JUNIOR SUBORDINATED DEBENTURES

12 Months Ended

Dec. 31, 2012

Notes to Financial Statements

JUNIOR SUBORDINATED DEBENTURES

NOTE 12—JUNIOR SUBORDINATED DEBENTURES

In December 2005 and January 2007 the Company, or an acquired company, issued junior subordinated debentures to the Trusts. These junior subordinated debentures are effectively subordinated to all of our borrowings. The Company also owns the common stock of each of the Trusts. The balance of the equity of the Trusts is comprised of mandatorily redeemable preferred securities and is included in “accrued interest receivable and other assets” on our Consolidated Balance Sheets.

As of December 31, 2012 and 2011, the Company had $26.8 million in junior subordinated debentures outstanding from two issuances of trust preferred securities. Junior subordinated debentures as of December 31, 2012 consisted of the following (in thousands):

			As of December 31, 2012
	Interest Rate	Maturity Date	Effective Interest Rate			Balance
FCB Statutory Trust I	3-month LIBOR + 1.55%	December 15, 2035		1.86	%	$	10,310
First California Capital Trust I	3-month LIBOR + 1.60%	March 15, 2037		1.91	%		16,495
				1.89	%	$	26,805

The Company does not consolidate the Trusts into the consolidated financial statements.

As of December 31, 2012, the entire balance of junior subordinated debentures is included in Tier 1 capital for regulatory capital purposes. However, under the proposed Basel III capital regulations and the proposed rule issued by the banking agencies, trust preferred securities will be phased-out of Tier 1 capital (becomes Tier 2 capital) over a ten-year period.