UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

OR

Commission File No. 001-42775

Avidia Bancorp, Inc.

(Exact Name of Registrant as Specified in Its Charter)

(800) 508-2265

(Registrant’s Telephone Number, Including Area Code)

N/A

(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)

Securities registered pursuant to Section 12(b) of the Act:

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

Yes ☐ No ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files). Yes ☒ NO ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b‑2 of the Exchange Act:

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to § 240.10D-1(b). ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). YES ☐ NO ☒

The aggregate market value of the voting and non-voting common equity held by non-affiliates of the Registrant, based on the closing price of the shares of common stock at the end of the last business day of the most recently completed second fiscal quarter on June 30, 2025, was $-0-.

There were 20,076,250 shares of the registrant’s common stock, par value $0.01 per share, outstanding as of March 25, 2026.

PART 1

ITEM 1. BUSINESS

FORWARD-LOOKING STATEMENTS

This report contains forward-looking statements, which can be identified by the use of words such as “estimate,” “project,” “believe,” “intend,” “anticipate,” “assume,” “plan,” “seek,” “expect,” “will,” “may,” “should,” “indicate,” “would,” “contemplate,” “continue,” “target” and words of similar meaning. These forward-looking statements include, but are not limited to:

These forward-looking statements are based on our current beliefs and expectations and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond our control. In addition, these forward-looking statements are subject to assumptions with respect to future business strategies and decisions that are subject to change.

The following factors, among others, could cause actual results to differ materially from the anticipated results or other expectations expressed in the forward-looking statements:

Because of these and a wide variety of other uncertainties, our actual future results may be materially different from the results indicated by these forward-looking statements. Except as required by applicable law or regulation, the Company assumes no obligation and disclaims any obligation to update any forward-looking statements.

In this Annual Report the terms "we," "our," and "us" refer to Avidia Bancorp, Inc. and Avidia Bank, unless the context indicates another meaning. In addition, we sometimes refer to Avidia Bancorp, Inc. as "Avidia Bancorp" or the "Company" and to Avidia Bank as the "Bank."

BUSINESS OF AVIDIA BANCORP, INC.

Avidia Bancorp, Inc. was incorporated in February 2025 and became the holding company for Avidia Bank upon the conversion of Assabet Valley Bancorp, the former mutual holding company and sole stockholder of Avidia Bank, from the mutual form of organization to the stock form of organization (the “Conversion”). In connection with the Conversion, which was completed on July 31, 2025, the Company sold 19,176,250 shares of common stock at a price of $10.00 per share and contributed 900,000 shares of common stock and $1.0 million in cash to the Avidia Bank Charitable Foundation, Inc.

The Company is a registered bank holding company subject to comprehensive regulation and examination by the Board of Governors of the Federal Reserve System (the “Federal Reserve Board”). The Company conducts its operations primarily through its wholly owned subsidiary, Avidia Bank. At December 31, 2025, the Company had total assets of $2.84 billion, loans of $2.30 billion, deposits of $2.13 billion, and stockholders’ equity of $379 million.

The Company’s principal office is located at 42 Main Street, Hudson, Massachusetts 01749, and the telephone number at that address is (800) 508-2265. Our website address is www.avidiabank.com. Information on our website is not and should not be considered a part of this annual report.

BUSINESS OF AVIDIA BANK

Avidia Bank (“the Bank”) is a Massachusetts-chartered stock savings bank, with its main office in Hudson, Massachusetts. Avidia Bank was formerly known as Hudson Savings Bank. In November 1997, Hudson Savings Bank converted from the mutual to stock form of organization by reorganizing into the current mutual holding company structure and Assabet Valley Bancorp became its mutual holding company and sole stockholder. In August 2007, Hudson Savings Bank and The Westborough Savings Bank merged and the combined institution adopted the Avidia Bank name. Both Hudson Savings Bank and The Westborough Savings Bank were originally chartered in 1869.

In addition to its headquarters facility in Hudson, Avidia Bank operates nine banking offices in western Middlesex County (Hudson (2 offices), Marlborough, and Framingham) and eastern Worcester County (Clinton, Leominster, Westborough, Northborough, and Shrewsbury), in Massachusetts.

Our business consists primarily of taking deposits from the general public in our local markets and nationally for our payments related services. We invest those deposits, together with funds generated from operations and contributed capital, primarily into one-to four-family residential mortgage loans, commercial real estate loans, and commercial and

industrial loans, including condominium association loans. To a substantially lesser extent, we also originate home equity and second mortgage loans, multifamily loans, construction and land loans, and consumer loans. We also invest in securities, primarily U.S. Government-related securities and U.S. agency mortgage-backed securities.

We offer a variety of deposit accounts, including certificate of deposit accounts, IRAs, money market accounts, savings accounts, demand deposit accounts and interest-bearing and noninterest-bearing checking accounts. As part of our deposit taking activities, through our Avidia Health program, we offer Health Savings Accounts (HSAs) nationwide. In addition to our core banking business, since 2000 we have engaged in payments processing activities, serving small business merchants and other payment processing entities nationwide.

Avidia Bank is subject to regulation, supervision and examination by the Massachusetts Commissioner of Banks under Massachusetts law and by the Federal Deposit Insurance Corporation (the “FDIC”), its primary federal regulator and the primary insurer of its deposit accounts under federal law. Avidia Bank is a member of the Federal Home Loan Bank system.

