Avidia Bancorp, Inc.
For the period ended Mar 31, 2026. Filed May 14, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2026 · Filed May 14, 2026
AVBC$22.42-0.8%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-09-30; filed 2025-11-14.
0001193125-25-283184
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCautionary Note Regarding Forward-Looking StatementsCurrent report: 10-Q
Period ended 2026-03-31; filed 2026-05-14.
0001193125-26-224283
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCautionary Note Regarding Forward-Looking StatementsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 119 previous paragraphs and 113 current paragraphs.
67 unchanged; 18 reworded; 20 added; 31 removed; 3 previous and 8 current paragraphs rearranged.
Tables are not compared: 4 previous and 8 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (20)
Current report
SELECTED FINANCIAL DATA
Current report
The following summary data is based in part on the Consolidated Financial Statements and accompanying notes, and other schedules appearing elsewhere in this Form 10-Q. Historical data is also based in part on, and should be read in conjunction with, prior filings with the SEC.
Current report
Non-GAAP Financial Measures. This document contains certain non-GAAP financial measures in addition to results presented in accordance with U.S. GAAP. These non-GAAP measures are intended to provide the reader with additional supplemental perspectives on operating results, performance trends, and financial condition. Non-GAAP financial measures are not a substitute for GAAP measures; they should be read and used in conjunction with the Company’s GAAP financial information. Each non-GAAP measure used by the Company in this document as supplemental financial data should be considered in conjunction with the Company’s GAAP financial information. The Company adjusts certain equity related measures to exclude intangible assets due to the importance of these measures to the investment community. A reconciliation of non-GAAP financial measures to GAAP measures is provided below.
Current report
Summary. Total assets were $2.81 billion at March 31, 2026, decreasing during the first quarter of 2026 by $30 million, or 1%, primarily due to the use of lower yielding short term investments to reduce higher cost borrowings.
Current report
Total Cash and Cash Equivalents. Total cash and cash equivalents decreased $52 million, or 36%, to $93 million during the quarter due primarily to a $56 million decrease in short-term investments to $74 million. This reflected continued utilization of proceeds from the 2025 common stock offering to reduce FHLB borrowings and reinvest into securities and bank owned life insurance.
Current report
Total Securities. Total securities increased $27 million, or 9%, to $309 million during the quarter due primarily to a $27 million increase in securities available for sale to $296 million due to continued purchases of mortgage-backed securities and deployment of available cash.
Current report
Total Loans. Total loans decreased $14 million, or 1%, to $2.28 billion during the quarter, primarily due to a $9 million decrease in condominium association loans and seasonally lower construction loans, which decreased $10 million. Loan exposure related to non-medical office space at March 31, 2026 was $89 million or 4% of gross loans, including $71 million on non-owner-occupied properties.
Current report
Asset Quality. Nonaccruing loans decreased by $6.6 million to $13.6 million during the first quarter of 2026, measuring 0.60% of total loans at period-end due primarily to the successful workout of nonaccruing construction loans. Net loan charge-offs during the quarter were $116 thousand, or 0.02% of total loans.
Current report
The allowance for credit losses increased to $22.8 million at March 31, 2026, from $22.0 million at year-end 2025. The period-end ratio of the allowance to total loans measured 1.00% and the ratio to nonaccrual loans measured 167%.
Current report
Total Deposits. Deposits increased by $18 million, or 1%, to $2.15 billion at March 31, 2026, from $2.13 billion at year-end 2025. NOW account balances decreased by $37 million primarily due to fluctuations related to payment processing services and IOLTA accounts. All other deposit account categories increased, growing by 4% in aggregate due to the Company’s business activities during the quarter.
Current report
Borrowings. Federal Home Loan Bank advances decreased by $55 million, or 21%, to $205 million due primarily to the availability of cash on hand to reduce higher cost borrowings.
Current report
Total Shareholders’ Equity. Shareholders’ equity increased by $5 million, or 1%, to $384 million at period-end from $379 million at year-end 2025, primarily due to the benefit of first quarter net income of $6 million. Shareholders' equity to total assets was 13.7% as of March 31, 2026, and the non-GAAP measure of tangible equity to tangible assets was 13.3%.
Current report
Net Income/Loss. First quarter net income was $6.0 million in 2026 compared to a net loss of $11.6 million for the first quarter of 2025. The 2025 net loss was due to a $17.6 million credit loss expense primarily reflecting a charge-off related to one commercial loan. Excluding credit loss expense, pre-tax income increased year-over-year to $9.3 million from $1.1 million, primarily due to a $4.8 million increase in net interest income and a $2.8 million reduction in non-interest expense. The efficiency ratio improved year-over-year to 67.2% from 95.2%. In the most recent quarter, return on assets measured 0.86%, return on equity was 6.4%, and the non-GAAP measure of return on tangible common equity was 6.6%. Earnings per share in this period totaled $0.32.
