Avidbank Sees Strong Growth and Profitability in Q2 2026
Avidbank reported a solid quarter for the second quarter of 2026, with growth in loans and deposits, as well as strong core profitability. According to the company's Chairman and CEO, Mark Mordell, this was another noisy quarter due to two discrete items that affected reported earnings: a charge to settle a litigation matter and a gain on bank-owned life insurance.
Excluding these items, adjusted net income was $8.2 million, or $0.76 a share, and the company's adjusted return on assets was 1.28%. This reflects the strength of the franchise and its continued improvement in core earnings power, as noted by Mordell. He added that settling the litigation matter was the right decision, putting the issue behind them and avoiding prolonged litigation costs.
The company also reported improvements in asset quality, with non-performing loans declining to 0.65% of total loans. However, criticized loans did tick up due to a non-owner occupied real estate relationship. Despite this, Avidbank's underwriting discipline has not changed, and the company is actively managing these credits.
On the growth front, loans grew $51 million in the quarter or about 9% annualized, and are up $312 million or 16% over the past year. Deposits grew $123 million or 22% annualized, with continued strength in core commercial relationships. The company's pipelines remain strong, driven by C&I and CRE loan growth.
Avidbank also made significant investments in talent this quarter, hiring five senior revenue-generating bankers and support functions across various business lines. This adds some expense in the near term but is an investment in the future and the power of the bank. Additionally, the company announced the launch of its new SBA lending division.
"We're getting close to bottoming out" on construction payoffs, said Mordell, which has been a consistent trend over the past 24 months. The company is targeting low double-digit growth in loans and deposits for the balance of the year, with a strong positioning driven by talent investments and a growing pipeline.
The report highlights Avidbank's continued focus on building its franchise, investing in talent, and driving growth across various business lines. With a solid quarter under its belt, the company is well-positioned to tackle the rest of 2026."
