SAN JOSE, Calif.--(BUSINESS WIRE)--
Avidbank Holdings, Inc. ("the Company") (OTC Pink: AVBH), a bank holding
company and the parent company of Avidbank ("the Bank"), an independent
full-service commercial bank serving businesses and consumers in
Northern California, announced unaudited consolidated net income of
$2,107,000 for the first quarter of 2018 compared to $1,554,000 for the
same period in 2017.
First Quarter 2018 Financial Highlights
-
Net interest income was $8,586,000 for the first quarter of 2018, an
increase of $1,618,000 over the $6,968,000 we achieved in the first
quarter of 2017. The 23% increase over the prior year quarter reflects
the impact of our loan growth over the past twelve months.
-
Net income was $2,107,000 for the first quarter of 2018, compared to
$1,554,000 for the first quarter of 2017. Results for the first
quarter of 2018 included no loan loss provision compared to a loan
loss provision of $721,000 in the first quarter of 2017.
-
Diluted earnings per common share were $0.36 for the first quarter of
2018, compared to $0.33 for the first quarter of 2017.
-
Total assets grew by 5% in the first three months of 2018, ending the
first quarter at $822 million.
-
Total loans net of deferred fees grew by 2% in the first three months
of 2018, ending the first quarter at $662 million.
-
Total deposits grew by 3% in the first three months of 2018, ending
the first quarter at $666 million.
-
The Company continues to be well capitalized for regulatory purposes
with a Tier 1 Leverage Ratio of 11.4%, a Tier 1 Risk Based Capital and
Common Equity Tier 1 Risk Based Capital Ratio of 10.8%, and a Total
Risk Based Capital Ratio of 13.2%.
Mark D. Mordell, Chairman and Chief Executive Officer, stated, "Net
interest income increased to $8.6 million in the first quarter of 2018,
a 23% increase over the first quarter of 2017 due to our loan growth
over the past twelve months. Loans grew $14 million in the first quarter
even as we absorbed our record growth from the previous quarter and
experienced a high level of payoffs in our Specialty Finance division
due primarily to the active merger and acquisition markets. We are
committed to a growth strategy to achieve optimal profitability and have
made substantial investments in personnel and facilities to help realize
that goal responsibly. In January 2018, we more than doubled the size of
our space at our San Francisco location to accommodate our rapidly
growing staff. We are well positioned to continue the franchise growth
strategy to scale our balance sheet and infrastructure to serve our
markets.”
Mr. Mordell continued, "In 2017, we added both business development and
support staff to sustain and manage our growth. We also expanded and
relocated our facilities to accommodate our growth in staff as well as
increase staff retention due to more favorable commute times.
Non-interest expenses increased by $1.9 million to $6.3 million in the
first quarter of 2018, from $4.4 million in the first quarter of 2017
primarily due to these increased investments. Our efficiency ratio
increased to 67.3% in the first quarter of 2018 from 58.7% in the first
quarter of 2017 as a result of the increased expenses. Total deposits
increased by $20 million in the first quarter of 2018 compared to the
fourth quarter of 2017 and increased by $74 million from the same
quarter in 2017. The increase in deposits for the first quarter of 2018
was primarily due to an increase in demand deposits and money market
accounts. Our net interest margin grew to 4.55% in the first quarter of
2018 compared to 4.26% in the first quarter of 2017 due to changes in
the mix of earning assets in favor of higher yielding loans. Return on
assets was 1.06% in the first quarter of 2018 compared to 0.91% in the
first quarter of 2017."
Results for the quarter ended March 31, 2018
For the three months ended March 31, 2018, net interest income before
provision for loan losses was $8.6 million, an increase of $1.6 million
or 23% compared to the first quarter of 2017. The increase was primarily
the result of higher average loans outstanding. Average total loans
outstanding for the quarter ended March 31, 2018 were $654 million,
compared to $539 million for the same quarter in 2017, an increase of
21%. Average earning assets were $766 million in the first quarter of
2018, a 16% increase over the first quarter of the prior year. Loans
made up 85% of average earning assets at the end of the first quarter of
2018 compared to 81% at the end of the first quarter of 2017. Net
interest margin was 4.55% for the first quarter of 2018, compared to
4.26% for the first quarter of 2017. No loan loss provision was taken in
the first quarter of 2018 compared with a loan loss provision of
$721,000 taken in the first quarter of 2017.
