10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2014

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                     to                    

CU BANCORP

(Exact name of registrant as specified in its charter)

California	90-0779788
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
15821 Ventura Boulevard, Suite 110 Encino, California	91436
(Address of principal executive offices)	(Zip Code)

(818) 257-7700

(Registrant’s telephone number, including area code)

Not applicable

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

Large Accelerated Filer	¨	Accelerated Filer	x
Non Accelerated Filer	¨	Smaller reporting company	¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  x

As of August 1, 2014 the number of shares outstanding of the registrant’s no par value Common Stock was 11,222,235.

CU BANCORP

June 30, 2014 FORM 10-Q

TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION
ITEM 1.	Financial Statements
	Consolidated Balance Sheets June 30, 2014 (Unaudited) and December 31, 2013	3
	Consolidated Statements of Income Three and Six Months Ended June 30, 2014 and 2013 (Unaudited)	4
	Consolidated Statements of Comprehensive Income Three and Six Months Ended June 30, 2014 and 2013 (Unaudited)	5
	Consolidated Statements of Changes in Shareholders’ Equity Year Ended December 31, 2013 and Six Months Ended June 30, 2014 (Unaudited)	6
	Consolidated Statements of Cash Flows Six Months Ended June 30, 2014 and 2013 (Unaudited)	7
	Notes to the Consolidated Financial Statements (Unaudited)	9
ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	41
	Overview	45
	Results of Operations	48
	Financial Condition	58
	Liquidity	63
	Dividends	64
	Capital Resources	65
ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk	67
ITEM 4.	Controls and Procedures	68
PART II. OTHER INFORMATION
ITEM 1.	Legal Proceedings	69
ITEM 1A.	Risk Factors	69
ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	69
ITEM 3.	Defaults Upon Senior Securities	69
ITEM 4.	Mine Safety Disclosures	69
ITEM 5.	Other Information	69
ITEM 6.	Exhibits	69
Signatures		70

Page 2 of 70

CU BANCORP

CONSOLIDATED BALANCE SHEETS

(Dollars in thousands)

	June 30, 2014			December 31, 2013
	(Unaudited)			(Audited)
ASSETS
Cash and due from banks	$	40,657		$	23,156
Interest earning deposits in other financial institutions		179,409			218,131
Total Cash and Cash Equivalents		220,066			241,287
Certificates of deposit in other financial institutions		64,577			60,307
Investment securities available-for-sale, at fair value		102,143			106,488
Loans		979,890			933,194
Allowance for loan loss		(11,284	)		(10,603	)
Net loans		968,606			922,591
Other real estate owned, net		219			—
Premises and equipment, net		3,785			3,531
Deferred tax assets, net		11,018			11,835
Goodwill		12,292			12,292
Core deposit and leasehold right intangibles		2,349			2,525
Bank owned life insurance		21,507			21,200
Accrued interest receivable and other assets		23,751			25,760
Total Assets	$	1,430,313		$	1,407,816
LIABILITIES AND SHAREHOLDERS’ EQUITY
LIABILITIES
Non-interest bearing demand deposits	$	682,300		$	632,192
Interest bearing transaction accounts		143,312			155,735
Money market and savings deposits		361,936			380,915
Certificates of deposit		57,732			63,581
Total deposits		1,245,280			1,232,423
Securities sold under agreements to repurchase		13,852			11,141
Subordinated debentures, net		9,459			9,379
Accrued interest payable and other liabilities		16,284			16,949
Total Liabilities		1,284,875			1,269,892
Commitments and Contingencies (Note 14)		—			—
SHAREHOLDERS’ EQUITY
Serial Preferred Stock – authorized, 50,000,000 shares no par value, no shares issued or outstanding		—			—
Common stock – authorized, 75,000,000 shares no par value, 11,222,235 and 11,081,364 shares issued and outstanding at June 30, 2014 and December 31, 2013, respectively		122,760			121,675
Additional paid-in capital		9,354			8,377
Retained earnings		13,129			8,077
Accumulated other comprehensive income (loss)		195			(205	)
Total Shareholders’ Equity		145,438			137,924
Total Liabilities and Shareholders’ Equity	$	1,430,313		$	1,407,816

The accompanying notes are an integral part of these consolidated financial statements.

Page 3 of 70

CU BANCORP

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

(Dollars in thousands, except per share data)

	Three Months Ended June 30,				Six Months Ended June 30,
	2014		2013		2014		2013
Interest Income
Interest and fees on loans	$	12,366	$	12,462	$	24,290	$	23,887
Interest on investment securities		467		495		968		979
Interest on interest bearing deposits in other financial institutions		206		157		417		317
Total Interest Income		13,039		13,114		25,675		25,183
Interest Expense
Interest on interest bearing transaction accounts		66		64		124		116
Interest on money market and savings deposits		222		249		456		509
Interest on certificates of deposit		55		74		111		150
Interest on securities sold under agreements to repurchase		11		21		19		40
Interest on subordinated debentures		107		126		214		250
Total Interest Expense		461		534		924		1,065
Net Interest Income		12,578		12,580		24,751		24,118
Provision for loan losses		408		1,153		483		1,287
Net Interest Income After Provision For Loan Losses		12,170		11,427		24,268		22,831
Non-Interest Income
Gain on sale of securities, net		—		—		—		5
Gain on sale of SBA loans, net		167		60		605		410
Deposit account service charge income		630		583		1,260		1,151
Other non-interest income		986		1,047		1,708		1,550
Total Non-Interest Income		1,783		1,690		3,573		3,116
Non-Interest Expense
Salaries and employee benefits (includes stock based compensation expense of $479 and $217 for the three months, and $887 and $475 for the six months ended June 30, 2014 and 2013, respectively)		5,807		5,655		11,820		11,330
Occupancy		985		1,019		1,971		2,083
Data processing		476		479		951		961
Legal and professional		411		572		934		1,079
FDIC deposit assessment		180		189		401		435
Merger related expenses		497		—		497		43
OREO valuation write-downs and expenses		6		23		6		49
Office services expenses		238		259		502		525
Other operating expenses		1,098		1,085		2,165		2,085
Total Non-Interest Expense		9,698		9,281		19,247		18,590
Net Income Before Provision for Income Tax Expense		4,255		3,836		8,594		7,357
Provision for income tax expense		1,869		1,515		3,542		2,881
Net Income	$	2,386	$	2,321	$	5,052	$	4,476
Earnings Per Share
Basic earnings per share	$	0.22	$	0.22	$	0.46	$	0.43
Diluted earnings per share	$	0.21	$	0.22	$	0.45	$	0.42

The accompanying notes are an integral part of these consolidated financial statements.

Page 4 of 70

CU BANCORP

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

(In thousands)

	Three Months Ended June 30,					Six Months Ended June 30,
	2014		2013			2014		2013
Net Income	$	2,386	$	2,321		$	5,052	$	4,476
Other Comprehensive Income, net of tax:
Non-credit portion of other-than-temporary impairments arising during the period		—		—			—		(22	)
Net unrealized gains (losses) on investment securities arising during the period		242		(734	)		400		(786	)
Other Comprehensive Income (Loss)		242		(734	)		400		(808	)
Comprehensive Income	$	2,628	$	1,587		$	5,452	$	3,668

The accompanying notes are an integral part of these consolidated financial statements.

Page 5 of 70

CU BANCORP

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

For the Year Ended December 31, 2013 and the Six Months Ended June 30, 2014

(2014 activity unaudited)

(Dollars and shares in thousands)

	Common Stock
	Outstanding Shares			Amount		Additional Paid in Capital			Retained Earnings (Deficit)			Accumulated Other Comprehensive Income (Loss)			Total Shareholders’ Equity
Balance at December 31, 2012		10,759		$	118,885	$	7,052		$	(1,708	)	$	1,394		$	125,623
Net Issuance of Restricted Stock		69			—		—			—			—			—
Exercise of Stock Options		282			2,790		—			—			—			2,790
Stock based compensation expense related to employee stock options and restricted stock		—			—		1,088			—			—			1,088
Restricted Stock Repurchase		(29	)		—		(422	)		—			—			(422	)
Excess tax benefit – stock based compensation		—			—		659			—			—			659
Net Income		—			—		—			9,785			—			9,785
Other Comprehensive (Loss)		—			—		—			—			(1,599	)		(1,599	)
Balance at December 31, 2013		11,081		$	121,675	$	8,377		$	8,077		$	(205	)	$	137,924
Net Issuance of Restricted Stock		45			—		—			—			—			—
Exercise of Stock Options		110			1,085		—			—			—			1,085
Stock based compensation expense related to employee stock options and restricted stock		—			—		887			—			—			887
Restricted Stock Repurchase		(14	)		—		(242	)		—			—			(242	)
Excess tax benefit – stock based compensation		—			—		332			—			—			332
Net Income		—			—		—			5,052			—			5,052
Other Comprehensive Income		—			—		—			—			400			400
Balance at June 30, 2014		11,222		$	122,760	$	9,354		$	13,129		$	195		$	145,438

The accompanying notes are an integral part of these consolidated financial statements.

Page 6 of 70

CU BANCORP

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(Dollars in thousands)

	Six Months Ended June 30,
	2014			2013
Cash flows from operating activities:
Net income:	$	5,052		$	4,476
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for loan losses		483			1,287
Provision for unfunded loan commitments		73			34
Stock based compensation expense		887			475
Depreciation		479			568
Net accretion of discounts/premiums for loans acquired and deferred loan fees/costs		(2,690	)		(3,071	)
Net amortization from investment securities		779			840
Increase in bank owned life insurance		(307	)		(308	)
Amortization of core deposit intangibles		138			166
Amortization of time deposit premium		(13	)		(106	)
Net amortization of leasehold right intangible asset and liabilities		151			(285	)
Accretion of subordinated debenture discount		80			114
Gain on sale of securities, net		—			(5	)
Gain on sale of SBA loans, net		(605	)		(410	)
Decrease in deferred tax assets		538			1,228
(Increase) decrease in accrued interest receivable and other assets		2,009			(390	)
Increase (decrease) in accrued interest payable and other liabilities		(457	)		314
Decrease in fair value of derivative swap liability		(394	)		(1,482	)
Net cash provided by operating activities		6,203			3,445
Cash flows from investing activities:
Purchases of available-for-sale investment securities		(6,215	)		(20,395	)
Proceeds from sales of available-for-sale investment securities		—			2,854
Proceeds from repayment and maturities from available-for-sale investment securities		10,460			23,531
Loans originated, net of principal payments		(43,422	)		(27,339	)
Purchases of premises and equipment		(733	)		(339	)
Net increase in certificates of deposit in other financial institutions		(4,270	)		(1,298	)
Net purchase of Federal Home Loan Bank and other bank stock		—			150
Net cash (used in) investing activities		(44,180	)		(22,836	)
Cash flows from financing activities:
Net increase in Non-interest bearing demand deposits		50,108			27,518
Net increase (decrease) in Interest bearing transaction accounts		(12,423	)		14,838
Net decrease in Money market and savings deposits		(18,979	)		(1,581	)
Net decrease in Certificates of deposit		(5,836	)		(21,038	)
Net increase in Securities sold under agreements to repurchase		2,711			6,755
Net proceeds from stock options exercised		1,085			53
Restricted stock repurchase		(242	)		(283	)
Net excess in tax benefit on stock compensation		332			31
Net cash provided by financing activities		16,756			26,293
Net increase (decrease) in cash and cash equivalents		(21,221	)		6,902
Cash and cash equivalents, beginning of year		241,287			182,896
Cash and cash equivalents, end of year	$	220,066		$	189,796

Page 7 of 70

CU BANCORP

CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)

(Unaudited)

(Dollars in thousands)

	Six Months Ended June 30,
	2014		2013
Supplemental disclosures of cash flow information:
Cash paid during the period for interest	$	849	$	1,074
Cash paid during the period for taxes	$	750	$	1,304
Supplemental disclosures of non-cash investing activities:
Net increase (decrease) in unrealized gain or loss on investment securities, net of tax	$	400	$	(808	)
Loans transferred to other real estate owned	$	219	$	—

The accompanying notes are an integral part of these consolidated financial statements

Page 8 of 70

CU BANCORP

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2014

(Unaudited)

Note 1 - Basis of Financial Statement Presentation

CU Bancorp (the “Company”) is a bank holding company whose operating subsidiary is California United Bank. CU Bancorp was established to facilitate the reorganization and merger of Premier Commercial Bank, N.A. into California United Bank, which took place after the close of business on July 31, 2012. As a bank holding company, CU Bancorp is subject to regulation of the Federal Reserve Board (“FRB”). The term “Company”, as used throughout this document, refers to the consolidated balance sheets and consolidated statements of income of CU Bancorp and California United Bank.

California United Bank (the “Bank”) is a full-service commercial business bank offering a broad range of banking products and services including: deposit services, lending and cash management to small and medium-sized businesses in Los Angeles, Orange and Ventura counties, to non-profit organizations, to business principals and entrepreneurs, to the professional community, including attorneys, certified public accountants, financial advisors, healthcare providers and investors. The Bank opened for business in 2005, with its headquarters office located in Encino, California. As a state chartered non-member bank, the Bank is subject to regulation by the California Department of Business Oversight, (the “DBO”) and the Federal Deposit Insurance Corporation (“FDIC”). The deposits of the Bank are insured by the FDIC, to the maximum amount allowed by law.

On June 3, 2014, CU Bancorp and 1^st Enterprise Bank (“1^st Enterprise”) announced the execution of a definitive agreement and plan of merger whereby 1^st Enterprise will merge into California United Bank in a transaction valued at approximately $102.2 million. The transaction combines two of the leading commercial banking franchises in Southern California with more than $2.2 billion in combined assets which operate offices in Los Angeles, Orange, Ventura and San Bernardino counties. California United Bank will survive the merger and will continue the commercial banking operations of the combined bank following the merger. The transaction is intended to qualify as a tax-free reorganization under the applicable provision of the Internal Revenue Code and 1st Enterprise shareholders who receive shares of CU Bancorp common stock in the merger should not recognize any taxable gain on the exchange. Shareholders of 1^st Enterprise will receive a fixed exchange ratio at closing of 1.3450 shares of CU Bancorp common stock for each share of 1^st Enterprise common stock. Based on the CU Bancorp stock price as of August 1, 2014, total consideration for each 1^st Enterprise share would be $25.00.

The consolidated financial statements include the accounts of the Company and the Bank. Significant intercompany items have been eliminated in consolidation. The accounting and reporting policies of the Company conform to U.S. generally accepted accounting principles (“GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission.

CU Bancorp is the common shareholder of Premier Commercial Statutory Trust I, Premier Commercial Statutory Trust II, and Premier Commercial Statutory Trust III, entities which were acquired in the merger with Premier Commercial Bancorp (“PC Bancorp”). These trusts were established for the sole purpose of issuing trust preferred securities and do not meet the criteria for consolidation in accordance with ASC 810 Consolidation. For more detail, see Note 8 – Borrowings and Subordinated Debentures.

Certain information and footnote disclosures presented in the annual consolidated financial statements are not included in the interim consolidated financial statements. Accordingly, the accompanying unaudited interim consolidated financial statements should be read in conjunction with the Company’s 2013 Annual Report on Form 10-K. In the opinion of management, the accompanying financial statements contain all necessary adjustments of a normal recurring nature, to present fairly the consolidated financial position of the Company and the results of its operations for the interim period presented.

Use of Estimates in the Preparation of Financial Statements

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. In addition, these accounting principles require the disclosure of contingent assets and liabilities as of the date of the financial statements.

Page 9 of 70

Estimates that are particularly susceptible to significant change relate to the determination of the allowance for loan loss and various assets and liabilities measured at fair value. While management uses the most current available information to recognize losses on loans, future additions to the allowance for loan loss may be necessary based on changes in local economic conditions. In addition, regulatory agencies, as an integral part of their examination process, periodically review the Company’s allowance for loan loss. Regulatory agencies may require the Company to recognize additions to the allowance for loan loss based on their judgment about information available to them at the time of their examination.

Business Segments

The Company is organized and operated as a single reporting segment, principally engaged in commercial business banking. The Company conducts its lending and deposit operations through eight full service branch offices located in Los Angeles, Orange, and Ventura counties.

Note 2 - Recent Accounting Pronouncements

In January 2014, the FASB issued ASU No. 2014-01, Investments – Equity Method and Joint Ventures (Topic 323): Accounting for Investments in Qualified Affordable Housing Projects (a consensus of the FASB Emerging Issues Task Force). ASU 2014-01 modifies the conditions that a reporting entity must meet to be eligible to use a method other than the equity or cost methods to account for qualified affordable housing project investments. If the modified conditions are met, the amendments permit an entity to amortize the initial cost of the investment in proportion to the amount of the tax credits and other tax benefits received and recognize the net investment performance in the income statement as a component of income tax expense (benefit). Additionally, ASU 2014-01 introduces new recurring disclosures about all investments in qualified affordable housing projects irrespective of the method used to account for the investments. Prior to these amendments, a reporting entity that invests in qualified affordable housing projects may elect to account for that investment using the level yield method if specific conditions are met. For investments that are not accounted for using the effective yield method, the investment must be accounted for under either the equity method or the cost method. Because the conditions which allow an entity to utilize the effective yield method were overly restrictive, this prevented many investors from using the effective yield method. Under the effective yield method, all tax credits, tax benefits, and the write-down of the investments are accounted for net of taxes as a component of income tax expense (benefit). This method more fairly represents the economics of the transaction than accounting under the equity method or cost method. The amendments in ASU 2014-01 are expected to enable more entities to qualify for the proportional amortization method to account for affordable housing project investments than the number of entities that currently qualify for the effective yield method. The amendments are effective for public business entities for annual periods and interim reporting periods within those annual periods, beginning after December 15, 2014. For all entities other than public business entities, the amendments are effective for annual periods beginning after December 15, 2014, and interim periods within annual reporting periods beginning after December 15, 2015. Early adoption is permitted. The Company early adopted ASU 2014-01 in the fourth quarter of 2013. See Note 11 – Investments in Qualified Affordable Housing Projects, in the Company’s 2013 Form 10-K, for the Company’s disclosures on its investments in LIHTC projects required under ASU 2014-01.

In January 2014, the FASB issued ASU No. 2014-04, Receivables – Troubled Debt Restructurings by Creditors (Subtopic 310-40): Reclassification of Residential Real Estate Collateralized Consumer Mortgage Loans upon foreclosure (a consensus of the FASB Emerging Issues Task Force). The objective of this Update is to reduce diversity in practice by clarifying when an in substance repossession or foreclosure occurs, that is, when a creditor should be considered to have received physical possession of residential real estate property collateralizing a consumer mortgage loan such that the loan receivable should be derecognized and the real estate property recognized. ASU 2014-04 clarifies that an in substance repossession or foreclosure occurs, and a creditor is considered to have received physical possession of residential real estate property collateralizing a consumer mortgage loan, upon either (1) the creditor obtaining legal title to the residential real estate property upon completion of a foreclosure or (2) the borrower conveying all interest in the residential real estate property to the creditor to satisfy that loan through completion of a deed in lieu of foreclosure or through a similar legal agreement. Additionally, the amendments require interim and annual disclosure of both (1) the amount of foreclosed residential real estate property held by the creditor and (2) the recorded investment in consumer mortgage loans collateralized by residential real estate property that are in the process of foreclosure according to local requirements of the applicable jurisdiction. These amendments are effective for public business entities for annual periods, and interim periods within those annual periods, beginning after December 15, 2014. For entities other than public business entities, the amendments are effective for annual periods beginning after December 15, 2014, and interim periods within annual periods beginning after December 15, 2015. An entity can elect to adopt these amendments using either a modified retrospective transition method or a prospective transition method. Early adoption is permitted. We do not expect the adoption of this ASU to have a material impact on the Company’s financial position or results of operations.

Page 10 of 70

In June 2014, the FASB issued ASU No. 2014-11, Transfers and Servicing (Topic 860): Repurchase-to-Maturity Transactions, Repurchase Financings, and Disclosures, to address investor concerns about the distinction in generally accepted accounting principles between repurchase agreements that settle at the same time as the maturity of the transferred financial asset and those that settle any time before maturity. ASU 2014-11 aligns the accounting for repurchase-to-maturity transactions and repurchase agreements executed as a repurchase financing with the accounting for other typical repurchase agreements. Going forward, these transactions all will be accounted for as secured borrowings. The new guidance eliminates sale accounting for repurchase-to-maturity transactions and supersedes the guidance under which a transfer of a financial asset and a contemporaneous repurchase financing could be accounted for on a combined basis as a forward agreement, which has resulted in outcomes referred to as off-balance-sheet accounting. ASU 2014-11 also requires a new disclosure for transactions economically similar to repurchase agreements in which the transferor retains substantially all of the exposure to the economic return on the transferred financial assets throughout the term of the transaction. Further, the ASU requires expanded disclosures about the nature of collateral pledged in repurchase agreements and similar transactions accounted for as secured borrowings. The accounting changes are effective for public companies for the first interim or annual period beginning after December 15, 2014. In addition, for public companies, the disclosure for certain transactions accounted for as a sale is effective for the first interim or annual period beginning after December 15, 2014, and the disclosure for transactions accounted for as secured borrowings is required to be presented for annual periods beginning after December 15, 2014, and interim periods beginning after March 15, 2014. For all other entities, all changes are effective for annual periods beginning after December 14, 2014, and interim periods beginning after December 15, 2015. Earlier application for a public company is prohibited, but all other companies and organizations may elect to apply the requirements for interim periods beginning after December 15, 2014. We do not expect the adoption of this ASU to have an impact on the Company’s financial position or results of operations.

Page 11 of 70

Note 3 - Computation of Book Value and Tangible Book Value per Common Share

The Company utilizes the term Tangible Common Equity (“TCE”), a non-GAAP financial measure. Management believes that TCE is useful because it is a measure utilized by both regulators and market analysts in evaluating a consolidated bank holding company’s financial condition and capital strength. TCE represents common shareholders’ equity less goodwill and certain intangible assets.

Book value per common share was calculated by dividing total shareholders’ equity by the number of common shares issued and outstanding. Tangible book value per common share was calculated by dividing tangible common equity by the number of common shares issued and outstanding.

The table below presents the computation of TCE, book value and tangible book value per common share as of the dates indicated (dollars in thousands, except share and per share data):

	June 30, 2014		December 31, 2013
Total Shareholders’ Equity	$	145,438	$	137,924
Less: Goodwill		12,292		12,292
Less: Core deposit and leasehold right intangibles		2,349		2,525
Tangible common equity	$	130,797	$	123,107
Common shares issued and outstanding		11,222,235		11,081,364
Book value per common share	$	12.96	$	12.45
Tangible book value per common share	$	11.66	$	11.11

Note 4 - Computation of Earnings per Common Share

Basic and diluted earnings per common share were determined by dividing the net income by the applicable basic and diluted weighted average common shares outstanding. The following table shows weighted average basic shares outstanding, potential dilutive shares related to stock options, unvested restricted stock, and weighted average diluted shares for the periods indicated (dollars in thousands, except share and per share data):

	Three Months Ended June 30,				Six Months Ended June 30,
	2014		2013		2014		2013
Net Income	$	2,386	$	2,321	$	5,052	$	4,476
Weighted average basic common shares outstanding		10,952,087		10,501,504		10,913,227		10,493,846
Dilutive effect of potential common share issuances from stock options and restricted stock		206,479		281,774		213,313		194,859
Weighted average diluted common shares outstanding		11,158,566		10,783,278		11,126,540		10,688,705
Income per common share
Basic	$	0.22	$	0.22	$	0.46	$	0.43
Diluted	$	0.21	$	0.22	$	0.45	$	0.42
Anti-dilutive shares not included in the calculation of diluted earnings per share		82,154		203,176		83,437		209,655

Page 12 of 70

Note 5 - Investment Securities

The investment securities portfolio has been classified as available-for-sale, and as such is recorded at estimated fair market value.

The following tables present the amortized cost and estimated fair values of investment securities by major category as of the dates indicated. There were no impaired securities at June 30, 2014 or December 31, 2013, and as such there were no other than temporary impairment losses in the securities portfolio for the periods indicated in the tables below (dollars in thousands):

			Gross Unrealized
June 30, 2014 – Available-for-sale:	Amortized Cost		Gains		Losses		Fair Market Value
U.S. Govt Agency and Sponsored Agency - Note Securities	$	3,084	$	7	$	—	$	3,091
U.S. Govt Agency - SBA Securities		52,487		742		448		52,781
U.S. Govt Agency - GNMA Mortgage-Backed Securities		24,938		268		538		24,668
U.S. Govt Sponsored Agency - CMO & Mortgage-Backed Securities		14,178		406		234		14,350
Corporate Securities		4,056		108		—		4,164
Municipal Securities		3,069		20		—		3,089
Total investment securities	$	101,812	$	1,551	$	1,220	$	102,143

			Gross Unrealized
December 31, 2013 – Available-for-sale:	Amortized Cost		Gains		Losses		Fair Market Value
U.S. Govt Agency and Sponsored Agency - Note Securities	$	4,153	$	1	$	2	$	4,152
U.S. Govt Agency - SBA Securities		50,521		875		491		50,905
U.S. Govt Agency - GNMA Mortgage-Backed Securities		28,107		180		909		27,378
U.S. Govt Sponsored Agency - CMO & Mortgage-Backed Securities		15,348		345		479		15,214
Corporate Securities		5,086		125		—		5,211
Municipal Securities		3,621		9		2		3,628
Total investment securities	$	106,836	$	1,535	$	1,883	$	106,488

The Company’s investment securities portfolio at June 30, 2014, consists of U.S. Agency and U.S. Sponsored Agency issued AAA and AA rated investment-grade securities, investment grade corporate bond securities, and municipal securities. Securities with a market value of $14.1 million and $11.8 million were pledged to secure securities sold under agreements to repurchase at June 30, 2014 and December 31, 2013, respectively. See Note 8 – Borrowings and Subordinated Debentures. Securities with a market value of $11.3 million and $11.0 million were pledged to secure a certificate of deposit of $10.0 million with the State of California Treasurer’s office at June 30, 2014 and December 31, 2013. Securities with a market value of $30.6 million and $29.3 million were pledged to secure outstanding standby letters of credit confirmed/issued by a correspondent bank for the benefit of our customers in the amount of $21.3 million and $21.9 million at June 30, 2014 and December 31, 2013, respectively. Securities with a market value of $947,000 and $275,000 were pledged to secure local agency deposits at June 30, 2014 and December 31, 2013, respectively.

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The following tables present investment securities with unrealized losses that are considered to be temporarily-impaired, summarized and classified according to the duration of the loss period as of the dates indicated (dollars in thousands).

	< 12 Continuous Months				> 12 Continuous Months				Total
June 30, 2014	Fair Value		Net Unrealized Loss		Fair Value		Net Unrealized Loss		Fair Value		Net Unrealized Loss
Temporarily-impaired available-for-sale investment securities:
U.S. Govt. - Agency and Sponsored Agency Note Securities	$	—	$	—	$	—	$	—	$	—	$	—
U.S. Govt. Agency SBA Securities		8,793		127		8,556		322		17,349		449
U.S. Govt. Agency – GNMA Mortgage-Backed Securities		7,905		71		7,373		337		15,278		408
U.S. Govt. Sponsored Agency – CMO & Mortgage-Backed Securities		—		—		9,642		363		9,642		363
Corporate Securities		—		—		—		—		—		—
Municipal Securities		—		—		—		—		—		—
Total temporarily-impaired available-for-sale investment securities	$	16,698	$	198	$	25,571	$	1,022	$	42,269	$	1,220

	< 12 Continuous Months				> 12 Continuous Months				Total
December 31, 2013	Fair Value		Net Unrealized Loss		Fair Value		Net Unrealized Loss		Fair Value		Net Unrealized Loss
Temporarily-impaired available-for-sale investment securities:
U.S. Govt. - Agency and Sponsored Agency Note Securities	$	1,041	$	2	$	—	$	—	$	1,041	$	2
U.S. Govt. Agency SBA Securities		11,686		491		—		—		11,686		491
U.S. Govt. Agency – GNMA Mortgage-Backed Securities		15,693		721		1,864		188		17,557		909
U.S. Govt. Sponsored Agency – CMO & Mortgage-Backed Securities		7,650		479		—		—		7,650		479
Corporate Securities		—		—		—		—		—		—
Municipal Securities		—		—		1,029		2		1,029		2
Total temporarily-impaired available-for-sale investment securities	$	36,070	$	1,693	$	2,893	$	190	$	38,963	$	1,883

The Company evaluates all securities for declines in the fair market values below the securities cost basis for possible impairment on each reporting date.

During the six months ended June 30, 2014, the Company did not recognize any gross gain or losses on sales of available-for-sale securities and recognized gross gains on sales of securities in the amount of $5,000 for the six months ended June 30, 2013 and $47,000 for the year ended December 31, 2013. The Company did not recognize any net proceeds from the sale of available-for-sale securities at June 30, 2014 and had net proceeds from the sale of available-for-sale securities of $2.9 million for the six months ended June 30, 2013 and $7.0 million for the year ended December 31, 2013.

The amortized cost, estimated fair value and average yield of debt securities at June 30, 2014, are reflected in the table below (dollars in thousands). Maturity categories are determined as follows:

• U.S. Govt. Agency and U.S. Govt. Sponsored Agency bonds and notes – maturity date

• U.S. Govt. Sponsored Agency CMO or Mortgage-Backed Securities, U.S. Govt. Agency GNMA Mortgage-Backed Securities and U.S. Gov. Agency SBA Securities – estimated cash flow taking into account estimated pre-payment speeds

• Investment grade Corporate Bonds and Municipal Securities – maturity date

Page 14 of 70

Although, U.S. Government Agency and U.S. Government Sponsored Agency mortgage-backed and CMO securities have contractual maturities through 2048, the expected maturity will differ from the contractual maturities because borrowers or issuers may have the right to prepay such obligations without penalties.

	June 30, 2014
Maturities Schedule of Securities	Amortized Cost		Fair Value		Weighted Average Yield
Due through one year	$	18,136	$	18,208		1.52	%
Due after one year through five years		39,808		40,151		1.88	%
Due after five years through ten years		26,781		26,522		2.27	%
Due after ten years		17,087		17,262		2.71	%
Total	$	101,812	$	102,143		2.06	%

The weighted average yields in the above table are based on effective rates of book balances at the end of the period. Yields are derived by dividing interest income, adjusted for amortization of premiums and accretion of discounts, by total amortized cost.

Investment in FHLB Common Stock

The Company’s investment in the common stock of the FHLB of San Francisco is carried at cost and was $4.2 million as of June 30, 2014 and December 31, 2013. See Note 8—Borrowings and Subordinated Debentures for a detailed discussion regarding the Company’s borrowings and the requirements to purchase FHLB common stock. See Note 5—Investment Securities in the Company’s December 31, 2013 10-K for additional discussion on the Company’s evaluation and accounting for its investment in FHLB common stock.

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Note 6 - Loans

The following table presents the composition of the Company’s loan portfolio as of the dates indicated (dollars in thousands):

	June 30, 2014		December 31, 2013
Commercial and Industrial Loans:	$	303,870	$	299,473
Loans Secured by Real Estate:
Owner-Occupied Nonresidential Properties		208,936		197,605
Other Nonresidential Properties		296,629		271,818
Construction, Land Development and Other Land		61,165		47,074
1-4 Family Residential Properties		64,583		65,711
Multifamily Residential Properties		36,727		33,780
Total Loans Secured by Real Estate		668,040		615,988
Other Loans:		7,980		17,733
Total Loans	$	979,890	$	933,194

The following table is a breakout of the Company’s loan portfolio stratified by the industry concentration of the borrower by their respective NAICS code as of the dates indicated (dollars in thousands):

	June 30,		December 31,
	2014		2013
Real Estate	$	431,243	$	381,830
Manufacturing		86,350		83,319
Hotel/Lodging		82,787		76,143
Construction		69,935		62,835
Wholesale		57,195		60,291
Professional Services		45,745		49,739
Finance		52,615		46,393
Healthcare		32,756		38,662
Restaurant/Food Service		23,574		35,244
Other Services		23,781		21,448
Retail		17,856		23,157
Administrative Management		18,619		15,218
Information		10,635		11,709
Education		9,985		10,270
Transportation		10,562		9,531
Entertainment		5,195		6,207
Other		1,057		1,198
Total	$	979,890	$	933,194

SBA Loans

The Company originates loans under the guidelines of the Small Business Administration (“SBA”) program. The total portfolio of the SBA contractual loan balances being serviced by the Company at June 30, 2014 was $105 million, of which $73 million has been sold. Of the $32 million remaining on the Company’s books, $23 million is un-guaranteed and $9 million is guaranteed by the SBA.

For SBA guaranteed loans, a secondary market exists to purchase the guaranteed portion of these loans with the Company continuing to “service” the entire loan. The secondary market for guaranteed loans is comprised of investors seeking long term assets with yields that adapt to the prevailing interest rates. These investors are typically financial institutions, insurance companies, pension funds, and other types of investors specializing in the acquisition of this product. When a decision to sell the guaranteed portion of an SBA loan is made by the Company, bids are solicited from secondary market investors and the loan is normally sold to the highest bidder.

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At June 30, 2014, there were no loans classified as held for sale. At June 30, 2014, the balance of unsold SBA 7a loans that have been originated in 2014 is $1.5 million, of which $1.1 million is guaranteed by the SBA. The Company does not currently plan on selling these loans, but it may choose to do so in the future.

Allowance for Loan Loss

The following table is a summary of the activity for the allowance for loan loss for the periods indicated (dollars in thousands):

	Three Months Ended June 30,						Six Months Ended June 30,
	2014			2013			2014			2013
Allowance for loan loss at beginning of period	$	10,823		$	8,841		$	10,603		$	8,803
Provision for loan losses		408			1,153			483			1,287
Net (charge-offs) recoveries:
Charge-offs		(157	)		(616	)		(157	)		(737	)
Recoveries		210			34			355			59
Net (charge-offs) recoveries		53			(582	)		198			(678	)
Allowance for loan loss at end of period	$	11,284		$	9,412		$	11,284		$	9,412
Net (charge-offs) recoveries to average loans		0.00	%		(0.07	)%		0.02	%		(0.08	)%

	June 30, 2014			December 30, 2013
Allowance for loan loss to total loans		1.15	%		1.14	%
Allowance for loan loss to total loans accounted for at historical cost, which excludes loans and the related allowance for loans acquired through acquisition		1.45	%		1.50	%

The allowance for losses on unfunded loan commitments to extend credit is primarily related to commercial lines of credit and construction loans. The amount of unfunded loan commitments at June 30, 2014 and December 31, 2013 was $417.1 million and $345.9 million, respectively. The inherent risk associated with a loan is evaluated at the same time the credit is extended. However, the allowance held for the commitments is reported in other liabilities within the accompanying balance sheets and not as part of the allowance for loan loss in the above table. The allowance for losses on unfunded loan commitments to extend credit was $403,000 and $329,000 at June 30, 2014 and December 31, 2013, respectively.

