PALO ALTO, Calif.--(BUSINESS WIRE)--Avidbank Holdings, Inc. ("the Company") (OTCBB: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 net income of $696,000 for the second quarter of 2014 compared to $922,000 for the same period in 2013.
Year-to-Date and Second Quarter 2014 Financial Highlights
- Net income was $1,105,000 for the first six months of 2014, compared to $1,436,000 for the first six months of 2013. Results for the 2013 period included $681,000 in gains from the sale of investment securities compared to none in the 2014 period.
- Diluted earnings per common share were $0.25 for the first six months of 2014, compared to $0.47 for the first six months of 2013.
- Net income was $696,000 for the second quarter of 2014, compared to $922,000 for the second quarter of 2013. Results for the 2013 period included $681,000 in gains from the sale of investment securities compared to none in the 2014 period.
- Diluted earnings per common share were $0.16 for the second quarter of 2014, compared to $0.30 for the second quarter of 2013.
- Total assets grew by 2% over the past six months, ending the second quarter at $483 million.
- Total loans outstanding grew by 9%, ending the second quarter at $278 million.
- Total deposits grew by 1%, ending the second quarter at $427 million.
- The Bank continues to be well capitalized with a Tier 1 Leverage Ratio of 10.4% and a Total Risk Based Capital Ratio of 13.2%.
Mark D. Mordell, Chairman and Chief Executive Officer, stated, "The Bank's efforts to build lending infrastructure by increasing loan production staff and facilities yielded positive results in the second quarter of 2014. Loans outstanding increased more than $23 million in the quarter, the largest quarterly loan growth in the Bank's history. These results confirm our progress as we focus on our plan of sustained and prudent growth in our loan portfolio. Net income for the second quarter of 2014 grew by 71% over the first quarter of 2014 primarily due to higher loans outstanding. We will continue with our plan to grow our loan portfolio and leverage the investments in personnel and infrastructure we have made. Our Corporate Finance division, which includes asset-based and technology lending, has demonstrated solid growth in 2014."
"The Bank's total deposits increased by $4.5 million in the second quarter of 2014, in spite of the fact that we continue to reduce our cost of funds. In addition, core deposits make up over 90% of total deposits and our non-interest bearing deposits have grown to over 40% of total deposits," noted Mr. Mordell. "We have expanded the size of our San Jose loan production office and are very excited about the potential of that market. We have added experienced loan officers in both Palo Alto and San Jose. Our high level of capital and the high quality of our loan portfolio provide us with ample capacity for growth.”
Results for the six months ended June 30, 2014
Net interest income before provision for loan losses was $7.8 million in 2014, an increase of $108,000 or 1.4% over the prior year. Higher outstanding loan balances and reductions in the rates paid on deposits were offset by lower loan yields. Average earning assets were $442 million in 2014, a 10% increase over the prior year. Net interest margin was 3.62% for 2014, compared to 3.88% in 2013. The decline in net interest margin was primarily caused by a decline in loan yields due to the current interest rate environment and a change in the mix of earning assets due to a significant increase in liquid funds. No loan loss provision was recorded in the first six months of either 2014 or 2013. We have experienced net recoveries of $21,000 in 2014 compared to net recoveries of $285,000 in 2013. Non-accrual loans totaled $2.3 million or 0.8% of total loans on June 30, 2014 compared to $2.0 million or 0.8% of total loans for the previous year-end. "Our high credit standards have led to a low level of problem loans and to net recoveries in 2014 and 2013," observed Mr. Mordell.
Non-interest income, excluding gains on sales of securities, was $608,000 in the first six months of 2014, an increase of $324,000 or 114% over 2013. The increase in non-interest income was due to an increase in service charges and other fee generation activities as well as an increase in earnings on bank owned life insurance. There were no gains on sales of securities in 2014 and $681,000 of gains on securities sales in 2013.
Non-interest expense grew by $374,000 or 6% in the first six months of 2014 to $6.5 million compared to $6.2 million in 2013. This growth was due to investments in loan production personnel and facilities as we continue to expand our footprint and grow our loan portfolio.
