v3.25.2
Shareholders' Equity
 6 Months Ended
Jun. 30, 2025
Shareholders' Equity [Abstract]  
Shareholders' Equity

NOTE 8 – SHAREHOLDERS' EQUITY

Dividends

The Company’s ability to pay cash dividends is dependent on dividends paid to it by the Bank, if any, and limited by Federal and California law. Under California law, the holders of common stock of the Company are entitled to receive dividends when and as declared by the Board of Directors, out of funds legally available, subject to certain restrictions. The California General Corporation Law prohibits the Company from paying dividends on its common stock unless either: (i) the amount of retained earnings of the corporation immediately prior to the dividend equals or exceeds the sum of (A) the amount of the proposed dividend plus (B) the preferential preferred dividends in arrears amount, if any, or (ii) immediately after the dividend, the value of the corporation’s assets would equal or exceed the sum of its total liabilities plus the preferential rights amount, if any.

Dividends paid from the Bank to the Company are restricted under certain Federal laws and regulations governing banks. In addition, the California Financial Code restricts the total dividend payment of any bank in any one year to the lesser of (1) the bank’s retained earnings or (2) the bank's net income for its last three fiscal years, less distributions made to shareholders during the same three-year period, without the prior approval of the California Department of Financial Protection and Innovation. At June 30, 2025, $63.3 million was free of such restrictions.

Earnings Per Common Share

A reconciliation of the numerators and denominators of the basic and diluted earnings per common share computations for the three and six months ended June 30, 2025 and June 30, 2024 is shown below:

Three Months Ended June 30,

Six Months Ended June 30,

(In thousands, except per share amounts)

2025

2024

2025

2024

Net income

$

5,797

$

3,466

$

11,233

$

8,712

Total weighted average shares outstanding - basic

7,534,264

7,426,949

7,511,285

7,406,794

Basic earnings per common share

$

0.77

$

0.47

$

1.50

$

1.18

Net income

$

5,797

$

3,466

$

11,233

$

8,712

Total weighted average shares outstanding - basic

7,534,264

7,426,949

7,511,285

7,406,794

Add: dilutive impact of restricted stock

152,121

151,664

173,691

158,271

Total weighted average shares outstanding - diluted

7,686,385

7,578,613

7,684,976

7,565,065

Diluted earnings per common share

$

0.75

$

0.46

$

1.46

$

1.15

Anti-dilutive awards (1)

–

–

3

–

(1) Represents the total number of shares related to restricted stock awards that have been excluded from the computation of diluted earnings per share because the impact would have been anti-dilutive. These awards were considered anti-dilutive because the assumed proceeds divided by the weighted average shares issuable were higher than the average price of the shares.

Stock Repurchase Program

The Company announced a stock repurchase program on November 25, 2020, then effective immediately, authorizing the repurchase of up to 5% or 307,780 shares of the Company's outstanding common stock. The program has no expiration date. Under the stock repurchase program, the Company may, from time to time, repurchase shares of its outstanding common stock in the open market, in privately-negotiated transactions, or otherwise, subject to applicable laws and regulations. The extent to which the Company repurchases its shares, and the timing of such repurchases, will depend upon a variety of factors, including market conditions, regulatory requirements, availability of funds, and other relevant considerations, as determined by the Company. The Company may, at its discretion, begin, suspend or terminate repurchases at any time prior to the program's expiration, without any prior notice. There is no obligation on the part of the Company to repurchase any shares of its common stock. For the three and six months ended June 30, 2025 and June 30, 2024, no shares were repurchased.

Regulatory Capital

Banks and bank holding companies are subject to regulatory capital requirements administered by federal banking agencies. Capital adequacy guidelines and, additionally for banks, prompt corrective action regulations, involve quantitative measures of assets, liabilities and certain off-balance-sheet items calculated under regulatory accounting practices. Capital amounts and classifications are also subject to qualitative judgments by regulators. Failure to meet capital requirements can initiate regulatory action. Under the Basel III rules, the Company must hold a capital conservation buffer above the adequately capitalized risk-based capital ratios. The net unrealized gain or loss on available-for-sale securities is not included in computing regulatory capital. Management believes as of June 30, 2025 and December 31, 2024, the Company and the Bank meet all capital adequacy requirements to which they are subject.

Prompt corrective action regulations provide five classifications: well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized, and critically undercapitalized, although these terms are not used to represent overall financial condition. If adequately capitalized, regulatory approval is required to accept brokered deposits. If undercapitalized, capital distributions are limited, as is asset growth and expansion, and capital restoration plans are required. At June 30, 2025 and December 31, 2024, the most recent regulatory notifications categorized the Bank as “well capitalized” under the regulatory framework for prompt corrective action. There are no conditions or events since that notification that management believes have changed the institution's category.


‎

To be categorized as well-capitalized, under the regulatory framework for prompt corrective actions, the Company and the Bank must maintain minimum total risk-based, Tier 1 risk-based and Tier 1 leverage ratios as set forth in the table below.

Actual and required capital amounts and ratios, exclusive of the capital conservation buffer, are presented below at June 30, 2025 and December 31, 2024:

June 30, 2025

December 31, 2024

(In thousands)

Amount

Ratio

Amount

Ratio

Leverage Ratio

Avidbank Holdings, Inc.

$

249,544

10.53%

$

237,700

10.35%

Avidbank

$

264,167

11.18%

$

253,437

11.07%

Minimum requirement for "Well-Capitalized" institution

$

113,101

5.00%

$

114,510

5.00%

Minimum regulatory requirement

$

90,481

4.00%

$

91,608

4.00%

Common Equity Tier I

Avidbank Holdings, Inc.

$

249,544

11.02%

$

237,700

10.59%

Minimum regulatory requirement

$

101,944

4.50%

$

101,018

4.50%

Avidbank

$

264,167

11.68%

$

253,437

11.32%

Minimum requirement for "Well-Capitalized" institution

$

147,031

6.50%

$

145,515

6.50%

Minimum regulatory requirement

$

101,791

4.50%

$

100,741

4.50%

Tier 1 Risk-Based Capital Ratio

Avidbank Holdings, Inc.

$

249,544

11.02%

$

237,700

10.59%

Minimum regulatory requirement

$

135,925

6.00%

$

134,690

6.00%

Avidbank

$

264,167

11.68%

$

253,437

11.32%

Minimum requirement for "Well-Capitalized" institution

$

180,961

8.00%

$

179,095

8.00%

Minimum regulatory requirement

$

135,721

6.00%

$

134,322

6.00%

Total Risk-Based Capital Ratio

Avidbank Holdings, Inc.

$

289,048

12.76%

$

276,225

12.30%

Minimum regulatory requirement

$

181,233

8.00%

$

179,587

8.00%

Avidbank

$

286,071

12.65%

$

274,362

12.26%

Minimum requirement for "Well-Capitalized" institution

$

226,202

10.00%

$

223,869

10.00%

Minimum regulatory requirement

$

180,961

8.00%

$

179,095

8.00%