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The following tables present, by portfolio segment, the changes in the allowance for loan loss and the recorded investment in loans as of the dates and for the periods indicated (dollars in thousands):

	Commercial and Industrial			Construction, Land Development and Other Land		Commercial and Other Real Estate			Other			Total
Three Months Ended June 30, 2014
Allowance for loan loss – Beginning balance	$	5,278		$	1,334	$	4,161		$	50		$	10,823
Provision for loan losses		91			88		228			1			408
Net (charge-offs) recoveries:
Charge-offs		(93	)		—		(64	)		—			(157	)
Recoveries		109			—		101			—			210
Net recoveries		16			—		37			—			53
Ending balance	$	5,385		$	1,422	$	4,426		$	51		$	11,284
Three Months Ended June 30, 2013
Allowance for loan loss – Beginning balance	$	4,187		$	2,147	$	2,400		$	107		$	8,841
Provision for loan losses		1,014			213		(6	)		68			1,153
Net (charge-offs) recoveries:
Charge-offs		(569	)		—		(47	)		—			(616	)
Recoveries		27			—		4			3			34
Net (charge-offs) recoveries		(542	)		—		(43	)		3			(582	)
Ending balance	$	4,659		$	2,360	$	2,351		$	42		$	9,412
	Commercial and Industrial			Construction, Land Development and Other Land		Commercial and Other Real Estate			Other			Total
Six Months Ended June 30, 2014
Allowance for loan loss – Beginning balance	$	5,534		$	1,120	$	3,886		$	63		$	10,603
Provision for loan losses		(308	)		302		501			(12	)		483
Net (charge-offs) recoveries:
Charge-offs		(93	)		—		(64	)		—			(157	)
Recoveries		252			—		103			—			355
Net recoveries		159			—		39			—			198
Ending balance	$	5,385		$	1,422	$	4,426		$	51		$	11,284
Six Months Ended June 30, 2013
Allowance for loan loss – Beginning balance	$	4,572		$	2,035	$	2,084		$	112		$	8,803
Provision for loan losses		650			325		379			(67	)		1,287
Net (charge-offs) recoveries:
Charge-offs		(612	)		—		(117	)		(8	)		(737	)
Recoveries		49			—		5			5			59
Net (charge-offs)		(563	)		—		(112	)		(3	)		(678	)
Ending balance	$	4,659		$	2,360	$	2,351		$	42		$	9,412

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The following tables present both the allowance for loan loss and the associated loan balance classified by loan portfolio segment and by credit evaluation methodology (dollars in thousands):

	Commercial and Industrial		Construction, Land Development and Other Land		Commercial and Other Real Estate		Other		Total
June 30, 2014
Allowance for loan loss:
Individually evaluated for impairment	$	240	$	—	$	—	$	—	$	240
Collectively evaluated for impairment		5,143		1,422		4,426		51		11,042
Purchased credit impaired (loans acquired with deteriorated credit quality)		2		—	$	—	$	—		2
Total Allowance for Loan Loss	$	5,385	$	1,422	$	4,426	$	51	$	11,284
Loans receivable:
Individually evaluated for impairment	$	2,582	$	—	$	2,960	$	—	$	5,542
Collectively evaluated for impairment		300,730		61,165		601,877		7,980		971,752
Purchased credit impaired (loans acquired with deteriorated credit quality)		558		—		2,038		—		2,596
Total Loans Receivable	$	303,870	$	61,165	$	606,875	$	7,980	$	979,890
	Commercial and Industrial		Construction, Land Development and Other Land		Commercial and Other Real Estate		Other		Total
December 31, 2013
Allowance for loan loss:
Individually evaluated for impairment	$	4	$	—	$	—	$	—	$	4
Collectively evaluated for impairment		5,520		1,120		3,886		63		10,589
Purchased credit impaired (loans acquired with deteriorated credit quality)		10		—		—		—		10
Total Allowance for Loan Loss	$	5,534	$	1,120	$	3,886	$	63	$	10,603
Loans receivable:
Individually evaluated for impairment	$	2,640	$	—	$	3,680	$	—	$	6,320
Collectively evaluated for impairment		295,787		47,074		561,952		17,733		922,546
Purchased credit impaired (loans acquired with deteriorated credit quality)		1,046		—		3,282		—		4,328
Total Loans Receivable	$	299,473	$	47,074	$	568,914	$	17,733	$	933,194

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Credit Quality of Loans

The Company utilizes an internal loan classification system as a means of reporting problem and potential problem loans. Under the Company’s loan risk rating system, loans are classified as “Pass,” with problem and potential problem loans as “Special Mention,” “Substandard,” “Doubtful” and “Loss”. Individual loan risk ratings are updated continuously or at any time the situation warrants. In addition, management regularly reviews problem loans to determine whether any loan requires a classification change, in accordance with the Company’s policy and applicable regulations. The grading analysis estimates the capability of the borrower to repay the contractual obligations of the loan agreements as scheduled or at all. The internal loan classification risk grading system is based on experiences with similarly graded loans.

The Company’s internally assigned grades are as follows:

• Pass – loans which are protected by the current net worth and paying capacity of the obligor or by the value of the underlying collateral. There are several different levels of Pass rated credits, including “Watch” which is considered a transitory grade for pass rated loans that require greater monitoring. Loans not meeting the criteria of special mention, substandard, doubtful or loss that have been analyzed individually as part of the above described process are considered to be pass-rated loans.

• Special Mention – loans where a potential weakness or risk exists, which could cause a more serious problem if not corrected. Special Mention loans do not currently expose the Company to sufficient risk to warrant classification as a Substandard, Doubtful or Loss classification, but possess weaknesses that deserve management’s close attention.

• Substandard – loans that have a well-defined weakness based on objective evidence and can be characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected.

• Doubtful – loans classified as doubtful have all the weaknesses inherent in those classified as substandard with the added characteristic that the weaknesses present make collection or liquidation in full, on the basis of currently existing facts, conditions and values, highly questionable and improbable.

• Loss – loans classified as a loss are considered uncollectible, or of such value that continuance as an asset is not warranted.

The following tables present the risk category of loans by class of loans based on the most recent internal loan classification as of the dates indicated (dollars in thousands):

	Commercial and Industrial		Construction, Land Development and Other Land		Commercial and Other Real Estate		Other		Total
June 30, 2014
Pass	$	292,219	$	61,165	$	585,390	$	7,979	$	946,753
Special Mention		2,200		—		4,035		—		6,235
Substandard		9,451		—		17,450		1		26,902
Doubtful		—		—		—		—		—
Total	$	303,870	$	61,165	$	606,875	$	7,980	$	979,890
December 31, 2013
Pass	$	289,594	$	47,074	$	547,600	$	17,731	$	901,999
Special Mention		1,540		—		2,613		—		4,153
Substandard		8,339		—		18,701		2		27,042
Doubtful		—		—		—		—		—
Total	$	299,473	$	47,074	$	568,914	$	17,733	$	933,194

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Age Analysis of Past Due and Non-Accrual Loans

The following tables present an aging analysis of the recorded investment of past due loans and non-accrual loans as of the dates indicated (dollars in thousands):

	31-60 Days Past Due		61-90 Days Past Due		Greater than 90 Days Past Due and Accruing		Total Past Due and Accruing		Total Non Accrual		Current		Total Loans
June 30, 2014
Commercial and Industrial	$	340	$	—	$	—	$	340	$	3,136	$	300,394	$	303,870
Construction, Land Development and Other Land		—		—		—		—		—		61,165		61,165
Commercial and Other Real Estate		631		—		—		631		3,892		602,352		606,875
Other		—		—		—		—		—		7,980		7,980
Total	$	971	$	—	$	—	$	971	$	7,028	$	971,891	$	979,890
	31-60 Days Past Due		61-90 Days Past Due		Greater than 90 Days Past Due and Accruing		Total Past Due and Accruing		Total Non Accrual		Current		Total Loans
December 31, 2013
Commercial and Industrial	$	—	$	241	$	—	$	241	$	3,682	$	295,550	$	299,473
Construction, Land Development and Other Land		—		—		—		—		—		47,074		47,074
Commercial and Other Real Estate		—		—		—		—		5,874		563,040		568,914
Other		—		—		—		—		—		17,733		17,733
Total	$	—	$	241	$	—	$	241	$	9,556	$	923,397	$	933,194

Page 21 of 70

Impaired Loans

Impaired loans are evaluated by comparing the fair value of the collateral, if the loan is collateral dependent, and the present value of the expected future cash flows discounted at the loan’s effective interest rate, if the loan is not collateral dependent.

A valuation allowance is established for an impaired loan when the fair value of the loan is less than the recorded investment. In certain cases, portions of impaired loans are charged-off to realizable value instead of establishing a valuation allowance and are included, when applicable, in the table below as impaired loans “with no specific allowance recorded.” The valuation allowance disclosed below is included in the allowance for loan loss reported in the consolidated balance sheets as of June 30, 2014 and December 31, 2013.

The following tables present, by loan category, the recorded investment and unpaid principal balances for impaired loans with the associated allowance amount, if applicable, for the dates and periods indicated (dollars in thousands). This table excludes purchased credit impaired loans (loans acquired in acquisitions with deteriorated credit quality) of $2.6 million and $4.3 million at June 30, 2014 and December 31, 2013, respectively.

	June 30, 2014						December 31, 2013
	Recorded Investment		Unpaid Principal Balance		Related Allowance		Recorded Investment		Unpaid Principal Balance		Related Allowance
With no specific allowance recorded:
Commercial and Industrial	$	1,060	$	1,138	$	—	$	2,540	$	5,347	$	—
Commercial and Other Real Estate		2,960		3,864		—		3,680		6,112		—
With a specific allowance recorded:
Commercial and Industrial		1,522		1,929		240		100		355		4
Total
Commercial and Industrial		2,582		3,067		240		2,640		5,702		4
Commercial and Other Real Estate		2,960		3,864		—		3,680		6,112		—
Total	$	5,542	$	6,931	$	240	$	6,320	$	11,814	$	4

	Three Months Ended June 30,								Six Months Ended June 30,
	2014				2013				2014				2013
	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
With no specific allowance recorded:
Commercial and Industrial	$	1,008	$	34	$	1,500	$	—	$	1,027	$	34	$	994	$	—
Construction, Land Development and Other Land		—		—		1,159		—		—		—		1,179		—
Commercial and Other Real Estate		2,981		—		3,340		—		3,325		—		3,398		—
With a specific allowance recorded:
Commercial and Industrial		1,535		—		488		—		1,553		—		319		—
Total:
Commercial and Industrial		2,543		34		1,988		—		2,580		34		1,313		—
Construction, Land Development and Other Land		1,535		—		1,159		—		—		—		1,179		—
Commercial and Other Real Estate		2,981		—		3,340		—		3,325		—		3,398		—
Total	$	5,524	$	34	$	6,487	$	—	$	5,905	$	34	$	5,890	$	—

Page 22 of 70

The following is a summary of additional information pertaining to impaired loans for the periods indicated (dollars in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2014		2013		2014		2013
Interest foregone on impaired loans	$	103	$	141	$	274	$	230
Cash collections applied to reduce principal balance	$	2,763	$	110	$	2,871	$	152
Interest income recognized on cash collections	$	34	$	—	$	34	$	—

Troubled Debt Restructuring

The Company’s loan portfolio contains certain loans that have been modified in a Troubled Debt Restructuring (“TDR”), where economic concessions have been granted to borrowers experiencing financial difficulties. Loans are restructured in an effort to maximize collections. Economic concessions can include: reductions to the interest rate, payment extensions, forgiveness of principal or other actions.

The modification process includes evaluation of impairment based on the present value of expected future cash flows, discounted at the contractual interest rate of the original loan agreement, except when the sole (remaining) source of repayment for the loan is the operation or liquidation of the loan collateral. In these cases, management uses the current fair value of the collateral, less selling costs, to evaluate the loan for impairment. If management determines that the value of the modified loan is less than the recorded investment in the loan (net of previous charge-offs and unamortized premium or discount), impairment is recognized through a specific allowance or a charge-off.

The following tables include the recorded investment and unpaid principal balances for troubled debt restructured loans for the periods ending June 30, 2014 and December 31, 2013 (dollars in thousands). These tables include TDR loans that were purchased credit impaired (PCI). As of June 30, 2014, there were three PCI loans with a recorded investment of $304,000 and unpaid principal balances of $491,000.

Period ended June 30, 2014	Recorded Investment		Unpaid Principal Balance		Interest Income Recognized
Commercial and Industrial	$	746	$	1,183	$	—
Commercial and Other Real Estate		2,109		2,785		—
Total	$	2,855	$	3,968	$	—
Year ended December 31, 2013	Recorded Investment		Unpaid Principal Balance		Interest Income Recognized
Commercial and Industrial	$	541	$	843	$	—
Commercial and Other Real Estate		2,173		2,785		—
Total	$	2,714	$	3,628	$	—

Page 23 of 70

The following table shows the pre- and post-modification recorded investment in TDR loans by loan segment that have occurred during the periods indicated (dollars in thousands):

	Three Months Ended June 30,
	2014						2013
	Number of Loans		Pre-Modification Recorded Investment		Post- Modification Recorded Investment		Number of Loans		Pre-Modification Recorded Investment		Post- Modification Recorded Investment
Troubled Debt Restructured Loans:
Commercial and Industrial		1		224		224		—		—		—
Total		1	$	224	$	224		—	$	—	$	—
	Six Months Ended June 30,
	2014						2013
	Number of Loans		Pre-Modification Recorded Investment		Post- Modification Recorded Investment		Number of Loans		Pre-Modification Recorded Investment		Post- Modification Recorded Investment
Troubled Debt Restructured Loans:
Commercial and Industrial		1		224		224		1		310		310
Total		1	$	224	$	224		1	$	310	$	310

Loans are restructured in an effort to maximize collections. There was no financial impact for specific reserves or from charge-offs for the modified loans included in the table above. Impairment analyses are performed on the Company’s troubled debt restructured loans in conjunction with the normal allowance for loan loss process. The Company’s troubled debt restructured loans are analyzed to ensure adequate cash flow or collateral supports the outstanding loan balance.

There have been no payment defaults in the six months ended June 30, 2014 or June 30, 2013 subsequent to modification on troubled debt restructured loans that have been modified within the last twelve months.

Loans Acquired Through Acquisition

The following table reflects the accretable net discount for loans acquired through acquisition, for the periods indicated (dollars in thousands):

	Three Months Ended June 30,						Six Months Ended June 30,
	2014			2013			2014			2013
Balance, beginning of period	$	7,350		$	11,269		$	7,912		$	12,189
Accretion, included in interest income		(889	)		(1,139	)		(1,451	)		(2,083	)
Reclassifications (to) from non-accretable yield		(49	)		—			(49	)		24
Balance, end of period	$	6,412		$	10,130		$	6,412		$	10,130

The above table reflects the fair value adjustment on the loans acquired from mergers that will be amortized to loan interest income based on the effective yield method over the remaining life of the loans. These amounts do not include the fair value adjustments on the purchased credit impaired loans acquired from mergers.

Page 24 of 70

Purchased Credit Impaired Loans

Purchased Credit Impaired Loans (“PCI”) loans are acquired loans with evidence of deterioration of credit quality since origination and it is probable at the acquisition date, that the Company will not be able to collect all contractually required amounts.

When the timing and/or amounts of expected cash flows on such loans are not reasonably estimable, no interest is accreted and the loan is reported as a non-accrual loan; otherwise, if the timing and amounts of expected cash flows for PCI loans are reasonably estimable, then interest is accreted and the loans are reported as accruing loans.

The non-accretable difference represents the difference between the undiscounted contractual cash flows and the undiscounted expected cash flows, and also reflects the estimated credit losses in the acquired loan portfolio at the acquisition date and can fluctuate due to changes in expected cash flows during the life of the PCI loans.

The following table reflects the outstanding balance and related carrying value of PCI loans as of the dates indicated (dollars in thousands):

	June 30, 2014				December 31, 2013
	Unpaid Principal Balance		Carrying Value		Unpaid Principal Balance		Carrying Value
Commercial and Industrial	$	935	$	558	$	1,599	$	1,046
Commercial and Other Real Estate		3,321		2,038		5,611		3,282
Other		—		—		—		—
Total	$	4,256	$	2,596	$	7,210	$	4,328

The following table reflects the activities in the accretable net discount for PCI loans for the period indicated (dollars in thousands):

	Three Months Ended June 30,						Six Months Ended June 30,
	2014			2013			2014			2013
Balance, beginning of period	$	378		$	9		$	395		$	9
Accretion, included in interest income		(18	)		(9	)		(35	)		(9	)
Reclassifications from non-accretable yield		—			428			—			428
Balance, end of period	$	360		$	428		$	360		$	428

Note 7 – Qualified Affordable Housing Project Investments

The Company’s investment in Qualified Affordable Housing Projects that generate Low Income Housing Tax Credits (“LIHTC”) at June 30, 2014 was $4.3 million, compared to $4.5 million at December 31, 2013. The decrease of $200,000 represents the amortization of the principal balance for the six months of 2014. The funding liability for the LIHTC at June 30, 2014 was $3.5 million compared to $4.0 million, at December 31, 2013. See Note 11 – Qualified Affordable Housing Project Investments in the Company’s 10-K financial statements at December 31, 2013 for additional detail regarding the Company’s investment in LIHTC.

Page 25 of 70

Note 8 - Borrowings and Subordinated Debentures

Securities Sold Under Agreements to Repurchase

The Company enters into certain transactions, the legal form of which are sales of securities under agreements to repurchase (“Repos”) at a later date at a set price. Securities sold under agreements to repurchase generally mature within 1 day to 180 days from the issue date and are routinely renewed.

As discussed in Note 5 – Investment Securities, the Company has pledged certain investments as collateral for these agreements. Securities with a fair value of $14.1 million and $11.8 million were pledged to secure the Repos at June 30, 2014 and December 31, 2013, respectively. The Company segregates both the principal and accrued interest on these securities with the Company’s third party safekeeping custodians. All principal and interest payments on the investment securities that are pledged as collateral on the Repo program are received directly by the safekeeping custodian.

The tables below describe the terms and maturity of the Company’s securities sold under agreements to repurchase as of the dates indicated (dollars in thousands):

	June 30, 2014
Date Issued	Amount		Interest Rate			Original Term		Maturity Date
June 30, 2014	$	13,852		0.10% – 0.38	%		1 day	July 1, 2014
Total	$	13,852		0.25	%
	December 31, 2013
Date Issued	Amount		Interest Rate			Original Term		Maturity Date
December 3, 2013	$	750		0.10	%		62 days	February 3, 2014
December 31, 2013		10,391		0.10% – 0.40	%		2 days	January 2, 2014
Total	$	11,141		0.30	%

Federal Home Loan Bank Borrowings

The Company maintains a secured credit facility with the Federal Home Loan Bank of San Francisco “FHLB”, allowing the Company to borrow on an overnight and term basis. The Company’s credit facility with the FHLB is $345.4 million, which represents approximately 25% of the Bank’s total assets, as reported by the Bank in its March 31, 2014 FFIEC Call Report.

As of June 30, 2014, the Company had $582 million of loan collateral pledged with the FHLB which provides $249.9 million in borrowing capacity. The Company has no investment securities pledged with the FHLB to support this credit facility. In addition, the Company must maintain an investment in the Capital Stock of the FHLB. Under the FHLB Act, the FHLB has a statutory lien on the FHLB capital stock that the Company owns and the FHLB capital stock serves as further collateral under the borrowing line.

The Company had no outstanding advances (borrowings) with the FHLB as of June 30, 2014 or December 31, 2013.

Page 26 of 70

Subordinated Debentures

The following table summarizes the terms of each issuance of subordinated debentures outstanding as of June 30, 2014:

Series	Amount (in thousands)			Issuance Date		Maturity Date		Rate Index			Current Rate			Next Reset Date
Trust I	$	6,186			12/10/04		03/15/35		3 month LIBOR + 2.05	%		2.28	%		9/15/14
Trust II		3,093			12/23/05		03/15/36		3 month LIBOR + 1.75	%		1.98	%		9/15/14
Trust III		3,093			06/30/06		09/15/36		3 month LIBOR + 1.85	%		2.08	%		9/15/14
Subtotal		12,372
Unamortized fair value adjustment		(2,913	)
Net	$	9,459

The Company had an aggregate outstanding contractual balance of $12.4 million in subordinated debentures at June 30, 2014. These subordinated debentures were issued in three separate series. Each issuance had a maturity of 30 years from their approximate date of issue. All three subordinated debentures are variable rate instruments that reprice quarterly based on the three month LIBOR plus a margin (see tables above). All three subordinated debentures had their interest rates reset in June 2014 at the current three month LIBOR plus their spread, and will continue to reprice quarterly through their maturity date. All three subordinated debentures are currently callable at par with no prepayment penalties.

The Company currently includes in Tier 1 capital an amount of subordinated debentures equal to no more than 25% of the sum of all core capital elements, which is generally defined as shareholders’ equity less goodwill, core deposit and leasehold right intangibles and a portion of the SBA servicing assets.

Interest payments made by the Company on subordinated debentures are considered dividend payments under FRB regulations. Notification to the FRB is required prior to the Company declaring and paying a dividend during any period in which the Company’s quarterly net earnings are insufficient to fund the dividend amount. This notification requirement is included in regulatory guidance regarding safety and soundness surrounding capital and includes other non-financial measures such as asset quality, financial condition, capital adequacy, liquidity, future earnings projections, capital planning and credit concentrations. Should the FRB object to the dividend payments, the Company would be precluded from paying interest on the subordinated debentures after giving notice within 15 days before the payment date. Payments would not commence until approval is received or the Company no longer needs to provide notice under applicable guidance. The Company has the right, assuming no default has occurred, to defer payments of interest on the subordinated debentures at any time for a period not to exceed 20 consecutive quarters. The Company has not deferred any interest payments.

Page 27 of 70

Note 9 - Derivative Financial Instruments

At June 30, 2014, the Company has twenty three pay-fixed, receive-variable, interest rate contracts that are designed to convert fixed rate loans into variable rate loans. The Company acquired these interest rate swap contracts (“swaps”) on July 31, 2012 as a result of the merger with PC Bancorp.

The Company also acquired as part of the PC Bancorp acquisition, a pay-fixed, receive-variable, interest rate swap contract that was originally utilized to convert a fixed rate borrowing on a subordinated debenture to a variable rate borrowing. The fixed rate subordinated debenture converted to a variable rate borrowing in December of 2012 and the swap matured in 2013.

Prior to the merger with PC Bancorp, the Company did not utilize interest rate swaps to manage its interest rate risk position. The Company has incorporated these instruments into its asset liability program when monitoring its interest rate risk position. All of the interest rate swap contracts are with the same counterparty bank. The total notional amount of the outstanding swap contracts as of June 30, 2014 is $31.3 million. The outstanding swaps have original maturities of up to 15 years.

Balance Sheet Classification of Derivative Financial Instruments

The following tables present the notional amount and the fair values of the asset and liability of the Company’s derivative instruments as of the dates and periods indicated (dollars in thousands):

	Derivative Liabilities
	June 30, 2014		December 31, 2013
Interest rate contacts notional amount	$	31,344	$	31,914
Derivatives not designated as hedging instruments:
Interest rate swap contracts fair value	$	645	$	738
Derivatives designated as hedging instruments:
Interest rate swap contracts fair value		2,904		3,205
Total interest rate contracts fair value	$	3,549	$	3,943
Balance sheet location		Accrued Interest Payable and Other Liabilities		Accrued Interest Payable and Other Liabilities

Page 28 of 70

The Effect of Derivative Instruments on the Consolidated Statements of Income

The following table summarizes the effect of derivative financial instruments on the consolidated statements of income for the periods indicated (dollars in thousands):

	Three Months Ended June 30,						Six Months Ended June 30,
	2014			2013			2014			2013
Derivatives not designated as hedging instruments:
Interest rate swap contracts – loans
Increase in fair value of interest rate swap contracts	$	32		$	155		$	93		$	217
Payments on interest rate swap contracts on loans		(68	)		(69	)		(136	)		(156	)
Net (decrease) increase in other non-interest income		(36	)		86			(43	)		61
Interest rate swap contracts – subordinated debenture
Increase in fair value of interest rate swap contracts		—			—			—			70
Payments on interest rate swap contracts on subordinated debentures		—			—			—			(70	)
Net decrease in other non-interest income		—			—			—			—
Net (decrease) increase in other non-interest income	$	(36	)	$	86		$	(43	)	$	61
Derivatives designated as hedging instruments:
Interest rate swap contracts – loans
Increase in fair value of interest rate swap contracts	$	118		$	851		$	301		$	1,196
Increase (decrease) in fair value of hedged loans		165			(521	)		238			(590	)
Payment on interest rate swap contracts on loans		(317	)		(331	)		(633	)		(633	)
Net decrease in interest income on loans	$	(34	)	$	(1	)	$	(94	)	$	(27	)

The interest rate swap contract associated with the subordinated debenture that was to mature in June 2013 was liquidated during the first quarter of 2013.

Under the interest rate swap contracts, the Company is required to pledge and maintain collateral for the credit support under these agreements. At June 30, 2014, the Company had $2.7 million in certificates of deposit and $1.9 million in non-interest bearing balances for a total of $4.6 million with the counterparty, Pacific Coast Bankers Bank. Of this amount, $3.8 million is required to be pledged as collateral under the interest rate swap contracts.

Page 29 of 70

Note 10 – Balance Sheet Offsetting

Assets and liabilities relating to certain financial instruments, including derivatives, and securities sold under repurchase agreements (“Repos”), may be eligible for offset in the consolidated balance sheets as permitted under accounting guidance. The Company’s interest rate swap derivatives are subject to a master bilateral netting and offsetting arrangement under specific conditions as defined within a master agreement governing all interest rate swap contracts that the Company and the counterparty bank have entered into. In addition, the master agreement under which the interest rate contracts have been written require the pledging of assets by the Company based on certain risk thresholds. The Company has pledged as collateral, both a certificate of deposit and cash that is maintained in a due from bank account with the counterparty bank. The pledged collateral under the swap agreements are reported in the Company’s consolidated balance sheets, unless the Company defaults under the master agreement. The Company currently does not net or offset the interest rate swap contracts in its consolidated balance sheets, as reflected within the table below.

The Company’s securities sold under repurchase agreements represent transactions the Company has entered into with several individual deposit customers. These transactions represent the sale of securities on an overnight or on a term basis to our deposit customers under an agreement to repurchase the securities from the customers the next business day or at maturity. There is an individual contract for each customer with only one transaction per customer. There is no master agreement that provides for the netting arrangement or the offsetting of these individual transactions or for the netting of collateral positions. The Company does not net or offset the Repos in its consolidated balance sheets as reflected within the table below.

The table below presents the Company’s financial instruments that may be eligible for offsetting which include securities sold under agreements to repurchase that have no enforceable master netting arrangement and derivative securities that could be offset in the consolidated financial statements due to an enforceable master netting arrangement (dollars in thousands):

	Gross Amounts Recognized in the Consolidated Balance Sheets		Gross Amounts Offset in the Consolidated Balance Sheets		Net Amounts of Assets Presented in the Consolidated Balance Sheets		Gross Amounts Not Offset in the Consolidated Balance Sheets				Net Amount (Collateral over liability balance required to be pledged)
							Financial Instruments		Collateral Pledged
June 30, 2014
Financial Liabilities:
Interest rate swap contracts fair value (See Note 9 – Derivative Financial Instruments)	$	3,549	$	—	$	3,549	$	3,549	$	3,814	$	265
Securities sold under agreements to repurchase (See Note 8 – Borrowings and Subordinated Debentures)		13,852		—		13,852		13,852		14,129		277
Total	$	17,401	$	—	$	17,401	$	17,401	$	17,943	$	542
December 31, 2013
Financial Liabilities:
Interest rate swap contracts fair value (See Note 9 – Derivative Financial Instruments)	$	3,943	$	—	$	3,943	$	3,943	$	4,194	$	251
Securities sold under agreements to repurchase (See Note 8 – Borrowings and Subordinated Debentures)		11,141		—		11,141		11,141		11,750		609
Total	$	15,084	$	—	$	15,084	$	15,084	$	15,944	$	860

Page 30 of 70

Note 11 - Stock Options and Restricted Stock

Equity Compensation Plans

The Company’s 2007 Equity and Incentive Plan, the “Equity Plan,” was adopted by the Company in 2007 and replaced two prior equity compensation plans. The Equity Plan provides for significant flexibility in determining the types and terms of awards that may be made to participants. The Equity Plan was revised and approved by the Company’s shareholders in 2011 and adopted by the Company as part of the Bank holding company reorganization. The Equity Plan is designed to promote the interest of the Company in aiding the Company to attract and retain employees, officers and non-employee directors who are expected to contribute to the future success of the organization. The Equity Plan is intended to provide participants with incentives to maximize their efforts on behalf of the Company through stock-based awards that provide an opportunity for stock ownership. The Equity Plan provides the Company with a flexible equity incentive compensation program, which allows the Company to grant stock options, restricted stock, restricted stock award units and performance units. Certain options and share awards provide for accelerated vesting, if there is a change in control, as defined in the Equity Plan. The Equity Plan is described more fully in Note 16 - Stock Options and Restricted Stock in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013.

At June 30, 2014, future compensation expense related to un-vested stock option and un-vested restricted stock grants are reflected in the table below (dollars in thousands):

Future Stock Based Compensation Expense	Stock Options		Restricted Stock		Total
Remainder of 2014	$	3	$	761	$	764
2015		2		748		750
2016		—		206		206
2017		—		27		27
2018		—		6		6
Thereafter		—		—		—
Total	$	5	$	1,748	$	1,753

The estimated fair value of both incentive stock options and non-qualified stock options granted in prior years, have been calculated using the Black-Scholes option pricing model. The use of the Black-Scholes model and the variables and assumptions are described in Note 16 - Stock Options and Restricted Stock in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013.

Stock Options

There have been no stock options granted by the Company after 2010.

The following table summarizes the share option activity under the plans as of the date and for the period indicated:

	Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value (in thousands)
Outstanding stock options at December 31, 2013		434,740	$	13.89		2.1	$	1,913
Granted		—		—
Exercised		110,044		9.87
Forfeited		—		—
Expired		—		—
Outstanding stock options at June 30, 2014		324,696	$	15.25		1.9	$	1,456
Exercisable options at June 30, 2014		315,496	$	15.33		1.9	$	1,394
Unvested options at June 30, 2014		9,200	$	12.30		2.3	$	62
Outstanding, vested and expected to vest at June 30, 2014		324,696	$	15.25		1.9	$	1,456

Page 31 of 70

The Company recorded stock option compensation expense of $2,000 and $3,000 for the three month period ended June 30, 2014 and 2013, and $6,000 and $12,000 for the six month period ended June 30, 2014 and 2013, respectively.

At December 31, 2013, there was one executive officer of the Company that had a remaining balance of 88,344 shares that were exercisable under Rule 10b5-1(c) (1) “10b5 Plan” under the Securities Exchange Act of 1934, as amended. This plan had been adopted by the executive officer in the fourth quarter of 2013. During the first quarter of 2014 all 88,344 options that remained outstanding were exercised and sold. In addition, there were an additional 21,700 options exercised by employees in the first and second quarters of 2014.

The total intrinsic value of options exercised during the six months ended June 30, 2014 was $894,000 and there were no options exercised during the six months ended June 30, 2013.

Restricted Stock

The weighted-average grant-date fair value per share in the table below is calculated by taking the total aggregate cost of the restricted shares issued divided by the number of shares of restricted stock issued. The aggregate cost of the restricted stock was calculated by multiplying the number of shares granted at each of the grant dates by the closing stock price of the Company’s common stock on the date of the grant. The following table summarizes the restricted stock activity under the Equity Plan for the period indicated:

	Number of Shares			Weighted-Average Grant-Date Fair Value per Share
Restricted Stock:
Unvested at December 31, 2013		266,050		$	13.49
Granted		45,900			18.17
Vested		(48,975	)		12.32
Cancelled and forfeited		(500	)		11.75
Unvested at June 30, 2014		262,475		$	14.53

Restricted stock compensation expense related to the restricted stock grants reflected in the table above was $477,000 and $414,000 for the three month period ended June 30, 2014 and 2013, and $881,000 and $463,000 for the six month period ended June 30, 2014 and 2013, respectively. Restricted stock awards reflected in the table above are valued at the closing stock price on the date of grant and are expensed to stock based compensation expense over the period for which the related service is performed.

Note 12 - Common Stock

During the first and second quarters of 2014, the Company’s outstanding common stock increased by 140,871 shares to 11,222,235 at June 30, 2014. The components of this increase are as follows: The Company issued 110,044 shares of stock from the exercise of employee stock options for a total value of $1.1 million. The Company issued 45,900 shares of restricted stock to the Company’s employees, cancelled 500 shares of unvested restricted stock related to employee turnover and repurchased 14,573 shares of restricted stock that had a value of $242,000 related to employees electing to pay their tax obligation via the repurchase of the stock by the Company. The net issuance of restricted stock for 2014 was 30,827 shares. See Note 11 – Stock Options and Restricted Stock for additional detail related to the issuances of these shares.

During 2013, the Company issued 282,031 shares of stock from the exercise of employee stock options for a total value of $2.8 million. The Company issued 81,050 shares of restricted stock to the Company’s directors and employees, cancelled 11,600 shares of unvested restricted stock related to employee turnover and cancelled 28,791 shares of restricted stock that had a value of $422,000, when employees elected to pay their tax obligation via the repurchase of the stock by the Company. The net issuance of restricted stock for 2013 was 69,450 shares.

Page 32 of 70

Note 13 - Other Comprehensive Income (Loss)

The following table presents the changes in accumulated other comprehensive income (loss) by component for the periods indicated (dollars in thousands):

	Before Tax			Tax Effect			Net of Tax
Three Months Ended – June 30, 2014
Net unrealized gains (losses) on investment securities:
Beginning balance	$	(80	)	$	(33	)	$	(47	)
Net unrealized gains arising during the period		411			169			242
Reclassification adjustment for gains realized in net income		0			0			0
Net other comprehensive income		411			169			242
Ending balance	$	331		$	136		$	195
	Before Tax			Tax Effect			Net of Tax
Three Months Ended – June 30, 2013
Net unrealized gains on investment securities:
Beginning balance	$	2,243		$	923		$	1,320
Non-credit portion of other-than-temporary impairments arising during the period		—			—			—
Net unrealized losses arising during the period		(1,247	)		(513	)		(734	)
Net other comprehensive loss		(1,247	)		(513	)		(734	)
Ending balance	$	996		$	410		$	586
	Before Tax			Tax Effect			Net of Tax
Six Months Ended – June 30, 2014
Net unrealized gains (losses) on investment securities:
Beginning balance	$	(348	)	$	(143	)	$	(205	)
Net unrealized gains arising during the period		679			279			400
Reclassification adjustment for gains realized in net income		0			0			0
Net other comprehensive income		679			279			400
Ending balance	$	331		$	136		$	195
	Before Tax			Tax Effect			Net of Tax
Six Months Ended – June 30, 2013
Net unrealized gains on investment securities:
Beginning balance	$	2,369		$	975		$	1,394
Non-credit portion of other-than-temporary impairments arising during the period		(32	)		(13	)		(19	)
Net unrealized losses arising during the period		(1,336	)		(550	)		(786	)
Other comprehensive loss before reclassifications		(1,368	)		(563	)		(805	)
Reclassification adjustment for gains realized in net income		(5	)		(2	)		(3	)
Net other comprehensive loss		(1,373	)		(565	)		(808	)
Ending balance	$	996		$	410		$	586

Page 33 of 70

Note 14 - Commitments and Contingencies

Litigation

From time to time the Company is a party to claims and legal proceedings arising in the ordinary course of business. The Company accrues for any probable loss contingencies that are estimable and discloses any material losses. As of June 30, 2014, there were no legal proceedings against the Company the outcome of which are expected to have a material adverse impact on the Company’s financial position, results of operations or cash flows, as a whole.

