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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒

QUARTERLY REPORT PURSUANT TO SECTION 13 OF 15(d) OR THE SECURITIES

EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2025

☐

TRANSITION REPORT PURSUANT TO SECTION 13 OF 15(d) OR THE SECURITIES

EXCHANGE ACT OF 1934

For the transition period from _______________ to ______________.

Commission File No. 001-42792

AVIDBANK HOLDINGS, INC.

(Exact Name of Registrant as Specified in its Charter)

California

6022

26-1731009

(State or other jurisdiction of incorporation or organization)

(Primary Standard Industrial Classification Code Number)

(I.R.S. Employer Identification No.)

1732 North First Street

6th Floor

San Jose, California 95112

(408) 200-7390

(Address, including zip code and telephone number, including area code, of registrant’s principal executive offices)

Securities registered pursuant to Section 12(b) of the Act:


Common Stock, No Par Value per Share	AVBH	The Nasdaq Stock Market LLC
(Title of class)	(Trading Symbol)	(Name of exchange on which registered)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES ☐ NO ☒

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). YES ☒ NO ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). YES ☐ NO ☒

As of September 12, 2025, the registrant had 10,936,020 shares of common stock, no par value per share (the “Common Stock”), outstanding.

AVIDBANK HOLDINGS, INC.

FORM 10-Q

TABLE OF CONTENTS

Part I. Financial Information		Page

Item 1.	Financial Statements (Unaudited)	3

	Consolidated Statements of Financial Condition (unaudited) at June 30, 2025 and December 31, 2024	3
	Consolidated Statements of Income (unaudited) for the three and six months ended June 30, 2025 and 2024	4
	Consolidated Statements of Comprehensive Income (unaudited) for the three and six months ended June 30, 2025 and 2024	5
	Consolidated Statements of Changes in Shareholders' Equity (unaudited) for the three and six months ended June 30, 2025 and 2024	6
	Consolidated Statements of Cash Flows (unaudited) for the six months ended June 30, 2025 and 2024	7
	Notes to Consolidated Financial Statements (unaudited)	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	30

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	59
Item 4.	Controls and Procedures	59

Part II. Other Information

Item 1.	Legal Proceedings	60
Item 1A.	Risk Factors	60
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	84
Item 3.	Defaults Upon Senior Securities	84
Item 4.	Mine Safety Disclosures	84
Item 5.	Other Information	84
Item 6.	Exhibits	85

Signatures		86

‎

PART I. FINANCIAL INFORMATION


AVIDBANK HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (UNAUDITED)

(In thousands, except per share data)	June 30, 2025		December 31, 2024

Assets
Cash and due from banks	$	2,800	$	8,662
Due from Federal Reserve Bank and interest-bearing deposits in banks		127,123		74,039
Total cash and cash equivalents		129,923		82,701

Securities available-for-sale, at fair value (amortized cost $356,216 and $369,155, net of allowance for credit losses of $0 and $0)		292,808		296,556
Loans, net of allowance for credit losses on loans of $19,624 in 2025 and $18,679 in 2024		1,892,094		1,846,263
Federal Home Loan Bank stock, at cost		8,409		8,409
Premises and equipment, net		1,927		2,331
Cash surrender value of bank-owned life insurance policies		12,857		12,674
Accrued interest receivable and other assets		54,111		55,554
Total assets	$	2,392,129	$	2,304,488

Liabilities
Deposits:
Noninterest-bearing	$	443,540	$	414,327
Interest-bearing		1,559,241		1,477,028
Total deposits		2,002,781		1,891,355

Subordinated debt, net		22,000		22,000
Short-term borrowings		145,000		185,000
Accrued interest payable and other liabilities		17,929		19,771
Total liabilities		2,187,710		2,118,126

Commitments and contingent liabilities (Note 9)

Shareholders' equity
Preferred stock - no par value; 5,000,000 shares authorized; no shares issued and outstanding at June 30, 2025 and December 31, 2024		–		–
Common stock - no par value; 25,000,000 shares authorized; 7,923,946 and 7,906,761 shares issued and outstanding at June 30, 2025 and December 31, 2024, respectively		107,608		106,997
Retained earnings		141,936		130,703
Accumulated other comprehensive loss, net of taxes		(45,125)		(51,338)
Total shareholders' equity		204,419		186,362
Total liabilities and shareholders' equity	$	2,392,129	$	2,304,488


The accompanying notes are an integral part of these consolidated financial statements (unaudited).

