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

Published

SAN JOSE, CA / ACCESSWIRE / April 17, 2024 / Avidbank Holdings, Inc. (OTC PINK:AVBH) announced net income for the first quarter of 2024 of $5.2 million, or $0.69 per diluted share, compared to $303,000, or $0.04 per diluted share, for the fourth quarter of 2023 and $6.4 million, or $0.85 per diluted share, for the first quarter of 2023.

First Quarter 2024 Highlights

Period end deposits increased $103.5 million, or 25% annualized, from December 31, 2023, and $139.8 million, or 9%, from March 31, 2023.

Taxable equivalent net interest margin(1) was 3.54% in the first quarter of 2024, compared to 3.49% in the fourth quarter of 2023.

Loans increased $42.4 million, or 10% annualized, from December 31, 2023, and $218.5 million, or 14%, from March 31, 2023.

Annualized net charge-offs to average loans totaled 0.0% for the first quarter of 2024 and the fourth quarter of 2023. Nonperforming assets to total assets was 0.06% as of March 31, 2024 and December 31, 2023.

Book value per share was $21.41, an increase of $0.14, or 1%, from December 31, 2023 and an increase of $1.84, or 9%, from March 31, 2023.

"We are pleased with our solid start to 2024, with the focus of strengthening our balance sheet and improving our performance metrics. Our first quarter results include deposit growth of $104 million and loan growth of $42 million. This strong growth, along with the steps we took in the fourth quarter made an impact in both areas. Our net interest margin was 3.54% in the first quarter and has now expanded 18 basis points from the third quarter of 2023. Credit quality continues to remain strong with no net charge-offs in the first quarter and nonperforming assets totaling only 6 basis points of total loans," said Mark Mordell, Chairman and Chief Executive Officer.

"Our bankers along with our enhanced treasury management team have been focused on increasing our revenue growth over the last several quarters. This has resulted in the 52% increase in service charge and foreign exchange fee income since the first quarter of 2023," added Mr. Mordell.

Income Statement

Taxable equivalent net interest income(1) totaled $18.9 million for the first quarter of 2024, an increase of $465,000, or 3%, from the fourth quarter of 2023, and a decrease of $1.2 million, or 6%, from the first quarter of 2023. The taxable equivalent net interest margin was 3.54% in the first quarter of 2024, an increase of 5 basis points compared to the fourth quarter of 2023, and a decrease of 39 basis points compared to the first quarter of 2023. The increase in taxable equivalent net interest income and net interest margin compared to the prior quarter was primarily driven by an overall increase in loan balances and a decrease in investment securities. The decrease in taxable equivalent net interest margin compared to the same period one year ago was primarily driven by an increase in high-cost short-term borrowings replacing lower-cost deposits, interest bearing deposits replacing no-cost demand deposits, and an overall increase in deposit costs, partially offset by an increase in loan yields and average loan balances.

The yield on loans in the first quarter of 2024 was 7.28%, an increase of 3 basis points from the fourth quarter of 2023 and an increase of 61 basis points from the first 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 first quarter of 2024 was 2.81%, an increase of 10 basis points from the fourth quarter of 2023 and an increase of 142 basis points from the first quarter of 2023. The cost of interest-bearing deposits in the first quarter of 2024 was 3.90% compared to 3.80% in the fourth quarter of 2023 and 2.38% in the first quarter of 2023. The increase in the cost of deposits compared to prior periods was primarily due to higher costs on new deposit accounts.

The provision for credit losses was $319,000 in the first quarter of 2024, compared to $1.27 million in the fourth quarter of 2023 and $185,000 in the first quarter of 2023. The provision decreased in the current quarter primarily due to an improving economic forecast in the first quarter of 2024 and lower relative loan growth compared to the fourth quarter of 2023. The provision for credit losses in the first quarter of 2024 included a $211,000 provision for credit losses on loans and a $108,000 provision for unfunded commitments.

