$AVBH Avidbank Holdings, Inc. Announces Net Income for the First Quarter of 2022Press Release | 04/20/2022
%SAN JOSE, CA / ACCESSWIRE / April 20, 2022 / Avidbank Holdings, Inc., (OTC PINK:AVBH) announced income for the first quarter of 2022 of $4.3 million, or $0.71 per diluted share, compared to $2.5 million, or $0.42 per diluted share, for the first and fourth quarters of 2021.
First Quarter 2022 Financial Highlights
Diluted earnings per share of $0.71, an increase of $0.29, or 69%, compared to the first quarter of 2021 and an increase of $0.29, or 276% annualized, compared to the fourth quarter of 2021.
Total assets were $2.1 billion, compared to $1.5 billion on March 31, 2021 and $2.2 billion at December 31, 2021.
Return on average assets totaled 0.83% and return on average equity was 12.72% in the first quarter of 2022.
Quarterly average earning assets increased $621 million, or 44%, compared to the first quarter of 2021 and $69 million, or 14% annualized, compared to the fourth quarter of 2021.
Net interest income totaled $15.2 million, an increase of $3.3 million, or 28%, compared to the first quarter of 2021 and increased $919,000, or 26% annualized, compared to the fourth quarter of 2021.
Annualized net charge-offs to average loans totaled 0.00% for the first quarter of 2022. Non-performing assets to total assets were 0.15% on March 31, 2022, a decrease from 0.22% on March 31, 2021 and unchanged from December 31, 2021.
"We are off to a solid start in 2022 with record earnings of $0.71 per diluted share," said Mark Mordell, Chairman and Chief Executive Officer. "Our pipeline for new business has been strong for the past several quarters and although the numbers do not reflect the activity, we originated over $80 million of new loans in the first quarter, we also had over $90 million in payoffs primarily due to our Construction and Specialty Finance divisions. We continue to be optimistic about the remainder of 2022 as our pipeline for new business is very encouraging along with the additional benefits we will see from each increase in the fed funds rate," added Mr. Mordell.
Income Statement
Net interest income totaled $15.2 million for the first quarter of 2022, an increase of $3.3 million, or 28%, from the first quarter of 2021, and an increase of $919,000, or 26% annualized, from the fourth quarter of 2021. This was primarily driven by an increase in interest income from the growth in average balance of loans and investment securities.
The net interest margin was 3.05% in the first quarter of 2022, compared to 3.44% in the first quarter of 2021 and 2.90% in the fourth quarter of 2021. The linked quarter increase in net interest margin was primarily due to the purchase of investment securities and corresponding reduction in excess cash balances.
The yield on loans in the first quarter of 2022 was 4.73%, a decrease of 14 basis points from the first quarter of 2021 and a decrease of 0.06% from the fourth quarter of 2021. The linked quarter decrease was primarily due to a decrease in loan fees.
The cost of deposits in the first quarter of 2022 was 0.13%, a decrease of 7 basis points from the first quarter of 2021 and a decrease of 1 basis point from the fourth quarter of 2021. The cost of interest-bearing deposits in the first quarter of 2022 was 0.26%, a decrease of 5 basis points from the fourth quarter of 2021.
There was no required loan loss provision for the first quarter of 2022 compared with a $75,000 loan loss provision taken in the first quarter of 2021 and $3.3 million for the fourth quarter of 2021.
Non-interest income was $1.1 million in the first quarter of 2022 compared to $711,000 in the first quarter of 2021 and $2.1 million in the fourth quarter of 2021. Service charge income totaled $636,000 in the first quarter of 2022, an increase of $166,000, or 35% from the first quarter of 2021, and an increase of $59,000, or 41% annualized, compared to the fourth quarter of 2021. The fourth quarter of 2021 included a gain on fund investments of $711,000 and $455,000 in warrant income.
