AVBH

This article first appeared on GuruFocus. Release Date: July 24, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Avidbank Holdings Inc (NASDAQ:AVBH) reported strong loan and deposit growth, with loans growing by $51 million and deposits by $123 million in the quarter. The company launched a new SBA lending division, expanding its commercial lending platform and enhancing client relationships. Non-performing loans declined to 0.65% of total loans, indicating improved asset quality. The adjusted efficiency ratio improved to 48.7% from 50.4% in the previous quarter, reflecting better cost management. Avidbank Holdings Inc (NASDAQ:AVBH) successfully attracted experienced bankers from larger institutions, enhancing its talent pool and growth potential. The company recorded a $2.6 million pre-tax charge to settle a litigation matter, impacting reported earnings. Criticized loans increased, primarily due to a non-owner-occupied real estate relationship, raising concerns about credit quality. Net interest margin decreased by 12 basis points to 4.26%, reflecting higher deposit costs and lower FHLB dividends. Provision for credit losses increased to $2.8 million, driven by a $1.9 million partial charge-off on a non-performing construction loan. Brokered deposits were utilized to augment funding, indicating potential challenges in maintaining core deposit growth. Warning! GuruFocus has detected 5 Warning Signs with AVBH. Is AVBH fairly valued? Test your thesis with our free DCF calculator. Q: Can you elaborate on your loan growth outlook for the rest of the year, given the strong second quarter performance? A: (Mark, CEO) The growth primarily comes from business units and CRE. Despite significant payoffs in construction loans over the past 24 months, our pipelines remain robust. We are confident in achieving low double-digit growth in loans and deposits for the second half of the year, driven by strong market confidence and a rebounding real estate market in Northern California. Q: How do you view the use of brokered deposits in your funding strategy, especially with anticipated loan growth? A: (Pat, CFO) We utilized brokered deposits in the first and early second quarters, but many are short-term and will mature soon. If deposit growth continues, we aim to let brokered deposits run off, maintaining a strong loan-to-deposit ratio. Q: What is your outlook on net interest margin and funding costs moving forward? A: (Pat, CFO) The net interest margin could trend down slightly due to more core funding and a shift in the earning asset base. However, if deposit growth continues as expected, interest income should rise. We anticipate the margin could move down to around 420 basis points. Q: Can you provide more details on the criticized non-owner-occupied loan and its resolution timeline? A: (Mark, CEO) The loan involves a long-time client with three properties. One property had a DCR covenant default, leading to a downgrade. We expect resolution over the next 24 months, and we feel well-collateralized with low loan-to-values. Q: How do you perceive the current construction loan cycle and its impact on your business? A: (Mark, CEO) The construction loan payoffs were partly due to COVID-related delays. Our core business in spec single-family homes remains strong, with zero losses over 20 years. We are tightening underwriting for mixed-use projects, focusing on our niche in single-family homes. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Interested in Avidbank Holdings Inc.? Here are five stocks we like better. Avidbank reported that adjusted net income came in at $8.2 million, or $0.76 per share, after a $2.6 million litigation settlement charge and a bank-owned life insurance gain affected reported results. Core profitability improved, with the adjusted efficiency ratio falling to 48.7% from 50.4% in the prior quarter. Loan and deposit growth remained strong: loans rose $51 million in the quarter and deposits increased $123 million, while management reiterated a full-year target of low-double-digit growth. The bank said its funding mix remains core-oriented, even as some brokered deposits mature. Credit quality was mixed, with nonperforming loans improving to 0.65% of total loans, but the bank also took a partial charge-off on a construction loan and raised its provision for credit losses to $2.8 million. Management said it is not seeing broad-based deterioration, though it is refining its approach to mixed-use construction projects and monitoring a $29 million criticized real estate relationship. Avidbank (NASDAQ:AVBH) said its second-quarter results included a litigation settlement charge and a gain from bank-owned life insurance proceeds, while management characterized underlying loan and deposit growth and core profitability as continuing to improve. Chairman and Chief Executive Officer Mark Mordell said the company recorded a $2.6 million pre-tax charge to settle litigation related to a fraudulent wire transfer involving a client account in fall 2024. The matter was resolved during the quarter. The company also recorded a gain associated with bank-owned life insurance, with the combined effect of the two discrete items reducing reported earnings, Mordell said. → Could Truth API Become Trump Media’s First Meaningful Revenue Driver? Excluding those items, Avidbank reported adjusted net income of $8.2 million, or $0.76 per share, and an adjusted return on assets of 1.28%. Asset quality improved in some measures during the quarter. Nonperforming loans declined to 0.65% of total loans from 0.75% at the end of the first quarter, according to Executive Vice President and Chief Financial Officer Pat Oakes. → GE Vernova Just Sent a Mixed AI Signal to Investors However, the bank took a partial charge-off of about $1.9 million on a construction loan while working toward a resolution. The charge-off contributed to a $2.8 million provision for credit losses, up from $1.4 million in the prior quarter. Net charge-offs equaled 35 basis points of average loans for the period. The allowance for credit losses was 0.97% of loans at quarter-end, compared with 0.96% in the first quarter. → D-Wave Quantum or a Quantum ETF: Which Is the Better Bet? Mordell said criticized loans increased, primarily because of a non-owner-occupied real estate relationship consisting of three loans totaling $29 million. He said the loans have low loan-to-value ratios and that the bank had proactively downgraded them. Oakes said one property triggered a debt-service-coverage covenant default, requiring the bank to downgrade all three loans. He said the relationship is expected to be paid down and worked through over the next 24 months. Management said it was not seeing broad-based deterioration in the loan portfolio. Mordell also said the bank is refining its approach to mixed-use construction projects following recent challenges, while remaining bullish on its core business of financing spec single-family homes in the Bay Area. Loans increased $51 million during the quarter, representing annualized growth of about 9%, and were up $312 million, or 16%, over the past year. Growth was primarily driven by commercial and industrial lending and commercial real estate, though it was partly offset by $36 million of construction and land loan payoffs. Mordell said construction payoffs have been consistent for nearly 24 months but may be nearing a bottom. He described pipelines across the bank’s business units as robust and said the company continues to target low-double-digit loan and deposit growth for the full year. Deposits rose $123 million in the quarter, or 22% on an annualized basis, led by core commercial relationships. Management said it expects deposit growth to remain positive in the second half, although Oakes cautioned that the second-quarter pace should not be expected every quarter. During the call, Oakes said the bank added brokered deposits primarily in the first quarter and early in the second quarter, with many of those deposits scheduled to mature during the current quarter. If core deposit growth continues, the company’s objective is to allow much of that funding to run off and remain core funded. Net interest margin was 4.26% in the second quarter, down 12 basis points from 4.38% in the first quarter and in line with prior guidance. Net interest income increased $181,000 from the preceding quarter to $26.7 million, as higher average earning assets partly offset a lower Federal Home Loan Bank dividend and higher deposit costs. The yield on loans was essentially unchanged at 6.67%, compared with 