Pending Acquisition of San Diego Trust Bank	3 Months Ended
Mar. 31, 2013
Pending Acquisition of San Diego Trust Bank
Pending Acquisition of San Diego Trust Bank	Note 10 — Pending Acquisition of San Diego Trust Bank On March 5, 2013, the Company entered into an Agreement and Plan of Reorganization (the “Merger Agreement”) with San Diego Trust Bank, a San Diego, California, based state-chartered bank (“SDTB”), pursuant to which the Bank will acquire SDTB. At March 31, 2013, SDTB had total assets of $210.9 million, total stockholders’ equity of $25.5 million and total deposits of $182.3 million. If the acquisition of SDTB is consummated, it will expand the Company’s banking footprint into San Diego County and is expect to further improve the Company’s deposit mix. On the date of the Merger Agreement, the transaction was valued at approximately $30.6 million. SDTB shareholders will have a choice between electing to receive $13.41 per share in cash or 1.114 shares of the Corporation’s common stock for each share of SDTB common stock, subject to the overall requirement that 50% of the consideration will be in the form of cash and 50% will be in the form of the Corporation’s common stock. Both the cash portion and the stock portion of the merger consideration payable to SDTB shareholders will be subject to possible adjustment prior to the closing of the transaction. The cash portion of the consideration payable to SDTB shareholders may be reduced if SDTB’s transaction-related expenses exceed $3.0 million on an after-tax basis. The number of shares of the Corporation’s common stock to be issued in exchange for each share of SDTB common stock is based on a fixed exchange ratio of 1.114 shares of Corporation common stock, subject to possible upward or downward adjustment in the event that the average closing price of the Corporation’s common stock price as measured during the 10 trading day period ending on the fifth business day prior to the effective time of the acquisition is below $10.83 per share or above $13.24 per share. In no event will an upward adjustment to the exchange ratio increase beyond a number of shares of Corporation common stock that would result in the Corporation issuing to SDTB shareholders in the aggregate more than 19.9% of its outstanding shares of Corporation common stock at the closing of the transaction. The transaction is expected to close late in the second quarter of 2013 or in the third quarter of 2013, subject to satisfaction of customary closing conditions and approval of the SDTB shareholders. Directors and executive officers of SDTB have entered into agreements with the Company and SDTB whereby they committed to vote their shares of SDTB common stock in favor of the acquisition. The Company has received bank regulatory approval for the acquisition of SDTB. For additional information about the proposed acquisition of SDTB, see the Company’s Current Report on Form 8-K filed with the SEC on March 6, 2013 and the Merger Agreement which is filed as an exhibit to the Current Report on Form 8-K.

Note 10 — Pending Acquisition of San Diego Trust Bank

On March 5, 2013, the Company entered into an Agreement and Plan of Reorganization (the “Merger Agreement”) with San Diego Trust Bank, a San Diego, California, based state-chartered bank (“SDTB”), pursuant to which the Bank will acquire SDTB. At March 31, 2013, SDTB had total assets of $210.9 million, total stockholders’ equity of $25.5 million and total deposits of $182.3 million. If the acquisition of SDTB is consummated, it will expand the Company’s banking footprint into San Diego County and is expect to further improve the Company’s deposit mix.

On the date of the Merger Agreement, the transaction was valued at approximately $30.6 million. SDTB shareholders will have a choice between electing to receive $13.41 per share in cash or 1.114 shares of the Corporation’s common stock for each share of SDTB common stock, subject to the overall requirement that 50% of the consideration will be in the form of cash and 50% will be in the form of the Corporation’s common stock. Both the cash portion and the stock portion of the merger consideration payable to SDTB shareholders will be subject to possible adjustment prior to the closing of the transaction. The cash portion of the consideration payable to SDTB shareholders may be reduced if SDTB’s transaction-related expenses exceed $3.0 million on an after-tax basis. The number of shares of the Corporation’s common stock to be issued in exchange for each share of SDTB common stock is based on a fixed exchange ratio of 1.114 shares of Corporation common stock, subject to possible upward or downward adjustment in the event that the average closing price of the Corporation’s common stock price as measured during the 10 trading day period ending on the fifth business day prior to the effective time of the acquisition is below $10.83 per share or above $13.24 per share. In no event will an upward adjustment to the exchange ratio increase beyond a number of shares of Corporation common stock that would result in the Corporation issuing to SDTB shareholders in the aggregate more than 19.9% of its outstanding shares of Corporation common stock at the closing of the transaction.

The transaction is expected to close late in the second quarter of 2013 or in the third quarter of 2013, subject to satisfaction of customary closing conditions and approval of the SDTB shareholders. Directors and executive officers of SDTB have entered into agreements with the Company and SDTB whereby they committed to vote their shares of SDTB common stock in favor of the acquisition. The Company has received bank regulatory approval for the acquisition of SDTB. For additional information about the proposed acquisition of SDTB, see the Company’s Current Report on Form 8-K filed with the SEC on March 6, 2013 and the Merger Agreement which is filed as an exhibit to the Current Report on Form 8-K.