10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2015

OR

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                     to                    

Commission file number 0-30777

PACIFIC MERCANTILE BANCORP

(Exact name of Registrant as specified in its charter)

California	33-0898238
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
949 South Coast Drive, Suite 300, Costa Mesa, California	92626
(Address of principal executive offices)	(Zip Code)

(714) 438-2500

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports); and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer,” “non-accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer	o	Accelerated filer	x
Non-accelerated filer	o	Smaller reporting company	o

Indicate by check mark whether the registrant is a shell company (as defined in Securities Exchange Act Rule 12b-2). Yes  ¨    No  x

As of May 6, 2015, there were 19,775,731 shares of Common Stock outstanding.

1

PACIFIC MERCANTILE BANCORP

QUARTERLY REPORT ON FORM 10Q

FOR THE QUARTER ENDED MARCH 31, 2015

TABLE OF CONTENTS

		Page No.
Part I. Financial Information
Item 1.	Financial Statements (unaudited)	3
	Consolidated Statements of Financial Condition at March 31, 2015 and December 31, 2014	3
	Consolidated Statements of Operations for the Three Months Ended March 31, 2015 and 2014	4
	Consolidated Statements of Comprehensive Income (Loss) for the Three Months Ended March 31, 2015 and 2014	5
	Consolidated Statement of Shareholders' Equity for the Three Months Ended March 31, 2015	6
	Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2015 and 2014	7
	Notes to Interim Consolidated Financial Statements	8
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	30
Item 3.	Quantitative and Qualitative Disclosure About Market Risk	49
Item 4.	Controls and Procedures	49
Part II. Other Information
Item 1.	Legal Proceedings	50
Item 1A.	Risk Factors	50
Item 6.	Exhibits	50
Signatures		51

2

PACIFIC MERCANTILE BANCORP AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

(Dollars in thousands, except for per share data)

(Unaudited)

	March 31, 2015			December 31, 2014
ASSETS
Cash and due from banks	$	19,601		$	9,997
Interest bearing deposits with financial institutions	118,138			167,138
Cash and cash equivalents	137,739			177,135
Interest-bearing time deposits with financial institutions	4,668			4,668
Federal Reserve Bank of San Francisco and Federal Home Loan Bank Stock, at cost	8,137			8,137
Securities available for sale, at fair value	58,968			60,926
Loans (net of allowances of $12,639 and $13,833, respectively)	827,754			824,197
Other real estate owned	1,872			1,592
Accrued interest receivable	2,500			2,436
Premises and equipment, net	1,099			1,092
Net deferred tax assets	5,933			5,933
Other assets	11,519			13,494
Total assets	$	1,060,189		$	1,099,610
LIABILITIES AND SHAREHOLDERS’ EQUITY
Deposits:
Noninterest-bearing	$	237,932		$	237,491
Interest-bearing	648,051			678,818
Total deposits	885,983			916,309
Borrowings	30,000			39,500
Accrued interest payable	193			222
Other liabilities	5,679			6,771
Junior subordinated debentures	17,527			17,527
Total liabilities	939,382			980,329
Commitments and contingencies (Note 10)
Shareholders’ equity:
Preferred stock, no par value, 2,000,000 shares authorized:
Series B Convertible 8.4% Noncumulative Preferred Stock, 300,000 shares authorized; 112,000 issued and outstanding at March 31, 2015 and December 31, 2014; liquidation preference $100 per share, plus accumulated but undeclared dividends at March 31, 2015 and December 31, 2014	8,747			8,747
Series C Convertible 8.4% Noncumulative Preferred Stock, 300,000 shares authorized; 35,225 and 29,308 issued and outstanding at March 31, 2015 and December 31, 2014, respectively; liquidation preference $100 per share plus accumulated but undeclared dividends at March 31, 2015 and December 31, 2014	3,523			2,930
Common stock, no par value, 85,000,000 shares authorized; 19,756,812 and 19,462,561 shares issued and outstanding at March 31, 2015 and December 31, 2014, respectively	132,604			131,181
Accumulated deficit	(23,563		)	(22,885		)
Accumulated other comprehensive loss	(504		)	(692		)
Total shareholders’ equity	120,807			119,281
Total liabilities and shareholders’ equity	$	1,060,189		$	1,099,610

The accompanying notes are an integral part of these consolidated financial statements.

3

PACIFIC MERCANTILE BANCORP AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(Dollars in thousands, except for per share data)

(Unaudited)

	Three Months Ended March 31,
	2015			2014
Interest income:
Loans, including fees	$	9,019		$	8,793
Securities available for sale and stock	373			417
Interest-bearing deposits with financial institutions	79			77
Total interest income	9,471			9,287
Interest expense:
Deposits	1,125			1,185
Borrowings	197			258
Total interest expense	1,322			1,443
Net interest income	8,149			7,844
Provision for loan and lease losses	—			450
Net interest income after provision for loan and lease losses	8,149			7,394
Noninterest income
Service fees on deposits and other banking services	212			208
Net gain on sale of small business administration loans	—			686
Other noninterest income	670			400
Total noninterest income	882			1,294
Noninterest expense
Salaries and employee benefits	5,908			5,604
Occupancy	660			589
Equipment and depreciation	393			369
Data processing	236			251
FDIC expense	352			293
Other real estate owned expense, net	102			861
Professional fees	628			574
Business development	156			94
Loan related expense	69			84
Insurance	88			137
Other operating expense	524			565
Total noninterest expense	9,116			9,421
Loss from continuing operations before income taxes	(85		)	(733		)
Income tax (benefit) provision	—			—
Net loss from continuing operations	(85		)	(733		)
Discontinued Operations
Income from discontinued operations before income taxes	—			1,184
Income tax provision (benefit)	—			—
Net income from discontinued operations	—			1,184
Net (loss) income	(85		)	451
Accumulated undeclared dividends on preferred stock	(309		)	(296		)
Net (loss) income allocable to common shareholders	$	(394	)	$	155
Basic (loss) income per common share:
Net loss from continuing operations	$	(0.02	)	$	(0.05	)
Net (loss) income available to common shareholders	$	(0.02	)	$	0.01
Diluted (loss) income per common share:
Net loss from continuing operations	$	(0.02	)	$	(0.05	)
Net (loss) income available to common shareholders	$	(0.02	)	$	0.01
Weighted average number of common shares outstanding:
Basic	19,616,691			19,146,116
Diluted	19,616,691			19,146,116

The accompanying notes are an integral part of these consolidated financial statements.

4

PACIFIC MERCANTILE BANCORP AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Dollars in thousands)

(Unaudited)

	Three Months Ended March 31,
	2015			2014
Net (loss) income	$	(85	)	$	451
Other comprehensive income, net of tax:
Change in unrealized gain on securities available for sale	188			617
Total comprehensive income	$	103		$	1,068

The accompanying notes are an integral part of these consolidated financial statements.

5

PACIFIC MERCANTILE BANCORP AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(Shares and dollars in thousands)

(Unaudited)

For the Three Months EndedMarch 31, 2015

	Series B and C Preferred stock			Common stock				Retained earnings (accumulated deficit)			Accumulated other comprehensive income (loss)			Total
	Number of shares	Amount		Number of shares		Amount
Balance at December 31, 2014	141	$	11,677	19,463		$	131,181	$	(22,885	)	$	(692	)	$	119,281
Issuance of restricted stock, net	—	—		91		—		—			—			—
Tax effect from vesting of restricted stock	—	—		(1	)	—		—			—			—
Series C Preferred Stock issued as a stock dividend on Series B Preferred Stock	6	593		—		—		(593		)	—			—
Common stock based compensation expense	—	—		—		316		—			—			316
Common stock options exercised	—	—		204		1,107		—			—			1,107
Net loss	—	—		—		—		(85		)	—			(85		)
Other comprehensive income	—	—		—		—		—			188			188
Balance at March 31, 2015	147	$	12,270	19,757		$	132,604	$	(23,563	)	$	(504	)	$	120,807

The accompanying notes are an integral part of these consolidated financial statements.

6

PACIFIC MERCANTILE BANCORP AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOW

(Dollars in thousands)

(Unaudited)

	Three Months Ended March 31,
	2015			2014
Cash Flows From Operating Activities:
Net income (loss)	$	(85	)	$	451
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization	128			147
Provision for loan and lease losses	—			450
Amortization of premium on securities	83			81
Net amortization of deferred fees and unearned income on loans	(149		)	(46		)
Net gain on sale of premises and equipment	—			(21		)
Net gain on sale of small business administration loans	—			(686		)
Small business administration loan originations	—			(9,165		)
Proceeds from sale of small business administration loans	—			9,853
Write down of other real estate owned	—			298
Stock-based compensation expense	316			276
Other	—			(27		)
Changes in operating assets and liabilities:
Net (increase) decrease in accrued interest receivable	(64		)	(306		)
Net (increase) decrease in other assets	(95		)	(305		)
Net decrease (increase) in deferred taxes	—			432
Net (increase) decrease in income taxes receivable	(17		)	(23		)
Net (decrease) increase in accrued interest payable	(29		)	197
Net (decrease) increase in other liabilities	(1,092		)	(738		)
Net cash provided by discontinued operations	—			976
Net cash (used in) provided by operating activities	(1,004		)	1,844
Cash Flows From Investing Activities:
Maturities of and principal payments received on securities available for sale and other stock	2,063			2,410
Principal payments received on other investments	2,087			—
Proceeds from sale of other real estate owned	—			1,130
Capitalized cost of other real estate owned	—			(21		)
Net increase in loans	(3,688		)	(6,662		)
Purchases of premises and equipment	(135		)	(179		)
Proceeds from sale of premises and equipment	—			38
Net cash provided by (used in) investing activities	327			(3,284		)
Cash Flows From Financing Activities:
Net increase (decrease) in deposits	(30,326		)	68,821
Payments of borrowings	(9,500		)	(9,408		)
Proceeds from exercise of common stock options	1,107			228
Net cash (used in) provided by financing activities	(38,719		)	59,641
Net (decrease) increase in cash and cash equivalents	(39,396		)	58,201
Cash and Cash Equivalents, beginning of period	177,135			106,940
Cash and Cash Equivalents, end of period	$	137,739		$	165,141
Supplementary Cash Flow Information:
Cash paid for interest on deposits and other borrowings	$	1,351		$	4,864
Cash paid for income taxes	$	—		$	—
Non-Cash Investing Activities:
Transfer of loans into other real estate owned	$	280		$	4,900
Non-Cash Financing Activities:
Series C Preferred Stock issued in connection with dividends on Series B Preferred Stock	$	593		$	544

The accompanying notes are an integral part of these consolidated financial statements.

7

1. Nature of Business

Organization

Pacific Mercantile Bancorp (“PMBC”) is a bank holding company which, through its wholly owned subsidiary, Pacific Mercantile Bank (the “Bank”), is engaged in the commercial banking business in Southern California. PMBC is registered as a one bank holding company under the United States Bank Holding Company Act of 1956, as amended, and, as such, is regulated by the Board of Governors of the Federal Reserve System (the “Federal Reserve Board”) and the Federal Reserve Bank of San Francisco (“FRBSF”) under delegated authority from the Federal Reserve Board. Substantially all of our operations are conducted and substantially all of our assets are owned by the Bank, which accounts for substantially all of our consolidated revenues, expenses, and income. The Bank provides a full range of banking services to small and medium-size businesses, professionals and the general public in Orange, Los Angeles, San Bernardino and San Diego counties in Southern California and is subject to competition from other banks and financial institutions and from financial services organizations conducting operations in those same markets. The Bank is chartered by the California Department of Business Oversight under the Division of Financial Institutions and is a member of the FRBSF. In addition, the deposit accounts of the Bank’s customers are insured by the Federal Deposit Insurance Corporation up to the maximum amount allowed by law. PM Asset Resolution, Inc. ("PMAR") is a wholly-owned subsidiary of PMBC which exists for the purpose of purchasing certain non-performing loans and other real estate from the Bank and thereafter collecting on or disposing of those assets.

During the fourth quarter of 2013, the Bank announced the closure of our mortgage banking business, which was completed during the third quarter of 2014. The Bank operated a direct-to-consumer retail mortgage banking business, originating and funding residential mortgage loans and selling those loans, generally within the succeeding 30 days. Our mortgage banking operations are classified as discontinued operations within the consolidated financial statements and footnotes for all presented periods.

PMBC, the Bank and PMAR are sometimes referred to, together, on a consolidated basis, in this report as the “Company” or as “we”, “us” or “our”.

2. Significant Accounting Policies

Except as discussed below, our accounting policies are described in Note 2, Significant Accounting Policies of our audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2014 (“Form 10-K”).

Interim Consolidated Financial Statements Basis of Presentation

Our interim consolidated financial statements are prepared in accordance with generally accepted accounting principles in effect in the United States (“GAAP”) for interim financial information pursuant to rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”), including instructions to Form 10-Q and Article 10 of Regulation S-X, on a basis consistent with prior periods. Our financial statements reflect all adjustments that are, in the opinion of management, necessary to present a fair statement of the results for the interim periods presented. The interim results are not necessarily indicative of operating results for the full year. The interim information should be read in conjunction with our audited consolidated financial statements in our Form 10-K.

Use of Estimates

The preparation of the financial statements in conformity with GAAP requires us to make certain estimates and assumptions that could affect the reported amounts of certain of our assets, liabilities, and contingencies at the date of the financial statements and the reported amounts of our revenues and expenses during the reporting periods. For the fiscal periods covered by this report, those estimates related primarily to our determinations of the allowance for loan and lease losses (“ALLL”), other real estate owned (“OREO”), the fair values of securities available for sale, repurchase reserves, and the determination of the valuation allowance pertaining to deferred tax assets. If circumstances or financial trends on which those estimates were based were to change in the future or there were to occur any currently unanticipated events affecting the amounts of those estimates, our future financial position or results of operations could differ, possibly materially, from those expected at the current time.

Principles of Consolidation

Our consolidated financial statements for the three months ended March 31, 2015 and 2014 include the accounts of PMBC, the Bank and PMAR. All significant intercompany balances and transactions were eliminated in consolidation.

8

Recent Accounting Pronouncements

In April 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2014-08, “Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity,” which amended its guidance on classification and reporting of discontinued operations. The amendments clarify when an entity should classify a component as discontinued operations, how to report the balances related to discontinued operations for prior periods, and additional disclosure requirements for discontinued operations. This guidance is effective for interim and annual periods beginning after December 15, 2014. Early adoption is permitted only for disposals which have not been previously reported. We adopted this guidance on January 1, 2015 and it did not have a material effect on our consolidated financial statements.

In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers (Topic 606),” which amended its guidance on revenue recognition to conform with international accounting guidance under the International Accounting Standards Board. The ASU provides a framework for addressing revenue recognition and replaces most existing revenue recognition guidance, as well as requires increased disclosure requirements. This guidance is effective for interim and annual periods beginning after December 15, 2016. Early adoption is not permitted. We will adopt this guidance on January 1, 2017. We are currently evaluating the expected impact on our consolidated financial statements.

In June 2014, the FASB issued ASU 2014-11, “Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period,” which amended its guidance on how to account for certain performance related share-based compensation plans. The amendments clarify the guidance on how to account for performance based awards when the requisite service period is met prior to potential performance targets being achieved. This guidance is effective for interim and annual periods beginning after December 15, 2015. Early adoption is permitted. We will adopt this guidance on January 1, 2016 and do not expect it to have a material effect on our consolidated financial statements.

In August 2014, the FASB issued ASU 2014-15, “Presentation of Financial Statements — Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern,” which defines management's responsibility to evaluate whether there is substantial doubt about an organization's ability to continue as a going concern and clarifies when to provide related footnote disclosure. This guidance is effective for interim and annual periods beginning after December 15, 2016. Early adoption is permitted. We will adopt this guidance on January 1, 2017 and do not expect it to have a material effect on our consolidated financial statements.

In January 2015, the FASB issued ASU 2015-01, “Income Statement - Extraordinary and Unusual Items (Subtopic 225-20): Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items,” which eliminated the concept of extraordinary items from GAAP. This guidance is effective for interim and annual periods beginning after December 15, 2015. Early adoption is permitted. We adopted this guidance on January 1, 2015 and it did not have an impact on our consolidated financial statements.

In February 2015, the FASB issued ASU 2015-02, “Consolidation (Topic 810): Amendments to the Consolidation Analysis,” amends the guidance for assessing how relationships of related parties affect the consolidation analysis, eliminates the presumption that a general partner should consolidate a limited partnership, eliminates the consolidation model specific to limited partnerships, clarifies when fees paid to a decision maker should be a factor in consolidation of a variable interest entity, and reduces the number of variable interest entity consolidation models. This guidance is effective for interim and annual periods beginning after December 15, 2015. Early adoption is permitted. We will adopt this guidance on January 1, 2016 and do not expect it to have an impact on our financial statements.

In April 2015, the FASB issued ASU 2015-03, “Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs,” which requires that the debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability. This simplifies the presentation of debt issuance costs and makes the presentation consistent with the presentation of debt discounts. This guidance is effective for interim and annual periods beginning after December 15, 2015. Early adoption is permitted. We will adopt this guidance on January 1, 2016 and do not expect it to have a material impact on our financial statements.

9

3. Fair Value Measurements

Under FASB Accounting Standards Codification (“ASC”) 820-10, we group assets and liabilities at fair value in three levels, based on the markets in which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value. These levels are:

Level 1	Valuation is based upon quoted prices for identical instruments traded in active markets.
Level 2	Valuation is based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market.
Level 3	Valuation is generated from model-based techniques that use at least one significant assumption not observable in the market. These unobservable assumptions reflect estimates of assumptions that market participants would use in pricing the asset or liability. Valuation techniques include use of option pricing models, discounted cash flow models and similar techniques.

Risks with Fair Value Measurements

Fair value estimates are made at a discrete point in time based on relevant market information and other information about the financial instruments. Because no active market exists for a significant portion of our financial instruments, fair value estimates are based in large part on judgments we make primarily regarding current economic conditions, risk characteristics of various financial instruments, prepayment rates, and future expected loss experience. These estimates are subjective in nature and invariably involve some inherent uncertainties. Additionally, the occurrence of unexpected events or changes in circumstances can occur that could require us to make changes to our assumptions and which, in turn, could significantly affect and require us to make changes to our previous estimates of fair value.

In addition, the fair value estimates are based on existing on and off-balance sheet financial instruments without attempting to estimate the value of existing and anticipated future customer relationships and the value of assets and liabilities that are not considered financial instruments, such as premises and equipment and OREO.

Measurement Methodology

Cash and Cash Equivalents. The fair value of cash and cash equivalents approximates its carrying value.

Interest-Bearing Deposits with Financial Institutions. The fair values of interest-bearing deposits maturing within one year approximate their carrying values.

FHLB and FRBSF Stock. The Bank is a member of the Federal Home Loan Bank of San Francisco (“FHLB”) and the FRBSF. As members, we are required to own stock of the FHLB and the FRBSF, the amount of which is based primarily on the level of our borrowings from those institutions. We also have the right to acquire additional shares of stock in either or both of the FHLB and the FRBSF; however, to date, we have not done so. The fair values of the FHLB and FRBSF stock are equal to their respective carrying amounts, are classified as restricted securities and are periodically evaluated for impairment based on our assessment of the ultimate recoverability of our investments in that stock. Any cash or stock dividends paid to us on such stock are reported as income.

Investment Securities Available for Sale.Fair value measurement for our investment securities available for sale is based upon quoted prices, if available. If quoted prices are not available, fair values are measured using independent pricing models or other model-based valuation techniques such as the present value of future cash flows, adjusted for the security’s credit rating, prepayment assumptions and other factors such as credit loss assumptions. Level 1 investment securities include those traded on an active exchange, such as the New York Stock Exchange, U.S. Treasury securities that are traded by dealers or brokers in active over-the- counter markets and money market funds. Level 2 investment securities include mortgage-backed securities issued by government sponsored entities, municipal bonds and corporate debt securities. Securities classified as Level 3 include asset-backed securities in less liquid markets.

Impaired Loans. Loans measured for impairment are measured at an observable market price (if available), or the fair value of the loan’s collateral (if the loan is collateral dependent). The fair value of an impaired loan may be estimated using one of several methods, including collateral value, market value of similar debt, liquidation value and discounted cash flows. Those impaired loans not requiring a specific loan loss reserve represent loans for which the fair value of the expected repayments or collateral exceeds the recorded investments in such loans. When the fair value of the collateral is based on an observable market price or a current appraised value, we record the impaired loan at Level 2. When an appraised value is not available or we determine that the fair value of the collateral is further impaired below the appraised value and there is no observable market price, we record the impaired loan at Level 3.

10

Loans. The fair value for loans with variable interest rates less a credit discount is the carrying amount. The fair value of fixed rate loans is derived by calculating the discounted value of future cash flows expected to be received by the various homogeneous categories of loans. All loans have been adjusted to reflect changes in credit risk. Changes are not recorded directly as an adjustment to current earnings or comprehensive income, but rather as an adjustment component in determining the overall adequacy of the loan loss reserve.

Other Real Estate Owned. OREO is reported at its net realizable value (fair value less estimated costs to sell), at the time any real estate collateral is acquired by the Bank in satisfaction of a loan. Subsequently, OREO is carried at the lower of carrying value or fair value less estimated costs to sell. Fair value is determined based upon independent market prices, appraised values of the collateral or management’s estimation of the value of the collateral. When the fair value of the collateral is based on an observable market price or a current appraised value, we record the foreclosed asset at Level 2. When an appraised value is not available or management determines the fair value of the collateral is further impaired below the appraised value and there is no observable market price, we record the foreclosed asset at Level 3.

Deposits. Deposits are carried at historical cost. The carrying amounts of deposits from savings and money market accounts are deemed to approximate fair value as they either have no stated maturities or short-term maturities. Certificates of deposit are estimated utilizing discounted cash flow techniques. The interest rates applied are rates currently being offered for similar certificates of deposit.

Borrowings. The fair value of borrowings is the carrying amount for those borrowings that mature on a daily basis. The fair value of term borrowings is derived by calculating the discounted value of future cash flows expected to be paid out by the Company.

Junior Subordinated Debentures. The fair value of the junior subordinated debentures is based on quoted market prices of the underlying securities. These securities are variable rate in nature and repriced quarterly.

Commitments to Extend Credit and Standby Letters of Credit. The fair value of commitments to extend credit and standby letters of credit are based on fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements and the counterparties’ credit standing.

Interest Receivable and Interest Payable. The carrying amounts of our accrued interest receivable and accrued interest payable are deemed to approximate fair value.

Assets Recorded at Fair Value on a Recurring Basis

The following tables show the recorded amounts of assets and liabilities measured at fair value on a recurring basis at March 31, 2015 and December 31, 2014:

	At March 31, 2015
(Dollars in thousands)	Total		Level 1		Level 2		Level 3
Assets and Liabilities at Fair Value:
Investment securities available for sale
Residential mortgage backed securities issued by U.S. agencies	$	51,972	$	—	$	51,972	$	—
Residential collateralized mortgage obligations issued by non-agency	754		—		754		—
Asset-backed security	1,438		—		—		1,438
Mutual funds	4,804		4,804		—		—
Total securities available for sale at fair value	$	58,968	$	4,804	$	52,726	$	1,438

11

	At December 31, 2014
(Dollars in thousands)	Total		Level 1		Level 2		Level 3
Assets and Liabilities at Fair Value:
Investment securities available for sale
Residential mortgage backed securities issued by U.S. agencies	$	53,739	$	—	$	53,739	$	—
Residential collateralized mortgage obligations issued by non-agency	777		—		777		—
Asset-backed security	1,650		—		—		1,650
Mutual funds	4,760		4,760		—		—
Total securities available for sale at fair value	$	60,926	$	4,760	$	54,516	$	1,650

The changes in Level 3 assets measured at fair value on a recurring basis are summarized as follows for the three months ended March 31, 2015:

	Asset Backed Securities
	(Dollars in thousands)
Balance of recurring Level 3 instruments at December 31, 2014	$	1,650
Total gains or losses (realized/unrealized):
Included in other comprehensive income	(202		)
Settlements	(10		)
Transfers in and/or out of Level 3	—
Balance of Level 3 assets at March 31, 2015	$	1,438

Assets Recorded at Fair Value on a Nonrecurring Basis

We may be required, from time to time, to measure certain assets at fair value on a nonrecurring basis in accordance with GAAP. These nonrecurring fair value adjustments typically involve application of lower of cost or market accounting or write-downs of individual assets. Information regarding assets measured at fair value on a nonrecurring basis is set forth in the table below.

	At March 31, 2015
	Total		Level 1		Level 2		Level 3
Assets at Fair Value:	(Dollars in thousands)
Impaired loans	$	30,736	$	—	$	—	$	30,736
Other real estate owned	1,872		—		1,872		—
Total	$	32,608	$	—	$	1,872	$	30,736

Significant Unobservable Inputs and Valuation Techniques of Level 3 Fair Value Measurements

For our fair value measurements classified in Level 3 of the fair value hierarchy as of March 31, 2015, a summary of the significant unobservable inputs and valuation techniques is as follows:

	Fair Value Measurement as of March 31, 2015		Valuation Techniques(3)	Unobservable Inputs(3)	Range	Weighted Average
	(Dollars in thousands)
Assets
Asset-backed security	$	1,438	Third-Party Pricing	Marketability discount	N/A (1)	N/A (1)
				Illiquidity discount	N/A (1)	N/A (1)
Impaired loans	30,736		Third-Party Pricing	Appraisals	N/A (2)	N/A (2)
	$	32,174

(1) Information is unavailable as valuation was obtained from third-party pricing services.

(2) We obtain appraisals for our various properties included within impaired loans which primarily rely upon market comparisons. These market comparisons support our assumption that the carrying value of the respective loans either requires or does not require additional impairment.

(3) As of March 31, 2015, there has been no change to our valuation techniques or the types of unobservable inputs used in the calculation of fair value from December 31, 2014.

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Fair Value Measurements for Other Financial Instruments

The table below provides estimated fair values and related carrying amounts of our financial instruments as of March 31, 2015 and December 31, 2014, excluding financial assets and liabilities which are recorded at fair value on a recurring basis.

	Estimated Fair Value
	At March 31, 2015										At December 31, 2014
	Carrying Value		Total		Level 1		Level 2		Level 3		Carrying Value		Total		Level 1	Level 2	Level 3
	(Dollars in thousands)
Financial assets:
Cash and cash equivalents	$	137,739	$	137,739	$	137,739	$	—	$	—	$	177,135	$	177,135	177,135	—	—
Interest-bearing deposits with financial institutions	4,668		4,668		4,668		—		—		4,668		4,668		4,668	—	—
Federal Reserve Bank of San Francisco and Federal Home Loan Bank stock	8,137		8,137		8,137		—		—		8,137		8,137		8,137	—	—
Loans, net	827,754		822,570		—		—		822,570		824,197		818,547		—	—	818,547
Accrued interest receivable	2,500		2,500		2,500		—		—		2,436		2,436		2,436	—	—
Financial liabilities:
Noninterest bearing deposits	237,932		237,932		237,932		—		—		237,491		237,491		237,491	—	—
Interest-bearing deposits	648,051		647,988		—		647,988		—		678,818		678,890		—	678,890	—
Borrowings	30,000		30,000		—		30,000		—		39,500		39,418		—	39,418	—
Junior subordinated debentures	17,527		17,527		—		17,527		—		17,527		17,527		—	17,527	—
Accrued interest payable	193		193		193		—		—		222		222		222	—	—

4. Investments

Securities Available For Sale, at Fair Value

The following table sets forth the major components of securities available for sale and compares the amortized costs and estimated fair market values of, and the gross unrealized gains and losses on, these securities at March 31, 2015 and December 31, 2014:

(Dollars in thousands)	March 31, 2015									December 31, 2014
	Amortized Cost		Gross Unrealized					Estimated Fair Value		Amortized Cost		Gross Unrealized					Estimated Fair Value
			Gain		Loss							Gain		Loss
Securities Available for Sale
Residential mortgage backed securities issued by U.S. Agencies(1)	$	52,535	$	67	$	(630	)	$	51,972	$	54,653	$	26	$	(940	)	$	53,739
Residential collateralized mortgage obligations issued by non agencies(1)	772		—		(18		)	754		790		—		(13		)	777
Asset backed security(2)	2,074		—		(636		)	1,438		2,083		—		(433		)	1,650
Mutual funds(3)	4,750		70		(16		)	4,804		4,750		45		(35		)	4,760
Total	$	60,131	$	137	$	(1,300	)	$	58,968	$	62,276	$	71	$	(1,421	)	$	60,926

(1) Secured by closed-end first liens on 1-4 family residential mortgages.

(2) Comprised of a security that represents an interest in a pool of trust preferred securities issued by U.S.-based banks and insurance companies.

(3) Consists primarily of mutual fund investments in closed-end first lien 1-4 family residential mortgages.

At March 31, 2015, U.S. agency mortgage backed securities with an aggregate fair market value of $4.0 million were pledged to secure repurchase agreements, local agency deposits and treasury, tax and loan accounts. At December 31, 2014, U.S. agency mortgage backed securities and collateralized mortgage obligations with an aggregate fair market value of $3.6 million were pledged to secure repurchase agreements, local agency deposits and treasury, tax and loan accounts.

The amortized cost and estimated fair values of securities available for sale at March 31, 2015 and December 31, 2014 are shown in the tables below by contractual maturities taking into consideration historical prepayments based on the prior twelve months of principal payments. Expected maturities will differ from contractual maturities and historical prepayments, particularly with respect to collateralized mortgage obligations, primarily because prepayment rates are affected by changes in conditions in the interest rate market and, therefore, future prepayment rates may differ from historical prepayment rates.

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	At March 31, 2015 Maturing in
(Dollars in thousands)	One year or less			Over one year through five years			Over five years through ten years			Over ten Years			Total
Securities available for sale, amortized cost	$	7,778		$	28,868		$	16,149		$	7,336		$	60,131
Securities available for sale, estimated fair value	7,709			28,635			15,979			6,645			58,968
Weighted average yield	1.51		%	1.63		%	1.58		%	1.87		%	1.63		%

	At December 31, 2014 Maturing in
(Dollars in thousands)	One year or less			Over one year through five years			Over five years through ten years			Over ten Years			Total
Securities available for sale, amortized cost	$	7,483		$	29,008		$	17,448		$	8,337		$	62,276
Securities available for sale, estimated fair value	7,359			28,614			17,148			7,805			60,926
Weighted average yield	1.54		%	1.64		%	1.60		%	1.83		%	1.64		%

We had no sales of securities available for sale during the three months ended March 31, 2015 and 2014.

The tables below indicate, as of March 31, 2015 and December 31, 2014, the gross unrealized losses and fair values of our investments, aggregated by investment category, and length of time that the individual securities have been in a continuous unrealized loss position.

	Securities with Unrealized Loss at March 31, 2015
	Less than 12 months					12 months or more					Total
(Dollars in thousands)	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss			Fair Value		Unrealized Loss
Residential mortgage backed securities issued by U.S. Agencies	$	381	$	—		$	30,002	$	(630	)	$	30,383	$	(630	)
Residential collateralized mortgage obligations issued by non-agencies	—		—			754		(18		)	754		(18		)
Asset backed security	—		—			1,438		(636		)	1,438		(636		)
Mutual funds	1,984		(16		)	—		—			1,984		(16		)
Total	$	2,365	$	(16	)	$	32,194	$	(1,284	)	$	34,559	$	(1,300	)

	Securities With Unrealized Loss at December 31, 2014
	Less than 12 months					12 months or more					Total
(Dollars In thousands)	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss			Fair Value		Unrealized Loss
Residential mortgage backed securities issued by U.S. Agencies	$	—	$	—		$	50,697	$	(940	)	$	50,697	$	(940	)
Residential collateralized mortgage obligations issued by non-agencies	—		—			776		(13		)	776		(13		)
Asset-backed security	—		—			1,651		(433		)	1,651		(433		)
Mutual funds	2,464		(35		)	—		—			2,464		(35		)
Total	$	2,464	$	(35	)	$	53,124	$	(1,386	)	$	55,588	$	(1,421	)

We regularly monitor investments for significant declines in fair value. We have determined that declines in the fair values of these investments below their respective amortized costs, as set forth in the tables above, are temporary because (i) those declines were due to interest rate changes and not to a deterioration in the creditworthiness of the issuers of those investment securities, and (ii) we have the ability to hold those securities until there is a recovery in their values or until their maturity.

We recognize other-than-temporary impairments (“OTTI”) to our available-for-sale debt securities in accordance with FASB ASC 320-10. When there are credit losses associated with, but we have no intention to sell, an impaired debt security, and it is more likely than not that we will not have to sell the security before recovery of its cost basis, we will separate the amount of impairment, or OTTI, between the amount that is credit related and the amount that is related to non-credit factors. Credit-related impairments are recognized in our consolidated statements of operations. Any non-credit-related impairments are recognized and reflected in other comprehensive income (loss) in our consolidated statements of financial condition.

Through the impairment assessment process, we determined that the available-for-sale securities discussed below were other-than-temporarily impaired at March 31, 2015. We recorded no impairment credit losses on available-for-sale securities in

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our consolidated statements of operations for the three months ended March 31, 2015 and 2014. The OTTI related to factors other than credit losses, in the aggregate amount of $636 thousand, and was recognized as other comprehensive loss in our accompanying consolidated statement of financial condition as of March 31, 2015.

The table below presents, for the three months ended March 31, 2015, a roll-forward of OTTI in those instances when a portion of the OTTI was attributable to non-credit related factors and, therefore, was recognized in other comprehensive loss:

(Dollars in thousands)	Gross Other- Than- Temporary Impairments			Other-Than- Temporary Impairments Included in Other Comprehensive Loss			Net Other-Than- Temporary Impairments Included in Retained  Earnings (Deficit)
Balance – December 31, 2014	$	(986	)	$	(433	)	$	(553	)
Change in market value on a security for which an OTTI was previously recognized	(208		)	(208		)	—
Principal received on OTTI security	5			5			—
Balance – March 31, 2015	$	(1,189	)	$	(636	)	$	(553	)

In determining the component of OTTI related to credit losses, we compare the amortized cost basis of each OTTI security to the present value of its expected cash flows, discounted using the effective interest rate implicit in the security at the date of acquisition.

As a part of our OTTI assessment process with respect to securities available for sale with unrealized losses, we consider available information about (i) the performance of the collateral underlying each such security, including any credit enhancements, (ii) historical prepayment speeds, (iii) delinquency and default rates, (iv) loss severities, (v) the age or “vintage” of the security, and (vi) any rating agency reports on the security. Significant judgments are required with respect to these and other factors in order to make a determination of the future cash flows that can be expected to be generated by the security.

Based on our OTTI assessment process, we determined that there is one asset-backed security in our portfolio of securities available for sale that was impaired as of March 31, 2015. This security is a multi-class, cash flow collateralized bond obligation backed by a pool of trust preferred securities issued by a diversified pool of 56 issuers that consisted of 45 U.S. depository institutions and 11 insurance companies at the time of the security’s issuance in November 2007. We purchased $3.0 million face amount of this security in November 2007 at a price of 95.21% for a total purchase price of $2.9 million, out of a total of $363 million of this security sold at the time of issuance. The security that we own (CUSIP 74042CAE8) is the mezzanine class B piece security with a variable interest rate of 3 month LIBOR plus 60 basis points, which had a rating of Aa2 and AA by Moody’s and Fitch, respectively, at the time of issuance in 2007.

As of March 31, 2015, the amortized cost of this security was $2.1 million with a fair value of $1.4 million, for an unrealized loss of approximately $636 thousand. As of March 31, 2015, the security had a Ba2 rating from Moody’s and a CCC rating from Fitch and had experienced $42.5 million in defaults (12.5% of total current collateral) and $24.0 million in deferring securities (7% of total current collateral) from issuance to March 31, 2015. We estimate that the security could experience another $95.0 million in defaults before the issuer would not receive all of the contractual cash flows under this security. This analysis is based on the following assumptions: approximate future default rates of 3.3%, prepayment rates of 1% until maturity, and 15% recovery of future defaults.

We have made a determination that the remainder of our securities with respect to which there were unrealized losses as of March 31, 2015 are not other-than-temporarily impaired, because we have concluded that we have the ability to continue to hold those securities until their respective fair market values increase above their respective amortized costs or, if necessary, until their respective maturities. In reaching that conclusion we considered a number of factors and other information, which included: (i) the significance of each such security, (ii) the amount of the unrealized losses attributable to each such security, (iii) our liquidity position, (iv) the impact that retention of those securities could have on our capital position and (v) our evaluation of the expected future performance of these securities (based on the criteria discussed above).

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Other Investments

As of December 31, 2014, we had one investment in a limited partnership which was accounted for under the equity method of accounting and included within other assets on the consolidated statements of financial condition. During the three months ended March 31, 2015, we redeemed 100% of our investment in the limited partnership for a return of capital of $2.1 million. As of March 31, 2015 and December 31, 2014, our other investment was as follows:

	March 31, 2015		December 31, 2014
	(Dollars in thousands)
Investment accounted for under the equity method	$	—	$	2,081

5. Loans and Allowance for Loan and Lease Losses

The loan portfolio consisted of the following at:

	March 31, 2015					December 31, 2014
(Dollars in thousands)	Amount			Percent		Amount			Percent
Commercial loans	$	312,613		37.2	%	$	301,746		36.0	%
Commercial real estate loans – owner occupied	211,654			25.2	%	212,515			25.4	%
Commercial real estate loans – all other	150,416			17.9	%	146,676			17.5	%
Residential mortgage loans – multi-family	82,674			9.8	%	95,276			11.4	%
Residential mortgage loans – single family	64,748			7.7	%	64,326			7.7	%
Land development loans	4,596			0.5	%	7,745			0.9	%
Consumer loans	13,598			1.6	%	9,687			1.2	%
Total loans	840,299			100.0	%	837,971			100.0	%
Deferred loan origination costs, net	94					59
Allowance for loan and lease losses	(12,639		)			(13,833		)
Loans, net	$	827,754				$	824,197

At March 31, 2015 and December 31, 2014, loans of approximately $531 million and $425 million, respectively, were pledged to secure borrowings obtained from the FHLB and to support our unfunded borrowing capacity.

Allowance for Loan and Lease Losses

The ALLL represents our estimate of credit losses in our loan and lease portfolio that are probable and estimable at the balance sheet date. We employ economic models that are based on bank regulatory guidelines, industry standards and our own historical loan loss experience, as well as a number of more subjective qualitative factors, to determine both the sufficiency of the ALLL and the amount of the provisions that are required to increase or replenish the ALLL.

The ALLL is first determined by (i) analyzing all classified loans (graded as “Substandard” or “Doubtful” under our internal asset quality grading parameters) on non-accrual status for loss exposure and (ii) establishing specific reserves as needed. ASC 310-10 defines loan impairment as the existence of uncertainty concerning collection of all principal and interest in accordance with the contractual terms of a loan. For collateral dependent loans, impairment is typically measured by comparing the loan amount to the fair value of collateral, less estimated costs to sell, with any “shortfall” amount charged off. Other methods can be used in estimating impairment, including market price and the present value of expected future cash flows discounted at the loan’s original interest rate. We are an active lender with the U.S. Small Business Administration and collection of a percentage of the loan balance of many of the loans originated is guaranteed.  The ALLL reserves are calculated against the non-guaranteed loan balances. 

On a quarterly basis, we utilize a classification migration model and individual loan review analytical tools as starting points for determining the adequacy of the ALLL for homogenous pools of loans that are not subject to specific reserve allocations. Our loss migration analysis tracks a certain number of quarters of loan loss history and industry loss factors to determine historical losses by classification category for each loan type, except certain consumer loans. We then apply these calculated loss factors, together with qualitative factors based on external economic conditions and trends and internal assessments, to the outstanding loan balances in each homogenous group of loans, and then, using our internal asset quality grading parameters, we grade the loans as “Pass,” “Special Mention,” “Substandard” or “Doubtful”. We also conduct individual loan review analysis, as part of the ALLL allocation process, applying specific monitoring policies and procedures in analyzing the existing loan portfolio. This

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grading is based on the credit classifications of assets as prescribed by government regulations and industry standards and is separated into the following groups:

• Pass: Loans classified as pass include current loans performing in accordance with contractual terms, installment/consumer loans that are not individually risk rated, and loans which exhibit certain risk factors that require greater than usual monitoring by management.

• Special Mention: Loans classified as special mention, while generally not delinquent, have potential weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or in the Bank’s credit position at some future date.

• Substandard: Loans classified as substandard have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. There is a distinct possibility that the Bank will sustain some loss if the deficiencies are not corrected.

• Doubtful: Loans classified as doubtful have all the weaknesses inherent in a substandard loan, and may also be at delinquency status and have defined weaknesses based on currently existing facts, conditions and values making collection or liquidation in full highly questionable and improbable.

Set forth below is a summary of the activity in the ALLL during the three months ended March 31, 2015 and 2014:

(Dollars in thousands)	Commercial			Real  Estate			Land Development			Consumer and Single Family Mortgages			Total
ALLL in the three months ended March 31, 2015:
Balance at beginning of period	$	7,670		$	5,133		$	296		$	734		$	13,833
Charge offs	(1,387		)	—			(85		)	—			(1,472		)
Recoveries	275			1			—			2			278
Provision	795			(847		)	(91		)	143			—
Balance at end of period	$	7,353		$	4,287		$	120		$	879		$	12,639
ALLL in the three months ended March 31, 2014:
Balance at beginning of period	$	5,812		$	4,517		$	165		$	864		$	11,358
Charge offs	(110		)	—			—			(100		)	(210		)
Recoveries	283			18			—			41			342
Provision	3			504			(11		)	(46		)	450
Balance at end of period	$	5,988		$	5,039		$	154		$	759		$	11,940

Set forth below is information regarding loan balances and the related ALLL, by portfolio type, as of March 31, 2015 and December 31, 2014.

(Dollars in thousands)	Commercial		Real  Estate		Land Development		Consumer and Single Family Mortgages		Total
ALLL balance at March 31, 2015 related to:
Loans individually evaluated for impairment	$	812	$	—	$	—	$	—	$	812
Loans collectively evaluated for impairment	6,541		4,287		120		879		11,827
Total	$	7,353	$	4,287	$	120	$	879	$	12,639
Loans balance at March 31, 2015 related to:
Loans individually evaluated for impairment	$	16,846	$	7,942	$	1,717	$	4,231	$	30,736
Loans collectively evaluated for impairment	295,767		436,802		2,879		74,115		809,563
Total	$	312,613	$	444,744	$	4,596	$	78,346	$	840,299
ALLL Balance at December 31, 2014 related to:
Loans individually evaluated for impairment	$	995	$	537	$	—	$	—	$	1,532
Loans collectively evaluated for impairment	6,675		4,596		296		734		12,301
Total	$	7,670	$	5,133	$	296	$	734	$	13,833
Loans balance at December 31, 2014 related to:
Loans individually evaluated for impairment	$	21,117	$	7,536	$	2,111	$	4,373	$	35,137
Loans collectively evaluated for impairment	280,629		446,931		5,634		69,640		802,834
Total	$	301,746	$	454,467	$	7,745	$	74,013	$	837,971

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Credit Quality

The amounts of nonperforming assets and delinquencies that occur within our loan portfolio factors into our evaluation of the adequacy of the ALLL.