Financial Instruments with Off Balance Sheet Risk

See Note 22 – Commitments and Contingencies in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013. Financial instruments with off balance sheet risk include commitments to extend credit of $417 million and $346 million at June 30, 2014 and December 31, 2013, respectively. Included in the aforementioned commitments were standby letters of credit outstanding of $40.7 million and $40.6 million at June 30, 2014 and December 31, 2013, respectively.

Note 15 - Fair Value of Assets and Liabilities

Fair Value Measurement

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market for an asset or liability in an orderly transaction between market participants at the measurement date. The required disclosure within the financial statements of the fair value of financial assets and financial liabilities includes both those financial assets and financial liabilities that are not measured and reported at fair value on a recurring basis and those reported on a non-recurring basis. The methodologies for estimating the fair value of financial assets and financial liabilities that are measured at fair value, and for estimating the fair value of financial assets and financial liabilities not recorded at fair value, are discussed below.

In accordance with accounting guidance, the Company groups its financial assets and financial liabilities measured at fair value in three levels, based on the markets in which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value. These levels are as follows:

• Level 1 – Observable unadjusted quoted market prices in active markets for identical assets and liabilities that the reporting entity has the ability to access at the measurement date.

• Level 2 – Significant other observable market based inputs, other than Level 1 prices such as quoted prices for similar assets or liabilities or unobservable inputs that are corroborated by market data. This includes quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data, either directly or indirectly. This would include those financial instruments that are valued using models or other valuation methodologies where substantially all of the assumptions are observable in the marketplace, can be derived from observable market data or are supported by observable levels at which transactions are executed in the marketplace.

• Level 3 – Significant unobservable inputs that reflect a reporting entity’s own assumptions about the assumptions that market participants would use in pricing an asset or liability. Assets measured utilizing level 3 are for positions that are not traded in active markets or are subject to transfer restrictions, and or where valuations are adjusted to reflect illiquidity and or non-transferability. These assumptions are not corroborated by market data. This is comprised of financial instruments whose fair value is estimated based on internally developed models or methodologies utilizing significant inputs that are generally less readily observable from objective sources. Management uses a combination of reviews of the underlying financial statements, appraisals and management’s judgment regarding credit quality to determine the value of the financial asset or liability.

A financial instrument’s level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. Management maximizes the use of observable inputs and attempts to minimize the use of unobservable inputs when determining fair value measurements. The following is a description of both the general and specific valuation methodologies used for certain instruments measured at fair value, as well as the general classification of these instruments pursuant to the valuation hierarchy.

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Investment Securities Available-for-Sale: The fair value of securities available-for-sale may be determined by obtaining quoted prices in active markets, when available, from nationally recognized securities exchanges (Level 1 financial assets) If quoted market prices are not available, the fair value is determined by a matrix pricing, which is a mathematical technique widely used in the securities industry to value debt securities without relying exclusively on quoted prices for the specific securities but rather by relying on the securities’ relationship to other benchmark quoted securities which are observable market inputs (Level 2 financial assets). Debt securities’ pricing is generally obtained from one of the matrix pricing models developed from one of the three national pricing agencies. In cases where significant credit valuation adjustments are incorporated into the estimation of fair value, reported amounts are classified as Level 3 financial assets.

Securities classified as available-for-sale are accounted for at their current fair value rather than amortized historical cost. Unrealized gains or losses are excluded from net income and reported as an amount net of taxes as a separate component of accumulated other comprehensive income included in shareholders’ equity.

The Company considers the inputs utilized to fair value the U.S. Agency and U.S. Sponsored Agency issued debt securities (callable and non-callable notes), mortgage backed securities guaranteed by those agencies, collateralized mortgage obligations issued by those agencies, corporate bond securities, and municipal securities to be observable market inputs and classified these financial assets within the Level 2 fair value hierarchy. Management bases the fair value for these investments primarily on third party price indications provided by independent pricing sources utilized by the Company’s bond accounting system to obtain market pricing on its individual securities. Vining Sparks, who provides the Company with its bond accounting system, utilizes pricing from three independent third party pricing sources for pricing of securities. These third party pricing sources utilize, quoted market prices or when quoted market prices are not available, then fair values are estimated using nationally recognized third-party vendor pricing models of which the inputs are observable. However, the fair value reported may not be indicative of the amounts that could be realized in an actual market exchange.

The fair value of the Company’s U.S. Agency and U.S. Sponsored Agency callable and non-callable agency securities, mortgage backed securities guaranteed by those agencies, and collateralized mortgage obligations issued by those agencies, corporate bond securities, and municipal securities are calculated using an option adjusted spread model from one of the nationally recognized third-party pricing models. Depending on the assumptions used and the treasury yield curve and other interest rate assumptions, the fair value could vary significantly in the near term.

Loans: The fair value for loans is estimated by discounting the expected future cash flows using current interest rates at which similar loans would be made to borrowers with similar credit ratings for the same remaining maturities, adjusted for the allowance for loan loss. Loans are segregated by type such as commercial and industrial, commercial real estate, construction and other loans with similar credit characteristics and are further segmented into fixed and variable interest rate loan categories. Expected future cash flows are projected based on contractual cash flows, adjusted for estimated prepayments. The inputs utilized in determining the fair value of loans are unobservable and accordingly, these financial assets are classified within Level 3 of the fair value hierarchy.

Impaired Loans: The fair value of impaired loans is determined based on an evaluation at the time the loan is originally identified as impaired, and periodically thereafter, at the lower of cost or fair value. Fair value on impaired loans is measured based on the value of the collateral securing these loans, less costs to sell, if the loan is collateral dependent, or based on the discounted cash flows for non-collateral dependent loans. Collateral on collateral dependent loans may be real estate and/or business assets including equipment, inventory and/or accounts receivable and is determined based on appraisals performed by qualified licensed appraisers hired by the Company. Appraised and reported values may be discounted based on management’s historical knowledge, changes in market conditions from the time of valuation, and/or management’s expertise and knowledge of the client and client’s business. Such discounts are typically significant and unobservable. For unsecured loans, the estimated future discounted cash flows of the business or borrower, are used in evaluating the fair value. Impaired loans are reviewed and evaluated on at least a quarterly basis for additional impairment and adjusted accordingly, based on the same factors identified above. The inputs utilized in determining the fair value of impaired loans are unobservable and accordingly, these financial assets are classified within Level 3 of the fair value hierarchy.

Interest Rate Swap Contracts: The fair value of the interest rate swap contracts are provided by an independent third party vendor that specializes in interest rate risk management and fair value analysis using a model that utilizes current market data to estimate cash flows of the interest rate swaps utilizing the future LIBOR yield curve for accruing and the future Overnight Index Swap Rate (Fed Funds Effective Swap Rate) “OIS” yield curve for discounting through the maturity date of the interest rate swap contract. The future LIBOR yield curve is the primary input in the valuation of the interest rate swap contracts. Both the LIBOR and OIS yield curves are readily observable in the marketplace. Accordingly, the interest rate swap contracts are classified within Level 2 of the fair value hierarchy.

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Other Real Estate Owned: The fair value of other real estate owned is generally based on real estate appraisals (unless more current market information is available) less estimated costs of sale. These appraisals may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach. Adjustments are routinely made in the appraisal process by the appraisers to adjust for differences between the comparable sales and income data available. Such adjustments are typically significant. The inputs utilized in determining the fair value of other real estate owned are unobservable and accordingly, these financial assets are classified within Level 3 of the fair value hierarchy.

SBA Servicing Asset: The Company acquired an SBA servicing asset with the PC Bancorp merger and has added to the servicing asset with the sale of SBA loans subsequent to the merger. This servicing asset was initially fair valued at the merger date based on an evaluation by a third party who specializes in fair value analysis. The fair value of this asset was based on the estimated discounted future cash flows utilizing market based discount rates and estimated prepayment speeds. The discount rate was based on the current U.S. Treasury yield curve, plus a spread for marketplace risk associated with these assets. Prepayment speeds were selected based on the historical prepayments of similar SBA pools. The prepayment speeds determine the timing of the cash flows. The SBA servicing asset is amortized over the estimated life of the loans based on an effective yield approach. In addition, the Company’s servicing asset is evaluated regularly for impairment by discounting the estimated future cash flows using market-based discount rates and prepayment speeds. If the calculated present value of the servicing asset declines below the Company’s current carrying value, the servicing asset is written down to its present value. Based on the Company’s methodology in its valuation of the SBA servicing asset, the current carrying value is estimated to approximate the fair value. The inputs utilized in determining the fair value of SBA servicing asset are unobservable and accordingly, these financial assets are classified within Level 3 of the fair value hierarchy.

Non-Maturing Deposits: The fair values for non-maturing deposits (deposits with no contractual termination date), which include non-interest bearing demand deposits, interest bearing transaction accounts, money market deposits and savings accounts are equal to their carrying amounts, which represent the amounts payable on demand. Because the carrying value and fair value are by definition identical, and accordingly non-maturity deposits are classified within Level 1 of the fair value hierarchy, these balances are not listed in the following tables.

Maturing Deposits: The fair values of fixed maturity certificates of deposit (time deposits) ) “CD’s” are estimated using a discounted cash flow calculation that applies current market deposit interest rates to the Company’s current certificates of deposit interest rates for similar term certificates. The inputs utilized in determining the fair value of maturing deposits are observable from published and quoted CD rates marketed by other financial institutions and accordingly, these financial liabilities are classified within Level 2 of the fair value hierarchy.

Securities Sold under Agreements to Repurchase (“Repos”): The fair value of securities sold under agreements to repurchase is estimated based on the discounted value of future cash flows expected to be paid on the deposits. The carrying amounts of Repos with maturities of 90 days or less approximate their fair values. The fair value of Repos with maturities greater than 90 days is estimated based on the discounted value of the contractual future cash flows. The inputs utilized in determining the fair value of securities sold under agreements to repurchase are observable and accordingly, these financial liabilities are classified within Level 2 of the fair value hierarchy.

Subordinated Debentures: The fair value of the three variable rate subordinated debentures (“debentures”) is estimated using a discounted cash flow calculation that applies the three month LIBOR plus the margin index at June 30, 2014, to the cash flows from the debentures, based on the actual interest rate the debentures were accruing at June 30, 2014. Because all three of the debentures re-priced on June 16, 2014 based on the current three month LIBOR index rate plus the index margin at that date, and with relatively little to no change in the three month LIBOR index rate from the re-pricing date through June 30, 2014, the current face value of the debentures and their calculated fair value are approximately equal. The inputs utilized in determining the fair value of subordinated debentures are observable and accordingly, these financial liabilities are classified within Level 2 of the fair value hierarchy.

Fair Value of Commitments: Loan commitments that are priced on an index plus a margin to a market rate of interest are reported at the carrying value of the loan commitment. Loan commitments on which the committed fixed interest rate is less or more than the current market rate were insignificant at June 30, 2014 and December 31, 2013.

Interest Rate Risk: The Company assumes interest rate risk (the risk that general interest rate levels will change) as a result of its normal operations. As a result, the fair values of the Company’s financial instruments will change when interest rate levels change and that change may be either favorable or unfavorable to the Company. Management attempts to match

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maturities of assets and liabilities to the extent believed necessary to minimize interest rate risk. However, borrowers with fixed rate obligations are less likely to prepay in a rising rate environment and more likely to prepay in a falling rate environment. In addition, depositors who are receiving fixed rates are more likely to withdraw funds before maturity in a rising rate environment and less likely to do so in a falling rate environment. Management monitors rates and maturities of assets and liabilities and attempts to minimize interest rate risk by adjusting terms of new loans and deposits and by investing in securities with terms that mitigate the Company’s overall rate risk.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following table summarizes the financial assets and financial liabilities measured at fair value on a recurring basis as of the dates indicated, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value (dollars in thousands):

	Fair Value		(Level 1)		(Level 2)		(Level 3)
Financial Assets – June 30, 2014
Investment securities available-for-sale	$	102,143	$	—	$	102,143	$	—
Financial Liabilities – June 30, 2014
Interest Rate Swap Contracts	$	3,549	$	—	$	3,549	$	—
Financial Assets – December 31, 2013
Investment securities available-for-sale	$	106,488	$	—	$	106,488	$	—
Financial Liabilities – December 31, 2013
Interest Rate Swap Contracts	$	3,943	$	—	$	3,943	$	—

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At December 31, 2013 and at June 30, 2014 the Company had no financial assets or liabilities that were measured at fair value on a recurring basis that required the use of significant unobservable inputs (Level 3), and thus a table has not been provided for the six months ended June 30, 2014. The following table presents a roll forward of all assets and liabilities and additional information about the financial assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the date and period indicated (dollars in thousands):

Financial Assets – Measured at Fair Value on a Recurring Basis using Unobservable Inputs	Balance at January 1		Included in Earnings			Included in Other Comprehensive Income (Loss)		Purchases, Issuances, Sales, Settlements			Transfers into (out of) Level 3		Balance at June 30
Period ended June 30, 2013
Private Issue CMO Securities	$	2,910	$	(20	)	$	—	$	(2,890	)	$	—	$	—
Total	$	2,910	$	(20	)	$	—	$	(2,890	)	$	—	$	—

There were no transfers of assets either between Level 1 and Level 2 nor in or out of Level 3 of the fair value hierarchy for assets measured on a recurring basis for the period ended June 30, 2014 and 2013. The above table reflects the sale of the Company’s Private Issue CMO securities during the first quarter of 2013.

Assets Measured at Fair Value on a Non-recurring Basis

The Company may be required periodically, to measure certain financial assets and financial liabilities at fair value on a nonrecurring basis, that is, the instruments are not measured at fair value on an ongoing basis, but are subject to fair value adjustments in certain circumstances (for example, when there is evidence of impairment). These include assets that are measured at the lower of cost or market value that were recognized at fair value below cost at the end of or during the period.

There was one loan transferred to other real estate owned “OREO” during the quarter ending June 30, 2014. At December 31, 2013 this loan was included in the collateral dependent impaired loans table below with a carrying value of $219,000. This asset was transferred to OREO during the 2^nd quarter of 2014 at a value of $219,000. There was no change in the valuation hierarchy for this asset. Two other loans with a carrying value of $45,000 were included in the $264,000 balance at December 31, 2013. These loans were both paid down resulting in no carrying value at June 30, 2014. There were no other reclassifications of assets either between Level 1 and Level 2 nor in or out of Level 3 of the fair value hierarchy for assets measured on a non-recurring basis for the three months ended June 30, 2014 and 2013.

The following table presents the balances of assets and liabilities measured at fair value on a non-recurring basis by caption and by level within the fair value hierarchy as of the dates indicated (dollars in thousands):

	Recorded Investment Carrying Value		(Level 1)		(Level 2)		(Level 3)
Financial Assets – June 30, 2014
Other real estate owned, net	$	219	$	—	$	—	$	219
		219		—		—		219
Financial Assets – December 31, 2013
Collateral dependent impaired loans with specific valuation allowance and/or partial charge-offs (non-purchased credit impaired loans)	$	264	$	—	$	—	$	264
Total	$	264	$	—	$	—	$	264

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The following table presents the significant unobservable inputs used in the fair value measurements for Level 3 assets and liabilities measured at fair value on a recurring or non-recurring basis as of the dates indicated (dollars in thousands):

	Fair Value		Valuation Methodology	Valuation Model and/or Factors	Unobservable Input Values
Financial Assets – June 30, 2014
Other real estate, net	$	219	Commercial real estate appraisal	Sales approach (3)
				Estimated selling costs		8	%
Financial Assets – December 31, 2013
Collateral dependent impaired loans with specific valuation allowance and/or partial charge-off (1)	$	45	Credit loss estimate of aged accounts receivable collateral	Credit loss factors on aging of accounts receivable collateral		80	%
	$	219	Commercial real estate appraisal	Sales approach (2)
				Estimated selling costs		8	%

(1) The Company has recorded total charge-offs of $605,000 on the principal balance on two of the loans included in the balance in the above table. These charge-offs were recorded in 2013.

(2) For the one commercial real estate loan included in the above table at December 31, 2013, the Company established the fair value of the loan based on a recent commercial real estate appraisal. The Company selected the “sales approach” for valuing the collateral.

(3) For the one commercial real estate property included in other real estate owned at June 30, 2014 as reflected in the above table, the Company established the fair value of this property based on a recent commercial real estate appraisal. The Company selected the “sales approach” for valuing the collateral.

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Fair Value of Financial Assets and Liabilities

The required disclosure within the financial statements of the fair value of financial assets and financial liabilities, include both those financial assets and financial liabilities that are not measured and reported at fair value on a recurring basis and those reported on a non-recurring basis. The estimated fair value amounts have been determined by the Company using available market information and appropriate valuation methodologies. However, considerable judgment is required to develop the estimates of fair value. Accordingly, the estimates presented below are not necessarily indicative of the amounts the Company could have realized in a current market exchange as of June 30, 2014 and December 31, 2013. The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts. The description of the valuation methodologies used for assets and liabilities measured at fair value and for estimating fair value for financial instruments not recorded at fair value has been described above.

The table below presents the carrying amounts and fair values of financial instruments based on their fair value hierarchy indicated (dollars in thousands):

			Fair Value
	Recorded Investment Carrying Value		(Level 1)		(Level 2)		(Level 3)
June 30, 2014
Financial Assets
Investment securities available-for-sale	$	102,143	$	—	$	102,143	$	—
Loans, net		968,606		—		—		972,960
Financial Liabilities
Certificates of deposit		57,732		—		57,775		—
Securities sold under agreements to repurchase		13,852		—		13,852		—
Subordinated debentures		9,459		—		12,372		—
Interest rate swap contracts		3,549		—		3,549		—
December 31, 2013
Financial Assets
Investment securities available-for-sale	$	106,488	$	—	$	106,488	$	—
Loans, net		922,591		—		—		926,500
Financial Liabilities
Certificates of deposit		63,581		—		63,680		0
Securities sold under agreements to repurchase		11,141		—		11,141		—
Subordinated debentures		9,379		—		12,372		—
Interest rate swap contracts		3,943		—		3,943		—

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ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

See “Cautionary Statement for Purposes of the “Safe Harbor” Provisions of the Private Securities Litigation Reform Act of 1995” below relating to “forward-looking” statements included in this report.

The following is management’s discussion and analysis of the major factors that influenced the results of the operations and financial condition of CU Bancorp, the (“Company”) for the current period. This analysis should be read in conjunction with the audited financial statements and accompanying notes included in the Company’s 2013 Annual Report on Form 10K and with the unaudited financial statements and notes as set forth in this report.

CAUTIONARY STATEMENT FOR PURPOSES OF THE “SAFE HARBOR” PROVISIONS OF THE

PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

We have made forward-looking statements in this document about the Company, for which the Company claims the protection of the safe harbor provisions contained in the Private Securities Litigation Reform Act of 1995.

The Company’s forward-looking statements include descriptions of plans or objectives of management for future operations, products or services, and forecasts of its revenues, earnings or other measures of economic performance. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. They often include the words “believe,” “expect,” “intend,” “estimate” “anticipates,” “project”, “assume”, “plan”, “predict” or words of similar meaning, or future or conditional verbs such as “will,” “would,” “should,” “could” or “may.”

We make forward-looking statements as set forth above and regarding projected sources of funds, availability of acquisition and growth opportunities, dividends, adequacy of our allowance for loan losses and provision for loan losses, our loan portfolio and subsequent charge-offs. Forward-looking statements involve substantial risks and uncertainties, many of which are difficult to predict and are generally beyond our control. There are many factors that could cause actual results to differ materially from those contemplated by these forward-looking statements. Risks and uncertainties that could cause our financial performance to differ materially from our goals, plans, expectations and projections expressed in forward-looking statements include those set forth in our filings with the SEC, Item 1A of our Annual Report on Form 10-K, and the following:

• Current and future economic and market conditions in the United States generally or in the communities we serve, including the effects of declines in property values, high unemployment rates and overall slowdowns in economic growth.

• Loss of customer checking and money-market account deposits as customers pursue other, higher-yield investments.

• Possible changes in consumer and business spending and saving habits and the related effect on our ability to increase assets and to attract deposits.

• Competitive market pricing factors.

• Deterioration in economic conditions that could result in increased loan losses.

• Risks associated with concentrations in real estate related loans.

• Risks associated with concentrations in deposits.

• Market interest rate volatility.

• Possible changes in the creditworthiness of customers and the possible impairment of the collectability of loans.

• Changes in the speed of loan prepayments, loan origination and sale volumes, loan loss provisions, charge offs or actual loan losses.

• Compression of our net interest margin.

• Stability of funding sources and continued availability of borrowings.

• Changes in legal or regulatory requirements or the results of regulatory examinations that could restrict growth.

• The inability of our internal disclosure controls and procedures to prevent or detect all errors or fraudulent acts.

• Inability of our framework to manage risks associated with our business, including operational risk and credit risk, to mitigate all risk or loss to us.

• Our ability to keep pace with technological changes, including our ability to identify and address cyber-security risks such as data security breaches, “denial of service” attacks, “hacking” and identity theft.

• The effects of man-made and natural disasters, including earthquakes, floods, droughts, brush fires, tornadoes and hurricanes.

• Our ability to recruit and retain key management and staff.

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• Availability of and competition for acquisition opportunities.

• Risks associated with merger and acquisition integration.

• Significant decline in the market value of the Company that could result in an impairment of goodwill.

• Regulatory limits on the Bank’s ability to pay dividends to the Company.

• New accounting pronouncements.

• The impact of the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”) and related rules and regulations on the Company’s business operations and competitiveness.

• Our ability to comply with applicable capital and liquidity requirements (including the finalized Basel III capital standards), including our ability to generate capital internally or raise capital on favorable terms.

• The effects of any damage to our reputation resulting from developments related to any of the items identified above.

Merger

On June 3, 2014, the Company announced it had entered into the Agreement and Plan of Merger, dated June 2, 2014, (the “merger agreement”) by and among CU Bancorp, the (“Company”), California United Bank, the (“Bank”) and 1^st Enterprise Bank (“1^st Enterprise”). In connection with the execution of that merger agreement, the Company has supplemented the risk factors previously disclosed in the Company’s most recent annual report on Form 10-K as follows:

We may fail to realize all of the anticipated benefits of the merger if the combined company does not achieve certain cost savings and other benefits or if the Bank and 1st Enterprise do not successfully integrate.

The Company’s belief that the cost savings and revenue enhancements are achievable is a forward-looking statement that is inherently uncertain. The combined company’s actual cost savings and revenue enhancements, if any, cannot be quantified at this time. Actual cost savings and revenue enhancements will depend on future expense levels and operating levels, the timing of certain events and general industry, regulatory and business conditions. Many of these events will be beyond the control of the combined company.

Further, if the Company is unable to successfully integrate the businesses of the Bank and 1st Enterprise, operating results may suffer. The Bank and 1st Enterprise have operated and, until completion of the merger, will continue to operate independently of one another. It is possible that the integration process could result in the loss of key employees, disruption of their ongoing businesses, or inconsistencies in standards, controls, policies or procedures. These could negatively affect both the Bank’s and 1st Enterprise’s ability to maintain relationships with customers and employees, or achieve the anticipated benefits of the merger. As with any completed merger of financial institutions, there may also be disruptions that cause customers, both deposit and loan, to take their business to competitors.

The Company will be subject to business uncertainties while the merger is pending that could adversely affect its business.

The parties’ efforts to complete the merger could cause substantial disruptions in the Company’s business, which could have an adverse effect on its financial results. Among other things, uncertainty as to whether the merger will be completed may affect the ability of each of the parties to recruit prospective employees or to retain and motivate existing employees. Employee retention may be particularly challenging while the merger is pending because employees may experience uncertainty about their future roles with the combined Company.

Uncertainty as to the future could adversely affect the Company’s business, reputation and relationships with potential depositors, borrowers and vendors. For example, vendors, customers and others who deal with the Company could defer decisions concerning working with the Company, or seek to change existing business relationships with the Company. Further, a substantial amount of the attention and management and employees of the Company is being directed toward the completion of the merger and thus is being diverted from the Company’s day-to-day operations because matters related to the merger, (including integration planning) require substantial commitments of time and resources.

In addition the merger agreement restricts the Company from taking certain actions without 1^st Enterprises’ consent while the merger is pending. These restrictions may, among other matters, prevent the Company from pursuing otherwise attractive business opportunities, selling assets, changing the capital structure, entering into other transactions or making other changes to our business prior to consummation of the merger or termination of the merger agreement. These restrictions could have a material adverse effect on the Company’s business, financial condition and results of operations.

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The Company will incur significant transaction and merger-related integration costs in connection with the merger.

The Company expects to incur significant costs associated with completing the merger and integrating the operations of the Bank and 1st Enterprise. Although the Company believes that the elimination of duplicate costs and the realization of other efficiencies related to the integration of the businesses of the Bank and 1^st Enterprise will offset incremental transition and merger-related costs over time, this net benefit may not be achieved in the near term, or at all.

Company shareholders will experience significant dilution as a result of the merger.

In connection with the merger, 1st Enterprise shareholders will receive 1.3450 shares of Company common stock in exchange for each share of 1st Enterprise common stock (except with respect to fractional shares) pursuant to the terms of the merger agreement. As a consequence, the shareholders of the Company will experience significant dilution in their ownership percentage and voting power in the Company following the merger. If the merger is consummated and based upon the exchange ratio of 1.3450, current 1st Enterprise common stock shareholders will own approximately 31.5% of the Company’s common stock, on a fully diluted basis. Accordingly, while the Company’s shareholders will still own a majority of the outstanding voting stock of the combined company after the merger, their interests will be diluted and would significantly reduce their ability to out vote current 1^st Enterprise shareholders if such current 1^st Enterprise shareholders voted together as a group.

The market price of Company common stock after the merger may be affected by factors different from those currently affecting the market price of 1st Enterprise common stock and Company common stock.

Upon completion of the merger, holders of 1st Enterprise common stock will become holders of Company common stock, and the Treasury, as the sole holder of the 1st Enterprise preferred stock, will become a holder of Company preferred stock. The Company’s business differs from that of 1st Enterprise and, accordingly, the results of operations of the combined company and the market price of Company common stock after the completion of the merger may be affected by factors different from those currently affecting the independent results of operations of each of the Company and 1st Enterprise.

The merger will not be completed unless important conditions are satisfied.

Specified conditions set forth in the merger agreement must be satisfied or waived to complete the merger. If the conditions are not satisfied or waived, to the extent permitted by law or NASDAQ rules, the merger will not occur or will be delayed, and the Company may lose some or all of the intended benefits of the merger. The following conditions must be satisfied or, with respect to conditions other than shareholder and regulatory approval, waived, if permissible, before the Company, the Bank, and 1st Enterprise are obligated to complete the merger:

• the merger agreement must be approved by the affirmative vote of at least a majority of the shares of Company common stock outstanding as of the record date for the Company annual meeting;

• the merger agreement must be approved by the affirmative vote of at least a majority of the shares of 1st Enterprise common stock and by the affirmative vote of at least a majority of the shares of 1st Enterprise preferred stock outstanding as of the record date for the 1st Enterprise annual meeting;

• all required regulatory approvals and consents must be obtained, including approvals and/or non-objections from the FRB, the FDIC and the California Department of Business Oversight, (the “DBO”);

• the absence of any law or order by a court or regulatory authority that would prohibit, restrict or make illegal the merger;

• the number of shares of 1st Enterprise common stock for which dissenters’ rights have been properly asserted shall not be more than 5% of the total issued and outstanding shares of 1st Enterprise common stock; and

• the Treasury, as the holder of the 1st Enterprise preferred stock, does not exercise dissenters’ rights with respect to any shares of the 1st Enterprise preferred stock it holds.

Failure to complete the merger could negatively impact the Company’s and the Bank’s business, financial condition, results of operations and / or stock price.

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If the merger agreement is terminated and the merger is not completed, the ongoing businesses of the Company and the Bank may be adversely affected. For example:

• the risk that the pursuit of the merger could lead to the Company’s failure to pursue other beneficial opportunities due to the focus of the Company’s management on completing the merger;

• pursuant to the merger agreement, the Company and the Bank are subject to certain restrictions on the conduct of their business prior to completing the merger, which restrictions could adversely affect their ability to realize certain of their business strategies;

• the market price of the Company’s common stock may decline to the extent that the current market price reflects a market assumption that the merger will be completed;

• the Company and the Bank may experience negative reactions to the termination of the merger from customers, depositors, investors, vendors and others who deal with the Company and the Bank;

• the Company would not realize any of the anticipated benefits of having completed the merger;

• the Company may be required to pay a termination fee of $1.0 million to 1st Enterprise and to reimburse 1st Enterprise for its merger-related expenses (up to $1.0 million) if the merger agreement is terminated under certain circumstances; and

• the expenses of the Company incurred in connection with the merger, such as legal and accounting fees, must be paid even if the merger is not completed and may not, except in certain circumstances, be recovered from the other party.

In addition, any delay in the consummation of the merger, or any uncertainty about the consummation of the merger, may adversely affect the Company’s and the Bank’s future business, growth, revenue and results of operations.

The consideration to be paid in the merger is fixed and will not be adjusted for changes in the Company’s or 1^st Enterprises’ business, assets, liabilities, prospects, outlook, financial condition or results of operations, or in the event of any change in the Company’s or 1^st Enterprises stock price.

The merger consideration is fixed in the merger agreement and will not be adjusted for changes in the Company’s or 1^st Enterprises’ business, assets, liabilities, prospects, outlook financial condition or results of operations, or changes in the market price of, analyst estimates of, or projections relating to, the Company’s common stock or 1^st Enterprises’ common stock. For example, if the Company experienced an improvement in its business, assets, liabilities, prospects, outlook, financial condition or results of operations prior to the consummation of the merger, there would be no adjustment to the amount of the merger consideration

Forward-looking statements speak only as of the date they are made. The Company does not undertake to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements are made or to reflect the occurrence of unanticipated events.

For a more complete discussion of these risks and uncertainties, see the Company’s Annual Report on Form 10-K for the year ended December 31, 2013 and particularly, Item 1A, titled “Risk Factors.”

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OVERVIEW

CU Bancorp (the “Company”) is a bank holding company whose operating subsidiary is California United Bank. As a bank holding company, CU Bancorp is subject to regulation of the Federal Reserve Board (“FRB”). The term “Company”, as used throughout this document, refers to the consolidated balance sheets and consolidated statements of income of CU Bancorp and California United Bank.

California United Bank (the “Bank”) is a full-service commercial business bank offering a broad range of banking products and services including: deposit services, lending and cash management to small and medium-sized businesses in Los Angeles, Orange and Ventura counties, to non-profit organizations, to business principals and entrepreneurs, to the professional community, including attorneys, certified public accountants, financial advisors, healthcare providers and investors. The Bank opened for business in 2005, with its headquarters office located in Encino, California. As a state chartered non-member bank, the Bank is subject to regulation by the California Department of Business Oversight, (the “DBO”) and the Federal Deposit Insurance Corporation (“FDIC”). The deposits of the Bank are insured by the FDIC, to the maximum amount allowed by law.

On June 3, 2014, CU Bancorp and 1^st Enterprise Bank (“1^st Enterprise”) announced the execution of a definitive agreement and plan of merger whereby 1^st Enterprise will merger into California United Bank. The transaction combines two of the leading commercial banking franchises in Southern California with more than $2.2 billion in combined assets which operate offices in Los Angeles, Orange, Ventura and San Bernardino counties. California United Bank will survive the merger and will continue the commercial banking operations of the combined bank following the merger. The transaction is intended to qualify as a tax-free reorganization under the applicable provision of the Internal Revenue Code and 1st Enterprise shareholders who receive shares of CU Bancorp common stock in the merger should not recognize any taxable gain on the exchange. Shareholders of 1^st Enterprise will receive a fixed exchange ratio at closing of 1.3450 shares of CU Bancorp common stock for each share of 1^st Enterprise common stock. Based on the CU Bancorp stock price as of June 2, 2014, the merger transaction is valued at approximately $103.4 million.

Total assets increased $22.5 million or 1.6% from December 31, 2013 to $1.4 billion mainly due to deposit growth of $12.9 million, growth in securities sold under agreements to repurchase of $2.7 million and net income of $5.1 million. Loan growth during the period was concentrated primarily in Commercial and Industrial loans of $4.4 million, Owner-Occupied Nonresidential Property loans of $ 11.3 million, Other Nonresidential Property loans of $24.8 million and Construction, Land Development and Other Land loans of $14.1 million. Funding the growth of the Company for the six months ending June 30, 2014 was an increase in non-interest bearing deposits of $50.1 million, partially offset by a decline in interest bearing deposits of $37.3 million. At June 30, 2014 and December 31, 2013, non-interest bearing deposits represented 55% and 51% of total deposits, respectively.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The discussion and analysis of our financial condition and results of operations are based upon our financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). The preparation of these financial statements requires management to make estimates and judgments that affect the reported amounts of assets and liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities at the date of our financial statements. Actual results may differ from these estimates under different assumptions or conditions.

Various elements of our accounting policies, by their nature, are inherently subject to estimation techniques, valuation assumptions, and other subjective assessments. We have identified several accounting policies that, due to judgments, estimates, and assumptions inherent in those policies, are essential to an understanding of our consolidated financial statements. These policies relate to the methodologies that determine our allowance for loan loss, the valuation of impaired loans, the classification and valuation of investment securities, accounting for and valuation of derivatives and hedging activities, accounting for business combinations, evaluation of goodwill for impairment, and accounting for income taxes.

Our critical accounting policies are described in greater detail in the Company’s 2013 Annual Report on Form 10-K, Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of Operations – Critical Accounting Policies and Estimates. We believe that our most critical accounting policies upon which our financial condition depends, and which involve the most complex or subjective decisions or assessment, are as follows:

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Allowance for Loan Loss

We maintain an allowance for loan loss (“Allowance”) to provide for probable losses in the loan portfolio. Additions to the Allowance are made by charges to operating expense in the form of a provision for loan losses. All loans that are judged to be uncollectible are charged against the Allowance while any recoveries are credited to the Allowance. We have instituted loan policies and procedures which enable us to adequately evaluate, analyze and monitor risk factors associated with our loan portfolio. These policies and procedures enable us to assess risk factors prior to granting new loans and to continually monitor the risk levels in the loan portfolio. We conduct a critical evaluation of the loan portfolio and the level of the Allowance quarterly. We have instituted loan policies to adequately evaluate and analyze risk factors associated with our loan portfolio and to enable us to assess such risk factors prior to granting new loans and to assess the sufficiency of the Allowance. This evaluation includes an assessment of the following factors: the results of any internal and external loan reviews and any regulatory examination, changes in management or lending policies and underwriting standards, levels of past due loans, loan loss experience, estimated probable loss exposure on each impaired credit, concentrations of credit, value of collateral and any known impairment in the borrowers’ ability to repay, and current economic conditions.

Investment Securities

The Company currently classifies its investment securities under the available-for-sale classification. Under the available-for-sale classification, securities can be sold in response to certain conditions, such as changes in interest rates, changes in the credit quality of the securities, when the credit quality of a security does not conform with current investment policy guidelines, fluctuations in deposit levels or loan demand or need to restructure the portfolio to better match the maturity or interest rate characteristics of liabilities with assets. Securities classified as available-for-sale are accounted for at their current fair value rather than amortized cost. Unrealized gains or losses are excluded from net income and reported as a separate component of accumulated other comprehensive income (loss) net of taxes included in shareholders’ equity.

