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Stockholders' Equity and Stock Plans | 12 Months Ended
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Dec. 31, 2021
Equity [Abstract] |
Stockholders' Equity and Stock Plans | Stockholders' Equity and Stock Plans Share-Based Awards On May 12, 2020, our shareholders approved the 2020 Director Stock Plan, replacing and superseding the 2010 Director Stock Plan (collectively "the Plan"). The Plan provides for the payment of director fees in common shares of Bancorp's common stock not to exceed 250,000 shares and a way for directors to purchase shares at fair market value. During 2021, 2020 and 2019 we issued 6,443, 5,723 and 5,544 shares of common stock, respectively, for director fees. As of December 31, 2021, 238,664 shares were available for future director fees and purchases. The 2017 Employee Stock Purchase Plan ("ESPP") gives our employees an opportunity to purchase Bancorp's common shares through payroll deductions of between one percent and fifteen percent of their pay in each pay period. Shares are purchased quarterly at a five percent discount from the closing market price on the last day of the quarter. As of December 31, 2021, 377,475 shares were available for future purchases under the ESPP. Under the 2017 Equity Plan, the Compensation Committee of the Board of Directors has the discretion to determine, among other things, which employees, advisors and non-employee directors will receive share-based awards, the number and timing of awards, the vesting schedule for each award, and the type of award to be granted. As of December 31, 2021, there were 868,222 sh ares available for future grants to employees, advisors and non-employee directors. Options are issued at an exercise price equal to the fair value of the stock at the date of grant. Options granted to officers and employees generally vest by one-third on each anniversary of the grant for three years and expire ten years from the grant date. Options granted to non-employee directors vest immediately and expire ten years from the grant date. Stock options and restricted stock may be net settled in a cashless exercise by a reduction in the number of shares otherwise deliverable upon exercise or vesting in satisfaction of the exercise payment and/or applicable tax withholding requirements. Shares withheld under net settlement arrangements are available for future grants. The table below depicts the total number of shares, amount, and weighted average price withheld for cashless exercises in each of the respective years.
| 2021 | 2020 | 2019
Number of shares withheld | 27,929 |  | 10,001 |  | 7,795 |
Total amount withheld (in thousands) | $ | 1,085 |  | $ | 398 |  | $ | 326 |
Weighted-average price | $ | 38.85 |  | $ | 39.83 |  | $ | 41.84 |
Performance-based stock awards (restricted stock) are issued to a selected group of employees under the 2017 Equity Plan. Stock award vesting is contingent upon the achievement of pre-established long-term performance goals set by the Compensation Committee of the Board of Directors. Performance is measured over a three-year period and cliff vested. These performance-based stock awards were granted at a maximum opportunity level, and based on the achievement of the pre-established goals, the actual payouts can range from 0% to 200% of the target award. For performance-based stock awards, an estimate is made of the number of shares expected to vest based on the probability that the performance criteria will be achieved to determine the amount of compensation expense to be recognized. The estimate is re-evaluated quarterly and total compensation expense is adjusted for any change in the current period. A summary of stock option activity for the years ended December 31, 2021, 2020, and 2019 is presented in the following table. The intrinsic value of options outstanding and exercisable is calculated as the number of in-the-money options times the difference between the market price of our stock and the exercise prices of the in-the-money options as of each year-end period presented.
