Avidia Bancorp, Inc.
For the period ended Jun 30, 2026. Filed Aug 13, 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.
Jun 30, 2026 · Filed Aug 13, 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 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 StatementsCurrent report: 10-Q
Period ended 2026-06-30; filed 2026-08-13.
0001193125-26-349298
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 113 previous paragraphs and 122 current paragraphs.
90 unchanged; 14 reworded; 14 added; 9 removed; 0 previous and 4 current paragraphs rearranged.
Tables are not compared: 8 previous and 9 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 (14)
Current report
Short-term Investments. Short-term investments decreased $78 million year-to-date to $51 million at period-end, continuing the reinvestment of proceeds from the July 2025 initial public stock offering.
Current report
Total Loans. Total loans decreased $38 million, or 2%, to $2.26 billion since year end 2025 due primarily to a $35 million decrease in commercial loans and an $11 million decrease in construction & land loans. These decreases were partially offset by an increase of $5 million in home equity loans and another $5 million increase in commercial real estate loans.. Loans categorized as commercial real estate totaled $540 million at period-end and measured 24% of total loans, compared to 23% at year-end 2025.
Current report
Asset Quality. Nonaccruing loans decreased by $3.3 million to $16.9 million during the first half of 2026 due primarily to the successful workout of $6.5 million in nonaccruing construction loans, partially offset by a $3.8 million increase in nonaccruing commercial & industrial loans. Nonaccruing loans measured 0.75% of total loans at period-end, compared to 0.88% at year-end 2025. The workouts resulted in the Company recording net recoveries of loan losses totaling $304 thousand during the first half of the year. The allowance for credit losses increased $1.9 million to $23.9 million, increasing to 1.06% of total loans at period-end from 0.96% at year-end 2025. The ratio of the allowance to nonaccruing loans measured 141% and 109% at these dates, respectively. Total criticized loans (rated special mention or lower) decreased to $79 million at midyear 2026 from $104 million at the start of the year.
Current report
Total Deposits. Deposits increased in the first half of 2026 by $25 million, or 1%, to $2.15 billion at period-end primarily due to a $29 million increase in money market accounts. Balances of lower cost transaction accounts (demand and NOW) decreased by $7 million, or 1%, from December 31, 2025 to June 30, 2026. Lower cost transaction accounts (demand and NOW) were 52% of total deposits at June 30, 2026.
Current report
Total Stockholders’ Equity. Stockholders’ equity increased by $11 million, or 3%, to $390 million in the first half of 2026 primarily due to net income of $13 million offset by the $2 million dividends that were paid. Stockholders' equity to total assets was 14.0% as of midyear 2026 and the non-GAAP measure of tangible equity to tangible assets was 13.6%. At that date, the regulatory ratio of common equity tier 1 capital as a percentage of risk-weighted assets measured 17.8%. As discussed in the subsequent event disclosure in Note 2: Basis of Presentation, the Company increased its quarterly dividend to $0.06 from $0.05 and also authorized a stock buyback plan in the third quarter.
Current report
Net Income/Loss. Second quarter net income was $7.2 million in 2026, an increase of $3.3 million, or 85%, compared to
Current report
$3.9 million in the second quarter of 2025. Earnings growth was primarily due to a $3.3 million increase in net interest income. As the benefit of the $186 million net cash proceeds from the Company’s initial public offering of stock were infused into the balance sheet on July 31, 2025, these proceeds were primarily used to reduce higher cost borrowings.
Current report
Net Interest Income. Second quarter net interest income increased year-over-year by $3.3 million, or 16%, to $24.0 million. The $198 million increase in average equity, primarily from the stock offering proceeds, were used to reduce higher cost average Federal Home Loan Bank advances by $157 million and fund a $45 million increase in average earning assets. As a result, borrowings expense decreased by $1.7 million. Income also benefited from a 2% increase in average earning assets, higher loan yields, and a decrease in the cost of deposits. The yield on loans increased 12 basis points for the second quarter to 5.32% from the second quarter of 2025. The cost of deposits decreased 4 basis points to 1.32%, including the benefit of a $600 thousand reduction in time deposit interest costs and the benefit of growth in lower cost average NOW and savings accounts.
Current report
Year to date net interest income increased year-over-year by $8.1 million, or 20%, to $47.9 million. Average earning assets increased by 4%. The net interest margin increased to 3.62% from 3.12%.