Current report
Net Interest Income. First quarter net interest income increased year-over-year by $4.8 million, or 25%, to $24.0 million in 2026. Average interest-earning assets increased 5%, with the primary drivers being loans and short-term investments. The net interest margin increased 57 basis points year-over-year to 3.61% from 3.04%. This was primarily due to the decrease in the cost of interest-bearing liabilities to 1.93% from 2.30%, primarily reflecting reductions in higher cost certificates of deposit and borrowings. Funding levels and costs fell due to the $185 million, or 94%, increase in average equity following the initial public offering of stock on July 31, 2025. Stock offering proceeds funded both earning asset growth and reductions in higher cost funding sources. Results also benefited from ongoing business operations, which included an $87 million year-over-year increase in average lower cost transaction account deposits (consisting of NOW deposits and noninterest-bearing demand deposits). Additionally, loan production contributed to a 21 basis point year-over-year increase in the loan yield to 5.37% in the most recent quarter.
Current report
Non-Interest Income. First quarter non-interest income increased year-over-year by $559 thousand, or 15%, to $4.3 million in 2026 due to a $541 thousand securities loss recorded in 2025 related to the Company’s exit from equity investment securities. A $247 thousand increase in mortgage banking income in 2026 was offset by a $283 thousand decrease in payment processing income.
Current report
Non-Interest Expense. First quarter non-interest expense decreased year-over-year by $2.8 million, or 13%, to $19.0 million in 2026, with decreases in most expense categories. Salary and employee benefits expense decreased by $1.4 million due primarily to expenses recorded in 2025 related to the termination of the long-term incentive program and adjustments to short-term incentive expense. Data processing expense decreased $488 thousand as online platform development costs were incurred in 2025. Payment processing expense decreased $676 thousand primarily due to the impact of lower activity and the sale of the direct merchant portfolio. Professional fees increased $447 thousand primarily due to the engagement in 2026 of a third-party to help implement a process improvement program.
Current report
Income Tax Expense. The Company recorded $2.2 million for income tax expense in the first quarter of 2026, resulting in a 27% effective tax rate. Due to the pre-tax loss in the first quarter of 2025, the Company recorded a $4.9 million income tax benefit in that period, which measured 30% of the pre-tax loss.
Current report
The Company prioritizes deposits as a primary funding source and maintains a variety of available liquidity sources, including FHLB advances and Federal Reserve borrowing capacity. When profitable lending and investment opportunities exist, the Company may access its liquidity sources to grow the balance sheet. The amount and type of assets the Company has available to pledge affects the Company’s FHLB and Federal Reserve borrowing capacity. For example, a prime one-to-four family residential loan may provide 75 cents of borrowing capacity for every $1.00 pledged, whereas a commercial loan may increase borrowing capacity in a lower amount. The Company’s lending decisions, therefore, can also affect its liquidity position.
Current report
The table below shows current and unused liquidity capacity from various sources at the dates indicated:
Current report
The table above indicates that at December 31, 2025, we would have experienced a 5.4 % decrease in net interest income in the event of an instantaneous parallel 200 basis point increase in market interest rates and a 0.6% increase in net interest income in the event of an instantaneous parallel 200 basis point decrease in market interest rates.
Removed paragraphs (31)
Previous report
Total Assets. Total assets increased $130.5 million, or 4.9%, to $2.79 billion at September 30, 2025 from $2.66 billion at December 31, 2024. The increase was primarily the result of increases in cash and cash equivalents and net loans.
Previous report
Cash and Cash Equivalents. Cash and short-term investments increased $49.4 million, or 79.1%, to $111.9 million at September 30, 2025 from $62.4 million at December 31, 2024. The increase was primarily related to the funds received from the IPO subscription offering.
Previous report
Securities Available for Sale. Securities available for sale increased $3.4 million, or 1.3%, to $269.3 million at September 30, 2025 from $265.9 million at December 31, 2024. The increase was primarily due to purchases of $44.1 million and unrealized losses decreasing $9.6 million, offset by principal paydowns of $22.9 million, maturities and calls of $18.7 million, and sales of $8.9 million.
Previous report
Federal Home Loan Bank Stock. Federal Home Loan Bank stock decreased $3.0 million, or 20.4%, to $11.7 million at September 30, 2025 from $14.7 million at December 31, 2024. The amount of stock we are required to own is in proportion to our Federal Home Loan Bank borrowings and our total assets.
Previous report
Net Loans. Net loans increased $74.0 million, or 3.4%, to $2.25 billion at September 30, 2025 from $2.18 billion at December 31, 2024. Loan growth from December 31, 2024 to September 30, 2025 related to increases in commercial real estate loans of $42.2 million, or 8.7%, multi-family real estate loans of $14.7 million, or 17.6%, one to four family residential mortgage loans of $10.1 million, or 2.0%, home equity and second mortgages of $9.7 million, or 14.6%, and condo loans of $3.3 million, or 0.7%.
Previous report
This loan growth was partially offset by a decrease from December 31, 2024 to September 30, 2025 of $4.7 million, or 0.9%, in commercial and industrial loans.
Previous report
The growth in loans reflects our strategy to grow the balance sheet by continuing to diversify into higher-yielding loans to improve net margins and manage interest rate risk.
