Avidbank Holdings Reports $37.7 Million Net Loss in Q3 2025, Despite Increased Net Interest Income

Avidbank Holdings, Inc. reported a net loss of $37.7 million, or $(4.12) per diluted share, for the third quarter of 2025, a significant decline from a net income of $5.8 million, or $0.77 per diluted share, in the same period of 2024. For the nine months ended September 30, 2025, the company recorded a net loss of $26.5 million, compared to a net income of $14.6 million for the same period in 2024. The decline in profitability was primarily attributed to a $62.4 million loss on the sale of available-for-sale securities as part of a strategic repositioning of the securities portfolio. Despite the loss, net interest income increased to $22.7 million for the third quarter, up 22% from $18.6 million in the prior year, driven by a decrease in borrowing expenses and an increase in average interest-earning assets.

Total assets for Avidbank Holdings increased to $2.36 billion as of September 30, 2025, compared to $2.30 billion at the end of 2024. The growth in assets was primarily due to an increase in cash and cash equivalents, which rose to $177.3 million from $82.7 million, and a rise in net loans, which increased to $1.94 billion from $1.87 billion. The company’s loan portfolio saw a notable increase in commercial and industrial loans, which accounted for 44% of total loans, while commercial real estate loans represented 43%. The allowance for credit losses on loans was $21.0 million, or 1.07% of total loans, reflecting a slight increase from the previous year.

In terms of strategic developments, Avidbank completed its initial public offering (IPO) in August 2025, raising approximately $61.3 million in net proceeds. The funds are intended to support organic growth strategies, enhance regulatory capital, and optimize the balance sheet. The company sold $274.7 million in available-for-sale securities during the third quarter, which was part of its strategy to reposition its securities portfolio. The average yield on newly purchased securities was 4.54%, with a duration of 2.8 years.

Operationally, Avidbank's total deposits increased to $2.05 billion as of September 30, 2025, up from $1.89 billion at the end of 2024. The increase was driven by a rise in interest-bearing checking accounts and money market deposits. The company reported a loan-to-deposit ratio of 95.6%, indicating a stable funding base. The efficiency ratio improved to 55.72% in the third quarter of 2025, compared to 59.29% in the same period of 2024, excluding the impact of the loss on securities.

Looking ahead, Avidbank Holdings expressed optimism about its growth potential, particularly in light of the capital raised from the IPO and the strategic repositioning of its securities portfolio. However, the company acknowledged the challenges posed by market conditions, interest rate fluctuations, and the competitive landscape in the banking sector. The management remains focused on maintaining credit quality and managing risks associated with its loan portfolio, particularly in the commercial real estate and venture lending sectors.