NOTE 9—BORROWINGS, SUBORDINATED DEBENTURES AND BROKERED DEPOSITS

Borrowings

As of September 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 weighted average interest rate on this debt was 6.30% and 6.28% at September 30, 2013 and December 31, 2012, respectively. The debt is secured by the equipment in the leases and all interest rates are fixed. As of September 30, 2013, the weighted average maturity of the debt was 2.0 years.

As of September 30, 2013 and December 31, 2012, there were no outstanding FHLB advances. Our aggregate remaining borrowing capacity under the FHLB secured borrowing lines was $1.3 billion at September 30, 2013. As of September 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 $11.5 million. Additionally, the Bank had secured borrowing capacity from the FRBSF of $467.8 million at September 30, 2013, secured by $589.9 million of certain qualifying loans. As of September 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:

	September 30, 2013						December 31, 2012

	September 30, 2013						December 31, 2012					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			3.35	%	$	10,310		3.41	%		8/15/03		9/17/33	3 month LIBOR + 3.10		12/13/13
Trust VI		10,310			3.30	%		10,310		3.36	%		9/3/03		9/15/33	3 month LIBOR + 3.05		12/12/13
Trust CII		5,155			3.20	%		5,155		3.26	%		9/17/03		9/17/33	3 month LIBOR + 2.95		12/13/13
Trust VII		61,856			2.99	%		61,856		3.05	%		2/5/04		4/23/34	3 month LIBOR + 2.75		1/28/14
Trust CIII		20,619			1.94	%		20,619		2.00	%		8/15/05		9/15/35	3 month LIBOR + 1.69		12/12/13
Trust FCCI⁽³⁾		16,495			1.85	%		—		—			1/25/07		3/15/37	3 month LIBOR + 1.60		12/12/13
Trust FCBI⁽³⁾		10,310			1.80	%		—		—			9/30/05		12/15/35	3 month LIBOR + 1.55		12/12/13

Gross subordinated debentures		135,055						108,250
Unamortized discount⁽⁴⁾		(2,555	)					—

Net subordinated debentures	$	132,500					$	108,250

(1): As of October 28, 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.

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.

Brokered Deposits

Brokered time deposits totaled $51.1 million at September 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 September 30, 2013 included $104.8 million of noninterest-bearing brokered deposits.