Current report
Non-Interest Income. Second quarter non-interest income increased year-over-year by $656 thousand, or 13%, to $5.9 million in 2026 due to increases in all named categories. Growth was concentrated in a $454 thousand increase in customer service fees and a $513 thousand increase in payments processing income. Income has benefited from both volume growth and from price adjustments and included $230 thousand in one-time fees from a payments processing contract termination. The category of other non-interest income decreased $651 thousand. This decrease was primarily due to the $250 thousand gain on the sale of the Direct Merchant Processing Book in 2025, as well as decreases in debit card income, commercial loan fees, and swap fees.
Current report
Year to date non-interest income increased year-over-year by $1.2 million, or 14%, to $10.2 million. Customer service fees increased $471 thousand, or 26%, to $2.3 million. Payments processing income increased $230 thousand, or 5%, to $4.5 million. Mortgage banking income increased $372 thousand, or 209%, to $550 thousand. A $611 thousand decrease in the category of other non-interest income was offset by an improvement of $619 thousand in securities losses recorded in 2025, which did not repeat in 2026.
Current report
Non-Interest Expense. Second quarter non-interest expense decreased year-over-year by $262 thousand, or 1%, to $19.5 million. Increases in salaries and employee benefits and professional fees expense were offset by decreases in occupancy and equipment, payments processing, and deposit insurance expense. Compensation costs increased based on the Company’s growth strategy and professional fees reflected the engagement of a third-party in 2026 for a process improvement initiative.
Current report
For the first half of the year, non-interest expense decreased year-over-year by $3.1 million, or 8%, to $38.5 million. Salaries and employee benefits expense decreased $312 thousand, or 1.5%. Compensation costs in 2025 included costs recorded in conjunction with the conversion and IPO, including costs of $756 thousand for the termination of the long-term incentive plan and a $1.3 million increase in short-term incentives and retirement expenses.
Current report
Income Tax Expense. The Company recorded 2026 income tax expense of $2.3 million in the second quarter and $4.5 million in the first half of the year. The effective tax rate was 25% for the first half of 2026. Income taxes were a benefit in 2025 due to the loss recorded in the first quarter of that year.
Removed paragraphs (9)
Previous 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.
Previous 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.
Previous 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.
Previous 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%.
Previous 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.
Previous 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%.
Previous 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.
Previous 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.
Previous 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.
Reworded paragraphs (14)
Previous wording
Allowance for Credit Losses. The allowance for credit losses (“ACL”) is a valuation account that is deducted from the loans’ amortized cost basis to present the net amount expected to be collected on the loans. Loans are charged off against the allowance when management believes the uncollectibility of a loan balance is confirmed. Expected recoveries do not exceed the aggregate of amounts previously charged-off and expected to be charged-off. Management evaluates the appropriateness of the ACL on loans quarterly. This evaluation is inherently subjective as it requires material estimates that may be susceptible to significant change from period to period.
Current wording
Allowance for Credit Losses. The allowance for credit losses (“ACL”) is a valuation account that is deducted from the loans’ amortized cost basis to present the net amount expected to be collected on the loans. Loans are charged off against the allowance when management confirms that the balance is unlikely to be collected. Expected recoveries do not exceed the aggregate of amounts previously charged-off and expected to be charged-off. Management evaluates the appropriateness of the ACL on loans quarterly. This evaluation is inherently subjective as it requires material estimates that may be susceptible to significant change from period to period.
Previous wording
Changes in the ACL are recorded as credit loss expense (or reversal). Losses are charged against the allowance when management believes the uncollectibility of an available for sale debt security is confirmed or when either of the criteria regarding intent or requirement to sell is met.
Current wording
Changes in the ACL are recorded as credit loss expense (or reversal). Losses are charged against the allowance when management confirms that an available for sale debt security is uncollectible or when either criterion related to intent or requirement to sell is met.
Previous wording
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 wording
Summary. Total assets were $2.78 billion at June 30, 2026, decreasing $57 million since year-end 2025 due primarily to the use of lower yielding short-term investments to reduce higher cost borrowings. Additionally, funds from deposit growth and loan run-off also contributed to increases in investment securities and bank-owned life insurance.
Previous wording
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 wording
Total Securities. Total securities increased $45 million to $328 million due to continued purchases of mortgage-backed securities from the deployment of available cash.
