Other loans 1,117 520 306 197 266 597 851 Total loans $ 1,806,607 $ 1,783,024 $ 1,740,647 $ 1,669,914 $ 1,650,265 $ 23,583 $ 156,342 Allowance for Credit Losses on Loans Balance, beginning of quarter $ 19,342 $ 19,131 $ 17,800 $ 17,636 $ 16,389 Provision for credit losses on loans 3,068 211 1,331 164 1,347 Charge-offs - - - - (100 ) Recoveries - - - - - Balance, end of quarter $ 22,410 $ 19,342 $ 19,131 $ 17,800 $ 17,636 Allowance for Credit Losses on Unfunded Commitments Balance, beginning of quarter $ 2,168 $ 2,060 $ 2,125 $ 2,169 $ 2,045 Provision for unfunded commitments (70 ) 108 (65 ) (44 ) 124 Balance, end of quarter $ 2,098 $ 2,168 $ 2,060 $ 2,125 $ 2,169 Total allowance for credit losses - loans and unfunded commitments $ 24,508 $ 21,510 $ 21,191 $ 19,925 $ 19,805 Provision for credit losses under CECL Provision for credit losses on loans $ 3,068 $ 211 $ 1,331 $ 164 $ 1,347 Provision for unfunded commitments (70 ) 108 (65 ) (44 ) 124 Total provision for credit losses $ 2,998 $ 319 $ 1,266 $ 120 $ 1,471 Nonperforming Assets Loans accounted for on a non-accrual basis $ 3,686 $ 1,370 $ 1,378 $ 1,385 $ 15,485 Loans past due 90 days or more and still accruing - - - - - Nonperforming loans 3,686 1,370 1,378 1,385 15,485 Other real estate owned - - - 14,095 - Nonperforming assets $ 3,686 $ 1,370 $ 1,378 $ 15,480 $ 15,485 Nonperforming Loans by Type: Commercial $ 3,686 $ 1,370 $ 1,378 $ 1,385 $ 1,390 Construction and land - - - - 14,095 Total Nonperforming loans $ 3,686 $ 1,370 $ 1,378 $ 1,385 $ 15,485 Asset Quality Ratios Allowance for credit losses on loans to total loans 1.24 % 1.08 % 1.10 % 1.07 % 1.07 % Allowance for credit losses to total loans 1.36 % 1.21 % 1.22 % 1.19 % 1.20 % Allowance for credit losses on loans to nonperforming loans 607.98 % 1411.82 % 1388.32 % 1285.20 % 113.89 % Nonperforming assets to total assets 0.16 % 0.06 % 0.06 % 0.70 % 0.70 % Nonperforming loans to total loans 0.20 % 0.08 % 0.08 % 0.08 % 0.94 % Net quarterly charge-offs to average loans (1) 0.00 % 0.00 % 0.00 % 0.00 % 0.03 % Criticized and classified loans to total loans 2.00 % 1.78 % 1.72 % 1.70 % 1.83 % (1) Annualized AVIDBANK HOLDINGS, INC.Deposits (Unaudited)(dollars in thousands) Current Year over June 30, March 31, Dec. 31, Sept. 30, June 30, Quarter Year Period End Deposits 2024 2024 2023 2023 2023 Change Change Non-interest-bearing demand $ 405,644 $ 477,728 $ 472,517 $ 490,289 $ 593,246 $ (72,084 ) $ (187,602 ) Interest-bearing checking 840,839 764,766 740,902 784,757 717,116 76,073 123,723 Money market and savings 312,162 319,692 298,117 322,983 316,991 (7,530 ) (4,829 ) Time 99,239 56,140 46,676 30,880 46,794 43,099 52,445 Brokered 80,608 139,532 96,117 79,291 74,566 (58,924 ) 6,042 Total deposits $ 1,738,492 $ 1,757,858 $ 1,654,329 $ 1,708,200 $ 1,748,713 $ (19,366 ) $ (10,221 ) Average Deposits Non-interest-bearing demand $ 436,498 $ 483,100 $ 487,301 $ 520,573 $ 621,603 $ (46,602 ) $ (185,105 ) Interest-bearing checking 783,048 746,916 766,856 748,016 486,367 36,132 296,681 Money market and savings 304,392 303,593 305,240 296,865 389,036 799 (84,644 ) Time 97,430 56,783 29,787 41,455 48,650 40,647 48,780 Brokered 135,952 134,453 119,605 75,420 83,319 1,499 52,633 Total deposits $ 1,757,320 $ 1,724,845 $ 1,708,789 $ 1,682,329 $ 1,628,975 $ 32,475 $ 128,345 AVIDBANK HOLDINGS, INC.Non-GAAP performance and Financial Measures Reconciliation (Unaudited)(in thousands, except share and per share amounts) 2024 2023 For the six months ended Second First Fourth Third Second June 30, Non-GAAP adjusted net income reconciliation Quarter Quarter Quarter Quarter Quarter 2024 2023 Net income - GAAP $ 3,466 $ 5,246 $ 303 $ 5,408 $ 4,726 $ 8,712 $ 11,090 Loss on sale of securities, net of income tax - - 3,888 - - - 595 Severance, net of income tax - - 233 - - - - BOLI surrender tax expense - - 478 - - - - Adjusted net income (non-GAAP) $ 3,466 $ 5,246 $ 4,902 $ 5,408 $ 4,726 $ 8,712 $ 11,685 Non-GAAP adjusted net income reconciliation Net income - GAAP $ 3,466 $ 5,246 $ 303 $ 5,408 $ 4,726 $ 8,712 $ 11,090 Loss on sale of securities - - 5,399 - - - 815 Tax impact of loss on sale of securities - - (1,511 ) - - - (220 ) Severance - - 324 - - - - Tax impact of severance - - (91 ) - - - - BOLI surrender tax expense - - 478 - - - - Adjusted net income (non-GAAP) $ 3,466 $ 5,246 $ 4,902 $ 5,408 $ 4,726 $ 8,712 $ 11,685 Non-GAAP adjusted diluted earnings per share reconciliation Diluted earnings per share - GAAP $ 0.46 $ 0.69 $ 0.04 $ 0.72 $ 0.63 $ 1.15 $ 1.49 Loss on sale of securities, net of income tax - - 0.52 - - - 0.08 Severance, net of income tax - - 0.03 - - - - BOLI surrender tax expense - - 0.06 - - - - Diluted earnings per share - adjusted (non-GAAP) $ 0.46 $ 0.69 $ 0.65 $ 0.72 $ 0.63 $ 1.15 $ 1.57 Non-GAAP adjusted return on average assets reconciliation Net income - GAAP $ 3,466 $ 5,246 $ 303 $ 5,408 $ 4,726 $ 8,712 $ 11,090 Average total assets 2,265,583 2,222,778 2,191,198 2,168,443 2,171,559 2,244,180 2,171,559 Return on average assets - GAAP 0.62 % 0.95 % 0.05 % 0.99 % 0.87 % 0.78 % 1.03 % Adjusted net income (non-GAAP) $ 3,466 $ 5,246 $ 4,902 $ 5,408 $ 4,726 $ 8,712 $ 11,685 Average total assets 2,265,583 2,222,778 2,191,198 2,168,443 2,171,559 2,244,180 2,171,559 Return on average assets - adjusted (non-GAAP) 0.62 % 0.95 % 0.89 % 0.99 % 0.87 % 0.78 % 1.09 % Non-GAAP taxable equivalent net interest income reconciliation Net interest income - GAAP $ 18,526 $ 18,885 $ 18,424 $ 17,483 $ 17,674 $ 37,410 $ 37,651 Taxable equivalent adjustment 5 6 2 - - 12 70 Net interest income - taxable equivalent (non-GAAP) $ 18,531 $ 18,891 $ 18,426 $ 17,483 $ 17,674 $ 37,422 $ 37,721 Non-GAAP taxable equivalent net interest margin reconciliation Net interest margin - GAAP 3.39 % 3.54 % 3.49 % 3.36 % 3.42 % 3.46 % 3.67 % Impact of taxable equivalent adjustment - - - - - - 0.01 Net interest margin - taxable equivalent (non-GAAP) 3.39 % 3.54 % 3.49 % 3.36 % 3.42 % 3.46 % 3.68 % Non-GAAP total deposits, excluding brokered deposits Total period end deposits - GAAP $ 1,738,492 $ 1,757,858 $ 1,654,329 $ 1,708,200 $ 1,748,713 $ 1,738,492 $ 1,748,713 Brokered deposits 80,608 139,532 96,117 79,291 74,566 80,608 74,566 Total deposits, excluding brokered (non-GAAP) $ 1,657,884 $ 1,618,326 $ 1,558,212 $ 1,628,909 $ 1,674,147 $ 1,657,884 $ 1,674,147 Non-GAAP pre-tax, pre-provision net income Net income - GAAP $ 3,466 $ 5,246 $ 303 $ 5,408 $ 4,726 $ 8,712 $ 11,090 Provision for credit losses 2,998 319 1,266 120 1,471 3,317 1,656 Provision for income taxes 1,402 2,176 683 2,122 1,967 3,578 4,367 Non-GAAP pre-tax, pre-provision net income $ 7,866 $ 7,741 $ 2,252 $ 7,650 $ 8,164 $ 15,607 $ 17,113 SOURCE: Avidbank Holdings, Inc. 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Avidbank Holdings, Inc. Announces Net Income for the Second Quarter of 2024 By: ACCESSWIRE July 22, 2024 at 02:30 AM EDT SAN JOSE, CA / ACCESSWIRE / July 22, 2024 / Avidbank Holdings, Inc. (OTC Pink:AVBH) announced net income for the second quarter of 2024 of $3.5 million, or $0.46 per diluted share, compared to $5.2 million, or $0.69 per diluted share, for the first quarter of 2024 and $4.7 million, or $0.63 per diluted share, for the second quarter of 2023. Second Quarter 2024 Highlights Book value per share was $21.77, an increase of $0.36, or 2%, from March 31, 2024, and an increase of $2.22, or 11%, from June 30, 2024. Loans increased $23.6 million, or 5% annualized, from March 31, 2024, and $66.0 million, or 4%, from December 31, 2023. Average deposits increased $32.5 million, or 8% annualized, from the first quarter of 2024, and $128.3 million, or 8%, from the second quarter of 2023. Period end deposits (excluding brokered deposits)(1) increased $39.6 million, or 10% annualized, from March 31, 2024, and $99.7 million, or 6%, from December 31, 2023. The efficiency ratio improved to 59.92% from 61.62% in the first quarter of 2024. Annualized net charge-offs to average loans totaled 0.0% for the second quarter and first quarter of 2024. Nonperforming assets to total assets was 0.16% as of June 30, 2024, compared to 0.06% as of March 31, 2024. Net income totaled $3.5 million, a decrease of $1.8 million from the first quarter of 2024, and a decrease of $1.3 million from the second quarter of 2023. A $3.0 million increase in the provision for credit losses was a primary contributor to the decrease. "We continue to make solid progress on our overall goal for this year of strengthening our balance sheet. This included another quarter of the growth in core