‎


AVIDBANK HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

	Three Months Ended June 30,				Six Months Ended June 30,
(In thousands, except per share data)	2025		2024		2025		2024
Interest income
Interest and fees on loans	$	32,967	$	33,255	$	64,852	$	65,083
Interest on investment securities - taxable		1,673		1,779		3,391		3,580
Interest on investment securities - tax exempt		30		22		61		44
Federal Home Loan Bank dividends		181		193		366		384
Other interest income		793		951		1,499		1,770
Total interest income		35,644		36,200		70,169		70,861
Interest expense
Interest on deposits		13,669		13,494		26,496		25,528
Interest on borrowings		1,685		4,180		4,031		7,923
Total interest expense		15,354		17,674		30,527		33,451
Net interest income		20,290		18,526		39,642		37,410
Provision for credit losses		925		2,998		925		3,317
Net interest income after provision for credit losses		19,365		15,528		38,717		34,093
Noninterest income
Service charges, fees and other income		840		658		1,602		1,275
Foreign exchange income		196		208		416		460
Bank-owned life insurance income		93		137		183		324
Warrant and success fee income		273		–		273		–
Other investment income		(23)		59		24		214
Other income		159		36		211		108
Total noninterest income		1,538		1,098		2,709		2,381
Noninterest expense
Salaries and employee benefits		8,978		7,980		18,075		16,774
Occupancy and equipment		759		1,039		1,755		2,067
Data processing		759		597		1,374		1,161
Regulatory assessments		420		568		964		1,014
Legal and professional fees		715		541		1,226		1,152
Other expense		978		1,033		2,057		2,016
Total noninterest expense		12,609		11,758		25,451		24,184
Income before provision for income taxes		8,294		4,868		15,975		12,290
Provision for income taxes		2,497		1,402		4,742		3,578
Net income	$	5,797	$	3,466	$	11,233	$	8,712

Net income per common share data
Basic earnings per common share	$	0.77	$	0.47	$	1.50	$	1.18
Diluted earnings per common share		0.75		0.46		1.46		1.15

Weighted average shares - basic		7,534,264		7,426,949		7,511,285		7,406,794
Weighted average shares - diluted		7,686,385		7,578,613		7,684,976		7,565,065

The accompanying notes are an integral part of these consolidated financial statements (unaudited).

‎


AVIDBANK HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)


		Three Months Ended June 30,			Six Months Ended June 30,
(In thousands)	2025		2024		2025		2024
Net income	$	5,797	$	3,466	$	11,233	$	8,712

Other comprehensive income/(loss), before tax
Unrealized gains/(losses) on securities:
Unrealized holdings gains/(losses)		2,180		227		9,191		(5,080)
Reclassification adjustment for losses included in net income		–		–		–		–
		2,180		227		9,191		(5,080)
Derivative instruments designated as cash flow hedges:
Unrealized holdings gains on derivatives		20		23		41		43
Other comprehensive income/(loss), before tax		2,200		250		9,232		(5,037)

Tax effect		(966)		(67)		(3,019)		1,474
Total other comprehensive income/(loss), after tax		1,234		183		6,213		(3,563)
Comprehensive income	$	7,031	$	3,649	$	17,446	$	5,149


The accompanying notes are an integral part of these consolidated financial statements (unaudited).