In recent years, we have expanded our management team with a goal to provide a strong foundation to continue to sharpen the focus of our existing franchise and, over time, to execute growth strategies in our business lines and to increase scale and improve operational efficiencies and to support profitability. The proceeds from the stock offering provide support to continue to implement prudent growth and expand our ability to service customers commensurate with our higher capital footings. The stock offering enabled us to establish a charitable foundation to support our communities and an Employee Stock Ownership Plan ("ESOP”) to support and incentivize performance and franchise value. In January 2026 we also declared our first quarterly cash dividend to common shareholders at $0.05 per share.

Market Area

Our headquarters facility and banking offices are located in the western suburbs of the Boston metropolitan market, a populous, economically vibrant and diversified market area that we believe will continue to provide growth opportunities. Our offices are located in western Middlesex County and eastern Worcester County. We consider these counties, and surrounding areas, to be our primary market area. These counties are within the Boston and Worcester Metropolitan Statistical areas (“MSAs”), which are the two largest MSAs in Massachusetts, with Boston ranked as the twelfth largest MSA in the country. The combined population of Middlesex and Worcester Counties was approximately 2.6 million based on March 2026 estimates utilizing U.S. Census Data.

Competition

We face significant competition within our market both in making loans and attracting deposits. Our market area has a high concentration of financial institutions, including large money center and regional banks, community banks, credit unions and other non-bank financial service providers. At June 30, 2025 (the most recent date for which FDIC data is available), we were ranked 12th among FDIC-insured financial institutions with offices in Middlesex County, with a deposit market share of 2.17%, and 10th among the FDIC-insured financial institutions with offices in Worcester County, with a deposit market share of 2.70%. Our competition for loans comes primarily from the competitors referenced above and from other financial service providers, such as mortgage companies and mortgage brokers. Competition for loans also comes from the increasing number of non-depository financial service companies participating in the mortgage market, such as insurance companies, securities firms, fintech companies, specialty finance firms and technology companies. Our ability to compete in our primary market area does not depend on any existing relationship. Competition in our payments processing business comes from other banks, and fintech companies, among others.

We expect competition to increase in the future as a result of legislative, regulatory and technological changes and the continuing trend toward consolidation of the financial services industry. Technological advances, for example, have lowered barriers to entry, which have allowed banks to expand their geographic reach by providing services over the internet making it possible for non-depository institutions, including fintech companies, to offer products and services that traditionally have been provided by banks. Competition for deposits and loans could limit our growth in the future.

Lending Activities

General. Our principal lending activity is originating and servicing real estate loans and commercial and industrial loans in our markets. Loans secured by real estate comprised 56.4% of total loans at December 31, 2025 and consisted primarily of residential mortgages and commercial real estate loans. Commercial and industrial loans comprised 43.4% of total loans at that date, split between condominium association loans and all other commercial and industrial loans, including dental practice loans and solar plant loans, among others. To a substantially lesser extent, we also originate home equity and second mortgage loans, multifamily loans, construction and land loans, and consumer loans.

Loan Portfolio Composition. The following table sets forth the composition of our loan portfolio by loan type at the dates indicated.

Contractual Maturities. The following tables set forth the contractual maturities of the total loan portfolio at December 31, 2025. Demand loans, which are loans having no stated repayment schedule or maturity, and overdraft loans are both reported as being due in one year or less. Because the table presents contractual maturities and does not reflect repricing or the effect of prepayments, actual maturities may differ.

The following table sets forth the Company's fixed and adjustable-rate loans at December 31, 2025, that are contractually due after December 31, 2026.

One- to Four-Family Residential Mortgage Loans. At December 31, 2025, one- to four-family residential mortgage loans totaled $518.2 million or 22.6% of total loans. The vast majority are secured by properties located in our primary market area.

One- to four-family residential mortgage loans are generally underwritten according to Fannie Mae guidelines, and we refer to loans that conform to such guidelines as “conforming loans.” We generally originate both fixed-rate and adjustable-rate loans in amounts up to the maximum conforming loan limits as established by the Federal Housing Finance Agency (“FHFA”). We also originate loans above the FHFA limit, which are referred to as “jumbo loans.” We generally underwrite jumbo loans in a same manner as conforming loans. While we do not track the dollar amount of

jumbo loans in our portfolio, we believe their amount is significant given that we operate in the western area of the Greater Boston metropolitan area where home prices often exceed FHFA conforming loan limits.

Adjustable-rate one- to four-family residential real estate loans are originated with terms of up to 30 years with initial interest rate adjustment periods of three, five and seven years based on changes in a designated market index. Interest rate adjustments are subject to periodic caps based on our asset/liability objectives and competitive factors. Fixed-rate one- to four-family residential real estate loans are primarily originated with terms of up to 30 years and a maximum loan-to-value ratio of 90% without private mortgage insurance. We generally charge a higher interest rate to waive private mortgage insurance. The maximum loan-to-value ratio is 97% for loans originated in conjunction with the Massachusetts Housing Partnership and 100% for loans to be sold to or insured by the Massachusetts Housing Finance Agency, an independent, quasi-public Massachusetts agency charged with providing financing for affordable housing in Massachusetts.

Subject to market conditions, we generally sell, with servicing rights retained, long-term, fixed-rate one- to four-family residential mortgage loans that we originate for interest rate risk management purposes.