6.68% in the first quarter. The cost of interest-bearing deposits increased 8 basis points to 3.06%, reflecting deposit pricing pressure experienced in the first quarter and early in the second quarter. Oakes said pressure moderated later in the quarter, with the spot rate at 3.07% at June 30 versus 3.03% at March 31. Oakes said margin could trend lower, potentially to 4.20%, if the bank continues to add deposits and shifts more earning assets into cash and the investment portfolio. He said loan yields should remain relatively stable, supported by predominantly prime-based floating-rate commercial and industrial loans and improving commercial real estate pricing. Noninterest income totaled $3.1 million, including $1.3 million in bank-owned life insurance death-benefit proceeds. Excluding those proceeds, noninterest income was $1.7 million, compared with $1.5 million in the first quarter. Noninterest expense was $16.5 million, including the $2.7 million litigation settlement. Excluding the settlement, core expenses declined to $13.8 million from $14.1 million in the prior quarter, largely due to lower credit-related legal and professional fees. The adjusted efficiency ratio improved to 48.7% from 50.4%. Book value per share increased $0.64 to $26.97. The Tier 1 leverage ratio was 11.50% and the total risk-based capital ratio was 12.79% at quarter-end. Avidbank launched an SBA lending division led by Managing Director of SBA Lending Brian Harper. Mordell said the new unit includes business development, credit and operations personnel and will expand the bank’s commercial lending platform. Oakes said the division will focus on SBA 7(a) production under an originate-to-sell strategy, with the intention of selling the guaranteed portion of loans. The bank already originates some SBA 504 loans, which it holds selectively, he said. The company ended the quarter with 162 full-time employees, up from 154 at the end of the first quarter. The additions included five senior revenue-generating bankers and support personnel across business lines. Mordell said the bank expects hiring to add near-term expense but views the investment as supporting future growth, particularly as market disruption creates opportunities to recruit talent and serve clients affected by consolidation. Avidbank Holdings, Inc operates as a bank holding company for Avidbank that provides financial products and services to small and middle-market businesses, professionals, and individuals in the Santa Clara, San Mateo, and San Francisco counties. It offers business and personal deposit products, such as checking, money market, and savings accounts; and certificates of deposit. The company also provides personal lending products include secured and unsecured lines of credit, home equity lines of credit, remodel and new home construction loans, and term loans; corporate banking comprises working capital lines of credit, equipment loans, acquisition financing, shareholder buyouts, ESOP loans, and owner-occupied real estate loans; and commercial real estate lending, such as permanent loans and bridge financing products. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Avidbank Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for July 2026.

SAN JOSE, CA / ACCESS Newswire / July 23, 2026 / Avidbank Holdings, Inc. (NASDAQ:AVBH) (the "Company" or "Avidbank Holdings"), the holding company for Avidbank, a California state-chartered bank (the "Bank"), announced net income for the second quarter of 2026 of $7.6 million, or $0.71 per diluted share, compared to net income of $9.0 million, or $0.84 per diluted share, for the first quarter of 2026 and net income of $5.8 million, or $0.75 per diluted share, for the second quarter of 2025. Results for the second quarter included a $2.6 million expense relating to the settlement of outstanding litigation and income of approximately $1.3 million on death benefit proceeds from bank-owned life insurance ("BOLI"). Excluding these items, adjusted net income (non-GAAP) (1) totaled $8.2 million, or $0.76 per adjusted diluted share (1) for the second quarter of 2026. Second Quarter 2026 Highlights Period-end loans, net of deferred fees, increased $51.3 million, or 9% annualized, from March 31, 2026 and $312.4 million, or 16%, from June 30, 2025. Average deposits increased $59.2 million, or 11% annualized, from the first quarter of 2026 and $238.1 million, or 12%, from the second quarter of 2025. Period-end deposits increased $122.6 million, or 22% annualized, from March 31, 2026 and $319.2 million, or 16%, from June 30, 2025. Return on average assets was 1.20% compared to 1.46% in the first quarter of 2026 and 1.00% in the second quarter of 2025. Excluding the litigation settlement and the income on BOLI proceeds, adjusted return on average assets (1) was 1.28% in the second quarter of 2026 compared to 1.46% in the prior quarter. Net interest margin declined to 4.26% in the second quarter of 2026, compared to 4.38% in the first quarter of 2026 and increased compared to 3.60% in the second quarter of 2025. Book value per share was $26.97 at June 30, 2026, an increase of $0.64 from March 31, 2026, and an increase of $1.17 from June 30, 2025. Non-performing loans to total loans decreased to 0.65% as of June 30, 2026 compared to 0.75% at March 31, 2026 and increased compared to 0.07% at June 30, 2025. Net charge-offs to average loans were 0.35% in the second quarter of 2026 compared to 0.52% in the first quarter of 2026. Mark Mordell, Chairman and Chief Executive Officer stated, "We are pleased to report another solid quarter of growth in loans and deposits. In regard to our income statement, our results included two non-recurring items - a charge to settle a previously disclosed litigation matter and income on a payment from bank-owned life insurance. If we exclude those items, our adjusted results reflect the continued strength of our core operating performance and the earning power of our franchise. Although criticized and classified loans increased, we are not seeing any systemic or broad-based deterioration across the portfolio. As I have often said, we never take credit for granted and believe we are focused on the appropriate areas." Mordell concluded, "We also continued to invest in our franchise, adding several experienced bankers as well as launching our new SBA Lending division, which expands our commercial banking platform and deepens the relationship-driven service that defines Avidbank. With a growing, diversified balance sheet and strong capital, we remain focused on disciplined growth and building long-term value for our shareholders." Results of Operations Net interest income totaled $26.7 million for the second quarter of 2026, an increase of $181 thousand, or 3% annualized, from the first quarter of 2026, and an increase of $6.4 million, or 31%, from the second quarter of 2025. The increase in net interest income compared to the prior quarter was primarily due to higher average loan balances, partially offset by a lower FHLB dividend and higher deposit costs. The increase compared to the second quarter of 2025 was driven by higher average loan balances, higher yields on securities and lower average short-term borrowings. For the six months ended June 30, 2026, net interest income increased $13.5 million, or 34%, compared to the six months ended June 30, 2025. Net interest margin was 4.26% in the second quarter of 2026, a decrease of 12 basis points compared to the first quarter of 2026, and a 66 basis point increase compared to the second quarter of 2025. The decrease in net interest margin compared to the prior quarter was primarily driven by higher cost of deposits and a lower FHLB dividend. The first quarter of 2026 included a special FHLB dividend totaling $241 thousand. During the second quarter of 2026, the FHLB lowered the rate paid on dividends to 4.75% for banks with no outstanding borrowings. The increase in net interest margin compared to the second quarter of 2025 was primarily driven by higher yields on securities, lower cost of deposits and lower rates and balances on short-term borrowings. For the six months ended June 30, 2026, net interest margin was 4.32%, an increase of 76 basis points from 3.56% for the six months ended June 30, 2025. The yield on loans in the second quarter of 2026 was 6.67%, relatively flat compared to the first quarter of 2026 and a decrease of 34 basis points from the second quarter of 2025, primarily driven by reductions in the Prime rate. The yield on securities increased in the second quarter of 2026 to 4.68% compared to 4.64% in