| Number of Shares | Weighted Average Exercise Price | Aggregate Intrinsic Value (in thousands) | Weighted Average Grant-Date Fair Value | Weighted Average Remaining Contractual Term (in years)
Options outstanding at December 31, 2018 | 425,700 |  | $ | 25.01 |  | $ | 6,910 |  |  | 5.85
Granted | 53,370 |  | 44.01 |  |  | $ | 9.37 |  |
Cancelled, expired or forfeited | (13,580) |  | 38.88 |  |  |  |
Exercised | (48,108) |  | 16.11 |  | 1,247 |  |  |
Options outstanding at December 31, 2019 | 417,382 |  | 28.01 |  | 7,112 |  |  | 5.50
Exercisable (vested) at December 31, 2019 | 333,870 |  | 25.34 |  | 6,581 |  |  | 4.76
Options outstanding at December 31, 2019 | 417,382 |  | 28.01 |  | 7,112 |  |  | 5.50
Granted | 44,632 |  | 39.18 |  |  | 6.84 |  |
Cancelled, expired or forfeited | (17,222) |  | 40.31 |  |  |  |
Exercised | (73,208) |  | 22.26 |  | 1,370 |  |  |
Options outstanding at December 31, 2020 | 371,584 |  | 29.92 |  | 2,262 |  |  | 5.12
Exercisable (vested) at December 31, 2020 | 315,377 |  | 28.05 |  | 2,254 |  |  | 4.53
Options outstanding at December 31, 2020 | 371,584 |  | 29.92 |  | 2,262 |  |  | 5.12
Granted | 55,861 |  | 36.39 |  |  | 8.84 |  |
Cancelled, expired or forfeited | (2,008) |  | 42.50 |  |  |  |
Exercised | (60,056) |  | 23.01 |  | 885 |  |  |
Options outstanding at December 31, 2021 | 365,381 |  | 31.97 |  | 2,326 |  |  | 5.57
Exercisable (vested) at December 31, 2021 | 315,744 |  | 30.85 |  | 2,264 |  |  | 5.15
A summary of the options outstanding and exercisable by price range as of December 31, 2021 is presented in the following table:
| Stock Options Outstanding as of December 31, 2021 |  | Stock Options Exercisable as of December 31, 2021
Range of Exercise Prices | Stock Options Outstanding | Remaining Contractual Life (in years) | Weighted Average Exercise Price |  | Stock Options Exercisable | Weighted Average Exercise Price
$10.00 - $20.00 | 32,852 |  | 0.7 | $ | 19.34 |  |  | 32,852 |  | $ | 19.34 |
$20.01 - $30.00 | 102,374 |  | 3.4 | $ | 24.47 |  |  | 102,374 |  | $ | 24.47 |
$30.01 - $40.00 | 156,415 |  | 7.1 | $ | 34.67 |  |  | 133,131 |  | $ | 34.18 |
$40.01 - $50.00 | 73,740 |  | 7.5 | $ | 42.29 |  |  | 47,387 |  | $ | 42.62 |
| 365,381 |  |  |  |  | 315,744 |  |
The following table summarizes non-vested restricted stock awards and changes during the years ended December 31, 2021, 2020, and 2019.
| Number of Shares | Weighted Average Grant-Date Fair Value
Non-vested awards at December 31, 2018 | 87,388 |  | $ | 31.26 |
Granted | 29,110 |  | 44.45 |
Vested | (28,099) |  | 27.88 |
Cancelled or forfeited | (18,333) |  | 32.34 |
Non-vested awards at December 31, 2019 | 70,066 |  | 37.81 |
Granted | 29,100 |  | 40.10 |
Vested | (23,524) |  | 36.35 |
Cancelled or forfeited | (14,314) |  | 37.63 |
Non-vested awards at December 31, 2020 | 61,328 |  | 39.50 |
Granted | 30,742 |  | 38.00 |
Vested | (26,392) |  | 36.81 |
Cancelled or forfeited | (3,848) |  | 33.96 |
Non-vested awards at December 31, 2021 | 61,830 |  | 40.25 |
We determine the fair value of stock options at the grant date using the Black-Scholes pricing model that takes into account the stock price at the grant date, exercise price, and the following assumptions (weighted-average shown).
