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Avidbank Holdings, Inc. Announces Financial Results for the Second Quarter of 2025

SAN JOSE, CA / / August 25, 2025 / Avidbank Holdings, Inc. (NASDAQ:AVBH) announced net income for the second quarter of 2025 of $5.8 million, or $0.75 per diluted share, compared to $5.4 million, or $0.71 per diluted share, for the first quarter of 2025 and $3.5 million, or $0.46 per diluted share, for the second quarter of 2024.

Initial Public Offering

Subsequent to the end of the second quarter, in August 2025 the Company completed an initial public offering of its common stock, issuing an aggregate total of 3,001,500 shares of common stock at the public offering price of $23.00 per share. After deductions for underwriting fees and commissions and estimated offering expenses, the Company's net proceeds from the initial public offering totaled approximately $62 million.

Second Quarter 2025 Highlights

• Book value per share was $25.80 at June 30, 2025, an increase of $0.95, or 15% annualized, from March 31, 2025, and an increase of $4.03, or 19%, from June 30, 2024.

• Net interest margin expanded to 3.60% in the second quarter of 2025, compared to 3.52% in the first quarter of 2025.

• Return on average assets improved to 1.00% compared to 0.96% in the first quarter of 2025 and 0.62% in the second quarter of 2024.

• Loans increased $70.5 million, or 15% annualized, from March 31, 2025 and $105.1 million, or 6%, from June 30, 2024.

• Average deposits increased $86.2 million, or 18% annualized, from the first quarter of 2025 and $214.9 million, or 12%, from the second quarter of 2024.

• Nonperforming assets to total assets totaled 0.06% as of June 30, 2025 and March 31, 2025.

"Our second quarter results reflect the continued strength of our business model, with solid loan and deposit growth, further expansion in our net interest margin, and improved profitability," said Mark D. Mordell, Chairman and Chief Executive Officer. "We are pleased to have successfully completed our initial public offering in August, which further strengthens our capital position to support our long-term strategy and provides the regulatory capital to potentially reposition a substantial portion of our available-for-sale securities portfolio. With a strong balance sheet, disciplined credit culture, and a growing client base, we believe we are well positioned to continue delivering value for our shareholders."

"Our results are a testament to the trust our clients place in us and the dedication of our employees, who deliver exceptional service every day. As we look ahead, we remain focused on maintaining our disciplined approach to growth while continuing to invest in the relationships, people, and innovative solutions that differentiate Avidbank in the marketplace," added Mr. Mordell.

Income Statement

Net income totaled $5.8 million for the second quarter of 2025, an increase of $361,000, or 27% annualized, from the first quarter of 2025, and an increase of $2.3 million, or 67%, from the second quarter of 2024. The primary contributors to the improvement in net income compared to the first quarter of 2025, were a $1.1 million increase in interest and fees on loans, an increase of $367,000 in noninterest income and a decrease in noninterest expense of $233,000. Partially offsetting this increase was $925,000 in provision for credit losses during the second quarter of 2025. This increase in provision for credit losses was primarily due to an increase in loans as of June 30, 2025 compared to March 31, 2025.

Net interest income totaled $20.3 million for the second quarter of 2025, an increase of $938,000, or 19% annualized, from the first quarter of 2025, and an increase of $1.8 million, or 10%, from the second quarter of 2024. Net interest margin was 3.60% in the second quarter of 2025, an increase of 8 basis points compared to the first quarter of 2025, and a 21-basis-point increase compared to the second quarter of 2024. The increase in net interest margin compared to the prior quarter was primarily driven by an increase in average loans and higher loan yields outpacing stable funding costs, which were driven by lower average short-term borrowings.

The yield on loans in the second quarter of 2025 was 7.01%, an increase of 5 basis points from the first quarter of 2025 and a decrease of 36 basis points from the second quarter of 2024. The increase in loan yields compared to the first quarter of 2025 was due to the increase in average loans during the second quarter of 2025 while the decrease in loan yields compared to the second quarter of 2024 was driven by a reduction in the Prime rate.

The cost of interest-bearing deposits in the second quarter of 2025 was 3.54%, an increase of 3 basis points compared to the first quarter of 2025 and a decrease of 57 basis points compared to the second quarter of 2024. The cost of deposits in the second quarter of 2025 was 2.78%, an increase of 2 basis points from the first quarter of 2025 and a decrease of 31 basis points from the second quarter of 2024.

The provision for credit losses was $925,000 in the second quarter of 2025, compared to $0 in the first quarter of 2025 and $3.0 million in the second quarter of 2024. The provision was higher in the second quarter of 2025 compared to the first quarter primarily due to higher loan balances.

Noninterest income was $1.5 million in the second quarter of 2025 compared to $1.2 million in the first quarter of 2025 and $1.1 million in the second quarter of 2024. The second quarter of 2025 included $273,000 from warrant and success fee income, partially offset by a decrease in other investments income due to fair value adjustments.

Noninterest expense totaled $12.6 million for the second quarter of 2025, compared to $12.8 million in the first quarter of 2025 and $11.8 million in the second quarter of 2024. The decrease from the first quarter was primarily due to lower salaries and benefits expense driven by the following: severance expense of $222,000 and seasonally higher payroll taxes during the first quarter of 2025, as well as higher capitalized loan origination costs during the second quarter of 2025, partially offset by an increase in incentives expense. Occupancy and equipment expense decreased due to lower rent expense in one of our loan production offices. There were 149 full-time equivalent employees on June 30, 2025, compared to 143 on March 31, 2025.