the first quarter of 2026 due to securities purchases and increased from 2.34% in the second quarter of 2025 due to the balance sheet restructuring in 2025. For the six months ended June 30, 2026, loan yields decreased 31 basis points while the yield on securities increased 229 basis points compared to the same period in the prior year. The yield on interest-earning assets increased 8 basis points during the second quarter of 2026 compared to the first quarter of 2026 and increased 5 basis points compared to the second quarter of 2025. The increase from the first quarter of 2026 was primarily driven by an increase in average loan balances and average interest-earning deposits as well as higher average balances of debt securities, offset by a lower FHLB dividend. The increase compared to the second quarter of 2025 was primarily due to higher average loan balances, higher average interest-earning deposits and higher yields on our debt securities portfolio following the balance sheet restructuring. For the six months ended June 30, 2026, the yield on interest-earning assets increased 11 basis points compared to the same period in the prior year. The cost of interest-bearing deposits in the second quarter of 2026 was 3.06%, an increase of 8 basis points compared to the first quarter of 2026 and a decrease of 48 basis points compared to the second quarter of 2025. The cost of deposits in the second quarter of 2026 was 2.29%, an increase of 5 basis points from the first quarter of 2026 and a decrease of 49 basis points from the second quarter of 2025, primarily driven by the reduction in the Federal Funds rate. Overall funding costs increased 7 basis points from the first quarter of 2026 and decreased 55 basis points compared to the second quarter of 2025. For the six months ended June 30, 2026, the cost of interest-bearing deposits was 3.02%, a decrease of 51 basis points compared to the same period in the prior year. The cost of deposits for the six months ended June 30, 2026, was down 50 basis points compared to the same period in 2025, while overall funding costs declined 59 basis points for the same period compared to the prior year. The provision for credit losses was $2.8 million in the second quarter of 2026, compared to $1.4 million in the first quarter of 2026 and $925 thousand in the second quarter of 2025. The provision was higher in the second quarter of 2026 compared to the first quarter of 2026 primarily due to a $1.9 million partial charge-off of one non-performing construction loan and was higher compared to the second quarter of 2025 due to higher loan balances and the aforementioned charge-off in the second quarter of 2026. For the six months ended June 30, 2026, the provision for credit losses totaled $4.2 million compared to $925 thousand for the six months ended June 30, 2025. Non-interest income was $3.1 million in the second quarter of 2026 compared to $1.5 million in both the first quarter of 2026 and the second quarter of 2025. The increase during the second quarter of 2026 was primarily driven by income of approximately $1.3 million on the death benefit proceeds of BOLI policies. For the six months ended June 30, 2026, non-interest income totaled $4.5 million compared to $2.7 million for the six months ended June 30, 2025. Non-interest expense totaled $16.5 million for the second quarter of 2026, compared to $14.1 million in the first quarter of 2026 and $12.6 million in the second quarter of 2025. The increase in non-interest expense was due to the $2.6 million settlement of outstanding litigation, partially offset by a decrease in credit-related legal and professional fees during the second quarter of 2026. For the six months ended June 30, 2026, non-interest expense totaled $30.6 million, an increase of $5.1 million, or 20%, compared to the same period in the prior year. Salaries and employee benefits were unchanged at $9.6 million compared to the first quarter of 2026, as higher salary expense was offset by lower bonus accruals and higher capitalized loan origination costs. There were 162 full-time equivalent employees on June 30, 2026, compared to 154 on March 31, 2026, and 149 on June 30, 2025. The effective tax rate for the second quarter of 2026 was 27.0% compared to 27.5% in the first quarter of 2026 and 30.1% in the second quarter of 2025. The decrease compared to the first quarter of 2026 and the second quarter of 2025 was primarily due to the recognition of approximately $1.3 million in tax-exempt BOLI proceeds. For the six months ended June 30, 2026, the effective tax rate was 27.2% compared to 29.7% for the same period of the prior year due to state tax impacts from changes in California law requiring financial institutions to apportion business income using a single sales factor for tax years beginning on or after January 1, 2025. As a result, the second quarter of 2025 included $153 thousand in additional tax expense related to the write-down of deferred tax assets. In addition, the first quarter of 2026 included approximately $514 thousand in discrete tax benefits related to the vesting of equity awards. Financial Condition Total assets were $2.66 billion as of June 30, 2026, compared to $2.58 billion as of March 31, 2026, and $2.39 billion as of June 30, 2025. Cash and cash equivalents were $159.9 million on June 30, 2026, compared to $149.0 million on March 31, 2026, and $129.9 million on June 30, 2025. Loans, net of deferred fees, on June 30, 2026, totaled $2.22 billion, an increase of $51.3 million, or 9% annualized, from March 31, 2026, and an increase of $312.4 million, or 16%, from June 30, 2025. Loan growth during the second quarter of 2026 included increases of $70.9 million in commercial and industrial loans, $33.2 million in owner-occupied real estate loans, and $12.7 million in multi-family loans, partially offset by decreases of $36.1 million in construction and land loans and $18.7 million in non-owner-occupied commercial real estate loans. The allowance for credit losses on loans was $21.5 million on June 30, 2026, an increase of $563 thousand from March 31, 2026, and an increase of $1.9 million compared to June 30, 2025. The allowance for credit losses - loans and unfunded commitments to total loans was 1.09% on June 30, 2026, compared to 1.07% on March 31, 2026 and 1.15% as of June 30, 2025. Non-performing loans to total loans was 0.65% at June 30, 2026, down 10 basis points compared to March 31, 2026 and up 58 basis points from June 30, 2025. The decrease in the second quarter of 2026 was primarily due to the partial charge-off of one construction loan totaling $1.9 million. The available-for-sale securities portfolio totaled $232.2 million as of June 30, 2026, compared to $210.6 million at March 31, 2026, and $292.8 million as of June 30, 2025. The net unrealized loss on the available-for-sale portfolio totaled $2.8 million as of June 30, 2026, compared to $1.8 million at March 31, 2026 and $63.4 million as of June 30, 2025. Deposits were $2.32 billion on June 30, 2026, an increase of $122.6 million, or 22% annualized, from March 31, 2026, and an increase of $319.2 million, or 16% from June 30, 2025. The change in deposits during the second quarter of 2026 included a $79.1 million increase in interest-bearing demand deposits, an increase of $27.0 million in non-reciprocal brokered deposits and an increase of $19.3 million in money market and savings deposits, partially offset by a decrease of $8.6 million in non-interest-bearing checking deposits. Quarterly average deposits for the second quarter of 2026 were $2.21 billion, an increase of $59.2 million from the first quarter of 2026, and an increase of $238.1 million from the second quarter of 2025. Average non-interest-bearing demand deposits increased $18.6 million compared to the first quarter of 2026 and $127.5 million compared to the second quarter of 2025. Short-term borrowings outstanding at June 30, 2026 were $0.0, compared to $55.0 million at March 31, 2026, and $145.0 million at June 30, 2025. Book value per share was $26.97 on June 30, 2026, an increase of $0.64 compared to March 31, 2026, and an increase of $1.17 compared to June 30, 2025. Total shareholders' equity was $296.2 million on June 30, 2026, an increase of $7.7 million compared to March 31, 2026, and an increase of $91.8 million from June 30, 2025, due to new shares issued as part of the IPO in 2025. No shares were repurchased during the second quarter of 2026, compared to 25,000 shares repurchased during the first quarter of 2026. Other Information The Company will host a conference call on