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STOCK-BASED COMPENSATION
 12 Months Ended
Dec. 31, 2012
Equity [Abstract]  
STOCK-BASED COMPENSATION
NOTE 18—STOCK-BASED COMPENSATION
 
Stock Incentive Plans—In June 2007, the Company’s Board of Directors approved the First California 2007 Omnibus Equity Incentive Plan, or the Plan. The Plan was amended in May 2011 by a vote of the Company’s stockholders. The Plan authorizes the issuance of awards for up to 3,000,000 shares of the Company’s common stock in the form of incentive stock options, non-statutory stock options, stock appreciation rights, restricted stock, restricted stock units and other stock-based awards.
 
The Company issues restricted stock to employees and directors under share-based compensation plans. For the years ended December 31, 2012, 2011 and 2010, stock-based compensation expense relating to restricted stock awards was $1,830,000, $1,474,000 and $218,000, respectively. A summary of non-vested restricted stock shares as of December 31, 2011 and changes during the year ended December 31, 2012, is presented below:
 

             
Non-Vested Shares
  
Number of
Shares
    
Weighted
Average
Price
  
Outstanding, December 31, 2011
     1,113,686     $ 3.85  
Granted
     75,638       4.85  
Vested
     (320,832 )     3.87  
Forfeited
     (76,510 )     3.91  
Outstanding, December 31, 2012
     791,982     $ 3.93  
 
The weighted average fair values of restricted stock awards granted during the year ended December 31, 2012 were $4.85. The weighted average fair values of restricted stock awards granted during the year ended December 31, 2011 were $3.76. As of December 31, 2012, total unrecognized compensation cost related to restricted stock awards amounted to $1.0 million. This cost is expected to be recognized over a remaining period of 1.4 years.
 
The activity of stock options for the year ended December 31, 2012 is as shown:
                           
   
Number
of
Shares
  
Weighted
Average
Exercise
Price
  
Weighted
Average
Remaining
Contractual
Term
(years)
  
Aggregate
Intrinsic
Value
  
               
(Dollars in
thousands)
  
Outstanding, December 31, 2011
    
590,008
  
$
7.86
    
3.69
  
$
2,117
  
Granted
    
—
    
—
              
Exercised
    
(6,644
)
  
5.21
              
Forfeited/Expired
    
(59,488
)
  
10.03
              
Outstanding, December 31, 2012
    
523,876
    
7.64
    
2.94
    
1,884
  
Exercisable, December 31, 2012
    
434,802
  
$
8.11
    
2.70
  
$
1,696
  
 
No stock options were granted in 2012. The estimated per share weighted average grant date fair value of options granted during the year ended December 31, 2011 was $1.63. No stock options were granted in 2010. Proceeds from options exercised during the year ended December 31, 2012 were $34,000. There were no proceeds from options exercised during the years ended December 31, 2011 and 2010. The total fair value of the shares granted during the year ended December 31, 2011 was $5,000. At December 31, 2012, there was $104,106 of total unrecognized compensation cost related to non-vested stock option awards granted under the share-based compensation plans. The cost is expected to be recognized over a weighted-average period of 0.2 years.
 
Under the fair value method, stock option compensation expense is measured on the date of grant using an option-pricing model. In accordance with the FASB codification accounting guidance related to stock-based compensation, the fair values of the stock options were estimated using a lattice option pricing model. For the years ended December 31, 2012, 2011 and 2010, compensation expense related to stock options was $58,000, $156,000 and $324,000, respectively.
 
The Company uses the lattice binomial model formula to determine the fair value of stock options using the following estimates and assumptions. The expected volatility assumption used in the lattice option pricing model is based upon the weekly historical volatility of the Company’s stock price using a blend of the un-weighted standard deviation of closing price with a weighted mean reversion formula. The risk-free interest rate assumption is for the expected term of the share options and is based upon the U.S. Treasury implied forward yield curve at the time of the grant. The dividend yield assumption is based upon the Company’s capital planning model. The fair value of the options at the grant dates also follows. The weighted average values used for the 2011 stock option grants are shown below.
                     
       
2011 Grants
      
                     
Expected option term
          
8.0 years
        
Expected volatility
          
43.7
%
      
Expected dividend yield
          
0.0
%
      
Risk-free interest rate
          
2.51
%
      
Stock option fair value
        
$
1.63