Previous report
Bank-owned Life Insurance. We invest in bank-owned life insurance to help offset the costs of our employee benefit plan obligations. Bank-owned life insurance also generally provides noninterest income that is non-taxable. Bank-owned life insurance increased $849 thousand, or 2.4%, to $36.4 million at September 30, 2025 from $35.5 million at December 31, 2024. The increase was primarily due to an increase in the cash surrender value of existing policies.
Previous report
Deposits. Deposits increased $12.7 million, or 0.6%, to $2.08 billion at September 30, 2025 from $2.06 billion at December 31, 2024. Core deposits (which we define as all deposits, other than certificates of deposit and brokered deposits) increased $69.7 million, or 4.2%, to $1.74 billion at September 30, 2025 from $1.67 billion at December 31, 2024. The increase was primarily related to growth in most core deposits categories during the period with a $30.2 million, or 7.9%, increase in regular and other savings accounts, a $27.2 million, or 10.8%, increase in money market accounts, a $24.5 million, or 3.6%, increase in interest-bearing checking accounts, offset by a $12.2 million, or 3.4%, decrease in non-interest bearing checking. Certificates of deposit (excluding brokered certificates of deposit) decreased $42.1 million, or 11.6%, to $321.5 million at September 30, 2025 from $363.6 million at December 31, 2024. Brokered deposits decreased $15.0 million to $12.0 million at September 30, 2025 from $27.0 million from December 31, 2024.
Previous report
Federal Home Loan Bank Advances. Advances decreased $65.0 million, or 20.0%, to $260.0 million at September 30, 2025 from $325.0 million at December 31, 2024 due to repayment of advances.
Previous report
Total Shareholders' Equity. Total shareholders' equity increased $178.2 million, or 91.9%, to $372.0 million at September 30, 2025 from $193.8 million at December 31, 2024. This increase was primarily attributable to the capital raised during the Company’s IPO, which was completed on July 31, 2025. The Company's IPO increased total shareholders' equity by $195.2 million, including $186.2 million in net offering proceeds and $9.0 million from the donation of 900 thousand shares of common stock to the Avidia Bank Charitable Foundation. Also contributing to the increase was a decrease in accumulated other comprehensive loss of $7.1 million and ESOP expense of $637 thousand, offset by $16.1 million from the purchase of common shares by the ESOP and the net loss of $8.6 million for the nine months ended September 30, 2025. The decrease in accumulated other comprehensive loss was primarily due to the impact of the lower market interest rate environment on our unrealized loss on securities available for sale and interest rate swaps.
Previous report
Net Loss/Income. The net loss for the three months ended September 30, 2025 was $907 thousand, or ($0.05) per share, compared to net income of $2.1 million for the three months ended September 30, 2024, a decrease of $3.0 million. The decrease was primarily due to a $10.5 million increase in non-interest expense, partially offset by a $5.1 million increase in net interest income, a $615 thousand decrease in credit loss expense, and a $1.7 million decrease in income tax expense. Non-interest expense included a $10.0 million, one-time donation, of 900 thousand shares of common stock at a total market value of $9.0 million and a $1.0 million cash contribution to the Avidia Bank Charitable Foundation.
Previous report
The net loss for the nine months ended September 30, 2025 was $8.6 million, or ($0.47) per share, compared to net income of $8.0 million for the nine months ended September 30, 2024, a decrease of $16.6 million. The decrease was primarily due to a $15.0 million increase in non-interest expense, a $17.8 million increase in the credit loss expense, a $358 thousand decrease in non-interest income, partially offset by a $9.1 million increase in net interest income and a $7.4 million decrease in income tax expense. Non-interest expense included a $10.0 million, one-time donation, of 900 thousand shares of common stock at a total market value of $9.0 million and a $1.0 million cash contribution to the Avidia Bank Charitable Foundation.
Previous report
Interest and Dividend Income. Interest and dividend income increased $2.4 million, or 7.5%, to $33.9 million for the three months ended September 30, 2025, from $31.5 million for the three months ended September 30, 2024, primarily due to a
Previous report
$1.3 million increase in interest on loans and a $1.2 million increase in other interest income. The increase in interest on loans resulted primarily from an increase of $61.9 million in the average balance of loans to $2.26 billion for the three months ended September 30, 2025 from $2.20 billion for the three months ended September 30, 2024. The weighted average yield on loans increased to 5.21% for the three months ended September 30, 2025 compared to 5.14% for the three months ended September 30, 2024.
Previous report
Interest and dividend income increased $4.5 million, or 4.9%, to $96.8 million for the nine months ended September 30, 2025, from $92.3 million for the nine months ended September 30, 2024, primarily due to a $3.6 million increase in interest on loans. The increase in interest on loans resulted primarily from an increase of $51.2 million in the average balance of loans to $2.24 billion for the nine months ended September 30, 2025 from $2.19 billion for the nine months ended September 30, 2024. The weighted average yield on loans increased to 5.19% for the nine months ended September 30, 2025 compared to 5.08% for the nine months ended September 30, 2024.