The following table provides a summary of the delinquency status of loans by portfolio type at March 31, 2015 and December 31, 2014:

(Dollars in thousands)	30-59 Days Past Due		60-89 Days Past Due		90 Days and Greater		Total Past Due		Current		Total Loans Outstanding		Loans >90 Days and Accruing
At March 31, 2015
Commercial loans	$	24,143	$	—	$	—	$	24,143	$	288,470	$	312,613	$	—
Commercial real estate loans – owner-occupied	891		—		—		891		210,763		211,654		—
Commercial real estate loans – all other	—		—		—		—		150,416		150,416		—
Residential mortgage loans – multi-family	—		—		—		—		82,674		82,674		—
Residential mortgage loans – single family	181		—		733		914		63,834		64,748		—
Land development loans	—		1,717		—		1,717		2,879		4,596		—
Consumer loans	—		—		—		—		13,598		13,598		—
Total	$	25,215	$	1,717	$	733	$	27,665	$	812,634	$	840,299	$	—
At December 31, 2014
Commercial loans	$	553	$	—	$	—	$	553	$	301,193	$	301,746	$	—
Commercial real estate loans – owner-occupied	—		—		—		—		212,515		212,515		—
Commercial real estate loans – all other	20		—		2,117		2,137		144,539		146,676		—
Residential mortgage loans – multi-family	—		—		—		—		95,276		95,276		—
Residential mortgage loans – single family	835		—		285		1,120		63,206		64,326		—
Land development loans	—		—		364		364		7,381		7,745		—
Consumer loans	17		—		—		17		9,670		9,687		—
Total	$	1,425	$	—	$	2,766	$	4,191	$	833,780	$	837,971	$	—

Generally, the accrual of interest on a loan is discontinued when principal or interest payments become more than 90 days past due, unless we believe that the loan is adequately collateralized and it is in the process of collection. There were no loans 90 days or more past due and still accruing interest at March 31, 2015 or December 31, 2014. In certain instances, when a loan is placed on non-accrual status, previously accrued but unpaid interest is reversed against current income. Subsequent collections of cash are applied as principal reductions when received (referred to as full nonaccrual basis of accounting), except when the ultimate collectability of principal is probable, in which case such payments are applied to accrued and unpaid interest, which is credited to income (referred to as nonaccrual cash basis of accounting). Non-accrual loans may be restored to accrual status when principal and interest become current and full repayment becomes expected.

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The following table provides information with respect to loans on nonaccrual status, by portfolio type, as of March 31, 2015 and December 31, 2014:

	March 31, 2015		December 31, 2014
	(Dollars in thousands)
Nonaccrual loans:
Commercial loans	$	14,628	$	16,182
Commercial real estate loans – owner occupied	2,138		2,171
Commercial real estate loans – all other	2,117		2,117
Residential mortgage loans – multi-family	456		—
Residential mortgage loans – single family	1,347		1,472
Land development loans	1,717		2,111
Total(1)	$	22,403	$	24,053

(1)    Nonaccrual loans may include loans that are currently considered performing loans.

We classify our loan portfolio using internal asset quality ratings. The following table provides a summary of loans by portfolio type and our internal asset quality ratings as of March 31, 2015 and December 31, 2014:

	March 31, 2015		December 31, 2014
	(Dollars in thousands)
Pass:
Commercial loans	$	295,666	$	280,102
Commercial real estate loans – owner occupied	207,869		208,687
Commercial real estate loans – all other	131,050		128,974
Residential mortgage loans – multi family	82,218		94,817
Residential mortgage loans – single family	63,401		62,854
Land development loans	2,879		5,634
Consumer loans	13,598		9,687
Total pass loans	$	796,681	$	790,755
Special Mention:
Commercial loans	$	—	$	351
Commercial real estate loans – all other	10,732		6,588
Residential mortgage loans – multi family	—		459
Total special mention loans	$	10,732	$	7,398
Substandard:
Commercial loans	$	16,363	$	19,655
Commercial real estate loans – owner occupied	3,785		3,828
Commercial real estate loans – all other	8,634		11,114
Residential mortgage loans – multi family	456		—
Residential mortgage loans – single family	1,347		1,472
Land development loans	1,717		2,111
Total substandard loans	$	32,302	$	38,180
Doubtful:
Commercial loans	$	584	$	1,638
Total doubtful loans	$	584	$	1,638
Total Loans:	$	840,299	$	837,971

Impaired Loans

A loan generally is classified as impaired when, in our opinion, principal or interest is not likely to be collected in accordance with the contractual terms of the loan agreement. We measure for impairments on a loan-by-loan basis, using either

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the present value of expected future cash flows discounted at the loan’s effective interest rate, or the fair value of the collateral if the loan is collateral dependent.

The following table sets forth information regarding impaired loans, at March 31, 2015 and December 31, 2014:

	March 31, 2015		December 31, 2014
	(Dollars in thousands)
Impaired loans:
Nonaccruing loans	$	18,186	$	18,118
Nonaccruing restructured loans	4,217		5,935
Accruing restructured loans (1)	8,333		11,084
Accruing impaired loans	—		—
Total impaired loans	$	30,736	$	35,137
Impaired loans less than 90 days delinquent and included in total impaired loans	$	30,002	$	32,371

(1) See "Troubled Debt Restructurings" below for a description of accruing restructured loans at March 31, 2015 and December 31, 2014.

The table below contains additional information with respect to impaired loans, by portfolio type, as of March 31, 2015 and December 31, 2014:

	March 31, 2015						December 31, 2014
	Recorded Investment		Unpaid Principal Balance		Related Allowance (1)		Recorded Investment		Unpaid Principal Balance		Related Allowance (1)
	(Dollars in thousands)
No allowance recorded:
Commercial loans	$	15,383	$	15,510	$	—	$	18,563	$	18,839	$	—
Commercial real estate loans – owner occupied	2,138		2,436		—		2,171		2,440		—
Commercial real estate loans – all other	5,348		5,406		—		5,365		5,423		—
Residential mortgage loans – multi-family	456		456		—		—		—		—
Residential mortgage loans – single family	4,231		4,368		—		4,373		4,610		—
Land development loans	1,717		1,732		—		2,111		2,146		—
Total	29,273		29,908		—		32,583		33,458		—
With allowance recorded:
Commercial loans	$	1,463	$	1,890	$	812	$	2,554	$	2,983	$	1,532
Total	1,463		1,890		812		2,554		2,983		1,532
Total
Commercial loans	$	16,846	$	17,400	$	812	$	21,117	$	21,822	$	1,532
Commercial real estate loans – owner occupied	2,138		2,436		—		2,171		2,440		—
Commercial real estate loans – all other	5,348		5,406		—		5,365		5,423		—
Residential mortgage loans – multi-family	456		456		—		—		—		—
Residential mortgage loans – single family	4,231		4,368		—		4,373		4,610		—
Land development loans	1,717		1,732		—		2,111		2,146		—
Total	30,736		31,798		812		35,137		36,441		1,532

(1) When the discounted cash flows, collateral value or market price equals or exceeds the recorded investment in the loan, then specific reserves are not required to be set aside for the loan within the ALLL. This typically occurs when the impaired loans have been partially charged-off and/or there have been interest payments received and applied to the balance of the principal outstanding.

At March 31, 2015 and December 31, 2014, there were $29.3 million and $32.6 million, respectively, of impaired loans for which no specific reserves had been allocated because these loans, in our judgment, were sufficiently collateralized. Of the impaired loans at March 31, 2015 for which no specific reserves were allocated, $28.5 million had been deemed impaired in the prior year.

Average balances and interest income recognized on impaired loans, by portfolio type, for the three months ended March 31, 2015 and 2014 were as follows:

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	Three Months Ended March 31,
	2015				2014
	Average Balance		Interest Income Recognized		Average Balance		Interest Income Recognized
	(Dollars in thousands)
No allowance recorded:
Commercial loans	$	11,319	$	116	$	8,035	$	50
Commercial real estate loans – owner occupied	2,330		—		2,477		—
Commercial real estate loans – all other	7,785		51		9,377		64
Residential mortgage loans – multi-family	57		5		—		—
Residential mortgage loans – single family	3,149		29		2,298		20
Land development loans	989		7		397		—
Total	25,629		208		22,584		134
With allowance recorded:
Commercial loans	2,532		—		1,261		28
Commercial real estate loans – owner occupied	61		—		—		—
Total	2,593		—		1,261		28
Total
Commercial loans	13,851		116		9,296		78
Commercial real estate loans – owner occupied	2,391		—		2,477		—
Commercial real estate loans – all other	7,785		51		9,377		64
Residential mortgage loans – multi-family	57		5		—		—
Residential mortgage loans – single family	3,149		29		2,298		20
Land development loans	989		7		397		—
Total	$	28,222	$	208	$	23,845	$	162

The interest that would have been earned had the impaired loans remained current in accordance with their original terms was $204 thousand and $70 thousand during the three months ended March 31, 2015 and 2014, respectively.

Troubled Debt Restructurings (“TDRs”)

Pursuant to the FASB's ASU No. 2011-2, A Creditor's Determination of whether a Restructuring is a Troubled Debt Restructuring, the Bank's TDRs totaled $12.6 million and $17.0 million at March 31, 2015 and December 31, 2014, respectively. TDRs consist of loans to which modifications have been made for the purpose of alleviating temporary impairments of the borrower's financial condition and cash flows. Those modifications have come in the forms of changes in amortization terms, reductions in interest rates, interest only payments and, in limited cases, concessions to outstanding loan balances. The modifications are made as part of workout plans we enter into with the borrower that are designed to provide a bridge for the borrower's cash flow shortfalls in the near term. If a borrower works through the near term issues, then in most cases, the original contractual terms of the borrower's loan will be reinstated.

Of the $12.6 million of TDRs outstanding at March 31, 2015, $8.3 million were performing in accordance with their terms and accruing interest, and $4.2 million were not. Our impairment analysis determined no specific reserves were required on the TDR balances outstanding at March 31, 2015.

The following table presents loans restructured as TDRs during the three months ended March 31, 2015 and 2014:

	March 31, 2015					March 31, 2014
(Dollars in thousands)	Number of loans	Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment		Number of loans	Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
Performing
Commercial real estate – all other	—	$	—	$	—	1	$	613	$	613
	—	—		—		1	613		613
Nonperforming
Land development loans	—	—		—		1	439		439
	—	—		—		1	439		439
Total troubled debt restructurings(1)	—	$	—	$	—	2	$	1,052	$	1,052

(1) No loans were restructured during the three months ended March 31, 2015.

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As of March 31, 2015, TDRs totaled $12.6 million as compared to $17.0 million at December 31, 2014.

During the three months ended March 31, 2015 and 2014, we had no TDRs that were modified within the preceding 12-month period which subsequently defaulted.

6. Income Taxes

For the three months ended March 31, 2015 and the three months ended March 31, 2014, we recorded no income tax provision. Our net deferred tax asset at March 31, 2015 was $5.9 million, net of a valuation allowance of $11.6 million. Based on the analysis performed, and the positive and negative evidence considered, management chose not to release any portion of the $11.6 million valuation allowance as of March 31, 2015. Positive evidence included improvement in asset quality, tax planning strategies, and economic conditions. Negative evidence included our current period loss, historical losses over the previous 12 quarter look back period and our accumulated deficit. Accordingly, there was no change in our net deferred tax asset from December 31, 2014. Our net deferred tax asset at March 31, 2014 was $7.1 million, net of a valuation allowance of $11.7 million. Based on the analysis performed, and the positive and negative evidence considered, management chose not to release any portion of the $11.7 million valuation allowance as of March 31, 2014. Positive evidence included improvement in our asset quality, tax planning strategies, and economic conditions. Negative evidence included historical operating losses and our accumulated deficit. Management determined the negative evidence was significant enough to outweigh the positive evidence and support no reversal of the valuation allowance; however, we did conclude that it was more-likely-than-not that the existing $7.1 million net deferred tax asset at the time would be realized.

We file income tax returns with the U.S. federal government and the state of California. As of March 31, 2015, we were subject to examination by the Internal Revenue Service with respect to our U.S. federal tax returns for the 2011 to 2013 tax years and Franchise Tax Board for California state income tax returns for the 2010 to 2013 tax years. Net operating losses (“NOLs”) on our U.S. federal and California state income tax returns may be carried forward twenty years. As of March 31, 2015, we do not believe there will be any material adverse changes in our unrecognized tax benefits over the next 12 months.

Our policy is to recognize interest and penalties accrued on any unrecognized tax benefits as a component of tax expense. We did not have any accrued interest or penalties associated with any unrecognized tax benefits, and no interest expense was recognized during the three months ended March 31, 2015 and 2014.

7. Stock-Based Employee Compensation Plans

In May 2010, our shareholders approved the adoption of our 2010 Equity Incentive Plan (the “2010 Incentive Plan”), which authorized and set aside a total of 400,000 shares of our common stock for issuance on the exercise of stock options or the grant of restricted stock or other equity incentives to our officers, and other key employees and directors. An additional 158,211 shares of common stock were also set aside which was equal to the total of the shares that were available for the grant of equity incentives under our shareholder-approved 2008 and 2004 Equity Incentive Plans (the "Previously Approved Plans") at the time of the adoption of the 2010 Incentive Plan. Options to purchase a total of 536,600 shares of our common stock granted under the Previously Approved Plans were outstanding at March 31, 2015. The 2010 Incentive Plan provides that if any of these outstanding options under the Previously Approved Plans expire or are terminated for any reason, then the number of shares that would become available for grants or awards of equity incentives under the 2010 Incentive Plan would be increased by an equivalent number of shares. At the Annual Shareholders meeting held in May 2013, our shareholders approved an additional 800,000 share increase in the maximum number of shares of our common stock that may be issued pursuant to grants or exercises of options or restricted shares or other equity incentives under the 2010 Incentive Plan, of which 49,987 shares of restricted stock have vested as of March 31, 2015 thereby decreasing the maximum number of shares authorized under the 2010 Incentive Plan. As a result, as of March 31, 2015, the maximum number of shares that were authorized for the grant of options or other equity incentives under the 2010 Incentive Plan totaled 1,844,824 (assuming that all 536,600 shares of our common stock subject to options under the Previously Approved Plans expire or are terminated), or approximately 9% of the shares of our common stock then outstanding.

A stock option entitles the recipient to purchase shares of our common stock at a price per share that may not be less than 100% of the fair market value of the Company’s shares on the date the option is granted. Restricted shares may be granted at such purchase prices and on such other terms, including restrictions and Company repurchase or reacquisition rights, as are fixed by the Compensation Committee at the time rights to purchase such restricted shares are granted. Stock Appreciation Rights ("SARs") entitle the recipient to receive a cash payment in an amount equal to the difference between the fair market value of the Company’s shares on the date of vesting and a “base price” (which, in most cases, will be equal to the fair market value of the Company’s shares on the date the SAR is granted), subject to the right of the Company to make such payment in shares of its common stock at their then fair market value. Options, restricted shares and SARs may vest immediately or in installments over various periods generally ranging up to five years, subject to the recipient’s continued employment or service or the achievement of specified performance goals, as determined by the Compensation Committee at the time it grants or awards the options, the restricted shares or the SARs. Stock options and SARs may be granted for terms of up to 10 years after the date of grant, but will terminate sooner

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upon or shortly after a termination of service occurring prior to the expiration of the term of the option or SAR. The Company will become entitled to repurchase any unvested restricted shares, at the same price that was paid for the shares by the recipient, or to cancel those shares in the event of a termination of employment or service of the holder of such shares or if any performance goals specified in the award are not satisfied. To date, the Company has not granted any SARs.

Under FASB ASC 718-10, we are required to recognize, in our financial statements, the fair value of the options or any restricted shares that we grant as compensation cost over their respective service periods. The fair values of the options that were outstanding at March 31, 2015 under the 2010 Incentive Plan were estimated as of their respective dates of grant using the Black-Scholes option-pricing model. The Company, under the 2010 Incentive Plan, granted restricted stock for the benefit of its employees and directors. These restricted shares vest over a period of three years for employees and one year for directors. The recipients of restricted shares have the right to vote all shares subject to such grant and receive all dividends with respect to such shares whether or not the shares have vested. The recipients do not pay any cash consideration for the shares.

Stock Options

The table below summarizes the weighted average assumptions used to determine the fair values of the options granted during the following periods:

	Three Months Ended March 31,
Assumptions with respect to:	2015			2014
Expected volatility	44		%	44		%
Risk-free interest rate	1.82		%	2.08		%
Expected dividends	—		%	0.61		%
Expected term (years)	6.0			6.7
Weighted average fair value of options granted during period	$	3.13		$	2.75

The following table summarizes the stock option activity under the Company’s equity incentive plans during the three months ended March 31, 2015 and 2014, respectively.

	Number of Shares		Weighted- Average Exercise Price Per Share		Number of Shares		Weighted- Average Exercise Price Per Share
	2015				2014
Outstanding – January 1,	1,257,390		$	6.51	1,821,000		$	6.88
Granted	112,828		7.09		41,892		6.18
Exercised	(204,312	)	5.47		(65,000	)	3.51
Forfeited/Canceled	(105,218	)	12.38		(235,100	)	11.22
Outstanding – March 31,	1,060,688		6.19		1,562,792		6.35
Options Exercisable – March 31,	532,418		$	5.96	771,107		$	6.61
Options Vested – March 31,	532,418		$	5.96	771,107		$	6.61

Options to purchase 204,312 shares of our common stock were exercised during the three months ended March 31, 2015. Options to purchase 65,000 shares of our common stock were exercised during the three months ended March 31, 2014. The aggregate intrinsic value of options exercised during the three months ended March 31, 2015 and 2014 was $322 thousand and $174 thousand, respectively. The fair values of options that vested during the three months ended March 31, 2015 and 2014 was $71 thousand and $70 thousand, respectively.

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The following table provides additional information regarding the vested and unvested options that were outstanding at March 31, 2015.

Options Outstanding as of March 31, 2015						Options Exercisable as of March 31, 2015(1)
	Vested	Unvested	Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (Years)	Shares	Weighted Average Exercise Price
$2.97 – $5.99	241,744	22,285	$	3.91	5.45	241,744	$	3.82
$6.00 – $9.99	251,374	505,985	6.48		8.41	251,374	6.45
$10.00 – $12.99	5,000	—	12.02		0.05	5,000	12.02
$13.00 – $17.99	19,800	—	15.44		1.29	19,800	15.44
$18.00 – $18.84	14,500	—	18.09		0.83	14,500	18.09
	532,418	528,270	$	6.19	7.39	532,418	$	5.96

(1) The weighted average remaining contractual life of the options that were exercisable as of March 31, 2015 was 6.16 years.

The aggregate intrinsic value of options that were outstanding and exercisable under the 2010 Incentive Plan at March 31, 2015 and December 31, 2014 was $1.0 million and $1.2 million, respectively.

A summary of the status of the unvested options outstanding as of March 31, 2015, and changes in the weighted average grant date fair values of the unvested options during the three months ended March 31, 2015, are set forth in the following table.

	For the three months ended
	2015				2014
	Number of Shares Subject to Options		Weighted Average Grant Date Fair Value		Number of Shares Subject to Options		Weighted Average Grant Date Fair Value
Unvested at the beginning of the period	468,504		$	2.68	785,566		$	2.57
Granted	112,828		3.13		41,892		2.75
Vested	(31,915	)	2.24		(34,773	)	2.00
Forfeited/Canceled	(21,147	)	2.56		(1,000	)	2.68
Unvested at the end of the period	528,270		2.81		791,685		2.60

At March 31, 2015, the weighted average period over which nonvested awards were expected to be recognized was 2.05 years.

Restricted Stock

The following table summarizes the activity related to restricted stock granted, vested and forfeited under our equity incentive plans during the three months ended March 31, 2015.

	For the Three Months Ended
	March 31, 2015				March 31, 2014
	Number of Shares		Average Grant Date Fair Value		Number of Shares	Average Grant Date Fair Value
Outstanding at the beginning of the period	141,254		$	6.29	141,284	$	6.23
Granted	94,675		7.10		18,608	6.18
Vested	(4,987	)	6.18		—	—
Forfeited	(3,638	)	6.18		—	—
Outstanding at the end of the period	227,304		$	6.63	159,892	$	6.23

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Compensation Expense

We expect that the compensation expense that will be recognized during the periods presented below in respect of stock options and restricted stock outstanding at March 31, 2015, will be as follows:

	Estimated Stock Based Compensation Expense Stock Options		Estimated Stock Based Compensation Expense Restricted Stock		Estimated Stock Based Compensation Expense Total
(Dollars in thousands)
For the years ending December 31,
Remainder of 2015	$	428	$	530	$	958
2016	298		479		776
2017	109		186		294
2018	33		23		57
2019 and beyond	6		—		6
	$	874	$	1,218	$	2,091

The aggregate amounts of stock based compensation expense recognized in our consolidated statements of operations for the three months ended March 31, 2015 and 2014 were $316 thousand and $277 thousand, respectively, in each case net of taxes.

8. Earnings Per Share (“EPS”)

Basic EPS excludes dilution and is computed by dividing net income or loss available to common shareholders by the weighted average number of common shares outstanding for the period. Diluted EPS reflects the potential dilution that could occur if stock options or other contracts to issue common stock were exercised or converted into common stock that would then share in our earnings.

The following table shows how we computed basic and diluted EPS for the three months ended March 31, 2015 and 2014.

(In thousands, except per share data)	For the Three Months Ended March 31,
	2015			2014
Numerator:
Net loss from continuing operations	$	(85	)	$	(733	)
Accumulated undeclared dividends on preferred stock	(309		)	(296		)
Numerator for basic and diluted net loss from continuing operations	(394		)	(1,029		)
Net income from discontinued operations	—			1,184
Numerator for basic and diluted net (loss) income available to common shareholders	$	(394	)	$	155
Denominator:
Basic weighted average outstanding shares of common stock	19,617			19,146
Dilutive effect of employee stock options and contingently issuable shares	—			—
Diluted weighted average common stock and common stock equivalents	19,617			19,146
Basic (loss) income per common share:
Net loss from continuing operations	$	(0.02	)	$	(0.05	)
Net income from discontinued operations	$	—		$	0.06
Net (loss) income available to common shareholders	$	(0.02	)	$	0.01
Diluted (loss) income per common share:
Net loss from continuing operations	$	(0.02	)	$	(0.05	)
Net income from discontinued operations	$	—		$	0.06
Net (loss) income available to common shareholders	$	(0.02	)	$	0.01

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The weighted average shares that have an antidilutive effect in the calculation of diluted net loss per share and have been excluded from the computations above were as follows:

	For the Three Months Ended March 31,
	2015	2014
Stock options(1)	1,135,864	1,574,097
Convertible securities(2)	2,734,018	2,522,004
Shares subject to stock purchase warrants(3)	761,278	761,278

(1) Stock options were excluded from the computation of diluted earnings per common share for the three months ended March 31, 2015 and 2014 as we reported a net loss from continuing operations.

(2) Convertible securities were excluded from the computation of diluted earnings per common share for the three months ended March 31, 2015 and 2014 as we reported a net loss from continuing operations.

(3) Stock purchase warrants were excluded from the computation of diluted earnings per common share for the three months ended March 31, 2015 and 2014 because the exercisability of those warrants is conditioned on the happening of certain future events.

9. Shareholders’ Equity

Accumulated Other Comprehensive Income (Loss), net

Accumulated other comprehensive income (loss), net as of March 31, 2015 and December 31, 2014 was as follows:

	Unrealized Gain (Loss) on Securities Available-for-Sale, net of tax			Accumulated Other Comprehensive Income, Net
	(Dollars in thousands)
Ending balance as of December 31, 2013	$	(2,154	)	$	(2,154	)
Other comprehensive income before reclassifications, net of tax provision of $847 thousand (1)	1,462			1,462
Amounts reclassified from accumulated other comprehensive loss, net of tax	—			—
Other comprehensive income, net of tax provision of $847 thousand	1,462			1,462
Ending balance as of December 31, 2014	$	(692	)	$	(692	)
Other comprehensive income before reclassifications, net of tax provision of $0	188			188
Amounts reclassified from accumulated other comprehensive income, net of tax	—			—
Other comprehensive income, net of tax provision of $0	188			188
Ending balance as of March 31, 2015	$	(504	)	$	(504	)

(1) Tax impact included in Deferred tax assets.

10. Commitments and Contingencies

Repurchase Reserves

We have historically maintained reserves for possible repurchases that we may have been required to make of certain of the mortgage loans which we sold as a result of deficiencies or defects that may be found to exist in such loans. Our repurchase reserve also covered returns of any premiums earned and administrative fees pertaining to the repurchase of mortgage loans that did not meet investor guidelines, including potential loss of advances on Veterans Affairs or Federal Housing Authority Ginnie Mae loans.  As a result of our exit from the mortgage banking business and no longer being subject to potential loss for anything other than mortgage fraud, we have undertaken an analysis of our accrual. Our analysis assumes that the repurchase liability exposure will decrease over time as mortgage loans are paid off and as we are no longer originating new mortgage loans. We repurchased $619 thousand of loans during the three months ended March 31, 2015. We repurchased $1.3 million of loans during the three months ended March 31, 2014 by adjusting the gains on sale recorded for these loans. The following table sets forth information, at March 31, 2015 and December 31, 2014, with respect to such reserves:

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	At and For the Three Months Ended			At and For the Year Ended
	March 31, 2015			December 31, 2014
	(Dollars in thousands)
Beginning balance	$	381		$	1,883
(Recovery of)/Provision for repurchases	(16		)	(1,502		)
Settlements	—			—
Total repurchases reserve	$	365		$	381

Commitments

To meet the financing needs of our customers in the normal course of business, we are a party to financial instruments with off-balance sheet risk. These financial instruments include commitments to extend credit and standby letters of credit. These instruments involve, to varying degrees, elements of credit and interest rate risk in excess of the amount recognized in the consolidated financial statements. At March 31, 2015 and December 31, 2014, we were committed to fund certain loans including letters of credit amounting to approximately $154 million and $148 million, respectively. The contractual amounts of a credit-related financial instrument, such as a commitment to extend credit, a credit-card arrangement or a letter of credit, represent the amount of potential accounting loss should the commitment be fully drawn upon, the customer were to default, and the value of any existing collateral securing the customer’s payment obligation becomes worthless. The loss reserve for unfunded loan commitments was $275 thousand and $275 thousand at March 31, 2015 and December 31, 2014, respectively.

As a result, we use the same credit policies in making commitments to extend credit and conditional obligations as we do for on-balance sheet instruments. Commitments generally have fixed expiration dates; however, since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. We evaluate each customer’s creditworthiness on a case-by-case basis, using the same credit underwriting standards that are employed in making commercial loans. The amount of collateral obtained, if any, upon an extension of credit is based on our evaluation of the creditworthiness of the customer. Collateral held varies, but may include accounts receivable, inventory, property, plant and equipment, residential real estate and income-producing commercial properties.

Litigation, Claims and Assessments

We are a defendant in or a party to a number of legal actions or proceedings that arise in the ordinary course of business. In some of these actions and proceedings, claims for monetary damages are asserted against us.

In accordance with applicable accounting guidance, we assess the likelihood of any loss or exposure with respect to lawsuits and other proceedings that are pending against us. We establish an accrued liability for lawsuits or other legal proceedings when they present loss contingencies that are both probable and estimable. Where a loss is not probable but it is reasonably possible or where a loss in excess of an amount accrued is reasonably possible, we disclose an estimate of the amount of the loss or range of possible losses for the claim if a reasonable estimate can be made, unless the amount of reasonably possible losses with respect to the matter is not material to our financial condition, results of operations or cash flows. We estimate any potential loss based upon currently available information and significant judgments and a variety of assumptions, and known and unknown uncertainties. Moreover, the facts and circumstances on which such estimates are based will change over time. Therefore, the amount of any losses we might incur in any lawsuits or other legal proceedings may exceed amounts which we had accrued based on our estimates and those estimates do not represent the maximum loss exposure that we may have in connection with any lawsuits or other legal proceedings.

Based on our evaluation of the lawsuits and other proceedings that were pending against us as of March 31, 2015, the outcomes in those suits or other proceedings are not expected to have, either individually or in the aggregate, a material adverse effect on our consolidated financial position, results of operations or cash flows. However, in light of the inherent uncertainties involved, some of which are beyond our control, and the very large or indeterminate damages often sought in such legal actions or proceedings, an adverse outcome in one or more of these suits or proceedings could be material to our financial position, results of operations or cash flows for any particular reporting period.

11. Business Segment Information

We have one reportable business segment, commercial banking. The commercial banking segment provides small and medium-size businesses, professional firms and individuals with a diversified range of products and services such as various types of deposit accounts, various types of commercial and consumer loans, cash management services, and online banking services. We also have one non-reportable segment, discontinued operations, which is comprised of our mortgage banking business. Our

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mortgage banking business originated mortgage loans that, for the most part, were resold within 30 days to long-term investors in the secondary residential mortgage market.

Since our operating segment derives all of its revenues from interest and noninterest income and interest expense constitutes its most significant expense, this segment, as well as our discontinued operations, are reported below using net interest income (interest income less interest expense) and noninterest income (primarily net gains on sales of SBA loans and fee income). We do not allocate general and administrative expenses or income taxes to our operating segment.

The following table sets forth information regarding the net interest income and noninterest income for our commercial banking and discontinued operations segments, respectively, for the three months ended March 31, 2015 and 2014.

(Dollars in thousands)	Commercial		Other			Total from continuing operations		Discontinued Operations		Total including discontinued operations
Net interest income for the three months ended March 31,
2015	$	8,243	$	(94	)	$	8,149	$	—	$	8,149
2014	$	7,841	$	3		$	7,844	$	74	$	7,918
Noninterest income for the three months ended March 31,
2015	$	879	$	3		$	882	$	—	$	882
2014	$	1,178	$	116		$	1,294	$	1,689	$	2,983
Segment Assets at:
March 31, 2015	$	1,055,104	$	5,085		$	1,060,189	$	—	$	1,060,189
December 31, 2014	$	1,094,120	$	5,490		$	1,099,610	$	—	$	1,099,610

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12. Regulatory Capital

Under federal banking regulations that apply to all United States based bank holding companies and federally insured banks, the Company (on a consolidated basis) and the Bank (on a stand-alone basis) must meet specific capital adequacy requirements that, for the most part, involve quantitative measures, primarily in terms of the ratios of their capital to their assets, liabilities, and certain off-balance sheet items, calculated under regulatory accounting practices. Under those regulations, each bank holding company must meet a minimum capital ratio and each federally insured bank is determined by its primary federal bank regulatory agency to come within one of the following capital adequacy categories on the basis of its capital ratios:

• well capitalized

• adequately capitalized

• undercapitalized

• significantly undercapitalized; or

• critically undercapitalized

Certain qualitative assessments also are made by a banking institution’s primary federal regulatory agency that could lead the agency to determine that the banking institution should be assigned to a lower capital category than the one indicated by the quantitative measures used to assess the institution’s capital adequacy. At each successive lower capital category, a banking institution is subject to greater operating restrictions and increased regulatory supervision by its federal bank regulatory agency.

The following table sets forth the capital and capital ratios of the Company (on a consolidated basis) and the Bank (on a stand-alone basis) at March 31, 2015, as compared to the respective regulatory requirements applicable to them.

					Applicable Federal Regulatory Requirement
					For Capital Adequacy Purposes			To be Categorized As Well Capital
	Amount		Ratio		Amount		Ratio	Amount		Ratio
	(Dollars in thousands)
Total Capital to Risk Weighted Assets:
Company	$	146,365	16.9	%	$	69,228	At least 8.0	N/A		N/A
Bank	126,456		14.7	%	68,773		At least 8.0	$	85,967	At least 10.0
Common Equity Tier 1 Capital to Risk Weighted Assets:
Company	$	107,756	12.5	%	$	38,941	At least 4.5	N/A		N/A
Bank	115,655		13.5	%	38,685		At least 4.5	$	55,878	At least 6.5
Tier 1 Capital to Risk Weighted Assets:
Company	$	135,494	15.7	%	$	51,921	At least 6.0	N/A		N/A
Bank	115,655		13.5	%	51,580		At least 6.0	$	68,773	At least 8.0
Tier 1 Capital to Average Assets:
Company	$	135,494	13.0	%	$	41,745	At least 4.0	N/A		N/A
Bank	115,655		11.1	%	41,524		At least 4.0	$	51,905	At least 5.0

In early July 2013, the Federal Reserve Board and the FDIC issued final rules implementing the Basel III regulatory capital framework and related Dodd-Frank Wall Street Reform and Consumer Protection Act changes.  The rules revise minimum capital requirements and adjust prompt correct action thresholds.  The final rules revise the regulatory capital elements, add a new common equity Tier 1 capital ratio, increase the minimum Tier 1 capital ratio requirement, and implement a new capital conservation buffer.  The rules also permit certain banking organizations to retain, through a one-time election, the existing treatment for accumulated other comprehensive income.  The final rules took effect for community banks on January 1, 2015, subject to a transition period for certain parts of the rules.  At March 31, 2015 the Bank (on a stand-alone basis) continued to qualify as a well-capitalized institution, and the Company continued to exceed the minimum required capital ratios applicable to it, under the capital adequacy guidelines described above.

29

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Forward Looking Statements

Statements contained in this Quarterly Report on Form 10-Q (this “Report”) that are not historical facts or that discuss our expectations, beliefs or views regarding our future operations or future financial performance, or financial or other trends in our business or in the markets in which we operate, constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. Often, they include words such as “believe,” “expect,” “anticipate,” “intend,” “plan,” “estimate,” “project,” "forecast," or words of similar meaning, or future or conditional verbs such as “will,” “would,” “should,” “could,” or “may.” The information contained in such forward-looking statements is based on current information available to us and on assumptions that we make about future economic and market conditions and other events over which we do not have control. In addition, our business and the markets in which we operate are subject to a number of risks and uncertainties. Such risks and uncertainties, and the occurrence of events in the future or changes in circumstances that had not been anticipated, could cause our financial condition or actual operating results in the future to differ materially from our expected financial condition or operating results that are set forth in the forward-looking statements contained in this Report and could, therefore, also affect the price performance of our shares.

In addition to the risk of incurring loan losses, which is an inherent risk of the banking business, these risks and uncertainties include, but are not limited to, the following: the risk that the economic recovery in the United States, which is improving but still relatively fragile, will be adversely affected by domestic or international economic conditions, which could cause us to incur additional loan losses and adversely affect our results of operations in the future; the risk that our interest margins and, therefore, our net interest income will be adversely affected by changes in prevailing interest rates; the risk that we will not succeed in further reducing our remaining nonperforming assets, in which event we would face the prospect of further loan charge-offs and write-downs of assets; the risk that we will not be able to manage our interest rate risks effectively, in which event our operating results could be harmed; the prospect that government regulation of banking and other financial services organizations will increase, causing our costs of doing business to increase and restricting our ability to take advantage of business and growth opportunities; the risk that our efforts to develop a robust commercial banking platform may not succeed; and the risk that we may be unable to realize our expected level of increasing deposit inflows. Additional information regarding these and other risks and uncertainties to which our business is subject is contained in our Annual Report on Form 10-K for the year ended December 31, 2014 (the “2014 Form 10-K”) that we filed with the Securities and Exchange Commission (“SEC”) on March 13, 2015, and readers of this Report are urged to review the additional information contained in that report, and in any subsequent Quarterly Report on Form 10-Q that we file with the SEC. We urge you to read those risk factors in conjunction with your review of the following discussion and analysis of our results of operations for the three months ended, and our financial condition at, March 31, 2015.

Due to the risks and uncertainties we face, readers are cautioned not to place undue reliance on the forward-looking statements contained in this Report, which speak only as of the date of this Report, or to make predictions about future performance based solely on historical financial performance. We also disclaim any obligation to update forward-looking statements contained in this Report as a result of new information, future events or otherwise, except as may otherwise be required by law.

Overview

The following discussion presents information about our consolidated results of operations, financial condition, liquidity and capital resources and should be read in conjunction with our consolidated financial statements and the notes thereto included in Item 1 above of this Report.

Our principal operating subsidiary is Pacific Mercantile Bank (the “Bank”), which is a California state chartered bank. The Bank accounts for substantially all of our consolidated revenues, expenses and income and our consolidated assets and liabilities. Accordingly, the following discussion focuses primarily on the Bank’s results of operations and financial condition.

As of March 31, 2015, our total assets, net loans and total deposits were $1.1 billion, $828 million and $886 million, respectively.

The Bank, which is headquartered in Orange County, California, approximately 40 miles south of Los Angeles, conducts a commercial banking business in Orange, Los Angeles, San Bernardino and San Diego counties in Southern California. The Bank is also a member of the Federal Reserve System and its deposits are insured, to the maximum extent permitted by law, by the Federal Deposit Insurance Corporation (the “FDIC”). For the three months ended March 31, 2015 and 2014, we operated as one reportable segment, Commercial Banking, and one non-reportable segment, Discontinued Operations.

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Unless the context otherwise requires, the “Company,” “we,” “our,” “ours,” and “us” refer to Pacific Mercantile Bancorp and its consolidated subsidiaries.

Current Developments

During the first quarter of 2015, the Company made the strategic decision to discontinue its business of funding broker-originated Small Business Administration (“SBA”) loans. The Bank employed a group that was originally hired in May 2012 which focused on originating loans through the SBA 504 and 7(a) lending programs (“SBA Group”). The SBA Group sourced loans through broker relationships, which generally did not result in the Bank having the borrower's full banking relationship. We concluded that the transactional nature of the business model in the SBA Group was not in line with our strategy of transitioning to a relationship-oriented commercial banking model. As a result of this decision, we terminated the 15 employees within the SBA Group and we incurred total personnel expense including severance pay of $611 thousand, which is recorded within noninterest expense for the three months ended March 31, 2015 and will be nonrecurring. We do not expect any additional expenses to be incurred as a result of this decision. The Bank continues to be in good standing with the SBA as a Preferred Lender and we will continue to originate SBA 504 and 7(a) loans through our core relationship banking strategy. We intend to sell the guaranteed portion of the 7(a) loans in the secondary market from time to time.

Results of Operations

Discontinued Operations

In connection with our exit from the mortgage banking business described in our 2014 Form 10-K, the revenues and expenses of our mortgage banking division have been classified as discontinued operations for all periods presented. As a result, all comparisons below reflect results from continuing operations. We completed the final wind down of the mortgage banking division during 2014 and had no additional revenue or expense during the current period.

Operating Results for the Three Months Ended March 31, 2015 and 2014

Our operating results for the three months ended March 31, 2015, compared to March 31, 2014, were as follows:

	Three Months Ended March 31,				2015 vs. 2014 % Change
	2015		2014
Interest income	9,471		9,287		2.0	%
Interest expense	1,322		1,443		(8.4	)%
Provision for loan and lease losses	—		450		(100.0	)%
Non-interest income	882		1,294		(31.8	)%
Non-interest expense	9,116		9,421		(3.2	)%
Net loss from continuing operations	(85	)	(733	)	(88.4	)%
Net income from discontinued operations	—		1,184		(100.0	)%
Net income (loss)	(85	)	451		(118.8	)%

Interest Income

Three Months Ended March 31, 2015 and 2014

Total interest income increased 2.0% to $9.5 million for the three months ended March 31, 2015 from $9.3 million for the three months ended March 31, 2014, with an average yield on interest-earning assets of 3.76% for the three months ended March 31, 2015 compared to 3.86% for the three months ended March 31, 2014. This increase was primarily due to an increase in interest income on loans during the three months ended March 31, 2015 compared to the same prior year period due to an increase in average loan balances, partially offset by a decline in the average yield on loans. During the three months ended March 31, 2015 and 2014, interest income on loans was $9.0 million and $8.8 million, respectively, yielding 4.42% and 4.58% on average loan balances of $827.5 million and $779.2 million, respectively. The increase in the average loan balances is attributable to an increase in loan demand. The decrease in average loan yield is primarily attributable to a $14.4 million loan relationship moving from nonaccrual cash basis of accounting to full nonaccrual basis of accounting.

During the three months ended March 31, 2015 and 2014, interest income from our securities available-for-sale and stock was $373 thousand and $417 thousand, respectively, yielding 2.21% and 2.29% on average balances of $68.3 million and $73.7

31

million, respectively. The average securities balances decreased as a result of maturities of, and payments on, securities which we did not fully replace due to liquidity needs. The investment yield decrease is primarily due to higher premium amortization attributable to higher prepayment speeds on our securities available-for-sale. Interest income from our short-term investments, including our federal funds sold and interest-bearing deposits, was $79 thousand and $77 thousand for the three months ended March 31, 2015 and 2014, respectively, yielding 0.26% and 0.26% on average balances of $125.5 million and $122.3 million, respectively. The average balances of short-term investments increased as a result of an increase in our funds held at the FRBSF. As a result, total interest income on investments increased for the three months ended March 31, 2015 as compared to the three months ended March 31, 2014.

Interest Expense

Three Months Ended March 31, 2015 and 2014

Total interest expense decreased 8.4% to $1.3 million for the three months ended March 31, 2015 from $1.4 million for the three months ended March 31, 2014. The decrease was primarily due to a decrease in average interest-bearing liabilities of $701.8 million and $709.4 million at March 31, 2015 and 2014, respectively, with a cost of funds of 0.76% and 0.82%, respectively, which consisted of deposits, borrowings and junior subordinated debentures. The decrease in interest expense was also due to a decrease in the volume of certificates of deposit and a decrease in the rates of interest paid on certificates of deposit. Interest expense on our certificates of deposit for the three months ended March 31, 2015 and 2014 was $696 thousand and $1.0 million, respectively, with a cost of funds of 0.89% and 0.98% on average balances of $316.5 million and $425.6 million, respectively.

Net Interest Margin

One of the principal determinants of a bank’s income is its net interest income, which is the difference between (i) the interest that a bank earns on loans, investment securities and other interest earning assets, on the one hand, and (ii) its interest expense, which consists primarily of the interest it must pay to attract and retain deposits and the interest that it pays on borrowings and other interest-bearing liabilities, on the other hand. As a general rule, all other things being equal, the greater the difference or "spread" between the amount of our interest income and the amount of our interest expense, the greater will be our net income; whereas, a decline in that difference or "spread" will generally result in a decline in our net income.

A bank’s interest income and interest expense are affected by a number of factors, some of which are outside of its control, including national and local economic conditions and the monetary policies of the Federal Reserve Board which affect interest rates, competition in the market place for loans and deposits, the demand for loans and the ability of borrowers to meet their loan payment obligations. Net interest income, when expressed as a percentage of total average interest earning assets, is a banking organization’s “net interest margin.”

The following tables set forth information regarding our average balance sheet, yields on interest earning assets, interest expense on interest-bearing liabilities, the interest rate spread and the interest rate margin for the three months ended March 31, 2015 and 2014. Average balances are calculated based on average daily balances.

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	Three Months Ended March 31,
	2015						2014
	Average Balance		Interest Earned/ Paid		Average Yield/ Rate		Average Balance		Interest Earned/ Paid		Average Yield/ Rate
	(Dollars in thousands)
Interest-earning assets
Short-term investments(1)	$	125,499	$	79	0.26	%	$	122,321	$	77	0.26	%
Securities available for sale and stock(2)	68,312		373		2.21	%	73,736		417		2.29	%
Loans(3)	827,471		9,019		4.42	%	779,165		8,793		4.58	%
Total interest-earning assets	1,021,282		9,471		3.76	%	975,222		9,287		3.86	%
Noninterest-earning assets
Cash and due from banks	14,789						13,317
All other assets(3)	10,382						35,748
Total assets	$	1,046,453					$	1,024,287
Interest-bearing liabilities:
Interest-bearing checking accounts	$	39,249	24		0.25	%	$	33,898	24		0.29	%
Money market and savings accounts	289,479		405		0.57	%	163,034		130		0.32	%
Certificates of deposit	316,487		696		0.89	%	425,620		1,031		0.98	%
Other borrowings	39,089		72		0.75	%	69,315		151		0.88	%
Junior subordinated debentures	17,527		125		2.89	%	17,527		107		2.48	%
Total interest bearing liabilities	701,831		1,322		0.76	%	709,394		1,443		0.82	%
Noninterest bearing liabilities
Demand deposits	217,605						186,308
Accrued expenses and other liabilities	6,777						13,366
Shareholders' equity	120,240						115,219
Total liabilities and shareholders' equity	$	1,046,453					$	1,024,287
Net interest income			$	8,149					$	7,844
Net interest income/spread					3.00	%					3.04	%
Net interest margin					3.24	%					3.26	%

The following table sets forth changes in interest income, including loan fees, and interest paid in the three months ended March 31, 2015 and 2014 and the extent to which those changes were attributable to changes in (i) the volumes of or in the rates of interest earned on interest-earning assets and (ii) the volumes of or in the rates of interest paid on our interest-bearing liabilities.