Previous wording
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 wording
Borrowings. Federal Home Loan Bank advances decreased by $100 million to $160 million year-to-date due primarily to the use of cash on hand to reduce higher cost borrowings.
Previous wording
Average Balances and Yields. The following table sets forth average balance sheets, average yields and costs, and certain other information for the periods indicated. Yields on tax-exempt securities have not been computed on a tax-equivalent basis, as the effects are immaterial. Average balances are calculated using daily average balances. Non-accrual loans are included in average balances only. Average yields include the effect of deferred fees, discounts, and premiums that are amortized or accreted to interest income or interest expense. Deferred loan fees are immaterial. Loan balances include loans held for sale.
Current wording
Average Balances and Yields. The following table sets forth average balance sheets, average yields and costs, and certain other information for the periods indicated. Yields on tax-exempt securities have not been computed on a tax-equivalent basis, as the effects are immaterial. Average balances are calculated using daily average balances. Nonaccrual loans are included in average balances only. Average yields include the effect of deferred fees, discounts, and premiums that are amortized or accreted to interest income or interest expense. Deferred loan fees are immaterial. Loan balances include loans held for sale.
Previous wording
Comparison of Operating Results for the Three Months Ended March 31, 2026 and March 31, 2025
Current wording
Comparison of Operating Results for the Three Months and Six Months Ended June 30, 2026 and 2025
Previous wording
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 wording
Net income for the first half of the year was $13.2 million in 2026 compared to a net loss of $7.7 million in 2025. The net loss in 2025 was due to an $18.8 million credit loss expense resulting from a charge-off related primarily to one commercial loan in the first quarter of 2025. Earnings per share for the first half of 2026 measured $0.71. For this period, return on assets measured 0.95%, return on equity was 6.90%, and the non-GAAP measure of return on tangible common equity was 7.12%.
Previous 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.
Current wording
Credit Loss Expense. Based on management’s analysis of the adequacy of the allowance for credit losses, a second quarter credit loss expense of $900 thousand was recorded in 2026 and $1.1 million was recorded in 2025. For the first six months of the year, the expense was $2.0 million and $18.7 million for these respective periods. The expense in 2025 was due to a land loan charge-off, as previously disclosed.
Previous wording
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 wording
Six month occupancy and equipment and data processing expense together decreased in total by $1.2 million. These costs in 2025 included a new on-line banking platform and licensing costs, and $379 thousand in contract termination expenses. Payments processing expense decreased by $1.2 million, primarily due to the impact of the sale of the direct merchant portfolio. Professional fees increased $875 thousand primarily due to the engagement in 2026 of a third-party to help implement a process improvement program. Deposit insurance expense decreased $767 thousand due to lower assessment rates.
Previous 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.
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 June 30, 2026, Avidia Bancorp, Inc. had liquid assets of $69.8 million on a stand-alone, unconsolidated basis.
Previous 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.
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 June 30, 2026, we had interest rate swaps related to Federal Home Loan Bank advances and investments with a notional amount of $60 million. At June 30, 2026, we had an interest rate cap related to Federal Home Loan Bank advances with a notional amount of $25 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 June 30, 2026, we had interest rate swaps related to customer loans of a notional amount of $104 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 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.
Current wording
The table above indicates that at June 30, 2026, we would have experienced a 6.0% decrease in net interest income in the event of an instantaneous parallel 200 basis point increase in market interest rates and a 1.8% increase in net interest income in the event of an instantaneous parallel 200 basis point decrease in market interest rates.
Previous 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.
Current wording
The table above indicates that at June 30, 2026, we would have experienced a 5.0% decrease in EVE in the event of an instantaneous parallel 200 basis point increase in market interest rates and a 2.1% decrease in EVE in the event of an instantaneous 200 basis point decrease in market interest rates.
Rearranged current paragraphs (4)
Current report — wording carried from 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.
Current report — wording carried from elsewhere
Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities.
Current report — wording carried from elsewhere
Net interest margin represents net interest income divided by average total interest-earning assets.
Current report — wording carried from elsewhere
The Company’s earnings per share improved to $0.39 in the most recent quarter as the second quarter efficiency ratio also improved year-over-year to 65.3% from 76.4%. In the most recent quarter, return on assets measured 1.04%, return on equity was 7.4%, and the non-GAAP measure of return on tangible common equity was 7.8%.