July 24, 2026, at 11:00 a.m. (Eastern Time) / 8:00 a.m. (Pacific Time) to discuss the earnings results for the second quarter of 2026. Investors may call in by dialing (833) 461-5787 within the US and +1(585) 542-9983 for all other locations (Conference ID: 599 992 664). Participants may also pre-register for the conference by navigating to https://events.q4inc.com/attendee/599992664. Alternatively, individuals may listen to a live webcast of the presentation by visiting the link on the Company's website at www.avidbank.com under About Us, Investor Relations. An audio replay of the live webcast is expected to be available by the evening of July 24, 2026, through the Investor Relations section of the Company's website. The recording will be available for one year from the day of posting. Information which may be discussed on the conference call is provided in an earnings supplement presentation available on the Company's website and furnished with the SEC and available at www.sec.gov. (1) A non-GAAP performance measure. We provide detailed reconciliations in the "Non-GAAP Performance and Financial Measures Reconciliation" table. About Avidbank Holdings 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 press release includes financial information prepared in accordance with accounting principles generally accepted in the United States ("GAAP"). This press release also includes non-GAAP financial information, which should be considered supplemental to, not a substitute for, or superior to, the financial measure calculated 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 adjusted net income, adjusted diluted earnings per share, adjusted return on average assets, adjusted return on average equity, adjusted efficiency ratio and taxable equivalent net interest income are reasonable measures to understand the Company's core operating performance and are important to many investors 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. For a description of the non-GAAP financial information included herein and reconciliations to the most directly comparable GAAP measure, see the "Non-GAAP Performance and Financial Measures Reconciliation" table. 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. All statements, other than statements of historical fact, are forward-looking statements. Forward-looking statements include statements concerning our possible or assumed financial condition, results of operations, including descriptions of our business plans, strategy and expectations, capital and financing needs and liquidity and regulatory and competitive outlook. 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 (which we define as the counties of Alameda, Contra Costa, Marin, Monterey, Napa, San Francisco, San Mateo, Santa Clara, Santa Cruz, Solano and Sonoma) 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; the effects of a prolonged government shutdown; the occurrence of significant natural disasters, including fires and earthquakes, geopolitical events, and acts of war or terrorism; the effects of 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, including their client and community relationships; our ability to successfully manage any chief executive officer transition; 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 non-performing 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 strategic transactions we may make or evaluate, and the costs associated with any potential or actual strategic transaction; 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 completed public offering; and our success at managing any of the risks involved in 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, including the Company's most recent annual report on Form 10-K and quarterly reports on Form 10-Q under the heading "Risk Factors" therein 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 OakesExecutive Vice President and Chief Financial [email protected] AVIDBANK HOLDINGS, INC.Selected Financial Data (Unaudited) (1) Annualized for the periods presented.(2) A non-GAAP performance measure. We provide detailed reconciliations in the "Non-GAAP Performance and Financial Measures Reconciliation" table.(3) Ratios presented are for Avidbank Holdings, Inc. and are estimated for the three months and six months ended June 30, 2026. AVIDBANK HOLDINGS, INC.Consolidated Statements of Financial Condition (Unaudited) (1) FDIC regulations impose a general cap on reciprocal deposits that may be exempt from brokered deposits classification equal to 20% of the Bank's total liabilities. As of June 30, 2026, March 31, 2026, December 31, 2025, September 30 2025 and June 30, 2025, an additional $513.0 million, $447.6 million, $475.4 million, $522.5 million and $495.4 million of our deposits were considered brokered deposits by the FDIC due to being in excess of the general cap, respectively. AVIDBANK HOLDINGS, INC.Consolidated Statements of Operations (Unaudited) (1) Includes $1.3 million in income related to BOLI death benefits for the three and six months ended June 30, 2026. AVIDBANK HOLDINGS, INC.Average Balance Sheets and Net Interest Margin Analysis (Unaudited) (1) Non-performing 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 net amortization of deferred fees / (costs) of $260 thousand and $252 thousand, for the three months ended June 30, 2026 and March 31, 2026, respectively.(2) Interest income on tax-exempt securities has been increased to reflect comparable interest on taxable securities. The rate used was 21%, reflecting the statutory federal income tax rate.(3) Including negative balance on average allowance for credit losses on loans of $20.5 million and $21.9 million, respectively.(4) Net interest margin is net interest income divided by total interest-earning assets.(5) Includes a special FHLB dividend totaling $241 thousand for the three months ended March 31, 2026.(6) Annualized for the periods presented. AVIDBANK HOLDINGS, INC.Average Balance Sheets and Net Interest Margin Analysis (Unaudited) (1) Non-performing 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 net amortization of deferred fees / (costs) of $260 thousand and $314 thousand, for the three months ended June 30, 2026 and June 30, 2025, respectively.(2) Interest income on tax-exempt securities has been increased to reflect comparable interest on taxable securities. The rate used was 21%, reflecting the statutory federal income tax rate.(3) Including negative balance on average allowance for credit losses on loans of $20.5 million and $19.1 million, respectively.(4) Net interest margin is net interest income divided by total interest-earning assets.(5) Annualized for the periods presented. AVIDBANK HOLDINGS, INC.Average Balance Sheets and Net Interest Margin Analysis (Unaudited) (1) Non-performing 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 fees / (costs) of $512 thousand and $810 thousand, for the six months ended June 30, 2026 and June 30, 2025, respectively.(2) Interest income on tax-exempt securities has been increased to reflect comparable interest on taxable securities. The rate used was 21%, reflecting the statutory federal income tax rate.(3) Including negative balance on average allowance for credit losses on loans of $21.2 million and $19.1 million, respectively.(4) Net interest margin is net interest income divided by total interest-earning assets.(5) Includes a special FHLB dividend totaling $241 thousand for the six months ended June 30, 2026.(6) Annualized for the periods presented. AVIDBANK HOLDINGS, INC.Asset Quality Data (Unaudited) (1) Annualized for the periods presented. AVIDBANK HOLDINGS, INC. Loans and Deposits (Unaudited) (1) FDIC regulations impose a general cap on reciprocal deposits that may be exempt from brokered deposits classification equal to 20% of the Bank's total liabilities. As of June 30, 2026, March 31, 2026, December 31, 2025, September 30, 2025 and June 30, 2025, an additional $513.0 million, $447.6 million, $475.4 million, $522.5 million, and $495.4 million of our deposits were considered brokered deposits by the FDIC due to being in excess of the general cap, respectively. AVIDBANK HOLDINGS, INC. Non-GAAP Performance and Financial Measures Reconciliation (Unaudited)Management believes that adjusted net income, adjusted diluted earnings per share, adjusted return on average assets, adjusted return on average equity, adjusted efficiency ratio and taxable equivalent net interest income are reasonable measures to understand the Company's core operating performance and are important to many investors who are interested in understanding our profitability prospects from our core operations. In addition, management reviews yields on certain asset categories and the net interest margin of the Company on a fully taxable equivalent basis. The non-GAAP taxable equivalent net interest income adjustment facilitates performance comparisons between taxable and tax-free assets by increasing the tax-free income by an amount equivalent to the Federal income taxes that would have been paid if this income were taxable at the Company's 21% Federal statutory rate. (1) Annualized for the periods presented. SOURCE: Avidbank Holdings, Inc. View the original press release on ACCESS Newswire