At each reporting date, investment securities are assessed to determine whether there is an other-than-temporary impairment. If it is probable, based on current information, that we will be unable to collect all amounts due according to the contractual terms of a debt security not impaired at acquisition, an other-than-temporary impairment shall be considered to have occurred. If it’s determined that an other-than-temporary impairment exists on a debt security, the Company then determines if (a) it intends to sell the security or (b) it is more likely than not that it will be required to sell the security before its anticipated recovery. If either of the conditions is met, the Company will recognize an other-than-temporary impairment in earnings equal to the difference between the security’s fair value and its adjusted cost basis, the credit portion of the loss is required to be recognized in current earnings, while the non-credit portion of the loss is recorded as a separate component of shareholders’ equity. If neither of the conditions is met, the Company determines (a) the amount of the impairment related to credit loss and (b) the amount of the impairment due to all other factors. The difference between the present value of the cash flows expected to be collected and the amortized cost basis is the credit loss. The credit loss portion of such impairment, if any, is the portion of the other-than-temporary impairments that is recognized in current earnings rather than as a separate component of shareholders’ equity and is a reduction to the cost basis of the security. The portion of total impairment related to all other factors is included in accumulated other comprehensive income (loss). Significant judgment is required in this analysis that includes, but is not limited to assumptions regarding the collectability of principal and interest, future default rates, future prepayment speeds, the amount of current delinquencies that will result in defaults and the amount of eventual recoveries expected on these defaulted loans through the foreclosure process.

Realized gains and losses on sales of securities are recognized in earnings at the time of sale and are determined on a specific-identification basis. Purchase premiums and discounts are recognized in interest income using the interest method over the terms of the securities. For mortgage-backed securities, the amortization or accretion is based on estimated lives of the securities. The lives of these securities can fluctuate based on the amount of prepayments received on the underlying collateral of the securities.

Derivative Financial Instruments and Hedging Activities

All derivative instruments are recorded on the consolidated balance sheet at fair value. For derivatives designated as fair value hedges, changes in the fair value of the derivative and hedged item related to the hedged risk are recognized in earnings. Current financial accounting and reporting standards require every derivative instrument (including certain derivative instruments embedded in other contracts) be recorded in the consolidated balance sheet as either an asset or liability measured at its fair value. Accounting standards require that changes in the derivative’s fair value be recognized currently in earnings unless specific hedge accounting criteria are met. Accounting for qualifying hedges allows a derivative’s gains and losses to offset related results on the hedged item in the income statement, and requires that a company must formally document, designate and assess the effectiveness of transactions that receive hedge accounting.

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On the date a derivative contract is entered into, the Company will designate the derivative contract as either a fair value hedge (i.e. a hedge of the fair value of a recognized asset or liability), a cash flow hedge (i.e. a hedge of the variability of cash flows to be received or paid related to a recognized asset or liability), or a stand-alone derivative (i.e. an instrument with no hedging designation). For a derivative designated as a fair value hedge, the changes in the fair value of the derivative and of the hedged item attributable to the hedged risk are recognized in earnings. If the derivative is designated as a cash flow hedge, the effective portions of changes in the fair value of the derivative are recorded in other comprehensive income and are recognized in the income statement when the hedged item affects earnings. Changes in the fair value of derivatives that do not qualify for hedge accounting are reported currently in earnings, as other non-interest income.

The Company will discontinue hedge accounting prospectively when: it is determined that the derivative is no longer effective in offsetting change in the fair value of the hedged item, the derivative expires or is sold, is terminated, is exercised or management determines that designation of the derivative as a hedging instrument is no longer appropriate. When hedge accounting is discontinued, the Company will continue to carry the derivative on the consolidated balance sheet at its fair value (if applicable), but will no longer adjust the hedged asset or liability for changes in fair value. The adjustments of the carrying amount of the hedged asset or liability will be accounted for in the same manner as other components of the carrying amount of that asset or liability, and the adjustments are amortized to interest income over the remaining life of the hedged item upon the termination of hedge accounting.

Business Combinations

The Company has a number of fair value adjustments recorded within the consolidated financial statements at June 30, 2014 that were created from the business combinations with California Oaks State Bank (“COSB”) and Premier Commercial Bancorp (“PC Bancorp”) on December 31, 2010 and July 31, 2012, respectively. These fair value adjustments include the Company’s goodwill, fair value adjustments on loans, core deposit intangible assets, other intangible assets, fair value adjustments to acquired lease obligations, fair value adjustments to high rate certificates of deposit and fair value adjustments on derivatives. The assets and liabilities acquired through acquisition have been accounted for at fair value as of the date of the acquisition. The goodwill that was recorded on the transactions represented the excess of the purchase price over the fair value of net assets acquired. If the consideration paid would have been less than the fair value of the net assets acquired, the Company would have recorded a bargain purchase gain. Goodwill is not amortized and is reviewed for impairment on October 1st of each year. If an event occurs or circumstances change that result in the Company’s fair value declining to below its book value, the Company would perform an impairment analysis at that time.

Purchased Credit Impaired Loans (“PCI”) loans are acquired loans with evidence of deterioration of credit quality since origination and it is probable at the acquisition date, that the Company will not be able to collect all contractually required amounts. When the timing and/or amounts of expected cash flows on such loans are not reasonably estimable, no interest is accreted and the loan is reported as a non-accrual loan; otherwise, if the timing and amounts of expected cash flows for PCI loans are reasonably estimable, then interest is accreted and the loans are reported as accruing loans. The non-accretable difference represents the difference between the undiscounted contractual cash flows and the undiscounted expected cash flows, and also reflects the estimated credit losses in the acquired loan portfolio at the acquisition date and can fluctuate due to changes in expected cash flows during the life of the PCI loans. For non-PCI loans, loan fair value adjustments consist of an interest rate premium or discount on each individual loan and are amortized to loan interest income based on the effective yield method over the remaining life of the loans.

Income Taxes

Deferred income tax assets and liabilities are computed using the asset and liability method, which recognizes a liability or asset representing the tax effects, based on current tax law, of future deductible or taxable amounts attributable to events that have been recognized in the financial statements. A valuation allowance may be established to the extent necessary to reduce the deferred tax asset to the level at which it is “more likely than not” that the tax assets or benefits will be realized. Realization of tax benefits depends on having sufficient taxable income, available tax loss carrybacks or credits, the reversing of taxable temporary differences and/or tax planning strategies within the reversal period and that current legislative tax law allows for the realization of those tax benefits.

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RESULTS OF OPERATIONS

Key Profitability Measures

The following table presents key profitability measures for the periods indicated and the dollar and percentage changes between the periods (dollars in thousands, except per share data):

	Three Months Ended June 30,												Six Months Ended June 30,
	Amounts						Increase (Decrease)						Amounts						Increase (Decrease)
	2014			2013						%			2014			2013						%
Net Income	$	2,386		$	2,321		$	65			2.8	%	$	5,052		$	4,476		$	576			12.9	%
Earnings per share
Basic	$	0.22		$	0.22		$	0.00			0.0	%	$	0.46		$	0.43		$	0.03			7.0	%
Diluted	$	0.21		$	0.22		$	(0.01	)		(4.5	)%	$	0.45		$	0.42		$	0.03			7.1	%
Return on average equity		6.63	%		7.16	%		(0.53	)%		(7.5	)%		7.15	%		7.02	%		0.13	%		1.9	%
Return on average assets		0.69	%		0.73	%		(0.04	)%		(5.3	)%		0.73	%		0.71	%		0.02	%		3.4	%
Net interest rate spread		3.70	%		4.06	%		(0.36	)%		(8.9	)%		3.67	%		3.94	%		(0.27	)%		(6.9	)%
Net interest margin		3.88	%		4.25	%		(0.37	)%		(8.7	)%		3.85	%		4.13	%		(0.28	)%		(6.8	)%
Efficiency ratio (1)		67.53	%		65.04	%		2.49	%		3.8	%		67.95	%		69.32	%		(0.32	)%		(0.47	)%

(1) Efficiency ratio is defined as non-interest expense divided by the sum of net interest income, gain on sale of SBA loans, and other non-interest income.

Operations Performance Summary

Three Months Ended June 30, 2014 Compared to Three Months Ended June 30, 2013

Net income for the three months ended June 30, 2014 was $2.4 million, or $0.21 per diluted share, compared to $2.3 million, or $0.22 per diluted share for the three months ended June 30, 2013. The $65,000 increase, or 2.8%, was primarily due to the following: Total interest income for the quarter decreased by $75,000 or 0.6% to $13.0 million at June 30, 2014, which was almost completely offset by the decrease in interest expense of $73,000 or 13.7% to $461,000. The provision for loan loss decreased by $745,000 and non-interest income increased by $93,000. These changes were offset by the increase in non-interest expense of $417,000, primarily due to merger-related expenses of $497,000, and the increase in the provision for income taxes of $354,000. The increases in the tax provision is related to the non-deductibility of the merger costs for tax purposes which has resulted in a higher effective tax rate for the second quarter of 2014 compared to 2013. Each of these increases and or decreases is more fully described below.

Six Months Ended June 30, 2014 Compared to Six Months Ended June 30, 2013

Net income for the six months ended June 30, 2014 was $5.1 million, or $0.45 per diluted share, compared to $4.5 million, or $0.42 per diluted share for the six months ended June 30, 2013. The $576,000 increase, or 12.9%, was primarily due to the following: Total interest income for the quarter increased by $492,000 or 2.0% to $25.7 million at June 30, 2014, while interest expense decreased by $141,000 or 13.2% to $924,000. The provision for loan loss decreased by $804,000, while non-interest income increased by $457,000. These changes were offset by the increase in non-interest expense of $657,000 and the increase in the provision for income taxes of $661,000. The increases in the tax provision is related to the non-deductibility of the merger costs for tax purposes which has resulted in a higher effective tax rate for the six month period of 2014 compared to 2013. Each of these increases and or decreases are more fully described below.

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    Average Balances, Interest Income and Expense, Yields and Rates

The following tables present the Company’s average balance sheets, together with the total dollar amounts of interest income and interest expense and the weighted average interest yield/rate for the periods presented. All average balances are daily average balances (dollars in thousands).

	Three Months Ended
	June 30, 2014							June 30, 2013
	Average Balance		Interest		Average Yield/ Rate (5)			Average Balance		Interest		Average Yield/ Rate (5)
Interest Earning Assets:
Deposits in other financial institutions	$	240,335	$	206		0.34	%	$	208,871	$	157		0.30	%
Investment securities (2)		101,410		467		1.84	%		106,706		495		1.86	%
Loans (1)		958,129		12,366		5.18	%		872,048		12,462		5.73	%
Total interest-earning assets		1,299,874		13,039		4.02	%		1,187,625		13,114		4.43	%
Non-interest-earning assets		90,383							92,770
Total Assets	$	1,390,257						$	1,280,395
Interest Bearing Liabilities:
Interest bearing transaction accounts	$	139,425	$	66		0.19	%	$	132,392	$	64		0.19	%
Money market and savings deposits		353,962		222		0.25	%		334,729		249		0.30	%
Certificates of deposit		60,752		55		0.36	%		67,914		74		0.44	%
Total Interest Bearing Deposits		554,139		343		0.25	%		535,035		387		0.29	%
Securities sold under agreements to repurchase		15,425		11		0.29	%		27,913		21		0.30	%
Subordinated debentures		9,439		107		4.48	%		9,599		126		5.26	%
Total Interest Bearing Liabilities		579,003		461		0.32	%		572,547		534		0.37	%
Non-interest bearing demand deposits		652,094							566,018
Total funding sources		1,231,097							1,138,565
Non-interest bearing liabilities		14,733							11,820
Shareholders’ Equity		144,427							130,010
Total Liabilities and Shareholders’ Equity	$	1,390,257						$	1,280,395
Net interest income			$	12,578						$	12,580
Net interest rate spread (3)						3.70	%						4.06	%
Net interest margin (4)						3.88	%						4.25	%
Core net interest margin (6)						3.73	%						3.89	%

(1) Average balances of loans are calculated net of deferred loan fees and fair value discounts, but would include non-accrual loans which have a zero yield.

(2) Average balances of investment securities are presented on an amortized cost basis and thus do not include the unrealized market gain or loss on the securities.

(3) Net interest rate spread represents the yield earned on average total interest-earning assets less the rate paid on average total interest bearing liabilities.

(4) Net interest margin is computed by dividing annualized net interest income by average total interest-earning assets.

(5) Annualized

(6) Core net interest margin is computed by dividing annualized net interest income, excluding accelerated accretion of fair value discounts earned on early loan payoffs of acquired loans and interest recovered or reversed on non-accrual loans, by average total interest-earning assets. See the reconciliation table for core net interest margin.

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	Six Months Ended
	June 30, 2014							June 30, 2013
	Average Balance		Interest		Average Yield/Rate (5)			Average Balance		Interest		Average Yield/Rate (5)
Interest Earning Assets:
Deposits in other financial institutions	$	252,973	$	417		0.33	%	$	211,520	$	317		0.30	%
Investment securities (2)		103,080		968		1.88	%		109,537		979		1.79	%
Loans (1)		940,648		24,290		5.21	%		857,224		23,887		5.62	%
Total interest-earning assets		1,296,701		25,675		3.99	%		1,178,281		25,183		4.31	%
Non-interest-earning assets		91,362							92,776
Total Assets	$	1,388,063						$	1,271,057
Interest Bearing Liabilities:
Interest bearing transaction accounts	$	138,720	$	124		0.18	%	$	125,416	$	116		0.19	%
Money market and savings deposits		363,556		456		0.25	%		342,502		509		0.30	%
Certificates of deposit		61,852		111		0.36	%		72,057		150		0.42	%
Total Interest Bearing Deposits		564,128		691		0.25	%		539,975		775		0.29	%
Securities sold under agreements to repurchase		13,698		19		0.28	%		26,889		40		0.30	%
Subordinated debentures		9,419		214		4.52	%		9,400		250		5.36	%
Total Interest Bearing Liabilities		587,245		924		0.32	%		576,264		1,065		0.37	%
Non-interest bearing demand deposits		642,716							553,808
Total funding sources		1,229,961							1,130,072
Non-interest bearing liabilities		15,658							12,328
Shareholders’ Equity		142,444							128,657
Total Liabilities and Shareholders’ Equity	$	1,388,063						$	1,271,057
Net interest income			$	24,751						$	24,118
Net interest rate spread (3)						3.67	%						3.94	%
Net interest margin (4)						3.85	%						4.13	%
Core net interest margin (6)						3.69	%						3.94	%

(1) Average balances of loans are calculated net of deferred loan fees and fair value discounts, but would include non-accrual loans which have a zero yield.

(2) Average balances of investment securities are presented on an amortized cost basis and thus do not include the unrealized market gain or loss on the securities.

(3) Net interest rate spread represents the yield earned on average total interest-earning assets less the rate paid on average total interest bearing liabilities.

(4) Net interest margin is computed by dividing annualized net interest income by average total interest-earning assets.

(5) Annualized

(6) Core net interest margin is computed by dividing annualized net interest income, excluding accelerated accretion of fair value discounts earned on early loan payoffs of acquired loans and interest recovered or reversed on non-accrual loans, by average total interest-earning assets. See the reconciliation table for core net interest margin.

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The following table represents a reconciliation of GAAP net interest margin to core net interest margin used by the Company. The table presents the information for the periods indicated (dollars in thousands):

	Three Months Ended June 30,						Six Months Ended June 30,
	2014			2013			2014			2013
Net Interest Income	$	12,578		$	12,580		$	24,751		$	24,118
Less: Interest recovered on non-accrual loans		—			162			—			162
Accelerated accretion of fair value adjustment on early loan payoffs		483			891			1,002			928
Core Net Interest Income	$	12,095		$	11,527		$	23,749		$	23,028
Net interest margin		3.88	%		4.25	%		3.85	%		4.13	%
Core net interest margin		3.73	%		3.89	%		3.69	%		3.94	%

The following table reflects the composition of the net deferred loan fees, costs and fair value discounts at June 30, 2014 and December 31, 2013 (dollars in thousands):

	June 30, 2014		December 31, 2013
Accreting loan discount	$	6,772	$	7,912
Non-accreting loan discount		1,155		2,683
Acquired loans remaining discount		7,927		10,595
Organic loans net deferred fees		2,731		2,014
Total	$	10,658	$	12,609

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Net Changes in Average Balances, Composition, Yields and Rates

The following tables set forth the composition of average interest-earning assets and average interest bearing liabilities by category and by the percentage of each category to the total for the periods indicated, including the change in average balance, composition, and yield/rate between these respective periods (dollars in thousands):

	Three Months Ended June 30,
	2014								2013								Increase (Decrease)
	Average Balance		% of Total			Average Yield/ Rate			Average Balance		% of Total			Average Yield/ Rate			Average Balance			% of Total			Average Yield/ Rate
Interest Earning Assets:
Deposits in other financial institutions	$	240,335		18.5	%		0.34	%	$	208,871		17.6	%		0.30	%	$	31,464			0.9	%		0.04	%
Investment securities		101,410		7.8	%		1.84	%		106,706		9.0	%		1.86	%		(5,296	)		(1.2	)%		(0.02	)%
Loans		958,129		73.7	%		5.18	%		872,048		73.4	%		5.73	%		86,081			0.3	%		(0.55	)%
Total interest-earning assets	$	1,299,874		100.0	%		4.02	%	$	1,187,625		100.0	%		4.43	%	$	112,249			0.0	%		(0.41	)%
Interest Bearing Liabilities:
Non-interest bearing demand deposits	$	652,094		53.0	%				$	566,018		49.7	%				$	86,076			3.3	%
Interest bearing transaction accounts		139,425		11.3	%		0.19	%		132,392		11.6	%		0.19	%		7,033			(0.3	)%		0.00	%
Money market and savings deposits		353,962		28.8	%		0.25	%		334,729		29.4	%		0.30	%		19,233			(0.6	)%		(0.05	)%
Certificates of deposit		60,752		4.9	%		0.36	%		67,914		6.0	%		0.44	%		(7,162	)		(1.0	)%		(0.08	)%
Total deposits		1,206,233		98.0	%		0.11	%		1,101,053		96.7	%		0.14	%		105,180			1.3	%		(0.03	)%
Securities sold under agreements to repurchase		15,425		1.3	%		0.29	%		27,913		2.5	%		0.30	%		(12,488	)		(1.2	)%		(0.01	)%
Subordinated debentures		9,439		0.8	%		4.48	%		9,599		0.8	%		5.26	%		(160	)		(0.1	)%		(0.78	)%
Total Borrowings		24,864		2.0	%		1.90	%		37,512		3.3	%		1.57	%		(12,648	)		(1.3	)%		0.33	%
Total funding sources	$	1,231,097		100.0	%		0.15	%	$	1,138,565		100.0	%		0.19	%	$	92,532			0.0	%		(0.04	)%

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	Six Months Ended June 30,
	2014								2013								Increase (Decrease)
	Average Balance		% of Total			Average Yield/ Rate			Average Balance		% of Total			Average Yield/ Rate			Average Balance			% of Total			Average Yield/ Rate
Interest Earning Assets:
Deposits in other financial institutions	$	252,973		19.5	%		0.33	%	$	211,520		18.0	%		0.30	%	$	41,453			1.6	%		0.03	%
Investment securities		103,080		7.9	%		1.88	%		109,537		9.3	%		1.79	%		(6,457	)		(1.3	)%		0.09	%
Loans		940,648		72.5	%		5.21	%		857,224		72.8	%		5.62	%		83,424			(0.2	)%		(0.41	)%
Total interest-earning assets	$	1,296,701		100.0	%		3.99	%	$	1,178,281		100.0	%		4.31	%	$	118,420			0.0	%		(0.32	)%
Interest Bearing Liabilities:
Non-interest bearing demand deposits	$	642,716		52.3	%				$	553,808		49.0	%				$	88,908			3.2	%
Interest bearing transaction accounts		138,720		11.3	%		0.18	%		125,416		11.1	%		0.19	%		13,304			0.2	%		(0.01	)%
Money market and savings deposits		363,556		29.6	%		0.25	%		342,502		30.3	%		0.30	%		21,054			(0.7	)%		(0.05	)%
Certificates of deposit		61,852		5.0	%		0.36	%		72,057		6.4	%		0.42	%		(10,205	)		(1.3	)%		(0.06	)%
Total deposits		1,206,844		98.1	%		0.12	%		1,093,783		96.8	%		0.14	%		113,061			1.3	%		(0.00	)%
Securities sold under agreements to repurchase		13,698		1.1	%		0.28	%		26,889		2.4	%		0.30	%		(13,191	)		(1.3	)%		(0.02	)%
Subordinated debentures		9,419		0.8	%		4.52	%		9,400		0.8	%		5.36	%		19			(0.1	)%		(0.84	)%
Total Borrowings		23,117		1.9	%		2.03	%		36,289		3.2	%		1.61	%		(13,172	)		(1.3	)%		0.42	%
Total funding sources	$	1,229,961		100.0	%		0.15	%	$	1,130,072		100.0	%		0.19	%	$	99,889			0.0	%		(0.04	)%

Page 53 of 70

Volume and Rate Variance Analysis of Net Interest Income

The following table presents the dollar amount of changes in interest income and interest expense due to changes in average balances of interest-earning assets and interest bearing liabilities and changes in interest rates. For each category of interest-earning assets and interest bearing liabilities, information is provided on changes attributable to: (i) changes in volume (i.e. changes in average balance multiplied by prior period rate) and (ii) changes in rate (i.e. changes in rate multiplied by prior period average balance). For purposes of this table, changes attributable to both rate and volume which cannot be segregated have been allocated proportionately based on the absolute dollar amounts of the changes due to volume and rate (dollars in thousands):

	Three Months Ended June 30, 2014 vs. 2013
	Increase (Decrease) Due To
	Volume			Rate			Total
Interest Income
Loans	$	1,229		$	(1,325	)	$	(96	)
Deposits in other financial institutions		25			24			49
Investment securities		(23	)		(5	)		(28	)
Total interest income		1,231			(1,306	)		(75	)
Interest Expense
Interest bearing transaction accounts		2			—			2
Money market and savings deposits		15			(42	)		(27	)
Certificates of deposit		(7	)		(12	)		(19	)
Total deposits		10			(54	)		(44	)
Securities sold under agreements to repurchase		(10	)		—			(10	)
Subordinated debentures		(2	)		(17	)		(19	)
Total borrowings		(12	)		(17	)		(29	)
Total interest expense		(2	)		(71	)		(73	)
Net Interest Income	$	1,233		$	(1,235	)	$	(2	)

	Six Months Ended June 30, 2014 vs. 2013
	Increase (Decrease) Due To
	Volume			Rate			Total
Interest Income
Loans	$	2,328		$	(1,925	)	$	403
Deposits in other financial institutions		62			38			100
Investment securities		(58	)		47			(11	)
Total interest income		2,332			(1,840	)		492
Interest Expense
Interest bearing transaction accounts		2			6			8
Money market and savings deposits		34			(87	)		(53	)
Certificates of deposit		(21	)		(18	)		(39	)
Total deposits		15			(99	)		(84	)
Securities sold under agreements to repurchase		(20	)		(1	)		(21	)
Subordinated debentures		0			(36	)		(36	)
Total borrowings		(20	)		(37	)		(57	)
Total interest expense		(5	)		(136	)		(141	)
Net Interest Income	$	2,337		$	(1,704	)	$	633

Page 54 of 70

Three Months Ended June 30, 2014 Compared to Three Months Ended June 30, 2013

The net interest margin declined 37 basis points to 3.88% for the three months ended June 30, 2014 compared to 4.25% for the three months ended June 30, 2013. The decline in net interest margin is primarily due to a 55 basis point decrease in the quarterly loan yield, offset by a 4 basis point decline in the interest bearing deposit rate. The lower net interest margin in 2014 is attributable to the continued low interest rate environment, as new loans have been originated at lower interest rates than those loans that have been paid off in the last half of 2013. This is in addition to a lower level of fair value discounts earned on early payoffs of acquired loans in 2014 compared to 2013. Fair value discounts earned on early payoffs of acquired loans was $483,000 compared to $891,000 for the three months ended June 30, 2014 and 2013, respectively. In addition, net interest income also included the recovery of interest income on a non-accrual loan that paid off during the quarter ended June 30, 2013 of $162,000. The impact to the Company’s net interest margin from the accelerated accretion of fair value discounts on early payoffs of acquired loans and the recovery of interest on a non-accrual loan that paid off during the quarters ending June 30, 2014 and 2013 was 15 basis points and 36 basis points, respectively.

Six Months Ended June 30, 2014 Compared to Six Months Ended June 30, 2013

The net interest margin declined 28 basis points to 3.85% for the six months ended June 30, 2014 compared to 4.13% for the six months ended June 30, 2013. The decline in net interest margin is primarily due to a 41 basis point decrease in loan yield, offset by a 4 basis point decline in the interest bearing deposit rate. The lower net interest margin in 2014 is attributable to the continued low interest rate environment, as new loans have been originated at lower interest rates than loans that have been paid off in the last half of 2013. During the six months ended June 30, 2014 and 2013, the Company has experienced $1.0 million and $928,000, respectively, of accelerated accretion of fair value discounts on early payoffs of acquired loans in 2014 and 2013. Net interest income also included the recovery of interest income on a non-accrual loan that paid off during the six months ended June 30, 2013 of $162,000. The impact to the Company’s net interest margin from the accelerated accretion of fair value discounts on early payoffs of acquired loans and the recovery of interest on a non-accrual loan that paid off during the six months ending June 30, 2014 and 2013 was 16 basis points and 19 basis points, respectively.

Page 55 of 70

Provision for Loan Losses

The Company maintains an allowance for loan loss (“Allowance”) to provide for probable losses in the loan portfolio. Additions to the Allowance are made by charges to operating expense in the form of a provision for loan losses. All loans that are judged to be uncollectible will be charged against the Allowance while any recoveries would be credited to the Allowance.

Provision for loan losses for the three months ended June 30, 2014 was $408,000, compared to $1.2 million for the three months ended June 30, 2013. Net recoveries for the three months ended June 30, 2014 were $53,000, compared to net charge-offs of $582,000 in 2013. Provision for loan losses for the six months ended June 30, 2014 was $483,000, compared to $1.3 million for the six months ended June 30, 2013. Net recoveries for the six months ended June 30, 2014 were $198,000, compared to net charge-offs of $678,000 in 2013. See further discussion in Balance Sheet Analysis, Allowance for Loan Loss.

Non-interest Income

	Three Months Ended June 30,				Increase (Decrease)						Six Months Ended June 30,				Increase (Decrease)
	2014		2013		$			%			2014		2013		$			%
Gain on sale of securities, net	$	—	$	—	$	—			—		$	—	$	5	$	(5	)		(100.0	)%
Gain on sale of SBA loans, net		167		60		107			178.3	%		605		410		195			47.6	%
Deposit account service charge income		630		583		47			8.1	%		1,260		1,151		109			9.5	%
Other non-interest income		986		1,047		(61	)		(5.8	)%		1,708		1,550		158			10.2	%
Total Non-Interest Income	$	1,783	$	1,690	$	93			5.5	%	$	3,573	$	3,116	$	457			14.7	%

Three Months Ended June 30, 2014 Compared to Three Months Ended June 30, 2013

Non-interest income increased $93,000 or 5.5% to $1.8 million for the three months ended June 30, 2014 compared to $1.7 million for the three months ended June 30, 2013. This change was mainly due to a $107,000 increase in the gain on sale of SBA loans, an increase on deposit account service charge income, partially offset by a decline of $61,000 on other non-interest income. The growth in deposit accounts by the Company resulted in the increase in deposit account service charge income between the periods. Included in other non-interest income for the second quarter of 2014 was a $225,000 settlement related to an other real estate owned property sold in 2013. Included in other non-interest income for the second quarter of 2013 was a $250,000 insurance settlement.

Six Months Ended June 30, 2014 Compared to Six Months Ended June 30, 2013

Non-interest income increased $457,000 or 14.7% to $3.6 million for the six months ended June 30, 2014 compared to $3.1 million for the six months ended June 30, 2013. The change was mainly due to a $195,000 increase in gain on sale of SBA loans, a $109,000 increase in deposit account service charge income and $158,000 increase in other non-interest income. The growth in deposit accounts by the Company resulted in the increase in deposit account service charge income between the periods. Included in other non-interest income for the six months ending June 30, 2014 was a $225,000 settlement related to an other real estate owned property sold in 2013. Included in other non-interest income for the six months ending June 30, 2013 was a $250,000 insurance settlement.

Page 56 of 70

Non-interest Expense

The following table sets forth certain information with respect to the Company’s non-interest expense for the periods indicated (dollars in thousands):

	Three Months Ended June 30,				Increase (Decrease)						Six Months Ended June 30,				Increase (Decrease)
	2014		2013		$			%			2014		2013		$			%
Salaries and employee benefits	$	5,328	$	5,438	$	(110	)		(2.0	)%	$	10,933	$	10,855	$	78			0.7	%
Stock based compensation expense		479		217		262			120.7	%		887		475		412			86.7	%
Occupancy		985		1,019		(34	)		(3.3	)%		1,971		2,083		(112	)		(5.4	)%
Data processing		476		479		(3	)		(0.6	)%		951		961		(10	)		(1.0	)%
Legal and professional		411		572		(161	)		(28.1	)%		934		1,079		(145	)		(13.4	)%
FDIC deposit assessment		180		189		(9	)		(4.8	)%		401		435		(34	)		(7.8	)%
Merger related expenses		497		—		497			100	%		497		43		454			1,055.8	%
OREO valuation write-downs and expenses		6		23		(17	)		(73.9	)%		6		49		(43	)		(87.8	)%
Office services expense		238		259		(21	)		(8.1	)%		502		525		(23	)		(4.4	)%
Other operating expenses		1,098		1,085		13			1.2	%		2,165		2,085		80			3.8	%
Total Non-Interest Expense	$	9,698	$	9,281	$	417			4.5	%	$	19,247	$	18,590	$	657			3.5	%

Three Months Ended June 30, 2014 Compared to Three Months Ended June 30, 2013

Non-interest expense increased $417,000 or 4.5% to $9.7 million for the three months ended June 30, 2014 compared to $9.3 million for the three months ended June 30, 2013. The overall increase between the quarters was primarily due to a $262,000 increase in stock based compensation expense and a $497,000 increase in merger related cost associated with the current pending merger. These costs were partially offset by a $110,000 decrease in salaries and employee benefits and a $161,000 decrease in legal and professional fees. The increase in stock based compensation was the result of the annual granting of restricted stock to some of the Company’s senior management in the first quarter of 2014 which compares to the delayed granting of annual restricted stock to both executive and senior management in the third quarter of 2013. The increase in total salaries was more than offset by a decrease in the bonus expense which was reflective of the Company’s second quarter 2014 results.

Six Months Ended June 30, 2014 Compared to Six Months Ended June 30, 2013

Non-interest expense increased $657,000 or 3.5% to $19.2 million for the six months ended June 30, 2014 compared to $18.6 million for the six months ended June 30, 2013. The overall increase between the six month periods was primarily due to a $412,000 increase in stock based compensation expense, a $78,000 increase in salaries and employee benefits and a $454,000 increase in merger related costs associated with the current pending merger. These costs were partially offset by a $112,000 decrease in occupancy expense and a $145,000 decrease in legal and professional fees. The increase in stock based compensation was the result of the granting of annual restricted stock to the Company’s senior management in the first six months of 2014, which compares to the delayed granting of annual restricted stock to both executive and senior management in the third quarter of 2013. The increase in salaries was partially offset by a decrease in the bonus expense, which was reflective of the Company’s first six months of 2014 results.

Income Taxes

The effective tax rate for the three months ended June 30, 2014 was 43.9% compared to 39.5% for the three months ended June 30, 2013. The effective tax rate for the six months ended June 30, 2014 was 41.2% compared to 39.2% for the six months ended June 30, 2013. The increase in the effective tax rates for these periods was due to the non-deductibility of certain merger related expenses incurred in 2014 and the discontinuance of the California net interest deductions on loans within designated enterprise zones. The Company’s effective tax rate is impacted by the increase in cash surrender value of bank owned life insurance policies which is excluded from taxable income and the Company has invested in Qualified Affordable Housing Projects “LIHTC” that generate tax credits and benefits for the Company. The Company operates in the Federal and California jurisdictions and the blended statutory tax rate for Federal and California income taxes is 42.05%.

Page 57 of 70

FINANCIAL CONDITION

Balance Sheet Analysis

Total assets increased $22.5 million for the six months ending June 30, 20 to $1.4 billion with net loan growth of $46.7 million, an increase in cash and due from banks of $17.5 million, partially offset by a $38.7 million decrease in interest-earnings deposits in other financial institutions. Net Organic loan growth during the period was $72.1 million, partially offset by $25.1 million in runoff of purchased loans from the COSB and PC Bancorp acquisitions. Loan growth for the six months of 2014 was concentrated in Commercial and Industrial loans of $4.4 million, Owner-Occupied Nonresidential Properties of $11.3 million, Other Nonresidential Properties of $24.8 million and Construction, Land Development and Other Land categories of $14.1 million.

Funding the asset growth for the Company for the first six months of 2014 was the growth in deposits of $12.9 million, growth in securities sold under agreements to repurchase of $2.7 million and earnings of $5.1 million. Non-interest bearing demand deposits increased by $50.1 million to $682.3 million at June 30, 2014. The increase in non-interest bearing deposits was partially offset by a $37.3 million decrease in interest bearing deposits. At June 30, 2014 and December 31, 2013, non-interest bearing deposits represented 55% and 51% of total deposits, respectively.

In May 2014, the Company acquired an OREO property, an industrial condominium with an appraised value of $219,000. This OREO property is carried at the lower of cost or fair value on the balance sheet at June 30, 2014. This property has subsequently been sold at approximately its carrying value in the third quarter of 2014.

Lending

The following table presents the composition of the loan portfolio at the dates indicated (dollars in thousands):

	June 30, 2014					December 31, 2013
	Amount		% of Total			Amount		% of Total
Commercial and Industrial Loans:	$	303,870		31	%	$	299,473		32	%
Loans Secured by Real Estate:
Owner-Occupied Nonresidential Properties		208,936		21	%		197,605		21	%
Other Nonresidential Properties		296,629		30	%		271,818		29	%
Construction, Land Development and Other Land		61,165		6	%		47,074		5	%
1-4 Family Residential Properties		64,583		7	%		65,711		7	%
Multifamily Residential Properties		36,727		4	%		33,780		4	%
Total Loans Secured by Real Estate		668,040		68	%		615,988		66	%
Other Loans:		7,980		1	%		17,733		2	%
Total Loans	$	979,890		100	%	$	933,194		100	%

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The following table is a breakout of the Company’s gross loans stratified by the industry concentration of the borrower by their respective NAICS code at the dates indicated (dollars in thousands):

	June 30, 2014					June 30, 2013
	Amount		% of Total			Amount		% of Total
Real Estate	$	431,243		44	%	$	381,830		41	%
Manufacturing		86,350		9	%		83,319		9	%
Hotel/Lodging		82,787		8	%		76,143		8	%
Construction		69,935		7	%		62,835		7	%
Wholesale		57,195		6	%		60,291		6	%
Finance		52,615		5	%		46,393		5	%
Professional Services		45,745		5	%		49,739		5	%
Healthcare		32,756		3	%		38,662		4	%
Other Services		23,781		2	%		21,448		2	%
Restaurant/Food Service		23,574		2	%		35,244		4	%
Administrative Services		18,619		2	%		15,218		2	%
Retail		17,856		2	%		23,157		2	%
Information		10,635		1	%		11,709		1	%
Transportation		10,562		1	%		9,531		1	%
Education		9,985		1	%		10,270		1	%
Entertainment		5,195		1	%		6,207		1	%
Other		1,057		0	%		1,198		0	%
Total Loans	$	979,890		100	%	$	933,194		100	%

The Company’s loan origination and lending activities continue to be focused primarily on direct contact with its borrowers through the Company’s relationship managers and/or executive officers. Total loans were $979.9 million at June 30, 2014, an increase of $46.7 million or 5.0% from $933.2 million at December 31, 2013. The Company had approximately $72.1 million of net organic loan growth which was partially offset by approximately $25.1 million in loan run-off from the acquired loan portfolios.