Noninterest income was $1.3 million in the first quarter of 2024 compared to $(4.6) million in the fourth quarter of 2023 and $5,000 in the first quarter of 2023. The fourth quarter of 2023 included a $5.40 million loss on sale of securities, a $165,000 loss on the sale of a foreclosed property, and a loss of $116,000 from changes in the fair value of fund investments. The first quarter of 2023 included an $815,000 loss on the sale of securities.

Noninterest expense totaled $12.4 million for the first quarter of 2024, an increase of $877,000 compared to the fourth quarter of 2023. Much of the increase was due to seasonally higher FICA taxes and incentive expense. Salaries and benefits expense for the fourth quarter of 2023 included severance charges of $324,000. There were 141 full-time equivalent employees on March 31, 2024, compared to 143 on December 31, 2023.

Balance Sheet

Total assets were $2.26 billion as of March 31, 2024 compared to $2.23 billion at December 31, 2023, and $2.17 billion at March 31, 2023. Cash and cash equivalents were $90.2 million on March 31, 2024, compared to $81.4 million on December 31, 2023, and $134.1 million on March 31, 2023.

Period end loans on March 31, 2024, totaled $1.78 billion, an increase of $42.4 million, or 10% annualized, from December 31, 2023, and an increase of $218.5 million, or 14%, from March 31, 2023. The growth in loans during the first quarter of 2024 included an increase of $24.6 million in commercial loans and $22.4 million in construction loans. Quarterly average loans for the first quarter of 2024 increased $58.1million, or 3%, from the fourth quarter of 2023 and $201.6 million, or 13%, from the first quarter of 2023.

The allowance for credit losses on loans was $19.3 million on March 31, 2024, representing an increase of $211,000 from December 31, 2023. The allowance for credit losses on loans to total loans was 1.08% on March 31, 2024, compared to 1.10% on December 31, 2023. Nonperforming loans to total loans was 0.08% on March 31, 2024, unchanged from December 31, 2023.

Investment securities were $314.8 million as of March 31, 2024, compared to $325.3 million on December 31, 2023, and $386.9 million at March 31, 2023. In the fourth quarter of 2023, we sold $35.8 million of securities for a loss of $5.4 million. During the first quarter of 2023, we sold $25 million in available for sale mortgage-backed securities and all $32 million in held to maturity municipal securities.

Period end deposits were $1.76 billion on March 31, 2024, an increase of $103.5 million, or 6%, from December 31, 2023. The change in deposits during the first quarter of 2024 included a $23.9 million and a $21.6 million increase in interest-bearing checking and money market/savings deposits, respectively, as well as a $43.4 million increase in brokered deposits. Quarterly average deposits for the first quarter of 2024 were $1.72 billion, an increase of $16.1 million from the fourth quarter of 2023 and a decrease of $28.5 million from the first quarter of 2023.

Short-term borrowings on March 31, 2024, totaled $290.0 million, a decrease of $70.0 million, or 19%, compared to December 31, 2023. The short-term borrowings on March 31, 2024 included $244.0 million in borrowings from the Bank Term Funding Program (BTFP).

Book value per share was $21.41 on March 31, 2024, an increase of $0.14 compared to $21.27 on December 31, 2023. Total shareholders' equity totaled $167.1 million on March 31, 2024, an increase of $1.8 million compared to December 31, 2023. This included an increase in accumulated other comprehensive loss of $3.7 million.

(1) A Non-GAAP performance measure. We provide detailed reconciliations in the "Non-GAAP Performance and Financial Measures Reconciliation" table.

About Avidbank

Avidbank Holdings, Inc. (OTC Pink: AVBH), headquartered in San Jose, California, offers innovative financial solutions and services. We specialize in commercial & industrial lending, venture lending, structured finance, asset-based lending, sponsor finance, fund finance, and real estate construction and commercial real estate lending. Avidbank provides a different approach to banking. We do what we say.

