Avidbank Holdings, Inc. Announces Net Income of $514,000 for the First Quarter of 2013

April 25, 2013

PALO ALTO, Calif.--(BUSINESS WIRE)-- Avidbank Holdings, Inc. ("the Company") (OTCBB: AVBH), sole owner of Avidbank ("the Bank"), an independent full-service commercial bank serving businesses and consumers in Northern California, announced unaudited net income of $514,000 for the first quarter of 2013, compared to $771,000 during the same period in 2012.

Financial Highlights

Net income was $514,000 for the first quarter of 2013
Diluted earnings per common share were $0.16 for the first quarter, compared to $0.26 for the first quarter of 2012
Total assets grew by 22% over the previous 12 months, ending the first quarter at $417 million
Total loans outstanding grew by 9% over the previous 12 months, ending the first quarter at $242 million
Total deposits grew by 25% over the previous 12 months, ending the first quarter at $375 million
The Bank continues to be well capitalized with a Tier 1 Leverage Ratio of 8.9% and a Total Risk Based Capital Ratio of 12.3%

Mark D. Mordell, Chairman and Chief Executive Officer, stated, "We are pleased to announce that Avidbank Holdings, Inc. recorded its fifteenth consecutive profitable quarter for the three months ended March 31, 2013. As expected, net income for the first quarter of 2013 decreased by 33% compared to the first quarter of 2012 due to significant investments in key loan production personnel and new infrastructure and facilities. These investments are very important to the Bank’s long term plans as we continue to grow and gain market share. The Bank's loans, deposits and total assets all showed growth over the balances a year earlier. We have strategically added several highly experienced bankers to our team which has enabled us to open new loan production offices in San Jose and Redwood City."

For the three months ended March 31, 2013, net interest income before provision for loan losses was $3.9 million, an increase of more than $160,000 or 4% compared to the first quarter of 2012. The growth in net interest income was the result of growth in loans outstanding. Due in large part to the competitive market, net interest margin was 3.93% for the first quarter of 2013, compared to 4.48% for the first quarter of 2012. The decline in margin was mitigated by a reduction in our overall cost of funds from 0.64% in 2012 to 0.34% for the same period in 2013.

Non-interest expense grew by $557,000 to $3.1 million in the first quarter of 2013, compared to $2.5 million for the first quarter of 2012 and $2.9 million for the fourth quarter of 2012. These expense outlays are part of the Bank’s strategic initiative to deepen our current lending expertise while broadening our market footprint. These investments will lead to future growth in both loan and fee income.

Non-interest income excluding gains from the sale of investment securities was $125,000 in the first quarter of 2013; an increase of $18,000 or 17% over the first quarter of 2012 and $3,000 or 3% over the fourth quarter of 2012.

About Avidbank

Avidbank Holdings, Inc., headquartered in Palo Alto, California offers innovative financial solutions and services. We specialize in the following markets: commercial & industrial, corporate finance, asset-based lending, real estate construction and commercial real estate lending, and real estate bridge financing. Avidbank advances the success of our clients by providing them with financial opportunities and serving them as we wish to be served – with mutual effort, ingenuity and trust – creating long-term banking relationships.

Forward-Looking Statement:

This news release contains statements that are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on current expectations, estimates and projections about Avidbank's business based, in part, on assumptions made by management. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements due to numerous factors, including those described above and the following: Avidbank's timely implementation of new products and services, technological changes, changes in consumer spending and savings habits and other risks discussed from time to time in Avidbank's reports and filings with banking regulatory agencies. In addition, such statements could be affected by general industry and market conditions and growth rates, and general domestic and international economic conditions. Such forward-looking statements speak only as of the date on which they are made, and Avidbank does not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date of this release.


Avidbank Holdings, Inc. Balance Sheet (Unaudited) ($000 except per share amounts)

Assets		3/31/2013		12/31/2012		3/31/2012
Cash and due from banks	$	11,381	$	21,493	$	13,174
Fed funds sold		102,070		85,510		18,365
Total cash and cash equivalents		113,451		107,003		31,539

Investment securities - available for sale		54,767		55,343		80,971

Loans, net of deferred loan fees		242,225		247,269		221,564
Allowance for loan losses		(4,736)		(4,480)		(4,359)
Loans, net of allowance for loan losses		237,489		242,789		217,205

Premises and equipment, net		1,334		1,291		711
Accrued interest receivable & other assets		10,201		9,296		10,250
Total assets	$	417,242	$	415,721	$	340,676

Liabilities
Non-interest-bearing demand deposits	$	101,386	$	105,518	$	64,669
Interest bearing transaction accounts		15,990		17,293		14,765
Money market and savings accounts		197,639		185,664		152,870
Time deposits		60,931		66,520		67,856
Total deposits		375,946		374,994		300,159

Other liabilities		2,884		2,864		5,429
Total liabilities		378,830		377,858		305,588

Shareholders' equity
Preferred stock		5,963		5,952		5,918
Common stock		29,647		29,556		29,373
Retained earnings (accumulated deficit)		1,599		1,171		(544)
Accumulated other comprehensive income		1,204		1,184		340
Total shareholders' equity		38,412		37,863		35,088

Total liabilities and shareholders' equity	$	417,242	$	415,721	$	340,676

Tier 1 leverage ratio		8.87%		8.88%		9.96%
Tier 1 risk-based capital ratio		11.01%		10.78%		11.35%
Total risk-based capital ratio		12.26%		12.03%		12.68%
Book value per share (excluding TARP)	$	12.37	$	12.22	$	11.16


Avidbank Holdings, Inc. Condensed Statements of Income (Unaudited) ($000 except per share amounts)
	For the Quarter Ended
		3/31/2013		3/31/2012
Interest and fees on loans	$	3,722	$	3,655
Interest on investment securities		404		529
Other interest income		54		20
Total interest income		4,180		4,203
Interest expense		318		501
Net interest income		3,862		3,702

Provision for loan losses		-		-
Net interest income after provision
for loan losses		3,862		3,702

Service charges, fees and other income		125		107

Compensation and benefit expenses		1,838		1,494
Occupancy and equipment expenses		971		792
Other operating expenses		286		253
Total non-interest expense		3,096		2,539

Income before income taxes		891		1270
Provision for income taxes		377		499
Net income	$	514	$	771

Preferred dividends & warrant amortization		84		84
Net income applicable to
common shareholders	$	430	$	687

Basic earnings per common share	$	0.16	$	0.26
Diluted earnings per common share	$	0.16	$	0.26

Weighted average shares outstanding		2,616,099		2,603,827
Weighted average diluted shares outstanding		2,695,340		2,628,127
Total shares outstanding at period end		2,623,852		2,611,018

Return on average assets (annualized)		0.49%		0.88%
Return on average common equity (annual.)		6.37%		10.67%

Net interest margin		3.93%		4.48%
Cost of funds		0.34%		0.64%
Efficiency ratio		78%		67%

Avidbank Holdings, Inc.
Steve Leen, 650-843-2204
Executive Vice President and Chief Financial Officer
sleen@avidbank.com
avidbank.com

Source: Avidbank Holdings, Inc.

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