We also originate one- to four-family residential mortgage loans secured by non-owner occupied properties. These loans are originated as fixed-rate or adjustable-rate loans with a maximum term of 30 years and a maximum loan-to-value ratio of 80%. The interest rate is generally 50 basis points (0.50%) above the interest rate on one- to four-family residential mortgage loans secured by owner occupied properties.

We generally do not offer “interest-only” mortgage loans on one- to four-family residential real estate loans nor do we offer loans that provide for negative amortization of principal, such as “Option ARM” loans, where the borrower can pay less than the interest owed on their loan, resulting in an increased principal balance during the life of the loan. Additionally, we do not offer “subprime loans” (loans that are made with low down-payments to borrowers with weakened credit histories typically characterized by payment delinquencies, previous charge-offs, judgments, bankruptcies, or borrowers with questionable repayment capacity as evidenced by low credit scores or high debt-burden ratios).

We evaluate both the borrower’s ability to make principal, interest and escrow payments and the value of the property that will secure the loan. Our one- to four-family residential real estate loans do not currently include prepayment penalties, are non-assumable and do not produce negative amortization. Our one- to four-family residential mortgage loans customarily include “due-on-sale” clauses giving us the right to declare the loan immediately due and payable in the event that, among other things, the borrower sells the property subject to the mortgage. All borrowers are required to obtain title insurance. We also require homeowner’s insurance and fire and casualty insurance and, where circumstances warrant, flood insurance on properties securing real estate loans.

Residential construction loans are generally originated as construction-permanent loans where after a 12 month construction period (the term of the construction period may be extended up to 36 months if circumstances warrant) the construction loan converts automatically to a permanent one- to four-family residential mortgage loan. During the construction phase fund are advanced on a “per completion” basis and the borrower makes interest-only payments. The interest rate is determined based on our internal risk/return objectives and competitive factors.

Home Equity Loans and Second Mortgage Loans. At December 31, 2025, home equity and second mortgage loans totaled $78.4 million or 3.4% of total loans. Subject to market conditions, we have a goal to increase this type of lending because it offers higher yields and their variable interest rates help to mitigate interest rate risk.

Home equity loans are generally revolving lines of credit and are generally underwritten using the same underwriting criteria for one- to four-family residential mortgage loans. Home equity lines of credit are generally underwritten with a loan-to-value ratio of up to 80% when combined with the principal balance of the existing first mortgage loan. Home equity lines of credit have a 20-year term. During the first 10 years the account revolves with a minimum monthly interest payment. During the last 10 years the account is closed to new draws and the principal balance is fully amortized, with interest. The interest rate is variable over the full term and is indexed to the prime rate as published in The Wall Street Journal. The maximum interest rate is 18% per annum, with no periodic rate caps. We may occasionally implement an interest rate floor depending on market conditions and internal risk/return objectives.

Second mortgage loans are fully-amortizing loans and are generally underwritten using the same underwriting criteria for one- to four-family residential mortgage loans. Second mortgage loans may be underwritten with a loan-to-value ratio of up to 90% when combined with the principal balance of the existing first mortgage loan. Second mortgage loans have a maximum term of 25 years and a maximum fixed interest rate of 18% per annum. The interest rate is set at origination based on market conditions and our asset/liability management objectives.

Commercial Real Estate Loans. At December 31, 2025, commercial real estate loans totaled $534.9 million or 23.3% of total loans. Commercial real estate loans are secured primarily by shopping centers, office building, light industrial properties, manufacturing facilities, and special use properties (e.g., a car wash facility) located in our primary market area. We generally originate adjustable-rate commercial real estate loans with maximum terms of up to 30 years. We generally limit loan-to-value ratios to 80% of the appraised value or purchase price, whichever is lower. All of our commercial real estate loans are subject to our underwriting procedures and guidelines. At December 31, 2025, our largest commercial real estate loan had an outstanding balance of $30.5 million and is secured by a retail shopping center in our primary market area. At December 31, 2025, it was performing according to its original terms.

We consider a number of factors in originating commercial real estate loans, including the creditworthiness of the borrower, the value and condition of the mortgaged property securing the loan, and the rent roll of the mortgaged property. When evaluating the borrower, we also consider the borrower’s experience in owning or managing similar property and the borrower’s payment history with us and other financial institutions. In evaluating the property securing the loan, among other factors we consider the net operating income of the mortgaged property before debt service and depreciation, the debt service coverage ratio (the ratio of net operating income to debt service) to ensure that, subject to certain exceptions, it is at least 1.20x, and the ratio of the loan amount to the appraised value of the mortgaged property. The collateral property is appraised by outside independent and qualified appraisers that are duly approved according to policy. Personal guarantees are often obtained from borrowers. Each borrower’s financial information is monitored on an ongoing basis by requiring periodic financial statement updates.

The following table shows the diversification of the commercial real estate portfolio as of December 31, 2025:

Commercial Real Estate Multifamily Loans. At December 31, 2025, commercial real estate multifamily loans totaled $104.7 million or 4.6% of total loans. Commercial real estate multifamily loans are secured primarily by five or more-unit residential apartment buildings located in our primary market area. We generally originate adjustable-rate commercial real estate multifamily loans with maximum terms of up to 30 years. From time to time we will also originate fixed rate loans in these portfolios. We generally limit loan-to-value ratios to 80% of the appraised value or purchase price, whichever is lower. At December 31, 2025, our largest commercial real estate multifamily loan had an outstanding balance of $4.7 million and it was performing according to its original terms.