	Three Months Ended March 31, 2015 Compared to Three Months Ended March 31, 2014 Increase (Decrease) due to Changes in
	Volume			Rates			Total Increase (Decrease)
	(Dollars in thousands)
Interest income
Short-term investments(1)	$	2		$	—		$	2
Securities available for sale and stock(2)	(30		)	(14		)	(44		)
Loans	534			(308		)	226
Total earning assets	506			(322		)	184
Interest expense
Interest-bearing checking accounts	4			(4		)	—
Money market and savings accounts	139			136			275
Certificates of deposit	(246		)	(89		)	(335		)
Borrowings	(58		)	(21		)	(79		)
Junior subordinated debentures	—			18			18
Total interest-bearing liabilities	(161		)	40			(121		)
Net interest income	$	667		$	(362	)	$	305

(1) Short-term investments consist of federal funds sold and interest bearing deposits that we maintain at financial institutions.

(2) Stock consists of FHLB stock and FRBSF stock.

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Provision for Loan and Lease Losses

We maintain reserves to provide for loan losses that occur in the ordinary course of the banking business. When it is determined that the payment in full of a loan has become unlikely, the carrying value of the loan is reduced ("written down") to what management believes is its realizable value or, if it is determined that a loan no longer has any realizable value, the carrying value of the loan is written off in its entirety (a loan "charge-off"). Loan charge-offs and write-downs are charged against our allowance for loan and lease losses (“ALLL”). The amount of the ALLL is increased periodically to replenish the ALLL after it has been reduced due to loan write-downs or charge-offs. The ALLL also is increased or decreased periodically to reflect increases or decreases in the volume of outstanding loans and to take account of changes in the risk of potential loan losses due to a deterioration or improvement in the condition of borrowers or in the value of properties securing non-performing loans or adverse changes or improvements in economic conditions. Increases in the ALLL are made through a charge, recorded as an expense in the statement of operations, referred to as the "provision for loan and lease losses." Recoveries of loans previously charged-off are added back to and, therefore, to that extent increase the ALLL and reduce the amount of the provision for loan and lease losses that might otherwise have had to be made to replenish or increase the ALLL.

We employ economic models that are based on bank regulatory guidelines, industry standards and our own historical loan loss experience, as well as a number of more subjective qualitative factors, to determine both the sufficiency of the ALLL and the amount of the provisions that we believe need to be made for potential loan losses to increase or replenish the ALLL. However, those determinations involve judgments and assumptions about trends in current economic conditions and other events that can affect the ability of borrowers to meet their loan obligations to us and a weighting among the quantitative and qualitative factors we consider in determining the amount of the ALLL. Moreover, the duration and anticipated effects of prevailing economic conditions or trends can be uncertain and can be affected by a number of risks and circumstances that are outside of our ability to control. If changes in economic or market conditions or unexpected subsequent events or changes in circumstances were to occur, or if changes were made to bank regulatory guidelines or industry standards that are used to assess the sufficiency of the ALLL, it could become necessary for us to record additional, and possibly significant, charges to increase the ALLL, which would have the effect of reducing our income or causing us to incur losses.

In addition, the FRBSF and the California Department of Business Oversight (“CDBO”), as an integral part of their examination processes, periodically review the adequacy of our ALLL. These agencies may require us to make additional provisions for possible loan losses, over and above the provisions that we have already made, the effect of which would be to reduce our income or increase any losses we might incur.

During the three months ended March 31, 2015, we recorded no provision for loan and lease losses, as compared to $450 thousand recorded during the three months ended March 31, 2014. There was no provision for loan and lease losses during the three months ended March 31, 2015 as loan growth was minimal during the period and, with the exception of a previously identified problem loan relationship, asset quality continued to improve. Taking into account net recoveries of $132 thousand during the three months ended March 31, 2014 and net loan growth of $1.8 million during the same period, our analysis supported a provision of $450 thousand during the three months ended March 31, 2014 in order to maintain the ALLL on the higher end of the determined range.

See "—Financial Condition—Nonperforming Assets and Allowance for Loan and Lease Losses" below in this Item 2 for additional information regarding the ALLL.

Noninterest Income

The following table identifies the components of and the percentage changes in noninterest income during the three months ended March 31, 2015 and 2014:

	Three Months Ended March 31,
	Amount		Amount		Percentage Change
	2015		2014		2015 vs. 2014
Service fees on deposits and other banking services	212		208		1.9	%
Net gain on sale of small business administration loans	—		686		(100.0	)%
Other noninterest income	670		400		67.5	%
Total noninterest income	$	882	$	1,294	(31.8	)%

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Three Months Ended March 31, 2015 and 2014

Noninterest income decreased by $412 thousand for the three months ended March 31, 2015 as compared to the three months ended March 31, 2014 primarily as a result of a $686 thousand decrease in net gain on the sale of SBA loans partially offset by a $200 thousand recovery during the first quarter of 2015 on a charged off loan in excess of the amount previously charged off against the ALLL.

Noninterest Expense

The following table sets forth the principal components and the amounts of, and the percentage changes in, noninterest expense during the three months ended March 31, 2015 and 2014.

	Three Months Ended March 31,
	2015		2014		2015 vs. 2014
	Amount		Amount		Percent Change
Salaries and employee benefits	$	5,908	$	5,604	5.4	%
Occupancy	660		589		12.1	%
Equipment and depreciation	393		369		6.5	%
Data processing	236		251		(6.0	)%
FDIC expense	352		293		20.1	%
Other real estate owned expense, net	102		861		(88.2	)%
Professional fees	628		574		9.4	%
Business development	156		94		66.0	%
Loan related expense	69		84		(17.9	)%
Insurance	88		137		(35.8	)%
Other operating expenses (1)	524		565		(7.3	)%
Total noninterest expense	$	9,116	$	9,421	(3.2	)%

(1) Other operating expenses primarily consist of telephone, investor relations, promotional, regulatory expenses, and correspondent bank fees.

Three Months Ended March 31, 2015 and 2014

Noninterest expense decreased$305 thousand, or 3.2%, for the three months ended March 31, 2015 as compared to the three months ended March 31, 2014, primarily as a result of:

• A decrease of $759 thousand in OREO expenses as a result of lower carrying costs and other expenses related to OREO during the three months ended March 31, 2015 as compared to the same period in 2014; partially offset by

• An increase of $304 thousand in salaries and employee benefits as a result of the personnel expense, including severance pay, related to the closure of the SBA Group partially offset by a refund on our workers compensation policy received during the first quarter of 2015.

Provision for (Benefit from ) Income Tax

Three Months EndedMarch 31, 2015and2014

For the three months ended March 31, 2015 and the three months ended March 31, 2014, we recorded no income tax provision. Our net deferred tax asset at March 31, 2015 was $5.9 million, net of a valuation allowance of $11.6 million. Based on the analysis performed, and the positive and negative evidence considered, management chose not to release any portion of the $11.6 million valuation allowance as of March 31, 2015. Positive evidence included improvement in asset quality, tax planning strategies, and economic conditions. Negative evidence included our current period loss, historical losses over the previous 12 quarter look back period and our accumulated deficit. Accordingly, there was no change in our net deferred tax asset from December 31, 2014. Our net deferred tax asset at March 31, 2014 was $7.1 million, net of a valuation allowance of $11.7 million. Based on the analysis performed, and the positive and negative evidence considered, management chose not to release any portion of the $11.7 million valuation allowance as of March 31, 2014. Positive evidence included improvement in our asset quality, tax planning strategies, and economic conditions. Negative evidence included historical operating losses and our accumulated deficit. Management determined the negative evidence was significant enough to outweigh the positive evidence and support no reversal of the valuation allowance; however, we did conclude that it was more-likely-than-not that the existing $7.1 million net deferred tax asset at the time would be realized.

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Financial Condition

Assets

Our total assets decreased by $39 million to $1.1 billion at March 31, 2015 from $1.1 billion at December 31, 2014. The following table sets forth the composition of our interest earning assets at:

	March 31, 2015		December 31, 2014
	(Dollars in thousands)
Interest-bearing deposits with financial institutions (1)	$	118,138	$	167,138
Interest-bearing time deposits with financial institutions	4,668		4,668
Federal Reserve Bank of San Francisco and Federal Home Loan Bank Stock, at cost	8,137		8,137
Securities available for sale, at fair value	58,968		60,926
Loans (net of allowances of $12,639 and $13,833, respectively)	827,754		824,197

(1) Includes interest-earning balances maintained at the FRBSF.

Investment Portfolio

Securities Available for Sale. Securities that we intend to hold for an indefinite period of time, but which may be sold in response to changes in liquidity needs, in interest rates, or in prepayment risks or other similar factors, are classified as “securities available for sale”. Such securities are recorded on our balance sheet at their respective fair values and increases or decreases in those values are recorded as unrealized gains or losses, respectively, and are reported as other comprehensive income (loss) on our accompanying consolidated statements of financial condition, rather than included in or deducted from our earnings.

The following is a summary of the major components of securities available for sale and a comparison of the amortized cost, estimated fair values and the gross unrealized gains and losses attributable to those securities, as of March 31, 2015 and December 31, 2014:

(Dollars in thousands)	Amortized Cost		Gross Unrealized Gain		Gross Unrealized Loss			Estimated Fair Value
Securities available for sale at March 31, 2015:
Residential mortgage backed securities issued by U.S. Agencies	$	52,535	$	67	$	(630	)	$	51,972
Residential collateralized mortgage obligations issued by non agencies	772		—		(18		)	754
Asset backed security	2,074		—		(636		)	1,438
Mutual funds	4,750		70		(16		)	4,804
Total securities available for sale	$	60,131	$	137	$	(1,300	)	$	58,968
Securities available for sale at December 31, 2014:
Residential mortgage backed securities issued by U.S. Agencies	$	54,653	$	26	$	(940	)	$	53,739
Residential collateralized mortgage obligations issued by non agencies	790		—		(13		)	777
Asset backed security	2,083		—		(433		)	1,650
Mutual funds	4,750		45		(35		)	4,760
Total securities available for sale	$	62,276	$	71	$	(1,421	)	$	60,926

The amortized cost of securities available for sale at March 31, 2015 is shown in the table below by contractual maturities taking into consideration historical prepayments based on the prior twelve months of principal payments. Expected maturities will differ from contractual maturities and historical prepayments, particularly with respect to collateralized mortgage obligations, primarily because prepayment rates are affected by changes in conditions in the interest rate market and, therefore, future prepayment rates may differ from historical prepayment rates.

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	March 31, 2015 Maturing in
	One year or less				Over one year through five years				Over five years through ten years				Over ten years				Total
(Dollars in thousands)	Amortized Cost		Weighted Average Yield		Amortized Cost		Weighted Average Yield		Amortized Cost		Weighted Average Yield		Amortized Cost		Weighted Average Yield		Amortized Cost		Weighted Average Yield
Securities available for sale:
Residential mortgage-backed securities issued by U.S. Agencies	$	7,778	1.51	%	$	23,346	1.52	%	$	16,149	1.58	%	$	5,262	1.66	%	$	52,535	1.55	%
Non-agency collateralized mortgage obligations	—		—		772		2.91	%	—		—		—		—		772		2.91	%
Asset backed securities	—		—		—		—		—		—		2,074		2.39	%	2,074		2.39	%
Mutual funds	—		—		4,750		1.93	%	—		—		—		—		4,750		1.93	%
Total Securities Available for sale	$	7,778	1.51	%	$	28,868	1.63	%	$	16,149	1.58	%	$	7,336	1.87	%	$	60,131	1.63	%

Loans

The following table sets forth the composition, by loan category, of our loan portfolio at March 31, 2015 and December 31, 2014:

	March 31, 2015					December 31, 2014
	Amount			Percent		Amount			Percent
	(Dollars in thousands)
Commercial loans	$	312,613		37.2	%	$	301,746		36.0	%
Commercial real estate loans – owner occupied	211,654			25.2	%	212,515			25.4	%
Commercial real estate loans – all other	150,416			17.9	%	146,676			17.5	%
Residential mortgage loans – multi-family	82,674			9.8	%	95,276			11.4	%
Residential mortgage loans – single family	64,748			7.7	%	64,326			7.7	%
Land development loans	4,596			0.5	%	7,745			0.9	%
Consumer loans	13,598			1.6	%	9,687			1.2	%
Total loans	840,299			100.0	%	837,971			100.0	%
Deferred loan origination costs, net	94					59
Allowance for loan and lease losses	(12,639		)			(13,833		)
Loans, net	$	827,754				$	824,197

Commercial loans are loans to businesses to finance capital purchases or improvements, or to provide cash flow for operations. Real estate and residential mortgage loans are loans secured by trust deeds on real properties, including commercial properties and single family and multi-family residences. Land development loans are loans secured by non-arable bare land. Consumer loans include installment loans to consumers.

The following table sets forth the maturity distribution of our loan portfolio (excluding single and multi-family residential mortgage loans and consumer loans) at March 31, 2015:

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	March 31, 2015
	One Year or Less		Over One Year Through Five Years		Over Five Years		Total
	(Dollars in thousands)
Real estate loans(1)
Floating rate	$	16,359	$	32,123	$	150,886	$	199,368
Fixed rate	23,934		73,694		69,670		167,298
Commercial loans
Floating rate	46,537		53,098		12,918		112,553
Fixed rate	114,775		75,946		9,339		200,060
Total	$	201,605	$	234,861	$	242,813	$	679,279

(1) Does not include mortgage loans on single or multi-family residences or consumer loans, which totaled $147.4 million and $13.6 million, respectively, at March 31, 2015.

Nonperforming Assets and Allowance for Loan and Lease Losses

Nonperforming Assets. Non-performing loans consist of (i) loans on non-accrual status which are loans on which the accrual of interest has been discontinued and include restructured loans when there has not been a history of past performance on debt service in accordance with the contractual terms of the restructured loans, and (ii) loans 90 days or more past due and still accruing interest. Non-performing assets are comprised of non-performing loans and OREO, which consists of real properties which we have acquired by or in lieu of foreclosure and which we intend to offer for sale.

Loans are placed on non-accrual status when, in our opinion, the full timely collection of principal or interest is in doubt. Generally, the accrual of interest is discontinued when principal or interest payments become more than 90 days past due, unless we believe the loan is adequately collateralized and the loan is in the process of collection. However, in certain instances, we may place a particular loan on non-accrual status earlier, depending upon the individual circumstances involved in that loan’s delinquency. When a loan is placed on non-accrual status, previously accrued but unpaid interest is reversed against current income. Subsequent collections of unpaid amounts on such a loan are applied to reduce principal when received, except when the ultimate collectability of principal is probable, in which case such payments are applied to interest and are credited to income. Non-accrual loans may be restored to accrual status if and when principal and interest become current and full repayment is expected. Interest income is recognized on the accrual basis for impaired loans which, based on our non-accrual policy, do not require non-accrual treatment.

The following table sets forth information regarding our nonperforming assets, as well as information regarding restructured loans, at March 31, 2015 and December 31, 2014:

	At March 31, 2015		At December 31, 2014
	(Dollars in thousands)
Nonaccrual loans:
Commercial loans	$	14,628	$	16,182
Commercial real estate	4,255		4,288
Residential real estate	1,803		1,472
Land development	1,717		2,111
Total nonaccrual loans	$	22,403	$	24,053
Loans past due 90 days and still accruing interest:
Total loans past due 90 days and still accruing interest	$	—	$	—
Other real estate owned (OREO):
Residential real estate	962		962
Construction and land development	910		630
Total other real estate owned	$	1,872	$	1,592
Total nonperforming assets	$	24,275	$	25,645
Restructured loans:
Accruing loans	$	8,333	$	11,084
Nonaccruing loans (included in nonaccrual loans above)	4,217		5,935
Total restructured loans	$	12,550	$	17,019

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As the above table indicates, total nonperforming assets decreased by approximately $1.3 million, or 5.1%, to $24.3 million as of March 31, 2015 from $25.6 million as of December 31, 2014, attributable to regular payment amortizations and payoffs and the charge off of two loans that were no longer deemed collectible in the ordinary course of business, partially offset by a new non-accrual loan relationship totaling $800 thousand.

Information Regarding Impaired Loans. At March 31, 2015, loans deemed impaired totaled $30.7 million as compared to $35.1 million at December 31, 2014. We had an average investment in impaired loans of $28.2 million for the three months ended March 31, 2015 as compared to $28.5 million for the year ended December 31, 2014. The interest that would have been earned during the three months ended March 31, 2015 had the nonaccruing impaired loans remained current in accordance with their original terms was approximately $204 thousand.

The following table sets forth the amount of impaired loans to which a portion of the ALLL has been specifically allocated, and the aggregate amount so allocated, in accordance with Accounting Standards Codification (“ASC”) 310-10, and the amount of the ALLL and the amount of impaired loans for which no such allocations were made, in each case at March 31, 2015 and December 31, 2014:

	March 31, 2015						December 31, 2014
	Loans		Reserves for Loan Losses		% of Reserves to Loans		Loans		Reserves for Loan Losses		% of Reserves to Loans
	(Dollars in thousands)
Impaired loans with specific reserves	$	1,463	$	812	55.5	%	$	2,554	$	1,532	60.0	%
Impaired loans without specific reserves	29,273		—		—		32,583		—		—
Total impaired loans	$	30,736	$	812	2.6	%	$	35,137	$	1,532	4.4	%

The $4.4 milliondecrease in impaired loans to $30.7 million at March 31, 2015 from $35.1 million at December 31, 2014 was primarily attributable to paydowns of $3.7 million and net charge-offs of $1.1 million, partially offset by the addition of an $800 thousand loan relationship, consisting of one commercial loan and one residential mortgage loan - multi-family and the foreclosure and transfer to OREO of a $280 thousand land development loan. Accruing restructured loans were comprised of a number of loans performing in accordance with modified terms, which included lowering of interest rates, deferral of payments, or modifications to payment terms. Based on an internal analysis, using the current estimated fair values of the collateral or the discounted present values of the future estimated cash flows of the impaired loans, we concluded that, at March 31, 2015, $812 thousand of specific reserves were required on four impaired loans and that all remaining impaired loans were well secured and adequately collateralized with no specific reserves required.

Allowance for Loan and Lease Losses. The ALLL totaled $12.6 million, representing 1.50% of loans outstanding, at March 31, 2015, as compared to $13.8 million, or 1.65% of loans outstanding, at December 31, 2014.

The adequacy of the ALLL is determined through periodic evaluations of the loan portfolio and other factors that can reasonably be expected to affect the ability of borrowers to meet their loan obligations. Those factors are inherently subjective as the process for determining the adequacy of the ALLL involves some significant estimates and assumptions about such matters such as (i) economic conditions and trends and the amounts and timing of expected future cash flows of borrowers which can affect their ability to meet their loan obligations to us, (ii) the fair value of the collateral securing non-performing loans, (iii) estimates of losses that we may incur on non-performing loans, which are determined on the basis of historical loss experience and industry loss factors and bank regulatory guidelines, which are subject to change, and (iv) various qualitative factors. Since those factors are subject to changes in economic and other conditions and changes in regulatory guidelines or other circumstances over which we have no control, the amount of the ALLL may prove to be insufficient to cover all of the loan losses we might incur in the future. In such an event, it may become necessary for us to increase the ALLL from time to time to maintain its adequacy. Such increases are effectuated by means of a charge to income, referred to as the “provision for loan and lease losses”, in our statements of our operations. See “—Results of Operations— Provision for Loan and Lease Losses, above in this Item 2.

The amount of the ALLL is first determined by assigning reserve ratios for all loans. All non-accrual loans and other loans classified as “Special Mention,” “Substandard” or “Doubtful” (“classified loans” or “classification categories”) and not fully collateralized are then assigned specific reserves within the ALLL, with greater reserve allocations made to loans deemed to be of a higher risk. These ratios are determined based on prior loss history and industry guidelines and loss factors, by type of loan, adjusted for current economic factors and current economic trends. Refer to Note 5, Loans and Allowance for Loan and Lease Losses, in Item 1 for definitions related to our internal asset quality indicators stated above.

On a quarterly basis, we utilize a classification migration model and individual loan review analytical tools as starting points for determining the adequacy of the ALLL. Our loss migration analysis tracks a certain number of quarters of loan loss history and industry loss factors to determine historical losses by classification category for each loan type, except certain loans

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(automobile, mortgage and credit cards), which are analyzed as homogeneous loan pools. These calculated loss factors are then applied to outstanding loan balances. We also conduct individual loan review analysis, as part of the ALLL allocation process, applying specific monitoring policies and procedures in analyzing the existing loan portfolio.

In determining whether and the extent to which we will make adjustments to our loan loss migration model for purposes of determining the ALLL, we also consider a number of qualitative factors that can affect the performance and the collectability of the loans in our loan portfolio. Such qualitative factors include:

• The effects of changes that we may make in our loan policies or underwriting standards on the quality of the loans and the risks in our loan portfolios;

• Trends and changes in local, regional and national economic conditions, as well as changes in industry specific conditions, and any other reasonably foreseeable events that could affect the performance or the collectability of the loans in our loan portfolios;

• Material changes that may occur in the mix or in the volume of the loans in our loan portfolios that could alter, whether positively or negatively, the risk profile of those portfolios;

• Changes in management or loan personnel or other circumstances that could, either positively or negatively, impact the application of our loan underwriting standards, the monitoring of nonperforming loans or our loan collection efforts;

• Changes in the concentration of risk in the loan portfolio; and

• External factors that, in addition to economic conditions, can affect the ability of borrowers to meet their loan obligations, such as fires, earthquakes and terrorist attacks.

Determining the effects that these qualitative factors may have on the performance of each category of loans in our loan portfolio requires numerous judgments, assumptions and estimates about conditions, trends and events which may subsequently prove to have been incorrect due to circumstances outside of our control. Moreover, the effects of qualitative factors such as these on the performance of our loan portfolios are often difficult to quantify. As a result, we may sustain loan losses in any particular period that are sizable in relation to the ALLL or that may even exceed the ALLL.

In response to the economic recession, which resulted in increased and relatively persistent high rates of unemployment, and the credit crisis that led to a severe tightening of credit, preventing borrowers from refinancing their loans, we (i) implemented more stringent loan underwriting standards, (ii) strengthened loan underwriting and approval processes, and (iii) added personnel with experience in addressing problem assets.

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Set forth below is information regarding loan balances and the related ALLL, by portfolio type, for the three months ended March 31, 2015 and 2014 (excluding mortgage loans held for sale).

(Dollars in thousands)	Commercial			Real  Estate			Land Development			Consumer and Single Family Mortgages			Total
ALLL for the three months ended March 31, 2015:
Balance at beginning of year	$	7,670		$	5,133		$	296		$	734		$	13,833
Charge offs	(1,387		)	—			(85		)	—			(1,472		)
Recoveries	275			1			—			2			278
Provision	795			(847		)	(91		)	143			—
Balance at end of year	$	7,353		$	4,287		$	120		$	879		$	12,639
Allowance for loan and lease losses as a percentage of average total loans													1.53		%
Allowance for loan and lease losses as a percentage of total outstanding loans													1.50		%
Ratio of net charge-offs to average loans outstanding (annualized)													0.59		%
ALLL for the three months ended March 31, 2014:
Balance at beginning of year	$	5,812		$	4,517		$	165		$	864		$	11,358
Charge offs	(110		)	—			—			(100		)	(210		)
Recoveries	283			18			—			41			342
Provision	3			504			(11		)	(46		)	450
Balance at end of year	$	5,988		$	5,039		$	154		$	759		$	11,940
Allowance for loan and lease losses as a percentage of average total loans													1.53		%
Allowance for loan and lease losses as a percentage of total outstanding loans													1.42		%
Ratio of net charge-offs to average loans outstanding (annualized)													(0.07		)%

The ALLL increased$699 thousand from March 31, 2014 to March 31, 2015 primarily as a result of new loan growth in the twelve-month period ended March 31, 2015. The decrease in the provision for loan and lease losses from March 31, 2014 to March 31, 2015 was primarily a result of improving asset quality evidenced by declining loan delinquencies, lower levels of classified loans and generally positive asset quality trends which more than offset the portfolio growth.

We classify our loan portfolios using internal asset quality ratings. The credit quality table in Note 5, Loans and Allowance for Loan and Lease Losses above in Item 1, provides a summary of loans by portfolio type and our internal asset quality ratings as of March 31, 2015 and December 31, 2014. Loans totaled approximately $840.3 million at March 31, 2015, an increase of $2.3 million from $838.0 million at December 31, 2014. The disaggregation of the loan portfolio by risk rating in the credit quality table located in Note 5 reflects the following changes that occurred between December 31, 2014 and March 31, 2015:

• Loans rated "Pass" totaled $796.7 million, an increase of $5.9 million from $790.8 million at December 31, 2014. The increase was primarily attributable to modest new loan growth and the upgrade to "Pass" from "Substandard" of a $4.2 million commercial real estate loan.

• Loans rated "Special Mention" totaled $10.7 million, an increase of $3.3 million from $7.4 million at December 31, 2014. The increase was primarily the result of a $4.2 million commercial real estate - owner occupied loan downgraded from "Pass", partially offset by the downgrade to "Substandard" of an $800 thousand loan relationship, which consisted of one commercial real estate loan and one commercial loan.

• Loans rated "Substandard" totaled $32.3 million, a decrease of $5.9 million from $38.2 million at December 31, 2014. This decrease was primarily the result of principal payments of $3.8 million on performing "Substandard" loans, the foreclosure and transfer to OREO of a $280 thousand land development loan and $2.4 million of loans upgraded to "Pass", partially offset by an $800 thousand loan relationship downgraded from "Special Mention".

• Loans rated "Doubtful" totaled $584 thousand, a decrease of $1.1 million from $1.6 million at December 31, 2014. The decrease is primarily attributable to the charge off of one commercial loan.

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Our loss migration analysis currently utilizes a series of four staggered 16-quarter migration periods, which more heavily weights periods for which we experienced higher losses, to determine the loss factors we apply to each of the above-described loan classification categories. As a result, for purposes of determining applicable loss factors at March 31, 2015, our migration analysis covered the period from December 1, 2010 to March 31, 2015. We believe this was consistent with and reasonably reflects current economic conditions, portfolio trends and the risks that were inherent in our loan portfolio at March 31, 2015.

The table below sets forth loan delinquencies, by quarter, for the five preceding quarters ended March 31, 2015.

	March 31, 2015		December 31, 2014		September 30, 2014		June 30, 2014		March 31, 2014
Loans Delinquent:	(Dollars in thousands)
90 days or more:
Commercial loans	$	—	$	—	$	303	$	1,647	$	266
Commercial real estate	—		2,117		2,117		2,117		2,117
Residential mortgages	733		285		244		—		—
Land development loans	—		364		364		—		—
	733		2,766		3,028		3,764		2,383
30-89 days:
Commercial loans	24,143		553		1,079		4,251		1,416
Commercial real estate	891		20		—		485		—
Residential mortgages	181		835		43		264		137
Land development loans	1,717		—		—		368		—
Consumer loans	—		17		—		—		—
	26,932		1,425		1,122		5,368		1,553
Total Past Due(1):	$	27,665	$	4,191	$	4,150	$	9,132	$	3,936

(1) Past due balances include nonaccrual loans.

As the above table indicates, total past due loans increased by $23.5 million, to $27.7 million at March 31, 2015 from $4.2 million at December 31, 2014. Loans past due 90 days or more decreased by $2.0 million, to $733 thousand at March 31, 2015, from $2.8 million at December 31, 2014 attributable to a $2.1 million loan relationship being brought current and the foreclosure and transfer to OREO of a $280 thousand nonaccrual land development loan.

Loans 30-89 days past due increased by $25.5 million to $26.9 million at March 31, 2015 from $1.4 million at December 31, 2014 primarily attributable to special assets in the process of negotiation or restructuring, which includes one performing loan relationship of $13.3 million which was delinquent due to a delay in the renewal process and has subsequently returned to current status.

Deposits

Average Balances of and Average Interest Rates Paid on Deposits

Set forth below are the average amounts of, and the average rates paid on, deposits for the three months ended March 31, 2015 and year ended December 31, 2014:

	Three Months Ended March 31, 2015				Year Ended December 31, 2014
	Average Balance		Average Rate		Average Balance		Average Rate
	(Dollars in thousands)
Noninterest bearing demand deposits	$	217,605	—		$	206,295	—
Interest-bearing checking accounts	39,249		0.25	%	36,281		0.28	%
Money market and savings deposits	289,479		0.57	%	170,047		0.34	%
Time deposits(1)	316,487		0.89	%	431,789		0.96	%
Total deposits	$	862,820	0.53	%	$	844,412	0.57	%

(1) Comprised of time certificates of deposit in denominations of less than and more than $100,000.

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Deposit Totals

Deposits totaled $886.0 million at March 31, 2015 as compared to $916.3 million at December 31, 2014. The following table provides information regarding the mix of our deposits at March 31, 2015 and December 31, 2014:

	At March 31, 2015				At December 31, 2014
	Amounts		% of Total Deposits		Amounts		% of Total Deposits
	(Dollars in thousands)
Deposits
Noninterest bearing demand deposits	$	237,932	27.0	%	$	237,491	25.9	%
Savings and other interest-bearing transaction deposits	335,578		37.9	%	318,096		34.7	%
Time deposits	312,473		35.3	%	360,722		39.4	%
Total deposits	$	885,983	100.0	%	$	916,309	100.0	%

At March 31, 2015, noninterest-bearing deposits totaled $237.9 million, or 27.0% of total deposits, as compared to $237.5 million, or 25.9% of total deposits at December 31, 2014. Certificates of deposit in denominations of $100,000 or more, on which we pay higher rates of interest than on other deposits, aggregated $272.4 million, or 30.8%, of total deposits at March 31, 2015, as compared to $315.0 million, or 34.4%, of total deposits at December 31, 2014.

Set forth below is a maturity schedule of domestic time certificates of deposit outstanding at March 31, 2015 and December 31, 2014:

	March 31, 2015				December 31, 2014
Maturities	Certificates of Deposit Under $ 100,000		Certificates of Deposit $100,000 or more		Certificates of Deposit Under $100,000		Certificates of Deposit $100,000 or more
	(Dollars in thousands)
Three months or less	$	6,779	$	33,043	$	16,841	$	118,302
Over three and through six months	8,362		53,211		6,740		29,933
Over six and through twelve months	19,244		151,915		13,707		96,507
Over twelve months	5,640		34,279		8,433		70,259
Total	$	40,025	$	272,448	$	45,721	$	315,001

Liquidity

We actively manage our liquidity needs to ensure that sufficient funds are available to meet our needs for cash, including to fund new loans and deposit withdrawals by our customers. We project the future sources and uses of funds and maintain liquid funds for unanticipated events. Our primary sources of cash include cash we have on deposit at other financial institutions, payments from borrowers on their loans, proceeds from sales or maturities of securities held for sale, sales of residential mortgage loans, increases in deposits and increases in borrowings principally from the FHLB. The primary uses of cash include funding new loans and making advances on existing lines of credit, purchasing investments, including securities available for sale, funding new residential mortgage loans, funding deposit withdrawals and paying operating expenses. We maintain funds in overnight federal funds and other short-term investments to provide for short-term liquidity needs. We also have obtained credit lines from the FHLB and other financial institutions to meet any additional liquidity requirements we might have. See "—Contractual Obligations—Borrowings" below for additional information related to our borrowings from the FHLB.

Our liquid assets, which included cash and due from banks, federal funds sold, interest earning deposits that we maintain with financial institutions and unpledged securities available for sale (excluding FRBSF and FHLB stock) totaled $184.7 million, which represented 17% of total assets, at March 31, 2015. We believe that our cash and cash equivalent resources, together with available borrowings under our credit facilities, will be sufficient to meet normal operating requirements for at least the next twelve months, including to enable us to meet any increase in deposit withdrawals that might occur in the foreseeable future.

Cash Flow (Used in) Provided by Operating Activities. During the three months ended March 31, 2015, operating activities used net cash of $1.0 million, primarily attributable to a decrease in our other liabilities, which resulted from the payment of our accrued incentive compensation for 2014. During the three months ended March 31, 2014, operating activities provided net cash of $1.8 million, comprised primarily of $1.0 million provided by our discontinued operations and our net income of $451 thousand.

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Cash Flow Provided by (Used in) Investing Activities. During the three months ended March 31, 2015, investing activities provided cash of $327 thousand, primarily comprised of $2.1 million of cash from maturities of and principal payments on securities available for sale and $2.1 million of cash from principal payments on other investments, partially offset by $3.7 million used to fund an increase in loans. During the three months ended March 31, 2014, investing activities used net cash of $3.3 million, primarily attributable to $6.7 million used to fund an increase in loans, partially offset by $2.4 million of cash from maturities and principal payments on securities available for sale and $1.1 million from sale of OREO.

Cash Flow (Used in) Provided by Financing Activities. During the three months ended March 31, 2015, financing activities used net cash of $38.7 million, consisting primarily of a $30.8 million net decrease in interest bearing deposits, which resulted primarily from a decision to decrease the rates of interest we pay on our certificates of deposit in order to increase our loan-to-deposit ratio and decrease our cost of funds, and a $9.5 million decrease in borrowings. During the three months ended March 31, 2014, financing activities provided net cash of $59.6 million, consisting primarily of a $76.1 million net increase in interest bearing deposits, which resulted primarily from a decision to increase the rates of interest we pay on our certificates of deposit in order to decrease our loan-to-deposit ratio and increase our liquidity, partially offset by a $9.4 million increase in borrowings.

Ratio of Loans to Deposits. The relationship between gross loans and total deposits can provide a useful measure of a bank’s liquidity. Since repayment of loans tends to be less predictable than the maturity of investments and other liquid resources, the higher the loan-to-deposit ratio the less liquid are our assets. On the other hand, since we realize greater yields on loans than we do on investments, a lower loan-to-deposit ratio can adversely affect interest income and earnings. As a result, our goal is to achieve a loan-to-deposit ratio that appropriately balances the requirements of liquidity and the need to generate a fair return on our assets. At March 31, 2015 and December 31, 2014, the loan-to-deposit ratio was 95% and 91%, respectively.

Capital Resources

Regulatory Capital Requirements Applicable to Banking Institutions

Under federal banking regulations that apply to all United States based bank holding companies and federally insured banks, the Company (on a consolidated basis) and the Bank (on a stand-alone basis) must meet specific capital adequacy requirements that, for the most part, involve quantitative measures, primarily in terms of the ratios of their capital to their assets, liabilities, and certain off-balance sheet items, calculated under regulatory accounting practices. Under those regulations, each bank holding company must meet a minimum capital ratio and each federally insured bank is determined by its primary federal bank regulatory agency to come within one of the following capital adequacy categories on the basis of its capital ratios:

• well capitalized

• adequately capitalized

• undercapitalized

• significantly undercapitalized; or

• critically undercapitalized

Certain qualitative assessments also are made by a banking institution’s primary federal regulatory agency that could lead the agency to determine that the banking institution should be assigned to a lower capital category than the one indicated by the quantitative measures used to assess the institution’s capital adequacy. At each successive lower capital category, a banking institution is subject to greater operating restrictions and increased regulatory supervision by its federal bank regulatory agency.

The following table sets forth the capital and capital ratios of the Company (on a consolidated basis) and the Bank (on a stand-alone basis) at March 31, 2015, as compared to the respective regulatory requirements applicable to them.

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					Applicable Federal Regulatory Requirement
					For Capital Adequacy Purposes			To be Categorized As Well Capital
	Amount		Ratio		Amount		Ratio	Amount		Ratio
	(Dollars in thousands)
Total Capital to Risk Weighted Assets:
Company	$	146,365	16.9	%	$	69,228	At least 8.0	N/A		N/A
Bank	126,456		14.7	%	68,773		At least 8.0	$	85,967	At least 10.0
Common Equity Tier 1 Capital to Risk Weighted Assets:
Company	$	107,756	12.5	%	$	38,941	At least 4.5	N/A		N/A
Bank	115,655		13.5	%	38,685		At least 4.5	$	55,878	At least 6.5
Tier 1 Capital to Risk Weighted Assets:
Company	$	135,494	15.7	%	$	51,921	At least 6.0	N/A		N/A
Bank	115,655		13.5	%	51,580		At least 6.0	$	68,773	At least 8.0
Tier 1 Capital to Average Assets:
Company	$	135,494	13.0	%	$	41,745	At least 4.0	N/A		N/A
Bank	115,655		11.1	%	41,524		At least 4.0	$	51,905	At least 5.0

In early July 2013, the Federal Reserve Board and the FDIC issued final rules implementing the Basel III regulatory capital framework and related Dodd-Frank Wall Street Reform and Consumer Protection Act changes.  The rules revise minimum capital requirements and adjust prompt correct action thresholds.  The final rules revise the regulatory capital elements, add a new common equity Tier 1 capital ratio, increase the minimum Tier 1 capital ratio requirement, and implement a new capital conservation buffer.  The rules also permit certain banking organizations to retain, through a one-time election, the existing treatment for accumulated other comprehensive income.  The final rules took effect for community banks on January 1, 2015, subject to a transition period for certain parts of the rules.  At March 31, 2015 the Bank (on a stand-alone basis) continued to qualify as a well-capitalized institution, and the Company continued to exceed the minimum required capital ratios applicable to it, under the capital adequacy guidelines described above.

The consolidated total capital and Tier 1 capital of the Company at March 31, 2015 includes an aggregate of $17.0 million principal amount of the $17.5 million of junior subordinated debentures that we issued in 2002 and 2004. See “—Contractual Obligations—Junior Subordinated Debentures” below for additional information. We contributed the net proceeds from the sales of the junior subordinated debentures to the Bank over the nine year period ended March 31, 2015, thereby providing it with additional cash to fund the growth of its banking operations and, at the same time, to increase its total capital and Tier 1 capital.

Notwithstanding termination of the FRBSF Agreement in November 2014, quarterly interest payments on the junior subordinated debentures require prior approval of the FRBSF. As of March 31, 2015, we were current on all interest payments.

Dividend Policy and Share Repurchase Programs.

It is, and since the beginning of 2009 it has been, the policy of the Boards of Directors of the Company and the Bank to preserve cash to enhance our capital positions and the Bank's liquidity. Accordingly, we do not expect to pay dividends or make share repurchases for the foreseeable future.

The principal source of cash available to a bank holding company consists of cash dividends from its bank subsidiaries. There are currently several restrictions on the Bank’s ability to pay us cash dividends. Government regulations, including the laws of the State of California, as they pertain to the payment of cash dividends by California state chartered banks, limits the amount of funds that the Bank is permitted to dividend to us. Further, Section 23(a) of the Federal Reserve Act limits the amounts that a bank may loan to its bank holding company to an aggregate of no more than 10% of the bank subsidiary’s capital surplus and retained earnings and requires that such loans be secured by specified assets of the bank holding company. See Note 14, Shareholders’ Equity, in the notes to our consolidated financial statements included in our 2014 Form 10-K for more detail regarding the restrictions on dividends and inter-company transactions. While restrictions on the payment of dividends from the Bank to us exist, there are no restrictions on the dividends that PM Asset Resolution, Inc. (“PMAR”), our wholly owned subsidiary, may pay us. PMAR has approximately $15.2 million in assets and could provide us with additional cash if required. In addition, we currently have sufficient cash on hand to meet our cash obligations. As a result, we do not expect that these restrictions will impact our ability to meet our cash obligations.

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Off Balance Sheet Arrangements

Loan Commitments and Standby Letters of Credit. To meet the financing needs of our customers in the normal course of business, we are a party to financial instruments with off-balance sheet risk. These financial instruments include commitments to extend credit and standby letters of credit. At March 31, 2015 and December 31, 2014, we were committed to fund certain loans including letters of credit amounting to approximately $154 million and $148 million, respectively.

Commitments to extend credit and standby letters of credit generally have fixed expiration dates or other termination clauses and the customer may be required to pay a fee and meet other conditions in order to draw on those commitments or standby letters of credit. We expect, based on historical experience, that many of the commitments will expire without being drawn upon and, therefore, the total commitment amounts do not necessarily represent future cash requirements.

To varying degrees, commitments to extend credit involve elements of credit and interest rate risk for us that are in excess of the amounts recognized in our balance sheets. Our maximum exposure to credit loss in the event of nonperformance by the customers to whom such commitments are made could potentially be equal to the amount of those commitments. As a result, before making such a commitment to a customer, we evaluate the customer’s creditworthiness using the same underwriting standards that we would apply if we were approving loans to the customer. In addition, we often require the customer to secure its payment obligations for amounts drawn on such commitments with collateral such as accounts receivable, inventory, property, plant and equipment, income-producing commercial properties, residential properties and properties under construction. As a consequence, our exposure to credit and interest rate risk on such commitments is not different in character or amount than risks inherent in the outstanding loans in our loan portfolio.

Standby letters of credit are conditional commitments issued by the Bank to guarantee a payment obligation of a customer to a third party. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan commitments to customers.

Contractual Obligations

Borrowings. As of March 31, 2015, we had $20.0 million of outstanding short-term borrowings and $10.0 million of outstanding long-term borrowings that we had obtained from the FHLB. The table below sets forth the amounts of, the interest rates we pay on and the maturity dates of these FHLB borrowings. These borrowings had a weighted-average annualized interest rate of 0.74% for the three months ended March 31, 2015.

Principal Amounts		Interest Rate		Maturity Dates	Principal Amounts		Interest Rate		Maturity Dates
(Dollars in thousands)
$	10,000	0.61	%	August 31, 2015	$	5,000	1.08	%	September 19, 2016
5,000		0.61	%	September 18, 2015	5,000		0.96	%	September 30, 2016
5,000		0.57	%	September 30, 2015

At March 31, 2015, $530.9 million of loans were pledged to secure these FHLB borrowings and to support our unfunded borrowing capacity.

The highest amount of borrowings outstanding at any month-end during the three months ended March 31, 2015 was $39.5 million, which consisted of borrowings from the FHLB. By comparison, the highest amount of borrowings outstanding at any month end in 2014 consisted of $70 million of borrowings from the FHLB.

Junior Subordinated Debentures. Pursuant to rulings of the Federal Reserve Board, bank holding companies were permitted to issue long term subordinated debt instruments that, subject to certain conditions, would qualify as and, therefore, augment capital for regulatory purposes. At March 31, 2015, we had outstanding approximately $17.5 million principal amount of 30-year junior subordinated floating rate debentures (the “Debentures”), of which $17.0 million qualified as additional Tier 1 capital for regulatory purposes as of March 31, 2015.

Set forth below is certain information regarding the Debentures:

Original Issue Dates	Principal Amount		Interest Rates	Maturity Dates
September 2002	$	7,217	LIBOR plus 3.40%	September 2032
October 2004	10,310		LIBOR plus 2.00%	October 2034
Total	$	17,527

(1) Subject to the receipt of prior regulatory approval, we may redeem the Debentures, in whole or in part, without premium or penalty, at any time prior to maturity.