deposits outpacing our growth in loans. Total deposits, excluding brokered, increased approximately $40 million while loans grew approximately $24 million in the second quarter. Net income in the second quarter was negatively impacted by a $2.4 million specific reserve on a nonperforming venture-backed loan. Pre-tax, pre-provision income(1) in the second quarter was $7.9 million, compared to $7.8 million in the first quarter. Overall credit quality remains solid with criticized and classified loans representing 2.0% of total loans," said Mark Mordell, Chairman and Chief Executive Officer. "Our new clients as well as existing clients continue to move deposits from noninterest bearing accounts to interest earning accounts. This shift was elevated in the second quarter, which negatively impacted our net interest margin," added Mr. Mordell. Income Statement Taxable equivalent net interest income(1) totaled $18.5 million for the second quarter of 2024, a decrease of $360,000, or 2%, from the first quarter of 2024, and an increase of $857,000, or 5%, from the second quarter of 2023. The taxable equivalent net interest margin was 3.39% in the second quarter of 2024, a decrease of 15 basis points compared to the first quarter of 2024, and a decrease of 3 basis points compared to the second quarter of 2023. The decrease in taxable equivalent net interest income and net interest margin compared to the prior quarter was primarily driven by a decrease in noninterest bearing deposits and an overall increase in the cost of deposits and borrowings. The increase in borrowing costs included the renewal of $244.0 million in borrowings from the Bank Term Funding Program during the first quarter of 2024. The yield on loans in the second quarter of 2024 was 7.37%, an increase of 9 basis points from the first quarter of 2024 and an increase of 63 basis points from the second quarter of 2023. The overall increase in loan yields compared to prior periods was primarily due to higher rates on new loans. The cost of deposits in the second quarter of 2024 was 3.09%, an increase of 28 basis points from the first quarter of 2024 and an increase of 112 basis points from the second quarter of 2023. The cost of interest-bearing deposits in the second quarter of 2024 was 4.11% compared to 3.90% in the first quarter of 2024 and 3.18% in the second quarter of 2023. The provision for credit losses was $3.0 million in the second quarter of 2024, compared to $319,000 in the first quarter of 2024 and $1.5 million in the second quarter of 2023. The provision increased in the current quarter primarily due to the addition of a $2.3 million nonaccrual loan. The provision for credit losses in the second quarter of 2024 included a $3.1 million provision for credit losses on loans offset by a $(70,000) provision for unfunded commitments. Noninterest income was $1.1 million in the second quarter of 2024 compared to $1.3 million in the first quarter of 2024 and $902,000 in the second quarter of 2023. Noninterest expense totaled $11.8 million for the second quarter of 2024, a decrease of $669,000 compared to the first quarter of 2024 primarily due to a lower incentive accrual and seasonally higher FICA taxes in the previous quarter. There were 144 full-time equivalent employees on June 30, 2024, compared to 141 on March 31, 2024. Balance Sheet Total assets were $2.29 billion as of June 30, 2024, compared to $2.26 billion as of March 31, 2024, and $2.21 billion at June 30, 2023. Cash and cash equivalents were $111.7 million on June 30, 2024, compared to $90.2 million on March 31, 2024, and $104.2 million on June 30, 2023. Period end loans on June 30, 2024, totaled $1.81 billion, an increase of $23.6 million, or 5% annualized, from March 31, 2024, and an increase of $156.3 million, or 9%, from June 30, 2023. The growth in loans during the second quarter of 2024 included an increase of $38.5 million in commercial loans, partially offset by a decrease of $16.6 million in construction loans. Quarterly average loans for the second quarter of 2024 increased $56.7 million, or 3%, from the first quarter of 2024 and $224.1 million, or 14%, from the second quarter of 2023. The allowance for credit losses on loans was $22.4 million on June 30, 2024, representing an increase of $3.1 million from March 31, 2024. The allowance for credit losses on loans to total loans was 1.24% on June 30, 2024, compared to 1.08% on March 31, 2024. Nonperforming loans to total loans was 0.20% on June 30, 2024, compared to 0.08% on March 31, 2024. The increase was due to the addition of one nonperforming venture-backed loan totaling $2.3 million. Investment securities were $308.7 million as of June 30, 2024, compared to $314.8 million on March 31, 2024, and $371.8 million at June 30, 2023. Period end deposits were $1.74 billion on June 30, 2024, a decrease of $19.4 million, or 1%, from March 31, 2024. The change in deposits during the second quarter of 2024 included a $76.1 million and $43.1 million increase in interest-bearing checking and time deposits, respectively, offset by a $72.1 million decrease in non-interest bearing and a $58.9 million decrease in brokered deposits. Quarterly average deposits for the second quarter of 2024 were $1.76 billion, an increase of $32.5 million from the first quarter of 2024, and an increase of $128.3 million from the second quarter of 2023. Short-term borrowings on June 30, 2024, totaled $330.0 million, an increase of $40.0 million, or 14%, compared to March 31, 2024. The short-term borrowings on June 30, 2024 included $244.0 million in borrowings from the Bank Term Funding Program (BTFP). Book value per share was $21.77 on June 30, 2024, an increase of $0.36 compared to $21.41 on March 31, 2024. Total shareholders' equity was $171.4 million on June 30, 2024, an increase of $4.4 million compared to March 31, 2024. This included an increase in retained earnings of $3.5 million. (1) A Non-GAAP performance measure. We provide detailed reconciliation 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. Non-GAAP Financial Measures This news release contains certain non-GAAP (Generally Accepted Accounting Principles) financial measures in addition to results presented in accordance with GAAP. Management has presented these non-GAAP financial measures in this earnings release because it believes that they provide useful and comparative information to assess trends in the Company's current quarter and year-to-date results and facilitate comparison of our performance with the performance of our peers. Where applicable, the Company has also presented comparable earnings information using GAAP financial measures. These non-GAAP measures have inherent limitations, are not required to be uniformly applied and are not audited. They should not be considered in isolation or as a substitute for operating results determined in accordance with GAAP. These non-GAAP measures may not be comparable to similarly titled measures reported by other companies. Forward-Looking Statements 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 six months ended 2024 2023 June 30, Second First Fourth Third Second Quarter Quarter Quarter Quarter Quarter 2024 2023 INCOME HIGHLIGHTS Net income $ 3,466 $ 5,246 $ 303 $ 5,408 $ 4,726 $ 8,712 $ 11,090 Loss on sale of securities, net of tax - - 3,888 - - - 595 Severance, net of income tax - - 233 - - - - BOLI surrender tax expense - - 478 - - - - Adjusted net income (1) $ 3,466 $ 5,246 $ 4,902 $ 5,408 $ 4,726 $ 8,712 $ 11,685 PER SHARE DATA Basic earnings per share $ 0.47 $ 0.71 $ 0.04 $ 0.74 $ 0.65 $ 1.18 $ 1.52 Diluted earnings per share 0.46 0.69 0.04 0.72 0.63 1.15 1.49 Diluted earnings per share - adjusted (1) 0.46 0.69 0.65 0.72 0.63 1.15 1.57 Book value per share 21.77 21.41 21.27 18.83 19.55 21.77 19.55 PERFORMANCE MEASURES Return on average assets 0.62 % 0.95 % 0.05 % 0.99 % 0.87 % 0.78 % 1.03 % Return on average assets - adjusted (1) 0.62 % 0.95 % 0.89 % 0.99 % 0.87 % 0.78 % 1.09 % Return on average equity 8.35 % 12.64 % 0.81 % 14.01 % 12.32 % 10.50 % 14.99 % Taxable equivalent net interest margin 3.39 % 3.54 % 3.49 % 3.36 % 3.42 % 3.46 % 3.68 % Efficiency ratio 59.92 % 61.62 % 83.68 % 58.75 % 56.05 % 60.78 % 55.62 % Average loans to average deposits 103.19 % 101.85 % 99.41 % 97.49 % 97.57 % 102.53 % 93.00 % CAPITAL Tier 1 leverage ratio 9.64 % 9.88 % 9.77 % 9.84 % 9.55 % 9.64 % 9.55 % Common equity tier 1 capital ratio 10.08 % 10.03 % 9.88 % 9.95 % 9.88 % 10.08 % 9.88 % Tier 1 risk-based capital ratio 10.08 % 10.03 % 9.88 % 9.95 % 9.88 % 10.08 % 9.88 % Total risk-based capital ratio 12.17 % 12.01 % 11.86 % 11.89 % 11.87 % 12.17 % 11.87 % Tangible common equity ratio 7.50 % 7.40 % 7.41 % 6.61 % 6.83 % 7.50 % 6.83 % SHARES OUTSTANDING Number of common shares outstanding 7,876,082 7,803,900 7,770,439 7,731,404 7,712,278 7,876,082 7,712,278 Average common shares outstanding - basic 7,426,949 7,386,639 7,344,693 7,327,197 7,321,246 7,406,794 7,310,188 Average common shares outstanding - diluted 7,578,613 7,551,406 7,543,616 7,511,373 7,457,906 7,565,065 7,454,643 ASSET QUALITY Allowance for credit losses to total loans 1.36 % 1.21 % 1.22 % 1.19 % 1.20 % 1.36 % 1.20 % Nonperforming assets to total assets 0.16 % 0.06 % 0.06 % 0.70 % 0.70 % 0.16 % 0.70 % Nonperforming loans to total loans 0.20 % 0.08 % 0.08 % 0.08 % 0.94 % 0.20 % 0.94 % Net charge-offs to average loans (2) 0.00 % 0.00 % 0.00 % 0.00 % 0.03 % 0.00 % 0.01 % AVERAGE BALANCES Loans, net of deferred loan fees $ 1,813,422 $ 1,756,770 $ 1,698,690 $ 1,640,080 $ 1,589,372 $ 1,785,096 $ 1,572,384 Investment securities 307,294 319,440 337,808 365,244 382,860 313,367 413,197 Total assets 2,265,583 2,222,778 2,191,198 2,168,443 2,171,559 2,244,180 2,168,020 Deposits 1,757,320 1,724,845 1,708,789 1,682,329 1,628,975 1,741,082 1,690,792 Shareholders' equity 166,874 166,907 148,723 153,099 153,877 166,890 149,166 (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) June 30, March 31, December 31, September 30, June 30, Assets 2024 2024 2023 2023 2023 Cash and due from banks $ 14,062 $ 10,268 $ 9,754 $ 21,157 $ 33,849 Due from Federal Reserve Bank and interest-bearing deposits in banks 97,662 79,911 71,642 58,885 70,364 Total cash and cash equivalents 111,724 90,179 81,396 80,042 104,213 Investment securities - available for sale 308,661 314,793 325,320 345,547 371,753 Total investment securities 308,661 314,793 325,320 345,547 371,753 Loans, net of deferred loan fees 1,806,607 1,783,024 1,740,647 1,669,914 1,650,265 Allowance for credit losses on loans (22,410 ) (19,342 ) (19,131 ) (17,800 ) (17,636 ) Loans, net of allowance for credit losses on loans 1,784,197 1,763,682 1,721,516 1,652,114 1,632,629 Bank owned life insurance 12,490 12,401 12,315 33,440 33,202 Premises and equipment, net 2,810 3,061 3,297 3,558 3,774 Other real estate owned - - - 14,095 - Accrued interest receivable and other assets 67,139 72,395 86,992 73,104 62,234 Total assets $ 2,287,021 $ 2,256,511 $ 2,230,836 $ 2,201,900 $ 2,207,805 Liabilities and Shareholders' Equity Deposits: Non-interest-bearing demand $ 405,644 $ 477,728 $ 472,517 $ 490,289 $ 593,246 Interest-bearing checking 840,839 764,766 740,902 784,757 717,116 Money market and savings 312,162 319,692 298,117 322,983 316,991 Time 99,239 56,140 46,676 30,880 46,794 Brokered 80,608 139,532 96,117 79,291 74,566 Total deposits 1,738,492 1,757,858 1,654,329 1,708,200 1,748,713 Subordinated debt, net 21,957 21,931 21,906 21,881 21,855 Short-term borrowings 330,000 290,000 360,000 300,000 264,000 Accrued interest payable and other liabilities 25,123 19,638 29,289 26,250 22,432 Total liabilities 2,115,572 2,089,427 2,065,524 2,056,331 2,057,000 Shareholders' Equity Common stock 105,487 104,771 104,499 104,018 103,420 Retained earnings 118,400 114,934 109,688 109,386 103,979 Accumulated other comprehensive (loss) (52,438 ) (52,621 ) (48,875 ) (67,835 ) (56,594 ) Total shareholders' equity 171,449 167,084 165,312 145,569 150,805 Total liabilities and shareholders' equity $ 2,287,021 $ 2,256,511 $ 2,230,836 $ 2,201,900 $ 2,207,805 AVIDBANK HOLDINGS, INC.Consolidated Statements of Income (Unaudited)(in thousands, except share and per share amounts) Three months ended For the six months ended June 30, March 31, Dec. 31, Sept. 30, June 30, 2024 2024 2023 2023 2023 2024 2023 Interest and fees on loans $ 33,255 $ 31,828 $ 31,078 $ 29,125 $ 26,713 $ 65,083 $ 52,290 Interest on investment securities 1,801 1,824 1,979 2,009 2,058 3,624 4,670 Federal Home Loan Bank dividends (1) 193 190 172 171 185 384 348 Other interest income 951 819 654 662 1,196 1,770 1,824 Total interest income 36,200 34,661 33,883 31,967 30,152 70,861 59,132 Deposit interest expense 13,494 12,034 11,692 10,704 7,989 25,528 14,019 Interest on short-term borrowings 3,880 3,442 3,467 3,480 4,189 7,322 6,862 Interest on long-term debt 300 300 300 300 300 601 600 Total interest expense 17,674 15,776 15,459 14,484 12,478 33,451 21,481 Net interest income 18,526 18,885 18,424 17,483 17,674 37,410 37,651 Provision for credit losses 2,998 319 1,266 120 1,471 3,317 1,656 Net interest income after provision for credit losses 15,528 18,566 17,158 17,363 16,203 34,093 35,995 Service charges and bank fees 658 618 613 560 545 1,275 1,036 Foreign exchange income 208 251 210 53 66 460 149 Income from bank owned life insurance 137 187 201 238 230 324 455 Gain/(loss) on sale of securities - - (5,399 ) - - - (815 ) Warrant and success fee income - - 15 8 - - - Other investment income 59 155 (116 ) 142 37 214 30 Loss on sale of ORE - - (165 ) - - - - Other income 36 72 19 62 24 108 51 Total noninterest income 1,098 1,283 (4,622 ) 1,063 902 2,381 906 Salaries and benefit expenses 7,980 8,794 8,137 7,460 7,021 16,774 14,975 Occupancy and equipment expenses 1,039 1,028 986 1,002 1,005 2,067 1,965 Data processing 597 564 499 538 477 1,161 1,004 Regulatory assessments 568 446 403 478 555 1,014 781 Legal and professional fees 541 611 531 483 394 1,152 825 Other operating expenses 1,033 984 994 935 960 2,016 1,894 Total noninterest expense 11,758 12,427 11,550 10,896 10,412 24,184 21,444 Income before income taxes 4,868 7,422 986 7,530 6,693 12,290 15,457 Provision for income taxes 1,402 2,176 683 2,122 1,967 3,578 4,367 Net income $ 3,466 $ 5,246 $ 303 $ 5,408 $ 4,726 $ 8,712 $ 11,090 Basic earnings per common share $ 0.47 $ 0.71 $ 0.04 $ 0.74 $ 0.65 $ 1.18 $ 1.52 Diluted earnings per common share 0.46 0.69 0.04 0.72 0.63 1.15 1.49 Weighted average shares - basic 7,426,949 7,386,639 7,344,693 7,327,197 7,321,246 7,406,794 7,310,188 Weighted average shares - diluted 7,578,613 7,551,406 7,543,616 7,511,373 7,457,906 7,565,065 7,454,643 (1) Federal Home Loan Bank dividends have been reclassified from total noninterest income to total interest income for all periods presented. AVIDBANK HOLDINGS, INC.Average Balance Sheets and Net Interest Margin Analysis (Unaudited)(dollars in thousands; taxable equivalent) Three months ended June 30, 2024 March 31, 2024 Interest Yields Interest Yields Average Income/ or Average Income/ or Balance Expense Rates Balance Expense Rates Assets Interest earning assets: Loans (1) $ 1,814,803 $ 33,255 7.37% $ 1,758,201 $ 31,828 7.28% Fed funds sold/interest bearing deposits 70,491 951 5.43% 59,391 819 5.46% Investment securities Taxable investment securities 305,492 1,778 2.34% 317,572 1,802 2.28% Non-taxable investment securities (2) 1,802 28 6.25% 1,868 28 5.93% Total investment securities 307,294 1,806 2.36% 319,440 1,830 2.30% FHLB stock (3) 8,409 193 9.23% 8,409 190 9.11% Total interest-earning assets 2,200,997 36,205 6.62% 2,145,441 34,667 6.50% Noninterest-earning assets: Cash and due from banks 12,188 13,038 All other assets (4) 52,398 64,299 Total assets $ 2,265,583 $ 2,222,778 Liabilities and Shareholders' Equity Interest-bearing liabilities: Deposits Demand $ 783,048 $ 8,031 4.12% $ 746,916 $ 7,439 4.01% Money market and savings 304,392 2,598 3.43% 303,593 2,270 3.01% Time 97,430 1,035 4.27% 56,783 555 3.93% Brokered 135,952 1,830 5.41% 134,453 1,770 5.29% Total interest-bearing deposits 1,320,822 13,494 4.11% 1,241,745 12,034 3.90% Short-term borrowings 295,220 3,880 5.29% 282,066 3,442 4.91% Subordinated debt 21,944 300 5.50% 21,917 300 5.51% Total interest-bearing liabilities 1,637,986 17,674 4.34% 1,545,728 15,776 4.10% Noninterest-bearing liabilities: Demand deposits 436,498 483,100 Accrued expenses and other liabilities 24,225 27,043 Shareholders' equity 166,874 166,907 Total liabilities and shareholders' equity $ 2,265,583 $ 2,222,778 Net interest spread 2.28% 2.40% Net interest income and margin (5) $ 18,531 3.39% $ 18,891 3.54% Non-taxable equivalent net interest margin 3.39% 3.54% Cost of deposits $ 1,757,320 $ 13,494 3.09% $ 1,724,845 $ 12,034 2.81% (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 $409 thousand and $455 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) Federal Home Loan Bank dividends have been reclassified from total noninterest income to total interest income for all periods presented. (4) Average allowance for