Avidbank Holdings Inc. (AVBH) came out with quarterly earnings of $0.76 per share, missing the Zacks Consensus Estimate of $0.83 per share. This compares to earnings of $0.75 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of -8.43%. A quarter ago, it was expected that this company would post earnings of $0.8 per share when it actually produced earnings of $0.84, delivering a surprise of +5%. Over the last four quarters, the company has surpassed consensus EPS estimates just once. Avidbank Holdings, which belongs to the Zacks Banks - West industry, posted revenues of $29.73 million for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 4.87%. This compares to year-ago revenues of $21.83 million. The company has topped consensus revenue estimates three times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Avidbank Holdings shares have added about 19.7% since the beginning of the year versus the S&P 500's gain of 9.6%. While Avidbank Holdings has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Avidbank Holdings was favorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #2 (Buy) for the stock. So, the shares are expected to outperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.86 on $29.4 million in revenues for the coming quarter and $3.44 on $116.05 million in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Banks - West is currently in the top 20% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. One other stock from the same industry, First Hawaiian (FHB), is yet to report results for the quarter ended June 2026. The results are expected to be released on July 24. This bank holding company is expected to post quarterly earnings of $0.60 per share in its upcoming report, which represents a year-over-year change of +3.5%. The consensus EPS estimate for the quarter has been revised 1.3% higher over the last 30 days to the current level. First Hawaiian's revenues are expected to be $227.91 million, up 4.8% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Avidbank Holdings Inc. (AVBH) : Free Stock Analysis Report First Hawaiian, Inc. (FHB) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

FS Bancorp (FSBW) came out with quarterly earnings of $1.08 per share, missing the Zacks Consensus Estimate of $1.13 per share. This compares to earnings of $0.99 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of -4.43%. A quarter ago, it was expected that this bank holding company would post earnings of $1.01 per share when it actually produced earnings of $1.02, delivering a surprise of +0.99%. Over the last four quarters, the company has surpassed consensus EPS estimates two times. FS Bancorp, which belongs to the Zacks Banks - West industry, posted revenues of $38.8 million for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 0.51%. This compares to year-ago revenues of $37.28 million. The company has topped consensus revenue estimates three times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. FS Bancorp shares have added about 4.5% since the beginning of the year versus the S&P 500's gain of 8.7%. While FS Bancorp has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for FS Bancorp was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $1.24 on $41.65 million in revenues for the coming quarter and $4.64 on $161.5 million in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Banks - West is currently in the top 20% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Avidbank Holdings Inc. (AVBH), another stock in the same industry, has yet to report results for the quarter ended June 2026. The results are expected to be released on July 23. This company is expected to post quarterly earnings of $0.83 per share in its upcoming report, which represents a year-over-year change of +10.7%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. Avidbank Holdings Inc.'s revenues are expected to be $28.35 million, up 29.9% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report FS Bancorp, Inc. (FSBW) : Free Stock Analysis Report Avidbank Holdings Inc. (AVBH) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Profitability and margin improved: Avidbank reported Q1 net income of $9.0M ($0.84/sh), ROA of 1.46% and ROE of 12.7%, while net interest margin widened to 4.38% (up 25 bps) though management expects NIM to settle around the mid‑4.20s as deposit costs stay above 3%. Loan and deposit growth driven by CRE: Loans rose $24M in the quarter (up $332M or 18% YoY), led by a $26M increase in non‑owner occupied CRE, and deposits increased $13M for the quarter (up $270M or 14% YoY). Credit and venture/SaaS monitoring: Provision fell to $1.4M but net charge‑offs were $2.8M (primarily two C&I charge‑offs); nonperforming loans declined to $16.3M (0.75%), and management is closely monitoring about $165M of SaaS/venture exposure for AI‑related disruption, investor backing and borrower cash burn (only roughly $4M criticized in horizontal SaaS). Interested in Avidbank Holdings Inc.? Here are five stocks we like better. Avidbank (NASDAQ:AVBH) reported improved profitability in its fiscal first quarter of 2026, driven by a higher net interest margin and lower provision expense, while management spent much of the earnings call addressing credit performance and its exposure to venture lending—particularly software-as-a-service (SaaS) borrowers amid broader industry disruption tied to artificial intelligence. Chief Financial Officer Patrick Oakes said the company earned net income of $9.0 million, or $0.84 per diluted share, compared with $6.9 million, or $0.65 per diluted share, in the fourth quarter. Profitability ratios also rose, with return on assets improving to 1.46% from 1.12% and return on average equity increasing to 12.7%. → Pipelines and Automation: 2 Energy Plays Built for Any Oil Price Chairman and CEO Mark Mordell said the company was “pleased” with its progress over several quarters in “putting ourselves in a more profitable metrics situation,” adding that the first quarter was “a pretty good quarter” despite typical seasonal patterns he said the bank has seen in prior years. Oakes said loans grew $24 million during the quarter. Growth was “driven mainly by a $26 million increase in non-owner occupied CRE loans,” partially offset by a $9 million decline in C&I balances due to payoffs and paydowns. On a year-over-year basis, the bank’s loan portfolio was up $332 million, or 18%, since March 31, 2025. → Homebuilder Earnings: D.R. Horton Sticks Out as Pulte & NVR Sales Tank Deposits increased $13 million in the quarter and were up $270 million, or 14%, year-over-year, according to Oakes. Mordell characterized core deposits as “reasonably flat,” while noting loan growth of about $25 million. The bank reported a net interest margin of 4.38%, up 25 basis points from the prior quarter. Oakes said loan yields were “essentially flat,” while interest-bearing deposit costs declined 20 basis points. → Meta Platforms Earnings Preview: What to Watch in Q1 2026 Report Oakes noted two items affecting comparability and the quarter’s margin performance: The fourth quarter included a $726,000 interest reversal on non-performing loans, which reduced that period’s margin by 12 basis points. The first quarter benefited from a special FHLB dividend, adding roughly 4 basis points to net interest margin. Even with the improvement, management flagged some pressure building in deposit pricing. Oakes said the average cost of interest-bearing deposits was 2.98% in the quarter, with a spot rate of 3.03% at March 31. In response to an analyst question about new deposit pricing and the margin outlook, Oakes said the bank is “having to put some deposit costs on at a higher cost than we’d like,” describing new deposit costs as “probably in the low 3s” on average. He added that the cost of interest-bearing deposits would likely “stay above 3%” and “could…creep up a little bit” in the near term, which he said would “take the margin down a