AVIDBANK HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (UNAUDITED)



						Accumulated
						Other		Total
	Common Stock			Retained		Comprehensive		Shareholders'
(In thousands)	Shares	Amount		Earnings		Income/(Loss)		Equity
Balance, March 31, 2025	7,912,184	$	106,839	$	136,139	$	(46,359)	$	196,619
Net income	-		-		5,797		-		5,797
Other comprehensive income	-		-		-		1,234		1,234
Restricted stock issued, net of forfeitures and shares withheld to cover taxes	11,762		(2)		-		-		(2)
Stock-based compensation	-		771		-		-		771
Balance, June 30, 2025	7,923,946	$	107,608	$	141,936	$	(45,125)	$	204,419

Balance, December 31, 2024	7,906,761	$	106,997	$	130,703	$	(51,338)	$	186,362
Net income	-		-		11,233		-		11,233
Other comprehensive loss	-		-		-		6,213		6,213
Restricted stock issued, net of forfeitures and shares withheld to cover taxes	17,185		(980)		-		-		(980)
Stock-based compensation	-		1,591		-		-		1,591
Balance, June 30, 2025	7,923,946	$	107,608	$	141,936	$	(45,125)	$	204,419

Balance, March 31, 2024	7,803,900	$	104,771	$	114,934	$	(52,621)	$	167,084
Net income	-		-		3,466		-		3,466
Other comprehensive income	-		-		-		183		183
Restricted stock issued, net of forfeitures and shares withheld to cover taxes	72,182		(15)		-		-		(15)
Stock-based compensation	-		731		-		-		731
Balance, June 30, 2024	7,876,082	$	105,487	$	118,400	$	(52,438)	$	171,449

Balance, December 31, 2023	7,770,439	$	104,499	$	109,688	$	(48,875)	$	165,312
Net income	-		-		8,712		-		8,712
Other comprehensive income	-		-		-		(3,563)		(3,563)
Restricted stock issued, net of forfeitures and shares withheld to cover taxes	105,643		(519)		-		-		(519)
Stock-based compensation	-		1,507		-		-		1,507
Balance, June 30, 2024	7,876,082	$	105,487	$	118,400	$	(52,438)	$	171,449

The accompanying notes are an integral part of these consolidated financial statements (unaudited).

‎


AVIDBANK HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

		Six Months Ended June 30,
(In thousands)	2025		2024
Operating activities
Net income	$	11,233	$	8,712
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for credit losses		925		3,317
Depreciation, amortization and accretion		760		830
(Gain) loss on disposal of premises and equipment		–		(16)
Amortization of debt issuance costs		–		51
(Increase) decrease in deferred loan origination fees, net		(245)		59
Earnings on bank-owned life insurance policies		(183)		(175)
Repayment of operating lease liabilities		1,175		1,330
Stock-based compensation expense		1,591		1,507
Net increase in accrued interest receivable and other assets		(2,710)		(1,406)
Net decrease in accrued interest payable and other liabilities		(1,876)		(4,204)
Net cash provided by operating activities		10,670		10,005

Investing activities
Purchase of available-for-sale investment securities		(1,944)		(3,247)
Proceeds from paydowns/maturities of available-for-sale investment securities		14,585		14,503
Net increase in loans		(46,477)		(66,019)
Proceeds from surrendered bank-owned life insurance policies		–		21,443
Purchase of premises and equipment		(58)		(37)
Proceeds from sale of premises and equipment		–		36
Net cash used in investing activities		(33,894)		(33,321)

Financing activities
Net increase in deposits		111,426		84,163
Restricted stock issued, net		(980)		(519)
Net proceeds/(repayment) from other borrowings		5,000		(50,000)
Net proceeds/(redemption) from Federal Reserve Bank borrowings		–		20,000
Net proceeds/(redemption) from Federal Home Loan Bank borrowings		(45,000)		–
Net cash provided by financing activities		70,446		53,644

Net change in cash and cash equivalents		47,222		30,328

Cash and cash equivalents at beginning of period		82,701		81,396
Cash and cash equivalents at end of period	$	129,923	$	111,724

Supplemental disclosure of cash flow information
Net cash paid during the period for:
Interest expense	$	31,222	$	36,667
Income taxes		4,601		3,297
Supplemental noncash disclosures
Recording of right-of-use assets in exchange for lease liabilities	$	439	$	–

The accompanying notes are an integral part of these consolidated financial statements (unaudited).

