Avidbank's second quarter arrived in a year that has not been kind to small-cap California banks, and the company used it to do two things at once: report a clean quarter of loan and deposit growth while absorbing a $2.6 million litigation settlement that distorted the earnings line. GAAP net income of $7.6 million ($0.71 per diluted share) looked a touch below the year-ago $5.8 million, but the comparable figure is misleading: Avidbank's share count has nearly doubled since the second quarter of 2025, following the late-2025 initial public offering. On a dollar basis, earnings grew 32% year over year, and excluding the litigation charge and a $1.3 million bank-owned life insurance ("BOLI") death benefit, adjusted diluted earnings per share of $0.76 would have been a 1% print on the year-ago quarter. Book value per share climbed to $26.97 - a $1.17 increase from a year earlier - and the capital ratios at the holding company remain well above regulatory minimums (Common Equity Tier 1 of 11.35%, Total Risk-Based Capital of 12.79%). The open question for the equity is not whether the franchise is earning through the rate cycle; it is whether criticized and classified loan growth - special-mention loans rose $37.2 million in the first half - is a watch item or a turning point.