Non-interest expense totaled $10.4 million in the first quarter of 2022 compared to $9.0 million in the first quarter of 2021 and $9.5 million in the fourth quarter of 2021. This increase was primarily due to higher compensation costs. The number of full-time equivalent employees on March 31, 2022 totaled 130 compared to 126 on December 31, 2021. Regulatory assessments also increased to $664,000 in the first quarter of 2022 primarily as a result of the strong growth in deposits over the last several quarters.
Balance Sheet
Total assets were $2.11 billion as of March 31, 2022, compared to $2.16 billion on December 31, 2021 and $1.54 billion at March 31, 2021. Cash balances held at the Federal Reserve decreased $143 million in the first quarter of 2022 while investments increased $89.0 million due to the purchase of additional mortgage-backed securities.
Period end loans on March 31, 2022 totaled $1.20 billion, which represented a decrease of $21.4 million from December 31, 2021, and an increase of $174.6 million, or 17%, from $1.03 billion at March 31, 2021. Quarterly average loans for the first quarter of 2022 increased $205.6 million, or 20%, from the first quarter of 2021 and $60.9 million, or 21% annualized, from the fourth quarter of 2021.
The allowance for loan losses on March 31, 2022 was $13.1 million, unchanged from December 31, 2021. The Allowance for Loan Losses to total loans was 1.08% on March 31, 2022, compared to 1.07% on December 31, 2021. Nonperforming loans to total loans was 0.27% on March 31, 2022, unchanged from December 31, 2021.
Period end deposits were $1.95 billion on March 31, 2022 compared to $1.98 billion at December 31, 2021 and an increase of $584 million, or 43%, compared to $1.36 billion at March 31, 2021. Quarterly average deposits for the first quarter of 2022 increased $655.4 million, or 51%, compared to the first quarter of 2021 and $80.5 million, or 17% annualized, from the fourth quarter of 2021.
Noninterest bearing deposits represented 48.9% of total deposits on March 31, 2022, compared to 50.2% on December 31, 2021 and 51.5% at March 31, 2021. The loan to deposit ratio was 62.3% on March 31, 2022 compared to 61.8% at December 31, 2021 and 75.5% at March 31, 2021.
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, 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 a pandemic; 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.
Contact:
Patrick Oakes
Executive Vice President and Chief Financial Officer
408-831-5653
poakes@avidbank.com
AVIDBANK HOLDINGS, INC.
Selected Financial Data
($000, except share and per share amounts)
2022 2021
First Fourth Third Second First
Quarter Quarter Quarter Quarter Quarter
INCOME AND PER SHARE HIGHLIGHTS
Net income
$ 4,349 $ 2,534 $ 3,574 $ 3,649 $ 2,507
Basic earnings per share
0.73 0.43 0.60 0.62 0.43
Diluted earnings per share
0.71 0.42 0.59 0.60 0.42
Book value per share
19.20 21.91 21.55 21.26 20.42
PERFORMANCE MEASURES
Return on average assets
0.83 % 0.49 % 0.80 % 0.94 % 0.69 %
Return on average equity
12.72 % 7.25 % 10.45 % 11.15 % 7.89 %
Net interest margin
3.05 % 2.90 % 2.98 % 3.28 % 3.44 %
Efficiency ratio
63.72 % 58.31 % 61.91 % 62.61 % 71.64 %
Average loans to average deposits
62.40 % 61.83 % 64.69 % 74.37 % 78.15 %
CAPITAL
Tier 1 leverage ratio
6.85 % 6.89 % 7.81 % 8.64 % 8.87 %
Common equity tier 1 capital ratio
9.09 % 8.90 % 9.94 % 10.57 % 10.38 %
Tier 1 risk-based capital ratio