Non-interest income was $704,000 in the first quarter of 2018, an
increase of $183,000 or 35% compared to the first quarter of 2017.
Non-interest income in the first quarter of 2018 included $281,000 from
earnings from an investment in a Small Business Investment Corporation
(SBIC) fund while non-interest income in the prior year's quarter
included $112,000 from the exercise of common stock warrants related to
a Specialty Finance loan.
Non-interest expense increased by $1,857,000 in the first quarter of
2018 to $6,252,000 compared to $4,395,000 for the first quarter of 2017.
This increase was primarily due to higher compensation costs related to
increased staffing and increased occupancy costs due to the expansion of
our facilities. The Bank's full time equivalent employees at March 31,
2018 and 2017 were 88 and 70, respectively. The Bank's efficiency ratio
increased from 58.7% in the first quarter of 2017 to 67.3% in the first
quarter of 2018 due to increased staffing and facilities costs to
accommodate our growth.
The effective tax rate was 30.6% in the first three months of 2018
compared to 34.5% for the same period in 2017. The rate declined in 2018
due to the Tax Cuts and Jobs Act federal income tax rate reduction
becoming effective for the 2018 tax year.
Balance Sheet
Total assets increased to $822 million as of March 31, 2018, compared to
$783 million at December 31, 2017 and $702 million on the same day one
year ago. The increase in total assets of $39 million, or 5%, from
December 31, 2017 was primarily due to increased FHLB borrowings and
increased demand deposit accounts in the first quarter of 2018. The
Company reported total loans at March 31, 2018 of $662 million, which
represented an increase of $14 million, or 2%, from $648 million at
December 31, 2017, and an increase of $105 million, or 19%, over $557
million at March 31, 2017. The increase in total loans for both periods
was primarily attributable to growth in commercial real estate,
multi-family and construction loans. The increase in loans from March
31, 2017 also included higher Specialty Finance and commercial loans.
"We had $2.3 million in non-accrual loans comprising 0.34% of total
loans from one relationship on March 31, 2018 compared to $5.2 million
in non-accrual loans at the end of the prior year. We are pleased that
the balance of our non-accrual loans was reduced by more than half in
the first quarter of 2018,” observed Mr. Mordell.
The Company’s total deposits were $666 million as of March 31, 2018,
which represented an increase of $20 million, or 3%, compared to $646
million at December 31, 2017 and an increase of $73 million, or 12%,
compared to $593 million at March 31, 2017. The increase in deposits
from December 31, 2017 was due to an increase in demand deposits and
money market accounts. The increase from March 31, 2017 was caused by an
increase in money market accounts, demand deposits and CDs greater than
$250,000. The Company had $50 million of Federal Home Loan Bank advances
outstanding as of March 31, 2018.
Demand and interest bearing transaction deposits represented 46% of
total deposits at March 31, 2018, compared to 45% at December 31, 2017
and 48% for the same period one year ago. Core deposits, which include
transaction deposits, money market accounts and CDs below $250,000,
represented 87% of total deposits at March 31, 2018, compared to 87% at
December 31, 2017 and 87% at March 31, 2017. The Company’s loan to
deposit ratio was 99% at March 31, 2018 compared to 100% at December 31,
2017 and 94% at March 31, 2017.
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, technology and
asset-based lending, sponsor finance, real estate construction and
commercial real estate lending. Avidbank provides a different approach
to banking. We do what we say.
Forward-Looking Statement:
This news release contains statements that are forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act of 1995. Forward-looking statements can be identified by the
fact that they do not relate strictly to historical or current facts,
and generally include the words “believes,” “plans,” “intends,”
“expects,” “opportunity,” “anticipates,” “targeted,” “continue,”
“remain,” “will,” “should,” “may,” or words of similar meaning. While we
believe that our forward-looking statements and the assumptions
underlying them are reasonably based, such statements and assumptions,
are, by their nature subject to risks and uncertainties, and thus could
later prove to be inaccurate or incorrect. Accordingly, actual results
could materially differ from forward-looking statements for a variety of
reasons, including, but not limited to local, regional, national and
international economic conditions and events and the impact they may
have on us and our customers, and in particular in our market areas;
ability to attract deposits and other sources of liquidity; oversupply
of property inventory and deterioration in values of California real
estate, both residential and commercial; a prolonged slowdown or decline
in construction activity; changes in the financial performance and/or
condition of our borrowers; changes in the level of non-performing
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 pandemic flu;
destabilization in international economies resulting from the European
sovereign debt crisis; the effects of the Tax Cuts and Jobs Act; 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.