credit losses on loans of $19.8 million and $19.1 million, respectively, is included as a contra asset. (5) 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 June 30, 2024 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) $ 1,814,803 $ 33,255 7.37% $ 1,590,758 $ 26,713 6.74% Fed funds sold/interest bearing deposits 70,491 951 5.43% 93,001 1,196 5.09% Investment securities Taxable investment securities 305,492 1,778 2.34% 382,860 2,058 2.16% Non-taxable investment securities (2) 1,802 28 6.25% - - 0.00% Total investment securities 307,294 1,806 2.36% 382,860 2,058 2.16% FHLB stock (3) 8,409 193 9.23% 8,361 185 8.87% Total interest-earning assets 2,200,997 36,205 6.62% 2,074,980 30,152 5.83% Noninterest-earning assets: Cash and due from banks 12,188 23,515 All other assets (4) 52,398 73,064 Total assets $ 2,265,583 $ 2,171,559 Liabilities and Shareholders' Equity Interest-bearing liabilities: Deposits Demand $ 783,048 $ 8,031 4.12% $ 25,854 $ 60 0.93% Money market and savings 304,392 2,598 3.43% 849,549 6,699 3.16% Time 97,430 1,035 4.27% 48,650 198 1.63% Brokered 135,952 1,830 5.41% 83,319 1,032 4.97% Total interest-bearing deposits 1,320,822 13,494 4.11% 1,007,372 7,989 3.18% Short-term borrowings 295,220 3,880 5.29% 343,341 4,189 4.89% Subordinated debt 21,944 300 5.50% 21,842 300 5.51% Total interest-bearing liabilities 1,637,986 17,674 4.34% 1,372,555 12,478 3.65% Noninterest-bearing liabilities: Demand deposits 436,498 621,603 Accrued expenses and other liabilities 24,225 23,524 Shareholders' equity 166,874 153,877 Total liabilities and shareholders' equity $ 2,265,583 $ 2,171,559 Net interest spread 2.28% 2.18% Net interest income and margin (5) $ 18,531 3.39% $ 17,674 3.42% Non-taxable equivalent net interest margin 3.39% 3.42% Cost of deposits $ 1,757,320 $ 13,494 3.09% $ 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 $409 thousand and $347 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) Federal Home Loan Bank dividends have been reclassified from total noninterest income to total interest income for all periods presented. (4) Average allowance for credit losses on loans of $19.8 million and $16.8 million, respectively, is included as a contra asset. (5) 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) Six months ended June 30, 2024 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) $ 1,786,502 $ 65,083 7.33 % $ 1,573,881 $ 52,290 6.70 % Fed funds sold/interest bearing deposits 64,941 1,770 5.48 % 74,753 1,824 4.85 % Investment securities Taxable investment securities 311,532 3,580 2.31 % 398,533 4,406 2.23 % Non-taxable investment securities (2) 1,835 56 6.14 % 14,664 334 4.59 % Total investment securities 313,367 3,636 2.33 % 413,197 4,740 2.31 % FHLB stock (3) 8,409 384 9.18 % 7,986 348 8.79 % Total interest-earning assets 2,173,219 70,873 6.56 % 2,069,817 59,202 5.77 % Noninterest-earning assets: Cash and due from banks 12,613 23,255 All other assets (4) 58,348 74,948 Total assets $ 2,244,180 $ 2,168,020 Liabilities and Shareholders' Equity Interest-bearing liabilities: Deposits Demand $ 764,981 $ 15,470 4.07 % $ 27,966 $ 116 0.84 % Money market and savings 303,992 4,868 3.22 % 884,228 12,292 2.80 % Time 77,107 1,590 4.15 % 57,193 421 1.48 % Brokered 135,203 3,600 5.35 % 48,442 1,190 4.95 % Total interest-bearing deposits 1,281,283 25,528 4.01 % 1,017,829 14,019 2.78 % Short-term borrowings 288,643 7,322 5.10 % 281,787 6,862 4.91 % Subordinated debt 21,931 601 5.51 % 21,829 600 5.54 % Total interest-bearing liabilities 1,591,857 33,451 4.23 % 1,321,445 21,481 3.28 % Noninterest-bearing liabilities: Demand deposits 459,799 672,963 Accrued expenses and other liabilities 25,634 24,446 Shareholders' equity 166,890 149,166 Total liabilities and shareholders' equity $ 2,244,180 $ 2,168,020 Net interest spread 2.33 % 2.49 % Net interest income and margin (5) $ 37,422 3.46 % $ 37,721 3.68 % Non-taxable equivalent net interest margin 3.46 % 3.67 % Cost of deposits $ 1,741,082 $ 25,528 2.95 % $ 1,690,792 $ 14,019 1.67 % (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 $864 thousand and $877 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) Federal Home Loan Bank dividends have been reclassified from total noninterest income to total interest income for all periods presented. (4) Average allowance for loan losses of $19.5 million and $16.5 million, respectively, is included as a contra asset. (5) Tax equivalent net interest income divided by total interest-earning assets. AVIDBANK HOLDINGS, INC.Loans and Credit Data (Unaudited)(dollars in thousands) June 30, March 31, Dec. 31, Sept. 30, June 30, Current Quarter Year over Year 2024 2024 2023 2023 2023 Change Change Commercial loans $ 821,623 $ 783,171 $ 758,552 $ 731,206 $ 716,355 $ 38,452 $ 105,268 Commercial real estate Multi-family 198,366 198,017 194,981 184,147 193,014 349 5,352 Owner Occupied 136,357 137,426 139,059 135,950 132,078 (1,069 ) 4,279 Non-Owner Occupied 390,461 388,141 393,809 386,629 376,467 2,320 13,994 Construction and land 242,966 259,562 237,124 214,474 215,865 (16,596 ) 27,101 Residential 15,717 16,187 16,816 17,311 16,220 (470 ) (503 ) Total real estate loans 983,867 999,333 981,789 938,511 933,644 (15,466 ) 50,223 Other loans 1,117 520 306 197 266 597 851 Total loans $ 1,806,607 $ 1,783,024 $ 1,740,647 $ 1,669,914 $ 1,650,265 $ 23,583 $ 156,342 Allowance for Credit Losses on Loans Balance, beginning of quarter $ 19,342 $ 19,131 $ 17,800 $ 17,636 $ 16,389 Provision for credit losses on loans 3,068 211 1,331 164 1,347 Charge-offs - - - - (100 ) Recoveries - - - - - Balance, end of quarter $ 22,410 $ 19,342 $ 19,131 $ 17,800 $ 17,636 Allowance for Credit Losses on Unfunded Commitments Balance, beginning of quarter $ 2,168 $ 2,060 $ 2,125 $ 2,169 $ 2,045 Provision for unfunded commitments (70 ) 108 (65 ) (44 ) 124 Balance, end of quarter $ 2,098 $ 2,168 $ 2,060 $ 2,125 $ 2,169 Total allowance for credit losses - loans and unfunded commitments $ 24,508 $ 21,510 $ 21,191 $ 19,925 $ 19,805 Provision for credit losses under CECL Provision for credit losses on loans $ 3,068 $ 211 $ 1,331 $ 164 $ 1,347 Provision for unfunded commitments (70 ) 108 (65 ) (44 ) 124 Total provision for credit losses $ 2,998 $ 319 $ 1,266 $ 120 $ 1,471 Nonperforming Assets Loans accounted for on a non-accrual basis $ 3,686 $ 1,370 $ 1,378 $ 1,385 $ 15,485 Loans past due 90 days or more and still accruing - - - - - Nonperforming loans 3,686 1,370 1,378 1,385 15,485 Other real estate owned - - - 14,095 - Nonperforming assets $ 3,686 $ 1,370 $ 1,378 $ 15,480 $ 15,485 Nonperforming Loans by Type: Commercial $ 3,686 $ 1,370 $ 1,378 $ 1,385 $ 1,390 Construction and land - - - - 14,095 Total Nonperforming loans $ 3,686 $ 1,370 $ 1,378 $ 1,385 $ 15,485 Asset Quality Ratios Allowance for credit losses on loans to total loans 1.24 % 1.08 % 1.10 % 1.07 % 1.07 % Allowance for credit losses to total loans 1.36 % 1.21 % 1.22 % 1.19 % 1.20 % Allowance for credit losses on loans to nonperforming loans 607.98 % 1411.82 % 1388.32 % 1285.20 % 113.89 % Nonperforming assets to total assets 0.16 % 0.06 % 0.06 % 0.70 % 0.70 % Nonperforming loans to total loans 0.20 % 0.08 % 0.08 % 0.08 % 0.94 % Net quarterly charge-offs to average loans (1) 0.00 % 0.00 % 0.00 % 0.00 % 0.03 % Criticized and classified loans to total loans 2.00 % 1.78 % 1.72 % 1.70 % 1.83 % (1) Annualized AVIDBANK HOLDINGS, INC.Deposits (Unaudited)(dollars in thousands) Current Year over June 30, March 31, Dec. 31, Sept. 30, June 30, Quarter Year Period End Deposits 2024 2024 2023 2023 2023 Change Change Non-interest-bearing demand $ 405,644 $ 477,728 $ 472,517 $ 490,289 $ 593,246 $ (72,084 ) $ (187,602 ) Interest-bearing checking 840,839 764,766 740,902 784,757 717,116 76,073 123,723 Money market and savings 312,162 319,692 298,117 322,983 316,991 (7,530 ) (4,829 ) Time 99,239 56,140 46,676 30,880 46,794 43,099 52,445 Brokered 80,608 139,532 96,117 79,291 74,566 (58,924 ) 6,042 Total deposits $ 1,738,492 $ 1,757,858 $ 1,654,329 $ 1,708,200 $ 1,748,713 $ (19,366 ) $ (10,221 ) Average Deposits Non-interest-bearing demand $ 436,498 $ 483,100 $ 487,301 $ 520,573 $ 621,603 $ (46,602 ) $ (185,105 ) Interest-bearing checking 783,048 746,916 766,856 748,016 486,367 36,132 296,681 Money market and savings 304,392 303,593 305,240 296,865 389,036 799 (84,644 ) Time 97,430 56,783 29,787 41,455 48,650 40,647 48,780 Brokered 135,952 134,453 119,605 75,420 83,319 1,499 52,633 Total deposits $ 1,757,320 $ 1,724,845 $ 1,708,789 $ 1,682,329 $ 1,628,975 $ 32,475 $ 128,345 AVIDBANK