The net growth in the Company’s other nonresidential real estate properties portfolio of approximately $24.8 million during the six months ending June 30, 2014 was primarily attributable to two loans. The first loan was originated to refinance a retail center in the Company’s footprint and has a balance that represents a loan-to-value of less than fifty percent. The second loan represents a new customer relationship for the Company with a borrower to facilitate the purchase of a hotel near an Orange County entertainment center, with plans to redevelop the property.

The increase in the construction, land development and other land portfolio of $14.1 million is primarily related to a $9.6 million loan for the development of a property located in Los Angeles by a real estate developer who is a well-known and long-time customer of the Bank.

We continue to establish new relationships and expand our current business, as evidenced by our increased commercial line of credit commitments, which are up 10.3% from December 31, 2013; however due to the dynamic nature of commercial and industrial lending, actual credit utilization does experience ebbs and flows. The Company’s commercial and industrial line of credit utilization was approximately 44% as of June 30, 2014 and 49% as of December 31, 2013. The Company experienced a spike in line utilization at December 31, 2013 as a result of several of our smaller businesses drawing on their lines of credit at year end and then paying down their lines during the first six months of the year. This occurs around year-end and appears to be a recurring trend.

The Company had 34 commercial banking relationship managers and 5 commercial real estate relationship managers at June 30, 2014. This compares with 35 commercial banking relationship managers and 5 commercial real estate relationship managers at December 31, 2013. The Company’s credit approval process includes an examination of the collateral, cash flow, and debt service coverage of the loan, as well as the financial condition and credit references of the borrower. The Company’s senior management is actively involved in its lending activities and collateral valuation and review process and the Company obtains independent third party appraisals of real property securing commercial real estate

Page 59 of 70

loans, as required by applicable federal and state laws and regulations. There is also a loan committee comprised of senior management that reviews problem loans.

The Company believes that it carefully manages credit risk in its loan portfolio and uses a variety of policy guidelines and analytical tools to achieve its asset quality objectives.

Allowance for Loan Loss

The Allowance increased by $681,000, to $11.3 million at June 30, 2014 from $10.6 million at December 31, 2014 due to a provision for loan losses of $483,000 and net recoveries of $198,000. The Allowance as a percentage of total loans was 1.15% and 1.14% at June 30, 2014 and December 31, 2013, respectively. The Allowance as a percentage of loans (excluding loan balances and the related Allowance on loans acquired through acquisition) was 1.45% and 1.50% at June 30, 2014 and December 31, 2013, respectively. The decrease in the allowance ratio related to organic loans was directly attributable to improvements in the economic conditions within the Company’s markets, a reduction in non-accrual loans as well as the level of charge-offs.

The Company’s management considered the following factors in evaluating the allowance for loan loss at June, 2014:

• During the six months ended June, 2014 there were net loan recoveries of $198,000

• There were twenty-two non-accrual loans totaling $7.0 million at June 30, 2014

• The overall growth and composition of the loan portfolio

• Changes to the overall economic conditions within the markets in which the Company makes loans

• Concentrations within the loan portfolio, as well as risk conditions within its commercial and industrial loan portfolio

• The remaining fair value adjustments on loans acquired through acquisition with special attention to the fair value adjustments associated with the purchased credit impaired loans

Management has considered various material elements of potential risk within the loan portfolio, including classified credits, pools of loans with similar characteristics, economic factors, trends in the loan portfolio and modification and changes in the Company’s lending policies, procedures and underwriting criteria. In addition, management recognized the potential for unforeseen events to occur when evaluating the qualitative factors in all categories of its analysis.

The Company analyzes historical net charge-offs in various loan portfolio segments when evaluating the reserves. For loan segments without previous loss experience, the analysis is adjusted to reflect regulatory peer group loss experience in those loan segments. The loss analysis is then adjusted for qualitative factors that may have an impact on loss experience in the particular loan segments.

The Allowance and the reserve for unfunded loan commitments are significant estimates that can and do change based on management’s process in analyzing the loan portfolio and on management’s assumptions about specific borrowers and applicable economic and environmental conditions, among other factors. In considering all of the above factors, management believes that the Allowance at June 30, 2014 is adequate. Although the Company maintains its Allowance at a level which it considers adequate to provide for probable charge-offs, there can be no assurance that such charge-offs will not exceed the estimated amounts, thereby adversely affecting future results of operations.

Loans acquired through acquisition are recorded at estimated fair value on their purchase date without a carryover of the related Allowance. Loans acquired with deteriorated credit quality are loans that have evidence of credit deterioration since origination and it is probable at the date of acquisition that the Company will not collect principal and interest payments according to contractual terms. These loans are accounted for under ASC Subtopic 310-30 Receivables – Loans and Debt Securities Acquired with Deteriorated Credit Quality. Evidence of credit quality deterioration as of the purchase date may include factors such as past due and non-accrual status. The difference between contractually required payments at acquisition and the cash flows expected to be collected at acquisition is referred to as the credit loss or non accretable yield. Further, any excess of cash flows expected at acquisition over the estimated fair value is referred to as the accretable yield and is recognized into interest income over the remaining life of the loan when there is a reasonable expectation about the amount and timing of such cash flows. Subsequent decreases to the expected cash flows will generally result in a provision for loan losses.

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The following table is a summary of the activity for the Allowance as of the dates and for the periods indicated (dollars in thousands):

	Three Months Ended June 30,						Six Months Ended June 30,
	2014			2013			2014			2013
Allowance for loan loss at beginning of period	$	10,823		$	8,841		$	10,603		$	8,803
Provision for loan losses		408			1,153			483			1,287
Net (charge-offs) recoveries:
Charge-offs		(157	)		(616	)		(157	)		(737	)
Recoveries		210			34			355			59
Total net (charge-offs) recoveries		(53	)		(582	)		(198	)		(678	)
Allowance for loan loss at end of period	$	11,284		$	9,412		$	11,284		$	9,412
Net (charge-offs) recoveries to average loans		0.00	%		(0.07	)%		0.02	%		(0.08	)%

The following is a summary of our asset quality data and key ratios at the dates indicated (dollars in thousands):

	June 30, 2014			December 31, 2013
Loans originated by the Bank on non-accrual	$	2,046		$	1,657
Loans acquired through acquisition that are on non-accrual		4,982			7,899
Total nonaccrual loans		7,028			9,556
Other Real Estate Owned		219			—
Total non-performing assets	$	7,247		$	9,556
Nonaccrual loans to total loans		0.72	%		1.02	%
Total non-performing assets to total assets		0.51	%		0.68	%
Allowance for loan losses to total loans		1.15	%		1.14	%
Allowance for loan losses to total loans accounted at historical cost, which excludes acquired loans and related allowance		1.45	%		1.50	%
Allowance for loan losses to nonaccrual loans accounted at historical cost, which excludes nonaccrual acquired loans and related allowance		551.4	%		639.8	%
Allowance for loan losses to total non-accrual loans		160.5	%		111.0	%

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Deposits

The following table presents the balance of each major category of deposits at the dates indicated (dollars in thousands):

	June 30, 2014					December 31, 2013
	Amount		% of Total			Amount		% of Total
Non-interest bearing demand deposits	$	682,300		55	%	$	632,192		51	%
Interest bearing transaction accounts		143,312		12	%		155,735		13	%
Money market and savings deposits		361,936		29	%		380,915		31	%
Certificates of deposit		57,732		5	%		63,581		5	%
Total deposits	$	1,245,280		100	%	$	1,232,423		100	%

Total deposits increased $12.9 million to $1.2 billion at June 30, 2014 mainly due to a $50.1 million increase in non-interest bearing demand deposits, offset by a $37.3 million decrease in total interest bearing deposits. At June 30, 2014 and December 31, 2013, non-interest bearing deposits represented 55% and 51% of total deposits, respectively.

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LIQUIDITY

The following table provides a summary of the Bank’s primary and secondary liquidity levels at the dates indicated (dollars in thousands):

	June 30, 2014			December 31, 2013
	Amount			Amount
Primary Liquidity- On Balance Sheet:
Cash and due from banks	$	40,657		$	23,156
Interest-earning deposits in other financial institutions		179,409			218,131
Investment securities available-for-sale		102,143			106,488
Less: pledged cash and due from banks		(1	)		(1	)
Less: pledged investment securities		(71,962	)		(71,327	)
Total primary liquidity	$	250,246		$	276,447
Ratio of primary liquidity to total deposits		20.1	%		22.2	%
Additional Liquidity Not Included In Primary Liquidity :
Certificates of deposit in other financial institutions	$	64,577		$	60,307
Less: Certificate of deposits pledged		(3	)		(3	)
Total other liquidity	$	64,574		$	60,304
Secondary Liquidity- Off-Balance Sheet:
Available Borrowing Capacity:
Total secured borrowing capacity with FHLB	$	249,853		$	292,000
Fed Funds Borrowing Lines		47,000			54,500
Secured credit line with the FRBSF		2,890			5,245
Total secondary liquidity	$	299,743		$	351,745

As of June 30, 2014 the Company’s primary overnight source of liquidity consisted of the balances reflected in the table above. The Company’s primary liquidity consisted of cash and due from banks and interest-earning deposits at financial institutions. The amount of funds maintained directly with the Federal Reserve included in interest-earning deposits in other financial institutions was $154.3 million and $203.0 million, at June 30, 2014 and December 31, 2013, respectively. The next source of liquidity is the Company’s collateralized borrowings and unsecured borrowing facilities. In additional, the Company has $64.6 million of Certificates of deposits in other financial institutions where the average maturity is approximately 4.4 months that could be utilized over time to supplement the liquidity needs of the Company.

The Company’s primary long term source of funding has come from the liability side of the balance sheet and has historically been through the growth in non-interest bearing and interest bearing core deposits from its customers. Additional sources of funds from the Company’s asset side of the balance sheet have included Federal Funds sold, interest-earning deposits with other financial institutions, balances maintained with the Federal Reserve Bank, certificates of deposit in other financial institutions and payments of principal and interest on loans and investment securities. While maturities and scheduled principal amortization on loans are a reasonably predictable source of funds, deposit flows and loan prepayments are greatly influenced by the level of interest rates, economic conditions and competition.

As an additional source of liquidity, the Company maintains credit facilities, “Fed Funds Borrowing Lines,” of $47.0 million and $54.5 million at June 30, 2014 and December 31, 2013, respectively, with its primary correspondent banks for the purchase of overnight Federal funds. The lines are subject to availability of funds and have restrictions as to the number of days and length used during a month, $5 million of these credit facilities require the pledging of investment securities collateral.

The Company has established a secured credit facility with the FHLB of San Francisco which allows the Bank to borrow up to 25% of the Bank’s total assets, which equates to a credit line of approximately $345 million at June 30, 2014. The Company currently has no outstanding borrowings with the FHLB. As of June 30, 2014, the Company had $582 million of loan collateral pledged with the FHLB. This level of loan collateral would provide the Company with $250 million in borrowing capacity. Any amount of borrowings in excess of the $250 million would require the Company to pledge additional collateral. In addition, the Company must maintain a certain investment level in the common stock of the FHLB.

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The Company’s investment in the common stock of the FHLB is $4.2 million at June 30, 2014. This level of capital would allow the Company to borrow up to $89 million. Any advances from the FHLB in excess of the $89 million would require additional purchases of FHLB common stock. The Company had no securities pledged with the FHLB at June 30, 2014.

The Company maintains a secured credit facility with the Federal Reserve Bank of San Francisco (“FRBSF”) which is collateralized by investment securities pledged with the FRB. At June 30, 2014, the Company’s available borrowing capacity was $2.9 million.

The Company maintains investments in certificates of deposit with other financial institutions, with an average remaining maturity of approximately 4.4 months, with various balances maturing monthly. The Company had balances of $64.6 million and $60.3 million at June 30, 2014 and December 31, 2013, respectively. At June 30, 2014, $2.7 million of the Company’s certificates of deposit with other financial institutions were pledged as collateral as credit support for the interest rate swap contracts and are not available as a source of liquidity.

At June 30, 2014 and December 31, 2013, $1.1 million of the Company’s due from bank balances was pledged as collateral as credit support for the interest rate swap contracts and is not available as a source of liquidity.

The Company’s commitments to extend credit (off-balance sheet liquidity risk) are agreements to lend funds to customers as long as there are no violations as established in the loan agreement. Many of the commitments are expected to expire without being drawn upon, and as such, the total commitment amounts do not necessarily represent future cash requirements. Financial instruments with off-balance sheet risk for the Company include both undisbursed loan commitments, as well as undisbursed letters of credit. The Company’s exposure to extend credit was $417 million and $346 million at June 30, 2014 and December 31, 2013, respectively.

CU Bancorp’s liquidity on a stand-alone basis was $4.9 million and $4.3 million, in cash on deposit at the Bank, at June 30, 2014 and December 31, 2013, respectively. Management believes this amount of cash is currently sufficient to fund the holding company’s cash flow needs over at least the next twelve to twenty-four months.

DIVIDENDS

To date, the Company has not paid any cash dividends. Payment of stock or cash dividends in the future will depend upon earnings, liquidity, financial condition and other factors deemed relevant by our Board of Directors. Notification to the FRB is required prior to declaring and paying a dividend to shareholders that exceeds earnings for the period for which the dividend is being paid. This notification requirement is included in regulatory guidance regarding safety and soundness surrounding capital and includes other non-financial measures such as asset quality, financial condition, capital adequacy, liquidity, future earnings projections, capital planning and credit concentrations. Should the FRB object to dividend payments, the Company would be precluded from declaring and paying dividends, until approval is received or the Company no longer needs to provide notice under applicable guidance.

California law also limits the Company’s ability to pay dividends. A corporation may make a distribution/dividend from retained earnings to the extent that the retained earnings exceed (a) the amount of the distribution plus (b) the amount if any, of dividends in arrears on shares with preferential dividend rights. Alternatively, a corporation may make a distribution/dividend, if, immediately after the distribution, the value of its assets equals or exceeds the sum of (a) its total liabilities plus (b) the liquidation preference of any shares which have a preference upon dissolution over the rights of shareholders receiving the distribution/dividend.

The Bank is subject to certain restrictions on the amount of dividends that may be declared without regulatory approval. Such dividends shall not exceed the lesser of the Bank’s retained earnings or net income for its last three fiscal years (less any distributions to shareholders made during such period). In addition, the Bank may not pay dividends that would result in its capital being reduced below the minimum requirements shown above for capital adequacy purposes.

As of June 30, 2014, both CU Bancorp and the Bank had positive retained earnings and positive net income that would allow either of them to declare and pay a dividend as of June 30, 2014. However, neither CU Bancorp nor the Bank has plans to declare and pay a cash dividend at the current time.

The Company has a program to repurchase a portion of an employee’s outstanding restricted stock upon the vesting of this restricted stock, but only in amounts necessary to cover the employee tax withholding obligations at the option of the restricted stockholder (employee). The Company had this program in place during all of 2013 and through the six months

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ending June 30, 2014. This program was designed to provide the Bank’s employees with the financial ability to cover their tax liability obligation associated with the vesting of their restricted stock at the date of vesting. These transactions under the State of California Corporations Code are defined as distributions to shareholders.

REGULATORY MATTERS

Capital Resources

The Company’s objective is to maintain a level of capital that will support sustained asset and loan growth, provide for anticipated credit risks, and ensure that regulatory guidelines and industry standards are met. The Company and the Bank are subject to certain minimum capital adequacy and minimum well capitalized category guidelines adopted by the FRB and the FDIC. These guidelines relate primarily to the Tier 1 leverage ratio, the Tier 1 risk-based capital ratio, and the Total risk-based capital ratio. The minimum well capitalized required ratios are 5.00% Tier 1 leverage, 6.00% Tier 1 risk-based capital and 10.00% total risk-based capital.

At June 30, 2014, the respective capital ratios of the Company and the Bank exceeded the minimum percentage requirements to be deemed “well-capitalized” under the current capital guidelines. The following tables present the regulatory capital ratios requirements and the actual capitalization levels of the Company and the Bank as of the dates indicated (dollars in thousands):

CU Bancorp

	June 30, 2014			December 31, 2013			Adequately Capitalized			Well Capitalized
	Amount			Amount			(greater than or equal to)
Regulatory Capital Ratios:
Tier 1 leverage ratio		10.38	%		9.57	%		4.0	%		5.0	%
Tier 1 risk-based capital ratio		11.79	%		11.84	%		4.0	%		6.0	%
Total risk-based capital ratio		12.75	%		12.80	%		8.0	%		10.0	%
Regulatory Capital Data:
Tier 1 capital	$	142,838		$	134,440
Total risk-based capital		154,525			145,372
Average total assets		1,375,480			1,404,293
Risk-weighted assets		1,212,027			1,135,552

California United Bank

	June 30, 2014			December 31, 2013			Adequately Capitalized			Well Capitalized
	Amount			Amount			(greater than or equal to)
Regulatory Capital Ratios:
Tier 1 leverage ratio		9.66	%		8.90	%		4.0	%		5.0	%
Tier 1 risk-based capital ratio		10.96	%		10.99	%		4.0	%		6.0	%
Total risk-based capital ratio		11.93	%		11.96	%		8.0	%		10.0	%
Regulatory Capital Data:
Tier 1 capital	$	132,757		$	124,750
Total risk-based capital		144,444			135,682
Average total assets		1,374,677			1,402,041
Risk-weighted assets		1,210,906			1,134,653

Total Tier 1 capital of the Company increased by $8.4 million or 6.3% to $142.8 million during the six month period ending June 30, 2014. The increase in the Company’s Tier 1 leverage ratio during the six months ended June 30, 2014, was primarily the result of the following increases to capital: six months of earnings of $5.1 million, the exercise of employee stock options of $1.1 million, stock based compensation expense of $887,000, excess tax benefits related to stock based

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compensation of $366,000, an increase in other comprehensive income (the increase in unrealized gains or the decrease in unrealized losses on investment securities) of $400,000 and a decrease in the amount of disallowed deferred tax that is subtracted from regulatory capital increased capital by approximately $1.1 million. For regulatory capital calculations, a portion of the Company’s deferred tax asset may be disallowed based on the regulatory capital disallowance calculation. There was no disallowed deferred tax asset that was subtracted from regulatory capital at June 30, 2014.

Total risk-based capital of the Company increased by $9.1 million or 6.2% to $154.4 million during the six months ended June 30, 2014. The major component elements that resulted in the increase in the Company’s Tier 1 risk-based capital, as described above were the same components that lead to the increases in the Total risk-based capital during the six months ended June 30, 2014. The Company’s Risk-weighted assets used in the calculation of Total risk-based capital ratio increased by $76.5 million or 6.7%.

Total Tier 1 capital at the Bank increased by $8.0 million or 6.4% to $132.8 million during the six month period ending June 30, 2014. The increase in the Bank’s Tier 1 leverage ratio during the six months ended June 30, 2014 was primarily the result of the following increases to capital: six months earnings of $5.5 million, stock based compensation expense of $877,000, excess tax benefits related to stock based compensation of $366,000, an increase in other comprehensive income (the increase in unrealized gains or the decrease in unrealized losses on investment securities) of $400,000 and a decrease in the amount of disallowed deferred tax that is subtracted from regulatory capital increased capital by approximately $1.1 million. For regulatory capital calculations, a portion of the Company’s deferred tax asset may be disallowed based on the regulatory capital disallowance calculation. There was no disallowed deferred tax asset that was subtracted from regulatory capital as of June 30, 2014. The Bank’s Average total assets used in the calculation of Tier 1 leverage ratio decreased by $27 million or 2.0%.

Basel III Capital Standards

For a discussion regarding the phase in of the new Basel III capital requirements see the Company’s December 31, 2013 Form 10K, Part I, Item 1 – Business – Recent Legislation and Regulation – New Financial Institution Capital Rules.

Management has evaluated the final rules and their expected impact on the Company. Based upon that assessment, management believes the Company’s and Bank’s current capital levels at June 30, 2014 would equal or exceed the minimum capital requirements, including the capital conservation buffer, if they were in effect on that date.

Dodd-Frank Wall Street Reform and Consumer Protection Act

For a discussion regarding the implementation of the Dodd-Frank Wall Street Reform and Consumer Protection Act, see the Company’s December 31, 2013 Form 10K, Part I, Item 1 – Business – Supervision and Regulation – Recent Legislation and Regulation – Dodd-Frank Wall Street Reform and Consumer Protection Act, Final Volker Rule, and Bureau of Consumer Financial Protection.

Corporate Governance

The following are some of the key corporate governance practices at both the Company and the Bank, which are oriented to ensure that there are no conflicts of interest and that the Company operates in the best interests of shareholders:

• Eight of the Company’s and Bank’s eleven directors at June 30, 2014 are independent outside directors.

• A new independent director was appointed effective April 1, 2014.

• None of the Company’s senior officers and directors have received loans from the Bank.

• There are no loans by the Bank to outside companies controlled by, or affiliated with officers or directors.

• The Company’s Board of Directors has Audit and Risk, and Compensation, Nomination and Governance committees comprised solely of independent outside directors.

Number of Employees

The number of active full-time equivalent employees increased from 176 at December 31, 2013 to 177 at June 30, 2014.

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ITEM 3. Quantitative and Qualitative Disclosures about Market Risk

The Company’s primary market risk is interest rate risk. Interest rate risk is the potential for economic losses due to future interest rate changes. These economic losses can be reflected as a loss of future net interest income and/or a loss of current fair market values. The objective is to measure the effect on net interest income and to adjust the balance sheet to minimize the inherent risk while at the same time maximizing income. Management realizes certain risks are inherent and that the goal is to identify and minimize the risks. To mitigate interest rate risk, the structure of the Company’s balance sheet is managed with the objective of correlating the movements of interest rates on loans and investments with those of deposits and borrowings.

The Company’s exposure to interest rate risk is reviewed by the Company’s management Asset/Liability Committee formally on a quarterly basis and on an ongoing basis. The main tool used to monitor interest rate risk is a dynamic simulation model that quantifies the estimated exposure of net interest income to sustained interest rate changes. The simulation model estimates the impact of changing interest rates on the interest income from all interest-earning assets and the interest expense paid on all interest bearing liabilities reflected on the Company’s balance sheet. This sensitivity analysis is compared to the Company’s policy limits, which specify a maximum tolerance level for net interest income exposure over a one-year horizon assuming no balance sheet growth, given a 100 and 400 basis point upward and 200 basis point downward shift in interest rates.

An additional tool used by management to monitor interest rate risk includes the standard GAP report, which measures the estimated difference between the amount of interest-sensitive assets and interest-sensitive liabilities anticipated to mature or reprice during future periods, based on certain assumptions. In general, the GAP report presents the carrying amounts of these assets and liabilities in a particular period based on either the date that they first reprice, for variable rate products, or the maturity date, for fixed rate products.

At June 30, 2014, the Company had twenty three pay-fixed, receive-variable interest rate contracts that were designed to convert fixed rate loans into variable rate loans. Twenty one of these swap contacts are designated as fair value hedges. For additional information on these interest rate contracts, see Note 9 – Derivative Financial Instruments located in Part I, Item 1. – Notes to the Consolidated Financial Statements.

The Company has no market risk sensitive instruments held for trading purposes. Management believes that the Company’s market risk is reasonable at this time.

The following depicts the Company’s net interest income sensitivity analysis as of June 30, 2014 (dollars in thousands):

Simulated Rate Changes	Estimated Net Interest Income Sensitivity
+ 400 basis points	38.9%	$16,918
+ 100 basis points	9.0%	$3,932
- 200 basis points (1)	(3.9)%	$(1,683)

The Company is currently asset sensitive. The estimated sensitivity does not necessarily represent our forecast and the results may not be indicative of actual changes to our net interest income. These estimates are based upon a number of assumptions including: the nature and timing of interest rate levels including yield curve shape, prepayments on loans and securities, pricing strategies on loans and deposits and replacement of asset and liability cash flows. The duration of the Company’s investment securities portfolio at June 30, 2014 is approximately 2.5 years. While the assumptions used are based on current economic and local market conditions, there is no assurance as to the predictive nature of these conditions including how customer preferences or competitor influences might change.

Variable rate loans make up 70% of the loan portfolio. However, the Company has floors on some of its loans. At June 30, 2014, 48% of variable rate loans are at their floor, and thus an increase in the underlying index may not necessarily result in an increase in the coupon until the loan index plus margin exceeds that floor.

The Company’s static GAP as of June 30, 2014, is not materially different from that reported at December 31, 2013 and is thus not included in this 10Q. See the Company’s Static Gap reports under “Item7A-Quantitative and Qualitative Disclosures about Market Risk” in the Company’s 2013 Annual Report on Form 10-K.

(1) The simulated rate change under the -200 basis points reflected above actually reflects only a maximum negative 25 basis points or less decline in actual rates based on the current targeted Fed Funds target rate by the government of 0% to 0.25%. The -200 simulation model reflects repricing of liabilities of less than 0.25% due to the Company paying significantly less than 25 basis points on its deposit accounts, and higher downward repricing of the Company’s interest-earning assets in the -200 simulation model.

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ITEM 4. Controls and Procedures

(a) As of the end of the period covered by this Quarterly Report on Form 10-Q, the Company’s principal executive officer (“CEO”) and principal financial officer (“CFO”) have evaluated the effectiveness of the Company’s “disclosure controls and procedures” (“Disclosure Controls”). Disclosure Controls, as defined in Rule 13a-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) (as adopted by the FDIC), are procedures that are designed with the objective of ensuring that information required to be disclosed in the Company’s reports filed under the Exchange Act, such as this Quarterly Report, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure Controls are also designed with the objective of ensuring that such information is accumulated and communicated to the Company’s management, including the CEO and CFO, as appropriate to allow timely decisions regarding required disclosure.

The Company’s management, including the CEO and CFO, does not expect that the Company’s Disclosure Controls will prevent all error and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple errors or mistakes. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

Based upon their controls evaluation, the CEO and CFO have concluded that the Company’s Disclosure Controls are effective at a reasonable assurance level.

(b) There have been no significant changes in the Company’s internal controls or in other factors that could significantly affect these controls subsequent to the date of their evaluation.

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PART II – OTHER INFORMATION

ITEM 1. Legal Proceedings

None.

ITEM 1A. Risk Factors

There have been no material changes from the risk factors previously disclosed in the Bank’s 2013 Annual Report on Form 10-K.

ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

ITEM 3. Defaults upon Senior Securities

None.

ITEM 4. Mine Safety Disclosures

Not applicable.

ITEM 5. Other Information

(a) None.

(b) None.

ITEM 6. Exhibits

(a) Index to Exhibits

Exhibit Number	Description
31.1D	Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2D	Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1D	Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2D	Certification of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INSD	XBRL Instance Document
101.SCHD	XBRL Taxonomy Extension Schema Document
101.CALD	XBRL Taxonomy Calculation Linkbase Document
101.LABD	XBRL Taxonomy Label Linkbase Document
101 DEFD	XBRL Taxonomy Extension Definition Linkbase Document
101.PRED	XBRL Taxonomy Presentation Linkbase Document

* Refers to management contracts or compensatory plans or arrangements

D Attached hereto

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SIGNATURES

Pursuant to the requirements of the Security Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

CU BANCORP

Date: August 8, 2014	/s/    DAVID I. RAINER
	David I. Rainer
	President and Chief Executive Officer
Date: August 8, 2014	/s/    KAREN A. SCHOENBAUM
	Karen A. Schoenbaum
	Executive Vice President and Chief Financial Officer

Page 70 of 70

EX-31.1

Exhibit 31.1

Certification

I, David I. Rainer, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of CU Bancorp;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f))for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, is made known to us by others within the entity, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

/s/ DAVID I. RAINER

David I. Rainer

President and Chief Executive Officer

Date: August 8, 2014

EX-31.2

Exhibit 31.2

Certification

I, Karen A. Schoenbaum, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of CU Bancorp;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f))for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, is made known to us by others within the entity, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

/s/ KAREN A. SCHOENBAUM

Karen A. Schoenbaum

Executive Vice President and Chief Financial Officer

Date: August 8, 2014

EX-32.1

Exhibit 32.1

Certification

Pursuant to the requirement set forth in Section 906 of the Sarbanes-Oxley Act of 2002, David I. Rainer hereby certifies as follows:

1. He is the duly appointed Chief Executive Officer of CU Bancorp, a California state chartered banking corporation (the “Bank”).

2. Based on his knowledge, the Bank’s Quarterly Report on Form 10-Q for the period ended June 30, 2014, and to which this Certification is attached as Exhibit 32.1 (the “Periodic Report”), fully complies with the requirements of section 13(a) or section 15(d) of the Securities Exchange Act of 1934 and the information contained in the Periodic Report fairly presents, in all material respects, the financial condition and results of operations of the Bank.

IN WITNESS WHEREOF, the undersigned has set his hand hereto as of this 8th day of August 2014.

/s/    DAVID I. RAINER        

David I. Rainer

Chief Executive Officer

EX-32.2

Exhibit 32.2

Certification

Pursuant to the requirement set forth in Section 906 of the Sarbanes-Oxley Act of 2002, Karen A. Schoenbaum hereby certifies as follows:

1. She is the duly appointed Chief Financial Officer of CU Bancorp, a California state chartered banking corporation (the “Bank”).

2. Based on her knowledge, the Company’s Quarterly Report on Form 10-Q for the period ended June 30, 2014, and to which this Certification is attached as Exhibit 32.2 (the “Periodic Report”), fully complies with the requirements of section 13(a) or section 15(d) of the Securities Exchange Act of 1934 and the information contained in the Periodic Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

IN WITNESS WHEREOF, the undersigned has set his hand hereto as of this 8th day of August 2014.

