Avidbank Holdings, Inc.

Good morning. Thank you for joining us today for Avid Bank's fourth quarter 2025 earnings call. Before we begin, let me remind you that today's call is being recorded and is available in the investor relations section of our website at avidbank.com, along with our earnings release and presentation material. Today's call contains forward-looking statements which are subject to certain risks, uncertainties, and other factors that could cause actual results to differ materially from those discussed. These statements are intended to be covered by safe harbor provisions of the federal securities laws. For a list of factors that may cause actual results to differ materially from expectations, please refer to our earnings release under the heading forward-looking statements, as well as the disclosures contained within our SEC filings. We will also reference non-GAAP financial measures alongside our discussion of GAAP results. We encourage you to review the GAAP to non-GAAP reconciliations provided in our earnings release. With that, I'd like to turn the call over to our chairman and CEO, Mark Mordell.

Thank you, Gina. Thank you, Jordan. And thank you all for joining us for our second earnings call from being a public company. And I apologize for my voice. I'm just getting over a little bit of a flu from the beginning of this week. You know, we had a great quarter, I think, a real strong quarter of growth, which is really what we've been striving for really since the crisis in 23. And we're leaning into being that growth bank again. And we've been demonstrating that for the last couple of years at this point. You know, loans were up $190 million for the quarter and $283 million for the year, which is a 15% annualized growth rate. Deposits were up $92 million for the quarter and $241 million for the year. Again, a 13% growth rate for the year. When you look at the loans, they were led significantly by our sponsor finance and corporate banking team for the quarter, but really every vertical with the exception of construction contributed to that growth in terms of loan growth for the quarter. Deposits were similar. It was led by corporate banking and venture lending, but all divisions contributed to those growth in core deposits. which is really setting us up for a strong 2026 for sure, given those balances met our goals and are setting us up for a better earning engine for 2026. Talking about the elephant in the room, MPAs did go up. That's clear. But that centered around, as the earnings release mentioned, around two construction loans and one sponsor finance loan. The good news is that we said that we're well collateralized in those two construction loans, and one is already taking care of itself, or we've taken care of it. It's already been paid off. And that was about a $3.7 million construction loan. Because we were well collateralized, it didn't have to go to MPA, and they took care of that. The other loan is a $16 million construction loan, multi-unit mixed use in Palo Alto. And that's been a hangover from COVID, a lot of delays. We feel we're well collateralized there as well. We have houses and guarantees, and we just have to work through this. It's going to be on our books for anywhere from four to six months, probably, unless we can find a softer landing. So we feel we're well collateralized. So credit migration has not changed all that much when you consider that criticized and classifieds are pretty much holding steady at 37 and 38 million respectively. So we don't see any trends in credit. We don't take credit for granted here, as you all know very well. We're always anxious about credit, but I think the... Where we sit with these loans, we feel that we'll have to work through them, but we'll get out of them, and it shouldn't result in any losses as we can see at this point. I'll turn it over to Pat to talk about some of the income items and some of the metrics.

Thanks, Mark. Good morning, everyone. So we reported net income of $6.9 million, or $0.65 per diluted share for the fourth quarter, and adjusted net income for the full year of $24.9 million, or $2.80. Pre-provision net revenue for the fourth quarter was 12.9 million compared to 10.7 million for the third quarter. The NIM expanded to 413 in the fourth quarter compared to 390 in the third quarter. And net income increased to 25 million from 22.7 million as we benefited from the strong growth in loans and core deposits, the full impact from the IPO and repositioning of the investment portfolio, a 32 basis point decrease in the cost of interest-bearing deposits and the $44 million increase in average non-interest-bearing deposits. These items help offset the impact of the $726,000 interest reversal on the three new non-performing loans. We purchased an additional $62 million in investment securities during the fourth quarter at an average yield of $448, increasing the total available for sale balance to $218 million at the end of the year. with a yield of 461 compared to 255 in the third quarter. The provision of credit losses was 2.8 million in the fourth quarter compared to 1.4 million in the third quarter. The increase in the provision expense was primarily driven by the 190 million in loan growth along with a $1.2 million specific reserve on the downgraded commercial loan. Star jobs totaled 30 basis points in the fourth quarter and seven basis points for all of 2025. Noninterest expense rose to $13.9 billion, an increase of $372,000 from the third quarter. The increase was primarily due to higher credit-related legal fees, an increase in our FDI assessment due to the impact of the net income loss in the third quarter, and an increase in consulting and professional fees. These increases were partially offset by lower salary and benefits expense, driven by an increase in capitalized loan origination costs from the strong loan growth in the quarter and that was offset by a higher incentive accrual. Our adjusted efficiency ratio improved to 51.72% from 55.72% in the third quarter. The tax rate in the fourth quarter increased to 31.1% compared to 28.9% in the third quarter. The increase was primarily due to a decrease in the California tax rate as we finalized the impact from the change in the California tax law earlier this year. Since we reported a loss for 2025, the decrease in the California tax rate caused an increase in our effective rate for the fourth quarter. In 2026, I expect the tax rate to move back to around 28.5%. Mark, turn it back over to you.