| Years ended December 31,
| 2021 | 2020 | 2019
Risk-free interest rate | 0.98 | % | 0.91 | % | 2.51 | %
Expected dividend yield on common stock | 2.57 | % | 2.38 | % | 1.75 | %
Expected life in years | 6.1 | 6.1 | 5.8
Expected price volatility | 33.12 | % | 24.43 | % | 22.71 | %
The fair value of stock options as of the grant date is recorded as stock-based compensation expense in the consolidated statements of comprehensive income over the requisite service period, which is generally the vesting period, with a corresponding increase in common stock. Stock-based compensation also includes compensation expense related to the issuance of restricted stock awards. The grant-date fair value of the restricted stock awards, which equals the grant date price, is recorded as compensation expense over the requisite service period with a corresponding increase in common stock as the shares vest. Beginning in 2018, stock option and restricted stock awards issued include a retirement eligibility clause whereby the requisite service period is satisfied at the retirement eligibility date. For those awards, we accelerate the recording of stock-based compensation when the award holder is eligible to retire. However, retirement eligibility does not affect the vesting of restricted stock or the exercisability of the stock options, which are based on the scheduled vesting period. Total compensation expense for stock options and restricted stock awards was $972 thousand, $1.2 million, and $1.5 million during 2021, 2020, and 2019, respectively, and the total recognized deferred tax benefits related thereto were $213 thousand, $341 thousand, and $389 thousand, respectively. As of December 31, 2021, there was $652 thousand of total unrecognized compensation expense related to non-vested stock options and restricted stock awards, which is expected to be recognized over a weighted-average period of approximately 2.3 years. The total grant-date fair value of stock options vested during the years ended December 31, 2021, 2020, and 2019 was $514 thousand, $484 thousand, and $473 thousand, respectively. The total grant-date fair value of restricted stock awards vested was $1.0 million during 2021, and $1.2 million during both 2020 and 2019. We record excess tax benefits (deficiencies) resulting from the exercise of non-qualified stock options, the disqualifying disposition of incentive stock options and vesting of restricted stock awards as income tax benefits (expense) in the consolidated statements of comprehensive income with a corresponding decrease (increase) to current taxes payable. In 2021, 2020, and 2019 we recognized $87 thousand, $120 thousand, and $145 thousand, respectively, in excess tax benefits recorded as a reduction to income tax expense related to these types of transactions. The tax benefits realized from disqualifying dispositions of incentive stock options were recognized in tax expense to the extent of the book compensation cost recorded. Dividends Presented below is a summary of cash dividends paid in 2021, 2020 and 2019 to common shareholders, recorded as a reduction from retained earnings. On January 21, 2022, the Board of Directors declared a $0.24 per share cash dividend, paid February 11, 2022 to the shareholders of record at the close of business on February 4, 2022.
| Years ended December 31,
(in thousands except per share data) | 2021 | 2020 | 2019
Cash dividends to common stockholders | $ | 13,107 |  | $ | 12,506 |  | $ | 10,958 |
Cash dividends per common share | $ | 0.94 |  | $ | 0.92 |  | $ | 0.80 |
The holders of unvested restricted stock awards are entitled to dividends on the same per-share ratio as holders of common stock. Tax benefits for dividends paid on unvested restricted stock awards are recorded as tax benefits in the consolidated statements of comprehensive income with a corresponding decrease to current taxes payable. Dividends on forfeited awards are included in stock-based compensation expense. Under the California Corporations Code, payment of dividends by Bancorp to its shareholders is restricted to the amount of retained earnings immediately prior to the distribution or the amount of assets that exceeds the total liabilities immediately after the distribution. As of December 31, 2021, Bancorp's retained earnings and amount of total assets that exceeds total liabilities were $239.9 million and $450.4 million, respectively. Under the California Financial Code, payment of dividends by the Bank to Bancorp is restricted to the lesser of retained earnings or the amount of undistributed net profits of the Bank from the three most recent fiscal years. Under this restriction, approximately $6.2 million of the Bank's retained earnings balance was available for payment of dividends to Bancorp as of December 31, 2021. Bancorp held $6.7 million in cash at December 31, 2021. Preferred Stock and Shareholder Rights Plan On July 6, 2017, Bancorp adopted a new shareholder rights agreement (“Rights Agreement”), which replaced the existing Rights Agreement that expired on July 23, 2017. The Rights Agreement, which expires on July 23, 2022, is designed to discourage takeovers that involve abusive tactics or do not provide fair value to shareholders. The Rights Agreement defines the percentage of share ownership of an "acquiring person" as 10% of the outstanding common shares. Currently, each right entitles the registered holder to purchase from Bancorp