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Stockholders' Equity and Stock Plans | 12 Months Ended
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Dec. 31, 2024
Equity [Abstract] |
Stockholders' Equity and Stock Plans | Stockholders' Equity and Stock Plans Share-Based Awards The 2020 Director Stock 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 2024, 2023 and 2022 we issued 27,287, 18,362 and 10,145 shares of common stock, respectively, for director payments. As of December 31, 2024, 182,355 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 and fifteen percent of their pay. 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, 2024, 370,739 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, 2024, there were 742,785 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.
| December 31, 2024 | December 31, 2023 | December 31, 2022
Number of shares withheld | 3,798 |  | 3,132 |  | 11,505 |
Total amount withheld (in thousands) | $ | 64 |  | $ | 86 |  | $ | 393 |
Weighted-average price | $ | 16.89 |  | $ | 27.57 |  | $ | 34.13 |
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 met 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, 2024, 2023, and 2022 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, 2021 | 365,381 |  | $ | 31.97 |  | $ | 2,326 |  |  | 5.57
Granted | 39,094 |  | 34.16 |  |  | 8.49 |  |
Cancelled, expired or forfeited | (23,760) |  | 37.48 |  |  |  |
Exercised | (51,010) |  | 23.01 |  | 617 |  |  |
Options outstanding at December 31, 2022 | 329,705 |  | 33.22 |  | 813 |  |  | 5.59
Exercisable (vested) at December 31, 2022 | 287,228 |  | 32.81 |  | 813 |  |  | 5.15
Options outstanding at December 31, 2022 | 329,705 |  | 33.22 |  | 813 |  |  | 5.59
Granted | 10,040 |  | 32.54 |  |  | 8.49 |  |
Cancelled, expired or forfeited | (23,804) |  | 35.06 |  |  |  |
Exercised | (12,164) |  | 20.25 |  | 88 |  |  |
Options outstanding at December 31, 2023 | 303,777 |  | 33.22 |  | 1 |  |  | 4.86
Exercisable (vested) at December 31, 2023 | 283,578 |  | 33.46 |  | 1 |  |  | 4.65
Options outstanding at December 31, 2023 | 303,777 |  | 33.22 |  | 1 |  |  | 4.86
Cancelled, expired or forfeited | (25,594) |  | 29.81 |  |  |  |
Options outstanding at December 31, 2024 | 278,183 |  | 33.92 |  | 2 |  |  | 3.93
Exercisable (vested) at December 31, 2024 | 273,242 |  | 33.92 |  | 2 |  |  | 3.87
A summary of the options outstanding and exercisable by price range as of December 31, 2024 is presented in the following table:
| Stock Options Outstanding as of December 31, 2024 |  | Stock Options Exercisable as of December 31, 2024
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 | 402 |  | 2.1 | $ | 19.96 |  |  | 402 |  | $ | 19.96 |
$20.01 - $30.00 | 60,840 |  | 0.8 | 24.98 |  | 60,840 |  | 24.98
$30.01 - $40.00 | 159,433 |  | 4.9 | 34.41 |  | 154,492 |  | 34.42
$40.01 - $50.00 | 57,508 |  | 4.6 | 42.12 |  | 57,508 |  | 42.12
| 278,183 |  |  |  |  | 273,242 |  |
The following table summarizes non-vested restricted stock awards and changes during the years ended December 31, 2024, 2023, and 2022.
| Number of Shares | Weighted Average Grant-Date Fair Value
Non-vested awards at December 31, 2021 | 61,830 |  | $ | 40.25 |
Granted | 46,672 |  | 34.03 |
Vested | (12,444) |  | 41.49 |
Cancelled or forfeited | (13,692) |  | 41.8 |
Non-vested awards at December 31, 2022 | 82,366 |  | 36.28 |
Granted | 61,978 |  | 27.10 |
Vested | (15,768) |  | 36.24 |
Cancelled or forfeited | (21,024) |  | 36.86 |
Non-vested awards at December 31, 2023 | 107,552 |  | 30.88 |
Granted | 106,964 |  | 16.61 |
Vested | (20,832) |  | 31.76 |
Cancelled or forfeited | (42,396) |  | 26.97 |
Non-vested awards at December 31, 2024 | 151,288 |  | 21.77 |
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). There were no options granted in the year 2024.
| Years ended December 31,
| 2024 | 2023 | 2022
Risk-free interest rate | N/A | 3.94 | % | 1.86 | %
Expected dividend yield on common stock | N/A | 3.07 | % | 2.85 | %
Expected life in years | N/A | 5.0 | 6.0
Expected price volatility | N/A | 34.68 | % | 33.44 | %
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 (loss) 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. Stock options 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 $622 thousand, $522 thousand, and $962 thousand during 2024, 2023, and 2022, respectively, and the total recognized deferred tax benefits related thereto were $206 thousand, $146 thousand, and $257 thousand, respectively. As of December 31, 2024, there was $800 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 2.2 years. The total grant-date fair value of stock options vested during the years ended December 31, 2024, 2023, and 2022 was $100 thousand, $255 thousand, and $356 thousand, respectively. The total grant-date fair value of restricted stock awards vested during the years ended December 31, 2024, 2023, and 2022 was $355 thousand, $428 thousand, and $431 thousand, respectively. 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 (loss), with a corresponding decrease (increase) to current taxes payable. In 2023 and 2022 we recognized $2 thousand and $3 thousand, respectively, in excess tax benefits recorded as a reduction to income tax expense related to these types of transactions while in 2024 we recognized none. 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 the years ended December 31, 2024, 2023, and 2022 to common shareholders, recorded as a reduction from retained earnings. On January 23, 2025, the Board of Directors declared a $0.25 per share cash dividend, paid on February 13, 2025 to the shareholders of record at the close of business on February 6, 2025.
| Years ended December 31,
(in thousands except per share data) | 2024 | 2023 | 2022
Cash dividends to common stockholders | $ | 16,197 |  | $ | 16,106 |  | $ | 15,673 |
Cash dividends per common share | $ | 1.00 |  | $ | 1.00 |  | $ | 0.98 |
Holders of unvested restricted stock awards are entitled to dividends at 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 (loss) 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, 2024, Bancorp's retained earnings and total assets that exceeded total liabilities were $250.0 million and $435.4 million, respectively. Under the California Financial Code, payment of dividends by the Bank to Bancorp generally 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 $717 thousand of the Bank's retained earnings balance was available for payment of dividends to Bancorp as of December 31, 2024. Dividends in excess of that amount may be paid with prior approval of the DFPI. Bancorp held $10.3 million in cash as of December 31, 2024. Share Repurchase Program In 2022, Bancorp repurchased 23,275 shares totaling $877 thousand in the share repurchase plan approved by the Bancorp's Board of Directors on July 16, 2021, amended October 22, 2021. On July 21, 2023, the Board of Directors approved the adoption of Bancorp's new share repurchase program, which replaced the existing program that expired on July 31, 2023, for up to $25.0 million and expiring on July 31, 2025. Under this new program, Bancorp repurchased 220,000 shares totaling $4.3 million at an average price of $19.21 per share in the year ended December 31, 2024, and made no repurchases under this program in the year ended December 31, 2023. Bancorp will continue to assess opportunities to utilize the program. 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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