|
| |
| |
| |
| |
| |
| Avidbank Holdings, Inc. |
| Consolidated Balance Sheets |
|
($000, except share and per share amounts) (Unaudited)
|
| | | | | | | | | |
|
Assets | | 3/31/18 | | 12/31/17 | | 9/30/17 | | 6/30/17 | | 3/31/17 |
|
Cash and due from banks
| | $15,729 | | $10,650 | | $11,068 | | $10,845 | | $17,431 |
|
Due from Federal Reserve Bank | |
48,475
|
|
22,710
|
|
74,970
|
|
32,510
|
|
21,265
|
|
Total cash and cash equivalents
| |
64,204
| |
33,360
| |
86,038
| |
43,355
| |
38,696
|
| | | | | | | | | |
|
|
Investment securities - available for sale
| |
70,797
| |
74,364
| |
76,742
| |
82,986
| |
86,905
|
| | | | | | | | | |
|
|
Loans, net of deferred loan fees
| |
662,005
| |
648,273
| |
578,524
| |
584,342
| |
556,969
|
|
Allowance for loan losses
| |
(8,297)
|
|
(8,297)
|
|
(8,191)
|
|
(8,076)
|
|
(6,991)
|
|
Loans, net of allowance for loan losses
| |
653,708
| |
639,976
| |
570,333
| |
576,266
| |
549,978
|
| | | | | | | | | |
|
|
Bank owned life insurance
| |
10,686
| |
10,619
| |
10,551
| |
10,479
| |
10,406
|
|
Premises and equipment, net
| |
6,349
| |
5,946
| |
3,387
| |
1,155
| |
668
|
|
Accrued interest receivable & other assets
| |
16,749
|
|
18,728
|
|
16,756
|
|
16,818
|
|
15,205
|
|
Total assets
| | $822,493 |
| $782,993 |
| $763,807 |
| $731,059 |
| $701,858 |
| | | | | | | | | |
|
Liabilities | | | | | | | | | | |
|
Non-interest-bearing demand deposits
| | $281,967 | | $275,925 | | $295,862 | | $264,514 | | $261,172 |
|
Interest bearing transaction accounts
| |
23,228
| |
16,555
| |
16,988
| |
17,642
| |
20,786
|
|
Money market and savings accounts
| |
250,218
| |
243,198
| |
229,143
| |
220,474
| |
207,106
|
|
Time deposits
| |
110,906
|
|
110,730
|
|
117,670
|
|
116,282
|
|
103,616
|
|
Total deposits
| |
666,319
| |
646,408
| |
659,663
| |
618,912
| |
592,680
|
| | | | | | | | | |
|
|
FHLB advances
| |
50,000
| |
30,000
| |
-
| |
30,000
| |
30,000
|
|
Subordinated debt, net
| |
11,782
| |
11,761
| |
11,740
| |
11,719
| |
11,698
|
|
Other liabilities
| |
3,578
|
|
5,717
|
|
4,421
|
|
3,572
|
|
2,425
|
|
Total liabilities
| |
731,679
| |
693,886
| |
675,824
| |
664,203
| |
636,803
|
| | | | | | | | | |
|
Shareholders' equity | | | | | | | | | | |
|
Common stock/additional paid-in capital
| |
67,230
| |
66,996
| |
66,704
| |
47,421
| |
47,259
|
|
Retained earnings
| |
25,050
| |
22,811
| |
21,802
| |
20,142
| |
18,711
|
|
Accumulated other comprehensive income (loss)
| |
(1,466)
|
|
(700)
|
|
(523)
|
|
(707)
|
|
(915)
|
|
Total shareholders' equity
| |
90,814
| |
89,107
| |
87,983
| |
66,856
| |
65,055
|
| | | | | | | | | |
|
|
Total liabilities and shareholders' equity
| | $822,493 |
| $782,993 |
| $763,807 |
| $731,059 |
| $701,858 |
| | | | | | | | | |
|
Capital ratios | | | | | | | | | | |
|
Tier 1 leverage ratio
| |
11.45%
| |
11.43%
| |
11.87%
| |
9.28%