Previous report
Average interest-earning assets increased $156.1 million, to $2.71 billion for the three months ended September 30, 2025, from $2.55 billion for the three months ended September 30, 2024. The yield on interest-earning assets increased to 4.97% for the three months ended September 30, 2025, from 4.92% for the three months ended September 30, 2024.
Previous report
Average interest-earning assets increased $89.8 million, to $2.62 billion for the nine months ended September 30, 2025, from $2.53 billion for the nine months ended September 30, 2024. The yield on interest-earning assets increased to 4.94% for the nine months ended September 30, 2025, from 4.87% for the nine months ended September 30, 2024.
Previous report
Interest Expense. Total interest expense decreased $2.8 million, or 21.1%, to $10.5 million for the three months ended September 30, 2025, from $13.2 million for the three months ended September 30, 2024. Interest expense on deposit accounts decreased $1.5 million, or 16.8%, to $7.3 million for the three months ended September 30, 2025, from $8.7 million for the three months ended September 30, 2024, due to a decrease in the weighted average rate on interest-bearing deposits to 1.67% for the three months ended September 30, 2025, from 2.14% for the three months ended September 30, 2024. Interest expense on Federal Home Loan Bank advances decreased $1.4 million, or 32.6%, to $2.8 million for the three months ended September 30, 2025, from $4.2 million for the three months ended September 30, 2024, due to a decrease in the average advances of $108.4 million between periods.
Previous report
Total interest expense decreased $4.6 million, or 12.0%, to $33.5 million for the nine months ended September 30, 2025, from $38.1 million for the nine months ended September 30, 2024. Interest expense on deposit accounts decreased $2.4 million, or 9.6%, to $22.2 million for the nine months ended September 30, 2025, from $24.6 million for the nine months ended September 30, 2024, due to a decrease in the weighted average rate on interest-bearing deposits to 1.73% for the nine months ended September 30, 2025, from 2.05% for the nine months ended September 30, 2024. Interest expense on Federal Home Loan Bank advances decreased $2.3 million, or 18.1%, to $10.3 million for the nine months ended September 30, 2025, from $12.5 million for the nine months ended September 30, 2024, due to a decrease in the average advances of $60.2 million between periods.
Previous report
Net Interest Income. Net interest income increased $5.1 million, or 28.2%, to $23.4 million for the three months ended September 30, 2025, from $18.3 million for the three months ended September 30, 2024, primarily due to an increase in net interest margin to 3.43% for the three months ended September 30, 2025, from 2.84% for the three months ended September 30, 2024 and a $156.1 million increase in the average balance of interest-earning assets during the three months ended September 30, 2025. Net interest rate spread increased to 2.91%, for the three months ended September 30, 2025, compared to 2.31% for the three months ended September 30, 2024. The increase in net interest margin and spread was driven by an increase in the weighted average yield on interest earning assets combined with a decrease in the weighted average rate paid on interest-bearing liabilities to 2.06% for the three months ended September 30, 2025, from 2.61% for the three months ended September 30, 2024.
Previous report
Net interest income increased $9.1 million, or 16.8%, to $63.3 million for the nine months ended September 30, 2025, from $54.2 million for the nine months ended September 30, 2024, primarily due to an increase in net interest margin to 3.23% for the nine months ended September 30, 2025, from 2.86% for the nine months ended September 30, 2024 and $89.8 million increase in the average balance of interest-earning assets during the nine months ended September 30, 2025. Net interest rate spread increased to 2.77%, for the nine months ended September 30, 2025, compared to 2.33% for the nine months ended September 30, 2024. The increase in net interest margin and spread was driven by an increase in the weighted average yield on interest earning assets combined with a decrease in the weighted average rate paid on interest-bearing liabilities to 2.17% for the nine months ended September 30, 2025, from 2.54% for the nine months ended September 30, 2024.
Previous report
A credit loss expense of $20.2 million was recorded for the nine months ended September 30, 2025, compared to a provision expense of $2.5 million for the nine months ended September 30, 2024. The $17.8 million increase is primarily due to the $16.7 million charge-off in the first quarter related to a land loan, as previously disclosed.
Previous report
Non-interest Income. Non-interest income increased $10 thousand, or 0.2%, to $4.5 million for the three months ended September 30, 2025, from $4.5 million for the three months ended September 30, 2024. Non-interest income was primarily impacted by a $1.0 million net loss on securities available for sale which was recorded in the three months ended September 30, 2024. There were no such losses recorded in the three months ended September 30, 2025. This was offset by an $896 thousand net gain on equity securities which was recorded for the three months ended September 30, 2024. There were no such gains recorded in the three months ended September 30, 2025.
Previous report
Non-interest income decreased $358 thousand, or 2.6%, to $13.5 million for the nine months ended September 30, 2025, from $13.9 million for the nine months ended September 30, 2024. The decrease was primarily due to a $2.5 million net gain on equity securities which was recorded for the nine months ended September 30, 2024. There were no such gains recorded in the nine months ended September 30, 2025. This decrease was partially offset by a $1.7 million decrease in net loss on securities available for sale, from losses of $2.4 million for the nine months ended September 30, 2024, compared to a $619 thousand loss for the nine months ended September 30, 2025, and a $540 thousand increase in payment processing income.