Results for the quarter ended June 30, 2014
For the three months ended June 30, 2014, net interest income before provision for loan losses was $4.2 million, an increase of $338,000 or 9% compared to the second quarter of 2013. The increase was primarily the result of higher average loans outstanding. Average earning assets were $429 million in the second quarter of 2014, a 7% increase over the second quarter of the prior year. Earning assets increased due to growth in the loan portfolio. Net interest margin was 3.98% for the second quarter of 2014, compared to 3.82% for the second quarter of 2013. Net interest margin increased due to growth in loans for the quarter and prepayment penalties on early payoffs. No loan loss provision was taken in the second quarter of 2014 or in the second quarter of 2013.
Non-interest income, excluding gains on sales of securities, was $330,000 in the second quarter of 2014, an increase of $171,000 or 108% over the second quarter of 2013. The increase was due to increases in service charges and other fee generation activities as well as an increase in earnings on bank owned life insurance. There were no gains on sales of securities in the second quarter of 2014 and $681,000 of gains on securities sales in the second quarter of 2013.
Non-interest expense grew by $240,000 in the second quarter of 2014 to $3.3 million compared to $3.1 million for the second quarter of 2013. This growth was due to the investments in loan production personnel and facilities mentioned previously.
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.
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Avidbank Holdings, Inc. |
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Balance Sheet ($000, except share and per share amounts) |
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(Unaudited) |
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Assets |
6/30/2014 |
3/31/2014 |
6/30/2013 |
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| Cash and due from banks | $ | 18,049 | $ | 15,427 | $ | 13,718 | |||||||||
| Fed funds sold | 100,445 | 127,785 | 115,575 | ||||||||||||
| Total cash and cash equivalents | 118,494 | 143,212 | 129,293 | ||||||||||||
| Investment securities - available for sale | 65,282 | 58,397 | 50,541 | ||||||||||||
| Loans, net of deferred loan fees | 277,822 | 254,375 | 247,964 | ||||||||||||
| Allowance for loan losses | (4,809 | ) | (4,795 | ) | (4,764 | ) | |||||||||
| Loans, net of allowance for loan losses | 273,013 | 249,580 | 243,200 | ||||||||||||
| Bank owned life insurance | 11,783 | 11,694 | 3,471 | ||||||||||||
| Premises and equipment, net | 1,210 | 1,287 | 1,269 | ||||||||||||
| Accrued interest receivable & other assets | 12,983 | 8,950 | 4,741 | ||||||||||||
| Total assets | $ | 482,765 | $ | 473,120 | $ | 432,515 | |||||||||
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Liabilities |
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| Non-interest-bearing demand deposits | $ | 173,394 | $ | 151,538 | $ | 115,115 | |||||||||
| Interest bearing transaction accounts | 15,523 | 18,041 | 16,177 | ||||||||||||
| Money market and savings accounts | 194,892 | 205,237 | 186,885 | ||||||||||||
| Time deposits | 42,777 | 47,250 | 58,901 | ||||||||||||
| Total deposits | 426,586 | 422,066 | 377,078 | ||||||||||||
| Other liabilities | 6,262 | 2,209 | 2,332 | ||||||||||||
| Total liabilities | 432,848 | 424,275 | 379,410 | ||||||||||||
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Shareholders' equity |
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| Preferred stock | - | - | 5,974 | ||||||||||||
| Common stock/additional paid-in capital | 44,985 | 44,774 | 44,579 | ||||||||||||
| Retained earnings | 4,574 | 3,877 | 2,436 | ||||||||||||
| Accumulated other comprehensive income | 358 | 194 | 116 | ||||||||||||
| Total shareholders' equity | 49,917 | 48,845 | 53,105 | ||||||||||||
| Total liabilities and shareholders' equity | $ | 482,765 | $ | 473,120 | $ | 432,515 | |||||||||