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)
2024 2023
First Quarter Fourth Quarter Third Quarter Second Quarter First Quarter
INCOME HIGHLIGHTS
Net income $5,246 $303 $5,408 $4,726 $6,364
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) $5,246 $4,902 $5,408 $4,726 $6,959
PER SHARE DATA
Basic earnings per share $0.71 $0.04 $0.74 $0.65 $0.87
Diluted earnings per share 0.69 0.04 0.72 0.63 0.85
Diluted earnings per share - adjusted (1) 0.69 0.65 0.72 0.63 0.93
Book value per share 21.41 21.27 18.83 19.55 19.57
PERFORMANCE MEASURES
Return on average assets 0.95% 0.05% 0.99% 0.87% 1.19%
Return on average assets - adjusted (1) 0.95% 0.89% 0.99% 0.87% 1.30%
Return on average equity 12.64% 0.81% 14.01% 12.32% 17.87%
Taxable equivalent net interest margin 3.54% 3.49% 3.36% 3.42% 3.94%
Efficiency ratio 61.62% 83.68% 58.75% 56.05% 55.21%
Average loans to average deposits 101.85% 99.41% 97.49% 97.57% 88.70%
CAPITAL
Tier 1 leverage ratio 9.88% 9.77% 9.84% 9.55% 9.33%
Common equity tier 1 capital ratio 10.03% 9.88% 9.95% 9.88% 10.14%
Tier 1 risk-based capital ratio 10.03% 9.88% 9.95% 9.88% 10.14%
Total risk-based capital ratio 12.01% 11.86% 11.89% 11.87% 12.16%
Tangible common equity ratio 7.40% 7.41% 6.61% 6.83% 6.95%
SHARES OUTSTANDING
Number of common shares outstanding 7,803,900 7,770,439 7,731,404 7,712,278 7,703,748
Average common shares outstanding - basic 7,386,639 7,344,693 7,327,197 7,321,246 7,299,006
Average common shares outstanding - diluted 7,551,406 7,543,616 7,511,373 7,457,906 7,452,254
ASSET QUALITY
Allowance for credit losses to total loans 1.21% 1.22% 1.19% 1.20% 1.18%
Nonperforming assets to total assets 0.06% 0.06% 0.70% 0.70% 0.66%
Nonperforming loans to total loans 0.08% 0.08% 0.08% 0.94% 0.91%
Net charge-offs to average loans (2) 0.00% 0.00% 0.00% 0.03% 0.00%
AVERAGE BALANCES
Loans, net of deferred loan fees $1,756,770 $1,698,690 $1,640,080 $1,589,372 $1,555,207
Investment securities 319,440 337,808 365,244 382,860 443,870
Total assets 2,222,778 2,191,198 2,168,443 2,171,559 2,164,441
Deposits 1,724,845 1,708,789 1,682,329 1,628,975 1,753,295
Shareholders' equity 166,907 148,723 153,099 153,877 144,402
(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)
March 31, 2024 December 31, 2023 September 30, 2023 June 30, 2023 March 31, 2023
Assets
Cash and due from banks $10,268 $9,754 $21,157 $33,849 $19,452
Due from Federal Reserve Bank
and interest-bearing deposits in banks 79,911 71,642 58,885 70,364 114,615
Total cash and cash equivalents 90,179 81,396 80,042 104,213 134,067
Investment securities - available for sale 314,793 325,320 345,547 371,753 386,947
Total investment securities 314,793 325,320 345,547 371,753 386,947
Loans, net of deferred loan fees 1,783,024 1,740,647 1,669,914 1,650,265 1,564,501
Allowance for credit losses on loans (19,342) (19,131) (17,800) (17,636) (16,389)
Loans, net of allowance for credit losses on loans 1,763,682 1,721,516 1,652,114 1,632,629 1,548,112
Bank owned life insurance 12,401 12,315 33,440 33,202 32,972
Premises and equipment, net 3,061 3,297 3,558 3,774 4,037
Other real estate owned - - 14,095 - -
Accrued interest receivable and other assets 72,395 86,992 73,104 62,234 63,916
Total assets $2,256,511 $2,230,836 $2,201,900 $2,207,805 $2,170,051