little bit from where it is today.” Oakes also pointed to deposit mix as a variable, noting that DDA balances were “probably a little bit high” at quarter end due to late-quarter client inflows that moved into DDA accounts and then shifted in April. He said he would not “count on that DDA remaining as high as it is today.” Later on the call, Oakes said his estimate for margin going forward was “below that 4.30, maybe 4.25-ish,” adding that he hoped the company could “stay above 4.25,” citing deposit costs as a key swing factor. Credit metrics were mixed during the quarter. Oakes said the provision for credit losses was $1.4 million, down from $2.8 million in the fourth quarter. However, the company recorded net charge-offs of $2.8 million, or 52 basis points of average loans, “primarily driven by the charge-off of 2 C&I credits.” Non-performing loans declined to $16.3 million, or 75 basis points of loans, which Oakes attributed mainly to the payoff of a construction loan and the charge-offs tied to those C&I credits. During Q&A, management was asked about criticized loans. Mordell said the increase was driven primarily by “a criticized real estate loan,” which he said the bank believed was “a money good loan” and performing, but was downgraded due to “concerns about a near-term tenant vacating.” He described the exposure as having a low loan-to-value and said it consisted of “two buildings in the South Bay.” A significant portion of the Q&A focused on the bank’s venture lending portfolio and SaaS exposure. In response to a question referencing about $165 million of SaaS exposure, Mordell said the bank conducted a “deep dive” review of where it was exposed and concluded that the key differentiator is how SaaS companies are “dealing with AI.” He said companies that are integrating AI into their business plans “are gonna be the top end of the food chain,” while those “that aren’t adapting” could be more at risk if they cannot raise funding. Mordell also drew a distinction between vertical SaaS models—specialized in workflow—and more horizontal offerings, which he described as broader. Oakes added that the bank’s greater concern is in the smaller, more general horizontal segment. He said there are “two loans” in that area that are criticized or classified totaling “about $4 million,” and noted that one of them is cash-flow positive. Management emphasized ongoing monitoring of borrower liquidity and investor support. Mordell said that in early-stage lending, a key risk is whether the bank allows “their cash balances [to] cross over to loan balances,” and that the bank is being “pretty critical of that” from a credit perspective. He said the bank tracks performance metrics monthly and may act if investor backing weakens. Asked about the broader pace of venture investment, Mordell said venture lending has “gained a lot more momentum over the last couple of quarters,” but funding decisions have become more analytical as investors “pick their horses.” He also said new funding rounds are being done at better valuations than for companies funded two or three years ago, and that some companies are being funded for shorter runways—“4 to 6 months as opposed to 2 years”—especially in more challenged areas. On exit markets, Mordell said the IPO market has been “quiet at best,” and he described M&A as “slowing down” as participants assess which companies are viable amid disruption. Elsewhere in the quarter, Oakes said non-interest income was $1.5 million, down from $1.8 million, as higher core banking fee income was offset by lower warrant, success fee, and fund investment income. Non-interest expense totaled $14.1 million, up $231,000 due mainly to higher credit-related legal and professional fees, while the efficiency ratio improved to 50.4%. The company added three employees in the quarter, bringing headcount to 154, and said it expects additional hiring—particularly bankers—during the second quarter. Oakes said book value per share increased to $26.33 and Tier 1 capital rose to $11.39. The company also repurchased 25,000 shares at an average price of $27.69 for a total of $693,000. The effective tax rate was 27.5% due to a discrete benefit related to equity board vesting, and management reiterated an expectation for a tax rate in the mid-28% range for the remainder of 2026. Avidbank Holdings, Inc operates as a bank holding company for Avidbank that provides financial products and services to small and middle-market businesses, professionals, and individuals in the Santa Clara, San Mateo, and San Francisco counties. It offers business and personal deposit products, such as checking, money market, and savings accounts; and certificates of deposit. The company also provides personal lending products include secured and unsecured lines of credit, home equity lines of credit, remodel and new home construction loans, and term loans; corporate banking comprises working capital lines of credit, equipment loans, acquisition financing, shareholder buyouts, ESOP loans, and owner-occupied real estate loans; and commercial real estate lending, such as permanent loans and bridge financing products. The article "Avidbank Q1 Earnings Call Highlights" was originally published by MarketBeat.

Image source: The Motley Fool. Tuesday, April 28, 2026 at 11 a.m. ET Chairman & CEO — Mark Mordell EVP & CFO — Patrick Oakes Mark Mordell: Thanks, Gina, and thank you all for attending our Q1 earnings call. We appreciate your interest as well as your support. As we stated in the release, overall, we are pleased with what we have accomplished not only for Q1, but more certainly what we have done over the last several quarters in putting ourselves in a more profitable metrics situation. I am not a big believer in seasonality, but as far as first quarters go, this was a pretty good quarter for us. We usually have some pullback and shrinkage, and we were able to grow loans by about $25 million, and our core deposits were reasonably flat. Although Patrick is going to give you more metric information, and we are going to follow it up with some questions after that. At this point, I would like to turn it over to Patrick to go through the quarter, the high-level metrics, and then we will open it up for questions. Patrick Oakes: Thanks, Mark. Good morning, everyone. Let me start with the headline numbers. In the first quarter, we earned net income of $9 million, or $0.84 per diluted share. That was up from $6.9 million, or $0.65 per diluted share in the fourth quarter. Return on assets improved to 1.46% from 1.12%, and return on average equity increased to 12.7%. Turning to the balance sheet, as Mark said, loans grew $24 million in the first quarter. That was driven mainly by a $26 million increase in non-owner-occupied CRE loans, partially offset by a $9 million decline in C&I balances due to higher payoffs and paydowns. Overall, loans are up $332 million, or 18%, since March 31, 2025. Deposits also moved higher, up $13 million in the first quarter, and they are up $270 million, or 14%, since March 31, 2025. We reported a net interest margin of 4.38% in the first quarter, up 25 basis points from the fourth quarter. Loan yields were essentially flat, and our interest-bearing deposit costs came down 20 basis points. As a reminder, the fourth quarter included a $726 thousand interest reversal on nonperforming loans, which reduced our margin in the fourth quarter by 12 basis points. In the first quarter, we also had the benefit of a special FHLB dividend, which added about 4 basis points to the margin. During the first quarter, we did see some upward pressure on our cost of interest-bearing deposits. The average cost for the quarter was 2.98%, and the spot rate was 3.03% at March 31. The provision for credit losses was $1.4 million in the first quarter, down from $2.8 million in the fourth quarter. Net charge-offs for the quarter were $2.8 million, or 52 basis points of average loans, primarily driven by the charge-off of two C&I credits. Nonperforming loans declined $16.3 million, or 75 basis points of loans, mainly reflecting the payoff of a construction loan and the charge-off of those two C&I credits. Noninterest income was $1.5 million, compared to $1.8 million in the fourth quarter. We saw higher core banking fee income, including service charges, FX, and credit card income. That was offset by lower warrant and success fee income and fund investment income. On the expense side, noninterest expense totaled $14.1 million, up $231 thousand from the fourth quarter, mainly due to higher credit-related legal and professional