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Taxable equivalent net interest income⁽¹⁾ totaled $19.4 million for the first quarter of 2025, an increase of $155,000, or 3% annualized, from the fourth quarter of 2024, and an increase of $470,000, or 2%, from the first quarter of 2024. The taxable equivalent net interest margin was 3.52% in the first quarter of 2025, an increase of 3 basis points compared to the fourth quarter of 2024, and down 2 basis points compared to the first quarter of 2024. The increase in taxable equivalent net interest margin compared to the prior quarter was primarily driven by a lower cost of deposits and lower rates on short-term borrowings. As of December 30, 2024, the $22 million of subordinated debt repriced from a fixed rate of 5.00% to quarterly floating rate of SOFR plus 359.5 basis points, or 7.91%.

The yield on loans in the first quarter of 2025 was 6.96%, a decrease of 11 basis points from the fourth quarter of 2024 and a decrease of 32 basis points from the first quarter of 2024. The overall decrease in loan yields compared to prior periods was primarily driven by the reduction in the Prime rate.

The cost of interest-bearing deposits in the first quarter of 2025 was 3.51% compared to 3.79% in the fourth quarter of 2024 and 3.90% in the first quarter of 2024, a decrease of 28 basis points and 39 basis points, respectively. The cost of deposits in the first quarter of 2025 was 2.76%, a decrease of 18 basis points from the fourth quarter of 2024 and a decrease of 5 basis points from the first quarter of 2024.

The provision for credit losses was $0 in the first quarter of 2025, compared to $779,000 in the fourth quarter of 2024 and $319,000 in the first quarter of 2024. The provision was lower in the first quarter of 2025 compared to the fourth quarter of 2024 primarily due to lower loan balances.

Noninterest income was $1.2 million in the first quarter of 2025 compared to $1.8 million in the fourth quarter of 2024 and $1.3 million in the first quarter of 2024. The fourth quarter of 2024 included income of $637,000 from fund investments and $150,000 in final proceeds from the settlement related to a previously sold foreclosed property.

Noninterest expense totaled $12.8 million for the first quarter of 2025, an increase of $1.8 million compared to the fourth quarter of 2024, and an increase of $415,000 from the first quarter of 2024. The increase from the fourth quarter was primarily due to higher incentive expense and seasonally higher payroll taxes. The first quarter of 2025 also included $222,000 in severance expense. There were 143 full-time equivalent employees on March 31, 2025, compared to 148 on December 31, 2024.

Balance Sheet

Total assets were $2.32 billion as of March 31, 2025, compared to $2.30 billion as of December 31, 2024, and $2.26 billion at March 31, 2024. Cash and cash equivalents were $125.0 million on March 31, 2025, compared to $82.7 million on December 31, 2024, and $90.2 million on March 31, 2024.

Period end loans on March 31, 2025, totaled $1.84 billion, a decrease of $23.8 million, or 5% annualized, from December 31, 2024, and an increase of $58.2 million, or 3%, from March 31, 2024. The decrease in loans during the first quarter of 2025 included a decrease of $19.7 million in construction and land loans and a $13.0 million decrease in commercial and industrial loans, offset by a $11.0 million increase in multi-family loans. Quarterly average loans for the first quarter of 2025 increased $42.8 million, or 2%, from the fourth quarter of 2024 and increased $101.9 million, or 6%, from the first quarter of 2024.

The allowance for credit losses on loans was $18.7 million on March 31, 2025, representing an increase of $43,000 from December 31, 2024. The allowance for credit losses - loans and unfunded commitments to total loans was 1.14% on March 31, 2025, compared to 1.12% on December 31, 2024.

Nonperforming loans to total loans was 0.07% on March 31, 2024 compared to 0.07% at December 31, 2024. Criticized and classified loans were 1.63% of total loans, compared to 2.49% as of December 31, 2024.

The available-for-sale securities portfolio totaled $296.6 million as of March 31, 2025, compared to $296.6 million on December 31, 2024, and $314.8 million as of March 31, 2024. The unrealized loss for the available-for-sale portfolio totaled $65.6 million as of March 31, 2025, compared to $72.6 million as of December 31, 2024 and $74.1 million as of March 31, 2024.

Period end deposits were $1.93 billion on March 31, 2025, an increase of $38.1 million, or 8% annualized, from December 31, 2024. The change in deposits during the first quarter of 2025 included a $60.4 million increase in money market and savings deposits, offset by a $27.8 million decrease in interest-bearing checking deposits. Quarterly average deposits for the first quarter of 2025 were $1.89 billion, a decrease of $8.3 million from the fourth quarter of 2024, and an increase of $161.1 million from the first quarter of 2024.