Liabilities and Shareholders' Equity
Deposits:
Non-interest-bearing demand $477,728 $472,517 $490,289 $593,246 $605,093
Interest-bearing checking 764,766 740,902 784,757 717,116 335,410
Money market and savings 319,692 298,117 322,983 316,991 563,097
Time 56,140 46,676 30,880 46,794 61,645
Brokered 139,532 96,117 79,291 74,566 52,823
Total deposits 1,757,858 1,654,329 1,708,200 1,748,713 1,618,068
Subordinated debt, net 21,931 21,906 21,881 21,855 21,830
Short-term borrowings 290,000 360,000 300,000 264,000 359,000
Accrued interest payable and other liabilities 19,638 29,289 26,250 22,432 20,414
Total liabilities 2,089,427 2,065,524 2,056,331 2,057,000 2,019,312
Shareholders' Equity
Common stock 104,771 104,499 104,018 103,420 102,718
Retained earnings 114,934 109,688 109,386 103,979 99,252
Accumulated other comprehensive (loss) (52,621) (48,875) (67,835) (56,594) (51,231)
Total shareholders' equity 167,084 165,312 145,569 150,805 150,739
Total liabilities and shareholders' equity $2,256,511 $2,230,836 $2,201,900 $2,207,805 $2,170,051
AVIDBANK HOLDINGS, INC. Consolidated Statements of Income (Unaudited) (in thousands, except share and per share amounts)
Three months ended
March 31,2024 December 31, 2023 September 30, 2023 June 30, 2023 March 31, 2023
Interest and fees on loans $31,828 $31,078 $29,125 $26,713 $25,577
Interest on investment securities 1,824 1,979 2,009 2,058 2,612
Federal Home Loan Bank dividends (1) 190 172 171 185 163
Other interest income 819 654 662 1,196 628
Total interest income 34,661 33,883 31,967 30,152 28,980
Deposit interest expense 12,034 11,692 10,704 7,989 6,030
Interest on short-term borrowings 3,442 3,467 3,480 4,189 2,673
Interest on long-term debt 300 300 300 300 300
Total interest expense 15,776 15,459 14,484 12,478 9,003
Net interest income 18,885 18,424 17,483 17,674 19,977
Provision for credit losses 319 1,266 120 1,471 185
Net interest income after provision for
credit losses 18,566 17,158 17,363 16,203 19,792
Service charges and bank fees 618 613 560 545 490
Foreign exchange income 251 210 53 66 83
Income from bank owned life insurance 187 201 238 230 225
Gain/(loss) on sale of securities - (5,399) - - (815)
Warrant and success fee income - 15 8 - -
Other investment income 155 (116) 142 37 (6)
Loss on sale of ORE - (165) - - -
Other income 72 19 62 24 28
Total noninterest income 1,283 (4,622) 1,063 902 5
Salaries and benefit expenses 8,794 8,137 7,460 7,021 7,954
Occupancy and equipment expenses 1,028 986 1,002 1,005 961
Data processing 564 499 538 477 528
Regulatory assessments 446 403 478 555 226
Legal and professional fees 611 531 483 394 431
Other operating expenses 984 994 935 960 933
Total noninterest expense 12,427 11,550 10,896 10,412 11,033
Income before income taxes 7,422 986 7,530 6,693 8,764
Provision for income taxes 2,176 683 2,122 1,967 2,400
Net income $5,246 $303 $5,408 $4,726 $6,364
Basic earnings per common share $0.71 $0.04 $0.74 $0.65 $0.87
Diluted earnings per common share 0.69 0.04 0.72 0.63 0.85
Weighted average shares - basic 7,386,639 7,344,693 7,327,197 7,321,246 7,299,006
Weighted average shares - diluted 7,551,406 7,543,616 7,511,373 7,457,906 7,452,254
(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
March 31, 2024 December 31, 2023