Balance Sheet

Total assets were $2.39 billion as of June 30, 2025, compared to $2.32 billion as of March 31, 2025, and $2.29 billion at June 30, 2024. Cash and cash equivalents were $129.9 million on June 30, 2025, compared to $125.0 million on March 31, 2025, and $111.7 million on June 30, 2024.

Loans on June 30, 2025, totaled $1.91 billion, an increase of $70.5 million, or 15% annualized, from March 31, 2025, and an increase of $105.1 million, or 6%, from June 30, 2024. The increase in loans during the second quarter of 2025 included an increase of $51.1 million in commercial and industrial loans, $25.6 million in owner occupied loans and $14.4 million in multi-family loans. Partially offsetting the increase in loans was a $21.7 million decrease in construction and land loans.

The allowance for credit losses on loans was $19.6 million on June 30, 2025, representing an increase of $902,000 from March 31, 2025 and a decrease of $2.8 million compared to June 30, 2024. The allowance for credit losses - loans and unfunded commitments to total loans was 1.15% on June 30, 2025, compared to 1.14% on March 31, 2025 and 1.36% as of June 30, 2024.

Nonperforming loans to total loans was 0.07% on June 30, 3025 unchanged from March 31, 2025 and down 10 basis points from June 30, 2024.

The available-for-sale securities portfolio totaled $292.8 million as of June 30, 2025, compared to $296.6 million on March 31, 2025, and $308.7 million as of June 30, 2024. The net unrealized loss for the available-for-sale portfolio totaled $63.4 million as of June 30, 2025, compared to $65.6 million at March 31, 2025 and $73.8 million as of June 30, 2024.

Deposits were $2.00 billion on June 30, 2025, an increase of $73.3 million, or 15% annualized, from March 31, 2025 and an increase of $264.3 million, or 15% from June 30, 2024. The change in deposits during the second quarter of 2025 included a $122.2 million increase in interest-bearing checking, offset by a $61.9 million decrease in non-reciprocal brokered deposits. Quarterly average deposits for the second quarter of 2025 were $1.97 billion, an increase of $86.2 million from the first quarter of 2025, and an increase of $214.9 million from the second quarter of 2024.

Short-term borrowings on June 30, 2025, totaled $145.0 million, a decrease of $10.0 million, or 26% annualized, compared to March 31, 2025, and a decrease of $185.0 million, or 56%, compared to June 30, 2024.

Book value per share was $25.80 on June 30, 2025, an increase of $0.95 compared to $24.85 on March 31, 2025 and $21.77 as of June 30, 2024. Total shareholders' equity was $204.4 million on June 30, 2025, an increase of $7.8 million compared to March 31, 2025 and an increase of $33.0 million from June 30, 2024. The change from March 31, 2025 to June 30, 2025 included an increase in retained earnings of $5.8 million and a decrease in accumulated other comprehensive loss of $1.2 million.

About Avidbank

Avidbank Holdings, Inc. (NASDAQ: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 because we believe that these measures provide useful information to management and investors that is supplementary to our financial condition, results of operations and cash flows computed in accordance with GAAP. Management believes that taxable equivalent net interest income and taxable equivalent net interest margin are reasonable measures to understand the Company's core operating performance and are important to many investors in the marketplace who are interested in understanding our profitability prospects from our core operations.

However, we acknowledge that our non-GAAP financial measures have a number of limitations. As such, you should not view these disclosures as a substitute for results determined in accordance with GAAP, and they are not necessarily comparable to non-GAAP financial measures that other banking companies use. Other banking companies may use names similar to those we use for the non-GAAP financial measures we disclose but may calculate them differently. You should understand how we and other companies each calculate their non-GAAP financial measures when making comparisons.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of U.S. federal securities laws, which involve risks and uncertainties. You should not place undue reliance on forward-looking statements because they are subject to numerous uncertainties and factors relating to our operations and business, all of which are difficult to predict and many of which are beyond our control. Forward-looking statements include information concerning our possible or assumed future results of operations, including descriptions of our business strategy and expectations. These forward-looking statements are generally identified by the use of forward-looking terminology, including the terms "anticipate," "believe," "could," "estimate," "expect," "intend," "may," "plan," "potential," "predict," "project," "should," "target," "will," "would" and, in each case, their negative or other variations or comparable terminology and expressions. The results, events and circumstances reflected in the forward-looking statements may not be achieved or occur, and actual results, events, or circumstances could differ materially from those described in the forward-looking statements. We caution that the forward-looking information and 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 and California; economic conditions affecting the venture capital and private equity industries, including any decline in overall portfolio company investment, merger and acquisition activity and other liquidity events affecting venture and private equity fund and their portfolio companies; 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; our inability to successfully reposition our available-for-sale securities portfolio utilizing the proceeds from our recent public offering; incurrence of any losses in connection with any repositioning of our available-for-sale securities portfolio utilizing the proceeds from our recently completed public offering; the occurrence of significant natural disasters, including fires and earthquakes, and acts of war or terrorism途 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; our use of the net proceeds from our recent public offering; and our success at managing any of the risks involved any of the foregoing items. Additional factors that could cause actual results to differ materially from those expressed in the forward-looking statements are discussed in the Company's filings with the SEC under the heading "Risk Factors" and available at the SEC's Internet site www.sec.gov. 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. 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
[email protected]