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These Debentures require quarterly interest payments, which are used to make quarterly distributions required to be paid on the corresponding trust preferred securities. Subject to certain conditions, we have the right, at our discretion, to defer those interest payments, and the corresponding distributions on the trust preferred securities, for up to five years. Exercise of this deferral right does not constitute a default of our obligations to pay the interest on the Debentures or the corresponding distributions that are payable on the trust preferred securities. As of March 31, 2015, we were current on all interest payments.

Credit Risk

Credit risk is the risk of loss arising from adverse changes in a client’s or counterparty’s ability to meet its financial obligations under agreed-upon terms. Credit risk primarily exists in our loan and investment portfolio. The degree of credit risk will vary based on many factors including the duration of the transaction, the financial capacity of the client, the contractual terms of the agreement and the availability and quality of collateral. We manage credit risk by limiting the total amount of credit extended to a single borrower relationship, by verification of its business operations and assets and with a thorough understanding of the nature and scope of the business activities in which they are engaged.

As appropriate, management and Board level committees evaluate and approve credit standards and oversee the credit risk management function related to loans and investments. These committees’ primary responsibilities include ensuring the adequacy of our credit risk management infrastructure, overseeing credit risk management strategies and methodologies, monitoring economic and market conditions that may impact our credit-related activities, and finally, evaluating and monitoring overall portfolio credit risk.

We maintain a comprehensive credit policy that includes specific underwriting guidelines as well as standards for loan origination and reporting as well as portfolio management. The credit policy is developed by credit management and approved by the Board of Directors, which also reviews it at least annually. In addition, the credit policy sets forth requirements that ensure compliance with all applicable laws and regulatory guidance.

Our underwriting guidelines outline specific standards and risk management criteria for each lending product offered. Loan types are further segmented into subsections where the inherent credit risk warrants detailed transaction and monitoring parameters, as follows:

• Loan structures, which includes the lien priority, amortization terms and loan tenors;

• Collateral requirements, coverage margins and valuation methods;

• Underwriting considerations which include recommended due diligence and verification requirements; and

• Specific credit performance standards. Examples include minimum debt service coverage ratios, liquidity requirements as well as limits on financial leverage.

We measure and document each loan’s compliance with our policy criteria at underwriting. If an exception to these criteria exists, an explanation of the factors that mitigate this additional risk is considered before an approval is granted. A report of loans with policy exceptions is reported to the Credit Policy Committee of the Board of Directors of the Bank on a monthly basis.

We continuously monitor a client’s ability to perform under its obligations. Reporting requirements and loan covenants are set forth in each loan approval and compliance with these items are monitored on at least an annual basis or more frequently as conditions warrant. Loan covenant compliance is tracked and results are reported to credit management.

Under our credit risk management structure, each loan is assigned an internal asset quality rating that is based on defined credit standards. While the criteria may vary by product, each rating focuses on the borrower’s inherent operating risks, the quality of management, historical financial performance, financial capacity, the stability of profits and cash flow, and the adequacy of the secondary repayment sources. Asset quality ratings for each loan are monitored and reassessed on an ongoing basis. If necessary, ratings are adjusted to reflect changes in the client’s financial condition, cash flow or financial position. Regular reporting to management and the Board includes the aggregated portfolio exposure by asset quality rating as one measure of credit risk within the loan portfolio. Refer to “Financial Condition — Allowance for Loan and Lease Losses” above in this Item 2 for further detail regarding our internal asset quality ratings.

The Bank recognizes that substantial risks are posed by concentrations of credit assets. As such, it maintains a diversified loan portfolio by limiting exposures by loan structure, business type or purpose, collateral type, and perceived asset quality. Credit management defines areas of concentration, recommends appropriate thresholds to the Board of Directors and takes action if needed to manage potential risk where asset concentrations exist.

Market Risk

Market risk is the risk that values of assets and liabilities or revenues will be adversely affected by changes in market conditions such as interest rate fluctuations. This risk is inherent in the financial instruments associated with our operations and/or activities, including loans, securities and short-term borrowings.

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The primary market risk to which we are exposed is interest rate risk, which is inherent in the financial instruments associated with our operations, primarily including our loans, deposits and borrowings. Interest rate risk is the exposure of a company’s financial condition, both earnings and the market value of assets and liabilities, to adverse movements in interest rates. Interest rate risk results from differences in the maturity or timing of interest earning assets and interest bearing liabilities, changes in the slope of the yield curve over time, imperfect correlation in the adjustment of rates earned and paid on different instruments with otherwise similar characteristics (e.g. three-month Treasury bill versus three-month LIBOR) and from interest-rate-related options embedded in bank products (e.g. loan prepayments, floors and caps, callable investment securities, customers redeploying non-interest bearing to interest bearing deposits, etc.).

The potential impact of interest rate risk is significant because of the liquidity and capital adequacy consequences that reduced earnings or net operating losses caused by a reduction in net interest income imply. We recognize and accept that interest rate risk is a routine part of bank operations and will from time to time impact our profits and capital position. The objective of interest rate risk management is to control exposure of net interest income to risks associated with interest rate movements in the market, to achieve consistent growth in net interest income and to profit from favorable market opportunities.

We measure interest rate risk and the effect of changes in market interest rates using a net interest income simulation analysis. The analysis incorporates our balance sheet as of March 31, 2015 and assumptions that reflect the current interest rate environment. The analysis estimates the interest rate impact of a parallel increase in interest rates over a twelve-month horizon.

The analysis below incorporates our assumptions for the market yield curve, pricing sensitivities on loans and deposits, reinvestment of asset and liability cash flows, and prepayments on loans and securities. The new loans, investment securities, borrowings and deposits are assumed to have interest rates that reflect our forecast of prevailing market terms. We also assumed that LIBOR and prime rates do not fall below 0% for loans and borrowings. FHLB borrowings are assumed to convert to cash as they run off. Actual results may differ from forecasted results due to changes in market conditions as well as changes in management strategies.

The estimated changes in net interest income for a twelve-month period based on changes in the interest rates applied as of March 31, 2015 were as follows:

Change in Market Interest Rates (basis points)	Amount ($)			Percent (%)
	(in thousands)
+200	$	2,214		6.56	%
+100	260			0.77	%
-100	(356		)	1.05	%

In addition to NII simulation, we measure the impact of market interest rate changes on our economic value of equity (“EVE”). EVE is defined as the net present value of assets, less the net present value of liabilities, adjusted for any off-balance sheet items.

The estimated changes in EVE in the following table are based on a discounted cash flow analysis which incorporates the impacts of changes in market interest rates. The model simulations and calculations are highly assumption-dependent and will change regularly as our asset/liability structure changes, as interest rate environments evolve, and as we change our assumptions in response to relevant market or business circumstances. These calculations do not reflect the changes that we anticipate or may make to reduce our EVE exposure in response to a change in market interest rates as part of our overall interest rate risk management strategy. As with any method of measuring interest rate risk, certain limitations are inherent in the method of analysis presented in the preceding table. We are exposed to yield curve risk, prepayment risk and basis risk, which cannot be fully modeled and expressed using the above methodology. Accordingly, the results in the following table should not be relied upon as a precise indicator of actual results in the event of changing market interest rates. Additionally, the resulting changes in EVE and NII estimates are not intended to represent, and should not be construed to represent the underlying value.

The estimated changes in EVE based on interest rates applied as of March 31, 2015 were as follows:

Change in Market Interest Rates (basis points)	Amount ($)			Percent (%)
	(in thousands)
+200	$	(3,461	)	(2.75	)%
+100	(717		)	(0.57	)%
-100	1,034			0.82	%

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Critical Accounting Policies

Our consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) and general practices in the banking industry. Certain of those accounting policies are considered critical accounting policies, because they require us to make assumptions and judgments regarding circumstances or trends that could affect the carrying value of our material assets, such as, for example, assumptions regarding economic conditions or trends that could impact our ability to fully collect our loans or ultimately realize the carrying value of certain of our other assets, such as securities available for sale and our deferred tax asset. Those assumptions and judgments are based on current information available to us regarding those economic conditions or trends or other circumstances. If adverse changes were to occur in the conditions, trends or other events on which our assumptions or judgments had been based, then under GAAP it could become necessary for us to reduce the carrying values of any affected assets on our balance sheet. In addition, because reductions in the carrying value of assets are sometimes effectuated by or require charges to income, such reductions also may have the effect of reducing our income.

There have been no significant changes during the three months ended March 31, 2015 to the items that we disclosed as our critical accounting policies and estimates in Critical Accounting Policies within Management's Discussion and Analysis of Financial Condition and Results of Operations included in our 2014 Form 10-K.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are exposed to certain financial risks, which are discussed in detail in Management's Discussion and Analysis of Financial Condition and Results of Operations in the Credit Risk and Market Risk sections.

ITEM 4.     CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure. In designing and evaluating our disclosure controls and procedures, our management recognized that any system of controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, as ours are designed to do, and management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

As required by SEC rules, an evaluation was performed under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer of the effectiveness, as of March 31, 2015, of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act). Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of March 31, 2015, the Company’s disclosure controls and procedures were effective to provide reasonable assurance that information required to be disclosed in the reports that we file under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and that such information is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.

Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting during the three months ended March 31, 2015 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

We are subject to legal actions that arise from time to time in the ordinary course of our business. Currently, neither we nor any of our subsidiaries is a party to, and none of our or our subsidiaries' property is the subject of, any material legal proceeding.

ITEM 1A. RISK FACTORS

There have been no material changes in our assessment of our risk factors from those set forth in our 2014 Form 10-K.

ITEM 6. EXHIBITS

(a) Exhibits

The Index to Exhibits attached hereto is incorporated by reference.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on May 8, 2015.

PACIFIC MERCANTILE BANCORP
By:	/S/   STEVEN K. BUSTER
	Steven K. Buster
	President and Chief Executive Officer

PACIFIC MERCANTILE BANCORP
By:	/S/   CURT A. CHRISTIANSSEN
	Curt A. Christianssen
	Chief Financial Officer

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EXHIBIT INDEX

Exhibit No.	Description of Exhibit
3.1	Articles of Incorporation of Pacific Mercantile Bancorp (Incorporated by reference to the same numbered exhibit to the Company's Registration Statement (No. 333-33452) on Form S-1 filed with the Commission on June 14, 2000.)
3.2	Certificate of Amendment of Articles of Incorporation of Pacific Mercantile Bancorp (Incorporated by reference to Exhibit 3.1 to the Quarterly Report on Form 10-Q dated August 14, 2001.)
3.3	Certificate of Amendment of Articles of Incorporation of Pacific Mercantile Bancorp (Incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K dated January 26, 2012 and filed with the Commission on February 1, 2012.)
3.4	Certificate of Determination of Rights, Preferences, Privileges and Restrictions of Series A Convertible 10% Cumulative Preferred Stock of Pacific Mercantile Bancorp. (Incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K (No. 000-30777) dated October 6, 2010.)
3.5	Certificate of Amendment of Certificate of Determination of Rights, Preferences, Privileges and Restrictions of the Series A Convertible 10% Cumulative Preferred Stock of Pacific Mercantile Bancorp. (Incorporated by reference to Exhibit 3.2 to the Current Report on Form 8-K dated January 26, 2012 and filed with the Commission on February 1, 2012.)
3.6	Certificate of Determination of Rights, Preferences, Privileges and Restrictions of the Series B Convertible 8.4% Noncumulative Preferred Stock of Pacific Mercantile Bancorp. (Incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K (No. 000-30777) dated August 22, 2011.)
3.7	Certificate of Determination of Rights, Preferences, Privileges and Restrictions of the Series C 8.4% Noncumulative Preferred Stock of Pacific Mercantile Bancorp. (Incorporated by reference to Exhibit 3.2 to the Current Report on Form 8-K (No. 000-30777) dated August 22, 2011.)
3.8	Pacific Mercantile Bancorp Bylaws, Amended and Restated as of January 22, 2014. (Incorporated by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K (No. 000-30777) dated January 22, 2014.)
10.1	Employment Agreement entered into as of April 4, 2014 by and among Robert J. Stevens, on the one hand, and Pacific Mercantile Bancorp and Pacific Mercantile Bank, on the other hand*
31.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2	Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
Exhibit 101.INS	XBRL Instance Document
Exhibit 101.SCH	XBRL Taxonomy Extension Schema Document
Exhibit 101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
Exhibit 101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
Exhibit 101.LAB	XBRL Taxonomy Extension Labels Linkbase Document
Exhibit 101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

* Management contract or compensatory plan or arrangement required to be filed as an exhibit pursuant to applicable rules of the Securities and Exchange Commission.

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EX-10.1

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into as of this 4th day of April, 2014, by and among Robert J. Stevens (the "Executive"), on the one hand, and Pacific Mercantile Bancorp and Pacific Mercantile Bank, a California banking corporation (collectively the "Bank"), on the other hand (Executive and the Bank collectively, the "Parties").

RECITALS

WHEREAS, Pacific Mercantile Bancorp ("PMB") is a bank holding company registered under the Bank Holding Company Act of 1956, as amended, subject to the primary supervision and regulation of the Board of Governors of the Federal Reserve System ("FRB").

WHEREAS, Pacific Mercantile Bank is a California chartered commercial bank and a wholly-owned subsidiary of PMB, subject to the primary supervision and regulation of the California Department of Business Oversight ("CDBO") and the FRB by virtue of its membership in the Federal Reserve Bank of San Francisco.

WHEREAS, it is the intention of the Parties to enter an employment agreement for the purposes of assuring the services of Executive as the Executive Vice President, Chief Credit Officer of the Bank on the terms and subject to the conditions set forth in this Agreement.

NOW, THEREFORE, based on the foregoing premises and in consideration of the mutual covenants and representations contained herein, the Parties hereto agree as follows:

1. Term. The Bank (the "Employer") hereby employs Executive, and Executive hereby accepts employment with Employer, under the terms of this Agreement. The term of this Agreement shall be for a period of three (3) years (the "Initial Term"), commencing as of April 1, 2014 (the "Effective Date") subject to the termination provisions of paragraph 4. The term of this Agreement, as in effect from time to time in accordance with the foregoing, shall be referred to herein as the "Term". The period of time between the Effective Date and the termination of the Executive's employment hereunder shall be referred to herein as the "Employment Period."

2. Employment.

(a)    Positions and Reporting. Executive shall be employed as the Executive Vice President, Chief Credit Officer of the Bank. During the Employment Period, Executive shall report directly to the Chief Executive Officer of the Bank.

(b)    Authorities and Duties. Executive shall exercise such authority, perform such executive duties and functions and discharge such responsibilities as are reasonably associated with Executive's position as Executive Vice President, Chief Credit Officer, commensurate with authority vested in Executive pursuant to this Agreement and consistent with the bylaws of the Bank. During the Employment Period, Executive shall devote his full business time, skill and efforts to the business of Employer and shall not during the Employment Period engage in any other business activities, duties, or pursuits whatsoever, or directly or indirectly render any services of a business, commercial, or professional nature to any other person or organization, whether for compensation or otherwise, without the prior written consent of the Board of Directors of Employer (the "Board"). Notwithstanding the foregoing, Executive may (i) serve in any capacity with any civic, educational or charitable organization, or any trade association, without seeking or obtaining approval by the Board, provided such activities and service do not materially interfere or conflict with the performance of his duties hereunder and (ii) with the approval of the Board serve on the boards of

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directors of other corporations that are not involved in commercial banking or similar business activities; provided, however, Executive shall not directly or indirectly acquire, hold, or retain any beneficial interest in any business competing with or similar in nature to the business of Employer except passive shareholder investments in other financial institutions and their respective affiliates which do not exceed three percent (3%) of the outstanding voting securities in the aggregate in any single financial institution and its affiliates on a consolidated basis.

(c)    Executive hereby represents and agrees that the services to be performed hereunder are of a special, unique, unusual, extraordinary, and intellectual character that gives them a peculiar value, the loss of which cannot be reasonably or adequately compensated in damages in an action at law. Executive therefore understands that Employer, in addition to any other rights or remedies that Employer may possess, may be entitled to injunctive and other equitable relief to prevent or remedy a breach of this Agreement by Executive.

3. Compensation and Benefits.

(a)    Salary. During the Initial Term Executive shall receive an annual base salary of $300,000 payable in equal semimonthly payments (the "Base Salary"). Such Base Salary shall be subject to review in the eleventh (11th) month after the Effective Date, and at each anniversary of the Effective Date thereafter, or during Executive's normal officer review period, for possible adjustment by the Chief Executive Officer in concurrence with the Compensation Committee of the Bank based on various factors including, but not limited to, market conditions, the consolidated results of operations of the Bank and the performance of Executive, but shall in no event be decreased from the level set forth above during the Initial Term. All payments of Base Salary shall be subject to applicable adjustments for withholding taxes, pro-rations for any partial payment periods and such other applicable payroll procedures of the Bank.

(b)    Salary Continuation During Disability. If Executive for any reason (except as expressly provided below) becomes temporarily or permanently disabled so that he is unable to perform the duties under this Agreement, Executive shall be paid the Base Salary otherwise payable to Executive pursuant to subparagraph 3(a) of this Agreement, reduced by teh amounts received by Executive from state disability insurance, or worker's compensation or other similar insurance benefits through policies provided by the Employer, for a period of six (6) months from the date of disability. For purposes of this paragraph 3(b), "disability" shall be defined as provided in the Employer's disability insurance program.

(c)    Cash Incentive Payments. Executive shall be eligible to participate in the Management Annual Incentive Plan. Executive's bonus, if any, shall be paid in one lump sum to Executive at such time as other executive bonuses are paid. The Chief Executive Officer retains the discretion to determine whether a pro-rata bonus is appropriate if the Executive is terminated or leaves the employ of the Bank prior to the annual determination of bonuses. All cash incentive payments shall be subject to the applicable adjustments for applicable withholding and payroll taxes. Notwithstanding any provision of any incentive plan or arrangement, no right of continued employment or any modification of the "at will' nature of Executive's employment with Employer shall be conferred upon Executive thereunder or result therefrom.

(d)    Insurance Benefits. During the Employment Period, Executive shall receive such group life, disability, and health (including medical, dental, vision and hospitalization), accident and disability insurance coverage and other benefits which Employer extends, as a matter of policy, to all of its executive employees, except as otherwise provided herein, and shall be entitled to participate in all

2

benefit and other incentive plans of the Employer, on the same basis as other like employees of Employer.

(e)    Vacation. After the first six (6) months of the Initial Term Executive shall be entitled to four(4) weeks of annual vacation during the Employment Period at his then existing rate of Base Salary, which shall be scheduled in Executive's discretion, subject to and taking into account applicable banking laws and regulations and business needs. Vacation will accrue in accordance with the Bank's personnel policies.

(f)    Business Expenses. During the Employment Period, Employer shall properly reimburse the Executive for all documented ordinary and necessary business expenses incurred by Executive in the performance of his duties under this Agreement. Executive shall also be reimbursed for reasonable expenses incurred in activities associated with promoting the business of Employer, including expenses for entertainment, travel, conventions, and educational programs. All such expenses described above will be subject to compliance with applicable policies of Employer. All such reimbursements shall be made upon presentation and approval of receipts, invoices or other appropriate evidence of such expense in accordance with the policies Employer in effect from time to time.

(g)    Car Allowance. The Bank shall provide the Executive with a monthly automobile allowance of $950.00 per month during the Employment Period. Executive shall (A) obtain and maintain public liability insurance and property damage insurance policies with insurer(s) acceptable to Employer and with such coverage in such amounts as may be reasonably acceptable to Employer, and (B) provide copies of such policies, endorsements or other evidence of insurance acceptable to Employer.

(h)    Stock Options. PMB shall grant to Executive 25,000 shares of restricted PMB common stock vesting over the three year period commencing on the later of (i) April 1, 2014 and (ii) the actual date of commencement of employment, and otherwise pursuant to PMB's 2010 Equity Incentive Plan (the "Plan"). Notwithstanding any provision of the Plan, the Restricted Stock Agreement or any other stock option or equity award agreement to the contrary, no additional right of continued employment or any modification of "at will" nature of Executive's employment with Employer shall be conferred upon Executive thereunder or result therefrom, other than as set forth in this Agreement.

(i)    Moving Expenses. The Bank shall provide a $50,000.00 relocation allowance ("Relocation Allowance") to Executive for the Executive and his family to relocate once from Arroyo Grande, California, to a location in Orange County. Executive will have 180 days from the date of this Agreement to request cash advances under the Relocation Allowance or to submit "moving expenses", i.e., the standard cost of packing and shipping household items, furniture, appliances, clothing and the like that can be expensed by the Bank under the Federal tax code, to the Bank for direct payment. The Bank will determine in its sole discretion the tax deductibility of an expense so as to qualify for direct payment, which approval will not be withheld unreasonably. It is understood that all cash advances and expense reimbursements that are deductible to the Bank under the Federal tax code will be reported as taxable income to the Executive. The total of cash advances and direct payments will at no time exceed $50,000.

(j)    Change in Control. Employee shall be eligible to participate in the Pacific Mercantile Bancorp Change in Control Severance Plan pursuant to the terms and conditions contained therein.

4. Termination of Employment.

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(a)    Termination for Cause. The Board of the Bank may terminate Executive's employment hereunder for "Cause" or without "Cause." For purposes of this Agreement termination for "Cause" shall mean (i) conviction of a crime directly related to his employment hereunder, (ii) conviction of a crime involving moral turpitude, (iii) willful and gross mismanagement of the business and affairs of Employer, (iv) willful and intentional violation of any state or federal banking or securities laws, or of the bylaws, rules, policies or resolutions of Bank, or the rules or regulations of or any final order issued by the FRB, the CDBO, or the Federal Deposit Insurance Corporation (the "FDIC"), (v) any violation of the Employer's policy against harassment, equal employment opportunity policy, drug and alcohol policy and/or the confidentiality agreement that shall Employee shall execute at the commencement of his employment and (vi) breach of any material provision of this Agreement. For purposes of this Agreement, no act, or the failure to act, on Executive's part shall be considered "willful" unless done, or omitted to be done, not in good faith and without reasonable belief that the action or omission was in the best interests of Employer. Executive shall not be deemed to have been terminated for Cause unless and until there shall have been delivered to him a notice of termination. In the event employment of Executive is terminated pursuant to this subparagraph 4(a), Employer shall have no further liability to Executive other than for compensation accrued and for reimbursement of business expenses incurred through the date of termination but not yet paid.

Termination under this subparagraph 4(a) shall not prejudice any remedy that the Employer or Employee may have at law, in equity, or under this Agreement.

(b)    Termination by Employer Without Cause or by Executive for Good Reason. Employer may terminate the employment of Executive without "Cause" (as defined in subparagraph 4(a)) at any time during the Employment Period by giving written notice to Executive specifying therein the effective date of termination. Executive shall have the right at any time to terminate his employment with the Bank for any reason or for no reason. For purposes of this Agreement, and subject to Employer's opportunity to cure as provided in Section 4(c) hereof, Executive shall have "Good Reason" to terminate his employment hereunder if such termination shall be the result of:

(i)    a material diminution during the Employment Period in the Executive's title, duties or responsibilities as set forth in Section 2 hereof without Executive's consent;

(ii)    a material breach by Employer of the compensation and benefits provisions set forth in Section 3 hereof;

(iii)    a material breach by Employer of any material terms of this Agreement; or

(iv)    the relocation of Executive's principal place of employment to any location more than 50 miles from the Bank's headquarters at the Effective Date.

(c)    Notice and Opportunity to Cure. Notwithstanding the foregoing, it shall be a condition precedent to Employer's right to terminate this Agreement under subparagraph 4(b)(iv) and Executive's right to terminate his employment for "Good Reason" that (1) the party alleging a breach shall first have given the other party written notice stating with specificity the reason for the termination ("breach") and (2) if such breach is susceptible of cure or remedy, a period of 30 days from and after giving of such notice to cure the breach. If the breach cannot reasonably be cured or remedied within 30 days, the period for remedy or cure shall be extended for a reasonable time (not to exceed 30 days), provided the party against whom a breach is alleged has made and continues to make a diligent effort to effect such remedy or cure.

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(d)    Termination Upon Death or Permanent Disability. This Agreement shall terminate automatically upon: (i) the death of Executive, and (ii) the "permanent disability" of Executive as such term is defined in the disability insurance provided by Employer, or if such insurance is not provided by Employer, the term shall mean that Executive has been deemed by a medical care provider to indefinitely be unable to perform the essential functions of Executive's position with or without accommodation. If the Employment Period is terminated by reason of the permanent disability of the Executive, Employer shall give 30-days' advance written notice to that effect to the Executive or his representative. Employer and Employee shall comply with any obligations they may respectively have, under state or federal law, to interact regarding reasonable accommodations.

5. Consequences of Termination. The following are the severance pay and benefits to which Executive is entitled upon termination of employment in all positions with Employer, and such payments and benefits shall be the exclusive payments and benefits to which Executive is entitled upon such termination. Except in the case of termination of employment by Employer for Cause, or due to death, the post-termination payments (other than those required by law) and benefits shall only be provided if the Executive first enters into a form of general release agreement reasonably satisfactory to Employer releasing Employer from any and all claims, known and unknown, related to the Executive's employment with the Bank.

(a)    Termination Without Cause or for Good Reason. In the event of termination of Executive's employment within the first twelve months of Executive's employment (i) by Employer without "Cause" (other than upon death or permanently disability), or (ii) by Executive for "Good Reason", Executive shall be entitled to the following Severance Pay:

(i)    Severance pay - a lump sum amount equal to twelve (12) months of the Executive's annual Base Salary.

(b)    Termination Upon Disability. In the event of termination of Executive's employment hereunder by Employer on account of permanent disability, Employer shall pay to Executive the accrued Base Salary and accrued and unused vacation earned through the date of disability. Such payment shall be made no later than sixty (60) days after the date of disability.

(c)    Termination Upon Death. In the event of termination of Executive's employment hereunder by Employer on account of Executive's death, Employer shall pay to Executive's beneficiary or beneficiaries or his estate, as the case may be, the accrued Base Salary and accrued and unused vacation earned through the date of death. Such payment shall be made no later than sixty (60) days after the date of death. In addition, Executive's beneficiary(ies) or his estate shall be entitled to the payment of benefits pursuant to any life insurance policy of Executive, as provided for in Section 3(c) above. Executive's beneficiary or estate shall not be required to remit to Employer any payments received pursuant to any life insurance policy purchased pursuant to Section 3(c) above.

(d)    Termination for Cause or Due to End of the Term. In event the employment of Executive is terminated by Employer for Cause, no severance payment or benefit shall be provided. In the event the employment of Executive is terminated as a result of the expiration of the Term, Executive shall be entitled to no severance payment or benefit of any kind notwithstanding any provision to the contrary in the Employer's employee manual or policies then in effect, except as to matters such as coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985 ("COBRA") and unused vacation required by law without reference to such manual or policies.

(e)    Accrued Rights. Notwithstanding the foregoing provisions of this Section 5, in the event of termination of Executive's employment hereunder for any reason or for no reason, Executive shall

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be entitled to payment of any unpaid portion of his Base Salary through the effective date of termination, payment for any accrued and unused vacation, payment of any unreimbursed business expenses incurred pursuant to Section 3(d) above, and payment of any accrued but unpaid benefits solely in accordance with the terms of any incentive bonus or employee benefit plan or program of Employer.

(f)    Non-assignability. Neither Executive nor any other person or entity acting on his behalf or as his representative shall have the power or right to transfer, assign, anticipate, hypothecate, mortgage, commute, modify, or otherwise encumber in advance any of the rights or benefits of Executive under this Section 5, nor shall any of said rights or benefits be subject to seizure for the payment of any debts, judgments, alimony or separate maintenance, owed by Executive or any other person or entity, or be transferable by operation of law in the event of bankruptcy, insolvency or otherwise. The terms of this Section 5(f) shall not affect the interpretation of any other provision of this Agreement.

(g)    Regulatory Restrictions. Notwithstanding anything to the contrary contained in this Agreement:

(i)    If Executive is removed and/or permanently prohibited from participating in the conduct of Employer's affairs by an order issued under Section 8(e)(4) or 8(g)(1) of the Federal Deposit Insurance Act ("FDIA") (12 U.S.C. 1818(e)(4) and (g)(1)), all obligations of Employer under this Agreement shall terminate, as of the effective date of such order, except for the payment of Base Salary due and owing on the effective date of termination and such matters required by law.

(ii)    If Executive is suspended and/or temporarily prohibited from participating in the conduct of Employer's affairs by a notice served under Section 8(e)(3) or 8(g)(1) of the FDIA (12 U.S.C. 1818(e)(3) and (g)(1)), all obligations of Employer under this Agreement shall be suspended as of the date of service, unless stayed by appropriate proceedings. If the charges in the notice are dismissed, Employer shall (i) pay Executive all or part of the compensation withheld while its contract obligations were suspended and (ii) reinstate (in whole or in part) any of its obligations which were suspended.

(iii)    If Bank is in default (as defined in Section 3(x)(1) of the FDIA), all obligations under this Agreement shall terminate as of the date of default, but the vested rights of the parties shall not be affected.

(iv)    All obligations under this Agreement shall be terminated, except to the extent a determination is made that continuation of the contract is necessary for the continued operation of Employer (i) by the director of the FDIC or his or her designee (the "Director"), at the time the FDIC enters into an agreement to provide assistance to or on behalf of Employer under the authority contained in 13(c) of teh FDIA; or (ii) by the Director, at the time the Director approves a supervisory merger to resolve problems related to operation of Employer when the Employer is determined by the Director to be in unsafe and unsound condition. Any rights of the Executive that have already vested, however, shall not be affected by such action.

(v)    No payments shall be made pursuant to this paragraph 5 or any other provision herein in violation of the requirements of Section 18(k) (12 U.S.C. §1828(k)).

(h)    IRC Section 280G. In no event shall the payment(s) described in this paragraph 5 exceed the amount permitted by Section 280G of the Internal Revenue Code of 1986, as amended (Section 280G). Therefore, if the aggregate present value (determined as of the date of the change of control

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in accordance with the provisions of Section 280G) of both the severance payment and all other payments to Executive in the nature of compensation which are contingent on a change in ownership or effective control of Bank or PMB or in the ownership of a substantial portion of the assets of the Bank (the Aggregate Severance) would result in a parachute payment, as defined under Section 280G, then the Aggregate Severance shall not be greater than an amount equal to 2.99 multiplied by Executive’s base amount for the base period, as those terms are defined under Section 280G. In the event the Aggregate Severance is required to be reduced pursuant to this subparagraph 5(h), the last payments in time shall be reduced first.

(i)    Conditions to Severance Benefits. The Bank shall have the right to seek repayment of the severance payments and benefits or to terminate payments or benefits provided by this paragraph 5 in the event that the Executive fails to honor, in accordance with their terms, the provisions of paragraphs 6 or 9 hereof.

6. Confidentiality. Executive agrees that he will not at any time during the Employment Period or at any time thereafter for any reason, in any fashion, form or manner, except as required by law to comply with legal process, either directly or indirectly, divulge, disclose or communicate to any person, firm, corporation or other business entity, in any manner whatsoever, any financial information or trade or business secrets, including, without limiting the generality of the foregoing, the techniques, methods or systems of its operation or management, any information regarding its financial matters, customer lists, computer software, or any other information concerning the business or operations of Employer, its subsidiaries, affiliates and any of its customers, governmental relations, customer contacts, underwriting methodology, loan program configuration and qualification strategies, marketing strategies and proposals, its manner of operation, its plans or other material data, or any other information concerning the business of the Employer, its subsidiaries or affiliates, and the Employer's goodwill (the "Business"). The provisions of this Section 6 shall not apply to (i) information disclosed in the performance of Executive's duties to Employer based on his good faith belief that such a disclosure is in the best interests of Employer; (ii) information that is, at the time of the disclosure, public knowledge; (iii) information disseminated by Employer to third parties in the ordinary course of business; (iv) information lawfully received by Executive from a third party who, based upon inquiry by Executive, is not bound by a confidential relationship to Employer or otherwise improperly received the information; or (v) information disclosed under a requirement of law or as directed by applicable legal authority having jurisdiction over Executive. In the event Executive is required by law to disclose such information described above, Executive will provide Employer and their counsel with immediate notice of such request so that they may consider seeking a protective order. Notwithstanding the foregoing, Executive may disclose such information concerning the business or operations of Employer and its subsidiaries and affiliates as may be required by the FRB, CDBO, FDIC or other regulatory agency having jurisdiction over the operations of Employer in connection with an examination of Bank or PMB or other proceeding conducted by such regulatory agency.

Executive agrees that all written, printed or electronic material, notebooks and records including, without limitation, computer disks, used and/or developed by Executive for Employer during the Term of this Agreement, other than Executive’s personal address lists, telephone lists, notes and diaries, are solely the property of Employer, and that Executive has no right, title or interest therein. Upon termination of Executive’s employment, Executive or Executive’s representative shall promptly deliver possession of all such materials (including any copies thereof) to the Bank.

7. Key-man Life Insurance. Employer shall have the right to obtain and hold a "key-man" life insurance policy on the life of Executive with the Bank as beneficiary of the policy. Executive agrees to provide

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any information required for the issuance of such policy and submit himself to any physical examination required for such policy.

8. Unsecured General Creditor. Neither Executive nor any other person or entity shall have any legal right or equitable rights interests or claims in or to any property or assets of Employer under the provisions of this Agreement. No assets of Employer shall be held under any trust for the benefit of Executive or any other person or entity or held in any way as security for the fulfilling of the obligations of Employer under this Agreement. All of Employer's assets shall be and remain the general, unpledged, unrestricted assets of Employer. Employer's 9 obligations under this Agreement are unfunded and unsecured promises, and to the extent such promises involve the payment of money, they are promises to pay money in the future. Executive and any person or entity claiming through him shall be unsecured general creditors with respect to any rights or benefits hereunder.

9. Business Protection Covenants.

(a)    Covenant Not to Compete. Executive agrees that he will not, during the Employment Period, voluntarily or involuntarily, directly or indirectly, (i) engage in any banking or financial products or service business, loan origination or deposit-taking business or any other business competitive with that of the Bank or its subsidiaries or affiliates ("Competitive Business") within Orange County, Los Angeles County, San Diego County and San Bernardino County (the "Market Area"), (ii) directly or indirectly own any interest in (other than less than three percent (3%) of any publicly traded company or mutual fund), manage, operate, control, be employed by, or provide management or consulting services in any capacity to any firm, corporation, or other entity (other than Employer or its subsidiaries or affiliates) engaged in any Competitive Business in the Market Area, or (iii) directly or indirectly solicit or otherwise intentionally cause any employee, officer, or member of the Board or any of its subsidiaries or affiliates to engage in any action prohibited under (i) or (ii) of this paragraph 9(a).

(b)    Inducing Employees To Leave The Bank; Employment of Employees. Any attempt on the part of the Executive to induce others to leave Employer’s employ, or the employ of any of its subsidiaries or affiliates, or any effort by Executive to interfere with Employer’s relationship with its other employees would be harmful and damaging to Employer. Executive agrees that during the Employment Period and for a period of twelve (12) months thereafter, Executive will not in any way, directly or indirectly: (i) induce or attempt to induce any employee of the Employer or any of its subsidiaries of affiliates to quit employment with Employer or the relevant subsidiary or affiliate; (ii) otherwise interfere with or disrupt the relationships between Employer and its subsidiaries and affiliates and their respective employees; (iii) solicit or recruit any employee of Employer or any subsidiary or affiliate or any former employee of Employer or any subsidiary or affiliate.

(c)    Nonsolicitation of Business. For a period of twelve (12) months from the date of termination of employment, Executive will not, using Employer’s trade secrets or confidential information, divert or attempt to divert from Employer or any of its subsidiaries or affiliates, any business Employer or a relevant subsidiary or affiliate had enjoyed or solicited from its customers, borrowers, depositors or investors during the twelve (12) months prior to termination of his employment.

(d)    Bank’s Ownership of Inventions. To the extent that Executive has intellectual property rights of any kind in any pre-existing works which are subsequently incorporated in any work or work product produced in rendering services to Bank, PMB or any their subsidiaries or affiliates, Executive hereby grants Bank a royalty-free, irrevocable, world-wide, perpetual non-exclusive license (with the right to sublicense), to make, have made, copy, modify, use, sell, license, disclose, publish or otherwise disseminate or transfer such subject matter. Similarly, Executive agrees that all inventions,

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discoveries, improvements, trade secrets, original works of authorship, developments, formulae, techniques, processes, and know-how, whether or not patentable, and whether or not reduced to practice, that are conceived, developed or reduced to practice during Executive’s employment with Employer, either alone or jointly with others, if on Employer’s time, using Employer’s facilities, or relating to Employer shall be owned exclusively by the Bank, and Executive hereby assigns to the Bank all of Executive’s right, title and interest throughout the world in all such intellectual property. Executive agrees that the Bank shall be the sole owner of all domestic and foreign patents or other rights pertaining thereto, and further agrees to execute all documents that the Bank reasonably determines to be necessary or convenient for use in applying for, prosecuting, perfecting, or enforcing patents or other intellectual property rights, including the execution of any assignments, patent applications, or other documents that the Bank may reasonably request. This provision is intended to apply to the extent permitted by applicable law and is expressly limited by Section 2870 of the California Labor Code, which is set forth in its entirety in Exhibit A to this Agreement. By signing this Agreement, Executive acknowledges that this Paragraph shall constitute written notice of the provisions of Section 2870.

(e)    Bank’s Ownership of Copyrights. Executive agrees that all original works of authorship not otherwise within the scope of paragraph 9(d) above that are conceived or developed during Executive’s employment with Employer, either alone or jointly with others, if on Employer’s time, using Employer facilities, or relating to Employer, or its subsidiaries or affiliates, are works for hire to the greatest extent permitted by law and shall be owned exclusively by the Bank, and Executive hereby assigns to the Bank all of Executive’s right, title, and interest in all such original works of authorship. Executive agrees that the Bank shall be the sole owner of all rights pertaining thereto, and further agrees to execute all documents that the Bank reasonably determines to be necessary or convenient for establishing in the Bank’s name the copyright to any such original works of authorship.

10. Resignations. The Executive agrees that upon termination of employment, for any reason, he will submit his resignations from all offices with the Bank and all of its subsidiaries and affiliates.

11. Other Agreements. The Parties further agree that to the extent of any inconsistency between this Agreement and any employee manual or policy of Employer, that the terms of this Agreement shall supersede the terms of such employee manual or policy.

12. Notice. For the purposes of this Agreement, notices, demands and all other communications provided for in this Agreement shall be in writing and shall be personally delivered or (unless otherwise specified) mailed by United States certified or registered mail, return receipt requested, postage prepaid, or sent by facsimile, provided that the facsimile cover sheet contains a notation of the date and time of transmission, and shall be deemed received: (i) if personally delivered, upon the date of delivery to the address of the person to receive such notice, (ii) if mailed in accordance with the provisions of this Section 13, two (2) business days after the date placed in the United States mail, (iii) if mailed other than in accordance with the provisions of this Section 13 or mailed from outside the United States, upon the date of delivery to the address of the person to receive such notice, or (iv) if given by facsimile, when sent. Notices shall be addressed as follows:

If to the Employer:

Pacific Mercantile Bank

949 South Coast Drive

Third Floor

Costa Mesa, California, 92626

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If to the Executive, to:

Mr. Robert J. Stevens

2244 Rail Court

Arroyo Grande, CA 93420

or to such other respective addresses as the Parties hereto shall designate to the other by like notice, provided that notice of a change of address shall be effective only upon receipt thereof.

13. Arbitration. Any dispute or controversy arising under or in connection with this Agreement, the inception or termination of the Executive's employment, or any alleged discrimination or tort claim related to such employment, including issues raised regarding the Agreement’s formation, interpretation or breach, shall be settled exclusively by binding arbitration. The only exception to the requirement of binding arbitration shall be for claims arising under the National Labor Relations Act which are brought before the National Labor Relations Board, claims for medical and disability benefits under the California Workers’ Compensation Act, Employment Development Department claims, or as may otherwise be required by state or federal law. However, nothing herein shall prevent the Executive from filing and pursuing proceedings before the California Department of Fair Employment and Housing, or the United States Equal Employment Opportunity Commission (although if Executive chooses to pursue a claim following the exhaustion of such administrative remedies, that claim would be subject to the provisions of this Agreement). In addition to any other requirements imposed by law, the arbitrator selected shall be a retired California Superior Court Judge, or an otherwise qualified individual to whom the parties mutually agree, and shall be subject to disqualification on the same grounds as would apply to a judge of such court. All rules of pleading (including the right of demurrer), all rules of evidence, all rights to resolution of the dispute by means of motions for summary judgment, judgment on the pleadings, and judgment under Code of Civil Procedure Section 631.8 shall apply and be observed. The arbitrator shall have the immunity of a judicial officer from civil liability when acting in the capacity of an arbitrator, which immunity supplements any other existing immunity. Likewise, all communications during or in connection with the arbitration proceedings are privileged in accordance with Cal. Civil Code Section 47(b). As reasonably required to allow full use and benefit of this agreement’s modifications to the Act’s procedures, the arbitrator shall extend the times set by the Act for the giving of notices and setting of hearings. Awards shall include the arbitrator’s written reasoned opinion. Resolution of all disputes shall be based solely upon the law governing the claims and defenses pleaded, and the arbitrator may not invoke any basis (including but not limited to, notions of just cause) other than such controlling law. By this binding arbitration provision, both Executive and Employer give up their respective right to trial by jury of any claim one may have against the other.

14. Waiver of Breach. Any waiver of any breach of this Agreement shall not be construed to be a continuing waiver or consent to any subsequent breach on the part either of the Executive or of Employer. No delay or omission in the exercise of any power, remedy, or right herein provided or otherwise available to any party shall impair or affect the right of such party thereafter to exercise the same. Any extension of time or other indulgence granted to a party hereunder shall not otherwise alter or affect any power, remedy or right of any other party, or the obligations of the party to whom such extension or indulgence is granted except as specifically waived.

15. Non-Assignment; Successors. Neither party hereto may assign his or its rights or delegate his or its duties under this Agreement without the prior written consent of the other party; provided, however, that: (i) this Agreement shall inure to the benefit of and be binding upon the successors and assigns of Employer upon any sale of all or substantially all of Employer's assets, or upon any merger, consolidation or reorganization of Bank with or into any other corporation, all as though such

10

successors and assigns of the Bank and their respective successors and assigns were the Bank; and (ii) this Agreement shall inure to the benefit of and be binding upon the heirs, assigns or designees of Executive to the extent of any payments due to them hereunder. As used in this Agreement, the term "Bank", or Employer shall be deemed to refer to any such successor or assign of the Bank or Employer referred to in the preceding sentence.

16. Withholding of Taxes. All payments required to be made by Employer to the Executive under this Agreement shall be subject to the withholding and deduction of such amounts, if any, relating to tax, and other payroll deductions as Employer may reasonably determine it should withhold and/or deduct pursuant to any applicable law or regulation (including, but not limited to, Executive's portion of social security payments and income tax withholding) now in effect or which may become effective any time during the term of this Agreement.