Interest Yields Interest Yields
Average Income/ or Average Income/ or
Balance Expense Rates Balance Expense Rates
Assets
Interest earning assets:
Loans (1) $1,758,201 $31,828 7.28% $1,700,094 $31,078 7.25%
Fed funds sold/interest bearing deposits 59,391 819 5.46% 47,906 654 5.34%
Investment securities
Taxable investment securities 317,572 1,802 2.28% 337,021 1,971 2.32%
Non-taxable investment securities (2) 1,868 28 5.93% 787 10 5.04%
Total investment securities 319,440 1,830 2.30% 337,808 1,981 2.33%
FHLB stock (3) 8,409 190 9.11% 8,409 172 8.10%
Total interest-earning assets 2,145,441 34,667 6.50% 2,094,217 33,885 6.42%
Noninterest-earning assets:
Cash and due from banks 13,038 12,528
All other assets (4) 64,299 84,453
Total assets $2,222,778 $2,191,198
Liabilities and Shareholders' Equity
Interest-bearing liabilities:
Deposits
Demand $746,916 $7,439 4.01% $766,856 $7,650 3.96%
Money market and savings 303,593 2,270 3.01% 305,240 2,218 2.88%
Time 56,783 555 3.93% 29,787 252 3.36%
Brokered 134,453 1,770 5.29% 119,605 1,572 5.21%
Total interest-bearing deposits 1,241,745 12,034 3.90% 1,221,488 11,692 3.80%
Short-term borrowings 282,066 3,442 4.91% 281,457 3,467 4.89%
Subordinated debt 21,917 300 5.51% 21,893 300 5.44%
Total interest-bearing liabilities 1,545,728 15,776 4.10% 1,524,838 15,459 4.02%
Noninterest-bearing liabilities:
Demand deposits 483,100 487,301
Accrued expenses and other liabilities 27,043 30,336
Shareholders' equity 166,907 148,723
Total liabilities and
shareholders' equity $2,222,778 $2,191,198
Net interest spread 2.40% 2.40%
Net interest income and margin (5) $18,891 3.54% $18,426 3.49%
Non-taxable equivalent net interest margin 3.54% 3.49%
Cost of deposits $1,724,845 $12,034 2.81% $1,708,789 $11,692 2.71%
(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 $455 thousand and $449 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 $19.1 million and $17.8 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)
Three months ended
March 31, 2024 March 31, 2023
Interest Yields Interest Yields
Average Income/ or Average Income/ or
Balance Expense Rates Balance Expense Rates
Assets
Interest earning assets:
Loans (1) $1,758,201 $31,828 7.28% $1,555,207 $25,577 6.67%
Fed funds sold/interest bearing deposits 59,391 819 5.46% 56,303 628 4.52%
Investment securities
Taxable investment securities 317,572 1,802 2.28% 414,380 2,348 2.30%
Non-taxable investment securities (2) 1,868 28 5.93% 29,490 334 4.59%
Total investment securities 319,440 1,830 2.30% 443,870 2,682 2.45%
FHLB stock (3) 8,409 190 9.11% 7,608 163 8.69%
Total interest-earning assets 2,145,441 34,667 6.50% 2,062,988 29,050 5.71%
Noninterest-earning assets:
Cash and due from banks 13,038 22,992
All other assets (4) 64,299 78,461
Total assets $2,222,778 $2,164,441
Liabilities and Shareholders' Equity
Interest-bearing liabilities:
Deposits
Demand $746,916 $7,439 4.01% $30,101 $56 0.75%
Money market and savings 303,593 2,270 3.01% 919,292 5,593 2.47%
Time 56,783 555 3.93% 65,830 223 1.37%
Brokered 134,453 1,770 5.29% 13,178 158 4.86%
Total interest-bearing deposits 1,241,745 12,034 3.90% 1,028,401 6,030 2.38%
Short-term borrowings 282,066 3,442 4.91% 219,550 2,673 4.94%
Subordinated debt 21,917 300 5.51% 21,816 300 5.58%