We consider a number of factors in originating commercial real estate multifamily loans, including the creditworthiness of the borrower, the value and condition of the mortgaged property securing the loan, and the rent roll of the mortgaged property. When evaluating the borrower, we also consider the borrower’s experience in owning or managing similar property and the borrower’s payment history with us and other financial institutions. In evaluating the property securing the loan, among other factors we consider the net operating income of the mortgaged property before debt service and depreciation, the debt service coverage ratio (the ratio of net operating income to debt service) to ensure that, subject to certain exceptions, it is at least 1.20x and that the ratio of the loan amount to the appraised value of the mortgaged property, subject to certain exception, is limited to 80%. The collateral property is appraised by outside independent and qualified appraisers that are duly approved according to policy. Personal guarantees are often obtained from borrowers.

Each borrower’s financial information is monitored on an ongoing basis by requiring periodic financial statement updates.

Construction and Land Loans. At December 31, 2025, construction and land loans totaled $57.0 million or 2.5% of total loans, which included speculative construction loans for residential properties, construction loans for commercial properties, and land loans for residential or commercial development. At December 31, 2025, the largest construction and land loan was a $13.0 million construction loan secured by commercial property and it was performing according to its original terms.

We originate residential construction loans to well-known builders in our market area. We generally will limit the maximum number of speculative units (units that are not pre-sold) approved for each builder. Commercial construction loans have terms up to 36 months. Funds are advanced on a “per completion” basis and the borrower makes interest-only payments. The interest rate is determined based on our risk/return objectives and competitive factors. For properties to be held for rental income or to be owner-occupied, upon completion of construction the construction loan may be converted to a permanent commercial real estate loan.

Construction loans are generally limited to 80% (75% for investment properties) loan-to-completed-appraised-value ratio upon completion of the project. Before making a commitment to fund a construction loan, we require an appraisal of the property by an independent licensed appraiser. We also generally require inspections of the property before disbursements of funds during the term of the construction loan.

We originate land loans generally for commercial development. These loans are generally 3-year, interest-only balloon loans, with no principal amortization, and have either fixed or variable interest rates. Land development loans which are approved for development are limited to 75%, and not yet approved for development land loans, are limited to 65% loan to as-is appraised value. We no longer originate loans secured by land not yet approved for development.

Commercial and Industrial Loans. At December 31, 2025, commercial and industrial loans totaled $998.5 million or 43.4% of total loans. Commercial and industrial loans include condominium association loans and all other commercial and industrial loans, including: dental practice loans; solar plant loans; and other commercial and industrial loans consisting primarily of lines of credit and term loans for working capital, business equipment, and general corporate needs. The Company monitors exposures to certain loan categories and manages within related board-approved contribution limits. We have preferred lender designation under the U.S. Small Business Administration’s Section 7(a).

At December 31, 2025, the largest category of commercial and industrial loans was condominium association loans, which totaled $506.7 million. We began condominium association lending in 2014. Funds from condominium association loans are used by the condominium association to replace or renovate a condominium complex’s roofs, siding, parking garages and areas, and other common areas. Collateral includes an assignment of cash flows from condominium unit owner dues, an assignment of the priority lien on the condominium complex, and an assignment of rental income on rented units. Loan terms are generally up to 30 years and fully amortizing, with fixed or variable interest rates. In underwriting a condominium association loan we review the mix of owners and renters living in the complex. While our condominium association loans are primarily made to condominium complexes located in our primary market area and surrounding area, we have made loans to condominium complexes outside of our market area. At December 31, 2025, the three states in which we had the largest concentration of condominium association loans were Massachusetts ($247.9 million), Florida ($78.4 million) and New York ($47.4 million). At December 31, 2025, the largest condominium association loan had an outstanding balance of $22.8 million and it was performing according to its original terms. The condominium complex is located in Miami Beach, Florida.

At December 31, 2025, dental practice loans totaled $183.3 million. We began dental practice lending in 2010. Funds are generally used by a dental practice group to acquire other dental practice groups. Loan terms are generally up to 10 years and fully amortizing, with fixed or variable interest rates. The loans are secured by a lien of the dental practice’s cash flows. Personal guarantees of the principals and an assignment of any life insurance policies on the principals are generally required. While our dental practice loans are primarily made to practices located in our primary market area and within Massachusetts, we have made loans to practices in neighboring New England states. At December 31, 2025, the largest dental practice loan had an outstanding balance of $4.3 million and it was performing according to its original terms. Takedown balances from the guidance line of credit are converted to term loans and do not reload the available

balance on the guidance line of credit.

At December 31, 2025, solar plant loans totaled $103.5 million. We began solar plant lending in 2015. These loans are generally made to New England-based solar plants. A solar plant’s deposit relationship is generally tied to the lending relationship. Loan terms are generally up to 10 years and fully amortizing, with fixed or variable interest rates. The loans are secured by a lien on the solar fixtures and cash flows, an assignment of the power purchase agreements, and an assignment of tax credits associated with the plant. At December 31, 2025, the largest solar plant loan had an outstanding balance of $23.1 million and it was performing according to its original terms.