HOLDINGS, INC.Non-GAAP performance and Financial Measures Reconciliation (Unaudited)(in thousands, except share and per share amounts) 2024 2023 For the six months ended Second First Fourth Third Second June 30, Non-GAAP adjusted net income reconciliation Quarter Quarter Quarter Quarter Quarter 2024 2023 Net income - GAAP $ 3,466 $ 5,246 $ 303 $ 5,408 $ 4,726 $ 8,712 $ 11,090 Loss on sale of securities, net of income tax - - 3,888 - - - 595 Severance, net of income tax - - 233 - - - - BOLI surrender tax expense - - 478 - - - - Adjusted net income (non-GAAP) $ 3,466 $ 5,246 $ 4,902 $ 5,408 $ 4,726 $ 8,712 $ 11,685 Non-GAAP adjusted net income reconciliation Net income - GAAP $ 3,466 $ 5,246 $ 303 $ 5,408 $ 4,726 $ 8,712 $ 11,090 Loss on sale of securities - - 5,399 - - - 815 Tax impact of loss on sale of securities - - (1,511 ) - - - (220 ) Severance - - 324 - - - - Tax impact of severance - - (91 ) - - - - BOLI surrender tax expense - - 478 - - - - Adjusted net income (non-GAAP) $ 3,466 $ 5,246 $ 4,902 $ 5,408 $ 4,726 $ 8,712 $ 11,685 Non-GAAP adjusted diluted earnings per share reconciliation Diluted earnings per share - GAAP $ 0.46 $ 0.69 $ 0.04 $ 0.72 $ 0.63 $ 1.15 $ 1.49 Loss on sale of securities, net of income tax - - 0.52 - - - 0.08 Severance, net of income tax - - 0.03 - - - - BOLI surrender tax expense - - 0.06 - - - - Diluted earnings per share - adjusted (non-GAAP) $ 0.46 $ 0.69 $ 0.65 $ 0.72 $ 0.63 $ 1.15 $ 1.57 Non-GAAP adjusted return on average assets reconciliation Net income - GAAP $ 3,466 $ 5,246 $ 303 $ 5,408 $ 4,726 $ 8,712 $ 11,090 Average total assets 2,265,583 2,222,778 2,191,198 2,168,443 2,171,559 2,244,180 2,171,559 Return on average assets - GAAP 0.62 % 0.95 % 0.05 % 0.99 % 0.87 % 0.78 % 1.03 % Adjusted net income (non-GAAP) $ 3,466 $ 5,246 $ 4,902 $ 5,408 $ 4,726 $ 8,712 $ 11,685 Average total assets 2,265,583 2,222,778 2,191,198 2,168,443 2,171,559 2,244,180 2,171,559 Return on average assets - adjusted (non-GAAP) 0.62 % 0.95 % 0.89 % 0.99 % 0.87 % 0.78 % 1.09 % Non-GAAP taxable equivalent net interest income reconciliation Net interest income - GAAP $ 18,526 $ 18,885 $ 18,424 $ 17,483 $ 17,674 $ 37,410 $ 37,651 Taxable equivalent adjustment 5 6 2 - - 12 70 Net interest income - taxable equivalent (non-GAAP) $ 18,531 $ 18,891 $ 18,426 $ 17,483 $ 17,674 $ 37,422 $ 37,721 Non-GAAP taxable equivalent net interest margin reconciliation Net interest margin - GAAP 3.39 % 3.54 % 3.49 % 3.36 % 3.42 % 3.46 % 3.67 % Impact of taxable equivalent adjustment - - - - - - 0.01 Net interest margin - taxable equivalent (non-GAAP) 3.39 % 3.54 % 3.49 % 3.36 % 3.42 % 3.46 % 3.68 % Non-GAAP total deposits, excluding brokered deposits Total period end deposits - GAAP $ 1,738,492 $ 1,757,858 $ 1,654,329 $ 1,708,200 $ 1,748,713 $ 1,738,492 $ 1,748,713 Brokered deposits 80,608 139,532 96,117 79,291 74,566 80,608 74,566 Total deposits, excluding brokered (non-GAAP) $ 1,657,884 $ 1,618,326 $ 1,558,212 $ 1,628,909 $ 1,674,147 $ 1,657,884 $ 1,674,147 Non-GAAP pre-tax, pre-provision net income Net income - GAAP $ 3,466 $ 5,246 $ 303 $ 5,408 $ 4,726 $ 8,712 $ 11,090 Provision for credit losses 2,998 319 1,266 120 1,471 3,317 1,656 Provision for income taxes 1,402 2,176 683 2,122 1,967 3,578 4,367 Non-GAAP pre-tax, pre-provision net income $ 7,866 $ 7,741 $ 2,252 $ 7,650 $ 8,164 $ 15,607 $ 17,113 SOURCE: Avidbank Holdings, Inc. 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SAN JOSE, CA / ACCESSWIRE / July 22, 2024 / Avidbank Holdings, Inc. (OTC Pink:AVBH) announced net income for the second quarter of 2024 of $3.5 million, or $0.46 per diluted share, compared to $5.2 million, or $0.69 per diluted share, for the first quarter of 2024 and $4.7 million, or $0.63 per diluted share, for the second quarter of 2023. Second Quarter 2024 Highlights Book value per share was $21.77, an increase of $0.36, or 2%, from March 31, 2024, and an increase of $2.22, or 11%, from June 30, 2024. Loans increased $23.6 million, or 5% annualized, from March 31, 2024, and $66.0 million, or 4%, from December 31, 2023. Average deposits increased $32.5 million, or 8% annualized, from the first quarter of 2024, and $128.3 million, or 8%, from the second quarter of 2023. Period end deposits (excluding brokered deposits)(1) increased $39.6 million, or 10% annualized, from March 31, 2024, and $99.7 million, or 6%, from December 31, 2023. The efficiency ratio improved to 59.92% from 61.62% in the first quarter of 2024. Annualized net charge-offs to average loans totaled 0.0% for the second quarter and first quarter of 2024. Nonperforming assets to total assets was 0.16% as of June 30, 2024, compared to 0.06% as of March 31, 2024. Net income totaled $3.5 million, a decrease of $1.8 million from the first quarter of 2024, and a decrease of $1.3 million from the second quarter of 2023. A $3.0 million increase in the provision for credit losses was a primary contributor to the decrease. "We continue to make solid progress on our overall goal for this year of strengthening our balance sheet. This included another quarter of the growth in core deposits outpacing our growth in loans. Total deposits, excluding brokered, increased approximately $40 million while loans grew approximately $24 million in the second quarter. Net income in the second quarter was negatively impacted by a $2.4 million specific reserve on a nonperforming venture-backed loan. Pre-tax, pre-provision income(1) in the second quarter was $7.9 million, compared to $7.8 million in the first quarter. Overall credit quality remains solid with criticized and classified loans representing 2.0% of total loans," said Mark Mordell, Chairman and Chief Executive Officer. "Our new clients as well as existing clients continue to move deposits from noninterest bearing accounts to interest earning accounts. This shift was elevated in the second quarter, which negatively impacted our net interest margin," added Mr. Mordell. Income Statement Taxable equivalent net interest income(1) totaled $18.5 million for the second quarter of 2024, a decrease of $360,000, or 2%, from the first quarter of 2024, and an increase of $857,000, or 5%, from the second quarter of 2023. The taxable equivalent net interest margin was 3.39% in the second quarter of 2024, a decrease of 15 basis points compared to the first quarter of 2024, and a decrease of 3 basis points compared to the second quarter of 2023. The decrease in taxable equivalent net interest income and net interest margin compared to the prior quarter was primarily driven by a decrease in noninterest bearing deposits and an overall increase in the cost of deposits and borrowings. The increase in borrowing costs included the renewal of $244.0 million in borrowings from the Bank Term Funding Program during the first quarter of 2024. The yield on loans in the second quarter of 2024 was 7.37%, an increase of 9 basis points from the first quarter of 2024 and an increase of 63 basis points from the second quarter of 2023. The overall increase in loan yields compared to prior periods was primarily due to higher rates on new loans. The cost of deposits in the second quarter of 2024 was 3.09%, an increase of 28 basis points from the first quarter of 2024 and an increase of 112 basis points from the second quarter of 2023. The cost of interest-bearing deposits in the second quarter of 2024 was 4.11% compared to 3.90% in the first quarter of 2024 and 3.18% in the second quarter of 2023. The provision for credit losses was $3.0 million in the second quarter of 2024, compared to $319,000 in the first quarter of 2024 and $1.5 million in the second quarter of 2023. The provision increased in the current quarter primarily due to the addition of a $2.3 million nonaccrual loan. The provision for credit losses in the second quarter of 2024 included a $3.1 million provision for credit losses on loans offset by a $(70,000) provision for unfunded commitments. Noninterest income was $1.1 million in the second quarter of 2024 compared to $1.3 million in the first quarter of 2024 and $902,000 in the second quarter of 2023. Noninterest expense totaled $11.8 million for the second quarter of 2024, a decrease of $669,000 compared to the first quarter of 2024 primarily due to a lower incentive accrual and seasonally higher FICA taxes in the previous quarter. There were 144 full-time equivalent employees on June 30, 2024, compared to 141 on March 31, 2024. Balance Sheet Total assets were $2.29 billion as of June 30, 2024, compared to $2.26 billion as of