Avidbank Holdings, Inc. Announces Completion of $22 Million Private Placement of Subordinated Notes

SAN JOSE, Calif.–(BUSINESS WIRE)–Avidbank Holdings, Inc., (OTC Pink: AVBH), a bank holding company and the parent company of Avidbank (the “Bank”), an independent full-service commercial bank serving businesses and individuals primarily in Northern California, announced today the completion of a private placement of $22 million in ten-year, fixed-to-floating rate subordinated notes due 2029 (the “Notes”) to certain qualified institutional buyers and institutional accredited investors.

The Notes have a maturity date of December 30, 2029 and an initial interest rate of 5.0% per annum, payable semiannually for the first five years of the term, and then quarterly at a variable rate based on the then current 3-month SOFR plus 359.5 basis points. The Notes are redeemable after five years subject to certain conditions. The Notes have been structured to qualify as Tier 2 capital at the Company level for regulatory purposes.

The Notes received an investment grade BBB- rating from Kroll Bond Rating Agency, a nationally recognized statistical rating organization registered with the Securities and Exchange Commission.

The Company used proceeds from the placement of the Notes to repurchase $12 million of subordinated notes previously outstanding. The remaining proceeds are intended to be used for general corporate purposes, including the support of capital levels and loan growth at the Bank.

Chairman and Chief Executive Officer, Mark D. Mordell, stated, “We are very pleased to announce the successful placement and repurchase of our subordinated debt. We again appreciate the confidence the market has shown in our mission to be a leading independent bank in the San Francisco Bay Area and beyond.”

Sandler O’Neill + Partners, L.P. acted as sole placement agent for the private placement of the subordinated notes. Manatt, Phelps & Phillips, LLP served as legal counsel to Avidbank Holdings, Inc. and Holland & Knight LLP served as legal counsel to the placement agent.

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.

The securities referenced in this press release have not been registered under the Securities Act of 1933, as amended, or any state securities laws, and may not be offered or sold absent registration or an exemption from registration under applicable law. Such securities have not been approved or disapproved by the Securities and Exchange Commission, any state securities commission or any regulatory authority, nor have any of the foregoing authorities passed upon or endorsed the merits of the offering or sale of these securities. Any representation to the contrary is a criminal offense.

Forward-Looking Statement

Certain statements in this press release may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding our plans and objectives, future events or performance. 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”, “anticipates”, “target”, “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; premature payoffs in our loan portfolio; 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; inflation, interest rates, 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; 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 attract and retain key management and personnel; changes in the competitive environment among financial and bank holding companies and other financial service providers; volatility in the credit and equity markets and its effect on the general economy; changes in interest rates; 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. The Company does not undertake, and specifically disclaims 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.

Contacts

Steve Leen, Chief Financial Officer

(408) 831-5653

www.avidbank.com

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