The vast majority of all other commercial and industrial loans are lines of credit and term loans generally secured by some or all of the business assets of the borrower, including machinery and equipment, accounts receivable, inventory, among other business assets. Lines of credit are generally variable rate demand loans with maturities of less than one year. Term loans have either fixed or variable rates and generally have terms not exceeding the estimated life of the collateral. When making commercial and industrial loans, we consider the financial statements of the borrower, lending history with the borrower, the debt service capabilities and global cash flows of the borrower and other guarantors, the projected cash flows of the business and the value of the business assets.

Consumer Loans. At December 31, 2025, consumer loans totaled $3.9 million or 0.2% of total loans. Consumer lending has not been and is not expected to be a significant lending activity. The consumer loan portfolio consists primarily of automobile loans and recreational vehicle loans, which are generally fixed-rate loans for terms up to 60 months.

Loan Underwriting Risks

Adjustable-Rate Residential Real Estate Loans. Although adjustable-rate mortgage loans may reduce to an extent our vulnerability to changes in market interest rates because they periodically reprice, as interest rates increase, the required payments due from the borrower also increase (subject to any rate caps), increasing the potential for default by the borrower. At the same time, the marketability of the underlying collateral may be adversely affected by higher interest rates. Upward adjustments of the contractual interest rate are also limited by the maximum periodic and lifetime rate adjustments permitted by our loan documents.

Commercial Real Estate and Multifamily Loans. Loans secured by commercial real estate or multifamily properties generally have larger balances and involve a greater degree of risk than owner-occupied, one- to four-family residential real estate loans. The primary concern in commercial real estate lending is the borrower’s creditworthiness and the feasibility and cash flow potential of the project. Payments on loans secured by income properties often depend on successful operation and management of the properties. As a result, repayment of such loans may be subject, to a greater extent than residential real estate loans, to adverse conditions in the real estate market or the economy. To monitor cash flows on income properties, we require borrowers and loan guarantors to provide quarterly, semi-annual or annual financial statements, depending on the size of the loan, on commercial real estate loans. In reaching a decision on whether to make a commercial real estate loan, we consider and review a global cash flow analysis of the borrower and consider the net operating income of the property, the borrower’s expertise, credit history and profitability and the value of the underlying property. We have generally required that the properties securing these real estate loans have an aggregate debt service ratio, including the guarantor’s cash flows and the borrower’s other projects, of at least 1.20x for commercial real estate and 1.30x for multifamily loans. An environmental phase one report is obtained when the possibility exists that hazardous materials may have existed on the site, or the site may have been impacted by adjoining properties that handled hazardous materials.

If we foreclose on a commercial real estate or multifamily loan, the marketing and liquidation period to convert the real estate asset to cash can be lengthy with substantial holding costs. In addition, vacancies, deferred maintenance, repairs and market stigma can result in prospective buyers expecting sale price concessions to offset their real or perceived economic losses for the time it takes them to return the property to profitability. Depending on the individual circumstances, initial charge-offs and subsequent losses on commercial real estate loans can be unpredictable and substantial.

Construction and Land Loans. Our construction and land loans are underwritten based upon estimates of costs and values associated with the completed project. Underwriting is focused on the borrowers’ financial strength, credit history and demonstrated ability to produce a quality product and effectively market and manage their operations. Construction lending involves additional risks when compared with permanent lending because funds are advanced upon the security of the project, which is of uncertain value before its completion. Because of the uncertainties inherent in estimating construction costs, as well as the market value of the completed project and the effects of governmental regulation of real property, it is relatively difficult to evaluate accurately the total funds required to complete a project and the related loan-to-value ratio. In addition, during the term of a construction loan, interest may be funded by the borrower or disbursed from an interest reserve set aside from the construction loan budget. These loans often involve the disbursement of substantial funds with repayment substantially dependent on the success of the ultimate project and the ability of the borrower to sell or lease the property or obtain permanent take-out financing, rather than the ability of the borrower or guarantor to repay principal and interest. If the appraised value of a completed project proves to be overstated, we may have inadequate security for the repayment of the loan upon completion of construction of the project and may incur a loss. In addition, speculative construction loans, which are loans made to home builders who, at the time of loan origination, have not yet secured an end buyer for the home under construction, typically carry higher risks than those associated with traditional construction loans. These increased risks arise because of the risk that there will be inadequate demand to ensure the sale of the property within an acceptable time. As a result, in addition to the risks associated with traditional construction loans, speculative construction loans carry the added risk that the builder will have to pay the property taxes and other carrying costs of the property until the home is sold. Land loans have substantially similar risks to speculative construction loans.

Commercial and Industrial Loans. Unlike residential real estate loans, which generally are made on the basis of the borrower’s ability to make repayment from his or her employment or other income, and which are secured by real property whose value tends to be more easily ascertainable, commercial and industrial loans are of higher risk and typically are made on the basis of the borrower’s ability to make payments from the cash flow of the borrower’s business. Our commercial and industrial loans are originated primarily based on the identified cash flows of the borrower and secondarily on the underlying collateral provided by the borrower. Collateral for commercial and industrial loans typically consists of accounts receivable, inventory or equipment. Collateral may also consist of limited use and difficult-to-value property, such as solar panels. Credit support provided by the borrower for most of these loans is based on the liquidation of the pledged collateral and enforcement of a personal guarantee, if any. Further, any collateral securing such loans may depreciate over time, may be difficult to appraise and may fluctuate in value. As a result, the availability of funds for the repayment of commercial and industrial loans may depend substantially on the success of the business itself.

