0001193125-26-129221
SEC filingAvidia Bancorp reported a net loss of $3.3 million for FY 2025, a significant decline from net income of $11.5 million in FY 2024. The loss was driven by a substantial $19.2 million charge-off on a land loan, resulting in a total credit loss expense of $21.7 million, and a one-time $10.0 million charitable contribution expense to establish the Avidia Bank Charitable Foundation. These negatives outweighed a strong 18.1% increase in net interest income to $86.5 million, fueled by loan growth and a higher net interest margin of 3.29%. The company completed its conversion to a stock holding company in July 2025, raising $185.8 million in net proceeds from its initial public offering, which significantly bolstered shareholders' equity to $379.0 million and reduced borrowings.
Avidia Bancorp's FY 2025 results were significantly impacted by two major items: a $19.2 million charge-off on a land loan within the construction portfolio and a $10.0 million charitable contribution expense to establish the Avidia Bank Charitable Foundation. These events resulted in a net loss of $3.3 million, a stark reversal from the $11.5 million net income reported in FY 2024. Excluding these items, underlying performance showed strength, with net interest income increasing by $13.3 million (18.1%) to $86.5 million, driven by a 4.6% growth in the loan portfolio to $2.30 billion and an improved net interest margin of 3.29%, up 40 basis points. The company successfully completed its conversion and initial public offering in July 2025, raising $185.8 million in net proceeds, which transformed its capital structure.
Total interest and dividend income increased by 5.5% to $130.6 million, primarily due to a $6.0 million increase in interest on loans. The average balance of loans grew by 2.8% to $2.25 billion, and the weighted average yield on loans improved to 5.23% from 5.10%. Non-interest income remained flat at $17.0 million, as an $800,000 improvement in net securities gains/losses was offset by a $1.2 million decrease in mortgage banking income. Payment processing income, a key non-interest revenue stream, increased by $360,000 (4.8%) to $7.8 million.
The net interest margin expanded significantly to 3.29% from 2.89% in the prior year, reflecting both asset yield improvement and a reduction in funding costs. The cost of interest-bearing liabilities decreased to 2.12% from 2.52%, driven by a shift in deposit mix toward lower-cost NOW accounts and a reduction in higher-cost certificates of deposit and Federal Home Loan Bank advances. The efficiency ratio deteriorated to 84.78% from 80.97%, primarily due to the one-time charitable contribution. Excluding this item, operating expenses increased by $4.7 million, largely due to higher salaries and employee benefits and data processing costs associated with the conversion and growth initiatives.
Net cash provided by operating activities was $28.4 million, while investing activities used $111.6 million primarily for loan originations ($122.0 million net). Financing activities provided $166.2 million, dominated by the $185.8 million net proceeds from the stock offering. Total assets increased 6.8% to $2.84 billion. Asset quality metrics weakened, with nonaccrual loans increasing to $20.2 million (0.88% of total loans) from $4.0 million (0.18%), and the allowance for credit losses to total loans ratio decreasing slightly to 0.96% from 0.99%. Shareholders' equity nearly doubled to $379.0 million due to the IPO, improving the equity-to-assets ratio to 13.36% from 7.30%.
The company's strategic priorities include leveraging the increased capital from the IPO to support prudent loan growth, particularly in commercial real estate and commercial & industrial loans. Management expects competition for deposits and loans to remain intense. Key risk factors include potential deterioration in asset quality, particularly in the construction and land portfolio, changes in interest rates affecting net interest margin, and the challenges of integrating the new capital structure. The company declared its first quarterly cash dividend of $0.05 per share in January 2026, signaling confidence in its capital position post-conversion.