fees. We also saw another improvement in our efficiency ratio, which came down to 50.4%. Salary and benefits were flat at $9.6 million. Lower salary and bonus expense was offset by higher payroll taxes and benefits expense, along with fewer capitalized loan origination costs. We added three people in the first quarter, bringing total headcount to 154, and we expect to hire additional bankers in the second quarter. Book value per share increased to $26.33, and Tier 1 capital increased to 11.39%. During the quarter, we repurchased 25 thousand shares at an average price of $27.69, for a total of $693 thousand. The effective tax rate for the quarter was 27.5%. That included a discrete tax benefit related to equity award vesting, and we continue to expect the tax rate to be in the mid-28% range for the remainder of 2026. With that, Mark, back to you. Mark Mordell: Thanks, Patrick. As you can see, we have had a lot of improvements in our profitability metrics, which we mentioned earlier. At this point, I would like to open it up for questions, because that is what is really on your mind. So please, Operator: At this time, I would like to remind everyone, in order to ask a question, press star, then the number one on your telephone keypad. Your first question comes from the line of Andrew Terrell with Stephens. Your line is open. Andrew Terrell: Hey, good morning. I want to start off asking a question around the SaaS exposure in venture lending. I appreciate the commentary you put in the presentation. It is about $165 million of exposure, it looks like. Can you talk about the review you conducted in the quarter? There are a lot of headlines out there now. Maybe sum up for us what the conclusions around this review were. If you could talk about any reserves specifically against this pool, whether you are worried about loss content, and then how should we think about your interest in this space—software specifically—going forward? Are you pulling back the reins a bit, modifying underwriting standards? Just want to run the gambit on the SaaS exposure. Mark Mordell: From a 30,000-foot view, we did a deep dive and looked at where we were exposed. We are finding it is not just SaaS; it is how companies are dealing with AI. A lot of SaaS-based companies with a good space have been utilizing AI or starting to utilize it more in their business plan in order to compete, and those companies are going to be at the top end of the food chain. Companies that are not adapting are going to be more suspect as we go forward. If they are not able to get the funding that is necessary because their metrics are off and their platform is not going to be as competitive as anticipated, those are the ones we are concerned about. Patrick can get into some detail of how much dollar exposure we have, but what we found is that the vertical integration of AI and the SaaS model is really where we want to be. Those are much more specialized in workflow versus the horizontal type, which is more broad based. It does not mean one is necessarily better than the other, but one has a little more legs at this point. We have done a strong analysis and talked to VCs. Are there going to be additional losses embedded? I do not know. When we are talking about early-stage investing, it is really whether we are going to let their cash balances cross over their loan balances. It gives us another factor we have to monitor months ahead before that cash approaches their loan balance, so we know if we need to pull an investor abandonment clause or something of that nature, whether we are going to let them borrow, or let that cash cross over. We are being pretty critical of that from a credit perspective across the board. Patrick, any additional color? Patrick Oakes: As you can see from the schedule we provided with the breakdown we did with the venture group, it is really the horizontal segment—the smaller, more general piece—that I think is the most concerning in terms of whether they are going to be able to raise funds going forward. That portfolio is small. There are two loans in there that are either criticized or classified, about $4 million total. In fact, one of those is cash-flow positive. So far, the portfolio is doing well. The concern is what is going to happen six to twelve months from now. Between our bankers, the investors, and everybody else, everyone is on this and tracking it quite closely. Andrew Terrell: Great. It sounds like there is an important bifurcation of horizontal versus vertical. Within the vertical space, you are still going to be lending and forming new relationships, picking up new clients in that specific vertical. So no change there, just still being critical and diligent from a credit standpoint. Mark Mordell: Everyone is looking at it a little bit differently in terms of new fundings. There is a lot more funding going into the AI space in the venture community at this point. New fundings could argue for a very strong model going forward because they start off integrating AI. Some companies that are two to four years old are needing to pivot and have needed to pivot months or quarters ago to be more competitive, given the explosive growth AI has had. It all pours into the underwriting for everything we are looking at. It is similar to what we have done for the last several years: how viable are these early-stage companies, what is their burn, and how strong is their business plan. We do have some legacy credits, and we are monitoring those closely. Andrew Terrell: On the margin, you outperformed a bit this quarter even normalizing for the FHLB special. It sounds like maybe some deposit cost pressure into period end. Relative to that 2.99% interest-bearing cost and the 3.03% spot rate, where are you bringing on new deposits on a weighted average basis, and general expectations for the margin as we move forward? Patrick Oakes: I wanted to highlight the 3.03% spot because we are a growth bank, and we are having to put some deposit costs on at a higher level than we would like at this point, which is probably in the low 3% range on average. Hopefully we can drive that down over time, but right now we want to grow deposits. I would assume cost of interest-bearing deposits will stay above 3% at this point. Could it creep up a little? Potentially, short term. That will take the margin down a little bit from where it is today. Loan yield I am not as worried about. Andrew Terrell: I think that loan yield would be relatively stable. Patrick Oakes: It could go up or down a few basis points with loan fees and mix changes, but you will see the margin move down a little here. One other factor to keep in mind: DDA was probably a little bit high at 33.1%. We had some clients bring in money late in the quarter that moved to the DDA account. That change has moved into April, so I would not count on DDA remaining as high as it is today. That is a little bit of pressure too. Hopefully we can keep it in the mid-20s, but it is probably a little elevated. Andrew Terrell: Yep. Okay. Great. Thank you for taking the questions. Operator: Your next question comes from the line of Matthew Clark with Piper Sandler. Your line is open. Analyst: Hey. Good morning. This is Adam Kroll on Matthew Clark, and thanks for taking my question. Mark Mordell: Hello. Good morning. Analyst: Maybe we could get your updated thoughts on loan and deposit growth expectations for the year. I think your previous target was in the low double-digit range. Has that changed at all, and what are you hearing from your borrowers given some of the macro uncertainty? Mark Mordell: We did experience a little softness in the quarter in terms of people making decisions and fundraising, but I do not think our outlook has changed. We are looking for low double digits going forward. We have some work to do on the deposit side, as Patrick mentioned, but we feel pretty good about the overall pipelines across all verticals for loans. In terms of deposits, we have a strong pipeline, but timing is more of an issue because fundings are taking a little longer. People are doing a little extra diligence. There is geopolitical noise out there, which is constantly out there, so I do not know why that should be more of a factor this quarter than historically. Our outlook has not changed. We are built for growth and expect low double digits for the year. We do have some work to do on the liability side of the balance sheet. Analyst: Got it. Appreciate the color. Switching to expenses, they were really well managed during the quarter. How are you thinking about a 2Q run rate