March 31, 2024, and $2.21 billion at June 30, 2023. Cash and cash equivalents were $111.7 million on June 30, 2024, compared to $90.2 million on March 31, 2024, and $104.2 million on June 30, 2023. Period end loans on June 30, 2024, totaled $1.81 billion, an increase of $23.6 million, or 5% annualized, from March 31, 2024, and an increase of $156.3 million, or 9%, from June 30, 2023. The growth in loans during the second quarter of 2024 included an increase of $38.5 million in commercial loans, partially offset by a decrease of $16.6 million in construction loans. Quarterly average loans for the second quarter of 2024 increased $56.7 million, or 3%, from the first quarter of 2024 and $224.1 million, or 14%, from the second quarter of 2023. The allowance for credit losses on loans was $22.4 million on June 30, 2024, representing an increase of $3.1 million from March 31, 2024. The allowance for credit losses on loans to total loans was 1.24% on June 30, 2024, compared to 1.08% on March 31, 2024. Nonperforming loans to total loans was 0.20% on June 30, 2024, compared to 0.08% on March 31, 2024. The increase was due to the addition of one nonperforming venture-backed loan totaling $2.3 million. Investment securities were $308.7 million as of June 30, 2024, compared to $314.8 million on March 31, 2024, and $371.8 million at June 30, 2023. Period end deposits were $1.74 billion on June 30, 2024, a decrease of $19.4 million, or 1%, from March 31, 2024. The change in deposits during the second quarter of 2024 included a $76.1 million and $43.1 million increase in interest-bearing checking and time deposits, respectively, offset by a $72.1 million decrease in non-interest bearing and a $58.9 million decrease in brokered deposits. Quarterly average deposits for the second quarter of 2024 were $1.76 billion, an increase of $32.5 million from the first quarter of 2024, and an increase of $128.3 million from the second quarter of 2023. Short-term borrowings on June 30, 2024, totaled $330.0 million, an increase of $40.0 million, or 14%, compared to March 31, 2024. The short-term borrowings on June 30, 2024 included $244.0 million in borrowings from the Bank Term Funding Program (BTFP). Book value per share was $21.77 on June 30, 2024, an increase of $0.36 compared to $21.41 on March 31, 2024. Total shareholders' equity was $171.4 million on June 30, 2024, an increase of $4.4 million compared to March 31, 2024. This included an increase in retained earnings of $3.5 million. (1) A Non-GAAP performance measure. We provide detailed reconciliation 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. Non-GAAP Financial Measures This news release contains certain non-GAAP (Generally Accepted Accounting Principles) financial measures in addition to results presented in accordance with GAAP. Management has presented these non-GAAP financial measures in this earnings release because it believes that they provide useful and comparative information to assess trends in the Company's current quarter and year-to-date results and facilitate comparison of our performance with the performance of our peers. Where applicable, the Company has also presented comparable earnings information using GAAP financial measures. These non-GAAP measures have inherent limitations, are not required to be uniformly applied and are not audited. They should not be considered in isolation or as a substitute for operating results determined in accordance with GAAP. These non-GAAP measures may not be comparable to similarly titled measures reported by other companies. Forward-Looking Statements 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 six months ended 2024 2023 June 30, Second First Fourth Third Second Quarter Quarter Quarter Quarter Quarter 2024 2023 INCOME HIGHLIGHTS Net income $ 3,466 $ 5,246 $ 303 $ 5,408 $ 4,726 $ 8,712 $ 11,090 Loss on sale of securities, net of tax - - 3,888 - - - 595 Severance, net of income tax - - 233 - - - - BOLI surrender tax expense - - 478 - - - - Adjusted net income (1) $ 3,466 $ 5,246 $ 4,902 $ 5,408 $ 4,726 $ 8,712 $ 11,685 PER SHARE DATA Basic earnings per share $ 0.47 $ 0.71 $ 0.04 $ 0.74 $ 0.65 $ 1.18 $ 1.52 Diluted earnings per share 0.46 0.69 0.04 0.72 0.63 1.15 1.49 Diluted earnings per share - adjusted (1) 0.46 0.69 0.65 0.72 0.63 1.15 1.57 Book value per share 21.77 21.41 21.27 18.83 19.55 21.77 19.55 PERFORMANCE MEASURES Return on average assets 0.62 % 0.95 % 0.05 % 0.99 % 0.87 % 0.78 % 1.03 % Return on average assets - adjusted (1) 0.62 % 0.95 % 0.89 % 0.99 % 0.87 % 0.78 % 1.09 % Return on average equity 8.35 % 12.64 % 0.81 % 14.01 % 12.32 % 10.50 % 14.99 % Taxable equivalent net interest margin 3.39 % 3.54 % 3.49 % 3.36 % 3.42 % 3.46 % 3.68 % Efficiency ratio 59.92 % 61.62 % 83.68 % 58.75 % 56.05 % 60.78 % 55.62 % Average loans to average deposits 103.19 % 101.85 % 99.41 % 97.49 % 97.57 % 102.53 % 93.00 % CAPITAL Tier 1 leverage ratio 9.64 % 9.88 % 9.77 % 9.84 % 9.55 % 9.64 % 9.55 % Common equity tier 1 capital ratio 10.08 % 10.03 % 9.88 % 9.95 % 9.88 % 10.08 % 9.88 % Tier 1 risk-based capital ratio 10.08 % 10.03 % 9.88 % 9.95 % 9.88 % 10.08 % 9.88 % Total risk-based capital ratio 12.17 % 12.01 % 11.86 % 11.89 % 11.87 % 12.17 % 11.87 % Tangible common equity ratio 7.50 % 7.40 % 7.41 % 6.61 % 6.83 % 7.50 % 6.83 % SHARES OUTSTANDING Number of common shares outstanding 7,876,082 7,803,900 7,770,439 7,731,404 7,712,278 7,876,082 7,712,278 Average common shares outstanding - basic 7,426,949 7,386,639 7,344,693 7,327,197 7,321,246 7,406,794 7,310,188 Average common shares outstanding - diluted 7,578,613 7,551,406 7,543,616 7,511,373 7,457,906 7,565,065 7,454,643 ASSET QUALITY Allowance for credit losses to total loans 1.36 % 1.21 % 1.22 % 1.19 % 1.20 % 1.36 % 1.20 % Nonperforming assets to total assets 0.16 % 0.06 % 0.06 % 0.70 % 0.70 % 0.16 % 0.70 % Nonperforming loans to total loans 0.20 % 0.08 % 0.08 % 0.08 % 0.94 % 0.20 % 0.94 % Net charge-offs to average loans (2) 0.00 % 0.00 % 0.00 % 0.00 % 0.03 % 0.00 % 0.01 % AVERAGE BALANCES Loans, net of deferred loan fees $ 1,813,422 $ 1,756,770 $ 1,698,690 $ 1,640,080 $ 1,589,372 $ 1,785,096 $ 1,572,384 Investment securities 307,294 319,440 337,808 365,244 382,860 313,367 413,197 Total assets 2,265,583 2,222,778 2,191,198 2,168,443 2,171,559 2,244,180 2,168,020 Deposits 1,757,320 1,724,845 1,708,789 1,682,329 1,628,975 1,741,082 1,690,792 Shareholders' equity 166,874 166,907 148,723 153,099 153,877 166,890 149,166 (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) June 30, March 31, December 31, September 30, June 30, Assets 2024 2024 2023 2023 2023 Cash and due from banks $ 14,062 $ 10,268 $ 9,754 $ 21,157 $ 33,849 Due from Federal Reserve Bank and interest-bearing deposits in banks 97,662 79,911 71,642 58,885 70,364 Total cash and cash equivalents 111,724 90,179 81,396 80,042 104,213 Investment securities - available for sale 308,661 314,793 325,320 345,547 371,753 Total investment securities 308,661 314,793 325,320 345,547 371,753 Loans, net of deferred loan fees 1,806,607 1,783,024 1,740,647 1,669,914 1,650,265 Allowance for credit losses on loans (22,410 ) (19,342 ) (19,131 ) (17,800 ) (17,636 ) Loans, net of allowance for credit losses on loans 1,784,197 1,763,682 1,721,516 1,652,114 1,632,629 Bank owned life insurance 12,490 12,401 12,315 33,440 33,202 Premises and equipment, net 2,810 3,061 3,297 3,558 3,774 Other real estate owned - - - 14,095 - Accrued interest receivable and other assets 67,139 72,395 86,992 73,104 62,234 Total assets $ 2,287,021 $ 2,256,511 $ 2,230,836 $ 2,201,900 $ 2,207,805 Liabilities and Shareholders' Equity Deposits: Non-interest-bearing demand $ 405,644 $ 477,728 $ 472,517 $ 490,289 $ 593,246 Interest-bearing checking 840,839 764,766 740,902 784,757 717,116 Money market and savings 312,162 319,692 298,117 322,983 316,991 Time 99,239 56,140 46,676 30,880 46,794 Brokered 80,608 139,532 96,117 79,291 74,566 Total deposits 1,738,492 1,757,858 1,654,329 1,708,200 1,748,713 Subordinated debt, net 21,957 21,931 21,906 21,881 21,855 Short-term borrowings 330,000 290,000 360,000 300,000 264,000 Accrued interest payable and other liabilities 25,123 19,638 29,289 26,250 22,432 Total liabilities 2,115,572 2,089,427 2,065,524 2,056,331 2,057,000 Shareholders' Equity Common stock 105,487 104,771 104,499 104,018 103,420 Retained earnings 118,400 114,934 109,688 109,386 103,979 Accumulated other comprehensive (loss) (52,438 ) (52,621 ) (48,875 ) (67,835 ) (56,594 ) Total shareholders' equity 171,449 167,084 165,312 