AVIDBANK HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 1 – BASIS OF PRESENTATION

The accompanying unaudited consolidated financial statements of Avidbank Holdings, Inc. (the “Company”) have been prepared in accordance with U.S. GAAP for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. In the opinion of management, all normal recurring adjustments considered necessary for a fair presentation have been included. All material intercompany balances and transactions have been eliminated. In the Statement of Cash Flows the Company has elected to present proceeds and redemptions from borrowings from the Federal Home Loan Bank and the Federal Reserve Bank on a net basis.

Operating results for the three and six months ended June 30, 2025, are not necessarily indicative of the results that may be expected for the year ending December 31, 2025, or any other period. These statements should be read in conjunction with the Consolidated Financial Statements and Notes thereto for the year ended December 31, 2024, as filed with the Securities and Exchange Commission (“SEC”) on the Company’s Form S-1 (File No. 333-288743).

Use of Estimates

The preparation of these consolidated financial statements requires management to make judgments in the application of certain accounting policies that involve significant estimates and assumptions. The Company has established policies and control procedures that are intended to ensure valuation methods are well-controlled and applied consistently from period to period.

Issued Accounting Standards

ASU No. 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures.” ASU 2023-09 requires public business entities to disclose in their rate reconciliation table additional categories of information about federal, state and foreign income taxes and to provide more details about the reconciling items in some categories if items meet a quantitative threshold. ASU 2023-09 also requires all entities to disclose income taxes paid, net of refunds, disaggregated by federal, state and foreign taxes for annual periods and to disaggregate the information by jurisdiction based on a quantitative threshold, among other things. ASU 2023-09 is effective for Public Business Entities for the annual period beginning January 1, 2025. The Company is considered an emerging growth company and plans to adopt this standard for the annual period beginning January 1, 2026. ASU 2023-09 is not expected to have a significant impact on the Company’s financial statements.

ASU No. 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures,” introduces requirements for reporting significant expenses by segment, presenting and describing other segment-related items, identifying the entity’s chief operating decision maker (including their role), and explaining how that individual uses reported profit or loss measures to evaluate segment performance. Additionally, it requires certain segment disclosures, previously only needed on an annual basis, to be presented in interim periods. Under ASU 2023-07, these changes become effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024. The Company has adopted this guidance, and the related updated disclosures can be found in Note 15 – Business Segment Information.

In November 2024, the FASB issued ASU No. 2024-03, “Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses.” ASU 2024-03 requires public companies to disclose, in the notes to the financial statements, specific information about certain costs and expenses at each interim and annual reporting period. This includes disclosing amounts related to employee compensation, depreciation, and intangible asset amortization. In addition, public companies will need to provide qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively. ASU 2024-03 is effective for public business entities for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Implementation of ASU 2024-03 may be applied prospectively or retrospectively. ASU 2024-03 is not expected to have a material impact on our consolidated financial statements.

In January 2025, the FASB issued ASU 2025-01, “Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date.” ASU 2025-01 amends the effective date of ASU 2024-03 to clarify that all public business entities are required to adopt the guidance in annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027. Early adoption of ASU 2024-03 is permitted. ASU 2025-01 is not expected to have a material impact on our consolidated financial statements.