one two-hundredth of a share of Series A Junior Participating Preferred Stock, no par value, of Bancorp at an initial price of $90 per one one-hundredth of a preferred share, subject to adjustment upon the occurrence of certain events. As of December 31, 2021, Bancorp was authorized to issue five million shares of preferred stock with no par value, one million shares of which have been designated as Series A Junior Participating Preferred Stock, with no par value under the Rights Agreement. In the event of a proposed merger, tender offer or other attempt to gain control of Bancorp that the Board of Directors does not approve, the Board of Directors may authorize the issuance of shares of common or preferred stock that would impede the completion of such a transaction. An effect of the possible issuance of common or preferred stock, therefore, may be to deter a future takeover attempt. The Board of Directors has no present plans or understandings for the issuance of any common or preferred stock in connection with the Rights Agreement. Share Repurchase Program On April 23, 2018, Bancorp announced that its Board of Directors approved a Share Repurchase Program under which Bancorp may repurchase up to $25.0 million of its outstanding common stock through May 1, 2019. Bancorp's Board of Directors subsequently extended the Share Repurchase Program through February 28, 2020. A new Share Repurchase Program was approved by the Board of Directors on January 24, 2020, which began on March 1, 2020 and allowed Bancorp to repurchase up to $25.0 million of its outstanding common stock and ended May 2021. On July 16, 2021, Bancorp Board of Directors approved a share repurchase program under which Bancorp could repurchase up to $25.0 million of its outstanding common stock through July 31, 2023. On October 22, 2021, Bancorp's Board of Directors approved an amendment to the current share repurchase program, which increased the total authorization from $25.0 million to $57.0 million and left the expiration date unchanged. Bancorp repurchased 1,117,666 shares totaling $40.7 million in 2021. Under the Share Repurchase Program, Bancorp may purchase shares of its common stock through various means such as open market transactions, including block purchases, and privately negotiated transactions. The number of shares repurchased and the timing, manner, price and amount of any repurchases will be determined at Bancorp's discretion. Factors include, but are not limited to, stock price, trading volume and general market conditions, along with Bancorp’s general business conditions. The program may be suspended or discontinued at any time and does not obligate Bancorp to acquire any specific number of shares of its common stock. As part of the Share Repurchase Program, Bancorp entered into a trading plan adopted in accordance with Rule 10b5-1 of the Securities Exchange Act of 1934, as amended. The 10b5-1 trading plan permits common stock to be repurchased at times that might otherwise be prohibited under insider trading laws or self-imposed trading restrictions. The 10b5-1 trading plan is administered by an independent broker and is subject to price, market volume and timing restrictions.

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- Definition The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 13 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=123467817&loc=SL123496158-112644 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 13 -URI http://asc.fasb.org/extlink&oid=123467817&loc=SL123496158-112644 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 14 -Subparagraph (c) -URI http://asc.fasb.org/extlink&oid=123467817&loc=SL123496171-112644 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 14 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=123467817&loc=SL123496171-112644 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.3-04) -URI http://asc.fasb.org/extlink&oid=120397183&loc=d3e187085-122770 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 18 -Subparagraph (d) -URI http://asc.fasb.org/extlink&oid=123467817&loc=SL123496189-112644 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 13 -Subparagraph (g) -URI http://asc.fasb.org/extlink&oid=123467817&loc=SL123496158-112644 Reference 8: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -URI http://asc.fasb.org/topic&trid=2208762 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 18 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=123467817&loc=SL123496189-112644 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 13 -Subparagraph (h) -URI http://asc.fasb.org/extlink&oid=123467817&loc=SL123496158-112644 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 14 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=123467817&loc=SL123496171-112644 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 18 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=123467817&loc=SL123496189-112644 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 16 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=123467817&loc=SL123496180-112644 Reference 14: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 13 -Subparagraph (i) -URI http://asc.fasb.org/extlink&oid=123467817&loc=SL123496158-112644 Reference 15: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(e)(1)) -URI http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 + Details
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