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Bank Capital ratios |
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| Tier 1 leverage ratio | 10.36 | % | 9.72 | % | 10.98 | % | |||||||||
| Tier 1 risk-based capital ratio | 11.89 | % | 12.89 | % | 13.79 | % | |||||||||
| Total risk-based capital ratio | 13.14 | % | 14.14 | % | 15.04 | % | |||||||||
| Book value per common share | $ | 11.51 | $ | 11.34 | $ | 11.03 | |||||||||
| Total shares outstanding | 4,336,292 | 4,308,756 | 4,274,014 | ||||||||||||
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Other Ratios |
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| Non-interest bearing/total deposits | 40.6 | % | 35.9 | % | 30.5 | % | |||||||||
| Loan to deposit ratio | 65.1 | % | 60.3 | % | 65.8 | % | |||||||||
| Allowance for loan losses/Total loans | 1.73 | % | 1.88 | % | 1.92 | % | |||||||||
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Avidbank Holdings, Inc. |
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| Condensed Statements of Income | ||||||||||||||||
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($000, except share and per share amounts) (Unaudited) |
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| Quarter Ended |
Year-to-Date |
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6/30/2014 |
6/30/2013 |
6/30/2014 |
6/30/2013 |
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| Interest and fees on loans | $ | 3,878 | $ | 3,661 | $ | 7,291 | $ | 7,383 | ||||||||
| Interest on investment securities | 437 | 399 | 812 | 803 | ||||||||||||
| Other interest income | 60 | 57 | 148 | 111 | ||||||||||||
| Total interest income | 4,375 | 4,117 | 8,251 | 8,297 | ||||||||||||
| Interest expense | 209 | 289 | 453 | 607 | ||||||||||||
| Net interest income | 4,166 | 3,828 | 7,798 | 7,690 | ||||||||||||
| Provision for loan losses | - | - | - | - | ||||||||||||
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Net interest income after provision for loan losses |
4,166 | 3,828 | 7,798 | 7,690 | ||||||||||||
| Service charges, fees and other income | 330 | 159 | 608 | 284 | ||||||||||||
| Gain on sale of investment securities | - | 681 | - | 681 | ||||||||||||
| Total non-interest income | 330 | 840 | 608 | 965 | ||||||||||||
| Compensation and benefit expenses | 2,024 | 1,802 | 4,076 | 3,640 | ||||||||||||
| Occupancy and equipment expenses | 620 | 584 | 1,189 | 1,151 | ||||||||||||
| Other operating expenses | 669 | 687 | 1,277 | 1,378 | ||||||||||||
| Total non-interest expense | 3,313 | 3,073 | 6,542 | 6,169 | ||||||||||||
| Income before income taxes | 1,183 | 1,595 | 1,864 | 2,486 | ||||||||||||
| Provision for income taxes | 487 | 673 | 759 | 1,050 | ||||||||||||
| Net income | $ | 696 | $ | 922 | $ | 1,105 | $ | 1,436 | ||||||||
| Preferred dividends & warrant amortization | - | 84 | - | 168 | ||||||||||||
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Net income applicable to common shareholders |
$ | 696 | $ | 838 | $ | 1,105 | $ | 1,268 | ||||||||
| Basic earnings per share | $ | 0.16 | $ | 0.31 | $ | 0.26 | $ | 0.47 | ||||||||
| Diluted earnings per share | $ | 0.16 | $ | 0.30 | $ | 0.25 | $ | 0.47 | ||||||||
| Average shares outstanding | 4,319,447 | 2,733,948 | 4,307,140 | 2,675,349 | ||||||||||||
| Average fully diluted shares | 4,397,544 | 2,773,900 | 4,379,416 | 2,715,301 | ||||||||||||
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Annualized returns: |
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Return on average assets |
0.60 | % | 0.88 | % | 0.46 | % | 0.69 | % | ||||||||
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Return on average common equity |
5.62 | % | 9.86 | % | 4.51 | % | 8.25 | % | ||||||||
| Net interest margin | 3.98 | % | 3.82 | % | 3.62 | % | 3.88 | % | ||||||||
| Cost of funds | 0.20 | % | 0.31 | % | 0.21 | % | 0.33 | % | ||||||||
| Efficiency ratio | 73.7 | % | 65.8 | % | 77.8 | % | 71.3 | % | ||||||||