17. Section 409A. If Executive determines, in good faith, that any compensation or benefits provided by this Agreement may result in the application of Section 409A of the Internal Revenue Code of 1986, as amended (the Code), Executive shall provide written notice thereof (describing in reasonable detail the basis therefor) to Employer, and Employer shall, in consultation with Executive, modify this Agreement in the least restrictive manner necessary in order to exclude such compensation from the definition of deferred compensation within the meaning of such Section 409A of the Code or in order to comply with the provisions of Section 409A of the Code, other applicable provision(s) of the Code and/or any rules, regulations or other regulatory guidance issued under such statutory provisions and without any diminution in the value of the payments to Executive. Any payments that, under the terms of this Agreement, qualify for the short-term deferral exception under Treasury Regulations Section 1.409A-1(b)(4), the separation pay exception under Treasury Regulations Section 1.409A-1(b)(9)(iii) or another exception under Section 409A of the Code will be paid under the applicable exceptions to the greatest extent possible. Each payment under this Agreement shall be treated as a separate payment for purposes of Section 409A of the Code. Anything in this Agreement to the contrary notwithstanding, if at the time of Executive’s separation from service within the meaning of Section 409A of the Code, Executive is considered a specified employee within the meaning of Section 409A(a)(2)(B)(i) of the Code, and if any payment that Executive becomes entitled to under this Agreement is considered deferred compensations subject to interest, penalties and additional tax imposed pursuant to Section 409A of the Code as a result of the application of Section 409A(a)(2)(B)(i) of the Code, then no such payment shall be payable prior to the date that is the earlier of (i) six months and one day Executive’s separation from service or (ii) Executive’s death. In no event shall the date of termination of Executive’s employment be deemed to occur until Executive experiences a separation from service within the meaning of Section 409A of the Code, and notwithstanding anything contained herein to the contrary, the date on which such separation from service takes place shall be the Date of Termination. All reimbursements provided under this Agreement shall be provided in accordance with the requirements of Section 409A of the Code, including, where applicable, the requirement that (A) the amount of expenses eligible for reimbursement during one calendar year will not affect the amount of expenses eligible for reimbursement in any other calendar year; (B) the reimbursement of an eligible expense will be made no later than the last day of the calendar year following the calendar year in which the expense is incurred; and (C) the right to any reimbursement will not be subject to liquidation or exchange for another benefit. Notwithstanding the foregoing, Employer makes no representation or covenant to ensure that the payments and benefits under this Agreement are exempt from, or compliant with, Section 409A of the Code.

18. Indemnification. To the fullest extent permitted by law, regulation, and the Articles of Incorporation and Bylaws of Bank, the Bank as appropriate shall pay as and when incurred all expenses, including legal and attorney costs, incurred by, or shall satisfy as and when entered or levied a judgment or

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fine rendered or levied against, Executive in an action brought by a third party against Executive (whether or not the Bank is joined as a party defendant) to impose a liability or penalty on Executive for an act alleged to have been committed by Executive while an officer of the Bank; provided, however, that Executive was acting in good faith, within what Executive reasonably believed to be the scope of Executive's employment or authority and for a purpose which the Executive reasonably believed to be in the best interests of the Bank or the Bank's shareholders, and in the case of a criminal proceeding, that the Executive had no reasonable cause to believe that Executive's conduct was unlawful. Payments authorized hereunder include amounts paid and expenses incurred in settling any such action or threatened action. All rights hereunder are limited by any applicable state or Federal laws.

19. Severability. To the extent any provision of this Agreement or portion thereof shall be invalid or unenforceable, it shall be considered deleted therefrom (but only for so long as such provision or portion thereof shall be invalid or unenforceable) and the remainder of such provision and of this Agreement shall be unaffected and shall continue in full force and effect to the fullest extent permitted by law if enforcement would not frustrate the overall intent of the Parties (as such intent is manifested by all provisions of the Agreement including such invalid, void, or otherwise unenforceable portion).

20. Payment. All amounts payable by the Bank to Executive under this Agreement shall be paid promptly on the dates required for such payment in this Agreement without notice or demand. Any salary, benefits or other amounts paid or to be paid to Executive or provided to or in respect of the Executive pursuant to this Agreement shall not be reduced by amounts owing from Executive to Bank.

21. Expenses. Each party shall pay his or its own fees and expenses incurred by him or it in the drafting, review and negotiation of this Agreement.

22. Authority. Each of the Parties hereto hereby represents that each has taken all actions necessary in order to execute and deliver this Agreement.

23. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same instrument.

24. Governing Law. This Agreement shall be construed, interpreted and enforced in accordance with the laws of the State of California, without giving effect to the choice of law principles thereof.

25. Entire Agreement; Amendments. This Agreement and written agreements, if any, entered into concurrently herewith constitute the entire agreement by Employer, on the one hand, and Executive on the other hand with respect to the subject matter hereof and merges and supersedes any and all prior discussions, negotiations, agreements or understandings between Executive and Employer with respect to the subject matter hereof, whether written or oral. This Agreement may be amended or modified only by a written instrument executed by Executive and Employer. With regard to such amendments, alterations, or modifications, facsimile signatures shall be effective as original signatures. Any amendment, alteration, or modification requiring the signature of more than one party may be signed in counterparts.

26. Further Actions. Each party agrees to perform any further acts and execute and deliver any further documents reasonably necessary to carry out the provisions of this Agreement.

27. Time of Essence. Time is of the essence of each and every term, condition, obligation and provision hereof.

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28. No Third Party Beneficiaries. This Agreement and each and every provision hereof is for the exclusive benefit of the Parties and not for the benefit of any third party.

29. Headings. The headings in this Agreement are inserted only as a matter of convenience, and in no way define, limit, or extend or interpret the scope of this Agreement or of any particular provision hereof.

30. Regulatory Approval of this Agreement. The Parties acknowledge and agree that entry into this Agreement is and payment of severance under paragraph 5 may be subject to receipt of approval from the FRB pursuant to Section 1828(k) and Part 359 of the FDIC Rules and Regulations, the FDIC and the CDBO. If such approval is not obtained or is subject to modifications specified by the FRB, the FDIC or the CDBO the Parties agree to negotiate in good faith to amend this Agreement to provide for substantially equivalent terms consistent with regulatory requirements.

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IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first written above.

PACIFIC MERCANTILE BANK
By:	/S/    STEVEN K. BUSTER
	Steven K. Buster
	President and Chief Executive Officer

EXECUTIVE:
By:	/S/    ROBERT J. STEVENS
	Robert J. Stevens

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EXHIBIT A

California Labor Code § 2870

Employment agreements; assignment of rights

(a) Any provision in an employment agreement which provides that an employee shall assign, or offer to assign, any of his or her rights in an invention to his or her employer shall not apply to an invention that the employee developed entirely on his or her own time without using the employer's equipment, supplies, facilities, or trade secret information except for those inventions that either:

(1) Relate at the time of conception or reduction to practice of the invention to the employer's business, or actual or demonstrably anticipated research or development of the employer; or

(2) Result from any work performed by the employee for the employer.

(b) To the extent a provision in an employment agreement purports to require an employee to assign an invention otherwise excluded from being required to be assigned under subdivision (a), the provision is against the public policy of this state and is unenforceable.

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EX-31.1

Exhibit 31.1

CERTIFICATIONS OF CHIEF EXECUTIVE OFFICER

UNDER

SECTION 302 OF THE SARBANES-OXLEY ACT

I, Steven K. Buster, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Pacific Mercantile Bancorp for the quarter ended March 31, 2015.

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 8, 2015

/S/    STEVEN K. BUSTER

Steven K. Buster

President and Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATIONS OF CHIEF FINANCIAL OFFICER

UNDER

SECTION 302 OF THE SARBANES-OXLEY ACT

I, Curt Christianssen, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Pacific Mercantile Bancorp for the quarter ended March 31, 2015.

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)  All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 8, 2015

/S/    CURT CHRISTIANSSEN

Curt Christianssen

Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATIONS OF CHIEF EXECUTIVE OFFICER

UNDER

SECTION 906 OF THE SARBANES-OXLEY ACT

PACIFIC MERCANTILE BANCORP

Quarterly Report on Form 10-Q

for the quarter ended March 31, 2015

In connection with the accompanying Quarterly Report on Form 10-Q of Pacific Mercantile Bancorp (the “Company”) for the quarter ended March 31, 2015 (the “Quarterly Report”), and pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2003, I, Steven K. Buster, certify that:

(1) The Quarterly Report fully complies with the requirements of Section 13(a) and 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Quarterly Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: May 8, 2015

/S/    STEVEN K. BUSTER

Steven K. Buster

President and Chief Executive Officer

EX-32.2

Exhibit 32.2

CERTIFICATIONS OF CHIEF FINANCIAL OFFICER

UNDER

SECTION 906 OF THE SARBANES-OXLEY ACT

PACIFIC MERCANTILE BANCORP

Quarterly Report on Form 10-Q

for the quarter ended March 31, 2015

In connection with the accompanying Quarterly Report on Form 10-Q of Pacific Mercantile Bancorp (the “Company”) for the quarter ended March 31, 2015 (the “Quarterly Report”), and pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2003, I, Curt Christianssen, certify that:

(1) The Quarterly Report fully complies with the requirements of Section 13(a) and 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Quarterly Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: May 8, 2015

/S/    CURT CHRISTIANSSEN

Curt Christianssen

Chief Financial Officer

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Investments - Securities with in Continuous Unrealized Loss Position (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Schedule of Available-for-sale Securities [Line Items]
Less than 12 months, Fair Value	$ 2,365	$ 2,464
Less than 12 months, Unrealized Loss	(16)	(35)
12 months or more, Fair Value	32,194	53,124
12 months or more, Unrealized Loss	(1,284)	(1,386)
Total, Fair Value	34,559	55,588
Total, Unrealized Loss	(1,300)	(1,421)
Residential mortgage backed securities issued by U.S.Agencies [Member]
Schedule of Available-for-sale Securities [Line Items]
Less than 12 months, Fair Value	381	0
Less than 12 months, Unrealized Loss	0	0
12 months or more, Fair Value	30,002	50,697
12 months or more, Unrealized Loss	(630)	(940)
Total, Fair Value	30,383	50,697
Total, Unrealized Loss	(630)	(940)
Residential collateralized mortgage obligations issued by non-agency [Member]
Schedule of Available-for-sale Securities [Line Items]
Less than 12 months, Fair Value	0	0
Less than 12 months, Unrealized Loss	0	0
12 months or more, Fair Value	754	776
12 months or more, Unrealized Loss	(18)	(13)
Total, Fair Value	754	776
Total, Unrealized Loss	(18)	(13)
Asset-backed security [Member]
Schedule of Available-for-sale Securities [Line Items]
Less than 12 months, Fair Value	0	0
Less than 12 months, Unrealized Loss	0	0
12 months or more, Fair Value	1,438	1,651
12 months or more, Unrealized Loss	(636)	(433)
Total, Fair Value	1,438	1,651
Total, Unrealized Loss	(636)	(433)
Mutual funds [Member]
Schedule of Available-for-sale Securities [Line Items]
Less than 12 months, Fair Value	1,984	2,464
Less than 12 months, Unrealized Loss	(16)	(35)
12 months or more, Fair Value	0	0
12 months or more, Unrealized Loss	0	0
Total, Fair Value	1,984	2,464
Total, Unrealized Loss	$ (16)	$ (35)

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Stock-Based Employee Compensation Plans - Weighted Average Assumptions (Detail) (USD $)	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Weighted average fair value of options granted during period (in dollars per share)	$ 3.13	$ 2.75
Stock Options [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected volatility	44.00%	44.00%
Risk-free interest rate	1.82%	2.08%
Expected dividends	0.00%	0.61%
Expected term (years)	6 years	6 years 8 months
Weighted average fair value of options granted during period (in dollars per share)	$ 3.13	$ 2.75

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Loans and Allowance for Loan and Lease Losses - Summary of Loans by Portfolio Type and Internal Credit Quality Ratings (Detail) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Financing Receivable, Recorded Investment [Line Items]
Total loans	$ 840,299	$ 837,971
Commercial loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	312,613	301,746
Consumer loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	13,598	9,687
Commercial real estate [Member] | Owner occupied [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	211,654	212,515
Commercial real estate [Member] | All other [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	150,416	146,676
Residential mortgage loans [Member] | Multi-family [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	82,674	95,276
Residential mortgage loans [Member] | Single family [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	64,748	64,326
Land development loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	4,596	7,745
Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	796,681	790,755
Pass [Member] | Commercial loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	295,666	280,102
Pass [Member] | Consumer loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	13,598	9,687
Pass [Member] | Commercial real estate [Member] | Owner occupied [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	207,869	208,687
Pass [Member] | Commercial real estate [Member] | All other [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	131,050	128,974
Pass [Member] | Residential mortgage loans [Member] | Multi-family [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	82,218	94,817
Pass [Member] | Residential mortgage loans [Member] | Single family [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	63,401	62,854
Pass [Member] | Land development loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	2,879	5,634
Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	10,732	7,398
Special Mention [Member] | Commercial loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	0	351
Special Mention [Member] | Commercial real estate [Member] | All other [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	10,732	6,588
Special Mention [Member] | Residential mortgage loans [Member] | Multi-family [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	0	459
Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	32,302	38,180
Substandard [Member] | Commercial loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	16,363	19,655
Substandard [Member] | Commercial real estate [Member] | Owner occupied [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	3,785	3,828
Substandard [Member] | Commercial real estate [Member] | All other [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	8,634	11,114
Substandard [Member] | Residential mortgage loans [Member] | Multi-family [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	456	0
Substandard [Member] | Residential mortgage loans [Member] | Single family [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	1,347	1,472
Substandard [Member] | Land development loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	1,717	2,111
Doubtful [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	584	1,638
Doubtful [Member] | Commercial loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans	$ 584	$ 1,638

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Stock-Based Employee Compensation Plans - Stock Option Activity under Plans (Detail) (USD $)	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Number of Shares
Outstanding, beginning of period (shares)	1,257,390	1,821,000
Granted (shares)	112,828	41,892
Exercised (shares)	(204,312)	(65,000)
Forfeited/Canceled (shares)	(105,218)	(235,100)
Outstanding, end of period (shares)	1,060,688	1,562,792
Option Exercisable, end of period (shares)	532,418	771,107
Options Vested, end of period (shares)	532,418	771,107
Weighted Average Exercise Price Per Share
Weighted Average Exercise Price, beginning of period (in dollars per share)	$ 6.51	$ 6.88
Granted (in dollars per share)	$ 7.09	$ 6.18
Exercised (in dollars per share)	$ 5.47	$ 3.51
Forfeited/Canceled (in dollars per share)	$ 12.38	$ 11.22
Weighted Average Exercise Price, end of period (in dollars per share)	$ 6.19	$ 6.35
Options Exercisable, end of period (in dollars per share)	$ 5.96	$ 6.61
Options Vested, end of period (in dollars per share)	$ 5.96	$ 6.61

XML

Loans and Allowance for Loan and Lease Losses - Summary of Delinquency Status of Loans by Portfolio Type (Detail) (USD $)	Mar. 31, 2015	Dec. 31, 2014
Financing Receivable, Recorded Investment, Past Due [Line Items]
30-59 Days Past Due	$ 25,215,000	$ 1,425,000
60-89 Days Past Due	1,717,000	0
90 Days and Greater	733,000	2,766,000
Total Past Due	27,665,000	4,191,000
Current	812,634,000	833,780,000
Total loans balance	840,299,000	837,971,000
Loans greater than 90 Days and Accruing	0	0
Commercial loans [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30-59 Days Past Due	24,143,000	553,000
60-89 Days Past Due	0	0
90 Days and Greater	0	0
Total Past Due	24,143,000	553,000
Current	288,470,000	301,193,000
Total loans balance	312,613,000	301,746,000
Loans greater than 90 Days and Accruing	0	0
Consumer loans [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30-59 Days Past Due	0	17,000
60-89 Days Past Due	0	0
90 Days and Greater	0	0
Total Past Due	0	17,000
Current	13,598,000	9,670,000
Total loans balance	13,598,000	9,687,000
Loans greater than 90 Days and Accruing	0	0
Commercial real estate [Member] | Owner occupied [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30-59 Days Past Due	891,000	0
60-89 Days Past Due	0	0
90 Days and Greater	0	0
Total Past Due	891,000	0
Current	210,763,000	212,515,000
Total loans balance	211,654,000	212,515,000
Loans greater than 90 Days and Accruing	0	0
Commercial real estate [Member] | All other [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30-59 Days Past Due	0	20,000
60-89 Days Past Due	0	0
90 Days and Greater	0	2,117,000
Total Past Due	0	2,137,000
Current	150,416,000	144,539,000
Total loans balance	150,416,000	146,676,000
Loans greater than 90 Days and Accruing	0	0
Residential mortgage loans [Member] | Multi-family [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30-59 Days Past Due	0	0
60-89 Days Past Due	0	0
90 Days and Greater	0	0
Total Past Due	0	0
Current	82,674,000	95,276,000
Total loans balance	82,674,000	95,276,000
Loans greater than 90 Days and Accruing	0	0
Residential mortgage loans [Member] | Single family [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30-59 Days Past Due	181,000	835,000
60-89 Days Past Due	0	0
90 Days and Greater	733,000	285,000
Total Past Due	914,000	1,120,000
Current	63,834,000	63,206,000
Total loans balance	64,748,000	64,326,000
Loans greater than 90 Days and Accruing	0	0
Land development loans [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30-59 Days Past Due	0	0
60-89 Days Past Due	1,717,000	0
90 Days and Greater	0	364,000
Total Past Due	1,717,000	364,000
Current	2,879,000	7,381,000
Total loans balance	4,596,000	7,745,000
Loans greater than 90 Days and Accruing	$ 0	$ 0

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Fair Value Measurements - Assets Measured at Fair Value on Nonrecurring Basis (Detail) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of assets on nonrecurring basis	$ 32,608
Impaired loans [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of assets on nonrecurring basis	30,736
Other real estate owned [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of assets on nonrecurring basis	1,872
Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of assets on nonrecurring basis	0
Level 1 [Member] | Impaired loans [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of assets on nonrecurring basis	0
Level 1 [Member] | Other real estate owned [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of assets on nonrecurring basis	0
Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of assets on nonrecurring basis	1,872
Level 2 [Member] | Impaired loans [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of assets on nonrecurring basis	0
Level 2 [Member] | Other real estate owned [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of assets on nonrecurring basis	1,872
Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of assets on nonrecurring basis	30,736
Level 3 [Member] | Impaired loans [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of assets on nonrecurring basis	30,736
Level 3 [Member] | Other real estate owned [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of assets on nonrecurring basis	$ 0

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Stock-Based Employee Compensation Plans - Additional Information Regarding Vested and Unvested Options Outstanding (Detail 2)	3 Months Ended
	Mar. 31, 2015
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Options Exercisable, Weighted Average Remaining Contractual life	6 years 1 month 28 days

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Earnings Per Share ("EPS") (Tables)

3 Months Ended

Mar. 31, 2015

Earnings Per Share [Abstract]

Computation of Basic and Diluted Earnings Per Share

The following table shows how we computed basic and diluted EPS for the three months ended March 31, 2015 and 2014.

(In thousands, except per share data)	For the Three Months Ended March 31,
	2015			2014
Numerator:
Net loss from continuing operations	$	(85	)	$	(733	)
Accumulated undeclared dividends on preferred stock	(309		)	(296		)
Numerator for basic and diluted net loss from continuing operations	(394		)	(1,029		)
Net income from discontinued operations	—			1,184
Numerator for basic and diluted net (loss) income available to common shareholders	$	(394	)	$	155
Denominator:
Basic weighted average outstanding shares of common stock	19,617			19,146
Dilutive effect of employee stock options and contingently issuable shares	—			—
Diluted weighted average common stock and common stock equivalents	19,617			19,146
Basic (loss) income per common share:
Net loss from continuing operations	$	(0.02	)	$	(0.05	)
Net income from discontinued operations	$	—		$	0.06
Net (loss) income available to common shareholders	$	(0.02	)	$	0.01
Diluted (loss) income per common share:
Net loss from continuing operations	$	(0.02	)	$	(0.05	)
Net income from discontinued operations	$	—		$	0.06
Net (loss) income available to common shareholders	$	(0.02	)	$	0.01

Antidilutive Securities Excluded from Earnings Per Share

The weighted average shares that have an antidilutive effect in the calculation of diluted net loss per share and have been excluded from the computations above were as follows:

	For the Three Months Ended March 31,
	2015	2014
Stock options(1)	1,135,864	1,574,097
Convertible securities(2)	2,734,018	2,522,004
Shares subject to stock purchase warrants(3)	761,278	761,278

(1) Stock options were excluded from the computation of diluted earnings per common share for the three months ended March 31, 2015 and 2014 as we reported a net loss from continuing operations.

(2) Convertible securities were excluded from the computation of diluted earnings per common share for the three months ended March 31, 2015 and 2014 as we reported a net loss from continuing operations.

(3) Stock purchase warrants were excluded from the computation of diluted earnings per common share for the three months ended March 31, 2015 and 2014 because the exercisability of those warrants is conditioned on the happening of certain future events.

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Loans and Allowance for Loan and Lease Losses - Additional Information with Respect to Impaired Loans, by Portfolio Type (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Dec. 31, 2014
Financing Receivable, Impaired [Line Items]
Recorded Investment	$ 30,736		$ 35,137
Unpaid Principal Balance	31,798		36,441
Related Allowance	812		1,532
Average Recorded Investment	28,222	23,845
Interest Income Recognized	208	162
Commercial loans [Member]
Financing Receivable, Impaired [Line Items]
Recorded Investment	16,846		21,117
Unpaid Principal Balance	17,400		21,822
Related Allowance	812		1,532
Average Recorded Investment	13,851	9,296
Interest Income Recognized	116	78
Commercial real estate [Member] | Owner occupied [Member]
Financing Receivable, Impaired [Line Items]
Recorded Investment	2,138		2,171
Unpaid Principal Balance	2,436		2,440
Related Allowance	0		0
Average Recorded Investment	2,391	2,477
Interest Income Recognized	0	0
Commercial real estate [Member] | All other [Member]
Financing Receivable, Impaired [Line Items]
Recorded Investment	5,348		5,365
Unpaid Principal Balance	5,406		5,423
Related Allowance	0		0
Average Recorded Investment	7,785	9,377
Interest Income Recognized	51	64
Residential mortgage loans [Member] | Multi-family [Member]
Financing Receivable, Impaired [Line Items]
Recorded Investment	456		0
Unpaid Principal Balance	456		0
Related Allowance	0		0
Average Recorded Investment	57	0
Interest Income Recognized	5	0
Residential mortgage loans [Member] | Single family [Member]
Financing Receivable, Impaired [Line Items]
Recorded Investment	4,231		4,373
Unpaid Principal Balance	4,368		4,610
Related Allowance	0		0
Average Recorded Investment	3,149	2,298
Interest Income Recognized	29	20
Land development loans [Member]
Financing Receivable, Impaired [Line Items]
Recorded Investment	1,717		2,111
Unpaid Principal Balance	1,732		2,146
Related Allowance	0		0
Average Recorded Investment	989	397
Interest Income Recognized	7	0
Loans with no specific reserves established [Member]
Financing Receivable, Impaired [Line Items]
Recorded Investment	29,273		32,583
Unpaid Principal Balance	29,908		33,458
Related Allowance	0		0
Average Recorded Investment	25,629	22,584
Interest Income Recognized	208	134
Loans with no specific reserves established [Member] | Commercial loans [Member]
Financing Receivable, Impaired [Line Items]
Recorded Investment	15,383		18,563
Unpaid Principal Balance	15,510		18,839
Related Allowance	0		0
Average Recorded Investment	11,319	8,035
Interest Income Recognized	116	50
Loans with no specific reserves established [Member] | Commercial real estate [Member] | Owner occupied [Member]
Financing Receivable, Impaired [Line Items]
Recorded Investment	2,138		2,171
Unpaid Principal Balance	2,436		2,440
Related Allowance	0		0
Average Recorded Investment	2,330	2,477
Interest Income Recognized	0	0
Loans with no specific reserves established [Member] | Commercial real estate [Member] | All other [Member]
Financing Receivable, Impaired [Line Items]
Recorded Investment	5,348		5,365
Unpaid Principal Balance	5,406		5,423
Related Allowance	0		0
Average Recorded Investment	7,785	9,377
Interest Income Recognized	51	64
Loans with no specific reserves established [Member] | Residential mortgage loans [Member] | Multi-family [Member]
Financing Receivable, Impaired [Line Items]
Recorded Investment	456		0
Unpaid Principal Balance	456		0
Related Allowance	0		0
Average Recorded Investment	57	0
Interest Income Recognized	5	0
Loans with no specific reserves established [Member] | Residential mortgage loans [Member] | Single family [Member]
Financing Receivable, Impaired [Line Items]
Recorded Investment	4,231		4,373
Unpaid Principal Balance	4,368		4,610
Related Allowance	0		0
Average Recorded Investment	3,149	2,298
Interest Income Recognized	29	20
Loans with no specific reserves established [Member] | Land development loans [Member]
Financing Receivable, Impaired [Line Items]
Recorded Investment	1,717		2,111
Unpaid Principal Balance	1,732		2,146
Related Allowance	0		0
Average Recorded Investment	989	397
Interest Income Recognized	7	0
Loans with specific reserves established [Member]
Financing Receivable, Impaired [Line Items]
Recorded Investment	1,463		2,554
Unpaid Principal Balance	1,890		2,983
Related Allowance	812		1,532
Average Recorded Investment	2,593	1,261
Interest Income Recognized	0	28
Loans with specific reserves established [Member] | Commercial loans [Member]
Financing Receivable, Impaired [Line Items]
Recorded Investment	1,463		2,554
Unpaid Principal Balance	1,890		2,983
Related Allowance	812		1,532
Average Recorded Investment	2,532	1,261
Interest Income Recognized	0	28
Loans with specific reserves established [Member] | Commercial real estate [Member] | Owner occupied [Member]
Financing Receivable, Impaired [Line Items]
Average Recorded Investment	61	0
Interest Income Recognized	$ 0	$ 0

XML

Loans and Allowance for Loan and Lease Losses - Additional Information (Detail) (USD $)	3 Months Ended
	Mar. 31, 2015 Loan	Mar. 31, 2014 Loan	Dec. 31, 2014
Accounts, Notes, Loans and Financing Receivable [Line Items]
Real estate loans pledged to secured borrowings obtained from Federal Home Loan Bank	$ 531,000,000		$ 425,000,000
Loans greater than 90 Days and Accruing	0		0
Impaired loans with no specific reserves	29,300,000		32,600,000
Interest that would have been earned had impaired loans remained current in accordance with original terms	204,000	70,000
Troubled debt restructurings, totals	12,600,000		17,000,000
Specific reserves on TDR's	0
TDRs that were modified within the preceding 12-month period which subsequently defaulted, number of loans	0	0
Deemed Impairment [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Impaired loans with no specific reserves	28,500,000
Nonperforming [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Troubled debt restructurings, totals	4,200,000
Performing [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Troubled debt restructurings, totals	$ 8,300,000

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Investments - Major Components of Securities Available for Sale (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Schedule of Available-for-sale Securities [Line Items]
Total	$ 60,131	$ 62,276
Gross Unrealized Gain	137	71
Gross Unrealized Loss	(1,300)	(1,421)
Estimated Fair Value	58,968	60,926
Mortgage backed securities issued by U.S. Agencies [Member]
Schedule of Available-for-sale Securities [Line Items]
Total	52,535	54,653
Gross Unrealized Gain	67	26
Gross Unrealized Loss	(630)	(940)
Estimated Fair Value	51,972	53,739
Collateralized mortgage obligations issued by non agencies [Member]
Schedule of Available-for-sale Securities [Line Items]
Total	772	790
Gross Unrealized Gain	0	0
Gross Unrealized Loss	(18)	(13)
Estimated Fair Value	754	777
Asset-backed security [Member]
Schedule of Available-for-sale Securities [Line Items]
Total	2,074	2,083
Gross Unrealized Gain	0	0
Gross Unrealized Loss	(636)	(433)
Estimated Fair Value	1,438	1,650
Mutual funds [Member]
Schedule of Available-for-sale Securities [Line Items]
Total	4,750	4,750
Gross Unrealized Gain	70	45
Gross Unrealized Loss	(16)	(35)
Estimated Fair Value	$ 4,804	$ 4,760

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Income Taxes - Additional Information (Details) (USD $)	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Dec. 31, 2014
Income Tax Disclosure [Abstract]
Income tax provision (benefit)	$ 0	$ 0
Net deferred tax assets	5,933,000	7,100,000	5,933,000
Valuation allowance	11,600,000	11,700,000
Change in valuation allowance	0
Accrued interest or penalties associated with unrecognized tax benefits	0
Interest expense recognized	$ 0	$ 0

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Business Segment Information - Additional Information (Detail)	3 Months Ended
	Mar. 31, 2015 Segment
Segment Reporting [Abstract]
Reportable business segments	1
Non-reportable segments	1
Originated mortgage loans, reselling period to long-term investors in the secondary residential mortgage market	30 days

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Earnings Per Share ("EPS") - Computation of Basic and Diluted Earnings Per Share (Details) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Numerator:
Net loss from continuing operations	$ (85)	$ (733)
Numerator for basic and diluted net loss from continuing operations	(394)	(1,029)
Net income from discontinued operations	0	1,184
Numerator for basic and diluted net (loss) income available to common shareholders	(394)	155
Denominator:
Basic weighted average outstanding shares of common stock	19,616,691	19,146,116
Dilutive effect of employee stock options and contingently issuable shares	0	0
Diluted weighted average common stock and common stock equivalents	19,616,691	19,146,116
Basic (loss) income per common share:
Net loss from continuing operations (in dollars per share)	$ (0.02)	$ (0.05)
Net (loss) income from discontinued operations (in dollars per share)	$ 0.00	$ 0.06
Net (loss) income available to common shareholders (in dollars per share)	$ (0.02)	$ 0.01
Diluted (loss) income per common share:
Net loss from continuing operations (in dollars per share)	$ (0.02)	$ (0.05)
Net (loss) income from discontinued operations (in dollars per share)	$ 0.00	$ 0.06
Net (loss) income available to common shareholders (in dollars per share)	$ (0.02)	$ 0.01
Dividend Undeclared [Member]
Numerator:
Accumulated dividends on preferred stock	$ (309)	$ (296)

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Loans and Allowance for Loan and Lease Losses - Loans on Nonaccrual Status by Portfolio Type (Detail) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Financing Receivable Recorded Investment Nonaccrual Status [Line Items]
Nonaccrual loans	$ 22,403	$ 24,053
Commercial loans [Member]
Financing Receivable Recorded Investment Nonaccrual Status [Line Items]
Nonaccrual loans	14,628	16,182
Commercial real estate [Member] | Owner occupied [Member]
Financing Receivable Recorded Investment Nonaccrual Status [Line Items]
Nonaccrual loans	2,138	2,171
Commercial real estate [Member] | All other [Member]
Financing Receivable Recorded Investment Nonaccrual Status [Line Items]
Nonaccrual loans	2,117	2,117
Residential mortgage loans [Member] | Multi-family [Member]
Financing Receivable Recorded Investment Nonaccrual Status [Line Items]
Nonaccrual loans	456	0
Residential mortgage loans [Member] | Single family [Member]
Financing Receivable Recorded Investment Nonaccrual Status [Line Items]
Nonaccrual loans	1,347	1,472
Land development loans [Member]
Financing Receivable Recorded Investment Nonaccrual Status [Line Items]
Nonaccrual loans	$ 1,717	$ 2,111

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Significant Accounting Policies

3 Months Ended

Mar. 31, 2015

Accounting Policies [Abstract]

Significant Accounting Policies

Significant Accounting Policies

Except as discussed below, our accounting policies are described in Note 2, Significant Accounting Policies of our audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2014 (“Form 10-K”).

Interim Consolidated Financial Statements Basis of Presentation

Our interim consolidated financial statements are prepared in accordance with generally accepted accounting principles in effect in the United States (“GAAP”) for interim financial information pursuant to rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”), including instructions to Form 10-Q and Article 10 of Regulation S-X, on a basis consistent with prior periods. Our financial statements reflect all adjustments that are, in the opinion of management, necessary to present a fair statement of the results for the interim periods presented. The interim results are not necessarily indicative of operating results for the full year. The interim information should be read in conjunction with our audited consolidated financial statements in our Form 10-K.

Use of Estimates

The preparation of the financial statements in conformity with GAAP requires us to make certain estimates and assumptions that could affect the reported amounts of certain of our assets, liabilities, and contingencies at the date of the financial statements and the reported amounts of our revenues and expenses during the reporting periods. For the fiscal periods covered by this report, those estimates related primarily to our determinations of the allowance for loan and lease losses (“ALLL”), other real estate owned (“OREO”), the fair values of securities available for sale, repurchase reserves, and the determination of the valuation allowance pertaining to deferred tax assets. If circumstances or financial trends on which those estimates were based were to change in the future or there were to occur any currently unanticipated events affecting the amounts of those estimates, our future financial position or results of operations could differ, possibly materially, from those expected at the current time.

Principles of Consolidation

Our consolidated financial statements for the three months ended March 31, 2015 and 2014 include the accounts of PMBC, the Bank and PMAR. All significant intercompany balances and transactions were eliminated in consolidation.

Recent Accounting Pronouncements

In April 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2014-08, “Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity,” which amended its guidance on classification and reporting of discontinued operations. The amendments clarify when an entity should classify a component as discontinued operations, how to report the balances related to discontinued operations for prior periods, and additional disclosure requirements for discontinued operations. This guidance is effective for interim and annual periods beginning after December 15, 2014. Early adoption is permitted only for disposals which have not been previously reported. We adopted this guidance on January 1, 2015 and it did not have a material effect on our consolidated financial statements.

In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers (Topic 606),” which amended its guidance on revenue recognition to conform with international accounting guidance under the International Accounting Standards Board. The ASU provides a framework for addressing revenue recognition and replaces most existing revenue recognition guidance, as well as requires increased disclosure requirements. This guidance is effective for interim and annual periods beginning after December 15, 2016. Early adoption is not permitted. We will adopt this guidance on January 1, 2017. We are currently evaluating the expected impact on our consolidated financial statements.

In June 2014, the FASB issued ASU 2014-11, “Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period,” which amended its guidance on how to account for certain performance related share-based compensation plans. The amendments clarify the guidance on how to account for performance based awards when the requisite service period is met prior to potential performance targets being achieved. This guidance is effective for interim and annual periods beginning after December 15, 2015. Early adoption is permitted. We will adopt this guidance on January 1, 2016 and do not expect it to have a material effect on our consolidated financial statements.

In August 2014, the FASB issued ASU 2014-15, “Presentation of Financial Statements — Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern,” which defines management's responsibility to evaluate whether there is substantial doubt about an organization's ability to continue as a going concern and clarifies when to provide related footnote disclosure. This guidance is effective for interim and annual periods beginning after December 15, 2016. Early adoption is permitted. We will adopt this guidance on January 1, 2017 and do not expect it to have a material effect on our consolidated financial statements.

In January 2015, the FASB issued ASU 2015-01, “Income Statement - Extraordinary and Unusual Items (Subtopic 225-20): Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items,” which eliminated the concept of extraordinary items from GAAP. This guidance is effective for interim and annual periods beginning after December 15, 2015. Early adoption is permitted. We adopted this guidance on January 1, 2015 and it did not have an impact on our consolidated financial statements.

In February 2015, the FASB issued ASU 2015-02, “Consolidation (Topic 810): Amendments to the Consolidation Analysis,” amends the guidance for assessing how relationships of related parties affect the consolidation analysis, eliminates the presumption that a general partner should consolidate a limited partnership, eliminates the consolidation model specific to limited partnerships, clarifies when fees paid to a decision maker should be a factor in consolidation of a variable interest entity, and reduces the number of variable interest entity consolidation models. This guidance is effective for interim and annual periods beginning after December 15, 2015. Early adoption is permitted. We will adopt this guidance on January 1, 2016 and do not expect it to have an impact on our financial statements.

In April 2015, the FASB issued ASU 2015-03, “Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs,” which requires that the debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability. This simplifies the presentation of debt issuance costs and makes the presentation consistent with the presentation of debt discounts. This guidance is effective for interim and annual periods beginning after December 15, 2015. Early adoption is permitted. We will adopt this guidance on January 1, 2016 and do not expect it to have a material impact on our financial statements.

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Earnings Per Share ("EPS") - Anti-dilutive Securities (Details)	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Stock options [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti-dilutive shares excluded from computation of earnings per share	1,135,864	1,574,097
Convertible securities [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti-dilutive shares excluded from computation of earnings per share	2,734,018	2,522,004
Stock purchase warrants [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti-dilutive shares excluded from computation of earnings per share	761,278	761,278

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Loans and Allowance for Loan and Lease Losses - Components of Loan Portfolio (Detail) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014	Mar. 31, 2014	Dec. 31, 2013
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans	$ 840,299	$ 837,971
Deferred loan origination costs, net	94	59
Allowance for loan and lease losses	(12,639)	(13,833)	(11,940)	(11,358)
Loans, net	827,754	824,197
Percentage of loan portfolio	100.00%	100.00%
Commercial loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans	312,613	301,746
Allowance for loan and lease losses	(7,353)	(7,670)	(5,988)	(5,812)
Percentage of loan portfolio	37.20%	36.00%
Consumer loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans	13,598	9,687
Percentage of loan portfolio	1.60%	1.20%
Commercial real estate [Member] | Owner occupied [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans	211,654	212,515
Percentage of loan portfolio	25.20%	25.40%
Commercial real estate [Member] | All other [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans	150,416	146,676
Percentage of loan portfolio	17.90%	17.50%
Residential mortgage loans [Member] | Multi-family [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans	82,674	95,276
Percentage of loan portfolio	9.80%	11.40%
Residential mortgage loans [Member] | Single family [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans	64,748	64,326
Percentage of loan portfolio	7.70%	7.70%
Land development loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans	$ 4,596	$ 7,745
Percentage of loan portfolio	0.50%	0.90%

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Regulatory Capital (Tables)

3 Months Ended

Mar. 31, 2015

Regulatory Capital Requirements [Abstract]

Actual Amount and Capital Ratios of Company and Bank

The following table sets forth the capital and capital ratios of the Company (on a consolidated basis) and the Bank (on a stand-alone basis) at March 31, 2015, as compared to the respective regulatory requirements applicable to them.

					Applicable Federal Regulatory Requirement
					For Capital Adequacy Purposes			To be Categorized As Well Capital
	Amount		Ratio		Amount		Ratio	Amount		Ratio
	(Dollars in thousands)
Total Capital to Risk Weighted Assets:
Company	$	146,365	16.9	%	$	69,228	At least 8.0	N/A		N/A
Bank	126,456		14.7	%	68,773		At least 8.0	$	85,967	At least 10.0
Common Equity Tier 1 Capital to Risk Weighted Assets:
Company	$	107,756	12.5	%	$	38,941	At least 4.5	N/A		N/A
Bank	115,655		13.5	%	38,685		At least 4.5	$	55,878	At least 6.5
Tier 1 Capital to Risk Weighted Assets:
Company	$	135,494	15.7	%	$	51,921	At least 6.0	N/A		N/A
Bank	115,655		13.5	%	51,580		At least 6.0	$	68,773	At least 8.0
Tier 1 Capital to Average Assets:
Company	$	135,494	13.0	%	$	41,745	At least 4.0	N/A		N/A
Bank	115,655		11.1	%	41,524		At least 4.0	$	51,905	At least 5.0

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Business Segment Information (Tables)

3 Months Ended

Mar. 31, 2015

Segment Reporting [Abstract]

Net Interest Income and Noninterest Income

The following table sets forth information regarding the net interest income and noninterest income for our commercial banking and discontinued operations segments, respectively, for the three months ended March 31, 2015 and 2014.

