CONCENTRATIONS OF CREDIT RISK

12 Months Ended

Dec. 31, 2012

Risks and Uncertainties [Abstract]

CONCENTRATIONS OF CREDIT RISK

NOTE 20—CONCENTRATIONS OF CREDIT RISK

The Company maintains balances in correspondent bank accounts which may at times exceed federally insured limits. Management believes that its risk of loss associated with such balances is minimal due to financial strength of the correspondent banks. The Company has not experienced any losses in such accounts.

Substantially all of the Company’s loans, commitments, and commercial and standby letters of credit have been granted to customers in the Company’s market areas, primarily Los Angeles, Orange, Ventura, San Diego, Riverside, San Luis Obispo and San Bernardino County, California. Many of such customers are also depositors of the Company. The concentrations of credit by type of loan are set forth in Notes 5 and 6. The distribution of commitments to extend credit approximates the distribution of loans outstanding. Commercial and standby letters of credit were granted primarily to commercial borrowers as of December 31, 2012. The Company’s loan policies require the extension of a non-real estate secured credit to any single borrower or group of related borrowers in excess of $2.0 million to be approved by the loan committee. The Company’s loan policies require the extension of a real estate secured credit to any single borrower or group of related borrowers in excess of $3.0 million to be approved by the loan committee.