145,569 150,805 Total liabilities and shareholders' equity $ 2,287,021 $ 2,256,511 $ 2,230,836 $ 2,201,900 $ 2,207,805 AVIDBANK HOLDINGS, INC.Consolidated Statements of Income (Unaudited)(in thousands, except share and per share amounts) Three months ended For the six months ended June 30, March 31, Dec. 31, Sept. 30, June 30, 2024 2024 2023 2023 2023 2024 2023 Interest and fees on loans $ 33,255 $ 31,828 $ 31,078 $ 29,125 $ 26,713 $ 65,083 $ 52,290 Interest on investment securities 1,801 1,824 1,979 2,009 2,058 3,624 4,670 Federal Home Loan Bank dividends (1) 193 190 172 171 185 384 348 Other interest income 951 819 654 662 1,196 1,770 1,824 Total interest income 36,200 34,661 33,883 31,967 30,152 70,861 59,132 Deposit interest expense 13,494 12,034 11,692 10,704 7,989 25,528 14,019 Interest on short-term borrowings 3,880 3,442 3,467 3,480 4,189 7,322 6,862 Interest on long-term debt 300 300 300 300 300 601 600 Total interest expense 17,674 15,776 15,459 14,484 12,478 33,451 21,481 Net interest income 18,526 18,885 18,424 17,483 17,674 37,410 37,651 Provision for credit losses 2,998 319 1,266 120 1,471 3,317 1,656 Net interest income after provision for credit losses 15,528 18,566 17,158 17,363 16,203 34,093 35,995 Service charges and bank fees 658 618 613 560 545 1,275 1,036 Foreign exchange income 208 251 210 53 66 460 149 Income from bank owned life insurance 137 187 201 238 230 324 455 Gain/(loss) on sale of securities - - (5,399 ) - - - (815 ) Warrant and success fee income - - 15 8 - - - Other investment income 59 155 (116 ) 142 37 214 30 Loss on sale of ORE - - (165 ) - - - - Other income 36 72 19 62 24 108 51 Total noninterest income 1,098 1,283 (4,622 ) 1,063 902 2,381 906 Salaries and benefit expenses 7,980 8,794 8,137 7,460 7,021 16,774 14,975 Occupancy and equipment expenses 1,039 1,028 986 1,002 1,005 2,067 1,965 Data processing 597 564 499 538 477 1,161 1,004 Regulatory assessments 568 446 403 478 555 1,014 781 Legal and professional fees 541 611 531 483 394 1,152 825 Other operating expenses 1,033 984 994 935 960 2,016 1,894 Total noninterest expense 11,758 12,427 11,550 10,896 10,412 24,184 21,444 Income before income taxes 4,868 7,422 986 7,530 6,693 12,290 15,457 Provision for income taxes 1,402 2,176 683 2,122 1,967 3,578 4,367 Net income $ 3,466 $ 5,246 $ 303 $ 5,408 $ 4,726 $ 8,712 $ 11,090 Basic earnings per common share $ 0.47 $ 0.71 $ 0.04 $ 0.74 $ 0.65 $ 1.18 $ 1.52 Diluted earnings per common share 0.46 0.69 0.04 0.72 0.63 1.15 1.49 Weighted average shares - basic 7,426,949 7,386,639 7,344,693 7,327,197 7,321,246 7,406,794 7,310,188 Weighted average shares - diluted 7,578,613 7,551,406 7,543,616 7,511,373 7,457,906 7,565,065 7,454,643 (1) Federal Home Loan Bank dividends have been reclassified from total noninterest income to total interest income for all periods presented. AVIDBANK HOLDINGS, INC.Average Balance Sheets and Net Interest Margin Analysis (Unaudited)(dollars in thousands; taxable equivalent) Three months ended June 30, 2024 March 31, 2024 Interest Yields Interest Yields Average Income/ or Average Income/ or Balance Expense Rates Balance Expense Rates Assets Interest earning assets: Loans (1) $ 1,814,803 $ 33,255 7.37% $ 1,758,201 $ 31,828 7.28% Fed funds sold/interest bearing deposits 70,491 951 5.43% 59,391 819 5.46% Investment securities Taxable investment securities 305,492 1,778 2.34% 317,572 1,802 2.28% Non-taxable investment securities (2) 1,802 28 6.25% 1,868 28 5.93% Total investment securities 307,294 1,806 2.36% 319,440 1,830 2.30% FHLB stock (3) 8,409 193 9.23% 8,409 190 9.11% Total interest-earning assets 2,200,997 36,205 6.62% 2,145,441 34,667 6.50% Noninterest-earning assets: Cash and due from banks 12,188 13,038 All other assets (4) 52,398 64,299 Total assets $ 2,265,583 $ 2,222,778 Liabilities and Shareholders' Equity Interest-bearing liabilities: Deposits Demand $ 783,048 $ 8,031 4.12% $ 746,916 $ 7,439 4.01% Money market and savings 304,392 2,598 3.43% 303,593 2,270 3.01% Time 97,430 1,035 4.27% 56,783 555 3.93% Brokered 135,952 1,830 5.41% 134,453 1,770 5.29% Total interest-bearing deposits 1,320,822 13,494 4.11% 1,241,745 12,034 3.90% Short-term borrowings 295,220 3,880 5.29% 282,066 3,442 4.91% Subordinated debt 21,944 300 5.50% 21,917 300 5.51% Total interest-bearing liabilities 1,637,986 17,674 4.34% 1,545,728 15,776 4.10% Noninterest-bearing liabilities: Demand deposits 436,498 483,100 Accrued expenses and other liabilities 24,225 27,043 Shareholders' equity 166,874 166,907 Total liabilities and shareholders' equity $ 2,265,583 $ 2,222,778 Net interest spread 2.28% 2.40% Net interest income and margin (5) $ 18,531 3.39% $ 18,891 3.54% Non-taxable equivalent net interest margin 3.39% 3.54% Cost of deposits $ 1,757,320 $ 13,494 3.09% $ 1,724,845 $ 12,034 2.81% (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 $409 thousand and $455 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) Federal Home Loan Bank dividends have been reclassified from total noninterest income to total interest income for all periods presented. (4) Average allowance for credit losses on loans of $19.8 million and $19.1 million, respectively, is included as a contra asset. (5) 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 June 30, 2024 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) $ 1,814,803 $ 33,255 7.37% $ 1,590,758 $ 26,713 6.74% Fed funds sold/interest bearing deposits 70,491 951 5.43% 93,001 1,196 5.09% Investment securities Taxable investment securities 305,492 1,778 2.34% 382,860 2,058 2.16% Non-taxable investment securities (2) 1,802 28 6.25% - - 0.00% Total investment securities 307,294 1,806 2.36% 382,860 2,058 2.16% FHLB stock (3) 8,409 193 9.23% 8,361 185 8.87% Total interest-earning assets 2,200,997 36,205 6.62% 2,074,980 30,152 5.83% Noninterest-earning assets: Cash and due from banks 12,188 23,515 All other assets (4) 52,398 73,064 Total assets $ 2,265,583 $ 2,171,559 Liabilities and Shareholders' Equity Interest-bearing liabilities: Deposits Demand $ 783,048 $ 8,031 4.12% $ 25,854 $ 60 0.93% Money market and savings 304,392 2,598 3.43% 849,549 6,699 3.16% Time 97,430 1,035 4.27% 48,650 198 1.63% Brokered 135,952 1,830 5.41% 83,319 1,032 4.97% Total interest-bearing deposits 1,320,822 13,494 4.11% 1,007,372 7,989 3.18% Short-term borrowings 295,220 3,880 5.29% 343,341 4,189 4.89% Subordinated debt 21,944 300 5.50% 21,842 300 5.51% Total interest-bearing liabilities 1,637,986 17,674 4.34% 1,372,555 12,478 3.65% Noninterest-bearing liabilities: Demand deposits 436,498 621,603 Accrued expenses and other liabilities 24,225 23,524 Shareholders' equity 166,874 153,877 Total liabilities and shareholders' equity $ 2,265,583 $ 2,171,559 Net interest spread 2.28% 2.18% Net interest income and margin (5) $ 18,531 3.39% $ 17,674 3.42% Non-taxable equivalent net interest margin 3.39% 3.42% Cost of deposits $ 1,757,320 $ 13,494 3.09% $ 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 $409 thousand and $347 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) Federal Home Loan Bank dividends have been reclassified from total noninterest income to total interest income for all periods presented. (4) Average allowance for credit losses on loans of $19.8 million and $16.8 million, respectively, is included as a contra asset. (5) 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) Six months ended June 30, 2024 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) $ 1,786,502 $ 65,083 7.33 % $ 1,573,881 $ 52,290 6.70 % Fed funds sold/interest bearing deposits 64,941 1,770 5.48 % 74,753 1,824 4.85 % Investment securities Taxable investment securities 311,532 3,580 2.31 % 398,533 4,406 2.23 % Non-taxable investment securities (2) 1,835 56 6.14 % 14,664 334 4.59 % Total investment securities 313,367 3,636 2.33 % 413,197 4,740 2.31 % FHLB stock (3) 8,409 384 9.18 % 7,986 348 8.79 % Total interest-earning assets 2,173,219 70,873 6.56 % 2,069,817 59,202 5.77 % Noninterest-earning assets: Cash and due from banks 12,613 23,255 All other assets (4) 58,348 74,948 Total assets $ 2,244,180 $ 2,168,020 Liabilities and Shareholders' Equity Interest-bearing liabilities: Deposits Demand $ 764,981 $ 15,470 4.07 % $ 27,966 $ 116 0.84 % Money market and savings 303,992 4,868 3.22 % 884,228 12,292 2.80 % Time 77,107 1,590 4.15 % 57,193 421 1.48 % Brokered 135,203 3,600 5.35 % 48,442 1,190 4.95 % Total interest-bearing deposits 1,281,283 25,528 4.01 % 1,017,829 14,019 2.78 % Short-term borrowings 288,643 7,322 5.10 % 281,787 6,862 4.91 % Subordinated