Previous report
Non-interest Expense. Non-interest expense increased $10.5 million, or 58.5%, to $28.4 million for the three months ended September 30, 2025, from $17.9 million for the three months ended September 30, 2024. The increase was primarily due to a $9.6 million increase in other general and administrative expense, which included the $10.0 million contribution to the Avidia Bank Charitable Foundation. The increase was also due to a $1.6 million increase in salaries and employee benefits, which included $637 thousand for the full nine-month expense for the employee stock ownership plan that was adopted in connection with the mutual-to-stock conversion, a $473 thousand increase in short-term incentives and retirement expenses, and a $398 thousand increase in salaries. This was offset by a decrease of $615 thousand in data processing expense primarily due to $460 thousand of one-time credits associated with a billing adjustment.
Previous report
Non-interest expense increased $15.0 million, or 27.3%, to $70.0 million for the nine months ended September 30, 2025, from $55.0 million for the nine months ended September 30, 2024. The increase was primarily due to a $9.1 million increase in other general and administrative expense, which included the $10.0 million contribution to the Avidia Bank Charitable Foundation. The increase was also due to a $4.7 million increase in salaries and employee benefits, which included $637 thousand for the full nine-month expense for the employee stock ownership plan that was adopted in connection with the mutual-to-stock conversion. The increase in salaries and employee benefits also included a $747 thousand increase in the long-term incentive expense, which was primarily the result of the termination of the plan and immediate vesting of participants, a $1.7 million increase in short-term incentives and retirement expenses, and a $1.3 million increase in salaries. Data processing costs increased $1.3 million, or 18.3%, primarily due to a new on-line banking platform, increased account volume and licensing costs, one-time expenses of $379 thousand related to contract terminations, offset by $460 thousand one-time credits associated with a billing adjustment.
Previous report
Income Tax Benefit/Expense. Income tax benefit was $1.0 million for the three months ended September 30, 2025, compared to an income tax expense of $667 thousand for the three months ended September 30, 2024.
Previous report
Income tax benefit was $4.8 million for the nine months ended September 30, 2025, compared to an income tax expense of $2.6 million for the nine months ended September 30, 2024.
Previous report
Our cash flows are comprised of three primary classifications: cash flows from operating activities, cash flows from investing activities, and cash flows from financing activities. See the accompanying Consolidated Statements of Cash Flows for further information.
Previous report
We are committed to maintaining a strong liquidity position. We monitor our liquidity position daily. We anticipate that we will have sufficient funds to meet our current funding commitments. Based on our deposit retention experience and current pricing strategy, we anticipate that a significant portion of maturing time deposits will be retained. The net proceeds from the stock offering significantly increased our liquidity.
Reworded paragraphs (18)
Previous wording
Management’s discussion and analysis is intended to enhance your understanding of our financial condition and results of operations. The financial information in this section is derived from the accompanying consolidated financial statements and related notes. You should read the financial information in this section in conjunction with the business and financial information contained in this report and in the Company’s definitive prospectus dated May 13, 2025, as filed with the Securities and Exchange Commission on May 21, 2025.
Current wording
Management’s discussion and analysis is intended to enhance your understanding of our financial condition and results of operations. The financial information in this section is derived from the accompanying consolidated financial statements and related notes. You should read the financial information in this section in conjunction with the business and financial information contained in this report and in the Company’s annual report on Form 10-K for the fiscal year 2025, as filed with the Securities and Exchange Commission on March 27, 2026.
Previous wording
This report contains forward-looking statements, which can be identified by the use of words such as “estimate,” “project,” “believe,” “intend,” “anticipate,” “assume,” “plan,” “seek,” “expect,” “will,” “may,” “should,” “indicate,” “would,” “believe,” “contemplate,” “continue,” “target” and words of similar meaning. These forward-looking statements include, but are not limited to:
Current wording
This report contains forward-looking statements, which can be identified by the use of words such as “estimate,” “project,” “believe,” “intend,” “anticipate,” “assume,” “plan,” “seek,” “expect,” “will,” “may,” “should,” “indicate,” “would,” “contemplate,” “continue,” “target” and words of similar meaning. These forward-looking statements include, but are not limited to:
Previous wording
Securities Valuation and Allowance for Credit Loss. Debt securities that management has the positive intent and ability to hold to maturity are classified as “held to maturity” and recorded at amortized cost. Debt securities not classified as held to maturity are classified as “available for sale” and recorded at fair value, with unrealized gains and losses excluded from earnings and reported in other comprehensive income (loss), net of tax. For available for sale debt securities in an unrealized loss position, we first assesses whether we intend to sell, or it is more likely than not that we will be required to sell the security before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the security’s amortized cost basis is written down to fair value through income. For available for sale debt securities that do not meet the aforementioned criteria, we evaluate whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, management considers the extent to which fair value is less than amortized cost, any changes to the rating of the security by a rating agency, and adverse conditions specifically related to the security, among other factors. If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the security are compared to the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an ACL is recorded for the credit loss, limited by the amount that the fair value is less than the amortized cost basis. Any impairment that has not been recorded through an ACL is recognized in other comprehensive income.