Consumer Loans. Consumer loans may entail greater risk than residential mortgage loans, particularly in the case of consumer loans that are unsecured or secured by assets that depreciate rapidly, such as automobiles and recreational vehicles. Repossessed collateral for a defaulted consumer loan may not provide an adequate source of repayment for the outstanding loan. Consumer loan collections depend on the borrower’s continuing financial stability, and therefore are likely to be adversely affected by various factors, including job loss, divorce, illness or personal bankruptcy. Furthermore, the application of various federal and state laws, including federal and state bankruptcy and insolvency laws, may limit the amount that can be collected.

Originations, Sales and Purchases of Loans

Our loan originations are primarily generated by our loan personnel operating at our banking offices and from referrals from existing and former customers and from accountants, real estate brokers, builders and attorneys. We also market through direct mail campaigns and radio and television advertising. All loans we originate are underwritten pursuant to our policies and procedures which incorporate Fannie Mae underwriting guidelines to the extent applicable for residential loans.

While we originate both fixed-rate and adjustable-rate loans, our ability to generate each type depends upon relative borrower demand and the pricing levels as set in the local marketplace by competitors. Our volume of real estate loan originations is influenced significantly by market interest rates, and, accordingly, the volume of our real estate loan originations can vary from period to period.

Consistent with our interest rate risk strategy, we originate for sale and sell a portion of the long-term, fixed-rate, one-to

four-family residential mortgage loans that we originate on a servicing-retained, limited or no recourse basis, while generally retaining shorter-term fixed-rate and all adjustable-rate one- to four-family residential real estate loans in our portfolio to manage interest rate risk. We consider our balance sheet risk profile as well as market conditions on an ongoing basis in making decisions as to whether to hold loans we originate for investment or to sell such loans to investors, choosing the strategy that is most advantageous to us from a profitability and risk management standpoint.

On occasion, we have engaged in commercial loan participations, both as lead lender selling participation interests to other financial institutions and as purchaser of participation interests from other lead lenders. Loan participations are periodically reported to the board of directors. At December 31, 2025, our largest loan participation interest totaled $22.0 million, representing a 73% interest as lead lender in a commercial real estate loan in Massachusetts, and it was performing according to its original terms.

Loan Approval Procedures, Loans to One Borrower Limit and Lending Authority

The maximum amount that we may lend to one borrower and the borrower’s related entities is generally limited, by statute, to 20% of our capital, which is defined under Massachusetts law as the sum of our surplus account, undivided profits and, after the completion of the conversion and stock offering, capital stock. Loans secured by a first mortgage on residential property occupied by the borrower are excluded from this limit. At December 31, 2025, our loans-to-one borrower regulatory limit was $65.3 million, and our internal lending limit is the lower of $40.0 million or 15% of tier one capital. At December 31, 2025, our largest exposure to one lending relationship totaled $30.5 million secured by a retail shopping center in our primary market area. At December 31, 2025, this relationship was performing according to its original repayment terms. As a result of the conversion and stock offering, our loans-to-one borrower regulatory limit increased. Consistent with our strategy to grow our loan portfolio, we would expect to originate and retain in our portfolio larger loan relationships while also remaining diversified with smaller and mid-sized relationships as well.

Our lending activities are subject to written underwriting standards and origination procedures. Decisions on loans are made consistent with our loan policies and procedures, and the underwriting and review of a loan decision is designed primarily to determine the borrower’s ability to repay the requested loan. The board of directors has overall responsibility for our lending policy, and the board reviews this policy at least annually.

Avidia Bank’s board of directors has delegated loan approval authority to the Executive Governance Committee (consisting of seven directors, including the President and Chief Executive Officer), the Commercial Loan Committee (consisting of the President and Chief Executive Officer, the Executive Vice President – Chief Operating Officer, the Chief Risk Officer, the Chief Credit Officer, the Credit Manager, and two Senior Commercial Lending Officers) and certain officers up to prescribed limits, depending on the loan type. Generally, depending on loan type, risk rating and other factors, individual officer loan approval authorities are up to $1.0 million, Commercial Loan Committee approval authority is up to $10.0 million per loan or relationship and Executive Governance Committee approval authority per loan or relationship is $10.0 million and greater.

Loan policy exceptions are fully disclosed to the approving committee prior to approval, loans with policy exceptions are excluded from individual authority. Reporting on policy exceptions are generally included within each Board package.

Generally, we require title insurance on our mortgage loans as well as fire and extended coverage casualty insurance in amounts at least equal to the principal amount of the loan or the value of improvements on the property, depending on the type of loan. We also require flood insurance if the improved property is determined to be in a flood zone area.

We incurred a $19.2 million charge-off related to a $25.0 million land loan within the construction and land loan portfolio. Under applicable bank regulatory guidance, this land loan is considered a “high volatility commercial real estate” (HVCRE) loan. The bank regulatory guidance generally defines a HVCRE loan as a loan that finances the acquisition, development, or construction of commercial real estate, is secured by commercial real estate, and depends on future income or sale proceeds from, or refinancing of, such real estate. Consistent with bank regulatory guidance, Avidia Bank is required to assign a higher risk weighting to HVCRE loans when calculating its risk-based capital as opposed to the risk weighting for a non-HVCRE loan. Since the land loan was originated in March 2023, we have revised our underwriting standards to cease originating HVCRE loans and there were no material exposures to HVCRE loans at December 31, 2025.