debt 21,931 601 5.51 % 21,829 600 5.54 % Total interest-bearing liabilities 1,591,857 33,451 4.23 % 1,321,445 21,481 3.28 % Noninterest-bearing liabilities: Demand deposits 459,799 672,963 Accrued expenses and other liabilities 25,634 24,446 Shareholders' equity 166,890 149,166 Total liabilities and shareholders' equity $ 2,244,180 $ 2,168,020 Net interest spread 2.33 % 2.49 % Net interest income and margin (5) $ 37,422 3.46 % $ 37,721 3.68 % Non-taxable equivalent net interest margin 3.46 % 3.67 % Cost of deposits $ 1,741,082 $ 25,528 2.95 % $ 1,690,792 $ 14,019 1.67 % (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 $864 thousand and $877 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) Federal Home Loan Bank dividends have been reclassified from total noninterest income to total interest income for all periods presented. (4) Average allowance for loan losses of $19.5 million and $16.5 million, respectively, is included as a contra asset. (5) Tax equivalent net interest income divided by total interest-earning assets. AVIDBANK HOLDINGS, INC.Loans and Credit Data (Unaudited)(dollars in thousands) June 30, March 31, Dec. 31, Sept. 30, June 30, Current Quarter Year over Year 2024 2024 2023 2023 2023 Change Change Commercial loans $ 821,623 $ 783,171 $ 758,552 $ 731,206 $ 716,355 $ 38,452 $ 105,268 Commercial real estate Multi-family 198,366 198,017 194,981 184,147 193,014 349 5,352 Owner Occupied 136,357 137,426 139,059 135,950 132,078 (1,069 ) 4,279 Non-Owner Occupied 390,461 388,141 393,809 386,629 376,467 2,320 13,994 Construction and land 242,966 259,562 237,124 214,474 215,865 (16,596 ) 27,101 Residential 15,717 16,187 16,816 17,311 16,220 (470 ) (503 ) Total real estate loans 983,867 999,333 981,789 938,511 933,644 (15,466 ) 50,223 Other loans 1,117 520 306 197 266 597 851 Total loans $ 1,806,607 $ 1,783,024 $ 1,740,647 $ 1,669,914 $ 1,650,265 $ 23,583 $ 156,342 Allowance for Credit Losses on Loans Balance, beginning of quarter $ 19,342 $ 19,131 $ 17,800 $ 17,636 $ 16,389 Provision for credit losses on loans 3,068 211 1,331 164 1,347 Charge-offs - - - - (100 ) Recoveries - - - - - Balance, end of quarter $ 22,410 $ 19,342 $ 19,131 $ 17,800 $ 17,636 Allowance for Credit Losses on Unfunded Commitments Balance, beginning of quarter $ 2,168 $ 2,060 $ 2,125 $ 2,169 $ 2,045 Provision for unfunded commitments (70 ) 108 (65 ) (44 ) 124 Balance, end of quarter $ 2,098 $ 2,168 $ 2,060 $ 2,125 $ 2,169 Total allowance for credit losses - loans and unfunded commitments $ 24,508 $ 21,510 $ 21,191 $ 19,925 $ 19,805 Provision for credit losses under CECL Provision for credit losses on loans $ 3,068 $ 211 $ 1,331 $ 164 $ 1,347 Provision for unfunded commitments (70 ) 108 (65 ) (44 ) 124 Total provision for credit losses $ 2,998 $ 319 $ 1,266 $ 120 $ 1,471 Nonperforming Assets Loans accounted for on a non-accrual basis $ 3,686 $ 1,370 $ 1,378 $ 1,385 $ 15,485 Loans past due 90 days or more and still accruing - - - - - Nonperforming loans 3,686 1,370 1,378 1,385 15,485 Other real estate owned - - - 14,095 - Nonperforming assets $ 3,686 $ 1,370 $ 1,378 $ 15,480 $ 15,485 Nonperforming Loans by Type: Commercial $ 3,686 $ 1,370 $ 1,378 $ 1,385 $ 1,390 Construction and land - - - - 14,095 Total Nonperforming loans $ 3,686 $ 1,370 $ 1,378 $ 1,385 $ 15,485 Asset Quality Ratios Allowance for credit losses on loans to total loans 1.24 % 1.08 % 1.10 % 1.07 % 1.07 % Allowance for credit losses to total loans 1.36 % 1.21 % 1.22 % 1.19 % 1.20 % Allowance for credit losses on loans to nonperforming loans 607.98 % 1411.82 % 1388.32 % 1285.20 % 113.89 % Nonperforming assets to total assets 0.16 % 0.06 % 0.06 % 0.70 % 0.70 % Nonperforming loans to total loans 0.20 % 0.08 % 0.08 % 0.08 % 0.94 % Net quarterly charge-offs to average loans (1) 0.00 % 0.00 % 0.00 % 0.00 % 0.03 % Criticized and classified loans to total loans 2.00 % 1.78 % 1.72 % 1.70 % 1.83 % (1) Annualized AVIDBANK HOLDINGS, INC.Deposits (Unaudited)(dollars in thousands) Current Year over June 30, March 31, Dec. 31, Sept. 30, June 30, Quarter Year Period End Deposits 2024 2024 2023 2023 2023 Change Change Non-interest-bearing demand $ 405,644 $ 477,728 $ 472,517 $ 490,289 $ 593,246 $ (72,084 ) $ (187,602 ) Interest-bearing checking 840,839 764,766 740,902 784,757 717,116 76,073 123,723 Money market and savings 312,162 319,692 298,117 322,983 316,991 (7,530 ) (4,829 ) Time 99,239 56,140 46,676 30,880 46,794 43,099 52,445 Brokered 80,608 139,532 96,117 79,291 74,566 (58,924 ) 6,042 Total deposits $ 1,738,492 $ 1,757,858 $ 1,654,329 $ 1,708,200 $ 1,748,713 $ (19,366 ) $ (10,221 ) Average Deposits Non-interest-bearing demand $ 436,498 $ 483,100 $ 487,301 $ 520,573 $ 621,603 $ (46,602 ) $ (185,105 ) Interest-bearing checking 783,048 746,916 766,856 748,016 486,367 36,132 296,681 Money market and savings 304,392 303,593 305,240 296,865 389,036 799 (84,644 ) Time 97,430 56,783 29,787 41,455 48,650 40,647 48,780 Brokered 135,952 134,453 119,605 75,420 83,319 1,499 52,633 Total deposits $ 1,757,320 $ 1,724,845 $ 1,708,789 $ 1,682,329 $ 1,628,975 $ 32,475 $ 128,345 AVIDBANK HOLDINGS, INC.Non-GAAP performance and Financial Measures Reconciliation (Unaudited)(in thousands, except share and per share amounts) 2024 2023 For the six months ended Second First Fourth Third Second June 30, Non-GAAP adjusted net income reconciliation Quarter Quarter Quarter Quarter Quarter 2024 2023 Net income - GAAP $ 3,466 $ 5,246 $ 303 $ 5,408 $ 4,726 $ 8,712 $ 11,090 Loss on sale of securities, net of income tax - - 3,888 - - - 595 Severance, net of income tax - - 233 - - - - BOLI surrender tax expense - - 478 - - - - Adjusted net income (non-GAAP) $ 3,466 $ 5,246 $ 4,902 $ 5,408 $ 4,726 $ 8,712 $ 11,685 Non-GAAP adjusted net income reconciliation Net income - GAAP $ 3,466 $ 5,246 $ 303 $ 5,408 $ 4,726 $ 8,712 $ 11,090 Loss on sale of securities - - 5,399 - - - 815 Tax impact of loss on sale of securities - - (1,511 ) - - - (220 ) Severance - - 324 - - - - Tax impact of severance - - (91 ) - - - - BOLI surrender tax expense - - 478 - - - - Adjusted net income (non-GAAP) $ 3,466 $ 5,246 $ 4,902 $ 5,408 $ 4,726 $ 8,712 $ 11,685 Non-GAAP adjusted diluted earnings per share reconciliation Diluted earnings per share - GAAP $ 0.46 $ 0.69 $ 0.04 $ 0.72 $ 0.63 $ 1.15 $ 1.49 Loss on sale of securities, net of income tax - - 0.52 - - - 0.08 Severance, net of income tax - - 0.03 - - - - BOLI surrender tax expense - - 0.06 - - - - Diluted earnings per share - adjusted (non-GAAP) $ 0.46 $ 0.69 $ 0.65 $ 0.72 $ 0.63 $ 1.15 $ 1.57 Non-GAAP adjusted return on average assets reconciliation Net income - GAAP $ 3,466 $ 5,246 $ 303 $ 5,408 $ 4,726 $ 8,712 $ 11,090 Average total assets 2,265,583 2,222,778 2,191,198 2,168,443 2,171,559 2,244,180 2,171,559 Return on average assets - GAAP 0.62 % 0.95 % 0.05 % 0.99 % 0.87 % 0.78 % 1.03 % Adjusted net income (non-GAAP) $ 3,466 $ 5,246 $ 4,902 $ 5,408 $ 4,726 $ 8,712 $ 11,685 Average total assets 2,265,583 2,222,778 2,191,198 2,168,443 2,171,559 2,244,180 2,171,559 Return on average assets - adjusted (non-GAAP) 0.62 % 0.95 % 0.89 % 0.99 % 0.87 % 0.78 % 1.09 % Non-GAAP taxable equivalent net interest income reconciliation Net interest income - GAAP $ 18,526 $ 18,885 $ 18,424 $ 17,483 $ 17,674 $ 37,410 $ 37,651 Taxable equivalent adjustment 5 6 2 - - 12 70 Net interest income - taxable equivalent (non-GAAP) $ 18,531 $ 18,891 $ 18,426 $ 17,483 $ 17,674 $ 37,422 $ 37,721 Non-GAAP taxable equivalent net interest margin reconciliation Net interest margin - GAAP 3.39 % 3.54 % 3.49 % 3.36 % 3.42 % 3.46 % 3.67 % Impact of taxable equivalent adjustment - - - - - - 0.01 Net interest margin - taxable equivalent (non-GAAP) 3.39 % 3.54 % 3.49 % 3.36 % 3.42 % 3.46 % 3.68 % Non-GAAP total deposits, excluding brokered deposits Total period end deposits - GAAP $ 1,738,492 $ 1,757,858 $ 1,654,329 $ 1,708,200 $ 1,748,713 $ 1,738,492 $ 1,748,713 Brokered deposits 80,608 139,532 96,117 79,291 74,566 80,608 74,566 Total deposits, excluding brokered (non-GAAP) $ 1,657,884 $ 1,618,326 $ 1,558,212 $ 1,628,909 $ 1,674,147 $ 1,657,884 $ 1,674,147 Non-GAAP pre-tax, pre-provision net income Net income - GAAP $ 3,466 $ 5,246 $ 303 $ 5,408 $ 4,726 $ 8,712 $ 11,090 Provision for credit losses 2,998 319 1,266 120 1,471 3,317 1,656 Provision for income taxes 1,402 2,176 683 2,122 1,967 3,578 4,367 Non-GAAP pre-tax, pre-provision net income $ 7,866 $ 7,741 $ 2,252 $ 7,650 $ 8,164 $ 15,607 $ 17,113 SOURCE: Avidbank Holdings, Inc. 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