Current wording
Securities Valuation and Allowance for Credit Loss. Debt securities that management has the positive intent and ability to hold to maturity are classified as “held to maturity” and recorded at amortized cost. Debt securities not classified as held to maturity are classified as “available for sale” and recorded at fair value, with unrealized gains and losses excluded from earnings and reported in other comprehensive income (loss), net of tax. For available for sale debt securities in an unrealized loss position, we first assess whether we intend to sell, or it is more likely than not that we will be required to sell the security before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the security’s amortized cost basis is written down to fair value through income. For available for sale debt securities that do not meet the aforementioned criteria, we evaluate whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, management considers the extent to which fair value is less than amortized cost, any changes to the rating of the security by a rating agency, and adverse conditions specifically related to the security, among other factors. If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the security are compared to the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an ACL is recorded for the credit loss, limited by the amount that the fair value is less than the amortized cost basis. Any impairment that has not been recorded through an ACL is recognized in other comprehensive income.
Previous wording
Comparison of Operating Results for the Three and Nine Months Ended September 30, 2025 and 2024
Current wording
Comparison of Operating Results for the Three Months Ended March 31, 2026 and March 31, 2025
Previous wording
Provision Expense for Credit Losses. Based on management’s analysis of the adequacy of allowance for credit losses, a credit loss expense of $1.5 million was recorded for the three months ended September 30, 2025, compared to a credit loss expense of $2.2 million for the three months ended September 30, 2024.
Current wording
Credit Loss Expense. Based on management’s analysis of the adequacy of the allowance for credit losses, a first quarter credit loss expense of $1.1 million was recorded in 2026 and $17.6 million was recorded in 2025. The expense in 2025 was due to a construction and land loan charge-off, as previously disclosed.
Previous wording
Liquidity describes our ability to meet the financial obligations that arise in the ordinary course of business. Liquidity is primarily needed to meet the borrowing and deposit withdrawal requirements of our customers and to fund current and planned expenditures. Our primary sources of funds are deposits, principal and interest payments on loans and securities, and proceeds from maturities of securities. In addition, we have available credit facilities with the Federal Home Loan Bank of Boston, correspondent banks, and the Federal Reserve Bank of Boston. At September 30, 2025, we had the ability to borrow $685.7 million from the Federal Home Loan Bank of Boston, of which $260.0 million was outstanding. At September 30, 2025, we also had a $500 thousand line of credit with the Federal Home Loan Bank of Boston with no borrowings outstanding. At September 30, 2025, we had $18.0 million of available lines of credit with correspondent banks with no borrowings outstanding under any of them. At September 30, 2025, we also had aggregate available borrowing capacity of $330.1 million through the discount window and the borrower-in-custody program at the Federal Reserve Bank of Boston with no borrowings under either facility.
Current wording
Liquidity. Liquidity describes our ability to meet the financial obligations that arise in the ordinary course of business. Liquidity is primarily needed to meet the borrowing and deposit withdrawal requirements of our customers and to fund current and planned expenditures. Our primary sources of funds are deposits, principal and interest payments on loans and securities, and proceeds from maturities of securities. The Company also actively utilizes borrowings in managing its liquidity and may access sources of liquidity, including brokered deposits and capital in the financial markets, depending on the Company’s financial condition and market conditions.
Previous wording
While maturities and scheduled amortization of loans and securities are predictable sources of funds, deposit flows and loan prepayments are greatly influenced by interest rates, economic conditions, and competition. Our most liquid assets are cash and short-term investments. The levels of these assets depend on our operating, financing, lending, and investing activities during any given period.
Current wording
While maturities and scheduled amortization of loans and securities are predictable sources of funds, deposit flows and loan prepayments are greatly influenced by market interest rates, economic conditions, and competition. Our most liquid assets are cash and short-term investments. The levels of these assets depend on our operating, financing, lending, and investing activities during any given period, and are reported in the statements of cash flows in our consolidated financial statements.
Previous wording
Avidia Bancorp, Inc. is a separate legal entity from Avidia Bank and it must provide for its own liquidity to pay its operating expenses and other financial obligations. Its primary source of income is dividends received from Avidia Bank. The amount of dividends that Avidia Bank may declare and pay is governed by applicable bank regulations. At September 30, 2025, Avidia Bancorp, Inc. (on an unconsolidated basis) had liquid assets of $76.6 million.
Current wording
Avidia Bancorp, Inc. is a separate legal entity from Avidia Bank and must provide for its own liquidity to pay its operating expenses and other financial obligations. Its primary source of income is dividends received from Avidia Bank. The amount of dividends that Avidia Bank may declare and pay to the Company is subject to regulation. At March 31, 2026, Avidia Bancorp, Inc. had liquid assets of $74.6 million on a stand-alone, unconsolidated basis.
Previous wording
At September 30, 2025, the Bank exceeded all of its regulatory capital requirements and was categorized as well-capitalized at that date. Management is not aware of any conditions or events since the most recent notification of well-capitalized status that would change this categorization.