| |
9.52%
|
|
Common equity tier 1 capital ratio
| |
10.84%
| |
10.70%
| |
11.61%
| |
8.94%
| |
9.24%
|
|
Tier 1 risk-based capital ratio
| |
10.84%
| |
10.70%
| |
11.61%
| |
8.94%
| |
9.24%
|
|
Total risk-based capital ratio
| |
13.24%
| |
13.13%
| |
14.27%
| |
11.61%
| |
11.91%
|
| | | | | | | | | |
|
|
Book value per common share
| | $15.25 | | $15.12 | | $14.99 | | $13.91 | | $13.57 |
|
Total common shares outstanding
| |
5,956,609
| |
5,893,144
| |
5,870,691
| |
4,806,377
| |
4,793,827
|
| | | | | | | | | |
|
Other Ratios | | | | | | | | | | |
|
Non-interest bearing deposits to total deposits
| |
42.3%
| |
42.7%
| |
44.9%
| |
42.7%
| |
44.1%
|
|
Core deposits to total deposits
| |
86.9%
| |
87.4%
| |
86.7%
| |
86.0%
| |
86.6%
|
|
Loan to deposit ratio
| |
99.4%
| |
100.3%
| |
87.7%
| |
94.4%
| |
94.0%
|
|
Allowance for loan losses to total loans
| |
1.25%
| |
1.28%
| |
1.42%
| |
1.38%
| |
1.26%
|
| | | | | | | | | |
|
|
| |
| |
| |
| Avidbank Holdings, Inc. |
Condensed Consolidated Statements of Income |
|
($000, except share and per share amounts) (Unaudited)
|
| | | | | |
|
| |
Quarter Ended
|
| | 3/31/18 | | 12/31/17 | | 3/31/17 |
|
Interest and fees on loans and leases
| | $8,896 | | $8,186 | | $6,978 |
|
Interest on investment securities
| |
455
| |
477
| |
529
|
|
Other interest income
| |
149
|
|
245
|
|
69
|
|
Total interest income
| |
9,500
| |
8,908
| |
7,576
|
| | | | | |
|
|
Deposit interest expense
| |
549
| |
496
| |
334
|
|
Other interest expense
| |
365
|
|
230
|
|
274
|
|
Total interest expense
| |
914
|
|
726
|
|
608
|
|
Net interest income
| |
8,586
| |
8,182
| |
6,968
|
| | | | | |
|
|
Provision for loan losses
| |
-
|
|
106
|
|
721
|
|
Net interest income after provision for loan losses
| |
8,586
| |
8,076
| |
6,247
|
| | | | | |
|
|
Service charges, fees and other income
| |
637
| |
407
| |
449
|
|
Income from bank owned life insurance
| |
67
|
|
68
|
|
72
|
|
Total non-interest income
| |
704
| |
475
| |
521
|
| | | | | |
|
|
Compensation and benefit expenses
| |
3,883
| |
3,126
| |
2,868
|
|
Occupancy and equipment expenses
| |
1,066
| |
1,038
| |
584
|
|
Other operating expenses
| |
1,303
|
|
1,068
|
|
943
|
|
Total non-interest expense
| |
6,252
| |
5,232
| |
4,395
|
| | | | | |
|
|
Income before income taxes
| |
3,038
| |
3,319
| |
2,373
|
|
Provision for income taxes
| |
931
|
|
2,310
|
|
819
|
|
Net income
| | $2,107 |
| $1,009 |
| $1,554 |
| | | | | |
|
| | | | | |
|
| | | | | |
|
|
Basic earnings per common share
| | $0.37 | | $0.18 | | $0.34 |
|
Diluted earnings per common share
| | $0.36 | | $0.17 | | $0.33 |
| | | | | |
|
|
Average common shares outstanding
| |
5,732,820
| |
5,712,595
| |
4,627,271
|
|
Average common fully diluted shares
| |
5,850,614
| |
5,825,747
| |
4,728,967
|
| | | | | |
|
|
Annualized returns:
| | | | | | |
|
Return on average assets