9.09 % 8.90 % 9.94 % 10.57 % 10.38 %
Total risk-based capital ratio
11.28 % 11.11 % 12.44 % 13.30 % 13.14 %
SHARES OUTSTANDING
Number of common shares outstanding
6,316,573 6,256,682 6,255,752 6,220,872 6,236,392
Average number of common shares outstanding - basic
5,935,948 5,904,446 5,898,208 5,892,713 5,864,976
Average number of common shares outstanding - diluted
6,116,306 6,101,778 6,072,085 6,051,243 6,020,336
ASSET QUALITY
Allowance for loan losses (ALLL) to total loans
1.08 % 1.07 % 1.19 % 1.24 % 1.22 %
ALLL to nonperforming loans
407.43 % 402.40 % 388.89 % 377.59 % 373.03 %
Nonperforming assets to total assets
0.15 % 0.15 % 0.18 % 0.21 % 0.22 %
Nonperforming loans to total loans
0.27 % 0.27 % 0.31 % 0.33 % 0.33 %
Net quarterly charge-offs to total loans
0.00 % 0.25 % 0.00 % 0.00 % 0.01 %
AVERAGE BALANCES
Gross loans
$ 1,215,153 $ 1,154,254 $ 1,028,098 $ 1,023,932 $ 1,009,580
Investment securities
436,427 287,915 231,526 200,016 167,939
Total assets
2,131,587 2,054,545 1,771,292 1,554,049 1,468,597
Deposits
1,947,208 1,866,704 1,589,384 1,376,736 1,291,767
Shareholder's equity
138,668 138,589 135,721 131,300 128,844
AT PERIOD END
Gross loans
$ 1,203,657 $ 1,225,187 $ 1,074,436 $ 1,016,200 $ 1,028,830
Investment securities
468,917 380,170 276,670 208,482 184,504
Total assets
2,110,091 2,162,478 1,828,021 1,604,273 1,535,683
Deposits
1,947,278 1,979,410 1,647,613 1,427,177 1,363,469
Shareholder's equity
121,282 137,100 134,797 132,231 127,319
Avidbank Holdings, Inc.
Consolidated Balance Sheets
($000, except share and per share amounts) (Unaudited)
3/31/22 12/31/21 9/30/21 6/30/21 3/31/21
Assets
Cash and due from banks
$ 47,091 $ 29,616 $ 34,864 $ 27,977 $ 21,870
Due from Federal Reserve Bank
320,336 463,727 378,380 308,596 258,921
Total cash and cash equivalents
367,427 493,343 413,244 336,573 280,791
Investment securities - available for sale
468,917 380,170 276,670 208,482 184,504
Loans, net of deferred loan fees
1,201,934 1,223,344 1,073,132 1,014,750 1,027,336
Allowance for loan losses
(13,054 ) (13,054 ) (12,775 ) (12,558 ) (12,558 )
Loans, net of allowance for loan losses
1,188,880 1,210,290 1,060,357 1,002,192 1,014,778
Bank owned life insurance
32,087 31,875 31,663 11,559 11,491
Premises and equipment, net
4,331 4,565 4,913 5,138 5,375
Accrued interest receivable & other assets
48,449 42,235 41,174 40,329 38,744
Total assets
$ 2,110,091 $ 2,162,478 $ 1,828,021 $ 1,604,273 $ 1,535,683
Liabilities
Non-interest-bearing demand deposits
$ 952,035 $ 993,156 $ 872,972 $ 728,522 $ 702,785
Interest bearing transaction accounts
47,711 50,674 49,722 30,538 27,863
Money market and savings accounts
812,701 845,718 614,992 541,145 499,507
Time deposits
134,831 89,862 109,927 126,972 133,314
Total deposits
1,947,278 1,979,410 1,647,613 1,427,177 1,363,469
Subordinated debt, net
21,729 21,703 21,671 21,636 21,601
Other liabilities
19,802 24,265 23,940 23,229 23,294
Total liabilities
1,988,809 2,025,378 1,693,224 1,472,042 1,408,364
Shareholders' equity
Common stock/additional paid-in capital
72,920 72,799 72,124 71,542 71,152
Retained earnings
73,150 68,801 66,267 62,693 59,044
Accumulated other comprehensive (loss)
(24,787 ) (4,500 ) (3,594 ) (2,004 ) (2,877 )
Total shareholders' equity
121,282 137,100 134,797 132,231 127,319
Total liabilities and shareholders' equity
$ 2,110,091 $ 2,162,478 $ 1,828,021 $ 1,604,273 $ 1,535,683
Avidbank Holdings, Inc.
