Avidbank Holdings, Inc. Q4 FY2025 earnings call

• Mark mentioned a strong quarter with loan and deposit growth, noting loans up $190M QoQ and $283M YoY, deposits up $92M QoQ and $241M YoY. NPAs increased but were centered around 2 construction loans and 1 sponsored finance loan, with the bank feeling well collateralized in those. - Pat discussed net income of $6.9M or $0.65 per diluted share for Q4, pre-provision net revenue $12.9M (up from $10.7M Q3), NIM expanded to 4.13% (up from 3.90% Q3), provision for credit losses $2.8M (up from $1.4M Q3), noninterest expense $13.9M (up from Q3), adjusted efficiency ratio 51.72% (up from 55.72% Q3), and tax rate increase in Q4 due to California tax law change.

Loans were up $190 million for the quarter and $283 million for the year, a 15% annualized growth rate. Deposits were up $92 million for the quarter and $241 million for the year, a 13% growth rate for the year. Loan growth was led by the sponsor finance and corporate banking team, with all verticals except construction contributing. Deposits were led by corporate banking and venture lending, with all divisions contributing to core deposit growth. In terms of revenue contribution, loan growth and deposit growth collectively drove the financial performance for the quarter.

• Targeting 10%-15% loan and deposit growth in 2026. - Expecting loan growth in 2026 to be between 10% and 15%. - Anticipates the tax rate to move back to around 28.5% in 2026.

• NPAs related to 2 construction loans and 1 sponsored finance loan, with one construction loan paid off and the other a $16M multiunit mixed-use loan in Palo Alto with delays. - Credit migration being a concern, though criticized and classifieds are holding steady at $37M and $38M respectively.

Q: Matthew Clark asked about deposit beta, sub debt, and deposit growth.

A: Patrick Oakes said deposit beta was 80% this quarter, with some deposits indexed and expecting to manage deposit costs with Fed rate cuts. Mark Mordell mentioned sub debt will be addressed in 2026. Patrick Oakes said deposit growth was across the board in Q4 with venture, finance, and corporate banking contributing.

Q: Andrew Terrell asked about margin, nonaccrual migration, near-term margin expectation, and loan growth pipeline.

A: Patrick Oakes said the 3 nonaccrual loans caused a 12 basis point interest reversal headwind, expecting margin around 4.25% with some headwinds. Mark Mordell mentioned good momentum and pipelines throughout the bank targeting double-digit loan and deposit growth.

Q: Ross Haberman asked about loan growth in 2026 and loan quality.

A: Mark Mordell expected loan growth in 2026 between 10%-15%, and said there are no other concerning trends in credit besides the mentioned loans which are well collateralized but a process.

Q: Timothy Coffey asked about loan-to-deposit ratio, noninterest expense run rate, and market opportunities.

A: Mark Mordell said loan-to-deposit ratio not expected to come down substantially. Patrick Oakes said noninterest expense run rate will be higher than $13.5M, with first quarter being higher. Mark Mordell said opportunities exist due to consistency and high-touch service, but not a significant change from prior plans