Current wording
Capital Resources. At March 31, 2026, Avidia Bank exceeded all of its regulatory capital requirements and was categorized as well-capitalized at that date. Management is not aware of any conditions or events since the most recent notification of well-capitalized status that would change this categorization. For additional information, including tabular financial information regarding Avidia Bank’s capital levels relative to the requirements for well-capitalized status, see Note 11 of the notes to consolidated financial statements.
Previous wording
Commitments. As a financial services provider, we routinely are a party to various financial instruments with off-balance-sheet risks, such as commitments to extend credit and unused lines of credit. While these contractual obligations represent our future cash requirements, a significant portion of commitments to extend credit may expire without being drawn upon. We anticipate that we will have sufficient funds available to meet our current lending commitments. At September 30, 2025, off-balance sheet commitments totaled $413.1 million.
Current wording
Commitments. As a financial services provider, we routinely are a party to various financial instruments with off-balance-sheet risks, such as commitments to extend credit and unused lines of credit. While these contractual obligations represent our future cash requirements, a significant portion of commitments to extend credit may expire without being drawn upon. We anticipate that we will have sufficient funds available to meet our current lending commitments. For additional information, see Note 10 to notes to consolidated financial statements.
Previous wording
General. Our most significant form of market risk is interest rate risk because, as a financial institution, the majority of our assets and liabilities are sensitive to changes in market interest rates. Therefore, a principal part of our operations is to manage interest rate risk and limit the exposure of our financial condition and results of operations to changes in market interest rates. Our Asset Liability Committee is responsible for evaluating the interest rate risk inherent in our assets and liabilities, for determining the level of risk that is appropriate given our business strategy, operating environment, capital, liquidity and performance objectives, and for managing this risk according to the policy and guidelines approved by our board of directors. The Asset Liability Committee meets at least quarterly, is comprised of executive officers and certain senior management, and reports to the full board of directors on at least a quarterly basis. We currently utilize a third-party modeling program, prepared on a quarterly basis, to evaluate our sensitivity to changing interest rates, given our business strategy, operating environment, capital, liquidity and performance objectives, and for managing this risk consistent with the guidelines approved by the board of directors.
Current wording
General. Our most significant form of market risk is interest rate risk because, as a financial institution, the majority of our assets and liabilities are sensitive to changes in market interest rates. Therefore, a principal part of our operations is to manage interest rate risk and limit the exposure of our financial condition and results of operations to changes in market interest rates. Our Asset Liability Committee is responsible for evaluating the interest rate risk inherent in our assets and liabilities, for determining the level of risk that is appropriate given our business strategy, operating environment, capital, liquidity and performance objectives, and for managing this risk according to the policy and guidelines approved by our board of directors. The Asset Liability Committee meets at least quarterly, is comprised of executive officers and certain senior management, and reports to the board risk committee on at least a quarterly basis. We currently utilize a third-party modeling program, prepared on a quarterly basis, to evaluate our sensitivity to changing interest rates, given our business strategy, operating environment, capital, liquidity and performance objectives, and for managing this risk consistent with the guidelines approved by the board of directors.
Previous wording
using our investment securities portfolio and interest rate swaps as part of our balance sheet asset and liability and interest rate risk management strategy to reduce the impact of market interest rate movements on net interest income and economic value of equity;
Current wording
using our investment securities portfolio and interest rate derivatives as part of our balance sheet asset and liability and interest rate risk management strategy to reduce the impact of market interest rate movements on net interest income and economic value of equity;
Previous wording
Interest Rate Swaps. We employ various financial risk methodologies that limit, or “hedge,” the adverse effects of increasing or decreasing market interest rates on our investment portfolio, loan portfolio and short-term liabilities, such as Federal Home Loan Bank advances. At September 30, 2025, we had interest rate swaps related to Federal Home Loan Bank advances with a notional amount of $100.0 million and interest rate swaps on agency securities with a notional amount of $35.0 million. We also engage in hedging strategies with respect to arrangements where our commercial banking customers swap floating interest rate obligations for fixed interest rate obligations, or vice versa. At September 30, 2025, we had interest rate swaps related to customer loans of a notional amount of $105.0 million. Our hedging activity varies based on the level and volatility of interest rates and other changing market conditions.
Current wording
Interest Rate Derivatives. We employ various financial risk methodologies that limit, or “hedge,” the adverse effects of increasing or decreasing market interest rates on our investment or loan portfolio and short-term liabilities, such as Federal Home Loan Bank advances. At March 31, 2026, we had interest rate swaps related to Federal Home Loan Bank advances with a notional amount of $75 million and interest rate swaps related to investments of a notional amount of $35 million. We also engage in hedging strategies with respect to arrangements where our commercial banking customers swap floating interest rate obligations for fixed interest rate obligations, or vice versa. At March 31, 2026, we had interest rate swaps related to customer loans of a notional amount of $105 million. Our hedging activity varies based on the level and volatility of interest rates and other changing market conditions. For additional information regarding these activities, see Note 6 in notes to consolidated financial statements.