Consolidated Statements of Income
($000, except share and per share amounts) (Unaudited)
Three months ended
March 31, December 31, March 31,
2022 2021 2021
Interest and fees on loans
$ 14,162 $ 13,927 $ 12,116
Interest on investment securities
1,855 1,154 699
Other interest income
153 193 48
Total interest income
16,171 15,274 12,863
Deposit interest expense
640 655 642
Other interest expense
300 307 310
Total interest expense
940 962 952
Net interest income
15,231 14,312 11,911
Provision for loan losses
- 3,279 75
Net interest income after provision for loan losses
15,231 11,033 11,836
Service charges and bank fees
725 671 507
Income from bank owned life insurance
212 213 67
Gain/(loss) on sale of assets
- (113 ) -
Warrant income
86 455 22
Other income
90 839 115
Total non-interest income
1,113 2,065 711
Compensation and benefit expenses
7,312 6,920 6,476
Occupancy and equipment expenses
894 924 1,071
Data processing
411 394 422
Regulatory assessments
664 384 279
Professional fees
195 272 152
Other operating expenses
938 655 643
Total non-interest expense
10,415 9,549 9,043
Income before income taxes
5,929 3,549 3,504
Provision for income taxes
1,580 1,015 997
Net income
$ 4,349 $ 2,534 $ 2,507
Basic earnings per common share
$ 0.73 $ 0.43 $ 0.43
Diluted earnings per common share
$ 0.71 $ 0.42 $ 0.42
Average common shares outstanding
5,935,948 5,904,446 5,864,976
Average common fully diluted shares
6,116,306 6,101,778 6,020,336
Avidbank Holdings, Inc.
Average Balance Sheets and Net Interest Margin Analysis
Selected Financial Information
($000) (Unaudited)
Three months ended
March 31, 2022 December 31, 2021
Yields Interest
Yields Interest
Average or Income/ Average or Income/
Balance Rates Expense Balance Rates Expense
Assets
Interest earning assets:
Loans (1)
$ 1,215,153 4.73% $ 14,163 $ 1,154,254 4.79% $ 13,927
Fed funds sold
374,648 0.17% 153 515,430 0.15% 193
Investment securities
436,427 1.72% 1,855 287,915 1.59% 1,154
Total interest-earning assets
2,026,228 3.24% 16,171 1,957,599 3.10% 15,274
Noninterest-earning assets:
Cash and due from banks
42,282 35,750
All other assets (2)
63,077 61,196
Total assets
$ 2,131,587 $ 2,054,545
Liabilities and Shareholder's Equity
Interest-bearing liabilities:
Deposits
Demand
$ 49,199 0.12% $ 15 $ 50,045 0.16% $ 20
Money market and savings
812,289 0.21% 422 715,540 0.26% 465
Time
120,886 0.68% 203 99,550 0.68% 170
Total interest-bearing deposits
982,374 0.26% 640 865,135 0.30% 655
Subordinated debt
21,714 5.60% 300 21,689 5.62% 307
Total interest-bearing liabilities
1,004,088 0.38% 940 886,824 0.43% 962
Noninterest-bearing liabilities:
Demand deposits
964,834 1,001,568
Accrued expenses and other liabilities
23,997 27,564
Shareholder's equity
138,668 138,589
Total liabilities and
shareholder's equity
$ 2,131,587 $ 2,054,545
Net interest income and margin (3)
3.05% $ 15,231 2.90% $ 14,312
(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 $628 thousand and $864 thousand, respectively.
(2) Allowance for loan losses of $13.1 million for both comparative periods is included as a contra asset.
(3) Net interest margin is net interest income divided by total interest-earning assets.
Avidbank Holdings, Inc.
