Avidbank Holdings, Inc.

What they do

The Company operates through its wholly owned subsidiary, Avidbank, a California state-chartered bank founded in 2003. It focuses on corporate banking, commercial real estate and real estate construction lending in the Bay Area, while its Venture Lending and Specialty Finance divisions operate nationally. It had one branch in San Jose and loan production offices in San Francisco and Redwood City, with banking relationships in 39 states.

Revenue drivers

• Commercial and Corporate Banking — Lending to small-to-medium sized businesses and technology companies in the Bay Area; total loans were $2.15 billion as of December 31, 2025 and $312.4 million, or 16%, higher as of June 30, 2026 than a year earlier.
• Venture Lending and Specialty Finance — National divisions lending outside California; as of December 31, 2025 approximately 26% of loan balances were located outside California.
• Commercial Real Estate and Construction Lending — Bay Area real estate-secured lending; management describes measured growth in these divisions versus scaling of Corporate Banking, Venture Lending and Specialty Finance.
• Deposits and Treasury Management — Commercial relationship deposits and treasury management services; total deposits were $2.19 billion at December 31, 2025, with $929.8 million of reciprocal deposits, or 43% of the deposit portfolio.

Recent performance

For the second quarter of 2026 the Company reported net income of $7.6 million, or $0.71 per diluted share, versus $5.8 million, or $0.75 per diluted share, a year earlier. Results included a $2.6 million litigation settlement expense and approximately $1.3 million of income from bank-owned life insurance death benefits; adjusted net income was $8.2 million. Net interest margin was 4.26%, down 12 basis points from the first quarter of 2026 but up 66 basis points from the second quarter of 2025. Period-end loans increased $51.3 million from March 31, 2026 and $312.4 million, or 16%, from June 30, 2025, while period-end deposits rose $122.6 million from the prior quarter and $319.2 million from a year earlier. Non-performing loans to total loans were 0.65% at June 30, 2026 versus 0.75% at March 31, 2026 and 0.07% at June 30, 2025.

Strategy

The Company completed an initial public offering in August 2025, and said proceeds would support organic growth, lending activities, regulatory capital and balance-sheet repositioning. In the third quarter of 2025 it sold $274.7 million of available-for-sale securities at a pre-tax loss of $62.4 million and purchased $205.4 million of securities with an average yield of 4.57% and duration of 5.4 years, and repaid short-term borrowings. Stated goals include scaling Corporate Banking, Venture Lending and Specialty Finance by hiring bankers, measured growth in commercial real estate and construction, expanding deposits and noninterest income, and improving operating efficiency. Management said it added experienced bankers and launched a new SBA Lending division during the second quarter of 2026.

Risks

• Geographic concentration — Operations are concentrated in California generally and the Bay Area in particular, making results more sensitive than diversified peers to local economic conditions.
• Reciprocal and brokered deposit dependence — At December 31, 2025, $929.8 million of reciprocal deposits were 43% of the deposit portfolio, including $475.4 million classified as brokered; at June 30, 2026 an additional $513.0 million of deposits were classified as brokered because they exceeded the 20%-of-liabilities regulatory cap.
• Asset quality volatility — The 10-K states nonperforming assets and charge-offs can be volatile given the credit profile of part of the loan portfolio; net charge-offs to average loans were 0.35% in the second quarter of 2026, and nonperforming loans to total loans rose to 0.65% from 0.07% a year earlier.
• Securities portfolio and interest-rate exposure — The 2025 securities repositioning produced a $62.4 million pre-tax loss, and GAAP requires available-for-sale debt securities to be carried at fair value with unrealized losses running through equity and, in some cases, earnings.

Outlook

Management characterized the second quarter of 2026 as continued growth in loans and deposits, with adjusted results reflecting core operating performance. Mark Mordell, Chairman and Chief Executive Officer, said criticized and classified loans increased but that the Company is not seeing systemic or broad-based deterioration across the portfolio. He said the Company continued investing in the franchise, adding bankers and launching a new SBA Lending division, and remains focused on disciplined growth and strong capital.