Previous wording
The following table sets forth, as of September 30, 2025, the calculation of the estimated changes in our net interest income that would result from the designated immediate changes in the United States Treasury yield curve. The changes indicated in the following table are within policy guidelines adopted by the board of directors.
Current wording
The following table sets forth, as of March 31, 2026, the calculation of the estimated changes in our net interest income that would result from the designated immediate changes in the United States Treasury yield curve. The changes indicated in the following table are within policy guidelines adopted by Avidia Bank’s board of directors.
Previous wording
The table above indicates that at September 30, 2025, we would have experienced a 5.6% decrease in net interest income in the event of an instantaneous parallel 200 basis point increase in market interest rates and a 0.0% decrease in net interest income in the event of an instantaneous 200 basis point decrease in market interest rates.
Current wording
The table above indicates that at March 31, 2026, we would have experienced a 5.6% decrease in net interest income in the event of an instantaneous parallel 200 basis point increase in market interest rates and a 1.4% increase in net interest income in the event of an instantaneous parallel 200 basis point decrease in market interest rates.
Previous wording
Economic Value of Equity. We also compute amounts by which the net present value of our assets and liabilities (economic value of equity or “EVE”) would change in the event of a range of assumed changes in market interest rates. This model uses a discounted cash flow analysis and an option-based pricing approach to measure the interest rate sensitivity of net portfolio value. The model estimates the economic value of each type of asset, liability and off-balance sheet contract under the assumptions that the United States Treasury yield curve increases instantaneously by 100, 200, 300 and 400 basis point increments or decreases instantaneously by 100 or 200 basis point increments, with changes in interest rates representing immediate and permanent, parallel shifts in the yield curve.
Current wording
Economic Value of Equity. We also compute amounts by which the net present value of our assets and liabilities (economic value of equity or “EVE”) would change in the event of a range of assumed changes in market interest rates. This model uses a discounted cash flow analysis and an option-based pricing approach to measure the interest rate sensitivity of net portfolio value. The model estimates the economic value of each type of asset, liability and off-balance sheet contract under the assumptions that the United States Treasury yield curve increases instantaneously by 100, 200, 300 and 400 basis point increments or decreases instantaneously by 100. 200 or 300 basis point increments, with changes in interest rates representing immediate and permanent, parallel shifts in the yield curve.
Previous wording
The following table sets forth, as of September 30, 2025, the calculation of the estimated changes in our EVE that would result from the designated immediate changes in the United States Treasury yield curve. The changes indicated in the following table are within policy guidelines adopted by our board of directors.
Current wording
The following table sets forth, as of March 31, 2026, the calculation of the estimated changes in our EVE that would result from the designated immediate changes in the United States Treasury yield curve. The changes indicated in the following table are within policy guidelines adopted by Avidia Bank’s board of directors.
Previous wording
The table above indicates that at September 30, 2025, we would have experienced a 10.3% decrease in EVE in the event of an instantaneous parallel 200 basis point increase in market interest rates and a 1.3% increase in EVE in the event of an instantaneous 200 basis point decrease in market interest rates.
Current wording
The table above indicates that at March 31, 2026, we would have experienced a 6.2% decrease in EVE in the event of an instantaneous parallel 200 basis point increase in market interest rates and a 1.2% decrease in EVE in the event of an instantaneous 200 basis point decrease in market interest rates.
Rearranged current paragraphs (8)
Current report — wording carried from elsewhere
The following table sets forth, as of December 31, 2025, the calculation of the estimated changes in our net interest income that would result from the designated immediate changes in the United States Treasury yield curve. The changes indicated in the following table are within policy guidelines adopted by Avidia Bank’s board of directors
Current report — wording carried from elsewhere
Assumes an immediate uniform change in interest rates at all maturities. One hundred basis points equals 1.00%.
Current report — wording carried from elsewhere
The following table sets forth, as of December 31, 2025, the calculation of the estimated changes in our EVE that would result from the designated immediate changes in the United States Treasury yield curve. The changes indicated in the following table are within policy guidelines adopted by Avidia Bank’s board of directors.
Current report — wording carried from elsewhere
Assumes an immediate uniform change in interest rates at all maturities. One hundred basis points equals 1.00%.
Current report — wording carried from elsewhere
EVE is the discounted present value of expected cash flows from assets, liabilities and off-balance sheet contracts.
Current report — wording carried from elsewhere
Present value of assets represents the discounted present value of incoming cash flows on interest-earning assets.
Current report — wording carried from elsewhere
EVE Ratio represents EVE divided by the present value of assets.
Current report — wording carried from elsewhere
The table above indicates that at December 31, 2025, we would have experienced a 7.4% decrease in EVE in the event of an instantaneous parallel 200 basis point increase in market interest rates and a 1.1% decrease in EVE in the event of an instantaneous 200 basis point decrease in market interest rates.
Rearranged previous paragraphs (3)
Previous report — wording carried elsewhere
Net interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average rate of interest-bearing liabilities.
Previous report — wording carried elsewhere
Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities.
Previous report — wording carried elsewhere
Net interest margin represents net interest income divided by average total interest-earning assets.