/s/    KAREN A. SCHOENBAUM        

Karen A. Schoenbaum

Executive Vice President and Chief Financial Officer

XML

Amortized Cost and Estimated Fair Values of Investment Securities (Detail) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale Securities, Amortized Cost	$ 101,812	$ 106,836
Available-for-sale Securities, Gross Unrealized Gains	1,551	1,535
Available-for-sale Securities, Gross Unrealized Losses	1,220	1,883
Fair Market Value	102,143	106,488
U.S. Govt Agency - GNMA Mortgage-Backed Securities
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale Securities, Amortized Cost	24,938	28,107
Available-for-sale Securities, Gross Unrealized Gains	268	180
Available-for-sale Securities, Gross Unrealized Losses	538	909
Fair Market Value	24,668	27,378
Corporate Securities
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale Securities, Amortized Cost	4,056	5,086
Available-for-sale Securities, Gross Unrealized Gains	108	125
Fair Market Value	4,164	5,211
Municipal Securities
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale Securities, Amortized Cost	3,069	3,621
Available-for-sale Securities, Gross Unrealized Gains	20	9
Available-for-sale Securities, Gross Unrealized Losses		2
Fair Market Value	3,089	3,628
U.S. Govt Agency and Sponsored Agency - Note Securities
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale Securities, Amortized Cost	3,084	4,153
Available-for-sale Securities, Gross Unrealized Gains	7	1
Available-for-sale Securities, Gross Unrealized Losses		2
Fair Market Value	3,091	4,152
U.S. Govt Agency - SBA Securities
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale Securities, Amortized Cost	52,487	50,521
Available-for-sale Securities, Gross Unrealized Gains	742	875
Available-for-sale Securities, Gross Unrealized Losses	448	491
Fair Market Value	52,781	50,905
U.S. Govt Sponsored Agency - CMO & Mortgage-Backed Securities
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale Securities, Amortized Cost	14,178	15,348
Available-for-sale Securities, Gross Unrealized Gains	406	345
Available-for-sale Securities, Gross Unrealized Losses	234	479
Fair Market Value	$ 14,350	$ 15,214

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Accretable Yield for Loans Acquired (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Receivables [Abstract]
Balance, beginning of period	$ 7,350	$ 11,269	$ 7,912	$ 12,189
Accretion, included in interest income	(889)	(1,139)	(1,451)	(2,083)
Reclassifications (to) from non-accretable yield	(49)		(49)	24
Balance, end of period	$ 6,412	$ 10,130	$ 6,412	$ 10,130

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Risk Category of Loans by Class of Loans (Detail) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Loans Receivable [Line Items]
Commercial and Industrial	$ 303,870	$ 299,473
Construction, Land Development and Other Land	61,165	47,074
Commercial and Other Real Estate	606,875	568,914
Other	7,980	17,733
Total Loans	979,890	933,194
Pass
Loans Receivable [Line Items]
Commercial and Industrial	292,219	289,594
Construction, Land Development and Other Land	61,165	47,074
Commercial and Other Real Estate	585,390	547,600
Other	7,979	17,731
Total Loans	946,753	901,999
Special Mention
Loans Receivable [Line Items]
Commercial and Industrial	2,200	1,540
Commercial and Other Real Estate	4,035	2,613
Total Loans	6,235	4,153
Substandard
Loans Receivable [Line Items]
Commercial and Industrial	9,451	8,339
Commercial and Other Real Estate	17,450	18,701
Other	1	2
Total Loans	$ 26,902	$ 27,042

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Changes in Accumulated Other Comprehensive Income (Loss) (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013	Dec. 31, 2013
Net unrealized gains (losses) on investment securities: Before Tax
Beginning balance	$ (80)	$ 2,243	$ (348)	$ 2,369	$ 2,369
Non-credit portion of other-than-temporary impairments arising during the period		0		(32)
Net unrealized gains (losses) arising during the period	411	(1,247)	679	(1,336)
Other comprehensive loss before reclassifications				(1,368)
Reclassification adjustment for gains realized in net income	0		0	(5)
Net other comprehensive income (loss)	411	(1,247)	679	(1,373)
Ending balance	331	996	331	996	(348)
Net unrealized gains (losses) on investment securities: Tax Effect
Beginning balance	(33)	923	(143)	975	975
Non-credit portion of other-than-temporary impairments arising during the period		0		(13)
Net unrealized gains (losses) arising during the period	169	(513)	279	(550)
Other comprehensive loss before reclassifications				(563)
Reclassification adjustment for gains realized in net income	0		0	(2)
Net other comprehensive income (loss)	169	(513)	279	(565)
Ending balance	136	410	136	410	(143)
Net unrealized gains (losses) on investment securities: Net of Tax
Beginning balance	(47)	1,320	(205)	1,394	1,394
Non-credit portion of other-than-temporary impairments arising during the period		0		(19)
Net unrealized gains (losses) arising during the period	242	(734)	400	(786)
Other comprehensive loss before reclassifications				(805)
Reclassification adjustment for gains realized in net income	0		0	(3)
Net other comprehensive income (loss)	242	(734)	400	(808)	(1,599)
Ending balance	$ 195	$ 586	$ 195	$ 586	$ (205)

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Carrying Value of Purchased Credit Impaired Loans (Detail) (USD $)	Jun. 30, 2014	Dec. 31, 2013
Debt Outstanding [Line Items]
Unpaid Principal Balance	$ 6,931,000	$ 11,814,000
Carrying Value	5,542,000	6,320,000
Purchased Credit Impaired Loans
Debt Outstanding [Line Items]
Unpaid Principal Balance	4,256,000	7,210,000
Carrying Value	2,596,000	4,328,000
Purchased Credit Impaired Loans | Commercial and Industrial
Debt Outstanding [Line Items]
Unpaid Principal Balance	935,000	1,599,000
Carrying Value	558,000	1,046,000
Purchased Credit Impaired Loans | Commercial and Other Real Estate
Debt Outstanding [Line Items]
Unpaid Principal Balance	3,321,000	5,611,000
Carrying Value	$ 2,038,000	$ 3,282,000

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Level in Fair Value Hierarchy for Financial Instruments Estimated Fair Values (Detail) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Investment securities available-for-sale	$ 102,143	$ 106,488
Loans, net, Recorded Investment Carrying Value	968,606	922,591
Certificates of deposit, Recorded Investment Carrying Value	57,732	63,581
Securities sold under agreements to repurchase, Recorded Investment Carrying Value	13,852	11,141
Securities sold under agreements to repurchase, Fair Value	13,852	11,141
Subordinated debentures, Recorded Investment Carrying Value	9,459	9,379
Interest rate swap contracts, Recorded Investment Carrying Value	3,549	3,943
Carrying (Reported) Amount, Fair Value Disclosure
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Investment securities available-for-sale	102,143	106,488
Loans, net, Recorded Investment Carrying Value	968,606	922,591
Certificates of deposit, Recorded Investment Carrying Value	57,732	63,581
Securities sold under agreements to repurchase, Recorded Investment Carrying Value	13,852	11,141
Subordinated debentures, Recorded Investment Carrying Value	12,372	9,379
Interest rate swap contracts, Recorded Investment Carrying Value	3,549	3,943
(Level 2)
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Investment securities available-for-sale	102,143	106,488
Certificates of deposit, Fair Value	57,775	63,680
Securities sold under agreements to repurchase, Fair Value	13,852	11,141
Subordinated debentures, Fair Value	12,372	12,372
Interest rate swap contracts, Fair Value	3,549	3,943
(Level 3)
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Loans, net, Fair Value	972,960	926,500
Certificates of deposit, Fair Value		$ 0

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Changes in Allowance for Loan Loss (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loan loss at beginning of period	$ 10,823	$ 8,841	$ 10,603	$ 8,803
Provision for loan losses	408	1,153	483	1,287
Net (charge-offs) recoveries:
Charge-offs	(157)	(616)	(157)	(737)
Recoveries	210	34	355	59
Total net (charge-offs) recoveries	53	(582)	198	(678)
Allowance for loan loss at end of period	11,284	9,412	11,284	9,412
Commercial and Industrial
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loan loss at beginning of period	5,278	4,187	5,534	4,572
Provision for loan losses	91	1,014	(308)	650
Net (charge-offs) recoveries:
Charge-offs	(93)	(569)	(93)	(612)
Recoveries	109	27	252	49
Total net (charge-offs) recoveries	16	(542)	159	(563)
Allowance for loan loss at end of period	5,385	4,659	5,385	4,659
Construction, Land Development and Other Land
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loan loss at beginning of period	1,334	2,147	1,120	2,035
Provision for loan losses	88	213	302	325
Net (charge-offs) recoveries:
Allowance for loan loss at end of period	1,422	2,360	1,422	2,360
Commercial and Other Real Estate
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loan loss at beginning of period	4,161	2,400	3,886	2,084
Provision for loan losses	228	(6)	501	379
Net (charge-offs) recoveries:
Charge-offs	(64)	(47)	(64)	(117)
Recoveries	101	4	103	5
Total net (charge-offs) recoveries	37	(43)	39	(112)
Allowance for loan loss at end of period	4,426	2,351	4,426	2,351
Other
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loan loss at beginning of period	50	107	63	112
Provision for loan losses	1	68	(12)	(67)
Net (charge-offs) recoveries:
Charge-offs				(8)
Recoveries		3		5
Total net (charge-offs) recoveries		3		(3)
Allowance for loan loss at end of period	$ 51	$ 42	$ 51	$ 42

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Other Comprehensive Income (Loss) (Tables)

6 Months Ended

Jun. 30, 2014

Text Block [Abstract]

Changes in Accumulated Other Comprehensive Income (Loss)

The following table presents the changes in accumulated other comprehensive income (loss) by component for the periods indicated (dollars in thousands):

	Before Tax			Tax Effect			Net of Tax
Three Months Ended – June 30, 2014
Net unrealized gains (losses) on investment securities:
Beginning balance	$	(80	)	$	(33	)	$	(47	)
Net unrealized gains arising during the period		411			169			242
Reclassification adjustment for gains realized in net income		0			0			0
Net other comprehensive income		411			169			242
Ending balance	$	331		$	136		$	195
	Before Tax			Tax Effect			Net of Tax
Three Months Ended – June 30, 2013
Net unrealized gains on investment securities:
Beginning balance	$	2,243		$	923		$	1,320
Non-credit portion of other-than-temporary impairments arising during the period		—			—			—
Net unrealized losses arising during the period		(1,247	)		(513	)		(734	)
Net other comprehensive loss		(1,247	)		(513	)		(734	)
Ending balance	$	996		$	410		$	586
	Before Tax			Tax Effect			Net of Tax
Six Months Ended – June 30, 2014
Net unrealized gains (losses) on investment securities:
Beginning balance	$	(348	)	$	(143	)	$	(205	)
Net unrealized gains arising during the period		679			279			400
Reclassification adjustment for gains realized in net income		0			0			0
Net other comprehensive income		679			279			400
Ending balance	$	331		$	136		$	195
	Before Tax			Tax Effect			Net of Tax
Six Months Ended – June 30, 2013
Net unrealized gains on investment securities:
Beginning balance	$	2,369		$	975		$	1,394
Non-credit portion of other-than-temporary impairments arising during the period		(32	)		(13	)		(19	)
Net unrealized losses arising during the period		(1,336	)		(550	)		(786	)
Other comprehensive loss before reclassifications		(1,368	)		(563	)		(805	)
Reclassification adjustment for gains realized in net income		(5	)		(2	)		(3	)
Net other comprehensive loss		(1,373	)		(565	)		(808	)
Ending balance	$	996		$	410		$	586

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Fair Value of Assets and Liabilities - Additional Information (Detail) (USD $)	6 Months Ended		6 Months Ended		3 Months Ended
	Jun. 30, 2014	Dec. 31, 2013	Jun. 30, 2014 Fair Value Hierarchy for Assets Measured on Recurring Basis	Jun. 30, 2013 Fair Value Hierarchy for Assets Measured on Recurring Basis	Jun. 30, 2014 Fair Value Hierarchy for Asset Measured on Non-recurring Basis Loan	Jun. 30, 2013 Fair Value Hierarchy for Asset Measured on Non-recurring Basis	Dec. 31, 2013 Fair Value Hierarchy for Asset Measured on Non-recurring Basis	Dec. 31, 2013 Fair Value Hierarchy for Asset Measured on Non-recurring Basis Other real estate owned	Dec. 31, 2013 Fair Value Hierarchy for Asset Measured on Non-recurring Basis Other Loan
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Financial assets measured at fair value on recurring basis	$ 0	$ 0
Financial liabilities measured at fair value on recurring basis	0	0
Transfer of assets	0		0	0	0	0
Number of loans transferred to other real estate owned					1
Collateral dependent impaired loans with specific valuation allowance and/or partial charge-offs (non-purchased credit impaired loans)					0		264,000	219,000	45,000
Asset transferred to OREO					$ 219,000

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Qualified Affordable Housing Project Investments - Additional Information (Detail) (Low Income Housing Tax Credits, USD $)	6 Months Ended
	Jun. 30, 2014	Dec. 31, 2013
Low Income Housing Tax Credits
Investment Holdings [Line Items]
Investment cost	$ 4,300,000	$ 4,500,000
Amortization of investment	200,000
Funding liability	$ 3,500,000	$ 4,000,000

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Significant Unobservable Inputs Used in Fair Value Measurements for Level 3 Assets and Liabilities Measured at Fair Value on Recurring or Non-Recurring Basis (Detail) (USD $) In Thousands, unless otherwise specified	6 Months Ended		12 Months Ended
	Jun. 30, 2014		Dec. 31, 2013
Quantitative Information About Significant Unobservable Inputs [Line Items]
Other real estate, net	$ 219
Assets, fair value			219
Collateral Dependent Impaired Loans With Specific Valuation Allowance And Or Partial Charge Off
Quantitative Information About Significant Unobservable Inputs [Line Items]
Assets, fair value			$ 45	[1]
Collateral Dependent Impaired Loans With Specific Valuation Allowance And Or Partial Charge Off | Commercial Real Estate Appraisal
Quantitative Information About Significant Unobservable Inputs [Line Items]
Valuation Model and/or Factors			Estimated selling costs
Estimated selling costs	8.00%		8.00%
Collateral Dependent Impaired Loans With Specific Valuation Allowance And Or Partial Charge Off | Commercial Real Estate Appraisal | Sales Approach
Quantitative Information About Significant Unobservable Inputs [Line Items]
Valuation Model and/or Factors			Sales approach	[2]
Collateral Dependent Impaired Loans With Specific Valuation Allowance And Or Partial Charge Off | Credit Loss Estimate of Aged Accounts Receivable Collateral
Quantitative Information About Significant Unobservable Inputs [Line Items]
Valuation Model and/or Factors			Credit loss factors on aging of accounts receivable collateral
Credit loss factors on aging of accounts receivable collateral			80.00%
Other Real Estate Net [Member] | Commercial Real Estate Appraisal
Quantitative Information About Significant Unobservable Inputs [Line Items]
Valuation Model and/or Factors	Estimated selling costs
Other Real Estate Net [Member] | Commercial Real Estate Appraisal | Sales Approach
Quantitative Information About Significant Unobservable Inputs [Line Items]
Valuation Model and/or Factors	Sales approach	[3]

[1] The Company has recorded total charge-offs of $605,000 on the principal balance on two of the loans included in the balance in the above table. These charge-offs were recorded in 2013.

[2] For the one commercial real estate loan included in the above table at December 31, 2013, the Company established the fair value of the loan based on a recent commercial real estate appraisal. The Company selected the "sales approach" for valuing the collateral.

[3] For the one commercial real estate property included in other real estate owned at June 30, 2014 as reflected in the above table, the Company established the fair value of this property based on a recent commercial real estate appraisal. The Company selected the "sales approach" for valuing the collateral

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Significant Unobservable Inputs Used in Fair Value Measurements for Level 3 Assets and Liabilities Measured at Fair Value on Recurring or Non-Recurring Basis (Parenthetical) (Detail) (USD $)	12 Months Ended
	Dec. 31, 2013 Loan
Fair Value Disclosures [Abstract]
Recorded total charge off principal balance	$ 605,000
Number of loans	2

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Commitments and Contingencies - Additional Information (Detail) (USD $)	6 Months Ended
	Jun. 30, 2014	Jun. 30, 2014 Commitments to Extend Credit	Dec. 31, 2013 Commitments to Extend Credit	Jun. 30, 2014 Commitments to Extend Credit Standby Letters of Credit	Dec. 31, 2013 Commitments to Extend Credit Standby Letters of Credit
Other Commitments [Line Items]
Legal proceedings against the company	$ 0
Financial instruments with off balance sheet risk		$ 417,000,000	$ 346,000,000	$ 40,700,000	$ 40,600,000

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Computation of Book Value and Tangible Book Value per Common Share (Tables)

6 Months Ended

Jun. 30, 2014

Text Block [Abstract]

Computation of TCE, Book Value and Tangible Book Value Per Common Share

The table below presents the computation of TCE, book value and tangible book value per common share as of the dates indicated (dollars in thousands, except share and per share data):

	June 30, 2014		December 31, 2013
Total Shareholders’ Equity	$	145,438	$	137,924
Less: Goodwill		12,292		12,292
Less: Core deposit and leasehold right intangibles		2,349		2,525
Tangible common equity	$	130,797	$	123,107
Common shares issued and outstanding		11,222,235		11,081,364
Book value per common share	$	12.96	$	12.45
Tangible book value per common share	$	11.66	$	11.11

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Recorded Investment and Unpaid Principal Balances for Impaired Loans (Detail) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013	Dec. 31, 2013
Financing Receivable, Impaired [Line Items]
Recorded Investment	$ 5,542,000		$ 5,542,000		$ 6,320,000
Unpaid Principal Balance	6,931,000		6,931,000		11,814,000
Related Allowance	240,000		240,000		4,000
Average Recorded Investment	5,524,000	6,487,000	5,905,000	5,890,000
Interest Income Recognized	34,000		34,000
Commercial and Industrial
Financing Receivable, Impaired [Line Items]
Recorded Investment, With no specific allowance recorded	1,060,000		1,060,000		2,540,000
Recorded Investment, With a specific allowance recorded	1,522,000		1,522,000		100,000
Unpaid Principal Balance, With no specific allowance recorded	1,138,000		1,138,000		5,347,000
Unpaid Principal Balance, With a specific allowance recorded	1,929,000		1,929,000		355,000
Recorded Investment	2,582,000		2,582,000		2,640,000
Unpaid Principal Balance	3,067,000		3,067,000		5,702,000
Related Allowance	240,000		240,000		4,000
Average Recorded Investment, With no specific allowance recorded	1,008,000	1,500,000	1,027,000	994,000
Interest Income Recognized, With no specific allowance recorded	34,000		34,000
Average Recorded Investment, With a specific allowance recorded	1,535,000	488,000	1,553,000	319,000
Interest Income Recognized, With a specific allowance recorded
Average Recorded Investment	2,543,000	1,988,000	2,580,000	1,313,000
Interest Income Recognized	34,000		34,000
Commercial and Other Real Estate
Financing Receivable, Impaired [Line Items]
Recorded Investment, With no specific allowance recorded	2,960,000		2,960,000		3,680,000
Unpaid Principal Balance, With no specific allowance recorded	3,864,000		3,864,000		6,112,000
Recorded Investment	2,960,000		2,960,000		3,680,000
Unpaid Principal Balance	3,864,000		3,864,000		6,112,000
Average Recorded Investment, With no specific allowance recorded	2,981,000	3,340,000	3,325,000	3,398,000
Average Recorded Investment	2,981,000	3,340,000	3,325,000	3,398,000
Construction, Land Development and Other Land
Financing Receivable, Impaired [Line Items]
Average Recorded Investment, With no specific allowance recorded		1,159,000		1,179,000
Average Recorded Investment	$ 1,535,000	$ 1,159,000		$ 1,179,000

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Composition of Loan Portfolio (Detail) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Loans Receivable [Line Items]
Commercial and Industrial Loans:	$ 303,870	$ 299,473
Loans Secured by Real Estate:
Loans Secured by Real Estate	668,040	615,988
Other Loans:	7,980	17,733
Total Loans	979,890	933,194
Owner-Occupied Nonresidential Properties
Loans Secured by Real Estate:
Loans Secured by Real Estate	208,936	197,605
Other Nonresidential Properties
Loans Secured by Real Estate:
Loans Secured by Real Estate	296,629	271,818
Construction, Land Development and Other Land
Loans Secured by Real Estate:
Loans Secured by Real Estate	61,165	47,074
Total Loans	61,165	47,074
1-4 Family Residential Properties
Loans Secured by Real Estate:
Loans Secured by Real Estate	64,583	65,711
Multifamily Residential Properties
Loans Secured by Real Estate:
Loans Secured by Real Estate	$ 36,727	$ 33,780

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Balances of Assets and Liabilities Measured at Fair Value on Non-Recurring Basis (Detail) (USD $)	Jun. 30, 2014	Dec. 31, 2013
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Other real estate owned, net	$ 219,000
Total		219,000
Fair Value Hierarchy for Asset Measured on Non-recurring Basis
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Other real estate owned, net	219,000
Collateral dependent impaired loans with specific valuation allowance and/or partial charge-offs (non-purchased credit impaired loans)	0	264,000
Total	219,000	264,000
(Level 3) | Fair Value Hierarchy for Asset Measured on Non-recurring Basis
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Other real estate owned, net	219,000
Collateral dependent impaired loans with specific valuation allowance and/or partial charge-offs (non-purchased credit impaired loans)		264,000
Total	$ 219,000	$ 264,000

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Basic and Diluted Earnings Per Common Share Computations (Detail) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013	Dec. 31, 2013
Earnings Per Share [Abstract]
Net Income	$ 2,386	$ 2,321	$ 5,052	$ 4,476	$ 9,785
Weighted average basic common shares outstanding	10,952,087	10,501,504	10,913,227	10,493,846
Dilutive effect of potential common share issuances from stock options and restricted stock	206,479	281,774	213,313	194,859
Weighted average diluted common shares outstanding	11,158,566	10,783,278	11,126,540	10,688,705
Anti-dilutive shares not included in the calculation of diluted earnings per share	82,154	203,176	83,437	209,655
Basic	$ 0.22	$ 0.22	$ 0.46	$ 0.43
Diluted	$ 0.21	$ 0.22	$ 0.45	$ 0.42

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Recorded Investment and Unpaid Principal Balances for Troubled Debt Restructured Loans (Detail) (USD $)	3 Months Ended	6 Months Ended		3 Months Ended	6 Months Ended				6 Months Ended	12 Months Ended	6 Months Ended	12 Months Ended	6 Months Ended	12 Months Ended
	Jun. 30, 2014	Jun. 30, 2014	Dec. 31, 2013	Jun. 30, 2014 Commercial and Industrial	Jun. 30, 2014 Commercial and Industrial	Dec. 31, 2013 Commercial and Industrial	Jun. 30, 2014 Commercial and Other Real Estate	Dec. 31, 2013 Commercial and Other Real Estate	Jun. 30, 2014 Troubled Debt Restructuring	Dec. 31, 2013 Troubled Debt Restructuring	Jun. 30, 2014 Troubled Debt Restructuring Commercial and Industrial	Dec. 31, 2013 Troubled Debt Restructuring Commercial and Industrial	Jun. 30, 2014 Troubled Debt Restructuring Commercial and Other Real Estate	Dec. 31, 2013 Troubled Debt Restructuring Commercial and Other Real Estate
Financing Receivable, Modifications [Line Items]
Recorded Investment	$ 5,542,000	$ 5,542,000	$ 6,320,000	$ 2,582,000	$ 2,582,000	$ 2,640,000	$ 2,960,000	$ 3,680,000	$ 2,855,000	$ 2,714,000	$ 746,000	$ 541,000	$ 2,109,000	$ 2,173,000
Unpaid Principal Balance	6,931,000	6,931,000	11,814,000	3,067,000	3,067,000	5,702,000	3,864,000	6,112,000	3,968,000	3,628,000	1,183,000	843,000	2,785,000	2,785,000
Interest Income Recognized	$ 34,000	$ 34,000		$ 34,000	$ 34,000

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Stock Option Activity (Detail) (USD $) In Thousands, except Share data, unless otherwise specified	6 Months Ended		12 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Dec. 31, 2013
Shares
Outstanding stock options at beginning, Shares	434,740
Granted, Shares
Exercised, Shares	110,044	0	282,031
Forfeited, Shares
Expired, Shares
Outstanding stock options at ending, Shares	324,696		434,740
Exercisable options at June 30, 2014, Shares	315,496
Unvested options at June 30, 2014, Shares	9,200
Outstanding, vested and expected to vest at June 30, 2014, Shares	324,696
Weighted Average Exercise Price
Outstanding stock options at beginning, Weighted Average Exercise Price	$ 13.89
Granted, Weighted Average Exercise Price
Exercised, Weighted Average Exercise Price	$ 9.87
Forfeited, Weighted Average Exercise Price
Expired, Weighted Average Exercise Price
Outstanding stock options at end, Weighted Average Exercise Price	$ 15.25		$ 13.89
Exercisable options at end, Weighted Average Exercise Price	$ 15.33
Unvested options at end, Weighted Average Exercise Price	$ 12.30
Outstanding, vested and expected to vest at end, Weighted Average Exercise Price	$ 15.25
Weighted Average Remaining Contractual Term
Outstanding stock options, Weighted Average Remaining Contractual Term	1 year 10 months 24 days		2 years 1 month 6 days
Exercisable options at end, Weighted Average Remaining Contractual Term	1 year 10 months 24 days
Unvested options at end, Weighted Average Remaining Contractual Term	2 years 3 months 18 days
Outstanding, vested and expected to vest at end, Weighted Average Remaining Contractual Term	1 year 10 months 24 days
Aggregate Intrinsic Value
Outstanding stock options at beginning, Aggregate Intrinsic Value	$ 1,913
Outstanding stock options at end, Aggregate Intrinsic Value	1,456		1,913
Exercisable options at end, Aggregate Intrinsic Value	1,394
Unvested options at end, Aggregate Intrinsic Value	62
Outstanding, vested and expected to vest at end, Aggregate Intrinsic Value	$ 1,456

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Derivative Financial Instruments - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	6 Months Ended
	Jun. 30, 2014 Agreement
Derivative [Line Items]
Number of pay-fixed, receive-variable interest rate swap agreements	23
Subordinated debenture, conversion date	2012-12
Swap, maturity date	2013
Total notional amount of the outstanding swap contracts	$ 31.3
Outstanding swaps original maturity period	15 years
Certificates of deposit with other financial institutions pledged	2.7
Non-interest bearing balances	1.9
Due from bank	4.6
Interest Rate Swap Contracts Fair Value
Derivative [Line Items]
Acquisition of interest rate swap contracts	Jul. 31, 2012
Interest Rate Swaption
Derivative [Line Items]
Pledged collateral with interest rate swap counterparty bank	$ 3.8

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Schedule Represents both Allowance for Loan Loss and Associated Loan Balance Classified by Loan Portfolio Segment and by Credit Evaluation Methodology (Detail) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Mar. 31, 2014	Dec. 31, 2013	Jun. 30, 2013	Mar. 31, 2013	Dec. 31, 2012
Financing Receivable, Allowance for Credit Losses [Line Items]
Individually evaluated for impairment	$ 240		$ 4
Collectively evaluated for impairment	11,042		10,589
Purchased credit impaired (loans acquired with deteriorated credit quality)	2		10
Total Allowance for Loan Loss	11,284	10,823	10,603	9,412	8,841	8,803
Loans receivable:
Individually evaluated for impairment	5,542		6,320
Collectively evaluated for impairment	971,752		922,546
Purchased credit impaired (loans acquired with deteriorated credit quality)	2,596		4,328
Total Loans	979,890		933,194
Commercial and Industrial
Financing Receivable, Allowance for Credit Losses [Line Items]
Individually evaluated for impairment	240		4
Collectively evaluated for impairment	5,143		5,520
Purchased credit impaired (loans acquired with deteriorated credit quality)	2		10
Total Allowance for Loan Loss	5,385	5,278	5,534	4,659	4,187	4,572
Loans receivable:
Individually evaluated for impairment	2,582		2,640
Collectively evaluated for impairment	300,730		295,787
Purchased credit impaired (loans acquired with deteriorated credit quality)	558		1,046
Total Loans	303,870		299,473
Construction, Land Development and Other Land
Financing Receivable, Allowance for Credit Losses [Line Items]
Individually evaluated for impairment	0		0
Collectively evaluated for impairment	1,422		1,120
Purchased credit impaired (loans acquired with deteriorated credit quality)	0		0
Total Allowance for Loan Loss	1,422	1,334	1,120	2,360	2,147	2,035
Loans receivable:
Individually evaluated for impairment	0		0
Collectively evaluated for impairment	61,165		47,074
Purchased credit impaired (loans acquired with deteriorated credit quality)	0		0
Total Loans	61,165		47,074
Commercial and Other Real Estate
Financing Receivable, Allowance for Credit Losses [Line Items]
Individually evaluated for impairment	0		0
Collectively evaluated for impairment	4,426		3,886
Purchased credit impaired (loans acquired with deteriorated credit quality)	0		0
Total Allowance for Loan Loss	4,426	4,161	3,886	2,351	2,400	2,084
Loans receivable:
Individually evaluated for impairment	2,960		3,680
Collectively evaluated for impairment	601,877		561,952
Purchased credit impaired (loans acquired with deteriorated credit quality)	2,038		3,282
Total Loans	606,875		568,914
Other
Financing Receivable, Allowance for Credit Losses [Line Items]
Individually evaluated for impairment	0		0
Collectively evaluated for impairment	51		63
Purchased credit impaired (loans acquired with deteriorated credit quality)	0		0
Total Allowance for Loan Loss	51	50	63	42	107	112
Loans receivable:
Individually evaluated for impairment	0		0
Collectively evaluated for impairment	7,980		17,733
Purchased credit impaired (loans acquired with deteriorated credit quality)	0		0
Total Loans	$ 7,980		$ 17,733

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Basis of Financial Statement Presentation

6 Months Ended

Jun. 30, 2014

Accounting Policies [Abstract]

Basis of Financial Statement Presentation

Note 1 - Basis of Financial Statement Presentation

CU Bancorp (the “Company”) is a bank holding company whose operating subsidiary is California United Bank. CU Bancorp was established to facilitate the reorganization and merger of Premier Commercial Bank, N.A. into California United Bank, which took place after the close of business on July 31, 2012. As a bank holding company, CU Bancorp is subject to regulation of the Federal Reserve Board (“FRB”). The term “Company”, as used throughout this document, refers to the consolidated balance sheets and consolidated statements of income of CU Bancorp and California United Bank.

California United Bank (the “Bank”) is a full-service commercial business bank offering a broad range of banking products and services including: deposit services, lending and cash management to small and medium-sized businesses in Los Angeles, Orange and Ventura counties, to non-profit organizations, to business principals and entrepreneurs, to the professional community, including attorneys, certified public accountants, financial advisors, healthcare providers and investors. The Bank opened for business in 2005, with its headquarters office located in Encino, California. As a state chartered non-member bank, the Bank is subject to regulation by the California Department of Business Oversight, (the “DBO”) and the Federal Deposit Insurance Corporation (“FDIC”). The deposits of the Bank are insured by the FDIC, to the maximum amount allowed by law.

On June 3, 2014, CU Bancorp and 1^st Enterprise Bank (“1^st Enterprise”) announced the execution of a definitive agreement and plan of merger whereby 1^st Enterprise will merge into California United Bank in a transaction valued at approximately $102.2 million. The transaction combines two of the leading commercial banking franchises in Southern California with more than $2.2 billion in combined assets which operate offices in Los Angeles, Orange, Ventura and San Bernardino counties. California United Bank will survive the merger and will continue the commercial banking operations of the combined bank following the merger. The transaction is intended to qualify as a tax-free reorganization under the applicable provision of the Internal Revenue Code and 1st Enterprise shareholders who receive shares of CU Bancorp common stock in the merger should not recognize any taxable gain on the exchange. Shareholders of 1^st Enterprise will receive a fixed exchange ratio at closing of 1.3450 shares of CU Bancorp common stock for each share of 1^st Enterprise common stock. Based on the CU Bancorp stock price as of August 1, 2014, total consideration for each 1^st Enterprise share would be $25.00.

The consolidated financial statements include the accounts of the Company and the Bank. Significant intercompany items have been eliminated in consolidation. The accounting and reporting policies of the Company conform to U.S. generally accepted accounting principles (“GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission.

CU Bancorp is the common shareholder of Premier Commercial Statutory Trust I, Premier Commercial Statutory Trust II, and Premier Commercial Statutory Trust III, entities which were acquired in the merger with Premier Commercial Bancorp (“PC Bancorp”). These trusts were established for the sole purpose of issuing trust preferred securities and do not meet the criteria for consolidation in accordance with ASC 810 Consolidation. For more detail, see Note 8 – Borrowings and Subordinated Debentures.

Certain information and footnote disclosures presented in the annual consolidated financial statements are not included in the interim consolidated financial statements. Accordingly, the accompanying unaudited interim consolidated financial statements should be read in conjunction with the Company’s 2013 Annual Report on Form 10-K. In the opinion of management, the accompanying financial statements contain all necessary adjustments of a normal recurring nature, to present fairly the consolidated financial position of the Company and the results of its operations for the interim period presented.

Use of Estimates in the Preparation of Financial Statements

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. In addition, these accounting principles require the disclosure of contingent assets and liabilities as of the date of the financial statements.

Estimates that are particularly susceptible to significant change relate to the determination of the allowance for loan loss and various assets and liabilities measured at fair value. While management uses the most current available information to recognize losses on loans, future additions to the allowance for loan loss may be necessary based on changes in local economic conditions. In addition, regulatory agencies, as an integral part of their examination process, periodically review the Company’s allowance for loan loss. Regulatory agencies may require the Company to recognize additions to the allowance for loan loss based on their judgment about information available to them at the time of their examination.

Business Segments

The Company is organized and operated as a single reporting segment, principally engaged in commercial business banking. The Company conducts its lending and deposit operations through eight full service branch offices located in Los Angeles, Orange, and Ventura counties.

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Balance Sheet Classification of Derivative Financial Instruments (Detail) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Derivative [Line Items]
Liability Derivatives	$ 3,549	$ 3,943
Accrued Interest Payable and Other Liabilities
Derivative [Line Items]
Liability Derivatives	3,549	3,943
Accrued Interest Payable and Other Liabilities | Interest Rate Contacts
Derivative [Line Items]
Liability Derivatives	31,344	31,914
Derivatives not Designated as Hedging Instruments | Accrued Interest Payable and Other Liabilities | Interest Rate Swap Contracts Fair Value
Derivative [Line Items]
Liability Derivatives	645	738
Derivatives Designated as Hedging Instruments | Accrued Interest Payable and Other Liabilities | Interest Rate Swap Contracts Fair Value
Derivative [Line Items]
Liability Derivatives	$ 2,904	$ 3,205

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Company's Loan Portfolio Stratified by Industry Concentration of Borrower (Detail) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Loans Receivable [Line Items]
Total Loans	$ 979,890	$ 933,194
Real Estate
Loans Receivable [Line Items]
Total Loans	431,243	381,830
Manufacturing
Loans Receivable [Line Items]
Total Loans	86,350	83,319
Hotel/Lodging
Loans Receivable [Line Items]
Total Loans	82,787	76,143
Construction
Loans Receivable [Line Items]
Total Loans	69,935	62,835
Wholesale
Loans Receivable [Line Items]
Total Loans	57,195	60,291
Professional Services
Loans Receivable [Line Items]
Total Loans	45,745	49,739
Finance
Loans Receivable [Line Items]
Total Loans	52,615	46,393
Healthcare
Loans Receivable [Line Items]
Total Loans	32,756	38,662
Restaurant/Food Service
Loans Receivable [Line Items]
Total Loans	23,574	35,244
Other Services
Loans Receivable [Line Items]
Total Loans	23,781	21,448
Retail
Loans Receivable [Line Items]
Total Loans	17,856	23,157
Administrative Management
Loans Receivable [Line Items]
Total Loans	18,619	15,218
Information
Loans Receivable [Line Items]
Total Loans	10,635	11,709
Education
Loans Receivable [Line Items]
Total Loans	9,985	10,270
Transportation
Loans Receivable [Line Items]
Total Loans	10,562	9,531
Entertainment
Loans Receivable [Line Items]
Total Loans	5,195	6,207
Other
Loans Receivable [Line Items]
Total Loans	$ 1,057	$ 1,198

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Borrowings and Subordinated Debentures (Tables)

6 Months Ended

Jun. 30, 2014

Brokers And Dealers [Abstract]

Terms and Maturity of Bank's Securities Sold under Agreements

The tables below describe the terms and maturity of the Company’s securities sold under agreements to repurchase as of the dates indicated (dollars in thousands):

	June 30, 2014
Date Issued	Amount		Interest Rate			Original Term		Maturity Date
June 30, 2014	$	13,852		0.10% – 0.38	%		1 day	July 1, 2014
Total	$	13,852		0.25	%
	December 31, 2013
Date Issued	Amount		Interest Rate			Original Term		Maturity Date
December 3, 2013	$	750		0.10	%		62 days	February 3, 2014
December 31, 2013		10,391		0.10% – 0.40	%		2 days	January 2, 2014
Total	$	11,141		0.30	%

Terms of Issuance Subordinated Debentures Outstanding

The following table summarizes the terms of each issuance of subordinated debentures outstanding as of June 30, 2014:

Series	Amount (in thousands)			Issuance Date		Maturity Date		Rate Index			Current Rate			Next Reset Date
Trust I	$	6,186			12/10/04		03/15/35		3 month LIBOR + 2.05	%		2.28	%		9/15/14
Trust II		3,093			12/23/05		03/15/36		3 month LIBOR + 1.75	%		1.98	%		9/15/14
Trust III		3,093			06/30/06		09/15/36		3 month LIBOR + 1.85	%		2.08	%		9/15/14
Subtotal		12,372
Unamortized fair value adjustment		(2,913	)
Net	$	9,459

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Loans (Tables)

6 Months Ended

Jun. 30, 2014

Receivables [Abstract]

Composition of Loan Portfolio

The following table presents the composition of the Company’s loan portfolio as of the dates indicated (dollars in thousands):

	June 30, 2014		December 31, 2013
Commercial and Industrial Loans:	$	303,870	$	299,473
Loans Secured by Real Estate:
Owner-Occupied Nonresidential Properties		208,936		197,605
Other Nonresidential Properties		296,629		271,818
Construction, Land Development and Other Land		61,165		47,074
1-4 Family Residential Properties		64,583		65,711
Multifamily Residential Properties		36,727		33,780
Total Loans Secured by Real Estate		668,040		615,988
Other Loans:		7,980		17,733
Total Loans	$	979,890	$	933,194

Company's Loan Portfolio Stratified by Industry Concentration of Borrower

The following table is a breakout of the Company’s loan portfolio stratified by the industry concentration of the borrower by their respective NAICS code as of the dates indicated (dollars in thousands):

	June 30,		December 31,
	2014		2013
Real Estate	$	431,243	$	381,830
Manufacturing		86,350		83,319
Hotel/Lodging		82,787		76,143
Construction		69,935		62,835
Wholesale		57,195		60,291
Professional Services		45,745		49,739
Finance		52,615		46,393
Healthcare		32,756		38,662
Restaurant/Food Service		23,574		35,244
Other Services		23,781		21,448
Retail		17,856		23,157
Administrative Management		18,619		15,218
Information		10,635		11,709
Education		9,985		10,270
Transportation		10,562		9,531
Entertainment		5,195		6,207
Other		1,057		1,198
Total	$	979,890	$	933,194

Summary of Activity for Allowance for Loan Loss

The following table is a summary of the activity for the allowance for loan loss for the periods indicated (dollars in thousands):

	Three Months Ended June 30,						Six Months Ended June 30,
	2014			2013			2014			2013
Allowance for loan loss at beginning of period	$	10,823		$	8,841		$	10,603		$	8,803
Provision for loan losses		408			1,153			483			1,287
Net (charge-offs) recoveries:
Charge-offs		(157	)		(616	)		(157	)		(737	)
Recoveries		210			34			355			59
Net (charge-offs) recoveries		53			(582	)		198			(678	)
Allowance for loan loss at end of period	$	11,284		$	9,412		$	11,284		$	9,412
Net (charge-offs) recoveries to average loans		0.00	%		(0.07	)%		0.02	%		(0.08	)%