Asset Quality

Detailed financial information about loan performance, loan quality, loan charge-offs, and the allowance for credit losses is contained in Note 3 of the Consolidated Financial Statements.

Past Due Loans. Loans past due 30 days are considered delinquent. When a borrower fails to make required loan payments, we take a number of steps to induce the borrower to cure the delinquency and restore the loan to current status. Collection efforts include automatic late notices, personal contact, telephone calls, and direct correspondence by Avidia Bank personnel with the delinquent borrower, generally beginning 15 to 30 days after the loan is first past due. The accrual of interest on a loan is discontinued when the loan is 90 days delinquent unless it is well secured and in the process of collection.

Generally, when a loan becomes 90 days past due, the loan is turned over to our attorneys to ensure further collection according to applicable laws and regulations. All loans past due 90 days are placed on nonaccrual status and reported to the board of directors monthly. If our attorneys do not receive a response from the borrower, or if the terms of any payment plan established are not followed, then collection proceedings will be pursued. Management submits a monthly delinquent loan report detailing loans 30 days or more past due to the board of directors.

Real Estate Owned. When we acquire real estate as a result of foreclosure or by deed in lieu of foreclosure, the real estate is classified as foreclosed real estate until it is sold. The real estate is recorded at estimated fair value at the date of acquisition less estimated costs to sell, and any write-down resulting from the acquisition is charged to the allowance for credit losses. Estimated fair value is based on an appraisal typically obtained before the foreclosure process is completed. Subsequent decreases in the value of the property are charged to operations. After acquisition, all costs incurred in maintaining the property are expensed. Costs relating to the development and improvement of the property, however, are capitalized to the extent of estimated fair value less estimated costs to sell. At December 31, 2025, we had no balance outstanding for real estate owned.

Collateral-Dependent Loans. A financial asset is considered collateral-dependent when the debtor is experiencing financial difficulty and repayment is expected to be provided substantially through the sale or operation of the collateral. For all classes of loans deemed collateral-dependent, we have elected the practical expedient to estimate expected credit losses based on the collateral’s fair value, less estimated cost to sell.

Modifications Made to Borrowers Experiencing Financial Difficulty. We occasionally modify loans to extend the term or make other concessions to help a borrower stay current on the loan and to avoid foreclosure. We consider modifications only after analyzing the borrower’s current repayment capacity, evaluating the strength of any guarantors based on documented current financial information, and assessing the current value of any collateral pledged. We generally do not forgive principal or interest on loans, but may do so if it is in our best interest and increases the likelihood that we can collect the remaining principal balance. We may modify the terms of loans to lower interest rates

(which may be at below market rates), to provide for fixed interest rates on loans where fixed rates are otherwise not available, to provide for longer amortization schedules, or to provide for interest-only terms. These modifications are made only when a workout plan has been agreed to by the borrower that we believe is reasonable and attainable and in our best interests.

Classified Assets. Federal regulations provide that each insured savings institution classify its assets on a regular basis. In addition, in connection with examination of insured depository institutions, federal and Massachusetts banking regulators have authority to identify problem assets and, if appropriate, classify them. There are three classifications for problem assets: “substandard,” “doubtful” or “loss.” An asset is considered “substandard” if it is inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. “Substandard” assets include those characterized by the “distinct possibility” that the insured institution will sustain “some loss” if the deficiencies are not corrected. Assets classified as “doubtful” have all of the weaknesses inherent in those classified “substandard,” with the added characteristic that the weaknesses present make “collection or liquidation in full,” on the basis of currently existing facts, conditions, and values, “highly questionable and improbable.” Assets classified as “loss” are those considered “uncollectible” and of such little value that their continuance as assets without the establishment of a specific loss reserve is not warranted. Assets which do not currently expose the insured institution to sufficient risk to warrant classification in one of the afore-mentioned categories but possess weaknesses are designated as “special mention” by our management. Loans rated as special mention or worse are designated as criticized loans.

When an insured depository institution classifies problem assets as either substandard or doubtful, it may establish general allowances in an amount deemed prudent by management to cover probable accrued losses. General allowances represent loss allowances which have been established to cover probable accrued losses associated with lending activities, but which, unlike specific allowances, have not been allocated to particular problem assets. When an insured institution classifies problem assets as “loss,” it is required either to establish a specific allowance for losses equal to 100% of that portion of the asset so classified or to charge-off such amount. An institution’s determination as to the classification of its assets and the amount of its valuation allowances is subject to review by the regulatory agencies, which may require the establishment of additional general or specific loss allowances.

In connection with our periodic regulatory reports and according to our classification of assets policy, we regularly review the problem loans in our portfolio to determine whether any loans require classification according to applicable regulations. In additional to internal loan review, we engage an external consultant annually to review, test and evaluate our internal loan review efforts, with a focus on risk rating accuracy. The external loan review also reviews the lending function’s compliance with our loan policy and applicable regulations.

