Avidbank Holdings, Inc. Announces Net Income for the Second Quarter of 2024

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 Oakes
Executive Vice President and Chief Financial Officer
408-200-7390
IR@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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