Total interest-bearing liabilities 1,545,728 15,776 4.10% 1,269,767 9,003 2.88%
Noninterest-bearing liabilities:
Demand deposits 483,100 724,894
Accrued expenses and other liabilities 27,043 25,378
Shareholders' equity 166,907 144,402
Total liabilities and
shareholders' equity $2,222,778 $2,164,441
Net interest spread 2.40% 2.83%
Net interest income and margin (5) $18,891 3.54% $20,047 3.94%
Non-taxable equivalent net interest margin 3.54% 3.93%
Cost of deposits $1,724,845 $12,034 2.81% $1,753,295 $6,030 1.39%
(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 $455 thousand and $530 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 $19.1 million and $16.2 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. Loans and Credit Data (Unaudited) (dollars in thousands)
March 31, Dec. 31, Sept. 30, June 30, March 31, Current Quarter Year over Year
2024 2023 2023 2023 2023 Change Change
Commercial loans $783,171 $758,552 $731,206 $716,355 $642,826 $24,619 $140,345
Commercial real estate
Multi-family 198,017 194,981 184,147 193,014 188,411 3,036 9,606
Owner Occupied 137,426 139,059 135,950 132,078 137,118 (1,633) 308
Non-Owner Occupied 388,141 393,809 386,629 376,467 350,730 (5,668) 37,411
Construction and land 259,562 237,124 214,474 215,865 233,162 22,438 26,400
Residential 16,187 16,816 17,311 16,220 11,969 (629) 4,218
Total real estate loans 999,333 981,789 938,511 933,644 921,390 17,544 77,943
Other loans 520 306 197 266 285 214 235
Total loans $1,783,024 $1,740,647 $1,669,914 $1,650,265 $1,564,501 $42,377 $218,523
Allowance for Credit Losses on Loans
Balance, beginning of quarter $19,131 $17,800 $17,636 $16,389 $16,481
Adoption of ASU 2016-13 - - - - (249)
Provision for loan losses 211 1,331 164 1,347 157
Charge-offs - - - (100) -
Recoveries - - - - -
Balance, end of quarter $19,342 $19,131 $17,800 $17,636 $16,389
Allowance for Credit Losses
on Unfunded Commitments
Balance, beginning of quarter $2,060 $2,125 $2,169 $2,045 $449
Adoption of ASU 2016-13 - - - - 1,568
Provision for unfunded commitments 108 (65) (44) 124 28
Balance, end of quarter $2,168 $2,060 $2,125 $2,169 $2,045
Total allowance for credit losses -
loans and unfunded commitments $21,510 $21,191 $19,925 $19,805 $18,434
Provision for credit losses under CECL
Provision for loan losses $211 $1,331 $164 $1,347 $157
Provision for unfunded commitments 108 (65) (44) 124 28
Total provision for credit losses $319 $1,266 $120 $1,471 $185
Nonperforming Assets
Loans accounted for on a non-accrual basis $1,370 $1,378 $1,385 $15,485 $14,240
Loans past due 90 days or more and still accruing - - - - -
Nonperforming loans 1,370 1,378 1,385 15,485 14,240
Other real estate owned - - 14,095 - -
Nonperforming assets $1,370 $1,378 $15,480 $15,485 $14,240
Nonperforming Loans by Type:
Commercial $1,370 $1,378 $1,385 $1,390 $145
Construction and land - - - 14,095 14,095
Total Nonperforming loans $1,370 $1,378 $1,385 $15,485 $14,240
Asset Quality Ratios
Allowance for credit losses on loans to total loans 1.08% 1.10% 1.07% 1.07% 1.05%
Allowance for credit losses to total loans 1.21% 1.22% 1.19% 1.20% 1.18%
Allowance for credit losses on loans to nonperforming loans 1411.82% 1388.32% 1285.20% 113.89% 115.09%
Nonperforming assets to total assets 0.06% 0.06% 0.70% 0.70% 0.66%