Short-term borrowings on March 31, 2025, totaled $155.0 million, compared to $185 million as of December 31, 2024 and $290 million as of March 31, 2024.

Book value per share was $24.85 on March 31, 2025, an increase of $1.28 compared to $23.57 on December 31, 2024. Total shareholders' equity was $196.6 million on March 31, 2025, an increase of $10.3 million compared to December 31, 2024. This included an increase in retained earnings of $5.4 million and a decrease in accumulated other comprehensive loss of $5.0 million compared to December 31, 2024.

(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 press release contains, and any accompanying oral statements by us and our management may contain, forward-looking statements. These forward-looking statements represent plans, estimates, objectives, goals, guidelines, expectations, intentions, projections and statements of our beliefs concerning future events, business plans, objectives, expected operating results and the assumptions upon which those statements are based. Forward-looking statements include without limitation, any statement that may predict, forecast, indicate or imply future results, performance or achievements, and are typically identified with words such as "may," "could," "should," "will," "would," "believe," "anticipate," "estimate," "expect," "aim," "strive," "intend," "plan" or words or phases of similar meaning. We caution that the forward-looking statements are based largely on our expectations and are subject to a number of known and unknown risks and uncertainties that are subject to change based on factors which are, in many instances, beyond our control. Such forward-looking statements are based on various assumptions (some of which may be beyond our control) and are subject to risks and uncertainties, which change over time, and other factors which could cause actual results to differ materially from those currently anticipated. Such risks and uncertainties include, but are not limited to: uncertain market conditions and economic trends nationally, regionally and particularly in the Bay Area (which we define as the California counties of Alameda, Contra Costa, Marin, Monterey, Napa, San Francisco, San Mateo, Santa Clara, Santa Cruz, Solano, and Sonoma) and California generally; risks related to the concentration of our business in California, and specifically within the Bay Area, including risks associated with any downturn in the real estate sector; effects of any actions we may take with respect to our asset or liability portfolios; the occurrence of significant natural disasters, including fires and earthquakes, and acts of war or terrorism; our ability to conduct our business could be disrupted by natural or man-made disasters, including the effects of pandemic viruses; changes in market interest rates that affect the pricing of our loans and deposits and our net interest income; risks related to our strategic focus on lending to small to medium-sized businesses; the sufficiency of the assumptions and estimates we make in establishing reserves for potential loan losses and the value of loan collateral and securities; our ability to attract and retain executive officers and key employees and their customer and community relationships; adverse changes in the financial performance and/or condition of our borrowers and, as a result, increased loan delinquency rates, deterioration in asset quality and losses in our loan portfolio; the costs of and effects of legal and regulatory developments, including legal proceedings and lawsuits we are or may become subject to; the results of regulatory examinations or reviews and the effect of and our ability to comply with, any regulations or regulatory orders or actions we are or may become subject to; our level of nonperforming assets and the costs associated with resolving problem loans; our ability to maintain adequate liquidity and to raise necessary capital to fund our growth strategy and operations or to meet increased minimum regulatory capital levels; the effects of increased competition from a wide variety of local, regional, national and other providers of financial services; technological changes and developments; negative trends in our market capitalization and adverse changes in the price of our common stock; risks associated with unauthorized access, cyber-crime and other threats to data security; the effects of any acquisitions or dispositions we may make or evaluate, and the costs associated with any potential or actual acquisition or disposition; our ability to comply with various governmental and regulatory requirements applicable to financial institutions, including supervisory actions by federal and state banking agencies; the impact of recent and future legislative and regulatory changes, including changes in banking, accounting, securities and tax laws and regulations and their application by our regulators, and economic stimulus programs; governmental monetary and fiscal policies, including the policies of the Federal Reserve and policies related to tariffs; our ability to implement, maintain and improve effective internal controls; and our success at managing any of the risks involved in the foregoing items.

The foregoing factors should not be considered exhaustive. New risks and uncertainties may emerge from time to time, and it is not possible for us to predict their occurrence or how they will affect us. If one or more of the factors affecting our forward-looking information and statements proves incorrect, then our actual results, performance or achievements could differ materially from those expressed in, or implied by, forward-looking information and statements contained in this press release. Therefore, we caution you not to place undue reliance on our forward-looking information and statements. We disclaim any duty to revise or update the forward-looking statements, whether written or oral, to reflect actual results or changes in the factors affecting the forward-looking statements, except as specifically required by law.

Contact:

Patrick Oakes
Executive Vice President and Chief Financial Officer
408-200-7390
IR@avidbank.com

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