| |
1.06%
| |
0.51%
| |
0.91%
|
|
Return on average common equity
| |
9.43%
| |
4.48%
| |
9.69%
|
| | | | | |
|
|
Net interest margin
| |
4.55%
| |
4.33%
| |
4.26%
|
|
Cost of funds
| |
0.52%
| |
0.42%
| |
0.39%
|
|
Efficiency ratio
| |
67.30%
| |
60.44%
| |
58.69%
|
| | | | | |
|
|
| |
| |
| |
| |
| |
| Avidbank Holdings, Inc. |
| Credit Trends |
|
($000) (Unaudited)
|
| | | | | | | | | |
|
| | 3/31/18 | | 12/31/17 | | 9/30/17 | | 6/30/17 | | 3/31/17 |
Allowance for Loan Losses | | | | | | | | | | |
|
Balance, beginning of quarter
| | $8,297 | | $8,191 | | $8,076 | | $6,991 | | $6,244 |
|
Provision for loan losses, quarterly
| |
-
| |
106
| |
74
| |
1,085
| |
721
|
|
Charge-offs, quarterly
| |
-
| |
-
| |
-
| |
-
| |
-
|
|
Recoveries, quarterly
| |
-
|
|
-
|
|
41
|
|
-
|
|
26
|
|
Balance, end of quarter
| | $8,297 |
| $8,297 |
| $8,191 |
| $8,076 |
| $6,991 |
| | | | | | | | | |
|
| | | | | | | | | |
|
Nonperforming Assets | | | | | | | | | | |
|
Loans accounted for on a non-accrual basis
| | $2,256 | | $5,151 | | $5,543 | | $5,210 | | $0 |
|
Loans with principal or interest contractually past due
| | | | | | | | | | |
|
90 days or more and still accruing interest
| |
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
Nonperforming loans
| |
2,256
| |
5,151
| |
5,543
| |
5,210
| |
-
|
|
Other real estate owned
| |
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
Nonperforming assets
| | $2,256 |
| $5,151 |
| $5,543 |
| $5,210 |
| $0 |
|
Loans restructured and in compliance with modified terms
| |
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
Nonperforming assets & restructured loans
| | $2,256 |
| $5,151 |
| $5,543 |
| $5,210 |
| $0 |
| | | | | | | | | |
|
| | | | | | | | | |
|
Nonperforming Loans by Type: | | | | | | | | | | |
|
Commercial
| | $2,256 | | $4,353 | | $4,730 | | $4,377 | | $0 |
|
Real Estate Loans
| |
-
| |
704
| |
714
| |
724
| |
-
|
|
Consumer Loans
| |
-
|
|
94
|
|
99
|
|
109
|
|
-
|
|
Total Nonperforming loans
| | $2,256 |
| $5,151 |
| $5,543 |
| $5,210 |
| $0 |
| | | | | | | | | |
|
| | | | | | | | | |
|
Asset Quality Ratios | | | | | | | | | | |
|
Allowance for loan losses (ALLL) to total loans
| |
1.25%
| |
1.28%
| |
1.42%
| |
1.38%
| |
1.26%
|
|
ALLL to nonperforming loans
| |
367.81%
| |
161.08%
| |
147.77%
| |
155.01%
| |
0.00%
|
|
Nonperforming assets to total assets
| |
0.27%
| |
0.66%
| |
0.73%
| |
0.71%
| |
0.00%
|
|
Nonperforming loans to total loans
| |
0.34%
| |
0.79%
| |
0.96%
| |
0.89%
| |
0.00%
|
|
Net quarterly charge-offs to total loans
| |
0.00%
| |
0.00%
| |
-0.01%
| |
0.00%
| |
0.00%
|
| | | | | | | | | |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20180425005529/en/
Avidbank Holdings, Inc.
Steve Leen, 408-831-5653
Executive
Vice President and Chief Financial Officer
sleen@avidbank.com
Source: Avidbank Holdings, Inc.