and overall growth for the year? Patrick Oakes: We have been doing some hiring. Mark can talk more about that. We added in the first quarter and more in the second quarter, so that will put a little pressure on expense growth, along with merit increases and some other items. The variable here is personnel expense. It was roughly $9.5 million; I could see that creeping up closer to $10 million for the quarter when you factor in everything. We did have a little bit higher legal and professional fees that could come down a bit to offset some of that, but expenses will definitely be up in the second quarter. Hopefully, that is all investment in growth. Mark Mordell: With the successful IPO we had, our profitability metrics trending well, and our long-term plan to scale, we will likely add more bankers this year than we have in the last several years. We brought on three in Q1, and we will probably have two to four more in Q2 and more after that as we look down the road. There is opportunity out there and some consolidation, and we will take advantage of it given our overall business plan. Analyst: Got it. Thanks for taking my questions. I will step back. Mark Mordell: Thank you. Operator: Your next question comes from the line of Gary Tenner with D.A. Davidson. Your line is open. Analyst: I wanted to follow up on the SaaS conversation and broaden it to the larger venture lending business. SaaS is a big part of that business, but what are you seeing in the pace of venture investment into startups at this point? Have you seen much diminution of that flow, and how does that impact both the venture lending and potentially the capital call business? Mark Mordell: As far as venture lending goes, it has gained a lot more momentum over the last couple of quarters. Everyone is doing the necessary homework because nobody wants to throw good money after bad. New fundings are at better valuations than for companies that are two or three years old. The question is can they pivot, and do they need to pivot? VCs and entrepreneurs are looking at it analytically. When this kind of transition or disruption happens, they decide to pick their horses. We monitor everything monthly—growth and metrics—and if they are not on plan, we know ahead of time and have those conversations. Like any time a vertical gets really hot, which AI is, there is more money going into AI-based investments than most anything else right now. We just need to use solid judgment across the board for new investments and be ultra-critical on existing investments. We need to determine whether they have an opportunity for new funding or are going to die on the vine, and whether we are going to let cash cross over our loan balance. That is our only savior at that point—not to let them borrow and to sweep the account if necessary because investors are not going to continue to support the company. Analyst: Thank you for that. I am sure you would have flagged this, but I want to confirm the $3.1 million construction loan that paid off in the quarter. There was no related interest recovery or benefit from that, correct? Patrick Oakes: Correct. We had everything that was owed to us on that one. Analyst: Okay. Thank you. Operator: Again, if you would like to ask a question, press star, then the number one on your telephone keypad. Your next question comes from the line of Timothy Coffey with Brean Capital. Your line is open. Timothy Coffey: Thank you. Good morning, everybody. Mark Mordell: Morning, Tim. Timothy Coffey: Mark, to follow up on the SaaS discussion, parsing through the loans and deposit data, it looks like the SaaS portfolio, both vertical and horizontal, has loan-to-deposit ratios somewhere around 45%. The total venture portfolio is somewhere around a 30% lower deposit ratio. Historically, has the SaaS segment always been around that 45% ratio? Patrick Oakes: What I hear from our bankers is these companies are still getting funding, but at a slower pace than previously. It is similar to 2022, where rounds of funding shrink a little and not get as much. Funders are being a little more careful, especially in some of the horizontal areas. It is probably a little less than historically. We could run that analysis; I have not done it, but that would be my gut. Mark Mordell: When there is a little stress in a vertical, they tend to spoon-feed rather than give two years of runway, which you see in a less concerning vertical. Companies are getting funded, but it is more metric based. They may fund for the next four to six months instead of two years, see where they end up, and whether they are getting necessary traction. That is typical in market disruption. That is why we are taking a closer look at these 60-plus accounts and watching them very carefully. Timothy Coffey: It sounds like I should follow up next quarter to see how things are playing out. Probably the next couple of quarters. Patrick Oakes: Yes. I will mark that down. Timothy Coffey: Mark, as you talk to clients in the technology and venture space, do you sense any material slowdown in planned IPOs or takeout activity? Mark Mordell: The IPO market has been quiet at best for a period of time. M&A, given some of the disruption, is slowing down until people figure out what is viable and what is not. There will be a lot of companies looking for soft landings that will find a soft landing. When there is this kind of disruption, people are cautious because some feel there will be more opportunities as stress rises in the marketplace, as opposed to getting too far ahead of it. We will continue to monitor the overall space like we do, but with this disruption, we have to pay attention to where money is flowing and what is happening from an M&A perspective. The IPO market is not something we are focused on at this point. Timothy Coffey: Appreciate that color. As you look to add bankers, are there specific geographies or business lines you are looking to support? Mark Mordell: The overall feeling is the same: the bankers we are adding will be more in the business lines than in real estate. We do a good job in commercial real estate and construction, but those two verticals require fewer employees than business lines like venture, traditional C&I, asset-based, sponsor, and search. You will see more bankers added in the business lines of our overall strategy because we feel that adds more to our franchise value. Timothy Coffey: Okay. Great. Patrick, a question about the margin. Coming into the quarter, we were looking for margin in the fourth quarter to be somewhere around 4.20% to 4.25%. Does that still seem reasonable given all the puts and takes discussed today? Patrick Oakes: It is probably going to be below that 4.30% we just printed—maybe around 4.25%, in that general range. Hopefully, we can stay above 4.25%, but I would guess in the 4.25% to 4.30% range. There are moving pieces to it, with deposit costs being the biggest one. Timothy Coffey: Alright. Those are my questions. Thank you very much. Patrick Oakes: Thanks, Tim. Operator: Your next question comes from the line of Matthew Clark with Piper Sandler. Your line is open. Matthew Clark: Hi, guys. Maybe just to follow up on credit quality. Could you provide some additional color on what drove the increase in criticized loans during the quarter and if there is any concern there? Mark Mordell: We are always concerned about credit. The biggest increase was a criticized real estate loan, which drove that up. We think it is a money-good loan. It is performing, but there are concerns about a near-term tenant vacating. It is a low loan-to-value relationship, and we think we are going to get through it. The main reason for the increase was a relationship that needed to be downgraded that consisted of two buildings in the South Bay. Matthew Clark: Got it. Appreciate it. Thanks for taking my question. Operator: There are no further questions at this time. I would like to turn the call back over to the presenters. Mark Mordell: Again, we certainly appreciate everyone’s interest and support, and appreciate attending our Q1 earnings release and earnings call. We look forward to following up with a solid quarter for Q2. Operator: This concludes today’s conference call. You may now disconnect. Before you buy stock in Avidbank, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Avidbank wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. 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As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Avidbank (AVBH) Q1 2026 Earnings Transcript was originally published by The Motley Fool