Average Balance Sheets and Net Interest Margin Analysis
Selected Financial Information
($000) (Unaudited)
Three months ended
March 31, 2022 March 31, 2021
Yields Interest
Yields Interest
Average or Income/ Average or Income/
Balance Rates Expense Balance Rates Expense
Assets
Interest earning assets:
Loans (1)
$ 1,215,153 4.73% $ 14,163 $ 1,009,580 4.87% $ 12,116
Fed funds sold
374,648 0.17% 153 227,233 0.09% 48
Investment securities
436,427 1.72% 1,855 167,939 1.69% 699
Total interest-earning assets
2,026,228 3.24% 16,171 1,404,752 3.71% 12,863
Noninterest-earning assets:
Cash and due from banks
42,282 21,595
All other assets (2)
63,077 42,250
Total assets
$ 2,131,587 $ 1,468,597
Liabilities and Shareholder's Equity
Interest-bearing liabilities:
Deposits
Demand
$ 49,199 0.12% $ 15 $ 25,871 0.20% $ 13
Money market and savings
812,289 0.21% 422 445,423 0.32% 354
Time
120,886 0.68% 203 137,680 0.81% 275
Total interest-bearing deposits
982,374 0.26% 640 608,974 0.43% 642
Subordinated debt
21,714 5.60% 300 21,582 5.83% 310
Total interest-bearing liabilities
1,004,088 0.38% 940 630,556 0.61% 952
Noninterest-bearing liabilities:
Demand deposits
964,834 682,793
Accrued expenses and other liabilities
23,997 26,404
Shareholder's equity
138,668 128,844
Total liabilities and
shareholder's equity
$ 2,131,587 $ 1,468,597
Net interest income and margin (3)
3.05% $ 15,231 3.44% $ 11,911
(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 $628 thousand and $561 thousand, respectively.
(2) Allowance for loan losses of $13.1 million and $12.6 million, respectively, is included as a contra asset.
(3) Net interest margin is net interest income divided by total interest-earning assets.
Avidbank Holdings, Inc.
Credit Trends
($000) (Unaudited)
3/31/22 12/31/21 9/30/21 6/30/21 3/31/21
Allowance for Loan Losses
Balance, beginning of quarter
$ 13,054 $ 12,775 $ 12,558 $ 12,558 $ 12,558
Provision for loan losses, quarterly
- 3,279 217 - 75
Charge-offs, quarterly
- (3,000 ) - - (75 )
Recoveries, quarterly
- - - - -
Balance, end of quarter
$ 13,054 $ 13,054 $ 12,775 $ 12,558 $ 12,558
Nonperforming Assets
Loans accounted for on a non-accrual basis
$ 3,204 $ 3,244 $ 3,285 $ 3,326 $ 3,367
Loans with principal or interest contractually past
due 90 days or more and still accruing interest
- - - - -
Nonperforming loans
3,204 3,244 3,285 3,326 3,367
Other real estate owned
- - - - -
Nonperforming assets
$ 3,204 $ 3,244 $ 3,285 $ 3,326 $ 3,367
Loans restructured and in compliance
with modified terms
- - - - -
Nonperforming assets & restructured loans
$ 3,204 $ 3,244 $ 3,285 $ 3,326 $ 3,367
Nonperforming Loans by Type:
Commercial
$ 441 $ 448 $ 456 $ 463 $ 470
Commercial Real Estate Loans
2,763 2,796 2,829 2,863 2,897
Total Nonperforming loans
$ 3,204 $ 3,244 $ 3,285 $ 3,326 $ 3,367
Asset Quality Ratios
Allowance for loan losses (ALLL) to total loans
1.08 % 1.07 % 1.19 % 1.24 % 1.22 %
ALLL to nonperforming loans
407.43 % 402.40 % 388.89 % 377.59 % 373.03 %
Nonperforming assets to total assets
0.15 % 0.15 % 0.18 % 0.21 % 0.22 %
Nonperforming loans to total loans
0.27 % 0.27 % 0.31 % 0.33 % 0.33 %
Net quarterly charge-offs to total loans
0.00 % 0.25 % 0.00 % 0.00 % 0.01 %
SOURCE: Avidbank Holdings, Inc.
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