Allowance for Credit Losses

On January 1, 2023, we adopted Accounting Standards Update (ASU) 2016-13 Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which replaces the incurred loss methodology with the CECL methodology. Under the CECL methodology, provisions for credit losses are charged to operations to establish an allowance for credit losses at a level to cover expected losses over the expected life of a loan or securities portfolio. Under the previous “incurred loss” model, provisions for loan losses were charged to operations to establish an allowance for loan losses at a level necessary to absorb known and inherent losses in our loan portfolio that are both probable and reasonably estimable at the date of the consolidated financial statements. In evaluating the level of the allowance for credit losses, management analyzes reasonable and supportable forecasts and several qualitative loan portfolio risk factors including, but not limited to, management’s ongoing review and grading of loans, facts and issues related to specific loans, historical loan loss and delinquency experience, trends in past due and non-accrual loans, existing risk characteristics of specific loans or loan pools, the fair value of underlying collateral, current economic conditions and other qualitative and quantitative factors which could affect potential credit losses.

Additions to the allowance for credit losses are provided by charges against income based on various factors, which, in our judgment, deserve current recognition in estimating probable losses. Credit losses are charged-off in the period the loans, or portion thereof, are deemed uncollectible. Generally, we will record a loan charge-off (including a partial charge-off) to reduce a loan to the estimated fair value of the underlying collateral, less cost to sell, for collateral dependent loans. We regularly review the loan portfolio to maintain the allowance for credit losses according to U.S. GAAP.

As an integral part of their examination process, the Massachusetts Division of Banks and the FDIC will periodically review our allowance for credit losses, and as a result of such reviews, we may determine to adjust our allowance for credit losses. However, regulatory agencies are not directly involved in the process for establishing the allowance for credit losses as the process is our responsibility and any increase or decrease in the allowance is the responsibility of management.

Allocation of Allowance for Credit Losses. The following tables set forth the allowance for credit losses allocated by loan category and the percent of the allowance in each category to the total allocated allowance at the dates indicated. The allowance for credit losses allocated to each category is not necessarily indicative of future losses in any particular category and does not restrict the use of the allowance to absorb losses in other categories.

The following table presents the allocation of the allowance for credit losses on loans by category as of the dates indicated:

The following table presents the allocation of the allowance for credit losses on loans as of the dates indicated:

Investment Activities

General. Our investment policy is established by the board of directors. The policy objectives are generally to: (i) invest excess funds when loan demand is low and provide a source of funds when loan demand is high, (ii) provide regulatory and operational liquidity needed to conduct daily operations, (iii) provide a high credit quality, diversified investments to minimize risk, (iv) enhance profitability by maintaining an acceptable spread over the cost of funds, and (v) provide collateral for pledging requirements such as pledges to secure Federal Home Loan Bank borrowings. Avidia Bank’s board of directors and its Asset Liability Committee (consisting of the President and Chief Executive Officer; Chief Financial Officer and Treasurer; Chief Risk Officer; Chief Lending Officer; and other members of executive and senior management) review all purchase and sale transactions at least quarterly.

Our investment policy is reviewed and approved annually by our board of directors. Authority to make investments under the approved guidelines are delegated to the President and Chief Executive Officer, the Chief Financial Officer and the Treasurer. These officers are authorized to execute investment transactions up to $10.0 million per transaction without the prior approval of Avidia Bank’s board of directors or its Executive Committee and within investment policy guidelines. Each transaction in excess of $10.0 million must receive the prior approval of the Executive Committee.

We have legal authority to invest in various types of liquid assets, including U.S. Treasury securities, U.S. government agency and government-sponsored enterprise securities, mortgage-backed securities, municipal securities, certificates of deposit of federally-insured institutions, and investment grade corporate bonds, among others. We also are required to maintain an investment in Federal Home Loan Bank of Boston stock. While we have the authority under applicable law to invest in derivative securities, we have not purchased derivative securities as an investment strategy.

At the time of purchase, we designate a security as held to maturity, available for sale, or trading, depending on our ability and intent. Securities available for sale or designated for trading are reported at fair value, while securities held to maturity are reported at amortized cost. Consistent with our overall business and asset/liability management plan, which focuses on sustaining adequate levels of core earnings, the base premise of our investment portfolio is that all securities purchased will be suitable to be held to maturity. At December 31, 2025, we had $269.1 million of securities designated available for sale, $13.0 million of securities designated held to maturity, and no securities designated for trading.

We measure expected credit losses on available for sale securities based upon the unrealized gain or loss position of the security. For available for sale debt securities in an unrealized loss position, we evaluate qualitative criteria to determine any expected loss unless we intend to sell, or it is more likely than not that we will be required to sell before recovery of the amortized cost. In the latter two circumstances, we recognize the entire difference between the security’s amortized cost basis and its fair value as a write-down of the investment balance with a charge to earnings. Otherwise, management’s analysis considers various factors, which include the extent to which fair value is less than amortized cost, performance on any underlying collateral, downgrades in the ratings of the security by a rating agency, the failure of the issuer to make scheduled interest or principal payments and adverse conditions specifically related to the security.

The following table summarizes year-end 2025 amortized cost, weighted average yields, and contractual maturities of our debt securities. Maturities are based on the final contractual payment dates, and do not reflect the effect of scheduled principal payments, prepayments, or early redemptions that may occur. Weighted average yields have been calculated based on the amortized cost of the security. Weighted average yields on securities have not been computed on a tax-equivalent basis, as the effects are immaterial.