Janney upgrades Avidbank to Buy as deposit growth paves better earnings path

As previously reported, Janney Montgomery Scott analyst Timothy Coffey upgraded Avidbank Holdings (AVBH) to Buy from Neutral with a fair value estimate of $26, up from $21.50. The firm believes the company has resolved its deposit growth challenges, successfully reduced borrowings, and may pursue an IPO with a capital raise to improve stock liquidity. The firm’s thesis changed post Q3 earnings, when the company reported a $170M increase in core deposits as a result of strategic hires within the last year. The firm believes management will get more competitive on loan pricing, and that could improve net interest income, which Janney notes is 90% of operating revenues.