(Dollars in thousands)	Commercial		Other			Total from continuing operations		Discontinued Operations		Total including discontinued operations
Net interest income for the three months ended March 31,
2015	$	8,243	$	(94	)	$	8,149	$	—	$	8,149
2014	$	7,841	$	3		$	7,844	$	74	$	7,918
Noninterest income for the three months ended March 31,
2015	$	879	$	3		$	882	$	—	$	882
2014	$	1,178	$	116		$	1,294	$	1,689	$	2,983
Segment Assets at:
March 31, 2015	$	1,055,104	$	5,085		$	1,060,189	$	—	$	1,060,189
December 31, 2014	$	1,094,120	$	5,490		$	1,099,610	$	—	$	1,099,610

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Stock-Based Employee Compensation Plans - Additional Information Regarding Vested and Unvested Options Outstanding (Detail) (USD $)	3 Months Ended
	Mar. 31, 2015	Dec. 31, 2014	Mar. 31, 2014	Dec. 31, 2013
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options outstanding, vested (shares)	532,418		771,107
Options outstanding, unvested (shares)	528,270	468,504	791,685	785,566
Options outstanding, weighted average exercise price (in dollars per share)	$ 6.19	$ 6.51	$ 6.35	$ 6.88
Options outstanding, weighted average remaining contractual life (years)	7 years 4 months 22 days
Options exercisable (shares)	532,418		771,107
Options exercisable, weighted average exercise price (in dollars per share)	$ 5.96		$ 6.61
$2.97 - $5.99 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Option outstanding, exercise price, lower limit (in dollars per share)	$ 2.97
Option outstanding, exercise price, upper limit (in dollars per share)	$ 5.99
Options outstanding, vested (shares)	241,744
Options outstanding, unvested (shares)	22,285
Options outstanding, weighted average exercise price (in dollars per share)	$ 3.91
Options outstanding, weighted average remaining contractual life (years)	5 years 5 months 13 days
Options exercisable (shares)	241,744
Options exercisable, weighted average exercise price (in dollars per share)	$ 3.82
$6.00 - $9.99 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Option outstanding, exercise price, lower limit (in dollars per share)	$ 6.00
Option outstanding, exercise price, upper limit (in dollars per share)	$ 9.99
Options outstanding, vested (shares)	251,374
Options outstanding, unvested (shares)	505,985
Options outstanding, weighted average exercise price (in dollars per share)	$ 6.48
Options outstanding, weighted average remaining contractual life (years)	8 years 4 months 28 days
Options exercisable (shares)	251,374
Options exercisable, weighted average exercise price (in dollars per share)	$ 6.45
$10.00 - $12.99 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Option outstanding, exercise price, lower limit (in dollars per share)	$ 10.00
Option outstanding, exercise price, upper limit (in dollars per share)	$ 12.99
Options outstanding, vested (shares)	5,000
Options outstanding, unvested (shares)	0
Options outstanding, weighted average exercise price (in dollars per share)	$ 12.02
Options outstanding, weighted average remaining contractual life (years)	20 days
Options exercisable (shares)	5,000
Options exercisable, weighted average exercise price (in dollars per share)	$ 12.02
$13.00 - $17.99 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Option outstanding, exercise price, lower limit (in dollars per share)	$ 13.00
Option outstanding, exercise price, upper limit (in dollars per share)	$ 17.99
Options outstanding, vested (shares)	19,800
Options outstanding, unvested (shares)	0
Options outstanding, weighted average exercise price (in dollars per share)	$ 15.44
Options outstanding, weighted average remaining contractual life (years)	1 year 3 months 13 days
Options exercisable (shares)	19,800
Options exercisable, weighted average exercise price (in dollars per share)	$ 15.44
$18.00 - $18.84 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Option outstanding, exercise price, lower limit (in dollars per share)	$ 18.00
Option outstanding, exercise price, upper limit (in dollars per share)	$ 18.84
Options outstanding, vested (shares)	14,500
Options outstanding, unvested (shares)	0
Options outstanding, weighted average exercise price (in dollars per share)	$ 18.09
Options outstanding, weighted average remaining contractual life (years)	9 months 29 days
Options exercisable (shares)	14,500
Options exercisable, weighted average exercise price (in dollars per share)	$ 18.09

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Loans and Allowance for Loan and Lease Losses - Summary of Activity in ALLL (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Allowance for Loan and Lease Losses [Roll Forward]
Balance at beginning of period	$ 13,833	$ 11,358
Charge offs	(1,472)	(210)
Recoveries	278	342
Provision	0	450
Balance at end of period	12,639	11,940
Commercial loans [Member]
Allowance for Loan and Lease Losses [Roll Forward]
Balance at beginning of period	7,670	5,812
Charge offs	(1,387)	(110)
Recoveries	275	283
Provision	795	3
Balance at end of period	7,353	5,988
Real Estate [Member]
Allowance for Loan and Lease Losses [Roll Forward]
Balance at beginning of period	5,133	4,517
Charge offs	0	0
Recoveries	1	18
Provision	(847)	504
Balance at end of period	4,287	5,039
Land Development [Member]
Allowance for Loan and Lease Losses [Roll Forward]
Balance at beginning of period	296	165
Charge offs	(85)	0
Recoveries	0	0
Provision	(91)	(11)
Balance at end of period	120	154
Consumer and Single Family Mortgages [Member]
Allowance for Loan and Lease Losses [Roll Forward]
Balance at beginning of period	734	864
Charge offs	0	(100)
Recoveries	2	41
Provision	143	(46)
Balance at end of period	$ 879	$ 759

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Nature of Business (Details)	3 Months Ended
	Mar. 31, 2015
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Reselling period of originated mortgage loans	30 days

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Fair Value Measurements - Assets Measured at Fair Value on Recurring Basis (Detail) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale, at fair value	$ 58,968	$ 60,926
Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale, at fair value	58,968	60,926
Recurring [Member] | Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale, at fair value	4,804	4,760
Recurring [Member] | Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale, at fair value	52,726	54,516
Recurring [Member] | Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale, at fair value	1,438	1,650
Mortgage backed securities issued by U.S. Agencies [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale, at fair value	51,972	53,739
Mortgage backed securities issued by U.S. Agencies [Member] | Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale, at fair value	51,972	53,739
Mortgage backed securities issued by U.S. Agencies [Member] | Recurring [Member] | Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale, at fair value	0	0
Mortgage backed securities issued by U.S. Agencies [Member] | Recurring [Member] | Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale, at fair value	51,972	53,739
Mortgage backed securities issued by U.S. Agencies [Member] | Recurring [Member] | Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale, at fair value	0	0
Collateralized mortgage obligations issued by non-agency [Member] | Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale, at fair value	754	777
Collateralized mortgage obligations issued by non-agency [Member] | Recurring [Member] | Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale, at fair value	0	0
Collateralized mortgage obligations issued by non-agency [Member] | Recurring [Member] | Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale, at fair value	754	777
Collateralized mortgage obligations issued by non-agency [Member] | Recurring [Member] | Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale, at fair value	0	0
Asset-backed security [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale, at fair value	1,438	1,650
Asset-backed security [Member] | Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale, at fair value	1,438	1,650
Asset-backed security [Member] | Recurring [Member] | Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale, at fair value	0	0
Asset-backed security [Member] | Recurring [Member] | Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale, at fair value	0	0
Asset-backed security [Member] | Recurring [Member] | Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale, at fair value	1,438	1,650
Mutual funds [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale, at fair value	4,804	4,760
Mutual funds [Member] | Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale, at fair value	4,804	4,760
Mutual funds [Member] | Recurring [Member] | Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale, at fair value	4,804	4,760
Mutual funds [Member] | Recurring [Member] | Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale, at fair value	0	0
Mutual funds [Member] | Recurring [Member] | Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale, at fair value	$ 0	$ 0

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Nature of Business

3 Months Ended

Mar. 31, 2015

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Nature of Business

Nature of Business

Organization

Pacific Mercantile Bancorp (“PMBC”) is a bank holding company which, through its wholly owned subsidiary, Pacific Mercantile Bank (the “Bank”), is engaged in the commercial banking business in Southern California. PMBC is registered as a one bank holding company under the United States Bank Holding Company Act of 1956, as amended, and, as such, is regulated by the Board of Governors of the Federal Reserve System (the “Federal Reserve Board”) and the Federal Reserve Bank of San Francisco (“FRBSF”) under delegated authority from the Federal Reserve Board. Substantially all of our operations are conducted and substantially all of our assets are owned by the Bank, which accounts for substantially all of our consolidated revenues, expenses, and income. The Bank provides a full range of banking services to small and medium-size businesses, professionals and the general public in Orange, Los Angeles, San Bernardino and San Diego counties in Southern California and is subject to competition from other banks and financial institutions and from financial services organizations conducting operations in those same markets. The Bank is chartered by the California Department of Business Oversight under the Division of Financial Institutions and is a member of the FRBSF. In addition, the deposit accounts of the Bank’s customers are insured by the Federal Deposit Insurance Corporation up to the maximum amount allowed by law. PM Asset Resolution, Inc. ("PMAR") is a wholly-owned subsidiary of PMBC which exists for the purpose of purchasing certain non-performing loans and other real estate from the Bank and thereafter collecting on or disposing of those assets.

During the fourth quarter of 2013, the Bank announced the closure of our mortgage banking business, which was completed during the third quarter of 2014. The Bank operated a direct-to-consumer retail mortgage banking business, originating and funding residential mortgage loans and selling those loans, generally within the succeeding 30 days. Our mortgage banking operations are classified as discontinued operations within the consolidated financial statements and footnotes for all presented periods.

PMBC, the Bank and PMAR are sometimes referred to, together, on a consolidated basis, in this report as the “Company” or as “we”, “us” or “our”.

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Fair Value Measurements - Changes in Level 3 Assets Measured at Fair Value on Recurring Basis (Detail) (Asset Backed Securities [Member], USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015
Asset Backed Securities [Member]
Changes in Level 3 assets measured at fair value on a recurring basis
Balance of recurring Level 3 instruments at December 31, 2014	$ 1,650
Total gains or losses (realized/unrealized):
Included in other comprehensive income	(202)
Settlements	(10)
Transfers in and/or out of Level 3	0
Balance of Level 3 assets at March 31, 2015	$ 1,438

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Investments - Roll-forward of OTTI (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015
Gross Other-Than-Temporary Impairments
Gross Other-Than-Temporary Impairments, Beginning Balance	$ (986)
Changes for credit losses on securities for which an OTTI was not previously recognized	(208)
Principal received on OTTI security	5
Gross Other-Than-Temporary Impairments, Ending Balance	(1,189)
Other-Than-Temporary Impairments Included in Other Comprehensive Loss
Other-Than Temporary Impairments Included in Other Comprehensive Income, Beginning Balance	(433)
Changes for credit losses on securities for which an OTTI was not previously recognized	(208)
Principal received on OTTI security	5
Other-Than Temporary Impairments Included in Other Comprehensive Income, Ending Balance	(636)
Net Other-Than Temporary Impairments Included in Retained Earnings
Net Other-Than Temporary Impairments Included in Retained Earnings, Beginning Balance	(553)
Changes for credit losses on securities for which an OTTI was not previously recognized	0
Principal received on OTTI security	0
Net Other-Than Temporary Impairments Included in Retained Earnings, Ending Balance	$ (553)

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Stock-Based Employee Compensation Plans - Additional Information (Detail) (USD $)	3 Months Ended		1 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	May 31, 2013	May 31, 2010	Dec. 31, 2014	Dec. 31, 2013
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options outstanding (shares)	1,060,688	1,562,792			1,257,390	1,821,000
Options exercised (shares)	204,312	65,000
Aggregate intrinsic value of options exercised	$ 322,000	$ 174,000
Fair value of options vested	71,000	70,000
Aggregate intrinsic values of options outstanding and exercisable	1,000,000				1,200,000
Nonvested awards, expected weighted average recognition period	2 years 18 days
Aggregate amounts of stock based compensation expense, net of taxes	$ 316,000	$ 277,000
Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares vested prior to reporting date	49,987
Shares of restricted stock vested	4,987	0
Shares granted	94,675	18,608
Shares granted, average grant date fair value (in dollars per share)	$ 7.10	$ 6.18
Restricted Stock [Member] | Employees [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options, restricted shares and SARs, vesting period	3 years
Restricted Stock [Member] | Directors [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options, restricted shares and SARs, vesting period	1 year
Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Purchase price per share of common stock as percentage of fair market value of shares on respective grant dates of stock options	100.00%
Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options, restricted shares and SARs, vesting period	5 years
Options and SARs, terms after date of grant	10 years
Equity Incentive Plan 2010 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares authorized	1,844,824			400,000
Additional shares authorized			800,000
Maximum number of shares available for grant, percent of common stock outstanding	9.00%
Previously Approved Equity Incentive Plans [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Additional shares authorized				158,211
Options outstanding (shares)	536,600

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CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
ASSETS
Cash and due from banks	$ 19,601	$ 9,997
Interest bearing deposits with financial institutions	118,138	167,138
Cash and cash equivalents	137,739	177,135
Interest-bearing time deposits with financial institutions	4,668	4,668
Federal Reserve Bank of San Francisco and Federal Home Loan Bank Stock, at cost	8,137	8,137
Securities available for sale, at fair value	58,968	60,926
Loans (net of allowances of $12,639 and $13,833, respectively)	827,754	824,197
Other real estate owned	1,872	1,592
Accrued interest receivable	2,500	2,436
Premises and equipment, net	1,099	1,092
Net deferred tax assets	5,933	5,933
Other assets	11,519	13,494
Total assets	1,060,189	1,099,610
Deposits:
Noninterest-bearing	237,932	237,491
Interest-bearing	648,051	678,818
Total deposits	885,983	916,309
Borrowings	30,000	39,500
Accrued interest payable	193	222
Other liabilities	5,679	6,771
Junior subordinated debentures	17,527	17,527
Total liabilities	939,382	980,329
Commitments and contingencies
Preferred stock, no par value, 2,000,000 shares authorized:
Common stock, no par value, 85,000,000 shares authorized; 19,756,812 and 19,462,561 shares issued and outstanding at March 31, 2015 and December 31, 2014, respectively	132,604	131,181
Accumulated deficit	(23,563)	(22,885)
Accumulated other comprehensive loss	(504)	(692)
Total shareholders’ equity	120,807	119,281
Total liabilities and shareholders’ equity	1,060,189	1,099,610
Series B Convertible 8.4% Noncumulative Preferred Stock [Member]
Preferred stock, no par value, 2,000,000 shares authorized:
Preferred Stock	8,747	8,747
Series C Convertible 8.4% Noncumulative Preferred Stock [Member]
Preferred stock, no par value, 2,000,000 shares authorized:
Preferred Stock	$ 3,523	$ 2,930

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Loans and Allowance for Loan and Lease Losses - Loan Balances and Related ALLL (Detail) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014	Mar. 31, 2014	Dec. 31, 2013
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loans individually evaluated for impairment	$ 812	$ 1,532
Allowance for loans collectively evaluated for impairment	11,827	12,301
Total allowance	12,639	13,833	11,940	11,358
Loans individually evaluated for impairment	30,736	35,137
Loans collectively evaluated for impairment	809,563	802,834
Total loans balance	840,299	837,971
Commercial loans [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loans individually evaluated for impairment	812	995
Allowance for loans collectively evaluated for impairment	6,541	6,675
Total allowance	7,353	7,670	5,988	5,812
Loans individually evaluated for impairment	16,846	21,117
Loans collectively evaluated for impairment	295,767	280,629
Total loans balance	312,613	301,746
Real Estate [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loans individually evaluated for impairment	0	537
Allowance for loans collectively evaluated for impairment	4,287	4,596
Total allowance	4,287	5,133	5,039	4,517
Loans individually evaluated for impairment	7,942	7,536
Loans collectively evaluated for impairment	436,802	446,931
Total loans balance	444,744	454,467
Land Development [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loans individually evaluated for impairment	0	0
Allowance for loans collectively evaluated for impairment	120	296
Total allowance	120	296	154	165
Loans individually evaluated for impairment	1,717	2,111
Loans collectively evaluated for impairment	2,879	5,634
Total loans balance	4,596	7,745
Consumer and Single Family Mortgages [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loans individually evaluated for impairment	0	0
Allowance for loans collectively evaluated for impairment	879	734
Total allowance	879	734	759	864
Loans individually evaluated for impairment	4,231	4,373
Loans collectively evaluated for impairment	74,115	69,640
Total loans balance	$ 78,346	$ 74,013

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CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (USD $) In Thousands, except Share data, unless otherwise specified	Total	Series B and C Preferred stock [Member]	Common stock [Member]	Retained earnings (accumulated deficit) [Member]	Accumulated other comprehensive income (loss) [Member]
Beginning Balance at Dec. 31, 2014	$ 119,281	$ 11,677	$ 131,181	$ (22,885)	$ (692)
Beginning Balance (in shares) at Dec. 31, 2014		141,000	19,463,000
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of restricted stock, net			91,000
Tax effect from vesting of restricted stock			(1,000)
Series C Preferred Stock issued as a stock dividend on Series B Preferred Stock		593		(593)
Series C Preferred Stock issued as a stock dividend on Series B Preferred Stock (in shares)		6,000
Common stock based compensation expense	316		316
Common stock options exercised	1,107		1,107
Common stock options exercised (in shares)	204,312		204,000
Net income (loss)	(85)			(85)
Other comprehensive income	188				188
Ending Balance at Mar. 31, 2015	$ 120,807	$ 12,270	$ 132,604	$ (23,563)	$ (504)
Ending Balance (in shares) at Mar. 31, 2015		147,000	19,757,000

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Stock-Based Employee Compensation Plans - Restricted Stock Activity (Details) (Restricted Stock [Member], USD $)	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Restricted Stock [Member]
Number of Shares
Outstanding, at beginning of year (shares)	141,254	141,284
Granted (shares)	94,675	18,608
Vested (shares)	(4,987)	0
Forfeited (shares)	(3,638)	0
Outstanding, at end of year (shares)	227,304	159,892
Average Grant Date Fair Value
Outstanding, at beginning of year (in dollars per share)	$ 6.29	$ 6.23
Granted (in dollars per share)	$ 7.10	$ 6.18
Vested (in dollars per share)	$ 6.18	$ 0.00
Forfeited (in dollars per share)	$ 6.18	$ 0.00
Outstanding, at end of year (in dollars per share)	$ 6.63	$ 6.23

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Fair Value Measurements - Fair Values and Related Carrying Amounts of Financial Instruments (Detail) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Carrying Value [Member]
Financial assets:
Cash and cash equivalents	$ 137,739	$ 177,135
Interest-bearing deposits with financial institutions	4,668	4,668
Federal Reserve Bank of San Francisco and Federal Home Loan Bank stock	8,137	8,137
Loans, net	827,754	824,197
Accrued interest receivable	2,500	2,436
Financial liabilities:
Noninterest bearing deposits	237,932	237,491
Interest-bearing deposits	648,051	678,818
Borrowings	30,000	39,500
Junior subordinated debentures	17,527	17,527
Accrued interest payable	193	222
Total [Member]
Financial assets:
Cash and cash equivalents	137,739	177,135
Interest-bearing deposits with financial institutions	4,668	4,668
Federal Reserve Bank of San Francisco and Federal Home Loan Bank stock	8,137	8,137
Loans, net	822,570	818,547
Accrued interest receivable	2,500	2,436
Financial liabilities:
Noninterest bearing deposits	237,932	237,491
Interest-bearing deposits	647,988	678,890
Borrowings	30,000	39,418
Junior subordinated debentures	17,527	17,527
Accrued interest payable	193	222
Level 1 [Member]
Financial assets:
Cash and cash equivalents	137,739	177,135
Interest-bearing deposits with financial institutions	4,668	4,668
Federal Reserve Bank of San Francisco and Federal Home Loan Bank stock	8,137	8,137
Loans, net	0	0
Accrued interest receivable	2,500	2,436
Financial liabilities:
Noninterest bearing deposits	237,932	237,491
Interest-bearing deposits	0	0
Borrowings	0	0
Junior subordinated debentures	0	0
Accrued interest payable	193	222
Level 2 [Member]
Financial assets:
Cash and cash equivalents	0	0
Interest-bearing deposits with financial institutions	0	0
Federal Reserve Bank of San Francisco and Federal Home Loan Bank stock	0	0
Loans, net	0	0
Accrued interest receivable	0	0
Financial liabilities:
Noninterest bearing deposits	0	0
Interest-bearing deposits	647,988	678,890
Borrowings	30,000	39,418
Junior subordinated debentures	17,527	17,527
Accrued interest payable	0	0
Level 3 [Member]
Financial assets:
Cash and cash equivalents	0	0
Interest-bearing deposits with financial institutions	0	0
Federal Reserve Bank of San Francisco and Federal Home Loan Bank stock	0	0
Loans, net	822,570	818,547
Accrued interest receivable	0	0
Financial liabilities:
Noninterest bearing deposits	0	0
Interest-bearing deposits	0	0
Borrowings	0	0
Junior subordinated debentures	0	0
Accrued interest payable	$ 0	$ 0

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Commitments and Contingencies - Additional Information (Details) (USD $)	3 Months Ended		12 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Dec. 31, 2014
Commitments and Contingencies Disclosure [Abstract]
Repurchased loans	$ 619,000	$ 1,300,000
Commitment to fund certain loans including letter of credit	154,000,000		148,000,000
Loss reserve for unfunded loan commitments	$ 275,000		$ 275,000

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Investments (Tables)

3 Months Ended

Mar. 31, 2015

Investments [Abstract]

Major Components of Securities Available for Sale and Comparison of Amortized Cost, Estimated Fair Market Values, and Gross Unrealized Gains and Losses

The following table sets forth the major components of securities available for sale and compares the amortized costs and estimated fair market values of, and the gross unrealized gains and losses on, these securities at March 31, 2015 and December 31, 2014:

(Dollars in thousands)	March 31, 2015									December 31, 2014
	Amortized Cost		Gross Unrealized					Estimated Fair Value		Amortized Cost		Gross Unrealized					Estimated Fair Value
			Gain		Loss							Gain		Loss
Securities Available for Sale
Residential mortgage backed securities issued by U.S. Agencies(1)	$	52,535	$	67	$	(630	)	$	51,972	$	54,653	$	26	$	(940	)	$	53,739
Residential collateralized mortgage obligations issued by non agencies(1)	772		—		(18		)	754		790		—		(13		)	777
Asset backed security(2)	2,074		—		(636		)	1,438		2,083		—		(433		)	1,650
Mutual funds(3)	4,750		70		(16		)	4,804		4,750		45		(35		)	4,760
Total	$	60,131	$	137	$	(1,300	)	$	58,968	$	62,276	$	71	$	(1,421	)	$	60,926

(1) Secured by closed-end first liens on 1-4 family residential mortgages.

(2) Comprised of a security that represents an interest in a pool of trust preferred securities issued by U.S.-based banks and insurance companies.

(3) Consists primarily of mutual fund investments in closed-end first lien 1-4 family residential mortgages.

Amortized Cost and Estimated Fair Values of Securities Available for Sale by Contractual Maturities and Historical Prepayments based on Prior Twelve Months of Principal Payments

The amortized cost and estimated fair values of securities available for sale at March 31, 2015 and December 31, 2014 are shown in the tables below by contractual maturities taking into consideration historical prepayments based on the prior twelve months of principal payments. Expected maturities will differ from contractual maturities and historical prepayments, particularly with respect to collateralized mortgage obligations, primarily because prepayment rates are affected by changes in conditions in the interest rate market and, therefore, future prepayment rates may differ from historical prepayment rates.

	At March 31, 2015 Maturing in
(Dollars in thousands)	One year or less			Over one year through five years			Over five years through ten years			Over ten Years			Total
Securities available for sale, amortized cost	$	7,778		$	28,868		$	16,149		$	7,336		$	60,131
Securities available for sale, estimated fair value	7,709			28,635			15,979			6,645			58,968
Weighted average yield	1.51		%	1.63		%	1.58		%	1.87		%	1.63		%

	At December 31, 2014 Maturing in
(Dollars in thousands)	One year or less			Over one year through five years			Over five years through ten years			Over ten Years			Total
Securities available for sale, amortized cost	$	7,483		$	29,008		$	17,448		$	8,337		$	62,276
Securities available for sale, estimated fair value	7,359			28,614			17,148			7,805			60,926
Weighted average yield	1.54		%	1.64		%	1.60		%	1.83		%	1.64		%

Gross Unrealized Losses and Fair Values of Investments

The tables below indicate, as of March 31, 2015 and December 31, 2014, the gross unrealized losses and fair values of our investments, aggregated by investment category, and length of time that the individual securities have been in a continuous unrealized loss position.

	Securities with Unrealized Loss at March 31, 2015
	Less than 12 months					12 months or more					Total
(Dollars in thousands)	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss			Fair Value		Unrealized Loss
Residential mortgage backed securities issued by U.S. Agencies	$	381	$	—		$	30,002	$	(630	)	$	30,383	$	(630	)
Residential collateralized mortgage obligations issued by non-agencies	—		—			754		(18		)	754		(18		)
Asset backed security	—		—			1,438		(636		)	1,438		(636		)
Mutual funds	1,984		(16		)	—		—			1,984		(16		)
Total	$	2,365	$	(16	)	$	32,194	$	(1,284	)	$	34,559	$	(1,300	)

	Securities With Unrealized Loss at December 31, 2014
	Less than 12 months					12 months or more					Total
(Dollars In thousands)	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss			Fair Value		Unrealized Loss
Residential mortgage backed securities issued by U.S. Agencies	$	—	$	—		$	50,697	$	(940	)	$	50,697	$	(940	)
Residential collateralized mortgage obligations issued by non-agencies	—		—			776		(13		)	776		(13		)
Asset-backed security	—		—			1,651		(433		)	1,651		(433		)
Mutual funds	2,464		(35		)	—		—			2,464		(35		)
Total	$	2,464	$	(35	)	$	53,124	$	(1,386	)	$	55,588	$	(1,421	)

Other-Than-Temporary Impairments, Portion Attributable to Non-Credit Related Factors Recognized in Other Comprehensive Loss

The table below presents, for the three months ended March 31, 2015, a roll-forward of OTTI in those instances when a portion of the OTTI was attributable to non-credit related factors and, therefore, was recognized in other comprehensive loss:

(Dollars in thousands)	Gross Other- Than- Temporary Impairments			Other-Than- Temporary Impairments Included in Other Comprehensive Loss			Net Other-Than- Temporary Impairments Included in Retained  Earnings (Deficit)
Balance – December 31, 2014	$	(986	)	$	(433	)	$	(553	)
Change in market value on a security for which an OTTI was previously recognized	(208		)	(208		)	—
Principal received on OTTI security	5			5			—
Balance – March 31, 2015	$	(1,189	)	$	(636	)	$	(553	)

Schedule of equity method investments

During the three months ended March 31, 2015, we redeemed 100% of our investment in the limited partnership for a return of capital of $2.1 million. As of March 31, 2015 and December 31, 2014, our other investment was as follows:

	March 31, 2015		December 31, 2014
	(Dollars in thousands)
Investment accounted for under the equity method	$	—	$	2,081

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Investments - Additional Information (Details) (USD $)	3 Months Ended		1 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Nov. 30, 2007 issuer institution company	Dec. 31, 2014
Schedule of Available-for-sale Securities [Line Items]
Aggregate fair market value of securities pledged as collateral	$ 4,000,000			$ 3,600,000
Proceeds from sale of securities available for sale	0	0
Impairment credit losses on available-for-sale securities	0	0
Portion of other-than-temporary impairment losses recognized in other comprehensive loss	636,000			433,000
Amortized Cost	60,131,000			62,276,000
Estimated Fair Value	58,968,000			60,926,000
Gross Unrealized Loss	1,300,000			1,421,000
Asset-backed security [Member]
Schedule of Available-for-sale Securities [Line Items]
Number of securities	1
Trust preferred securities, number of issuers			56
Trust preferred securities, number of U.S. depository institutions			45
Trust preferred securities, number of insurance companies			11
Available for sale security purchased, face value			3,000,000.0
Available for sale security purchased, price as percentage of face amount			95.21%
Available for sale security purchased, price paid			2,900,000
Trust preferred securities issued, value			363,000,000
Basis points over 3 months LIBOR			0.60%
Amortized Cost	2,074,000			2,083,000
Estimated Fair Value	1,438,000			1,650,000
Gross Unrealized Loss	636,000			433,000
Available-for-sale securities, default experienced	42,500,000
Percentage of default to total current collateral	12.50%
Security payment deferrals	24,000,000
Percentage of payment deferrals to total current collateral	7.00%
Estimated additional defaults	$ 95,000,000
Assumption in estimating security defaults, future default rates	3.30%
Fair value inputs, prepayment rate	1.00%
Fair value inputs, recovery rate	15.00%

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Stock-Based Employee Compensation Plans (Tables)

3 Months Ended

Mar. 31, 2015

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Weighted Average Assumptions used to Determine Fair Values of Options Granted

The table below summarizes the weighted average assumptions used to determine the fair values of the options granted during the following periods:

	Three Months Ended March 31,
Assumptions with respect to:	2015			2014
Expected volatility	44		%	44		%
Risk-free interest rate	1.82		%	2.08		%
Expected dividends	—		%	0.61		%
Expected term (years)	6.0			6.7
Weighted average fair value of options granted during period	$	3.13		$	2.75

Stock Option Activity under Plans

The following table summarizes the stock option activity under the Company’s equity incentive plans during the three months ended March 31, 2015 and 2014, respectively.

	Number of Shares		Weighted- Average Exercise Price Per Share		Number of Shares		Weighted- Average Exercise Price Per Share
	2015				2014
Outstanding – January 1,	1,257,390		$	6.51	1,821,000		$	6.88
Granted	112,828		7.09		41,892		6.18
Exercised	(204,312	)	5.47		(65,000	)	3.51
Forfeited/Canceled	(105,218	)	12.38		(235,100	)	11.22
Outstanding – March 31,	1,060,688		6.19		1,562,792		6.35
Options Exercisable – March 31,	532,418		$	5.96	771,107		$	6.61
Options Vested – March 31,	532,418		$	5.96	771,107		$	6.61

Additional Information Regarding Vested and Unvested Options Outstanding

The following table provides additional information regarding the vested and unvested options that were outstanding at March 31, 2015.

Options Outstanding as of March 31, 2015						Options Exercisable as of March 31, 2015(1)
	Vested	Unvested	Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (Years)	Shares	Weighted Average Exercise Price
$2.97 – $5.99	241,744	22,285	$	3.91	5.45	241,744	$	3.82
$6.00 – $9.99	251,374	505,985	6.48		8.41	251,374	6.45
$10.00 – $12.99	5,000	—	12.02		0.05	5,000	12.02
$13.00 – $17.99	19,800	—	15.44		1.29	19,800	15.44
$18.00 – $18.84	14,500	—	18.09		0.83	14,500	18.09
	532,418	528,270	$	6.19	7.39	532,418	$	5.96

(1) The weighted average remaining contractual life of the options that were exercisable as of March 31, 2015 was 6.16 years.

Summary of Status of Unvested Options and Changes in Number of Shares Subject to and in Weighted Average Grant Date Fair Values of Unvested Options

A summary of the status of the unvested options outstanding as of March 31, 2015, and changes in the weighted average grant date fair values of the unvested options during the three months ended March 31, 2015, are set forth in the following table.

	For the three months ended
	2015				2014
	Number of Shares Subject to Options		Weighted Average Grant Date Fair Value		Number of Shares Subject to Options		Weighted Average Grant Date Fair Value
Unvested at the beginning of the period	468,504		$	2.68	785,566		$	2.57
Granted	112,828		3.13		41,892		2.75
Vested	(31,915	)	2.24		(34,773	)	2.00
Forfeited/Canceled	(21,147	)	2.56		(1,000	)	2.68
Unvested at the end of the period	528,270		2.81		791,685		2.60

Schedule of Restricted Stock Activity

The following table summarizes the activity related to restricted stock granted, vested and forfeited under our equity incentive plans during the three months ended March 31, 2015.

	For the Three Months Ended
	March 31, 2015				March 31, 2014
	Number of Shares		Average Grant Date Fair Value		Number of Shares	Average Grant Date Fair Value
Outstanding at the beginning of the period	141,254		$	6.29	141,284	$	6.23
Granted	94,675		7.10		18,608	6.18
Vested	(4,987	)	6.18		—	—
Forfeited	(3,638	)	6.18		—	—
Outstanding at the end of the period	227,304		$	6.63	159,892	$	6.23

Compensation Expense of Non-Vested Stock Options Outstanding

We expect that the compensation expense that will be recognized during the periods presented below in respect of stock options and restricted stock outstanding at March 31, 2015, will be as follows:

	Estimated Stock Based Compensation Expense Stock Options		Estimated Stock Based Compensation Expense Restricted Stock		Estimated Stock Based Compensation Expense Total
(Dollars in thousands)
For the years ending December 31,
Remainder of 2015	$	428	$	530	$	958
2016	298		479		776
2017	109		186		294
2018	33		23		57
2019 and beyond	6		—		6
	$	874	$	1,218	$	2,091

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Business Segment Information - Net Interest Income and Noninterest Income (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Dec. 31, 2014
Segment Reporting Information [Line Items]
Net interest income	$ 8,149	$ 7,918
Noninterest income	882	2,983
Assets	1,060,189		1,099,610
Continuing Operations [Member]
Segment Reporting Information [Line Items]
Net interest income	8,149	7,844
Noninterest income	882	1,294
Assets	1,060,189		1,099,610
Continuing Operations [Member] | Commercial [Member]
Segment Reporting Information [Line Items]
Net interest income	8,243	7,841
Noninterest income	879	1,178
Assets	1,055,104		1,094,120
Continuing Operations [Member] | Other [Member]
Segment Reporting Information [Line Items]
Net interest income	(94)	3
Noninterest income	3	116
Assets	5,085		5,490
Discontinued Operations [Member]
Segment Reporting Information [Line Items]
Net interest income	0	74
Noninterest income	0	1,689
Assets	$ 0		$ 0

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CONSOLIDATED STATEMENTS OF CASH FLOW (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Cash Flows From Operating Activities:
Net income (loss)	$ (85)	$ 451
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization	128	147
Provision for loan and lease losses	0	450
Amortization of premium on securities	83	81
Net amortization of deferred fees and unearned income on loans	(149)	(46)
Net gain on sale of premises and equipment	0	(21)
Net gain on sale of small business administration loans	0	(686)
Small business administration loan originations	0	(9,165)
Proceeds from sale of small business administration loans	0	9,853
Write down of other real estate owned	0	298
Stock-based compensation expense	316	276
Other	0	(27)
Changes in operating assets and liabilities:
Net (increase) decrease in accrued interest receivable	(64)	(306)
Net (increase) decrease in other assets	(95)	(305)
Net decrease (increase) in deferred taxes	0	432
Net (increase) decrease in income taxes receivable	(17)	(23)
Net (decrease) increase in accrued interest payable	(29)	197
Net (decrease) increase in other liabilities	(1,092)	(738)
Net cash provided by discontinued operations	0	976
Net cash (used in) provided by operating activities	(1,004)	1,844
Cash Flows From Investing Activities:
Maturities of and principal payments received on securities available for sale and other stock	2,063	2,410
Principal payments received on other investments	2,087	0
Proceeds from sale of other real estate owned	0	1,130
Capitalized cost of other real estate owned	0	(21)
Net increase in loans	(3,688)	(6,662)
Purchases of premises and equipment	(135)	(179)
Proceeds from sale of premises and equipment	0	38
Net cash provided by (used in) investing activities	327	(3,284)
Cash Flows From Financing Activities:
Net increase (decrease) in deposits	(30,326)	68,821
Payments of borrowings	(9,500)	(9,408)
Proceeds from exercise of common stock options	1,107	228
Net cash (used in) provided by financing activities	(38,719)	59,641
Net (decrease) increase in cash and cash equivalents	(39,396)	58,201
Cash and Cash Equivalents, beginning of period	177,135	106,940
Cash and Cash Equivalents, end of period	137,739	165,141
Supplementary Cash Flow Information:
Cash paid for interest on deposits and other borrowings	1,351	4,864
Cash paid for income taxes	0	0
Non-Cash Investing Activities:
Transfer of loans into other real estate owned	280	4,900
Non-Cash Financing Activities:
Series C Preferred Stock issued in connection with dividends on Series B Preferred Stock	$ 593	$ 544

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CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (Parenthetical) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended	12 Months Ended
	Mar. 31, 2015	Dec. 31, 2014
Loans, allowances	$ 12,639	$ 13,833
Preferred stock, par value (in dollars per share)
Preferred stock, shares authorized	2,000,000	2,000,000
Common stock, par value (in dollars per share)
Common stock, shares authorized	85,000,000	85,000,000
Common stock, shares issued	19,756,812	19,462,561
Common stock, shares outstanding	19,756,812	19,462,561
Series B Convertible 8.4% Noncumulative Preferred Stock [Member]
Preferred stock, dividend rate	8.40%	8.40%
Preferred stock, shares authorized	300,000	300,000
Preferred Stock, shares issued	112,000	112,000
Preferred Stock, shares outstanding	112,000	112,000
Preferred Stock, liquidation preference (in dollars per share)	$ 100	$ 100
Series C Convertible 8.4% Noncumulative Preferred Stock [Member]
Preferred stock, dividend rate	8.40%	8.40%
Preferred stock, shares authorized	300,000	300,000
Preferred Stock, shares issued	35,225	29,308
Preferred Stock, shares outstanding	35,225	29,308
Preferred Stock, liquidation preference (in dollars per share)	$ 100	$ 100

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Commitments and Contingencies

3 Months Ended

Mar. 31, 2015

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

Repurchase Reserves

We have historically maintained reserves for possible repurchases that we may have been required to make of certain of the mortgage loans which we sold as a result of deficiencies or defects that may be found to exist in such loans. Our repurchase reserve also covered returns of any premiums earned and administrative fees pertaining to the repurchase of mortgage loans that did not meet investor guidelines, including potential loss of advances on Veterans Affairs or Federal Housing Authority Ginnie Mae loans.  As a result of our exit from the mortgage banking business and no longer being subject to potential loss for anything other than mortgage fraud, we have undertaken an analysis of our accrual. Our analysis assumes that the repurchase liability exposure will decrease over time as mortgage loans are paid off and as we are no longer originating new mortgage loans. We repurchased $619 thousand of loans during the three months ended March 31, 2015. We repurchased $1.3 million of loans during the three months ended March 31, 2014 by adjusting the gains on sale recorded for these loans. The following table sets forth information, at March 31, 2015 and December 31, 2014, with respect to such reserves:

	At and For the Three Months Ended			At and For the Year Ended
	March 31, 2015			December 31, 2014
	(Dollars in thousands)
Beginning balance	$	381		$	1,883
(Recovery of)/Provision for repurchases	(16		)	(1,502		)
Settlements	—			—
Total repurchases reserve	$	365		$	381

Commitments

To meet the financing needs of our customers in the normal course of business, we are a party to financial instruments with off-balance sheet risk. These financial instruments include commitments to extend credit and standby letters of credit. These instruments involve, to varying degrees, elements of credit and interest rate risk in excess of the amount recognized in the consolidated financial statements. At March 31, 2015 and December 31, 2014, we were committed to fund certain loans including letters of credit amounting to approximately $154 million and $148 million, respectively. The contractual amounts of a credit-related financial instrument, such as a commitment to extend credit, a credit-card arrangement or a letter of credit, represent the amount of potential accounting loss should the commitment be fully drawn upon, the customer were to default, and the value of any existing collateral securing the customer’s payment obligation becomes worthless. The loss reserve for unfunded loan commitments was $275 thousand and $275 thousand at March 31, 2015 and December 31, 2014, respectively.

As a result, we use the same credit policies in making commitments to extend credit and conditional obligations as we do for on-balance sheet instruments. Commitments generally have fixed expiration dates; however, since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. We evaluate each customer’s creditworthiness on a case-by-case basis, using the same credit underwriting standards that are employed in making commercial loans. The amount of collateral obtained, if any, upon an extension of credit is based on our evaluation of the creditworthiness of the customer. Collateral held varies, but may include accounts receivable, inventory, property, plant and equipment, residential real estate and income-producing commercial properties.

Litigation, Claims and Assessments

We are a defendant in or a party to a number of legal actions or proceedings that arise in the ordinary course of business. In some of these actions and proceedings, claims for monetary damages are asserted against us.

In accordance with applicable accounting guidance, we assess the likelihood of any loss or exposure with respect to lawsuits and other proceedings that are pending against us. We establish an accrued liability for lawsuits or other legal proceedings when they present loss contingencies that are both probable and estimable. Where a loss is not probable but it is reasonably possible or where a loss in excess of an amount accrued is reasonably possible, we disclose an estimate of the amount of the loss or range of possible losses for the claim if a reasonable estimate can be made, unless the amount of reasonably possible losses with respect to the matter is not material to our financial condition, results of operations or cash flows. We estimate any potential loss based upon currently available information and significant judgments and a variety of assumptions, and known and unknown uncertainties. Moreover, the facts and circumstances on which such estimates are based will change over time. Therefore, the amount of any losses we might incur in any lawsuits or other legal proceedings may exceed amounts which we had accrued based on our estimates and those estimates do not represent the maximum loss exposure that we may have in connection with any lawsuits or other legal proceedings.

Based on our evaluation of the lawsuits and other proceedings that were pending against us as of March 31, 2015, the outcomes in those suits or other proceedings are not expected to have, either individually or in the aggregate, a material adverse effect on our consolidated financial position, results of operations or cash flows. However, in light of the inherent uncertainties involved, some of which are beyond our control, and the very large or indeterminate damages often sought in such legal actions or proceedings, an adverse outcome in one or more of these suits or proceedings could be material to our financial position, results of operations or cash flows for any particular reporting period.

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Document and Entity Information	3 Months Ended
	Mar. 31, 2015	May 06, 2015
Document and Entity Information [Abstract]
Entity Registrant Name	PACIFIC MERCANTILE BANCORP
Entity Central Index Key	0001109546
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Document Type	10-Q
Document Period End Date	Mar. 31, 2015
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	Q1
Trading Symbol	PMBC
Amendment Flag	false
Entity Common Stock, Shares Outstanding		19,775,731

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Business Segment Information

3 Months Ended

Mar. 31, 2015

Segment Reporting [Abstract]

Business Segment Information

Business Segment Information

We have one reportable business segment, commercial banking. The commercial banking segment provides small and medium-size businesses, professional firms and individuals with a diversified range of products and services such as various types of deposit accounts, various types of commercial and consumer loans, cash management services, and online banking services. We also have one non-reportable segment, discontinued operations, which is comprised of our mortgage banking business. Our mortgage banking business originated mortgage loans that, for the most part, were resold within 30 days to long-term investors in the secondary residential mortgage market.

Since our operating segment derives all of its revenues from interest and noninterest income and interest expense constitutes its most significant expense, this segment, as well as our discontinued operations, are reported below using net interest income (interest income less interest expense) and noninterest income (primarily net gains on sales of SBA loans and fee income). We do not allocate general and administrative expenses or income taxes to our operating segment.

The following table sets forth information regarding the net interest income and noninterest income for our commercial banking and discontinued operations segments, respectively, for the three months ended March 31, 2015 and 2014.

(Dollars in thousands)	Commercial		Other			Total from continuing operations		Discontinued Operations		Total including discontinued operations
Net interest income for the three months ended March 31,
2015	$	8,243	$	(94	)	$	8,149	$	—	$	8,149
2014	$	7,841	$	3		$	7,844	$	74	$	7,918
Noninterest income for the three months ended March 31,
2015	$	879	$	3		$	882	$	—	$	882
2014	$	1,178	$	116		$	1,294	$	1,689	$	2,983
Segment Assets at:
March 31, 2015	$	1,055,104	$	5,085		$	1,060,189	$	—	$	1,060,189
December 31, 2014	$	1,094,120	$	5,490		$	1,099,610	$	—	$	1,099,610

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CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Interest income:
Loans, including fees	$ 9,019	$ 8,793
Securities available for sale and stock	373	417
Interest-bearing deposits with financial institutions	79	77
Total interest income	9,471	9,287
Interest expense:
Deposits	1,125	1,185
Borrowings	197	258
Total interest expense	1,322	1,443
Net interest income	8,149	7,844
Provision for loan and lease losses	0	450
Net interest income after provision for loan and lease losses	8,149	7,394
Noninterest income
Service fees on deposits and other banking services	212	208
Net gain on sale of small business administration loans	0	686
Other noninterest income	670	400
Total noninterest income	882	1,294
Noninterest expense
Salaries and employee benefits	5,908	5,604
Occupancy	660	589
Equipment and depreciation	393	369
Data processing	236	251
FDIC expense	352	293
Other real estate owned expense, net	102	861
Professional fees	628	574
Business development	156	94
Loan related expense	69	84
Insurance	88	137
Other operating expense	524	565
Total noninterest expense	9,116	9,421
Loss from continuing operations before income taxes	(85)	(733)
Income tax (benefit) provision	0	0
Net loss from continuing operations	(85)	(733)
Discontinued Operations
Income from discontinued operations before income taxes	0	1,184
Income tax provision (benefit)	0	0
Net income from discontinued operations	0	1,184
Net (loss) income	(85)	451
Net (loss) income allocable to common shareholders	(394)	155
Basic (loss) income per common share:
Net loss from continuing operations (in dollars per share)	$ (0.02)	$ (0.05)
Net (loss) income available to common shareholders (in dollars per share)	$ (0.02)	$ 0.01
Diluted (loss) income per common share:
Net loss from continuing operations (in dollars per share)	$ (0.02)	$ (0.05)
Net (loss) income available to common shareholders (in dollars per share)	$ (0.02)	$ 0.01
Weighted average number of common shares outstanding:
Basic (in shares)	19,616,691	19,146,116
Diluted (in shares)	19,616,691	19,146,116
Dividend Undeclared [Member]
Discontinued Operations
Accumulated undeclared dividends on preferred stock	$ (309)	$ (296)

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Loans and Allowance for Loan and Lease Losses

3 Months Ended

Mar. 31, 2015

Receivables [Abstract]

Loans and Allowance for Loan Losses

Loans and Allowance for Loan and Lease Losses

The loan portfolio consisted of the following at:

	March 31, 2015					December 31, 2014
(Dollars in thousands)	Amount			Percent		Amount			Percent
Commercial loans	$	312,613		37.2	%	$	301,746		36.0	%
Commercial real estate loans – owner occupied	211,654			25.2	%	212,515			25.4	%
Commercial real estate loans – all other	150,416			17.9	%	146,676			17.5	%
Residential mortgage loans – multi-family	82,674			9.8	%	95,276			11.4	%
Residential mortgage loans – single family	64,748			7.7	%	64,326			7.7	%
Land development loans	4,596			0.5	%	7,745			0.9	%
Consumer loans	13,598			1.6	%	9,687			1.2	%
Total loans	840,299			100.0	%	837,971			100.0	%
Deferred loan origination costs, net	94					59
Allowance for loan and lease losses	(12,639		)			(13,833		)
Loans, net	$	827,754				$	824,197

At March 31, 2015 and December 31, 2014, loans of approximately $531 million and $425 million, respectively, were pledged to secure borrowings obtained from the FHLB and to support our unfunded borrowing capacity.

Allowance for Loan and Lease Losses

The ALLL represents our estimate of credit losses in our loan and lease portfolio that are probable and estimable at the balance sheet date. We employ economic models that are based on bank regulatory guidelines, industry standards and our own historical loan loss experience, as well as a number of more subjective qualitative factors, to determine both the sufficiency of the ALLL and the amount of the provisions that are required to increase or replenish the ALLL.

The ALLL is first determined by (i) analyzing all classified loans (graded as “Substandard” or “Doubtful” under our internal asset quality grading parameters) on non-accrual status for loss exposure and (ii) establishing specific reserves as needed. ASC 310-10 defines loan impairment as the existence of uncertainty concerning collection of all principal and interest in accordance with the contractual terms of a loan. For collateral dependent loans, impairment is typically measured by comparing the loan amount to the fair value of collateral, less estimated costs to sell, with any “shortfall” amount charged off. Other methods can be used in estimating impairment, including market price and the present value of expected future cash flows discounted at the loan’s original interest rate. We are an active lender with the U.S. Small Business Administration and collection of a percentage of the loan balance of many of the loans originated is guaranteed.  The ALLL reserves are calculated against the non-guaranteed loan balances. 

