Avidbank Holdings (AVBH) in Palo Alto, Calif., has raised $16 million.

The $417 million-asset company said Wednesday it sold roughly 1.6 million shares of common stock in a private offering.

Avidbank said it would use the proceeds to repay $6 million it received in 2009 through the Troubled Asset Relief Program and to fund growth initiatives.

"We believe the successful completion of this offering is a significant step forward for our company, providing the capital we need to continue our growth and giving us the opportunity to repurchase our outstanding Tarp securities," Mark Mordell, Avidbank's chief executive, said in a press release. "It will also allow us to maximize our potential in one of the most opportune markets in the country."

Sandler O'Neill served as agent for Avidbank, which was advised by the law firm of Manatt, Phelps & Phillips.

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