Avidbank Holdings Issues $30M Subordinated Notes; Redeems 2029 Notes

What Happened

• Avidbank Holdings, Inc. announced on August 26, 2026 that it entered into a Subordinated Note Purchase Agreement and sold $30 million aggregate principal of 7.00% Fixed‑to‑Floating Rate Subordinated Notes due September 1, 2036 in a private placement to institutional accredited investors and QIBs. The notes were issued at par on August 26, 2026.
• The company intends to use net proceeds to redeem and/or repurchase its outstanding $22 million of 5.000% Fixed‑to‑Floating Subordinated Notes due 2029. Following issuance of the new notes, on August 27, 2026 Avidbank privately repurchased and cancelled $18 million of the 2029 notes (for about $18.2M including accrued interest) and provided notice to redeem the remaining $4 million on September 30, 2026.

Key Details

• Issuance size and pricing: $30,000,000 of 7.00% subordinated notes, issued at 100% of face (Aug 26, 2026).
• Interest terms: 7.00% fixed from Aug 26, 2026 through (but excluding) Sept 1, 2031; thereafter quarterly resets to three‑month term SOFR + 291 basis points (or a similar agreed fallback rate).
• Maturity and redemption: Stated maturity Sept 1, 2036; callable by the company on or after Sept 1, 2031 (any interest payment date) at 100% of principal plus accrued interest; limited early redemptions only in narrowly defined circumstances prior to Sept 1, 2031.
• Security and regulatory treatment: Notes are unsecured, subordinated obligations (junior to senior debt), not convertible, no sinking fund, intended to qualify as Tier 2 regulatory capital. Offering relied on Securities Act exemptions (Section 4(a)(2) and Rule 506(b)).

Why It Matters

• The transaction replaces near‑term subordinated debt (2029 notes) with longer‑dated Tier 2 capital (2036 maturity), extending Avidbank’s capital runway and preserving regulatory capital treatment.
• Investors should note the higher fixed coupon (7.00%) through 2031 and the floating rate thereafter (SOFR + 291 bps), which could increase the company’s interest expense over time compared with the 5.00% 2029 notes.
• The filing also discloses the completed $18M private repurchase and an announced redemption of the remaining $4M of the 2029 notes (expected Sept 30, 2026), after which the 2029 issue will be retired in full.