NOTE 9—BORROWINGS, SUBORDINATED DEBENTURES AND BROKERED DEPOSITS

Borrowings

The following table summarizes our borrowings outstanding as of the dates indicated:

	June 30, 2013					December 31, 2012

	Amount		Rate			Amount		Rate
	(Dollars in thousands)
Non-recourse debt	$	9,696		6.30	%	$	12,591		6.28	%

As of June 30, 2013 and December 31, 2012, our borrowings consisted of non-recourse debt relating to the payment stream of certain leases sold to third parties. The debt is secured by the equipment in the leases and all interest rates are fixed. As of June 30, 2013, the weighted average maturity of the debt was 2.2 years.

As of June 30, 2013 and December 31, 2012, there were no outstanding FHLB advances. Our aggregate remaining borrowing capacity under the FHLB secured borrowing lines was $1.4 billion at June 30, 2013. As of June 30, 2013, our FHLB advances facility was secured by: (1) a blanket lien on certain qualifying loans in our loan portfolio, which were not pledged to the Federal Reserve Bank of San Francisco ("FRBSF"), and (2) available-for-sale securities with a carrying value of $12.8 million. Additionally, the Bank had secured borrowing capacity from the FRBSF of $489.9 million at June 30, 2013, secured by $612.2 million of certain qualifying loans. As of June 30, 2013, the Bank also had unsecured lines of credit of $80.0 million with correspondent banks for the purchase of overnight funds; these lines are subject to availability of funds.

Subordinated Debentures

The following table summarizes the terms of each issuance of the subordinated debentures outstanding as of the dates indicated:

							December 31, 2012

	June 30, 2013
	June 30, 2013											Date Issued		Maturity Date			Next Reset Date
Series	Amount			Rate⁽¹⁾			Amount		Rate⁽²⁾			Date Issued		Maturity Date		Rate Index	Next Reset Date
	(Dollars in thousands)
Trust V	$	10,310			3.37	%	$	10,310		3.41	%		8/15/03		9/17/33	3 month LIBOR + 3.10		9/13/13
Trust VI		10,310			3.32	%		10,310		3.36	%		9/3/03		9/15/33	3 month LIBOR + 3.05		9/12/13
Trust CII		5,155			3.22	%		5,155		3.26	%		9/17/03		9/17/33	3 month LIBOR + 2.95		9/13/13
Trust VII		61,856			3.02	%		61,856		3.05	%		2/5/04		4/23/34	3 month LIBOR + 2.75		10/28/13
Trust CIII		20,619			1.96	%		20,619		2.00	%		8/15/05		9/15/35	3 month LIBOR + 1.69		9/12/13
Trust FCCI⁽³⁾		16,495			1.87	%		—		—			1/25/07		3/15/37	3 month LIBOR + 1.60		9/12/13
Trust FCBI⁽³⁾		10,310			1.82	%		—		—			9/30/05		12/15/35	3 month LIBOR + 1.55		9/12/13

Gross subordinated debentures		135,055						108,250
Unamortized discount⁽⁴⁾		(2,697	)					—

Net subordinated debentures	$	132,358					$	108,250

(1): As of July 26, 2013.
(2): As of January 28, 2013.
(3): Acquired in the FCAL acquisition.
(4): Amount represents the fair value adjustment on trusts acquired in the FCAL acquisition.

The Company had an aggregate amount of $132.4 million in subordinated debentures outstanding at June 30, 2013. With the FCAL acquisition, we added $24.1 million of subordinated debentures, net of a $2.7 million discount. These subordinated debentures were issued in separate series and each issuance had a maturity of thirty years from its date of issue. The subordinated debentures are variable-rate instruments and are each callable at par with no prepayment penalty. The subordinated debentures were issued to trusts established by us or entities we have acquired, which in turn issued trust preferred securities, which totaled $131.0 million at June 30, 2013. The proceeds of the subordinated debentures were used primarily to fund several of our acquisitions and to augment regulatory capital.

Interest payments made by the Company on subordinated debentures are considered dividend payments under the Board of Governors of the Federal Reserve System ("FRB") regulations. Bank holding companies, such as PacWest Bancorp, are required to notify the FRB prior to declaring and paying a dividend to stockholders during any period in which quarterly and/or cumulative twelve-month net earnings are insufficient to fund the dividend amount, among other requirements. We are not required to make such notification to the FRB.

Debt Termination Expense—FHLB Advances and Subordinated Debentures

In March 2012, the Company incurred $22.6 million in debt termination expense related to the repayment of $225.0 million in fixed-rate term FHLB advances and the early redemption of $18.6 million in fixed-rate subordinated debentures. The Company used a combination of excess cash and collateralized overnight FHLB advances to repay these debt instruments. The FHLB advances were composed of $200 million maturing in December 2017 with a fixed rate of 3.16% and $25 million due in January 2018 with a fixed rate of 2.61%. The agreements for these FHLB advances had an early repayment fee for payoffs made before maturity. The subordinated debentures were composed of a $10.3 million debenture, due in March 2030 and bearing a fixed rate of 11.00%, which was referred to as "Trust CI," and an $8.3 million debenture due in September 2030 and bearing a fixed rate of 10.6%, which was referred to as "Trust I."

Brokered Deposits

Brokered time deposits totaled $54.0 million at June 30, 2013, and $37.7 million at December 31, 2012, all of which were part of the CDARS program. The CDARS program represents deposits that are participated with other FDIC insured financial institutions as a means to provide FDIC deposit insurance coverage for the full amount of our customers' deposits. In addition, liabilities from discontinued operations at June 30, 2013 included $93.2 million of noninterest-bearing brokered deposits.