‎

NOTE 2 – INVESTMENT SECURITIES

The Company did not hold securities classified as trading or held-to-maturity at June 30, 2025 or December 31, 2024. The amortized cost and estimated fair value of available-for-sale investment securities at June 30, 2025 and December 31, 2024 consisted of the following:


	June 30, 2025
(In thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Available-for-sale securities
U.S. agencies	$	526	$	–	$	(26)	$	500
Commercial mortgage-backed securities		5,075		4		(229)		4,850
Residential mortgage-backed securities		345,909		–		(63,025)		282,884
U.S. states and political subdivisions		4,706		31		(163)		4,574
Total available-for-sale securities	$	356,216	$	35	$	(63,443)	$	292,808

	December 31, 2024
(In thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Available-for-sale securities
U.S. agencies	$	578	$	–	$	(40)	$	538
Commercial mortgage-backed securities		3,161		–		(298)		2,863
Residential mortgage-backed securities		360,713		–		(72,252)		288,461
U.S. states and political subdivisions		4,703		57		(66)		4,694
Total available-for-sale securities	$	369,155	$	57	$	(72,656)	$	296,556

Net unrealized losses on available-for-sale investment securities totaling $45.2 million were recorded as accumulated other comprehensive income, net of tax of $18.2 million, within shareholders' equity at June 30, 2025. Net unrealized losses on available-for-sale investment securities totaling $51.3 million were recorded as accumulated other comprehensive income, net of tax of $21.3 million, within shareholders' equity at December 31, 2024.

There were no sales or calls of investment securities during the three and six months ended June 30, 2025 or June 30, 2024. Therefore, there were no realized gains or losses. There were no transfers between investment categories during the three and six months ended June 30, 2025 or June 30, 2024.

‎

Investment securities with unrealized losses at June 30, 2025 and December 31, 2024 are summarized and classified according to the duration of the loss period as follows: (in thousands)


	Less than 12 Months				12 Months or More				Total
June 30, 2025	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses

U.S. agencies	$	–	$	–	$	500	$	(26)	$	500	$	(26)
Commercial mortgage-backed securities		2,919		(38)		1,191		(191)		4,110		(229)
Residential mortgage-backed securities		2,479		(12)		280,405		(63,013)		282,884		(63,025)
U.S. states and political subdivisions		3,548		(163)		–		–		3,548		(163)
Total available-for-sale	$	8,946	$	(213)	$	282,096	$	(63,230)	$	291,042	$	(63,443)


	Less than 12 Months				12 Months or More				Total
December 31, 2024	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses

U.S. agencies	$	–	$	–	$	538	$	(40)	$	538	$	(40)
Commercial mortgage-backed securities		1,691		(54)		1,172		(244)		2,863		(298)
Residential mortgage-backed securities		2,460		(46)		286,001		(72,206)		288,461		(72,252)
U.S. states and political subdivisions		2,637		(66)		–		–		2,637		(66)
Total available-for-sale	$	6,788	$	(166)	$	287,711	$	(72,490)	$	294,499	$	(72,656)

At June 30, 2025, the Company held 26 securities available-for-sale which were in a loss position for greater than 12 months. Management believes the unrealized losses on the Company’s investment securities were caused by interest rate changes. The contractual cash flows of those investments are guaranteed or supported by an agency or sponsored entity of the U.S. Government. Accordingly, it is expected that the securities would not be settled at a price less than the amortized cost of the Company’s investment. As of June 30, 2025, the Company did not intend to sell and does not believe it will be required to sell securities in an unrealized loss position prior to the recovery of their amortized cost basis. No credit impairment was recorded for those securities in an unrealized loss position for the three and six months ended June 30, 2025 or June 30, 2024, and there was no allowance for credit losses on securities available-for-sale recorded as of June 30, 2025 or December 31, 2024.

The amortized cost and estimated fair value of available-for-sale investment securities at June 30, 2025 by contractual maturity are shown below. Expected maturities will differ from contractual maturities because the issuers of the securities may have the right to call or prepay obligations with or without call or prepayment penalties.

Avidbank Holdings, Inc. 10-Q