Avidbank Holdings, Inc. (NASDAQ:AVBH) reported net income of $10.2 million, or $0.94 per diluted share, for the third quarter of 2026. The result compared with net income of $7.6 million, or $0.71 per diluted share, in the second quarter of 2026 and a net loss of $37.7 million, or $4.12 loss per diluted share, in the third quarter of 2025.
#Loans and deposits increased
Loans, net of deferred fees, reached $2.28 billion at September 30, 2026. That was an increase of $58.4 million, or 10% annualized, from June 30, 2026, and $323.9 million, or 17%, from September 30, 2025.
Quarterly loan growth included increases of $20.7 million in commercial and industrial loans, $17.8 million in multi-family loans, $13.6 million in owner-occupied real estate loans and $8.8 million in non-owner-occupied real estate loans. Construction and land loans declined by $2.6 million.
Deposits stood at $2.61 billion at September 30, 2026, up $290.1 million, or 50% annualized, from June 30, 2026, and $562.9 million, or 27%, from September 30, 2025. Average deposits for the quarter were $2.49 billion.
The company said approximately $270.0 million of the deposit increase came from a temporary deposit that it expects to leave in the fourth quarter. The deposit increased interest income but also placed pressure on the net interest margin.
FDIC regulations provide a limited exception from brokered deposit classification for certain reciprocal deposits, subject to a general cap determined using a tiered calculation based on the Bank's total liabilities.
#Net interest income and margin
Net interest income was $28.7 million in the third quarter of 2026. This represented an increase of $2.0 million, or 30% annualized, from the second quarter of 2026 and an increase of $6.0 million, or 27%, from the third quarter of 2025.
Avidbank Holdings attributed the quarterly increase mainly to temporarily higher deposit balances, higher average loan balances and higher debt securities balances. Compared with the third quarter of 2025, the increase reflected higher average loan balances, higher securities yields, lower deposit costs and lower average short-term borrowings.
Net interest margin was 4.07%, down 19 basis points from the second quarter of 2026 and up 17 basis points from the third quarter of 2025. The company said a $205 million increase in average interest-earning cash balances, primarily linked to temporarily higher deposits, affected the margin by approximately 17 basis points.
The provision for credit losses was $1.2 million, compared with $2.8 million in the second quarter of 2026 and $1.4 million in the third quarter of 2025. For the nine months ended September 30, 2026, the provision totalled $5.4 million.
#Credit quality and balance sheet
Non-performing loans represented 0.70% of total loans at September 30, 2026, compared with 0.65% at June 30, 2026 and 0.14% at September 30, 2025. The company attributed the quarterly increase to a $1.5 million land loan being placed on nonaccrual.
Annualized net charge-offs to average loans were 0.00% for the third quarter of 2026 and 0.28% year-to-date 2026. The allowance for credit losses on loans was $22.8 million at September 30, 2026.
Total assets were $2.97 billion at September 30, 2026, compared with $2.66 billion at June 30, 2026 and $2.36 billion at September 30, 2025. Cash and cash equivalents were $354.1 million, compared with $159.9 million and $177.3 million at those respective dates. The company attributed the increase in cash primarily to the temporary rise in deposits.
Total shareholders' equity was $299.5 million at September 30, 2026, an increase of $3.3 million from June 30, 2026 and $26.4 million from September 30, 2025. Book value per share was $27.24, up $0.27 from June 30, 2026 and $2.24 from September 30, 2025.
#Subordinated notes refinancing
During the quarter, Avidbank Holdings issued $30.0 million of new 7.00% fixed-to-floating rate subordinated notes due 2036. The company used part of the proceeds to retire all $22.0 million of its fixed-to-floating rate subordinated notes due 2029.
The new notes carry a fixed interest rate of 7.00% for the first five years after issuance. They are not redeemable until September 1, 2031, or any interest payment date thereafter, except in certain limited circumstances.
#Expenses and non-GAAP measures
Non-interest income was $1.7 million in the third quarter of 2026, compared with $3.1 million in the second quarter of 2026 and a loss of $60.9 million in the third quarter of 2025. Non-interest expense was $15.1 million, compared with $16.5 million and $13.5 million in the respective comparison periods.
The company had 171 full-time equivalent employees at September 30, 2026, compared with 162 at June 30, 2026 and 151 at September 30, 2025.
Avidbank Holdings also reported adjusted return on average equity, adjusted return on average assets and an adjusted efficiency ratio. The company said its non-GAAP measures are supplemental to, and not a substitute for or superior to, GAAP measures. It also noted that other banking companies may calculate similarly named non-GAAP measures differently.
#Management comments and results call
Mark Mordell, chairman and chief executive officer, said the company generated profitability while expanding loans and deposits. He also said a significant portion of the deposit increase came from a temporary large client deposit that the company expects to leave in the fourth quarter, while bankers produced core deposit growth across the franchise.
Mordell said the company remains focused on consistent growth and long-term value for shareholders, citing its capital position, balance sheet and credit management. These statements reflect management's views and expectations and are subject to the risks and uncertainties described by the company.
Avidbank Holdings is scheduled to hold a conference call on October 27, 2026, at 11:00 a.m. Eastern Time / 8:00 a.m. Pacific Time to discuss the third-quarter results. An audio replay is expected to be available by the evening of October 27, 2026, with the recording available for one year from the day of posting.
#Key Takeaways
- Third-quarter 2026 net income was $10.2 million, or $0.94 per diluted share.
- Loans reached $2.28 billion and deposits reached $2.61 billion at September 30, 2026.
- Approximately $270.0 million of the deposit increase came from a temporary deposit that the company expects to leave in the fourth quarter.
- The company issued $30.0 million of subordinated notes and retired $22.0 million of notes due 2029.
- Non-performing loans to total loans were 0.70% at September 30, 2026.
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