On a quarterly basis, we utilize a classification migration model and individual loan review analytical tools as starting points for determining the adequacy of the ALLL for homogenous pools of loans that are not subject to specific reserve allocations. Our loss migration analysis tracks a certain number of quarters of loan loss history and industry loss factors to determine historical losses by classification category for each loan type, except certain consumer loans. We then apply these calculated loss factors, together with qualitative factors based on external economic conditions and trends and internal assessments, to the outstanding loan balances in each homogenous group of loans, and then, using our internal asset quality grading parameters, we grade the loans as “Pass,” “Special Mention,” “Substandard” or “Doubtful”. We also conduct individual loan review analysis, as part of the ALLL allocation process, applying specific monitoring policies and procedures in analyzing the existing loan portfolio. This grading is based on the credit classifications of assets as prescribed by government regulations and industry standards and is separated into the following groups:

• Pass: Loans classified as pass include current loans performing in accordance with contractual terms, installment/consumer loans that are not individually risk rated, and loans which exhibit certain risk factors that require greater than usual monitoring by management.

• Special Mention: Loans classified as special mention, while generally not delinquent, have potential weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or in the Bank’s credit position at some future date.

• Substandard: Loans classified as substandard have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. There is a distinct possibility that the Bank will sustain some loss if the deficiencies are not corrected.

• Doubtful: Loans classified as doubtful have all the weaknesses inherent in a substandard loan, and may also be at delinquency status and have defined weaknesses based on currently existing facts, conditions and values making collection or liquidation in full highly questionable and improbable.

Set forth below is a summary of the activity in the ALLL during the three months ended March 31, 2015 and 2014:

(Dollars in thousands)	Commercial			Real  Estate			Land Development			Consumer and Single Family Mortgages			Total
ALLL in the three months ended March 31, 2015:
Balance at beginning of period	$	7,670		$	5,133		$	296		$	734		$	13,833
Charge offs	(1,387		)	—			(85		)	—			(1,472		)
Recoveries	275			1			—			2			278
Provision	795			(847		)	(91		)	143			—
Balance at end of period	$	7,353		$	4,287		$	120		$	879		$	12,639
ALLL in the three months ended March 31, 2014:
Balance at beginning of period	$	5,812		$	4,517		$	165		$	864		$	11,358
Charge offs	(110		)	—			—			(100		)	(210		)
Recoveries	283			18			—			41			342
Provision	3			504			(11		)	(46		)	450
Balance at end of period	$	5,988		$	5,039		$	154		$	759		$	11,940

Set forth below is information regarding loan balances and the related ALLL, by portfolio type, as of March 31, 2015 and December 31, 2014.

(Dollars in thousands)	Commercial		Real  Estate		Land Development		Consumer and Single Family Mortgages		Total
ALLL balance at March 31, 2015 related to:
Loans individually evaluated for impairment	$	812	$	—	$	—	$	—	$	812
Loans collectively evaluated for impairment	6,541		4,287		120		879		11,827
Total	$	7,353	$	4,287	$	120	$	879	$	12,639
Loans balance at March 31, 2015 related to:
Loans individually evaluated for impairment	$	16,846	$	7,942	$	1,717	$	4,231	$	30,736
Loans collectively evaluated for impairment	295,767		436,802		2,879		74,115		809,563
Total	$	312,613	$	444,744	$	4,596	$	78,346	$	840,299
ALLL Balance at December 31, 2014 related to:
Loans individually evaluated for impairment	$	995	$	537	$	—	$	—	$	1,532
Loans collectively evaluated for impairment	6,675		4,596		296		734		12,301
Total	$	7,670	$	5,133	$	296	$	734	$	13,833
Loans balance at December 31, 2014 related to:
Loans individually evaluated for impairment	$	21,117	$	7,536	$	2,111	$	4,373	$	35,137
Loans collectively evaluated for impairment	280,629		446,931		5,634		69,640		802,834
Total	$	301,746	$	454,467	$	7,745	$	74,013	$	837,971

Credit Quality

The amounts of nonperforming assets and delinquencies that occur within our loan portfolio factors into our evaluation of the adequacy of the ALLL.

The following table provides a summary of the delinquency status of loans by portfolio type at March 31, 2015 and December 31, 2014:

(Dollars in thousands)	30-59 Days Past Due		60-89 Days Past Due		90 Days and Greater		Total Past Due		Current		Total Loans Outstanding		Loans >90 Days and Accruing
At March 31, 2015
Commercial loans	$	24,143	$	—	$	—	$	24,143	$	288,470	$	312,613	$	—
Commercial real estate loans – owner-occupied	891		—		—		891		210,763		211,654		—
Commercial real estate loans – all other	—		—		—		—		150,416		150,416		—
Residential mortgage loans – multi-family	—		—		—		—		82,674		82,674		—
Residential mortgage loans – single family	181		—		733		914		63,834		64,748		—
Land development loans	—		1,717		—		1,717		2,879		4,596		—
Consumer loans	—		—		—		—		13,598		13,598		—
Total	$	25,215	$	1,717	$	733	$	27,665	$	812,634	$	840,299	$	—
At December 31, 2014
Commercial loans	$	553	$	—	$	—	$	553	$	301,193	$	301,746	$	—
Commercial real estate loans – owner-occupied	—		—		—		—		212,515		212,515		—
Commercial real estate loans – all other	20		—		2,117		2,137		144,539		146,676		—
Residential mortgage loans – multi-family	—		—		—		—		95,276		95,276		—
Residential mortgage loans – single family	835		—		285		1,120		63,206		64,326		—
Land development loans	—		—		364		364		7,381		7,745		—
Consumer loans	17		—		—		17		9,670		9,687		—
Total	$	1,425	$	—	$	2,766	$	4,191	$	833,780	$	837,971	$	—

Generally, the accrual of interest on a loan is discontinued when principal or interest payments become more than 90 days past due, unless we believe that the loan is adequately collateralized and it is in the process of collection. There were no loans 90 days or more past due and still accruing interest at March 31, 2015 or December 31, 2014. In certain instances, when a loan is placed on non-accrual status, previously accrued but unpaid interest is reversed against current income. Subsequent collections of cash are applied as principal reductions when received (referred to as full nonaccrual basis of accounting), except when the ultimate collectability of principal is probable, in which case such payments are applied to accrued and unpaid interest, which is credited to income (referred to as nonaccrual cash basis of accounting). Non-accrual loans may be restored to accrual status when principal and interest become current and full repayment becomes expected.

The following table provides information with respect to loans on nonaccrual status, by portfolio type, as of March 31, 2015 and December 31, 2014:

	March 31, 2015		December 31, 2014
	(Dollars in thousands)
Nonaccrual loans:
Commercial loans	$	14,628	$	16,182
Commercial real estate loans – owner occupied	2,138		2,171
Commercial real estate loans – all other	2,117		2,117
Residential mortgage loans – multi-family	456		—
Residential mortgage loans – single family	1,347		1,472
Land development loans	1,717		2,111
Total(1)	$	22,403	$	24,053

(1)    Nonaccrual loans may include loans that are currently considered performing loans.

We classify our loan portfolio using internal asset quality ratings. The following table provides a summary of loans by portfolio type and our internal asset quality ratings as of March 31, 2015 and December 31, 2014:

	March 31, 2015		December 31, 2014
	(Dollars in thousands)
Pass:
Commercial loans	$	295,666	$	280,102
Commercial real estate loans – owner occupied	207,869		208,687
Commercial real estate loans – all other	131,050		128,974
Residential mortgage loans – multi family	82,218		94,817
Residential mortgage loans – single family	63,401		62,854
Land development loans	2,879		5,634
Consumer loans	13,598		9,687
Total pass loans	$	796,681	$	790,755
Special Mention:
Commercial loans	$	—	$	351
Commercial real estate loans – all other	10,732		6,588
Residential mortgage loans – multi family	—		459
Total special mention loans	$	10,732	$	7,398
Substandard:
Commercial loans	$	16,363	$	19,655
Commercial real estate loans – owner occupied	3,785		3,828
Commercial real estate loans – all other	8,634		11,114
Residential mortgage loans – multi family	456		—
Residential mortgage loans – single family	1,347		1,472
Land development loans	1,717		2,111
Total substandard loans	$	32,302	$	38,180
Doubtful:
Commercial loans	$	584	$	1,638
Total doubtful loans	$	584	$	1,638
Total Loans:	$	840,299	$	837,971

Impaired Loans

A loan generally is classified as impaired when, in our opinion, principal or interest is not likely to be collected in accordance with the contractual terms of the loan agreement. We measure for impairments on a loan-by-loan basis, using either the present value of expected future cash flows discounted at the loan’s effective interest rate, or the fair value of the collateral if the loan is collateral dependent.

The following table sets forth information regarding impaired loans, at March 31, 2015 and December 31, 2014:

	March 31, 2015		December 31, 2014
	(Dollars in thousands)
Impaired loans:
Nonaccruing loans	$	18,186	$	18,118
Nonaccruing restructured loans	4,217		5,935
Accruing restructured loans (1)	8,333		11,084
Accruing impaired loans	—		—
Total impaired loans	$	30,736	$	35,137
Impaired loans less than 90 days delinquent and included in total impaired loans	$	30,002	$	32,371

(1) See "Troubled Debt Restructurings" below for a description of accruing restructured loans at March 31, 2015 and December 31, 2014.

The table below contains additional information with respect to impaired loans, by portfolio type, as of March 31, 2015 and December 31, 2014:

	March 31, 2015						December 31, 2014
	Recorded Investment		Unpaid Principal Balance		Related Allowance (1)		Recorded Investment		Unpaid Principal Balance		Related Allowance (1)
	(Dollars in thousands)
No allowance recorded:
Commercial loans	$	15,383	$	15,510	$	—	$	18,563	$	18,839	$	—
Commercial real estate loans – owner occupied	2,138		2,436		—		2,171		2,440		—
Commercial real estate loans – all other	5,348		5,406		—		5,365		5,423		—
Residential mortgage loans – multi-family	456		456		—		—		—		—
Residential mortgage loans – single family	4,231		4,368		—		4,373		4,610		—
Land development loans	1,717		1,732		—		2,111		2,146		—
Total	29,273		29,908		—		32,583		33,458		—
With allowance recorded:
Commercial loans	$	1,463	$	1,890	$	812	$	2,554	$	2,983	$	1,532
Total	1,463		1,890		812		2,554		2,983		1,532
Total
Commercial loans	$	16,846	$	17,400	$	812	$	21,117	$	21,822	$	1,532
Commercial real estate loans – owner occupied	2,138		2,436		—		2,171		2,440		—
Commercial real estate loans – all other	5,348		5,406		—		5,365		5,423		—
Residential mortgage loans – multi-family	456		456		—		—		—		—
Residential mortgage loans – single family	4,231		4,368		—		4,373		4,610		—
Land development loans	1,717		1,732		—		2,111		2,146		—
Total	30,736		31,798		812		35,137		36,441		1,532

(1) When the discounted cash flows, collateral value or market price equals or exceeds the recorded investment in the loan, then specific reserves are not required to be set aside for the loan within the ALLL. This typically occurs when the impaired loans have been partially charged-off and/or there have been interest payments received and applied to the balance of the principal outstanding.

At March 31, 2015 and December 31, 2014, there were $29.3 million and $32.6 million, respectively, of impaired loans for which no specific reserves had been allocated because these loans, in our judgment, were sufficiently collateralized. Of the impaired loans at March 31, 2015 for which no specific reserves were allocated, $28.5 million had been deemed impaired in the prior year.

Average balances and interest income recognized on impaired loans, by portfolio type, for the three months ended March 31, 2015 and 2014 were as follows:

	Three Months Ended March 31,
	2015				2014
	Average Balance		Interest Income Recognized		Average Balance		Interest Income Recognized
	(Dollars in thousands)
No allowance recorded:
Commercial loans	$	11,319	$	116	$	8,035	$	50
Commercial real estate loans – owner occupied	2,330		—		2,477		—
Commercial real estate loans – all other	7,785		51		9,377		64
Residential mortgage loans – multi-family	57		5		—		—
Residential mortgage loans – single family	3,149		29		2,298		20
Land development loans	989		7		397		—
Total	25,629		208		22,584		134
With allowance recorded:
Commercial loans	2,532		—		1,261		28
Commercial real estate loans – owner occupied	61		—		—		—
Total	2,593		—		1,261		28
Total
Commercial loans	13,851		116		9,296		78
Commercial real estate loans – owner occupied	2,391		—		2,477		—
Commercial real estate loans – all other	7,785		51		9,377		64
Residential mortgage loans – multi-family	57		5		—		—
Residential mortgage loans – single family	3,149		29		2,298		20
Land development loans	989		7		397		—
Total	$	28,222	$	208	$	23,845	$	162

The interest that would have been earned had the impaired loans remained current in accordance with their original terms was $204 thousand and $70 thousand during the three months ended March 31, 2015 and 2014, respectively.

Troubled Debt Restructurings (“TDRs”)

Pursuant to the FASB's ASU No. 2011-2, A Creditor's Determination of whether a Restructuring is a Troubled Debt Restructuring, the Bank's TDRs totaled $12.6 million and $17.0 million at March 31, 2015 and December 31, 2014, respectively. TDRs consist of loans to which modifications have been made for the purpose of alleviating temporary impairments of the borrower's financial condition and cash flows. Those modifications have come in the forms of changes in amortization terms, reductions in interest rates, interest only payments and, in limited cases, concessions to outstanding loan balances. The modifications are made as part of workout plans we enter into with the borrower that are designed to provide a bridge for the borrower's cash flow shortfalls in the near term. If a borrower works through the near term issues, then in most cases, the original contractual terms of the borrower's loan will be reinstated.

Of the $12.6 million of TDRs outstanding at March 31, 2015, $8.3 million were performing in accordance with their terms and accruing interest, and $4.2 million were not. Our impairment analysis determined no specific reserves were required on the TDR balances outstanding at March 31, 2015.

The following table presents loans restructured as TDRs during the three months ended March 31, 2015 and 2014:

	March 31, 2015					March 31, 2014
(Dollars in thousands)	Number of loans	Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment		Number of loans	Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
Performing
Commercial real estate – all other	—	$	—	$	—	1	$	613	$	613
	—	—		—		1	613		613
Nonperforming
Land development loans	—	—		—		1	439		439
	—	—		—		1	439		439
Total troubled debt restructurings(1)	—	$	—	$	—	2	$	1,052	$	1,052

(1) No loans were restructured during the three months ended March 31, 2015.

As of March 31, 2015, TDRs totaled $12.6 million as compared to $17.0 million at December 31, 2014.

During the three months ended March 31, 2015 and 2014, we had no TDRs that were modified within the preceding 12-month period which subsequently defaulted.

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Investments

3 Months Ended

Mar. 31, 2015

Investments [Abstract]

Investments

Investments

Securities Available For Sale, at Fair Value

The following table sets forth the major components of securities available for sale and compares the amortized costs and estimated fair market values of, and the gross unrealized gains and losses on, these securities at March 31, 2015 and December 31, 2014:

(Dollars in thousands)	March 31, 2015									December 31, 2014
	Amortized Cost		Gross Unrealized					Estimated Fair Value		Amortized Cost		Gross Unrealized					Estimated Fair Value
			Gain		Loss							Gain		Loss
Securities Available for Sale
Residential mortgage backed securities issued by U.S. Agencies(1)	$	52,535	$	67	$	(630	)	$	51,972	$	54,653	$	26	$	(940	)	$	53,739
Residential collateralized mortgage obligations issued by non agencies(1)	772		—		(18		)	754		790		—		(13		)	777
Asset backed security(2)	2,074		—		(636		)	1,438		2,083		—		(433		)	1,650
Mutual funds(3)	4,750		70		(16		)	4,804		4,750		45		(35		)	4,760
Total	$	60,131	$	137	$	(1,300	)	$	58,968	$	62,276	$	71	$	(1,421	)	$	60,926

(1) Secured by closed-end first liens on 1-4 family residential mortgages.

(2) Comprised of a security that represents an interest in a pool of trust preferred securities issued by U.S.-based banks and insurance companies.

(3) Consists primarily of mutual fund investments in closed-end first lien 1-4 family residential mortgages.

At March 31, 2015, U.S. agency mortgage backed securities with an aggregate fair market value of $4.0 million were pledged to secure repurchase agreements, local agency deposits and treasury, tax and loan accounts. At December 31, 2014, U.S. agency mortgage backed securities and collateralized mortgage obligations with an aggregate fair market value of $3.6 million were pledged to secure repurchase agreements, local agency deposits and treasury, tax and loan accounts.

The amortized cost and estimated fair values of securities available for sale at March 31, 2015 and December 31, 2014 are shown in the tables below by contractual maturities taking into consideration historical prepayments based on the prior twelve months of principal payments. Expected maturities will differ from contractual maturities and historical prepayments, particularly with respect to collateralized mortgage obligations, primarily because prepayment rates are affected by changes in conditions in the interest rate market and, therefore, future prepayment rates may differ from historical prepayment rates.

	At March 31, 2015 Maturing in
(Dollars in thousands)	One year or less			Over one year through five years			Over five years through ten years			Over ten Years			Total
Securities available for sale, amortized cost	$	7,778		$	28,868		$	16,149		$	7,336		$	60,131
Securities available for sale, estimated fair value	7,709			28,635			15,979			6,645			58,968
Weighted average yield	1.51		%	1.63		%	1.58		%	1.87		%	1.63		%

	At December 31, 2014 Maturing in
(Dollars in thousands)	One year or less			Over one year through five years			Over five years through ten years			Over ten Years			Total
Securities available for sale, amortized cost	$	7,483		$	29,008		$	17,448		$	8,337		$	62,276
Securities available for sale, estimated fair value	7,359			28,614			17,148			7,805			60,926
Weighted average yield	1.54		%	1.64		%	1.60		%	1.83		%	1.64		%

We had no sales of securities available for sale during the three months ended March 31, 2015 and 2014.

The tables below indicate, as of March 31, 2015 and December 31, 2014, the gross unrealized losses and fair values of our investments, aggregated by investment category, and length of time that the individual securities have been in a continuous unrealized loss position.

	Securities with Unrealized Loss at March 31, 2015
	Less than 12 months					12 months or more					Total
(Dollars in thousands)	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss			Fair Value		Unrealized Loss
Residential mortgage backed securities issued by U.S. Agencies	$	381	$	—		$	30,002	$	(630	)	$	30,383	$	(630	)
Residential collateralized mortgage obligations issued by non-agencies	—		—			754		(18		)	754		(18		)
Asset backed security	—		—			1,438		(636		)	1,438		(636		)
Mutual funds	1,984		(16		)	—		—			1,984		(16		)
Total	$	2,365	$	(16	)	$	32,194	$	(1,284	)	$	34,559	$	(1,300	)

	Securities With Unrealized Loss at December 31, 2014
	Less than 12 months					12 months or more					Total
(Dollars In thousands)	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss			Fair Value		Unrealized Loss
Residential mortgage backed securities issued by U.S. Agencies	$	—	$	—		$	50,697	$	(940	)	$	50,697	$	(940	)
Residential collateralized mortgage obligations issued by non-agencies	—		—			776		(13		)	776		(13		)
Asset-backed security	—		—			1,651		(433		)	1,651		(433		)
Mutual funds	2,464		(35		)	—		—			2,464		(35		)
Total	$	2,464	$	(35	)	$	53,124	$	(1,386	)	$	55,588	$	(1,421	)

We regularly monitor investments for significant declines in fair value. We have determined that declines in the fair values of these investments below their respective amortized costs, as set forth in the tables above, are temporary because (i) those declines were due to interest rate changes and not to a deterioration in the creditworthiness of the issuers of those investment securities, and (ii) we have the ability to hold those securities until there is a recovery in their values or until their maturity.

We recognize other-than-temporary impairments (“OTTI”) to our available-for-sale debt securities in accordance with FASB ASC 320-10. When there are credit losses associated with, but we have no intention to sell, an impaired debt security, and it is more likely than not that we will not have to sell the security before recovery of its cost basis, we will separate the amount of impairment, or OTTI, between the amount that is credit related and the amount that is related to non-credit factors. Credit-related impairments are recognized in our consolidated statements of operations. Any non-credit-related impairments are recognized and reflected in other comprehensive income (loss) in our consolidated statements of financial condition.

Through the impairment assessment process, we determined that the available-for-sale securities discussed below were other-than-temporarily impaired at March 31, 2015. We recorded no impairment credit losses on available-for-sale securities in our consolidated statements of operations for the three months ended March 31, 2015 and 2014. The OTTI related to factors other than credit losses, in the aggregate amount of $636 thousand, and was recognized as other comprehensive loss in our accompanying consolidated statement of financial condition as of March 31, 2015.

The table below presents, for the three months ended March 31, 2015, a roll-forward of OTTI in those instances when a portion of the OTTI was attributable to non-credit related factors and, therefore, was recognized in other comprehensive loss:

(Dollars in thousands)	Gross Other- Than- Temporary Impairments			Other-Than- Temporary Impairments Included in Other Comprehensive Loss			Net Other-Than- Temporary Impairments Included in Retained  Earnings (Deficit)
Balance – December 31, 2014	$	(986	)	$	(433	)	$	(553	)
Change in market value on a security for which an OTTI was previously recognized	(208		)	(208		)	—
Principal received on OTTI security	5			5			—
Balance – March 31, 2015	$	(1,189	)	$	(636	)	$	(553	)

In determining the component of OTTI related to credit losses, we compare the amortized cost basis of each OTTI security to the present value of its expected cash flows, discounted using the effective interest rate implicit in the security at the date of acquisition.

As a part of our OTTI assessment process with respect to securities available for sale with unrealized losses, we consider available information about (i) the performance of the collateral underlying each such security, including any credit enhancements, (ii) historical prepayment speeds, (iii) delinquency and default rates, (iv) loss severities, (v) the age or “vintage” of the security, and (vi) any rating agency reports on the security. Significant judgments are required with respect to these and other factors in order to make a determination of the future cash flows that can be expected to be generated by the security.

Based on our OTTI assessment process, we determined that there is one asset-backed security in our portfolio of securities available for sale that was impaired as of March 31, 2015. This security is a multi-class, cash flow collateralized bond obligation backed by a pool of trust preferred securities issued by a diversified pool of 56 issuers that consisted of 45 U.S. depository institutions and 11 insurance companies at the time of the security’s issuance in November 2007. We purchased $3.0 million face amount of this security in November 2007 at a price of 95.21% for a total purchase price of $2.9 million, out of a total of $363 million of this security sold at the time of issuance. The security that we own (CUSIP 74042CAE8) is the mezzanine class B piece security with a variable interest rate of 3 month LIBOR plus 60 basis points, which had a rating of Aa2 and AA by Moody’s and Fitch, respectively, at the time of issuance in 2007.

As of March 31, 2015, the amortized cost of this security was $2.1 million with a fair value of $1.4 million, for an unrealized loss of approximately $636 thousand. As of March 31, 2015, the security had a Ba2 rating from Moody’s and a CCC rating from Fitch and had experienced $42.5 million in defaults (12.5% of total current collateral) and $24.0 million in deferring securities (7% of total current collateral) from issuance to March 31, 2015. We estimate that the security could experience another $95.0 million in defaults before the issuer would not receive all of the contractual cash flows under this security. This analysis is based on the following assumptions: approximate future default rates of 3.3%, prepayment rates of 1% until maturity, and 15% recovery of future defaults.

We have made a determination that the remainder of our securities with respect to which there were unrealized losses as of March 31, 2015 are not other-than-temporarily impaired, because we have concluded that we have the ability to continue to hold those securities until their respective fair market values increase above their respective amortized costs or, if necessary, until their respective maturities. In reaching that conclusion we considered a number of factors and other information, which included: (i) the significance of each such security, (ii) the amount of the unrealized losses attributable to each such security, (iii) our liquidity position, (iv) the impact that retention of those securities could have on our capital position and (v) our evaluation of the expected future performance of these securities (based on the criteria discussed above).

Other Investments

As of December 31, 2014, we had one investment in a limited partnership which was accounted for under the equity method of accounting and included within other assets on the consolidated statements of financial condition. During the three months ended March 31, 2015, we redeemed 100% of our investment in the limited partnership for a return of capital of $2.1 million. As of March 31, 2015 and December 31, 2014, our other investment was as follows:

	March 31, 2015		December 31, 2014
	(Dollars in thousands)
Investment accounted for under the equity method	$	—	$	2,081

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Loans and Allowance for Loan and Lease Losses (Tables)

3 Months Ended

Mar. 31, 2015

Receivables [Abstract]

Composition of Loan Portfolio

The loan portfolio consisted of the following at:

	March 31, 2015					December 31, 2014
(Dollars in thousands)	Amount			Percent		Amount			Percent
Commercial loans	$	312,613		37.2	%	$	301,746		36.0	%
Commercial real estate loans – owner occupied	211,654			25.2	%	212,515			25.4	%
Commercial real estate loans – all other	150,416			17.9	%	146,676			17.5	%
Residential mortgage loans – multi-family	82,674			9.8	%	95,276			11.4	%
Residential mortgage loans – single family	64,748			7.7	%	64,326			7.7	%
Land development loans	4,596			0.5	%	7,745			0.9	%
Consumer loans	13,598			1.6	%	9,687			1.2	%
Total loans	840,299			100.0	%	837,971			100.0	%
Deferred loan origination costs, net	94					59
Allowance for loan and lease losses	(12,639		)			(13,833		)
Loans, net	$	827,754				$	824,197

Allowance for Loan Losses and Loan Balances

Set forth below is a summary of the activity in the ALLL during the three months ended March 31, 2015 and 2014:

(Dollars in thousands)	Commercial			Real  Estate			Land Development			Consumer and Single Family Mortgages			Total
ALLL in the three months ended March 31, 2015:
Balance at beginning of period	$	7,670		$	5,133		$	296		$	734		$	13,833
Charge offs	(1,387		)	—			(85		)	—			(1,472		)
Recoveries	275			1			—			2			278
Provision	795			(847		)	(91		)	143			—
Balance at end of period	$	7,353		$	4,287		$	120		$	879		$	12,639
ALLL in the three months ended March 31, 2014:
Balance at beginning of period	$	5,812		$	4,517		$	165		$	864		$	11,358
Charge offs	(110		)	—			—			(100		)	(210		)
Recoveries	283			18			—			41			342
Provision	3			504			(11		)	(46		)	450
Balance at end of period	$	5,988		$	5,039		$	154		$	759		$	11,940

Set forth below is information regarding loan balances and the related ALLL, by portfolio type, as of March 31, 2015 and December 31, 2014.

(Dollars in thousands)	Commercial		Real  Estate		Land Development		Consumer and Single Family Mortgages		Total
ALLL balance at March 31, 2015 related to:
Loans individually evaluated for impairment	$	812	$	—	$	—	$	—	$	812
Loans collectively evaluated for impairment	6,541		4,287		120		879		11,827
Total	$	7,353	$	4,287	$	120	$	879	$	12,639
Loans balance at March 31, 2015 related to:
Loans individually evaluated for impairment	$	16,846	$	7,942	$	1,717	$	4,231	$	30,736
Loans collectively evaluated for impairment	295,767		436,802		2,879		74,115		809,563
Total	$	312,613	$	444,744	$	4,596	$	78,346	$	840,299
ALLL Balance at December 31, 2014 related to:
Loans individually evaluated for impairment	$	995	$	537	$	—	$	—	$	1,532
Loans collectively evaluated for impairment	6,675		4,596		296		734		12,301
Total	$	7,670	$	5,133	$	296	$	734	$	13,833
Loans balance at December 31, 2014 related to:
Loans individually evaluated for impairment	$	21,117	$	7,536	$	2,111	$	4,373	$	35,137
Loans collectively evaluated for impairment	280,629		446,931		5,634		69,640		802,834
Total	$	301,746	$	454,467	$	7,745	$	74,013	$	837,971

Summary of Delinquency Status of Loans by Portfolio Type

The following table provides a summary of the delinquency status of loans by portfolio type at March 31, 2015 and December 31, 2014:

(Dollars in thousands)	30-59 Days Past Due		60-89 Days Past Due		90 Days and Greater		Total Past Due		Current		Total Loans Outstanding		Loans >90 Days and Accruing
At March 31, 2015
Commercial loans	$	24,143	$	—	$	—	$	24,143	$	288,470	$	312,613	$	—
Commercial real estate loans – owner-occupied	891		—		—		891		210,763		211,654		—
Commercial real estate loans – all other	—		—		—		—		150,416		150,416		—
Residential mortgage loans – multi-family	—		—		—		—		82,674		82,674		—
Residential mortgage loans – single family	181		—		733		914		63,834		64,748		—
Land development loans	—		1,717		—		1,717		2,879		4,596		—
Consumer loans	—		—		—		—		13,598		13,598		—
Total	$	25,215	$	1,717	$	733	$	27,665	$	812,634	$	840,299	$	—
At December 31, 2014
Commercial loans	$	553	$	—	$	—	$	553	$	301,193	$	301,746	$	—
Commercial real estate loans – owner-occupied	—		—		—		—		212,515		212,515		—
Commercial real estate loans – all other	20		—		2,117		2,137		144,539		146,676		—
Residential mortgage loans – multi-family	—		—		—		—		95,276		95,276		—
Residential mortgage loans – single family	835		—		285		1,120		63,206		64,326		—
Land development loans	—		—		364		364		7,381		7,745		—
Consumer loans	17		—		—		17		9,670		9,687		—
Total	$	1,425	$	—	$	2,766	$	4,191	$	833,780	$	837,971	$	—

Loans on Nonaccrual Status by Portfolio Type

The following table provides information with respect to loans on nonaccrual status, by portfolio type, as of March 31, 2015 and December 31, 2014:

	March 31, 2015		December 31, 2014
	(Dollars in thousands)
Nonaccrual loans:
Commercial loans	$	14,628	$	16,182
Commercial real estate loans – owner occupied	2,138		2,171
Commercial real estate loans – all other	2,117		2,117
Residential mortgage loans – multi-family	456		—
Residential mortgage loans – single family	1,347		1,472
Land development loans	1,717		2,111
Total(1)	$	22,403	$	24,053

(1)    Nonaccrual loans may include loans that are currently considered performing loans.

Summary of Loans by Portfolio Type and Internal Credit Quality Ratings

We classify our loan portfolio using internal asset quality ratings. The following table provides a summary of loans by portfolio type and our internal asset quality ratings as of March 31, 2015 and December 31, 2014:

	March 31, 2015		December 31, 2014
	(Dollars in thousands)
Pass:
Commercial loans	$	295,666	$	280,102
Commercial real estate loans – owner occupied	207,869		208,687
Commercial real estate loans – all other	131,050		128,974
Residential mortgage loans – multi family	82,218		94,817
Residential mortgage loans – single family	63,401		62,854
Land development loans	2,879		5,634
Consumer loans	13,598		9,687
Total pass loans	$	796,681	$	790,755
Special Mention:
Commercial loans	$	—	$	351
Commercial real estate loans – all other	10,732		6,588
Residential mortgage loans – multi family	—		459
Total special mention loans	$	10,732	$	7,398
Substandard:
Commercial loans	$	16,363	$	19,655
Commercial real estate loans – owner occupied	3,785		3,828
Commercial real estate loans – all other	8,634		11,114
Residential mortgage loans – multi family	456		—
Residential mortgage loans – single family	1,347		1,472
Land development loans	1,717		2,111
Total substandard loans	$	32,302	$	38,180
Doubtful:
Commercial loans	$	584	$	1,638
Total doubtful loans	$	584	$	1,638
Total Loans:	$	840,299	$	837,971

Schedule of Impaired Loans

Average balances and interest income recognized on impaired loans, by portfolio type, for the three months ended March 31, 2015 and 2014 were as follows:

	Three Months Ended March 31,
	2015				2014
	Average Balance		Interest Income Recognized		Average Balance		Interest Income Recognized
	(Dollars in thousands)
No allowance recorded:
Commercial loans	$	11,319	$	116	$	8,035	$	50
Commercial real estate loans – owner occupied	2,330		—		2,477		—
Commercial real estate loans – all other	7,785		51		9,377		64
Residential mortgage loans – multi-family	57		5		—		—
Residential mortgage loans – single family	3,149		29		2,298		20
Land development loans	989		7		397		—
Total	25,629		208		22,584		134
With allowance recorded:
Commercial loans	2,532		—		1,261		28
Commercial real estate loans – owner occupied	61		—		—		—
Total	2,593		—		1,261		28
Total
Commercial loans	13,851		116		9,296		78
Commercial real estate loans – owner occupied	2,391		—		2,477		—
Commercial real estate loans – all other	7,785		51		9,377		64
Residential mortgage loans – multi-family	57		5		—		—
Residential mortgage loans – single family	3,149		29		2,298		20
Land development loans	989		7		397		—
Total	$	28,222	$	208	$	23,845	$	162

The table below contains additional information with respect to impaired loans, by portfolio type, as of March 31, 2015 and December 31, 2014:

	March 31, 2015						December 31, 2014
	Recorded Investment		Unpaid Principal Balance		Related Allowance (1)		Recorded Investment		Unpaid Principal Balance		Related Allowance (1)
	(Dollars in thousands)
No allowance recorded:
Commercial loans	$	15,383	$	15,510	$	—	$	18,563	$	18,839	$	—
Commercial real estate loans – owner occupied	2,138		2,436		—		2,171		2,440		—
Commercial real estate loans – all other	5,348		5,406		—		5,365		5,423		—
Residential mortgage loans – multi-family	456		456		—		—		—		—
Residential mortgage loans – single family	4,231		4,368		—		4,373		4,610		—
Land development loans	1,717		1,732		—		2,111		2,146		—
Total	29,273		29,908		—		32,583		33,458		—
With allowance recorded:
Commercial loans	$	1,463	$	1,890	$	812	$	2,554	$	2,983	$	1,532
Total	1,463		1,890		812		2,554		2,983		1,532
Total
Commercial loans	$	16,846	$	17,400	$	812	$	21,117	$	21,822	$	1,532
Commercial real estate loans – owner occupied	2,138		2,436		—		2,171		2,440		—
Commercial real estate loans – all other	5,348		5,406		—		5,365		5,423		—
Residential mortgage loans – multi-family	456		456		—		—		—		—
Residential mortgage loans – single family	4,231		4,368		—		4,373		4,610		—
Land development loans	1,717		1,732		—		2,111		2,146		—
Total	30,736		31,798		812		35,137		36,441		1,532

(1) When the discounted cash flows, collateral value or market price equals or exceeds the recorded investment in the loan, then specific reserves are not required to be set aside for the loan within the ALLL. This typically occurs when the impaired loans have been partially charged-off and/or there have been interest payments received and applied to the balance of the principal outstanding.

The following table sets forth information regarding impaired loans, at March 31, 2015 and December 31, 2014:

	March 31, 2015		December 31, 2014
	(Dollars in thousands)
Impaired loans:
Nonaccruing loans	$	18,186	$	18,118
Nonaccruing restructured loans	4,217		5,935
Accruing restructured loans (1)	8,333		11,084
Accruing impaired loans	—		—
Total impaired loans	$	30,736	$	35,137
Impaired loans less than 90 days delinquent and included in total impaired loans	$	30,002	$	32,371

(1) See "Troubled Debt Restructurings" below for a description of accruing restructured loans at March 31, 2015 and December 31, 2014.

Troubled Debt Restructurings

The following table presents loans restructured as TDRs during the three months ended March 31, 2015 and 2014:

	March 31, 2015					March 31, 2014
(Dollars in thousands)	Number of loans	Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment		Number of loans	Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
Performing
Commercial real estate – all other	—	$	—	$	—	1	$	613	$	613
	—	—		—		1	613		613
Nonperforming
Land development loans	—	—		—		1	439		439
	—	—		—		1	439		439
Total troubled debt restructurings(1)	—	$	—	$	—	2	$	1,052	$	1,052

(1) No loans were restructured during the three months ended March 31, 2015.

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Regulatory Capital

3 Months Ended

Mar. 31, 2015

Regulatory Capital Requirements [Abstract]

Regulatory Capital

Regulatory Capital

Under federal banking regulations that apply to all United States based bank holding companies and federally insured banks, the Company (on a consolidated basis) and the Bank (on a stand-alone basis) must meet specific capital adequacy requirements that, for the most part, involve quantitative measures, primarily in terms of the ratios of their capital to their assets, liabilities, and certain off-balance sheet items, calculated under regulatory accounting practices. Under those regulations, each bank holding company must meet a minimum capital ratio and each federally insured bank is determined by its primary federal bank regulatory agency to come within one of the following capital adequacy categories on the basis of its capital ratios:

• well capitalized

• adequately capitalized

• undercapitalized

• significantly undercapitalized; or

• critically undercapitalized

Certain qualitative assessments also are made by a banking institution’s primary federal regulatory agency that could lead the agency to determine that the banking institution should be assigned to a lower capital category than the one indicated by the quantitative measures used to assess the institution’s capital adequacy. At each successive lower capital category, a banking institution is subject to greater operating restrictions and increased regulatory supervision by its federal bank regulatory agency.

The following table sets forth the capital and capital ratios of the Company (on a consolidated basis) and the Bank (on a stand-alone basis) at March 31, 2015, as compared to the respective regulatory requirements applicable to them.

					Applicable Federal Regulatory Requirement
					For Capital Adequacy Purposes			To be Categorized As Well Capital
	Amount		Ratio		Amount		Ratio	Amount		Ratio
	(Dollars in thousands)
Total Capital to Risk Weighted Assets:
Company	$	146,365	16.9	%	$	69,228	At least 8.0	N/A		N/A
Bank	126,456		14.7	%	68,773		At least 8.0	$	85,967	At least 10.0
Common Equity Tier 1 Capital to Risk Weighted Assets:
Company	$	107,756	12.5	%	$	38,941	At least 4.5	N/A		N/A
Bank	115,655		13.5	%	38,685		At least 4.5	$	55,878	At least 6.5
Tier 1 Capital to Risk Weighted Assets:
Company	$	135,494	15.7	%	$	51,921	At least 6.0	N/A		N/A
Bank	115,655		13.5	%	51,580		At least 6.0	$	68,773	At least 8.0
Tier 1 Capital to Average Assets:
Company	$	135,494	13.0	%	$	41,745	At least 4.0	N/A		N/A
Bank	115,655		11.1	%	41,524		At least 4.0	$	51,905	At least 5.0

In early July 2013, the Federal Reserve Board and the FDIC issued final rules implementing the Basel III regulatory capital framework and related Dodd-Frank Wall Street Reform and Consumer Protection Act changes.  The rules revise minimum capital requirements and adjust prompt correct action thresholds.  The final rules revise the regulatory capital elements, add a new common equity Tier 1 capital ratio, increase the minimum Tier 1 capital ratio requirement, and implement a new capital conservation buffer.  The rules also permit certain banking organizations to retain, through a one-time election, the existing treatment for accumulated other comprehensive income.  The final rules took effect for community banks on January 1, 2015, subject to a transition period for certain parts of the rules.  At March 31, 2015 the Bank (on a stand-alone basis) continued to qualify as a well-capitalized institution, and the Company continued to exceed the minimum required capital ratios applicable to it, under the capital adequacy guidelines described above.

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Earnings Per Share ("EPS")

3 Months Ended

Mar. 31, 2015

Earnings Per Share [Abstract]

Earnings Per Share ("EPS")

Earnings Per Share (“EPS”)

Basic EPS excludes dilution and is computed by dividing net income or loss available to common shareholders by the weighted average number of common shares outstanding for the period. Diluted EPS reflects the potential dilution that could occur if stock options or other contracts to issue common stock were exercised or converted into common stock that would then share in our earnings.

The following table shows how we computed basic and diluted EPS for the three months ended March 31, 2015 and 2014.

(In thousands, except per share data)	For the Three Months Ended March 31,
	2015			2014
Numerator:
Net loss from continuing operations	$	(85	)	$	(733	)
Accumulated undeclared dividends on preferred stock	(309		)	(296		)
Numerator for basic and diluted net loss from continuing operations	(394		)	(1,029		)
Net income from discontinued operations	—			1,184
Numerator for basic and diluted net (loss) income available to common shareholders	$	(394	)	$	155
Denominator:
Basic weighted average outstanding shares of common stock	19,617			19,146
Dilutive effect of employee stock options and contingently issuable shares	—			—
Diluted weighted average common stock and common stock equivalents	19,617			19,146
Basic (loss) income per common share:
Net loss from continuing operations	$	(0.02	)	$	(0.05	)
Net income from discontinued operations	$	—		$	0.06
Net (loss) income available to common shareholders	$	(0.02	)	$	0.01
Diluted (loss) income per common share:
Net loss from continuing operations	$	(0.02	)	$	(0.05	)
Net income from discontinued operations	$	—		$	0.06
Net (loss) income available to common shareholders	$	(0.02	)	$	0.01

The weighted average shares that have an antidilutive effect in the calculation of diluted net loss per share and have been excluded from the computations above were as follows:

	For the Three Months Ended March 31,
	2015	2014
Stock options(1)	1,135,864	1,574,097
Convertible securities(2)	2,734,018	2,522,004
Shares subject to stock purchase warrants(3)	761,278	761,278

(1) Stock options were excluded from the computation of diluted earnings per common share for the three months ended March 31, 2015 and 2014 as we reported a net loss from continuing operations.

(2) Convertible securities were excluded from the computation of diluted earnings per common share for the three months ended March 31, 2015 and 2014 as we reported a net loss from continuing operations.

(3) Stock purchase warrants were excluded from the computation of diluted earnings per common share for the three months ended March 31, 2015 and 2014 because the exercisability of those warrants is conditioned on the happening of certain future events.

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Stock-Based Employee Compensation Plans - Compensation Expense Expected to be Recognized (Detail) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Estimated Stock Based Compensation Expense for remainder of year 2015	$ 958
Estimated Stock Based Compensation Expense for year 2016	776
Estimated Stock Based Compensation Expense for year 2017	294
Estimated Stock Based Compensation Expense for year 2018	57
Estimated Stock Based Compensation Expense for year 2019 and Beyond	6
Estimated Stock Based Compensation Expense	2,091
Stock Options [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Estimated Stock Based Compensation Expense for remainder of year 2015	428
Estimated Stock Based Compensation Expense for year 2016	298
Estimated Stock Based Compensation Expense for year 2017	109
Estimated Stock Based Compensation Expense for year 2018	33
Estimated Stock Based Compensation Expense for year 2019 and Beyond	6
Estimated Stock Based Compensation Expense	874
Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Estimated Stock Based Compensation Expense for remainder of year 2015	530
Estimated Stock Based Compensation Expense for year 2016	479
Estimated Stock Based Compensation Expense for year 2017	186
Estimated Stock Based Compensation Expense for year 2018	23
Estimated Stock Based Compensation Expense for year 2019 and Beyond	0
Estimated Stock Based Compensation Expense	$ 1,218

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Income Taxes

3 Months Ended

Mar. 31, 2015

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

For the three months ended March 31, 2015 and the three months ended March 31, 2014, we recorded no income tax provision. Our net deferred tax asset at March 31, 2015 was $5.9 million, net of a valuation allowance of $11.6 million. Based on the analysis performed, and the positive and negative evidence considered, management chose not to release any portion of the $11.6 million valuation allowance as of March 31, 2015. Positive evidence included improvement in asset quality, tax planning strategies, and economic conditions. Negative evidence included our current period loss, historical losses over the previous 12 quarter look back period and our accumulated deficit. Accordingly, there was no change in our net deferred tax asset from December 31, 2014. Our net deferred tax asset at March 31, 2014 was $7.1 million, net of a valuation allowance of $11.7 million. Based on the analysis performed, and the positive and negative evidence considered, management chose not to release any portion of the $11.7 million valuation allowance as of March 31, 2014. Positive evidence included improvement in our asset quality, tax planning strategies, and economic conditions. Negative evidence included historical operating losses and our accumulated deficit. Management determined the negative evidence was significant enough to outweigh the positive evidence and support no reversal of the valuation allowance; however, we did conclude that it was more-likely-than-not that the existing $7.1 million net deferred tax asset at the time would be realized.