	June 30, 2014			December 30, 2013
Allowance for loan loss to total loans		1.15	%		1.14	%
Allowance for loan loss to total loans accounted for at historical cost, which excludes loans and the related allowance for loans acquired through acquisition		1.45	%		1.50	%

Changes in Allowance for Loan Loss

The following tables present, by portfolio segment, the changes in the allowance for loan loss and the recorded investment in loans as of the dates and for the periods indicated (dollars in thousands):

	Commercial and Industrial			Construction, Land Development and Other Land		Commercial and Other Real Estate			Other			Total
Three Months Ended June 30, 2014
Allowance for loan loss – Beginning balance	$	5,278		$	1,334	$	4,161		$	50		$	10,823
Provision for loan losses		91			88		228			1			408
Net (charge-offs) recoveries:
Charge-offs		(93	)		—		(64	)		—			(157	)
Recoveries		109			—		101			—			210
Net recoveries		16			—		37			—			53
Ending balance	$	5,385		$	1,422	$	4,426		$	51		$	11,284
Three Months Ended June 30, 2013
Allowance for loan loss – Beginning balance	$	4,187		$	2,147	$	2,400		$	107		$	8,841
Provision for loan losses		1,014			213		(6	)		68			1,153
Net (charge-offs) recoveries:
Charge-offs		(569	)		—		(47	)		—			(616	)
Recoveries		27			—		4			3			34
Net (charge-offs) recoveries		(542	)		—		(43	)		3			(582	)
Ending balance	$	4,659		$	2,360	$	2,351		$	42		$	9,412
	Commercial and Industrial			Construction, Land Development and Other Land		Commercial and Other Real Estate			Other			Total
Six Months Ended June 30, 2014
Allowance for loan loss – Beginning balance	$	5,534		$	1,120	$	3,886		$	63		$	10,603
Provision for loan losses		(308	)		302		501			(12	)		483
Net (charge-offs) recoveries:
Charge-offs		(93	)		—		(64	)		—			(157	)
Recoveries		252			—		103			—			355
Net recoveries		159			—		39			—			198
Ending balance	$	5,385		$	1,422	$	4,426		$	51		$	11,284
Six Months Ended June 30, 2013
Allowance for loan loss – Beginning balance	$	4,572		$	2,035	$	2,084		$	112		$	8,803
Provision for loan losses		650			325		379			(67	)		1,287
Net (charge-offs) recoveries:
Charge-offs		(612	)		—		(117	)		(8	)		(737	)
Recoveries		49			—		5			5			59
Net (charge-offs)		(563	)		—		(112	)		(3	)		(678	)
Ending balance	$	4,659		$	2,360	$	2,351		$	42		$	9,412

Schedule Represents both Allowance for Loan Loss and Associated Loan Balance Classified by Loan Portfolio Segment and by Credit Evaluation Methodology

The following tables present both the allowance for loan loss and the associated loan balance classified by loan portfolio segment and by credit evaluation methodology (dollars in thousands):

	Commercial and Industrial		Construction, Land Development and Other Land		Commercial and Other Real Estate		Other		Total
June 30, 2014
Allowance for loan loss:
Individually evaluated for impairment	$	240	$	—	$	—	$	—	$	240
Collectively evaluated for impairment		5,143		1,422		4,426		51		11,042
Purchased credit impaired (loans acquired with deteriorated credit quality)		2		—	$	—	$	—		2
Total Allowance for Loan Loss	$	5,385	$	1,422	$	4,426	$	51	$	11,284
Loans receivable:
Individually evaluated for impairment	$	2,582	$	—	$	2,960	$	—	$	5,542
Collectively evaluated for impairment		300,730		61,165		601,877		7,980		971,752
Purchased credit impaired (loans acquired with deteriorated credit quality)		558		—		2,038		—		2,596
Total Loans Receivable	$	303,870	$	61,165	$	606,875	$	7,980	$	979,890

	Commercial and Industrial		Construction, Land Development and Other Land		Commercial and Other Real Estate		Other		Total
December 31, 2013
Allowance for loan loss:
Individually evaluated for impairment	$	4	$	—	$	—	$	—	$	4
Collectively evaluated for impairment		5,520		1,120		3,886		63		10,589
Purchased credit impaired (loans acquired with deteriorated credit quality)		10		—		—		—		10
Total Allowance for Loan Loss	$	5,534	$	1,120	$	3,886	$	63	$	10,603
Loans receivable:
Individually evaluated for impairment	$	2,640	$	—	$	3,680	$	—	$	6,320
Collectively evaluated for impairment		295,787		47,074		561,952		17,733		922,546
Purchased credit impaired (loans acquired with deteriorated credit quality)		1,046		—		3,282		—		4,328
Total Loans Receivable	$	299,473	$	47,074	$	568,914	$	17,733	$	933,194

Risk Category of Loans by Class of Loans

The following tables present the risk category of loans by class of loans based on the most recent internal loan classification as of the dates indicated (dollars in thousands):

	Commercial and Industrial		Construction, Land Development and Other Land		Commercial and Other Real Estate		Other		Total
June 30, 2014
Pass	$	292,219	$	61,165	$	585,390	$	7,979	$	946,753
Special Mention		2,200		—		4,035		—		6,235
Substandard		9,451		—		17,450		1		26,902
Doubtful		—		—		—		—		—
Total	$	303,870	$	61,165	$	606,875	$	7,980	$	979,890
December 31, 2013
Pass	$	289,594	$	47,074	$	547,600	$	17,731	$	901,999
Special Mention		1,540		—		2,613		—		4,153
Substandard		8,339		—		18,701		2		27,042
Doubtful		—		—		—		—		—
Total	$	299,473	$	47,074	$	568,914	$	17,733	$	933,194

Aging Analysis of Recorded Investment

The following tables present an aging analysis of the recorded investment of past due loans and non-accrual loans as of the dates indicated (dollars in thousands):

	31-60 Days Past Due		61-90 Days Past Due		Greater than 90 Days Past Due and Accruing		Total Past Due and Accruing		Total Non Accrual		Current		Total Loans
June 30, 2014
Commercial and Industrial	$	340	$	—	$	—	$	340	$	3,136	$	300,394	$	303,870
Construction, Land Development and Other Land		—		—		—		—		—		61,165		61,165
Commercial and Other Real Estate		631		—		—		631		3,892		602,352		606,875
Other		—		—		—		—		—		7,980		7,980
Total	$	971	$	—	$	—	$	971	$	7,028	$	971,891	$	979,890

	31-60 Days Past Due		61-90 Days Past Due		Greater than 90 Days Past Due and Accruing		Total Past Due and Accruing		Total Non Accrual		Current		Total Loans
December 31, 2013
Commercial and Industrial	$	—	$	241	$	—	$	241	$	3,682	$	295,550	$	299,473
Construction, Land Development and Other Land		—		—		—		—		—		47,074		47,074
Commercial and Other Real Estate		—		—		—		—		5,874		563,040		568,914
Other		—		—		—		—		—		17,733		17,733
Total	$	—	$	241	$	—	$	241	$	9,556	$	923,397	$	933,194

Recorded Investment and Unpaid Principal Balances for Impaired Loans

The following tables present, by loan category, the recorded investment and unpaid principal balances for impaired loans with the associated allowance amount, if applicable, for the dates and periods indicated (dollars in thousands). This table excludes purchased credit impaired loans (loans acquired in acquisitions with deteriorated credit quality) of $2.6 million and $4.3 million at June 30, 2014 and December 31, 2013, respectively.

	June 30, 2014						December 31, 2013
	Recorded Investment		Unpaid Principal Balance		Related Allowance		Recorded Investment		Unpaid Principal Balance		Related Allowance
With no specific allowance recorded:
Commercial and Industrial	$	1,060	$	1,138	$	—	$	2,540	$	5,347	$	—
Commercial and Other Real Estate		2,960		3,864		—		3,680		6,112		—
With a specific allowance recorded:
Commercial and Industrial		1,522		1,929		240		100		355		4
Total
Commercial and Industrial		2,582		3,067		240		2,640		5,702		4
Commercial and Other Real Estate		2,960		3,864		—		3,680		6,112		—
Total	$	5,542	$	6,931	$	240	$	6,320	$	11,814	$	4

	Three Months Ended June 30,								Six Months Ended June 30,
	2014				2013				2014				2013
	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
With no specific allowance recorded:
Commercial and Industrial	$	1,008	$	34	$	1,500	$	—	$	1,027	$	34	$	994	$	—
Construction, Land Development and Other Land		—		—		1,159		—		—		—		1,179		—
Commercial and Other Real Estate		2,981		—		3,340		—		3,325		—		3,398		—
With a specific allowance recorded:
Commercial and Industrial		1,535		—		488		—		1,553		—		319		—
Total:
Commercial and Industrial		2,543		34		1,988		—		2,580		34		1,313		—
Construction, Land Development and Other Land		1,535		—		1,159		—		—		—		1,179		—
Commercial and Other Real Estate		2,981		—		3,340		—		3,325		—		3,398		—
Total	$	5,524	$	34	$	6,487	$	—	$	5,905	$	34	$	5,890	$	—

Additional Information on Impaired Loans

The following is a summary of additional information pertaining to impaired loans for the periods indicated (dollars in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2014		2013		2014		2013
Interest foregone on impaired loans	$	103	$	141	$	274	$	230
Cash collections applied to reduce principal balance	$	2,763	$	110	$	2,871	$	152
Interest income recognized on cash collections	$	34	$	—	$	34	$	—

Recorded Investment and Unpaid Principal Balances for Troubled Debt Restructured Loans

The following tables include the recorded investment and unpaid principal balances for troubled debt restructured loans for the periods ending June 30, 2014 and December 31, 2013 (dollars in thousands). These tables include TDR loans that were purchased credit impaired (PCI). As of June 30, 2014, there were three PCI loans with a recorded investment of $304,000 and unpaid principal balances of $491,000.

Period ended June 30, 2014	Recorded Investment		Unpaid Principal Balance		Interest Income Recognized
Commercial and Industrial	$	746	$	1,183	$	—
Commercial and Other Real Estate		2,109		2,785		—
Total	$	2,855	$	3,968	$	—

Year ended December 31, 2013	Recorded Investment		Unpaid Principal Balance		Interest Income Recognized
Commercial and Industrial	$	541	$	843	$	—
Commercial and Other Real Estate		2,173		2,785		—
Total	$	2,714	$	3,628	$	—

Pre and Post Modification Recorded Investment in Troubled Debt Restructuring Loans

The following table shows the pre- and post-modification recorded investment in TDR loans by loan segment that have occurred during the periods indicated (dollars in thousands):

	Three Months Ended June 30,
	2014						2013
	Number of Loans		Pre-Modification Recorded Investment		Post- Modification Recorded Investment		Number of Loans		Pre-Modification Recorded Investment		Post- Modification Recorded Investment
Troubled Debt Restructured Loans:
Commercial and Industrial		1		224		224		—		—		—
Total		1	$	224	$	224		—	$	—	$	—

	Six Months Ended June 30,
	2014						2013
	Number of Loans		Pre-Modification Recorded Investment		Post- Modification Recorded Investment		Number of Loans		Pre-Modification Recorded Investment		Post- Modification Recorded Investment
Troubled Debt Restructured Loans:
Commercial and Industrial		1		224		224		1		310		310
Total		1	$	224	$	224		1	$	310	$	310

Accretable Yield for Loans Acquired

The following table reflects the accretable net discount for loans acquired through acquisition, for the periods indicated (dollars in thousands):

	Three Months Ended June 30,						Six Months Ended June 30,
	2014			2013			2014			2013
Balance, beginning of period	$	7,350		$	11,269		$	7,912		$	12,189
Accretion, included in interest income		(889	)		(1,139	)		(1,451	)		(2,083	)
Reclassifications (to) from non-accretable yield		(49	)		—			(49	)		24
Balance, end of period	$	6,412		$	10,130		$	6,412		$	10,130

Carrying Value of Purchased Credit Impaired Loans

The following table reflects the outstanding balance and related carrying value of PCI loans as of the dates indicated (dollars in thousands):

	June 30, 2014				December 31, 2013
	Unpaid Principal Balance		Carrying Value		Unpaid Principal Balance		Carrying Value
Commercial and Industrial	$	935	$	558	$	1,599	$	1,046
Commercial and Other Real Estate		3,321		2,038		5,611		3,282
Other		—		—		—		—
Total	$	4,256	$	2,596	$	7,210	$	4,328

Accretable Net Discount of Purchased Credit Impaired Loans

The following table reflects the activities in the accretable net discount for PCI loans for the period indicated (dollars in thousands):

	Three Months Ended June 30,						Six Months Ended June 30,
	2014			2013			2014			2013
Balance, beginning of period	$	378		$	9		$	395		$	9
Accretion, included in interest income		(18	)		(9	)		(35	)		(9	)
Reclassifications from non-accretable yield		—			428			—			428
Balance, end of period	$	360		$	428		$	360		$	428

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Accretable Net Discount of Purchased Credit Impaired Loans (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Acquired Impaired Loans Change In Accretable Yield [Line Items]
Balance, beginning of period	$ 7,350	$ 11,269	$ 7,912	$ 12,189
Accretion, included in interest income	(889)	(1,139)	(1,451)	(2,083)
Balance, end of period	6,412	10,130	6,412	10,130
Purchased Credit Impaired Loans
Acquired Impaired Loans Change In Accretable Yield [Line Items]
Balance, beginning of period	378	9	395	9
Accretion, included in interest income	(18)	(9)	(35)	(9)
Reclassifications from non-accretable yield		428		428
Balance, end of period	$ 360	$ 428	$ 360	$ 428

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Loans - Additional Information (Detail) (USD $)	6 Months Ended		12 Months Ended	3 Months Ended	6 Months Ended			6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Dec. 31, 2013	Jun. 30, 2014 Troubled Debt Restructuring Loan	Jun. 30, 2014 Troubled Debt Restructuring Loan	Jun. 30, 2013 Troubled Debt Restructuring Loan	Dec. 31, 2013 Troubled Debt Restructuring	Jun. 30, 2014 Troubled Debt Restructuring Purchased Credit Impaired Loans Loan	Jun. 30, 2014 SBA Servicing Asset	Jun. 30, 2014 SBA Servicing Asset PC Bancorp	Jun. 30, 2014 SBA 7a Loans [Member]	Jun. 30, 2014 Debt Instrument Remaining Loans SBA Servicing Asset	Jun. 30, 2014 Debt Instrument Un-guaranteed Loans SBA Servicing Asset	Jun. 30, 2014 Debt Instrument Guaranteed Loans SBA Servicing Asset
Loans Receivable [Line Items]
Total loans									$ 1,100,000	$ 105,000,000	$ 1,500,000
Loans sold									73,000,000			32,000,000	23,000,000	9,000,000
Loans held for sale	0
Unfunded loan commitments	417,100,000		345,900,000
Allowance for losses on unfunded loan commitments	403,000		329,000
Credit purchase impaired loan	2,600,000		4,300,000
Number of Loans				1	1	1		3
Recorded Investment	5,542,000		6,320,000	2,855,000	2,855,000		2,714,000	304,000
Unpaid Principal Balance	6,931,000		11,814,000	3,968,000	3,968,000		3,628,000	491,000
Payment defaults subsequent to modification on troubled debt restructured loans	$ 0	$ 0

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Derivative Financial Instruments (Tables)

6 Months Ended

Jun. 30, 2014

Derivative Instruments And Hedging Activities Disclosure [Abstract]

Balance Sheet Classification of Derivative Financial Instruments

The following tables present the notional amount and the fair values of the asset and liability of the Company’s derivative instruments as of the dates and periods indicated (dollars in thousands):

	Derivative Liabilities
	June 30, 2014		December 31, 2013
Interest rate contacts notional amount	$	31,344	$	31,914
Derivatives not designated as hedging instruments:
Interest rate swap contracts fair value	$	645	$	738
Derivatives designated as hedging instruments:
Interest rate swap contracts fair value		2,904		3,205
Total interest rate contracts fair value	$	3,549	$	3,943
Balance sheet location		Accrued Interest Payable and Other Liabilities		Accrued Interest Payable and Other Liabilities

Effect of Derivative Instruments on Consolidated Statements of Income

The following table summarizes the effect of derivative financial instruments on the consolidated statements of income for the periods indicated (dollars in thousands):

	Three Months Ended June 30,						Six Months Ended June 30,
	2014			2013			2014			2013
Derivatives not designated as hedging instruments:
Interest rate swap contracts – loans
Increase in fair value of interest rate swap contracts	$	32		$	155		$	93		$	217
Payments on interest rate swap contracts on loans		(68	)		(69	)		(136	)		(156	)
Net (decrease) increase in other non-interest income		(36	)		86			(43	)		61
Interest rate swap contracts – subordinated debenture
Increase in fair value of interest rate swap contracts		—			—			—			70
Payments on interest rate swap contracts on subordinated debentures		—			—			—			(70	)
Net decrease in other non-interest income		—			—			—			—
Net (decrease) increase in other non-interest income	$	(36	)	$	86		$	(43	)	$	61
Derivatives designated as hedging instruments:
Interest rate swap contracts – loans
Increase in fair value of interest rate swap contracts	$	118		$	851		$	301		$	1,196
Increase (decrease) in fair value of hedged loans		165			(521	)		238			(590	)
Payment on interest rate swap contracts on loans		(317	)		(331	)		(633	)		(633	)
Net decrease in interest income on loans	$	(34	)	$	(1	)	$	(94	)	$	(27	)

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Balance Sheet Offsetting (Tables)

6 Months Ended

Jun. 30, 2014

Text Block [Abstract]

Securities Sold under Repurchase Agreements and Derivatives Securities Offset in Consolidated Financial Statements Due to an Enforceable Master Netting Arrangement

The table below presents the Company’s financial instruments that may be eligible for offsetting which include securities sold under agreements to repurchase that have no enforceable master netting arrangement and derivative securities that could be offset in the consolidated financial statements due to an enforceable master netting arrangement (dollars in thousands):

	Gross Amounts Recognized in the Consolidated Balance Sheets		Gross Amounts Offset in the Consolidated Balance Sheets		Net Amounts of Assets Presented in the Consolidated Balance Sheets		Gross Amounts Not Offset in the Consolidated Balance Sheets				Net Amount (Collateral over liability balance required to be pledged)
							Financial Instruments		Collateral Pledged
June 30, 2014
Financial Liabilities:
Interest rate swap contracts fair value (See Note 9 – Derivative Financial Instruments)	$	3,549	$	—	$	3,549	$	3,549	$	3,814	$	265
Securities sold under agreements to repurchase (See Note 8 – Borrowings and Subordinated Debentures)		13,852		—		13,852		13,852		14,129		277
Total	$	17,401	$	—	$	17,401	$	17,401	$	17,943	$	542
December 31, 2013
Financial Liabilities:
Interest rate swap contracts fair value (See Note 9 – Derivative Financial Instruments)	$	3,943	$	—	$	3,943	$	3,943	$	4,194	$	251
Securities sold under agreements to repurchase (See Note 8 – Borrowings and Subordinated Debentures)		11,141		—		11,141		11,141		11,750		609
Total	$	15,084	$	—	$	15,084	$	15,084	$	15,944	$	860

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Consolidated Statements of Cash Flows (Unaudited) (USD $)	6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013
Cash flows from operating activities:
Net income:	$ 5,052,000	$ 4,476,000
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for loan losses	483,000	1,287,000
Provision for unfunded loan commitments	73,000	34,000
Stock based compensation expense	887,000	475,000
Depreciation	479,000	568,000
Net accretion of discounts/premiums for loans acquired and deferred loan fees/costs	(2,690,000)	(3,071,000)
Net amortization from investment securities	779,000	840,000
Increase in bank owned life insurance	(307,000)	(308,000)
Amortization of core deposit intangibles	138,000	166,000
Amortization of time deposit premium	(13,000)	(106,000)
Net amortization of leasehold right intangible asset and liabilities	151,000	(285,000)
Accretion of subordinated debenture discount	80,000	114,000
Gain on sale of securities, net		(5,000)
Gain on sale of SBA loans, net	(605,000)	(410,000)
Decrease in deferred tax assets	538,000	1,228,000
(Increase) decrease in accrued interest receivable and other assets	2,009,000	(390,000)
Increase (decrease) in accrued interest payable and other liabilities	(457,000)	314,000
Decrease in fair value of derivative swap liability	(394,000)	(1,482,000)
Net cash provided by operating activities	6,203,000	3,445,000
Cash flows from investing activities:
Purchases of available-for-sale investment securities	(6,215,000)	(20,395,000)
Proceeds from sales of available-for-sale investment securities		2,854,000
Proceeds from repayment and maturities from available-for-sale investment securities	10,460,000	23,531,000
Loans originated, net of principal payments	(43,422,000)	(27,339,000)
Purchases of premises and equipment	(733,000)	(339,000)
Net increase in certificates of deposit in other financial institutions	(4,270,000)	(1,298,000)
Net purchase of Federal Home Loan Bank and other bank stock		150,000
Net cash (used in) investing activities	(44,180,000)	(22,836,000)
Cash flows from financing activities:
Net increase in Non-interest bearing demand deposits	50,108,000	27,518,000
Net increase (decrease) in Interest bearing transaction accounts	(12,423,000)	14,838,000
Net decrease in Money market and savings deposits	(18,979,000)	(1,581,000)
Net decrease in Certificates of deposit	(5,836,000)	(21,038,000)
Net increase in Securities sold under agreements to repurchase	2,711,000	6,755,000
Net proceeds from stock options exercised	1,085,000	53,000
Restricted stock repurchase	(242,000)	(283,000)
Net excess in tax benefit on stock compensation	332,000	31,000
Net cash provided by financing activities	16,756,000	26,293,000
Net increase (decrease) in cash and cash equivalents	(21,221,000)	6,902,000
Cash and cash equivalents, beginning of year	241,287,000	182,896,000
Cash and cash equivalents, end of year	220,066,000	189,796,000
Supplemental disclosures of cash flow information:
Cash paid during the period for interest	849,000	1,074,000
Cash paid during the period for taxes	750,000	1,304,000
Supplemental disclosures of non-cash investing activities:
Net increase (decrease) in unrealized gain or loss on investment securities, net of tax	400,000	(808,000)
Loans transferred to other real estate owned	$ 219,000

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Stock Options and Restricted Stock (Tables)

6 Months Ended

Jun. 30, 2014

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Future Compensation Expense Related to Un-Vested Stock Option and Un-Vested Restricted Stock Grants

At June 30, 2014, future compensation expense related to un-vested stock option and un-vested restricted stock grants are reflected in the table below (dollars in thousands):

Future Stock Based Compensation Expense	Stock Options		Restricted Stock		Total
Remainder of 2014	$	3	$	761	$	764
2015		2		748		750
2016		—		206		206
2017		—		27		27
2018		—		6		6
Thereafter		—		—		—
Total	$	5	$	1,748	$	1,753

Stock Option Activity

The following table summarizes the share option activity under the plans as of the date and for the period indicated:

	Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value (in thousands)
Outstanding stock options at December 31, 2013		434,740	$	13.89		2.1	$	1,913
Granted		—		—
Exercised		110,044		9.87
Forfeited		—		—
Expired		—		—
Outstanding stock options at June 30, 2014		324,696	$	15.25		1.9	$	1,456
Exercisable options at June 30, 2014		315,496	$	15.33		1.9	$	1,394
Unvested options at June 30, 2014		9,200	$	12.30		2.3	$	62
Outstanding, vested and expected to vest at June 30, 2014		324,696	$	15.25		1.9	$	1,456

Restricted Stock Activity

The following table summarizes the restricted stock activity under the Equity Plan for the period indicated:

	Number of Shares			Weighted-Average Grant-Date Fair Value per Share
Restricted Stock:
Unvested at December 31, 2013		266,050		$	13.49
Granted		45,900			18.17
Vested		(48,975	)		12.32
Cancelled and forfeited		(500	)		11.75
Unvested at June 30, 2014		262,475		$	14.53

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Investment Securities with Unrealized Losses that are Considered to be Temporarily-impaired (Detail) (USD $) In Thousands, unless otherwise specified	6 Months Ended	12 Months Ended
	Jun. 30, 2014	Dec. 31, 2013
Schedule of Available-for-sale Securities [Line Items]
Temporarily-impaired available-for-sale investment securities, Less than 12 Continuous Months, Fair Value	$ 16,698	$ 36,070
Temporarily-impaired available-for-sale investment securities, More than 12 Continuous Months, Fair Value	25,571	2,893
Temporarily-impaired available-for-sale investment securities, Total, Fair Value	42,269	38,963
Temporarily-impaired available-for-sale investment securities, Less than 12 Continuous Months, Net Unrealized Loss	198	1,693
Temporarily-impaired available-for-sale investment securities, More than 12 Continuous Months, Net Unrealized Loss	1,022	190
Temporarily-impaired available-for-sale investment securities, Total, Net Unrealized Loss	1,220	1,883
U.S. Govt Agency - GNMA Mortgage-Backed Securities
Schedule of Available-for-sale Securities [Line Items]
Temporarily-impaired available-for-sale investment securities, Less than 12 Continuous Months, Fair Value	7,905	15,693
Temporarily-impaired available-for-sale investment securities, More than 12 Continuous Months, Fair Value	7,373	1,864
Temporarily-impaired available-for-sale investment securities, Total, Fair Value	15,278	17,557
Temporarily-impaired available-for-sale investment securities, Less than 12 Continuous Months, Net Unrealized Loss	71	721
Temporarily-impaired available-for-sale investment securities, More than 12 Continuous Months, Net Unrealized Loss	337	188
Temporarily-impaired available-for-sale investment securities, Total, Net Unrealized Loss	408	909
Corporate Securities
Schedule of Available-for-sale Securities [Line Items]
Temporarily-impaired available-for-sale investment securities, Less than 12 Continuous Months, Fair Value
Temporarily-impaired available-for-sale investment securities, More than 12 Continuous Months, Fair Value
Temporarily-impaired available-for-sale investment securities, Total, Fair Value
Temporarily-impaired available-for-sale investment securities, Less than 12 Continuous Months, Net Unrealized Loss
Temporarily-impaired available-for-sale investment securities, More than 12 Continuous Months, Net Unrealized Loss
Temporarily-impaired available-for-sale investment securities, Total, Net Unrealized Loss
U.S. Govt Agency and Sponsored Agency - Note Securities
Schedule of Available-for-sale Securities [Line Items]
Temporarily-impaired available-for-sale investment securities, Less than 12 Continuous Months, Fair Value		1,041
Temporarily-impaired available-for-sale investment securities, Total, Fair Value		1,041
Temporarily-impaired available-for-sale investment securities, Less than 12 Continuous Months, Net Unrealized Loss		2
Temporarily-impaired available-for-sale investment securities, Total, Net Unrealized Loss		2
U.S. Govt Agency - SBA Securities
Schedule of Available-for-sale Securities [Line Items]
Temporarily-impaired available-for-sale investment securities, Less than 12 Continuous Months, Fair Value	8,793	11,686
Temporarily-impaired available-for-sale investment securities, More than 12 Continuous Months, Fair Value	8,556
Temporarily-impaired available-for-sale investment securities, Total, Fair Value	17,349	11,686
Temporarily-impaired available-for-sale investment securities, Less than 12 Continuous Months, Net Unrealized Loss	127	491
Temporarily-impaired available-for-sale investment securities, More than 12 Continuous Months, Net Unrealized Loss	322
Temporarily-impaired available-for-sale investment securities, Total, Net Unrealized Loss	449	491
U.S. Govt Sponsored Agency - CMO & Mortgage-Backed Securities
Schedule of Available-for-sale Securities [Line Items]
Temporarily-impaired available-for-sale investment securities, Less than 12 Continuous Months, Fair Value		7,650
Temporarily-impaired available-for-sale investment securities, More than 12 Continuous Months, Fair Value	9,642
Temporarily-impaired available-for-sale investment securities, Total, Fair Value	9,642	7,650
Temporarily-impaired available-for-sale investment securities, Less than 12 Continuous Months, Net Unrealized Loss		479
Temporarily-impaired available-for-sale investment securities, More than 12 Continuous Months, Net Unrealized Loss	363
Temporarily-impaired available-for-sale investment securities, Total, Net Unrealized Loss	363	479
Municipal Securities
Schedule of Available-for-sale Securities [Line Items]
Temporarily-impaired available-for-sale investment securities, More than 12 Continuous Months, Fair Value		1,029
Temporarily-impaired available-for-sale investment securities, Total, Fair Value		1,029
Temporarily-impaired available-for-sale investment securities, More than 12 Continuous Months, Net Unrealized Loss		2
Temporarily-impaired available-for-sale investment securities, Total, Net Unrealized Loss		$ 2

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Pre and Post Modification Recorded Investment in Troubled Debt Restructuring Loans (Detail) (Troubled Debt Restructuring, USD $) In Thousands, unless otherwise specified	3 Months Ended	6 Months Ended
	Jun. 30, 2014 Loan	Jun. 30, 2014 Loan	Jun. 30, 2013 Loan
Financing Receivable, Modifications [Line Items]
Number of Loans	1	1	1
Pre-Modification Recorded Investment	$ 224	$ 224	$ 310
Post-Modification Recorded Investment	224	224	310
Commercial and Industrial
Financing Receivable, Modifications [Line Items]
Number of Loans	1	1	1
Pre-Modification Recorded Investment	224	224	310
Post-Modification Recorded Investment	$ 224	$ 224	$ 310

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Financial Assets and Financial Liabilities Measured at Fair Value on Recurring Basis (Detail) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Investment securities available-for-sale	$ 102,143	$ 106,488
Interest Rate Swap Contracts	3,549	3,943
Interest Rate Swap Contracts Fair Value
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Interest Rate Swap Contracts	3,549	3,943
(Level 2)
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Investment securities available-for-sale	102,143	106,488
(Level 2) | Interest Rate Swap Contracts Fair Value
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Interest Rate Swap Contracts	$ 3,549	$ 3,943

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Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
ASSETS
Cash and due from banks	$ 40,657	$ 23,156
Interest earning deposits in other financial institutions	179,409	218,131
Total Cash and Cash Equivalents	220,066	241,287
Certificates of deposit in other financial institutions	64,577	60,307
Investment securities available-for-sale, at fair value	102,143	106,488
Loans	979,890	933,194
Allowance for loan loss	(11,284)	(10,603)
Net loans	968,606	922,591
Other real estate owned, net	219
Premises and equipment, net	3,785	3,531
Deferred tax assets, net	11,018	11,835
Goodwill	12,292	12,292
Core deposit and leasehold right intangibles	2,349	2,525
Bank owned life insurance	21,507	21,200
Accrued interest receivable and other assets	23,751	25,760
Total Assets	1,430,313	1,407,816
LIABILITIES AND SHAREHOLDERS' EQUITY
Non-interest bearing demand deposits	682,300	632,192
Interest bearing transaction accounts	143,312	155,735
Money market and savings deposits	361,936	380,915
Certificates of deposit	57,732	63,581
Total deposits	1,245,280	1,232,423
Securities sold under agreements to repurchase	13,852	11,141
Subordinated debentures, net	9,459	9,379
Accrued interest payable and other liabilities	16,284	16,949
Total Liabilities	1,284,875	1,269,892
Commitments and Contingencies (Note 14)
SHAREHOLDERS' EQUITY
Serial Preferred Stock - authorized, 50,000,000 shares no par value, no shares issued or outstanding
Common stock - authorized, 75,000,000 shares no par value, 11,222,235 and 11,081,364 shares issued and outstanding at June 30, 2014 and December 31, 2013, respectively	122,760	121,675
Additional paid-in capital	9,354	8,377
Retained earnings	13,129	8,077
Accumulated other comprehensive income (loss)	195	(205)
Total Shareholders' Equity	145,438	137,924
Total Liabilities and Shareholders' Equity	$ 1,430,313	$ 1,407,816

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Summary of Activity for Allowance for Loan Loss (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013	Dec. 31, 2013
Receivables [Abstract]
Allowance for loan loss at beginning of period	$ 10,823	$ 8,841	$ 10,603	$ 8,803	$ 8,803
Provision for loan losses	408	1,153	483	1,287
Net (charge-offs) recoveries:
Charge-offs	(157)	(616)	(157)	(737)
Recoveries	210	34	355	59
Net (charge-offs) recoveries	53	(582)	198	(678)
Allowance for loan loss at end of period	$ 11,284	$ 9,412	$ 11,284	$ 9,412	$ 10,603
Net (charge-offs) recoveries to average loans	0.00%	(0.07%)	0.02%	(0.08%)
Allowance for loan loss to total loans	1.15%		1.15%		1.14%
Allowance for loan loss to total loans accounted for at historical cost, which excludes loans and the related allowance for loans acquired through acquisition			1.45%		1.50%

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Consolidated Statements of Comprehensive Income (Unaudited) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Statement Of Income And Comprehensive Income [Abstract]
Net Income	$ 2,386	$ 2,321	$ 5,052	$ 4,476
Other Comprehensive Income, net of tax:
Non-credit portion of other-than-temporary impairments arising during the period				(22)
Net unrealized gains (losses) on investment securities arising during the period	242	(734)	400	(786)
Net other comprehensive income (loss)	242	(734)	400	(808)
Comprehensive Income	$ 2,628	$ 1,587	$ 5,452	$ 3,668

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Terms and Maturity of Bank's Securities Sold under Agreements (Detail) (USD $) In Thousands, unless otherwise specified	6 Months Ended	12 Months Ended
	Jun. 30, 2014	Dec. 31, 2013
Financial Instruments Owned and Pledged as Collateral [Line Items]
Amount	$ 13,852	$ 11,141
Interest Rate	0.25%	0.30%
June 30, 2014
Financial Instruments Owned and Pledged as Collateral [Line Items]
Amount	13,852
Original Term	1 day
Maturity Date	Jul. 01, 2014
June 30, 2014 | Minimum
Financial Instruments Owned and Pledged as Collateral [Line Items]
Interest Rate	0.10%
June 30, 2014 | Maximum
Financial Instruments Owned and Pledged as Collateral [Line Items]
Interest Rate	0.38%
December 3, 2013
Financial Instruments Owned and Pledged as Collateral [Line Items]
Amount		750
Interest Rate		0.10%
Original Term		62 days
Maturity Date		Feb. 03, 2014
December 31, 2013
Financial Instruments Owned and Pledged as Collateral [Line Items]
Amount		$ 10,391
Original Term		2 days
Maturity Date		Jan. 02, 2014
December 31, 2013 | Minimum
Financial Instruments Owned and Pledged as Collateral [Line Items]
Interest Rate		0.10%
December 31, 2013 | Maximum
Financial Instruments Owned and Pledged as Collateral [Line Items]
Interest Rate		0.40%

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Basis of Financial Statement Presentation - Additional Information (Detail) (USD $)	0 Months Ended
	Jun. 03, 2014	Jun. 30, 2014 Office	Jun. 03, 2014	Aug. 01, 2014 Subsequent Event
Summary Of Significant Accounting Policies [Line Items]
Merger transaction cost			$ 102,200,000
Combination of assets			$ 2,200,000,000
Exchange ratio of shares acquired	1.3450
Stock price total consideration				$ 25.00
Full service branch offices		8

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Future Compensation Expense Related to Un-Vested Stock Option and Un-Vested Restricted Stock Grants (Detail) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2014
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Remainder of 2014	$ 764
2015	750
2016	206
2017	27
2018	6
Thereafter
Total	1,753
Stock Options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Remainder of 2014	3
2015	2
Thereafter
Total	5
Restricted Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Remainder of 2014	761
2015	748
2016	206
2017	27
2018	6
Thereafter
Total	$ 1,748

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Commitments and Contingencies

6 Months Ended

Jun. 30, 2014

Commitments And Contingencies Disclosure [Abstract]

Commitments and Contingencies

Note 14 – Commitments and Contingencies

Litigation

From time to time the Company is a party to claims and legal proceedings arising in the ordinary course of business. The Company accrues for any probable loss contingencies that are estimable and discloses any material losses. As of June 30, 2014, there were no legal proceedings against the Company the outcome of which are expected to have a material adverse impact on the Company’s financial position, results of operations or cash flows, as a whole.