Nonperforming loans to total loans 0.08% 0.08% 0.08% 0.94% 0.91%
Net quarterly charge-offs to average loans (1) 0.00% 0.00% 0.00% 0.03% 0.00%
(1) Annualized
AVIDBANK HOLDINGS, INC. Deposits (Unaudited) (dollars in thousands)
Period End Deposits March 31, 2024 Dec. 31, 2023 Sept. 30, 2023 June 30, 2023 March 31, 2023 Current Quarter Change Year over Year Change
Non-interest-bearing demand $477,728 $472,517 $490,289 $593,246 $605,093 $5,211 $(127,365)
Interest-bearing checking 764,766 740,902 784,757 717,116 335,410 23,864 429,356
Money market and savings 319,692 298,117 322,983 316,991 563,097 21,575 (243,405)
Time 56,140 46,676 30,880 46,794 61,645 9,464 (5,505)
Brokered 139,532 96,117 79,291 74,566 52,823 43,415 86,709
Total deposits $1,757,858 $1,654,329 $1,708,200 $1,748,713 $1,618,068 $103,529 $139,791
Average Deposits March 31,2024 Dec. 31,2023 Sept. 30,2023 June 30,2023 March 31,2023 CurrentQuarterChange Year overYearChange
Non-interest-bearing demand $483,100 $487,301 $520,573 $621,603 $724,894 $(4,201) $(241,794)
Interest-bearing checking 746,916 766,856 748,016 486,367 87,198 (19,940) 659,718
Money market and savings 303,593 305,240 296,865 389,036 862,195 (1,647) (558,602)
Time 56,783 29,787 41,455 48,650 65,830 26,996 (9,047)
Brokered 134,453 119,605 75,420 83,319 13,178 14,848 121,275
Total deposits $1,724,845 $1,708,789 $1,682,329 $1,628,975 $1,753,295 $16,056 $(28,450)
AVIDBANK HOLDINGS, INC. Non-GAAP Performance and Financial Measures Reconciliation (Unaudited) (in thousands, except share and per share amounts)
2024 2023
Non-GAAP adjusted net income reconciliation FirstQuarter FourthQuarter ThirdQuarter SecondQuarter FirstQuarter
Net income - GAAP $5,246 $303 $5,408 $4,726 $6,364
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) $5,246 $4,902 $5,408 $4,726 $6,959
Non-GAAP adjusted net income reconciliation
Net income - GAAP $5,246 $303 $5,408 $4,726 $6,364
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) $5,246 $4,902 $5,408 $4,726 $6,959
Non-GAAP adjusted diluted earnings per share reconciliation
Diluted earnings per share - GAAP $0.69 $0.04 $0.72 $0.63 $0.85
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) $0.69 $0.65 $0.72 $0.63 $0.93
Non-GAAP adjusted return on average assets reconciliation
Net income - GAAP $5,246 $303 $5,408 $4,726 $6,364
Average total assets 2,222,778 2,191,198 2,168,443 2,171,559 2,164,441
Return on average assets - GAAP 0.95% 0.05% 0.99% 0.87% 1.19%
Adjusted net income (non-GAAP) $5,246 $4,902 $5,408 $4,726 $6,959
Average total assets 2,222,778 2,191,198 2,168,443 2,171,559 2,164,441
Return on average assets - adjusted (non-GAAP) 0.95% 0.89% 0.99% 0.87% 1.30%
Non-GAAP taxable equivalent net interest income reconciliation
Net interest income - GAAP $18,885 $18,424 $17,483 $17,674 $19,977
Taxable equivalent adjustment 6 2 - - 70
Net interest income - taxable equivalent (non-GAAP) $18,891 $18,426 $17,483 $17,674 $20,047
Non-GAAP taxable equivalent net interest margin reconciliation
Net interest margin - GAAP 3.54% 3.49% 3.36% 3.42% 3.93%
Impact of taxable equivalent adjustment - - - - 0.01
Net interest margin - taxable equivalent (non-GAAP) 3.54% 3.49% 3.36% 3.42% 3.94%

SOURCE: Avidbank Holdings, Inc.

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