We file income tax returns with the U.S. federal government and the state of California. As of March 31, 2015, we were subject to examination by the Internal Revenue Service with respect to our U.S. federal tax returns for the 2011 to 2013 tax years and Franchise Tax Board for California state income tax returns for the 2010 to 2013 tax years. Net operating losses (“NOLs”) on our U.S. federal and California state income tax returns may be carried forward twenty years. As of March 31, 2015, we do not believe there will be any material adverse changes in our unrecognized tax benefits over the next 12 months.

Our policy is to recognize interest and penalties accrued on any unrecognized tax benefits as a component of tax expense. We did not have any accrued interest or penalties associated with any unrecognized tax benefits, and no interest expense was recognized during the three months ended March 31, 2015 and 2014.

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Stock-Based Employee Compensation Plans

3 Months Ended

Mar. 31, 2015

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock-Based Employee Compensation Plans

Stock-Based Employee Compensation Plans

In May 2010, our shareholders approved the adoption of our 2010 Equity Incentive Plan (the “2010 Incentive Plan”), which authorized and set aside a total of 400,000 shares of our common stock for issuance on the exercise of stock options or the grant of restricted stock or other equity incentives to our officers, and other key employees and directors. An additional 158,211 shares of common stock were also set aside which was equal to the total of the shares that were available for the grant of equity incentives under our shareholder-approved 2008 and 2004 Equity Incentive Plans (the "Previously Approved Plans") at the time of the adoption of the 2010 Incentive Plan. Options to purchase a total of 536,600 shares of our common stock granted under the Previously Approved Plans were outstanding at March 31, 2015. The 2010 Incentive Plan provides that if any of these outstanding options under the Previously Approved Plans expire or are terminated for any reason, then the number of shares that would become available for grants or awards of equity incentives under the 2010 Incentive Plan would be increased by an equivalent number of shares. At the Annual Shareholders meeting held in May 2013, our shareholders approved an additional 800,000 share increase in the maximum number of shares of our common stock that may be issued pursuant to grants or exercises of options or restricted shares or other equity incentives under the 2010 Incentive Plan, of which 49,987 shares of restricted stock have vested as of March 31, 2015 thereby decreasing the maximum number of shares authorized under the 2010 Incentive Plan. As a result, as of March 31, 2015, the maximum number of shares that were authorized for the grant of options or other equity incentives under the 2010 Incentive Plan totaled 1,844,824 (assuming that all 536,600 shares of our common stock subject to options under the Previously Approved Plans expire or are terminated), or approximately 9% of the shares of our common stock then outstanding.

A stock option entitles the recipient to purchase shares of our common stock at a price per share that may not be less than 100% of the fair market value of the Company’s shares on the date the option is granted. Restricted shares may be granted at such purchase prices and on such other terms, including restrictions and Company repurchase or reacquisition rights, as are fixed by the Compensation Committee at the time rights to purchase such restricted shares are granted. Stock Appreciation Rights ("SARs") entitle the recipient to receive a cash payment in an amount equal to the difference between the fair market value of the Company’s shares on the date of vesting and a “base price” (which, in most cases, will be equal to the fair market value of the Company’s shares on the date the SAR is granted), subject to the right of the Company to make such payment in shares of its common stock at their then fair market value. Options, restricted shares and SARs may vest immediately or in installments over various periods generally ranging up to five years, subject to the recipient’s continued employment or service or the achievement of specified performance goals, as determined by the Compensation Committee at the time it grants or awards the options, the restricted shares or the SARs. Stock options and SARs may be granted for terms of up to 10 years after the date of grant, but will terminate sooner upon or shortly after a termination of service occurring prior to the expiration of the term of the option or SAR. The Company will become entitled to repurchase any unvested restricted shares, at the same price that was paid for the shares by the recipient, or to cancel those shares in the event of a termination of employment or service of the holder of such shares or if any performance goals specified in the award are not satisfied. To date, the Company has not granted any SARs.

Under FASB ASC 718-10, we are required to recognize, in our financial statements, the fair value of the options or any restricted shares that we grant as compensation cost over their respective service periods. The fair values of the options that were outstanding at March 31, 2015 under the 2010 Incentive Plan were estimated as of their respective dates of grant using the Black-Scholes option-pricing model. The Company, under the 2010 Incentive Plan, granted restricted stock for the benefit of its employees and directors. These restricted shares vest over a period of three years for employees and one year for directors. The recipients of restricted shares have the right to vote all shares subject to such grant and receive all dividends with respect to such shares whether or not the shares have vested. The recipients do not pay any cash consideration for the shares.

Stock Options

The table below summarizes the weighted average assumptions used to determine the fair values of the options granted during the following periods:

	Three Months Ended March 31,
Assumptions with respect to:	2015			2014
Expected volatility	44		%	44		%
Risk-free interest rate	1.82		%	2.08		%
Expected dividends	—		%	0.61		%
Expected term (years)	6.0			6.7
Weighted average fair value of options granted during period	$	3.13		$	2.75

The following table summarizes the stock option activity under the Company’s equity incentive plans during the three months ended March 31, 2015 and 2014, respectively.

	Number of Shares		Weighted- Average Exercise Price Per Share		Number of Shares		Weighted- Average Exercise Price Per Share
	2015				2014
Outstanding – January 1,	1,257,390		$	6.51	1,821,000		$	6.88
Granted	112,828		7.09		41,892		6.18
Exercised	(204,312	)	5.47		(65,000	)	3.51
Forfeited/Canceled	(105,218	)	12.38		(235,100	)	11.22
Outstanding – March 31,	1,060,688		6.19		1,562,792		6.35
Options Exercisable – March 31,	532,418		$	5.96	771,107		$	6.61
Options Vested – March 31,	532,418		$	5.96	771,107		$	6.61

Options to purchase 204,312 shares of our common stock were exercised during the three months ended March 31, 2015. Options to purchase 65,000 shares of our common stock were exercised during the three months ended March 31, 2014. The aggregate intrinsic value of options exercised during the three months ended March 31, 2015 and 2014 was $322 thousand and $174 thousand, respectively. The fair values of options that vested during the three months ended March 31, 2015 and 2014 was $71 thousand and $70 thousand, respectively.

The following table provides additional information regarding the vested and unvested options that were outstanding at March 31, 2015.

Options Outstanding as of March 31, 2015						Options Exercisable as of March 31, 2015(1)
	Vested	Unvested	Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (Years)	Shares	Weighted Average Exercise Price
$2.97 – $5.99	241,744	22,285	$	3.91	5.45	241,744	$	3.82
$6.00 – $9.99	251,374	505,985	6.48		8.41	251,374	6.45
$10.00 – $12.99	5,000	—	12.02		0.05	5,000	12.02
$13.00 – $17.99	19,800	—	15.44		1.29	19,800	15.44
$18.00 – $18.84	14,500	—	18.09		0.83	14,500	18.09
	532,418	528,270	$	6.19	7.39	532,418	$	5.96

(1) The weighted average remaining contractual life of the options that were exercisable as of March 31, 2015 was 6.16 years.

The aggregate intrinsic value of options that were outstanding and exercisable under the 2010 Incentive Plan at March 31, 2015 and December 31, 2014 was $1.0 million and $1.2 million, respectively.

A summary of the status of the unvested options outstanding as of March 31, 2015, and changes in the weighted average grant date fair values of the unvested options during the three months ended March 31, 2015, are set forth in the following table.

	For the three months ended
	2015				2014
	Number of Shares Subject to Options		Weighted Average Grant Date Fair Value		Number of Shares Subject to Options		Weighted Average Grant Date Fair Value
Unvested at the beginning of the period	468,504		$	2.68	785,566		$	2.57
Granted	112,828		3.13		41,892		2.75
Vested	(31,915	)	2.24		(34,773	)	2.00
Forfeited/Canceled	(21,147	)	2.56		(1,000	)	2.68
Unvested at the end of the period	528,270		2.81		791,685		2.60

At March 31, 2015, the weighted average period over which nonvested awards were expected to be recognized was 2.05 years.

Restricted Stock

The following table summarizes the activity related to restricted stock granted, vested and forfeited under our equity incentive plans during the three months ended March 31, 2015.

	For the Three Months Ended
	March 31, 2015				March 31, 2014
	Number of Shares		Average Grant Date Fair Value		Number of Shares	Average Grant Date Fair Value
Outstanding at the beginning of the period	141,254		$	6.29	141,284	$	6.23
Granted	94,675		7.10		18,608	6.18
Vested	(4,987	)	6.18		—	—
Forfeited	(3,638	)	6.18		—	—
Outstanding at the end of the period	227,304		$	6.63	159,892	$	6.23

Compensation Expense

We expect that the compensation expense that will be recognized during the periods presented below in respect of stock options and restricted stock outstanding at March 31, 2015, will be as follows:

	Estimated Stock Based Compensation Expense Stock Options		Estimated Stock Based Compensation Expense Restricted Stock		Estimated Stock Based Compensation Expense Total
(Dollars in thousands)
For the years ending December 31,
Remainder of 2015	$	428	$	530	$	958
2016	298		479		776
2017	109		186		294
2018	33		23		57
2019 and beyond	6		—		6
	$	874	$	1,218	$	2,091

The aggregate amounts of stock based compensation expense recognized in our consolidated statements of operations for the three months ended March 31, 2015 and 2014 were $316 thousand and $277 thousand, respectively, in each case net of taxes.

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Shareholders' Equity

3 Months Ended

Mar. 31, 2015

Equity [Abstract]

Shareholders' Equity

Shareholders’ Equity

Accumulated Other Comprehensive Income (Loss), net

Accumulated other comprehensive income (loss), net as of March 31, 2015 and December 31, 2014 was as follows:

	Unrealized Gain (Loss) on Securities Available-for-Sale, net of tax			Accumulated Other Comprehensive Income, Net
	(Dollars in thousands)
Ending balance as of December 31, 2013	$	(2,154	)	$	(2,154	)
Other comprehensive income before reclassifications, net of tax provision of $847 thousand (1)	1,462			1,462
Amounts reclassified from accumulated other comprehensive loss, net of tax	—			—
Other comprehensive income, net of tax provision of $847 thousand	1,462			1,462
Ending balance as of December 31, 2014	$	(692	)	$	(692	)
Other comprehensive income before reclassifications, net of tax provision of $0	188			188
Amounts reclassified from accumulated other comprehensive income, net of tax	—			—
Other comprehensive income, net of tax provision of $0	188			188
Ending balance as of March 31, 2015	$	(504	)	$	(504	)

(1) Tax impact included in Deferred tax assets.

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Shareholders' Equity - Accumulated Other Comprehensive Income (Loss) (Details 2) (USD $) In Thousands, unless otherwise specified	3 Months Ended	12 Months Ended
	Mar. 31, 2015	Dec. 31, 2014
Unrealized Gain (Loss) on Securities Available-for-Sale, Tax
Other comprehensive income (loss) before reclassifications, tax provision	$ 0	$ 847
Other comprehensive income (loss), tax provision	$ 0	$ 847

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Commitments and Contingencies - Repurchase Reserves (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended	12 Months Ended
	Mar. 31, 2015	Dec. 31, 2014
Repurchase Reserve [Roll Forward]
Beginning balance	$ 381	$ 1,883
(Recovery of)/Provision for repurchases	(16)	(1,502)
Settlements	0	0
Total repurchases reserve	$ 365	$ 381

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Shareholders' Equity - Accumulated Other Comprehensive Income (Loss) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended	12 Months Ended
	Mar. 31, 2015	Dec. 31, 2014
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Beginning Balance	$ (692)	$ (2,154)
Other comprehensive income (loss) before reclassifications, net of tax	188	1,462
Amounts reclassified from accumulated other comprehensive income (loss), net of tax	0	0
Other comprehensive income (loss), net of tax	188	1,462
Ending Balance	(504)	(692)
Unrealized Gain (Loss) on Securities Available-for-Sale, net of tax [Member]
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Beginning Balance	(692)	(2,154)
Other comprehensive income (loss) before reclassifications, net of tax	188	1,462
Amounts reclassified from accumulated other comprehensive income (loss), net of tax	0	0
Other comprehensive income (loss), net of tax	188	1,462
Ending Balance	$ (504)	$ (692)

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Fair Value Measurements - Valuation Techniques for Level 3 Financial Instruments (Details) (Level 3 [Member], USD $) In Thousands, unless otherwise specified	Mar. 31, 2015
Assets [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Assets, Fair Value Disclosure	$ 32,174
Asset-backed security [Member] | Third-Party Pricing
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Assets, Fair Value Disclosure	1,438
Impaired loans [Member] | Third-Party Pricing
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Assets, Fair Value Disclosure	$ 30,736

XML

Loans and Allowance for Loan and Lease Losses - Troubled Debt Restructurings (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015 Loan	Mar. 31, 2014 Loan
Financing Receivable, Modifications [Line Items]
Number of loans	0	2
Pre-Modification Outstanding Recorded Investment	$ 0	$ 1,052
Post Modification Outstanding Recorded Investment	0	1,052
Performing [Member]
Financing Receivable, Modifications [Line Items]
Number of loans	0	1
Pre-Modification Outstanding Recorded Investment	0	613
Post Modification Outstanding Recorded Investment	0	613
Performing [Member] | All other [Member] | Commercial real estate [Member]
Financing Receivable, Modifications [Line Items]
Number of loans	0	1
Pre-Modification Outstanding Recorded Investment	0	613
Post Modification Outstanding Recorded Investment	0	613
Nonperforming [Member]
Financing Receivable, Modifications [Line Items]
Number of loans	0	1
Pre-Modification Outstanding Recorded Investment	0	439
Post Modification Outstanding Recorded Investment	0	439
Nonperforming [Member] | Land development loans [Member]
Financing Receivable, Modifications [Line Items]
Number of loans	0	1
Pre-Modification Outstanding Recorded Investment	0	439
Post Modification Outstanding Recorded Investment	$ 0	$ 439

XML

Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2015

Fair Value Disclosures [Abstract]

Assets and Liabilities Measured at Fair Value on Recurring Basis

The following tables show the recorded amounts of assets and liabilities measured at fair value on a recurring basis at March 31, 2015 and December 31, 2014:

	At March 31, 2015
(Dollars in thousands)	Total		Level 1		Level 2		Level 3
Assets and Liabilities at Fair Value:
Investment securities available for sale
Residential mortgage backed securities issued by U.S. agencies	$	51,972	$	—	$	51,972	$	—
Residential collateralized mortgage obligations issued by non-agency	754		—		754		—
Asset-backed security	1,438		—		—		1,438
Mutual funds	4,804		4,804		—		—
Total securities available for sale at fair value	$	58,968	$	4,804	$	52,726	$	1,438

	At December 31, 2014
(Dollars in thousands)	Total		Level 1		Level 2		Level 3
Assets and Liabilities at Fair Value:
Investment securities available for sale
Residential mortgage backed securities issued by U.S. agencies	$	53,739	$	—	$	53,739	$	—
Residential collateralized mortgage obligations issued by non-agency	777		—		777		—
Asset-backed security	1,650		—		—		1,650
Mutual funds	4,760		4,760		—		—
Total securities available for sale at fair value	$	60,926	$	4,760	$	54,516	$	1,650

Changes in Level 3 Assets Measured at Fair Value on Recurring Basis

The changes in Level 3 assets measured at fair value on a recurring basis are summarized as follows for the three months ended March 31, 2015:

	Asset Backed Securities
	(Dollars in thousands)
Balance of recurring Level 3 instruments at December 31, 2014	$	1,650
Total gains or losses (realized/unrealized):
Included in other comprehensive income	(202		)
Settlements	(10		)
Transfers in and/or out of Level 3	—
Balance of Level 3 assets at March 31, 2015	$	1,438

Assets Measured at Fair Value on Nonrecurring Basis

Information regarding assets measured at fair value on a nonrecurring basis is set forth in the table below.

	At March 31, 2015
	Total		Level 1		Level 2		Level 3
Assets at Fair Value:	(Dollars in thousands)
Impaired loans	$	30,736	$	—	$	—	$	30,736
Other real estate owned	1,872		—		1,872		—
Total	$	32,608	$	—	$	1,872	$	30,736

Summary of Significant Unobservable Inputs and Valuation Techniques

For our fair value measurements classified in Level 3 of the fair value hierarchy as of March 31, 2015, a summary of the significant unobservable inputs and valuation techniques is as follows:

	Fair Value Measurement as of March 31, 2015		Valuation Techniques(3)	Unobservable Inputs(3)	Range	Weighted Average
	(Dollars in thousands)
Assets
Asset-backed security	$	1,438	Third-Party Pricing	Marketability discount	N/A (1)	N/A (1)
				Illiquidity discount	N/A (1)	N/A (1)
Impaired loans	30,736		Third-Party Pricing	Appraisals	N/A (2)	N/A (2)
	$	32,174

(1) Information is unavailable as valuation was obtained from third-party pricing services.

(2) We obtain appraisals for our various properties included within impaired loans which primarily rely upon market comparisons. These market comparisons support our assumption that the carrying value of the respective loans either requires or does not require additional impairment.

(3) As of March 31, 2015, there has been no change to our valuation techniques or the types of unobservable inputs used in the calculation of fair value from December 31, 2014.

Estimated Fair Values and Amounts of Financial Instruments

The table below provides estimated fair values and related carrying amounts of our financial instruments as of March 31, 2015 and December 31, 2014, excluding financial assets and liabilities which are recorded at fair value on a recurring basis.

	Estimated Fair Value
	At March 31, 2015										At December 31, 2014
	Carrying Value		Total		Level 1		Level 2		Level 3		Carrying Value		Total		Level 1	Level 2	Level 3
	(Dollars in thousands)
Financial assets:
Cash and cash equivalents	$	137,739	$	137,739	$	137,739	$	—	$	—	$	177,135	$	177,135	177,135	—	—
Interest-bearing deposits with financial institutions	4,668		4,668		4,668		—		—		4,668		4,668		4,668	—	—
Federal Reserve Bank of San Francisco and Federal Home Loan Bank stock	8,137		8,137		8,137		—		—		8,137		8,137		8,137	—	—
Loans, net	827,754		822,570		—		—		822,570		824,197		818,547		—	—	818,547
Accrued interest receivable	2,500		2,500		2,500		—		—		2,436		2,436		2,436	—	—
Financial liabilities:
Noninterest bearing deposits	237,932		237,932		237,932		—		—		237,491		237,491		237,491	—	—
Interest-bearing deposits	648,051		647,988		—		647,988		—		678,818		678,890		—	678,890	—
Borrowings	30,000		30,000		—		30,000		—		39,500		39,418		—	39,418	—
Junior subordinated debentures	17,527		17,527		—		17,527		—		17,527		17,527		—	17,527	—
Accrued interest payable	193		193		193		—		—		222		222		222	—	—

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Shareholders' Equity (Tables)

3 Months Ended

Mar. 31, 2015

Equity [Abstract]

Schedule of Accumulated Other Comprehensive Income

Accumulated other comprehensive income (loss), net as of March 31, 2015 and December 31, 2014 was as follows:

	Unrealized Gain (Loss) on Securities Available-for-Sale, net of tax			Accumulated Other Comprehensive Income, Net
	(Dollars in thousands)
Ending balance as of December 31, 2013	$	(2,154	)	$	(2,154	)
Other comprehensive income before reclassifications, net of tax provision of $847 thousand (1)	1,462			1,462
Amounts reclassified from accumulated other comprehensive loss, net of tax	—			—
Other comprehensive income, net of tax provision of $847 thousand	1,462			1,462
Ending balance as of December 31, 2014	$	(692	)	$	(692	)
Other comprehensive income before reclassifications, net of tax provision of $0	188			188
Amounts reclassified from accumulated other comprehensive income, net of tax	—			—
Other comprehensive income, net of tax provision of $0	188			188
Ending balance as of March 31, 2015	$	(504	)	$	(504	)

(1) Tax impact included in Deferred tax assets.

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Loans and Allowance for Loan and Lease Losses - Nonaccrual Loans and Restructured Loans (Detail) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Impaired loans:
Nonaccruing loans	$ 18,186	$ 18,118
Nonaccruing restructured loans	4,217	5,935
Accruing restructured loans	8,333	11,084
Accruing impaired loans	0	0
Total impaired loans	30,736	35,137
Impaired loans less than 90 days delinquent [Member]
Impaired loans:
Total impaired loans	$ 30,002	$ 32,371

XML

Investments - Other Investments (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Dec. 31, 2014 Investment
Investments [Abstract]
Number of investments accounted for under the equity method			1
Investment in limited partnership, percent of investment redeemed	100.00%
Return of capital	$ 2,087	$ 0
Investments accounted for under the equity method	$ 0		$ 2,081

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Statement of Comprehensive Income [Abstract]
Net (loss) income	$ (85)	$ 451
Other comprehensive income, net of tax:
Change in unrealized gain on securities available for sale	188	617
Total comprehensive income	$ 103	$ 1,068

XML

Fair Value Measurements

3 Months Ended

Mar. 31, 2015

Fair Value Disclosures [Abstract]

Fair Value Measurements

Fair Value Measurements

Under FASB Accounting Standards Codification (“ASC”) 820-10, we group assets and liabilities at fair value in three levels, based on the markets in which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value. These levels are:

Level 1	Valuation is based upon quoted prices for identical instruments traded in active markets.
Level 2	Valuation is based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market.
Level 3	Valuation is generated from model-based techniques that use at least one significant assumption not observable in the market. These unobservable assumptions reflect estimates of assumptions that market participants would use in pricing the asset or liability. Valuation techniques include use of option pricing models, discounted cash flow models and similar techniques.

Risks with Fair Value Measurements

Fair value estimates are made at a discrete point in time based on relevant market information and other information about the financial instruments. Because no active market exists for a significant portion of our financial instruments, fair value estimates are based in large part on judgments we make primarily regarding current economic conditions, risk characteristics of various financial instruments, prepayment rates, and future expected loss experience. These estimates are subjective in nature and invariably involve some inherent uncertainties. Additionally, the occurrence of unexpected events or changes in circumstances can occur that could require us to make changes to our assumptions and which, in turn, could significantly affect and require us to make changes to our previous estimates of fair value.

In addition, the fair value estimates are based on existing on and off-balance sheet financial instruments without attempting to estimate the value of existing and anticipated future customer relationships and the value of assets and liabilities that are not considered financial instruments, such as premises and equipment and OREO.

Measurement Methodology

Cash and Cash Equivalents. The fair value of cash and cash equivalents approximates its carrying value.

Interest-Bearing Deposits with Financial Institutions. The fair values of interest-bearing deposits maturing within one year approximate their carrying values.

FHLB and FRBSF Stock. The Bank is a member of the Federal Home Loan Bank of San Francisco (“FHLB”) and the FRBSF. As members, we are required to own stock of the FHLB and the FRBSF, the amount of which is based primarily on the level of our borrowings from those institutions. We also have the right to acquire additional shares of stock in either or both of the FHLB and the FRBSF; however, to date, we have not done so. The fair values of the FHLB and FRBSF stock are equal to their respective carrying amounts, are classified as restricted securities and are periodically evaluated for impairment based on our assessment of the ultimate recoverability of our investments in that stock. Any cash or stock dividends paid to us on such stock are reported as income.

Investment Securities Available for Sale.Fair value measurement for our investment securities available for sale is based upon quoted prices, if available. If quoted prices are not available, fair values are measured using independent pricing models or other model-based valuation techniques such as the present value of future cash flows, adjusted for the security’s credit rating, prepayment assumptions and other factors such as credit loss assumptions. Level 1 investment securities include those traded on an active exchange, such as the New York Stock Exchange, U.S. Treasury securities that are traded by dealers or brokers in active over-the- counter markets and money market funds. Level 2 investment securities include mortgage-backed securities issued by government sponsored entities, municipal bonds and corporate debt securities. Securities classified as Level 3 include asset-backed securities in less liquid markets.

Impaired Loans. Loans measured for impairment are measured at an observable market price (if available), or the fair value of the loan’s collateral (if the loan is collateral dependent). The fair value of an impaired loan may be estimated using one of several methods, including collateral value, market value of similar debt, liquidation value and discounted cash flows. Those impaired loans not requiring a specific loan loss reserve represent loans for which the fair value of the expected repayments or collateral exceeds the recorded investments in such loans. When the fair value of the collateral is based on an observable market price or a current appraised value, we record the impaired loan at Level 2. When an appraised value is not available or we determine that the fair value of the collateral is further impaired below the appraised value and there is no observable market price, we record the impaired loan at Level 3.

Loans. The fair value for loans with variable interest rates less a credit discount is the carrying amount. The fair value of fixed rate loans is derived by calculating the discounted value of future cash flows expected to be received by the various homogeneous categories of loans. All loans have been adjusted to reflect changes in credit risk. Changes are not recorded directly as an adjustment to current earnings or comprehensive income, but rather as an adjustment component in determining the overall adequacy of the loan loss reserve.

Other Real Estate Owned. OREO is reported at its net realizable value (fair value less estimated costs to sell), at the time any real estate collateral is acquired by the Bank in satisfaction of a loan. Subsequently, OREO is carried at the lower of carrying value or fair value less estimated costs to sell. Fair value is determined based upon independent market prices, appraised values of the collateral or management’s estimation of the value of the collateral. When the fair value of the collateral is based on an observable market price or a current appraised value, we record the foreclosed asset at Level 2. When an appraised value is not available or management determines the fair value of the collateral is further impaired below the appraised value and there is no observable market price, we record the foreclosed asset at Level 3.

Deposits. Deposits are carried at historical cost. The carrying amounts of deposits from savings and money market accounts are deemed to approximate fair value as they either have no stated maturities or short-term maturities. Certificates of deposit are estimated utilizing discounted cash flow techniques. The interest rates applied are rates currently being offered for similar certificates of deposit.

Borrowings. The fair value of borrowings is the carrying amount for those borrowings that mature on a daily basis. The fair value of term borrowings is derived by calculating the discounted value of future cash flows expected to be paid out by the Company.

Junior Subordinated Debentures. The fair value of the junior subordinated debentures is based on quoted market prices of the underlying securities. These securities are variable rate in nature and repriced quarterly.

Commitments to Extend Credit and Standby Letters of Credit. The fair value of commitments to extend credit and standby letters of credit are based on fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements and the counterparties’ credit standing.

Interest Receivable and Interest Payable. The carrying amounts of our accrued interest receivable and accrued interest payable are deemed to approximate fair value.

Assets Recorded at Fair Value on a Recurring Basis

The following tables show the recorded amounts of assets and liabilities measured at fair value on a recurring basis at March 31, 2015 and December 31, 2014:

	At March 31, 2015
(Dollars in thousands)	Total		Level 1		Level 2		Level 3
Assets and Liabilities at Fair Value:
Investment securities available for sale
Residential mortgage backed securities issued by U.S. agencies	$	51,972	$	—	$	51,972	$	—
Residential collateralized mortgage obligations issued by non-agency	754		—		754		—
Asset-backed security	1,438		—		—		1,438
Mutual funds	4,804		4,804		—		—
Total securities available for sale at fair value	$	58,968	$	4,804	$	52,726	$	1,438

	At December 31, 2014
(Dollars in thousands)	Total		Level 1		Level 2		Level 3
Assets and Liabilities at Fair Value:
Investment securities available for sale
Residential mortgage backed securities issued by U.S. agencies	$	53,739	$	—	$	53,739	$	—
Residential collateralized mortgage obligations issued by non-agency	777		—		777		—
Asset-backed security	1,650		—		—		1,650
Mutual funds	4,760		4,760		—		—
Total securities available for sale at fair value	$	60,926	$	4,760	$	54,516	$	1,650

The changes in Level 3 assets measured at fair value on a recurring basis are summarized as follows for the three months ended March 31, 2015:

	Asset Backed Securities
	(Dollars in thousands)
Balance of recurring Level 3 instruments at December 31, 2014	$	1,650
Total gains or losses (realized/unrealized):
Included in other comprehensive income	(202		)
Settlements	(10		)
Transfers in and/or out of Level 3	—
Balance of Level 3 assets at March 31, 2015	$	1,438

Assets Recorded at Fair Value on a Nonrecurring Basis

We may be required, from time to time, to measure certain assets at fair value on a nonrecurring basis in accordance with GAAP. These nonrecurring fair value adjustments typically involve application of lower of cost or market accounting or write-downs of individual assets. Information regarding assets measured at fair value on a nonrecurring basis is set forth in the table below.

	At March 31, 2015
	Total		Level 1		Level 2		Level 3
Assets at Fair Value:	(Dollars in thousands)
Impaired loans	$	30,736	$	—	$	—	$	30,736
Other real estate owned	1,872		—		1,872		—
Total	$	32,608	$	—	$	1,872	$	30,736

Significant Unobservable Inputs and Valuation Techniques of Level 3 Fair Value Measurements

For our fair value measurements classified in Level 3 of the fair value hierarchy as of March 31, 2015, a summary of the significant unobservable inputs and valuation techniques is as follows:

	Fair Value Measurement as of March 31, 2015		Valuation Techniques(3)	Unobservable Inputs(3)	Range	Weighted Average
	(Dollars in thousands)
Assets
Asset-backed security	$	1,438	Third-Party Pricing	Marketability discount	N/A (1)	N/A (1)
				Illiquidity discount	N/A (1)	N/A (1)
Impaired loans	30,736		Third-Party Pricing	Appraisals	N/A (2)	N/A (2)
	$	32,174

(1) Information is unavailable as valuation was obtained from third-party pricing services.

(2) We obtain appraisals for our various properties included within impaired loans which primarily rely upon market comparisons. These market comparisons support our assumption that the carrying value of the respective loans either requires or does not require additional impairment.

(3) As of March 31, 2015, there has been no change to our valuation techniques or the types of unobservable inputs used in the calculation of fair value from December 31, 2014.

Fair Value Measurements for Other Financial Instruments

The table below provides estimated fair values and related carrying amounts of our financial instruments as of March 31, 2015 and December 31, 2014, excluding financial assets and liabilities which are recorded at fair value on a recurring basis.

	Estimated Fair Value
	At March 31, 2015										At December 31, 2014
	Carrying Value		Total		Level 1		Level 2		Level 3		Carrying Value		Total		Level 1	Level 2	Level 3
	(Dollars in thousands)
Financial assets:
Cash and cash equivalents	$	137,739	$	137,739	$	137,739	$	—	$	—	$	177,135	$	177,135	177,135	—	—
Interest-bearing deposits with financial institutions	4,668		4,668		4,668		—		—		4,668		4,668		4,668	—	—
Federal Reserve Bank of San Francisco and Federal Home Loan Bank stock	8,137		8,137		8,137		—		—		8,137		8,137		8,137	—	—
Loans, net	827,754		822,570		—		—		822,570		824,197		818,547		—	—	818,547
Accrued interest receivable	2,500		2,500		2,500		—		—		2,436		2,436		2,436	—	—
Financial liabilities:
Noninterest bearing deposits	237,932		237,932		237,932		—		—		237,491		237,491		237,491	—	—
Interest-bearing deposits	648,051		647,988		—		647,988		—		678,818		678,890		—	678,890	—
Borrowings	30,000		30,000		—		30,000		—		39,500		39,418		—	39,418	—
Junior subordinated debentures	17,527		17,527		—		17,527		—		17,527		17,527		—	17,527	—
Accrued interest payable	193		193		193		—		—		222		222		222	—	—

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Stock-Based Employee Compensation Plans - Summary of Status of Unvested Options Outstanding and Changes in Number of Shares Subject to and in Weighted Average Grant Date Fair Values (Detail) (USD $)	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Number of Shares Subject to Options
Unvested, Beginning of Period (shares)	468,504	785,566
Granted (shares)	112,828	41,892
Vested (shares)	(31,915)	(34,773)
Forfeited/Canceled (shares)	(21,147)	(1,000)
Unvested, End of Period (shares)	528,270	791,685
Weighted Average Grant Date Fair Value
Unvested, Beginning of Period (in dollars per share)	$ 2.68	$ 2.57
Granted (in dollars per share)	$ 3.13	$ 2.75
Vested (in dollars per share)	$ 2.24	$ 2.00
Forfeited/Canceled (in dollars per share)	$ 2.56	$ 2.68
Unvested, End of Period (in dollars per share)	$ 2.81	$ 2.60

XML

Regulatory Capital - Actual Amount and Capital Ratios of Company and Bank (Detail) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015
Company
Total Capital to Risk Weighted Assets
Total Capital to Risk Weighted Assets, Actual Capital Amount	$ 146,365
Total Capital to Risk Weighted Assets, Actual Capital Ratio	16.90%
Total Capital to Risk Weighted Assets, For Capital Adequacy Purposes, Amount	69,228
Common Equity Tier 1 Capital to Risk Weighted Assets
Common Equity Tier 1 Capital to Risk Weighted Assets, Actual Capital Amount	107,756
Common Equity Tier 1 Capital to Risk Weighted Asset, Actual Capital Ratio	12.50%
Common Equity Tier 1 Capital to Risk Weighted Assets, For Capital adequacy Purposes, Amount	38,941
Tier 1 Capital to Risk Weighted Assets
Tier 1 Capital to Risk Weighted Assets, Actual Capital Amount	135,494
Tier 1 Capital to Risk Weighted Asset, Actual Capital Ratio	15.70%
Tier 1 Capital to Risk Weighted Assets, For Capital adequacy Purposes, Amount	51,921
Tier 1 Capital to Average Assets
Tier 1 Capital to Average Assets, Actual Capital Amount	135,494
Tier 1 Capital to Average Asset, Actual Capital Ratio	13.00%
Tier 1 Capital to Average Assets, For Capital adequacy Purposes, Amount	41,745
Bank
Total Capital to Risk Weighted Assets
Total Capital to Risk Weighted Assets, Actual Capital Amount	126,456
Total Capital to Risk Weighted Assets, Actual Capital Ratio	14.70%
Total Capital to Risk Weighted Assets, For Capital Adequacy Purposes, Amount	68,773
Total Capital to Risk Weighted Assets To be Categorized as Well Capitalized, Amount	85,967
Common Equity Tier 1 Capital to Risk Weighted Assets
Common Equity Tier 1 Capital to Risk Weighted Assets, Actual Capital Amount	115,655
Common Equity Tier 1 Capital to Risk Weighted Asset, Actual Capital Ratio	13.50%
Common Equity Tier 1 Capital to Risk Weighted Assets, For Capital adequacy Purposes, Amount	38,685
Common Equity Tier 1 Capital to Risk Weighted Assets, To be Categorized As Well Capitalized, Amount	55,878
Tier 1 Capital to Risk Weighted Assets
Tier 1 Capital to Risk Weighted Assets, Actual Capital Amount	115,655
Tier 1 Capital to Risk Weighted Asset, Actual Capital Ratio	13.50%
Tier 1 Capital to Risk Weighted Assets, For Capital adequacy Purposes, Amount	51,580
Tier 1 Capital to Risk Weighted Assets, To be Categorized As Well Capitalized, Amount	68,773
Tier 1 Capital to Average Assets
Tier 1 Capital to Average Assets, Actual Capital Amount	115,655
Tier 1 Capital to Average Asset, Actual Capital Ratio	11.10%
Tier 1 Capital to Average Assets, For Capital adequacy Purposes, Amount	41,524
Tier 1 Capital to Risk Weighted Assets, To be Categorized As Well Capitalized, Amount	$ 51,905
Minimum [Member] | Company
Total Capital to Risk Weighted Assets
Total Capital to Risk Weighted Assets, For Capital Adequacy Purposes, Ratio	8.00%
Common Equity Tier 1 Capital to Risk Weighted Assets
Common Equity Tier 1 Capital to Risk Weighted Assets, For Capital adequacy Purposes, Ratio	4.50%
Tier 1 Capital to Risk Weighted Assets
Tier 1 Capital to Risk Weighted Assets, For Capital adequacy Purposes, Ratio	6.00%
Tier 1 Capital to Average Assets
Tier 1 Capital to Average Assets, For Capital adequacy Purposes, Ratio	4.00%
Minimum [Member] | Bank
Total Capital to Risk Weighted Assets
Total Capital to Risk Weighted Assets, For Capital Adequacy Purposes, Ratio	8.00%
Total Capital to Risk Weighted Assets To be Categorized as Well Capitalized, Ratio	10.00%
Common Equity Tier 1 Capital to Risk Weighted Assets
Common Equity Tier 1 Capital to Risk Weighted Assets, For Capital adequacy Purposes, Ratio	4.50%
Common Equity Tier 1 Capital to Risk Weighted Assets, To be Categorized As Well Capitalized, Ratio	6.50%
Tier 1 Capital to Risk Weighted Assets
Tier 1 Capital to Risk Weighted Assets, For Capital adequacy Purposes, Ratio	6.00%
Tier 1 Capital to Risk Weighted Assets, To be Categorized As Well Capitalized, Ratio	8.00%
Tier 1 Capital to Average Assets
Tier 1 Capital to Average Assets, For Capital adequacy Purposes, Ratio	4.00%
Tier 1 Capital to Average Assets, To be Categorized As Well Capitalized, Ratio	5.00%

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Commitments and Contingencies (Tables)

3 Months Ended

Mar. 31, 2015

Commitments and Contingencies Disclosure [Abstract]

Activity Related Repurchase Reserves For Previously Sold Loans

The following table sets forth information, at March 31, 2015 and December 31, 2014, with respect to such reserves:

	At and For the Three Months Ended			At and For the Year Ended
	March 31, 2015			December 31, 2014
	(Dollars in thousands)
Beginning balance	$	381		$	1,883
(Recovery of)/Provision for repurchases	(16		)	(1,502		)
Settlements	—			—
Total repurchases reserve	$	365		$	381

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Investments - Amortized Cost and Estimated Fair Value by Contractual Maturities (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Available for Sale, Amortized Cost
One year or less	$ 7,778	$ 7,483
Over one year through five years	28,868	29,008
Over five years through ten years	16,149	17,448
Over ten Years	7,336	8,337
Total	60,131	62,276
Available for Sale, Estimated Fair Value
One year or less	7,709	7,359
Over one year through five years	28,635	28,614
Over five years through ten years	15,979	17,148
Over ten Years	6,645	7,805
Total	$ 58,968	$ 60,926
Available for Sale, Weighted Average Yield
One year or less	1.51%	1.54%
Over one year through five years	1.63%	1.64%
Over five years through ten years	1.58%	1.60%
Over ten Years	1.87%	1.83%
Total	1.63%	1.64%

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Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2015

Accounting Policies [Abstract]

Interim Consolidated Financial Statements Basis of Presentation

Interim Consolidated Financial Statements Basis of Presentation

Our interim consolidated financial statements are prepared in accordance with generally accepted accounting principles in effect in the United States (“GAAP”) for interim financial information pursuant to rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”), including instructions to Form 10-Q and Article 10 of Regulation S-X, on a basis consistent with prior periods. Our financial statements reflect all adjustments that are, in the opinion of management, necessary to present a fair statement of the results for the interim periods presented. The interim results are not necessarily indicative of operating results for the full year. The interim information should be read in conjunction with our audited consolidated financial statements in our Form 10-K.

Use of Estimates

Use of Estimates

The preparation of the financial statements in conformity with GAAP requires us to make certain estimates and assumptions that could affect the reported amounts of certain of our assets, liabilities, and contingencies at the date of the financial statements and the reported amounts of our revenues and expenses during the reporting periods. For the fiscal periods covered by this report, those estimates related primarily to our determinations of the allowance for loan and lease losses (“ALLL”), other real estate owned (“OREO”), the fair values of securities available for sale, repurchase reserves, and the determination of the valuation allowance pertaining to deferred tax assets. If circumstances or financial trends on which those estimates were based were to change in the future or there were to occur any currently unanticipated events affecting the amounts of those estimates, our future financial position or results of operations could differ, possibly materially, from those expected at the current time.

Principles of Consolidation

Principles of Consolidation

Our consolidated financial statements for the three months ended March 31, 2015 and 2014 include the accounts of PMBC, the Bank and PMAR. All significant intercompany balances and transactions were eliminated in consolidation.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

In April 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2014-08, “Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity,” which amended its guidance on classification and reporting of discontinued operations. The amendments clarify when an entity should classify a component as discontinued operations, how to report the balances related to discontinued operations for prior periods, and additional disclosure requirements for discontinued operations. This guidance is effective for interim and annual periods beginning after December 15, 2014. Early adoption is permitted only for disposals which have not been previously reported. We adopted this guidance on January 1, 2015 and it did not have a material effect on our consolidated financial statements.

In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers (Topic 606),” which amended its guidance on revenue recognition to conform with international accounting guidance under the International Accounting Standards Board. The ASU provides a framework for addressing revenue recognition and replaces most existing revenue recognition guidance, as well as requires increased disclosure requirements. This guidance is effective for interim and annual periods beginning after December 15, 2016. Early adoption is not permitted. We will adopt this guidance on January 1, 2017. We are currently evaluating the expected impact on our consolidated financial statements.

In June 2014, the FASB issued ASU 2014-11, “Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period,” which amended its guidance on how to account for certain performance related share-based compensation plans. The amendments clarify the guidance on how to account for performance based awards when the requisite service period is met prior to potential performance targets being achieved. This guidance is effective for interim and annual periods beginning after December 15, 2015. Early adoption is permitted. We will adopt this guidance on January 1, 2016 and do not expect it to have a material effect on our consolidated financial statements.

In August 2014, the FASB issued ASU 2014-15, “Presentation of Financial Statements — Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern,” which defines management's responsibility to evaluate whether there is substantial doubt about an organization's ability to continue as a going concern and clarifies when to provide related footnote disclosure. This guidance is effective for interim and annual periods beginning after December 15, 2016. Early adoption is permitted. We will adopt this guidance on January 1, 2017 and do not expect it to have a material effect on our consolidated financial statements.

In January 2015, the FASB issued ASU 2015-01, “Income Statement - Extraordinary and Unusual Items (Subtopic 225-20): Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items,” which eliminated the concept of extraordinary items from GAAP. This guidance is effective for interim and annual periods beginning after December 15, 2015. Early adoption is permitted. We adopted this guidance on January 1, 2015 and it did not have an impact on our consolidated financial statements.

In February 2015, the FASB issued ASU 2015-02, “Consolidation (Topic 810): Amendments to the Consolidation Analysis,” amends the guidance for assessing how relationships of related parties affect the consolidation analysis, eliminates the presumption that a general partner should consolidate a limited partnership, eliminates the consolidation model specific to limited partnerships, clarifies when fees paid to a decision maker should be a factor in consolidation of a variable interest entity, and reduces the number of variable interest entity consolidation models. This guidance is effective for interim and annual periods beginning after December 15, 2015. Early adoption is permitted. We will adopt this guidance on January 1, 2016 and do not expect it to have an impact on our financial statements.

In April 2015, the FASB issued ASU 2015-03, “Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs,” which requires that the debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability. This simplifies the presentation of debt issuance costs and makes the presentation consistent with the presentation of debt discounts. This guidance is effective for interim and annual periods beginning after December 15, 2015. Early adoption is permitted. We will adopt this guidance on January 1, 2016 and do not expect it to have a material impact on our financial statements.