Avidbank Holdings, Inc. Debt Disclosure
8. SUBORDINATED DEBT AND OTHER BORROWING ARRANGEMENTS
On December 20, 2019, the Company issued $22.0 million in -year, fixed-to-floating rate subordinated notes to certain qualified institutional buyers and institutional accredited investors. The subordinated notes have a maturity date of December 30, 2029 and bear interest at the rate of 5.0% per annum, payable semiannually for the first five years of the term, and then quarterly at a variable rate based on the then current 3-month plus 359.5 basis points. The notes are redeemable after five years subject to certain conditions. The indebtedness evidenced by the subordinated notes, including principal and interest, is unsecured and subordinate and junior to general and secured creditors and depositors. On the statement of financial condition, the subordinated notes are carried net of debt issuance costs, and these were fully amortized as of December 31, 2024. The interest rate paid on the subordinated notes as of December 31, 2025 was 7.26%.
The Company had unsecured Federal Funds lines of credit with its correspondent banks totaling $206.0 million at December 31, 2025 and $175.0 million at December 31, 2024. Borrowings outstanding as of December 31, 2025 and 2024, totaled $60.0 million and $115.0 million, respectively. The interest rate paid on the borrowings outstanding was 3.75% as of December 31, 2025 and 4.40% - 4.65% as of December 31, 2024.
The Company has a short-term borrowing arrangement with the Federal Reserve Bank through the Discount Window. The Company currently has a detailed lien on certain loans to secure borrowings. The borrowing capacity under the agreement varies depending on the amount of loans pledged and totaled $853.9 million and $786.5 million as of December 31, 2025 and 2024, respectively. There were no borrowings outstanding under the agreement at December 31, 2025 or 2024.
As a member of the Federal Home Loan Bank of San Francisco, the Bank is eligible to use the FHLB’s facilities for short- and long-term borrowing. Borrowing capacity requires stock ownership in the FHLB and is based on pledged assets or a lien against certain loan categories. As of December 31, 2025 there were no borrowings outstanding from the FHLB. FHLB borrowings totaled $70.0 million with a floating rate of 4.78% as of December 31, 2024 with open maturity dates. The remaining borrowing capacity at December 31, 2025 and 2024, was $530.0 million and $391.2 million, respectively, under a detailed lien on loans.
About Debt Disclosures
Debt disclosures detail a company's borrowing structure — the types of instruments, interest rates, maturity schedule, and covenant restrictions that define its financial obligations and flexibility. This section is essential for assessing refinancing risk, interest rate exposure, and the margin of safety against financial distress.
Key signals: the maturity schedule reveals concentration risk — large maturities within 1-2 years during tight credit markets can force dilutive refinancing or asset sales. Compare the fair value of debt against carrying amount to gauge whether the market views the company's credit risk differently than the balance sheet suggests. Watch covenant compliance disclosures for tightening cushions, especially leverage and interest coverage ratios. Variable-rate debt exposure quantifies sensitivity to interest rate changes. Secured versus unsecured mix affects recovery rates and future borrowing capacity. Compare net debt-to-EBITDA against industry peers and covenant limits to assess financial health.