Financial Instruments with Off Balance Sheet Risk

See Note 22 – Commitments and Contingencies in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013. Financial instruments with off balance sheet risk include commitments to extend credit of $417 million and $346 million at June 30, 2014 and December 31, 2013, respectively. Included in the aforementioned commitments were standby letters of credit outstanding of $40.7 million and $40.6 million at June 30, 2014 and December 31, 2013, respectively.

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Computation of TCE, Book Value and Tangible Book Value Per Common Share (Detail) (USD $) In Thousands, except Share data, unless otherwise specified	6 Months Ended	12 Months Ended
	Jun. 30, 2014	Dec. 31, 2013	Dec. 31, 2012
Equity [Abstract]
Total Shareholders' Equity	$ 145,438	$ 137,924	$ 125,623
Less: Goodwill	12,292	12,292
Less: Core deposit and leasehold right intangibles	2,349	2,525
Tangible common equity	$ 130,797	$ 123,107
Common shares issued and outstanding	11,222,235	11,081,364
Book value per common share	$ 12.96	$ 12.45
Tangible book value per common share	$ 11.66	$ 11.11

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Basis of Financial Statement Presentation (Policies)

6 Months Ended

Jun. 30, 2014

Accounting Policies [Abstract]

Use of Estimates in the Preparation of Financial Statements

Use of Estimates in the Preparation of Financial Statements

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. In addition, these accounting principles require the disclosure of contingent assets and liabilities as of the date of the financial statements.

Estimates that are particularly susceptible to significant change relate to the determination of the allowance for loan loss and various assets and liabilities measured at fair value. While management uses the most current available information to recognize losses on loans, future additions to the allowance for loan loss may be necessary based on changes in local economic conditions. In addition, regulatory agencies, as an integral part of their examination process, periodically review the Company’s allowance for loan loss. Regulatory agencies may require the Company to recognize additions to the allowance for loan loss based on their judgment about information available to them at the time of their examination.

Business Segments

Business Segments

The Company is organized and operated as a single reporting segment, principally engaged in commercial business banking. The Company conducts its lending and deposit operations through eight full service branch offices located in Los Angeles, Orange, and Ventura counties.

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Restricted Stock Activity (Detail) (USD $)	6 Months Ended
	Jun. 30, 2014
Number of Shares
Unvested, at beginning, Number of Shares	266,050
Granted, Number of Shares	45,900
Vested, Number of Shares	(48,975)
Cancelled and forfeited, Number of Shares	(500)
Unvested, at end, Number of Shares	262,475
Weighted-Average Grant-Date Fair Value per Share
Unvested, at beginning, Weighted-Average Grant-Date Fair Value per Share	$ 13.49
Granted, Weighted-Average Grant-Date Fair Value per Share	$ 18.17
Vested, Weighted-Average Grant-Date Fair Value per Share	$ 12.32
Cancelled and forfeited, Weighted-Average Grant-Date Fair Value per Share	$ 11.75
Unvested, at end, Weighted-Average Grant-Date Fair Value per Share	$ 14.53

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Consolidated Statements of Shareholders' Equity (USD $)	Total	Common Stock	Additional Paid in Capital	Retained Earnings (Deficit)	Accumulated Other Comprehensive Income (Loss)
Beginning Balance at Dec. 31, 2012	$ 125,623,000	$ 118,885,000	$ 7,052,000	$ (1,708,000)	$ 1,394,000
Beginning Balance (in shares) at Dec. 31, 2012		10,759,000
Net Issuance of Restricted Stock	69,450	69,000
Exercise of Stock Options (in shares)	282,031	282,000
Exercise of Stock Options	2,790,000	2,790,000
Stock based compensation expense related to employee stock options and restricted stock	1,088,000		1,088,000
Restricted Stock Repurchase (in shares)		(29,000)
Restricted Stock Repurchase	(422,000)		(422,000)
Excess tax benefit - stock based compensation	659,000		659,000
Net Income	9,785,000			9,785,000
Other Comprehensive Income (Loss)	(1,599,000)				(1,599,000)
Ending Balance at Dec. 31, 2013	137,924,000	121,675,000	8,377,000	8,077,000	(205,000)
Ending Balance (in shares) at Dec. 31, 2013		11,081,000
Net Issuance of Restricted Stock	30,827	45,000
Exercise of Stock Options (in shares)	110,044	110,000
Exercise of Stock Options	1,085,000	1,085,000
Stock based compensation expense related to employee stock options and restricted stock	887,000		887,000
Restricted Stock Repurchase (in shares)		(14,000)
Restricted Stock Repurchase	(242,000)		(242,000)
Excess tax benefit - stock based compensation	332,000		332,000
Net Income	5,052,000			5,052,000
Other Comprehensive Income (Loss)	400,000				400,000
Ending Balance at Jun. 30, 2014	$ 145,438,000	$ 122,760,000	$ 9,354,000	$ 13,129,000	$ 195,000
Ending Balance (in shares) at Jun. 30, 2014		11,222,000

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Consolidated Balance Sheets (Parenthetical) (USD $)	Jun. 30, 2014	Dec. 31, 2013
Statement Of Financial Position [Abstract]
Preferred Stock, authorized shares	50,000,000	50,000,000
Preferred Stock, no par value
Preferred Stock, shares issued	0	0
Preferred Stock, shares outstanding	0	0
Common stock, shares authorized	75,000,000	75,000,000
Common stock, no par value
Common stock, shares issued	11,222,235	11,081,364
Common stock, shares outstanding	11,222,235	11,081,364

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Derivative Financial Instruments

6 Months Ended

Jun. 30, 2014

Derivative Instruments And Hedging Activities Disclosure [Abstract]

Derivative Financial Instruments

Note 9 - Derivative Financial Instruments

At June 30, 2014, the Company has twenty three pay-fixed, receive-variable, interest rate contracts that are designed to convert fixed rate loans into variable rate loans. The Company acquired these interest rate swap contracts (“swaps”) on July 31, 2012 as a result of the merger with PC Bancorp.

The Company also acquired as part of the PC Bancorp acquisition, a pay-fixed, receive-variable, interest rate swap contract that was originally utilized to convert a fixed rate borrowing on a subordinated debenture to a variable rate borrowing. The fixed rate subordinated debenture converted to a variable rate borrowing in December of 2012 and the swap matured in 2013.

Prior to the merger with PC Bancorp, the Company did not utilize interest rate swaps to manage its interest rate risk position. The Company has incorporated these instruments into its asset liability program when monitoring its interest rate risk position. All of the interest rate swap contracts are with the same counterparty bank. The total notional amount of the outstanding swap contracts as of June 30, 2014 is $31.3 million. The outstanding swaps have original maturities of up to 15 years.

Balance Sheet Classification of Derivative Financial Instruments

The following tables present the notional amount and the fair values of the asset and liability of the Company’s derivative instruments as of the dates and periods indicated (dollars in thousands):

	Derivative Liabilities
	June 30, 2014		December 31, 2013
Interest rate contacts notional amount	$	31,344	$	31,914
Derivatives not designated as hedging instruments:
Interest rate swap contracts fair value	$	645	$	738
Derivatives designated as hedging instruments:
Interest rate swap contracts fair value		2,904		3,205
Total interest rate contracts fair value	$	3,549	$	3,943
Balance sheet location		Accrued Interest Payable and Other Liabilities		Accrued Interest Payable and Other Liabilities

The Effect of Derivative Instruments on the Consolidated Statements of Income

The following table summarizes the effect of derivative financial instruments on the consolidated statements of income for the periods indicated (dollars in thousands):

	Three Months Ended June 30,						Six Months Ended June 30,
	2014			2013			2014			2013
Derivatives not designated as hedging instruments:
Interest rate swap contracts – loans
Increase in fair value of interest rate swap contracts	$	32		$	155		$	93		$	217
Payments on interest rate swap contracts on loans		(68	)		(69	)		(136	)		(156	)
Net (decrease) increase in other non-interest income		(36	)		86			(43	)		61
Interest rate swap contracts – subordinated debenture
Increase in fair value of interest rate swap contracts		—			—			—			70
Payments on interest rate swap contracts on subordinated debentures		—			—			—			(70	)
Net decrease in other non-interest income		—			—			—			—
Net (decrease) increase in other non-interest income	$	(36	)	$	86		$	(43	)	$	61
Derivatives designated as hedging instruments:
Interest rate swap contracts – loans
Increase in fair value of interest rate swap contracts	$	118		$	851		$	301		$	1,196
Increase (decrease) in fair value of hedged loans		165			(521	)		238			(590	)
Payment on interest rate swap contracts on loans		(317	)		(331	)		(633	)		(633	)
Net decrease in interest income on loans	$	(34	)	$	(1	)	$	(94	)	$	(27	)

The interest rate swap contract associated with the subordinated debenture that was to mature in June 2013 was liquidated during the first quarter of 2013.

Under the interest rate swap contracts, the Company is required to pledge and maintain collateral for the credit support under these agreements. At June 30, 2014, the Company had $2.7 million in certificates of deposit and $1.9 million in non-interest bearing balances for a total of $4.6 million with the counterparty, Pacific Coast Bankers Bank. Of this amount, $3.8 million is required to be pledged as collateral under the interest rate swap contracts.

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Document and Entity Information	6 Months Ended
	Jun. 30, 2014	Aug. 01, 2014
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2014
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	Q2
Trading Symbol	CUNB
Entity Registrant Name	CU Bancorp
Entity Central Index Key	0001543643
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		11,222,235

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Balance Sheet Offsetting

6 Months Ended

Jun. 30, 2014

Text Block [Abstract]

Balance Sheet Offsetting

Note 10 – Balance Sheet Offsetting

Assets and liabilities relating to certain financial instruments, including derivatives, and securities sold under repurchase agreements (“Repos”), may be eligible for offset in the consolidated balance sheets as permitted under accounting guidance. The Company’s interest rate swap derivatives are subject to a master bilateral netting and offsetting arrangement under specific conditions as defined within a master agreement governing all interest rate swap contracts that the Company and the counterparty bank have entered into. In addition, the master agreement under which the interest rate contracts have been written require the pledging of assets by the Company based on certain risk thresholds. The Company has pledged as collateral, both a certificate of deposit and cash that is maintained in a due from bank account with the counterparty bank. The pledged collateral under the swap agreements are reported in the Company’s consolidated balance sheets, unless the Company defaults under the master agreement. The Company currently does not net or offset the interest rate swap contracts in its consolidated balance sheets, as reflected within the table below.

The Company’s securities sold under repurchase agreements represent transactions the Company has entered into with several individual deposit customers. These transactions represent the sale of securities on an overnight or on a term basis to our deposit customers under an agreement to repurchase the securities from the customers the next business day or at maturity. There is an individual contract for each customer with only one transaction per customer. There is no master agreement that provides for the netting arrangement or the offsetting of these individual transactions or for the netting of collateral positions. The Company does not net or offset the Repos in its consolidated balance sheets as reflected within the table below.

The table below presents the Company’s financial instruments that may be eligible for offsetting which include securities sold under agreements to repurchase that have no enforceable master netting arrangement and derivative securities that could be offset in the consolidated financial statements due to an enforceable master netting arrangement (dollars in thousands):

	Gross Amounts Recognized in the Consolidated Balance Sheets		Gross Amounts Offset in the Consolidated Balance Sheets		Net Amounts of Assets Presented in the Consolidated Balance Sheets		Gross Amounts Not Offset in the Consolidated Balance Sheets				Net Amount (Collateral over liability balance required to be pledged)
							Financial Instruments		Collateral Pledged
June 30, 2014
Financial Liabilities:
Interest rate swap contracts fair value (See Note 9 – Derivative Financial Instruments)	$	3,549	$	—	$	3,549	$	3,549	$	3,814	$	265
Securities sold under agreements to repurchase (See Note 8 – Borrowings and Subordinated Debentures)		13,852		—		13,852		13,852		14,129		277
Total	$	17,401	$	—	$	17,401	$	17,401	$	17,943	$	542
December 31, 2013
Financial Liabilities:
Interest rate swap contracts fair value (See Note 9 – Derivative Financial Instruments)	$	3,943	$	—	$	3,943	$	3,943	$	4,194	$	251
Securities sold under agreements to repurchase (See Note 8 – Borrowings and Subordinated Debentures)		11,141		—		11,141		11,141		11,750		609
Total	$	15,084	$	—	$	15,084	$	15,084	$	15,944	$	860

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Consolidated Statements of Income (Unaudited) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Interest Income
Interest and fees on loans	$ 12,366,000	$ 12,462,000	$ 24,290,000	$ 23,887,000
Interest on investment securities	467,000	495,000	968,000	979,000
Interest on interest bearing deposits in other financial institutions	206,000	157,000	417,000	317,000
Total Interest Income	13,039,000	13,114,000	25,675,000	25,183,000
Interest Expense
Interest on interest bearing transaction accounts	66,000	64,000	124,000	116,000
Interest on money market and savings deposits	222,000	249,000	456,000	509,000
Interest on certificates of deposit	55,000	74,000	111,000	150,000
Interest on securities sold under agreements to repurchase	11,000	21,000	19,000	40,000
Interest on subordinated debentures	107,000	126,000	214,000	250,000
Total Interest Expense	461,000	534,000	924,000	1,065,000
Net Interest Income	12,578,000	12,580,000	24,751,000	24,118,000
Provision for loan losses	408,000	1,153,000	483,000	1,287,000
Net Interest Income After Provision For Loan Losses	12,170,000	11,427,000	24,268,000	22,831,000
Non-Interest Income
Gain on sale of securities, net				5,000
Gain on sale of SBA loans, net	167,000	60,000	605,000	410,000
Deposit account service charge income	630,000	583,000	1,260,000	1,151,000
Other non-interest income	986,000	1,047,000	1,708,000	1,550,000
Total Non-Interest Income	1,783,000	1,690,000	3,573,000	3,116,000
Non-Interest Expense
Salaries and employee benefits (includes stock based compensation expense of $479 and $217 for the three months, and $887 and $475 for the six months ended June 30, 2014 and 2013, respectively)	5,807,000	5,655,000	11,820,000	11,330,000
Occupancy	985,000	1,019,000	1,971,000	2,083,000
Data processing	476,000	479,000	951,000	961,000
Legal and professional	411,000	572,000	934,000	1,079,000
FDIC deposit assessment	180,000	189,000	401,000	435,000
Merger related expenses	497,000		497,000	43,000
OREO valuation write-downs and expenses	6,000	23,000	6,000	49,000
Office services expenses	238,000	259,000	502,000	525,000
Other operating expenses	1,098,000	1,085,000	2,165,000	2,085,000
Total Non-Interest Expense	9,698,000	9,281,000	19,247,000	18,590,000
Net Income Before Provision for Income Tax Expense	4,255,000	3,836,000	8,594,000	7,357,000
Provision for income tax expense	1,869,000	1,515,000	3,542,000	2,881,000
Net Income	$ 2,386,000	$ 2,321,000	$ 5,052,000	$ 4,476,000
Earnings Per Share
Basic earnings per share	$ 0.22	$ 0.22	$ 0.46	$ 0.43
Diluted earnings per share	$ 0.21	$ 0.22	$ 0.45	$ 0.42

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Computation of Earnings per Common Share

6 Months Ended

Jun. 30, 2014

Earnings Per Share [Abstract]

Computation of Earnings per Common Share

Note 4 - Computation of Earnings per Common Share

Basic and diluted earnings per common share were determined by dividing the net income by the applicable basic and diluted weighted average common shares outstanding. The following table shows weighted average basic shares outstanding, potential dilutive shares related to stock options, unvested restricted stock, and weighted average diluted shares for the periods indicated (dollars in thousands, except share and per share data):

	Three Months Ended June 30,				Six Months Ended June 30,
	2014		2013		2014		2013
Net Income	$	2,386	$	2,321	$	5,052	$	4,476
Weighted average basic common shares outstanding		10,952,087		10,501,504		10,913,227		10,493,846
Dilutive effect of potential common share issuances from stock options and restricted stock		206,479		281,774		213,313		194,859
Weighted average diluted common shares outstanding		11,158,566		10,783,278		11,126,540		10,688,705
Income per common share
Basic	$	0.22	$	0.22	$	0.46	$	0.43
Diluted	$	0.21	$	0.22	$	0.45	$	0.42
Anti-dilutive shares not included in the calculation of diluted earnings per share		82,154		203,176		83,437		209,655

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Computation of Book Value and Tangible Book Value per Common Share

6 Months Ended

Jun. 30, 2014

Text Block [Abstract]

Computation of Book Value and Tangible Book Value per Common Share

Note 3 – Computation of Book Value and Tangible Book Value per Common Share

The Company utilizes the term Tangible Common Equity (“TCE”), a non-GAAP financial measure. Management believes that TCE is useful because it is a measure utilized by both regulators and market analysts in evaluating a consolidated bank holding company’s financial condition and capital strength. TCE represents common shareholders’ equity less goodwill and certain intangible assets.

Book value per common share was calculated by dividing total shareholders’ equity by the number of common shares issued and outstanding. Tangible book value per common share was calculated by dividing tangible common equity by the number of common shares issued and outstanding.

The table below presents the computation of TCE, book value and tangible book value per common share as of the dates indicated (dollars in thousands, except share and per share data):

	June 30, 2014		December 31, 2013
Total Shareholders’ Equity	$	145,438	$	137,924
Less: Goodwill		12,292		12,292
Less: Core deposit and leasehold right intangibles		2,349		2,525
Tangible common equity	$	130,797	$	123,107
Common shares issued and outstanding		11,222,235		11,081,364
Book value per common share	$	12.96	$	12.45
Tangible book value per common share	$	11.66	$	11.11

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Fair Value of Assets and Liabilities

6 Months Ended

Jun. 30, 2014

Fair Value Disclosures [Abstract]

Fair Value of Assets and Liabilities

Note 15 - Fair Value of Assets and Liabilities

Fair Value Measurement

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market for an asset or liability in an orderly transaction between market participants at the measurement date. The required disclosure within the financial statements of the fair value of financial assets and financial liabilities includes both those financial assets and financial liabilities that are not measured and reported at fair value on a recurring basis and those reported on a non-recurring basis. The methodologies for estimating the fair value of financial assets and financial liabilities that are measured at fair value, and for estimating the fair value of financial assets and financial liabilities not recorded at fair value, are discussed below.

In accordance with accounting guidance, the Company groups its financial assets and financial liabilities measured at fair value in three levels, based on the markets in which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value. These levels are as follows:

• Level 1 – Observable unadjusted quoted market prices in active markets for identical assets and liabilities that the reporting entity has the ability to access at the measurement date.

• Level 2 – Significant other observable market based inputs, other than Level 1 prices such as quoted prices for similar assets or liabilities or unobservable inputs that are corroborated by market data. This includes quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data, either directly or indirectly. This would include those financial instruments that are valued using models or other valuation methodologies where substantially all of the assumptions are observable in the marketplace, can be derived from observable market data or are supported by observable levels at which transactions are executed in the marketplace.

• Level 3 – Significant unobservable inputs that reflect a reporting entity’s own assumptions about the assumptions that market participants would use in pricing an asset or liability. Assets measured utilizing level 3 are for positions that are not traded in active markets or are subject to transfer restrictions, and or where valuations are adjusted to reflect illiquidity and or non-transferability. These assumptions are not corroborated by market data. This is comprised of financial instruments whose fair value is estimated based on internally developed models or methodologies utilizing significant inputs that are generally less readily observable from objective sources. Management uses a combination of reviews of the underlying financial statements, appraisals and management’s judgment regarding credit quality to determine the value of the financial asset or liability.

A financial instrument’s level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. Management maximizes the use of observable inputs and attempts to minimize the use of unobservable inputs when determining fair value measurements. The following is a description of both the general and specific valuation methodologies used for certain instruments measured at fair value, as well as the general classification of these instruments pursuant to the valuation hierarchy.

Investment Securities Available-for-Sale: The fair value of securities available-for-sale may be determined by obtaining quoted prices in active markets, when available, from nationally recognized securities exchanges (Level 1 financial assets) If quoted market prices are not available, the fair value is determined by a matrix pricing, which is a mathematical technique widely used in the securities industry to value debt securities without relying exclusively on quoted prices for the specific securities but rather by relying on the securities’ relationship to other benchmark quoted securities which are observable market inputs (Level 2 financial assets). Debt securities’ pricing is generally obtained from one of the matrix pricing models developed from one of the three national pricing agencies. In cases where significant credit valuation adjustments are incorporated into the estimation of fair value, reported amounts are classified as Level 3 financial assets.

Securities classified as available-for-sale are accounted for at their current fair value rather than amortized historical cost. Unrealized gains or losses are excluded from net income and reported as an amount net of taxes as a separate component of accumulated other comprehensive income included in shareholders’ equity.

The Company considers the inputs utilized to fair value the U.S. Agency and U.S. Sponsored Agency issued debt securities (callable and non-callable notes), mortgage backed securities guaranteed by those agencies, collateralized mortgage obligations issued by those agencies, corporate bond securities, and municipal securities to be observable market inputs and classified these financial assets within the Level 2 fair value hierarchy. Management bases the fair value for these investments primarily on third party price indications provided by independent pricing sources utilized by the Company’s bond accounting system to obtain market pricing on its individual securities. Vining Sparks, who provides the Company with its bond accounting system, utilizes pricing from three independent third party pricing sources for pricing of securities. These third party pricing sources utilize, quoted market prices or when quoted market prices are not available, then fair values are estimated using nationally recognized third-party vendor pricing models of which the inputs are observable. However, the fair value reported may not be indicative of the amounts that could be realized in an actual market exchange.

The fair value of the Company’s U.S. Agency and U.S. Sponsored Agency callable and non-callable agency securities, mortgage backed securities guaranteed by those agencies, and collateralized mortgage obligations issued by those agencies, corporate bond securities, and municipal securities are calculated using an option adjusted spread model from one of the nationally recognized third-party pricing models. Depending on the assumptions used and the treasury yield curve and other interest rate assumptions, the fair value could vary significantly in the near term.

Loans: The fair value for loans is estimated by discounting the expected future cash flows using current interest rates at which similar loans would be made to borrowers with similar credit ratings for the same remaining maturities, adjusted for the allowance for loan loss. Loans are segregated by type such as commercial and industrial, commercial real estate, construction and other loans with similar credit characteristics and are further segmented into fixed and variable interest rate loan categories. Expected future cash flows are projected based on contractual cash flows, adjusted for estimated prepayments. The inputs utilized in determining the fair value of loans are unobservable and accordingly, these financial assets are classified within Level 3 of the fair value hierarchy.

Impaired Loans: The fair value of impaired loans is determined based on an evaluation at the time the loan is originally identified as impaired, and periodically thereafter, at the lower of cost or fair value. Fair value on impaired loans is measured based on the value of the collateral securing these loans, less costs to sell, if the loan is collateral dependent, or based on the discounted cash flows for non-collateral dependent loans. Collateral on collateral dependent loans may be real estate and/or business assets including equipment, inventory and/or accounts receivable and is determined based on appraisals performed by qualified licensed appraisers hired by the Company. Appraised and reported values may be discounted based on management’s historical knowledge, changes in market conditions from the time of valuation, and/or management’s expertise and knowledge of the client and client’s business. Such discounts are typically significant and unobservable. For unsecured loans, the estimated future discounted cash flows of the business or borrower, are used in evaluating the fair value. Impaired loans are reviewed and evaluated on at least a quarterly basis for additional impairment and adjusted accordingly, based on the same factors identified above. The inputs utilized in determining the fair value of impaired loans are unobservable and accordingly, these financial assets are classified within Level 3 of the fair value hierarchy.

Interest Rate Swap Contracts: The fair value of the interest rate swap contracts are provided by an independent third party vendor that specializes in interest rate risk management and fair value analysis using a model that utilizes current market data to estimate cash flows of the interest rate swaps utilizing the future LIBOR yield curve for accruing and the future Overnight Index Swap Rate (Fed Funds Effective Swap Rate) “OIS” yield curve for discounting through the maturity date of the interest rate swap contract. The future LIBOR yield curve is the primary input in the valuation of the interest rate swap contracts. Both the LIBOR and OIS yield curves are readily observable in the marketplace. Accordingly, the interest rate swap contracts are classified within Level 2 of the fair value hierarchy.

Other Real Estate Owned: The fair value of other real estate owned is generally based on real estate appraisals (unless more current market information is available) less estimated costs of sale. These appraisals may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach. Adjustments are routinely made in the appraisal process by the appraisers to adjust for differences between the comparable sales and income data available. Such adjustments are typically significant. The inputs utilized in determining the fair value of other real estate owned are unobservable and accordingly, these financial assets are classified within Level 3 of the fair value hierarchy.

SBA Servicing Asset: The Company acquired an SBA servicing asset with the PC Bancorp merger and has added to the servicing asset with the sale of SBA loans subsequent to the merger. This servicing asset was initially fair valued at the merger date based on an evaluation by a third party who specializes in fair value analysis. The fair value of this asset was based on the estimated discounted future cash flows utilizing market based discount rates and estimated prepayment speeds. The discount rate was based on the current U.S. Treasury yield curve, plus a spread for marketplace risk associated with these assets. Prepayment speeds were selected based on the historical prepayments of similar SBA pools. The prepayment speeds determine the timing of the cash flows. The SBA servicing asset is amortized over the estimated life of the loans based on an effective yield approach. In addition, the Company’s servicing asset is evaluated regularly for impairment by discounting the estimated future cash flows using market-based discount rates and prepayment speeds. If the calculated present value of the servicing asset declines below the Company’s current carrying value, the servicing asset is written down to its present value. Based on the Company’s methodology in its valuation of the SBA servicing asset, the current carrying value is estimated to approximate the fair value. The inputs utilized in determining the fair value of SBA servicing asset are unobservable and accordingly, these financial assets are classified within Level 3 of the fair value hierarchy.

Non-Maturing Deposits: The fair values for non-maturing deposits (deposits with no contractual termination date), which include non-interest bearing demand deposits, interest bearing transaction accounts, money market deposits and savings accounts are equal to their carrying amounts, which represent the amounts payable on demand. Because the carrying value and fair value are by definition identical, and accordingly non-maturity deposits are classified within Level 1 of the fair value hierarchy, these balances are not listed in the following tables.

Maturing Deposits: The fair values of fixed maturity certificates of deposit (time deposits) ) “CD’s” are estimated using a discounted cash flow calculation that applies current market deposit interest rates to the Company’s current certificates of deposit interest rates for similar term certificates. The inputs utilized in determining the fair value of maturing deposits are observable from published and quoted CD rates marketed by other financial institutions and accordingly, these financial liabilities are classified within Level 2 of the fair value hierarchy.

Securities Sold under Agreements to Repurchase (“Repos”): The fair value of securities sold under agreements to repurchase is estimated based on the discounted value of future cash flows expected to be paid on the deposits. The carrying amounts of Repos with maturities of 90 days or less approximate their fair values. The fair value of Repos with maturities greater than 90 days is estimated based on the discounted value of the contractual future cash flows. The inputs utilized in determining the fair value of securities sold under agreements to repurchase are observable and accordingly, these financial liabilities are classified within Level 2 of the fair value hierarchy.

Subordinated Debentures: The fair value of the three variable rate subordinated debentures (“debentures”) is estimated using a discounted cash flow calculation that applies the three month LIBOR plus the margin index at June 30, 2014, to the cash flows from the debentures, based on the actual interest rate the debentures were accruing at June 30, 2014. Because all three of the debentures re-priced on June 16, 2014 based on the current three month LIBOR index rate plus the index margin at that date, and with relatively little to no change in the three month LIBOR index rate from the re-pricing date through June 30, 2014, the current face value of the debentures and their calculated fair value are approximately equal. The inputs utilized in determining the fair value of subordinated debentures are observable and accordingly, these financial liabilities are classified within Level 2 of the fair value hierarchy.

Fair Value of Commitments: Loan commitments that are priced on an index plus a margin to a market rate of interest are reported at the carrying value of the loan commitment. Loan commitments on which the committed fixed interest rate is less or more than the current market rate were insignificant at June 30, 2014 and December 31, 2013.

Interest Rate Risk: The Company assumes interest rate risk (the risk that general interest rate levels will change) as a result of its normal operations. As a result, the fair values of the Company’s financial instruments will change when interest rate levels change and that change may be either favorable or unfavorable to the Company. Management attempts to match maturities of assets and liabilities to the extent believed necessary to minimize interest rate risk. However, borrowers with fixed rate obligations are less likely to prepay in a rising rate environment and more likely to prepay in a falling rate environment. In addition, depositors who are receiving fixed rates are more likely to withdraw funds before maturity in a rising rate environment and less likely to do so in a falling rate environment. Management monitors rates and maturities of assets and liabilities and attempts to minimize interest rate risk by adjusting terms of new loans and deposits and by investing in securities with terms that mitigate the Company’s overall rate risk.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following table summarizes the financial assets and financial liabilities measured at fair value on a recurring basis as of the dates indicated, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value (dollars in thousands):

	Fair Value		(Level 1)		(Level 2)		(Level 3)
Financial Assets – June 30, 2014
Investment securities available-for-sale	$	102,143	$	—	$	102,143	$	—
Financial Liabilities – June 30, 2014
Interest Rate Swap Contracts	$	3,549	$	—	$	3,549	$	—
Financial Assets – December 31, 2013
Investment securities available-for-sale	$	106,488	$	—	$	106,488	$	—
Financial Liabilities – December 31, 2013
Interest Rate Swap Contracts	$	3,943	$	—	$	3,943	$	—

At December 31, 2013 and at June 30, 2014 the Company had no financial assets or liabilities that were measured at fair value on a recurring basis that required the use of significant unobservable inputs (Level 3), and thus a table has not been provided for the six months ended June 30, 2014. The following table presents a roll forward of all assets and liabilities and additional information about the financial assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the date and period indicated (dollars in thousands):

Financial Assets – Measured at Fair Value on a Recurring Basis using Unobservable Inputs	Balance at January 1		Included in Earnings			Included in Other Comprehensive Income (Loss)		Purchases, Issuances, Sales, Settlements			Transfers into (out of) Level 3		Balance at June 30
Period ended June 30, 2013
Private Issue CMO Securities	$	2,910	$	(20	)	$	—	$	(2,890	)	$	—	$	—
Total	$	2,910	$	(20	)	$	—	$	(2,890	)	$	—	$	—

There were no transfers of assets either between Level 1 and Level 2 nor in or out of Level 3 of the fair value hierarchy for assets measured on a recurring basis for the period ended June 30, 2014 and 2013. The above table reflects the sale of the Company’s Private Issue CMO securities during the first quarter of 2013.

Assets Measured at Fair Value on a Non-recurring Basis

The Company may be required periodically, to measure certain financial assets and financial liabilities at fair value on a nonrecurring basis, that is, the instruments are not measured at fair value on an ongoing basis, but are subject to fair value adjustments in certain circumstances (for example, when there is evidence of impairment). These include assets that are measured at the lower of cost or market value that were recognized at fair value below cost at the end of or during the period.

There was one loan transferred to other real estate owned “OREO” during the quarter ending June 30, 2014. At December 31, 2013 this loan was included in the collateral dependent impaired loans table below with a carrying value of $219,000. This asset was transferred to OREO during the 2^nd quarter of 2014 at a value of $219,000. There was no change in the valuation hierarchy for this asset. Two other loans with a carrying value of $45,000 were included in the $264,000 balance at December 31, 2013. These loans were both paid down resulting in no carrying value at June 30, 2014. There were no other reclassifications of assets either between Level 1 and Level 2 nor in or out of Level 3 of the fair value hierarchy for assets measured on a non-recurring basis for the three months ended June 30, 2014 and 2013.

The following table presents the balances of assets and liabilities measured at fair value on a non-recurring basis by caption and by level within the fair value hierarchy as of the dates indicated (dollars in thousands):

	Recorded Investment Carrying Value		(Level 1)		(Level 2)		(Level 3)
Financial Assets – June 30, 2014
Other real estate owned, net	$	219	$	—	$	—	$	219
		219		—		—		219
Financial Assets – December 31, 2013
Collateral dependent impaired loans with specific valuation allowance and/or partial charge-offs (non-purchased credit impaired loans)	$	264	$	—	$	—	$	264
Total	$	264	$	—	$	—	$	264

The following table presents the significant unobservable inputs used in the fair value measurements for Level 3 assets and liabilities measured at fair value on a recurring or non-recurring basis as of the dates indicated (dollars in thousands):

	Fair Value		Valuation Methodology	Valuation Model and/or Factors	Unobservable Input Values
Financial Assets – June 30, 2014
Other real estate, net	$	219	Commercial real estate appraisal	Sales approach (3)
				Estimated selling costs		8	%
Financial Assets – December 31, 2013
Collateral dependent impaired loans with specific valuation allowance and/or partial charge-off (1)	$	45	Credit loss estimate of aged accounts receivable collateral	Credit loss factors on aging of accounts receivable collateral		80	%
	$	219	Commercial real estate appraisal	Sales approach (2)
				Estimated selling costs		8	%

(1) The Company has recorded total charge-offs of $605,000 on the principal balance on two of the loans included in the balance in the above table. These charge-offs were recorded in 2013.

(2) For the one commercial real estate loan included in the above table at December 31, 2013, the Company established the fair value of the loan based on a recent commercial real estate appraisal. The Company selected the “sales approach” for valuing the collateral.

(3) For the one commercial real estate property included in other real estate owned at June 30, 2014 as reflected in the above table, the Company established the fair value of this property based on a recent commercial real estate appraisal. The Company selected the “sales approach” for valuing the collateral.

Fair Value of Financial Assets and Liabilities

The required disclosure within the financial statements of the fair value of financial assets and financial liabilities, include both those financial assets and financial liabilities that are not measured and reported at fair value on a recurring basis and those reported on a non-recurring basis. The estimated fair value amounts have been determined by the Company using available market information and appropriate valuation methodologies. However, considerable judgment is required to develop the estimates of fair value. Accordingly, the estimates presented below are not necessarily indicative of the amounts the Company could have realized in a current market exchange as of June 30, 2014 and December 31, 2013. The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts. The description of the valuation methodologies used for assets and liabilities measured at fair value and for estimating fair value for financial instruments not recorded at fair value has been described above.

The table below presents the carrying amounts and fair values of financial instruments based on their fair value hierarchy indicated (dollars in thousands):

			Fair Value
	Recorded Investment Carrying Value		(Level 1)		(Level 2)		(Level 3)
June 30, 2014
Financial Assets
Investment securities available-for-sale	$	102,143	$	—	$	102,143	$	—
Loans, net		968,606		—		—		972,960
Financial Liabilities
Certificates of deposit		57,732		—		57,775		—
Securities sold under agreements to repurchase		13,852		—		13,852		—
Subordinated debentures		9,459		—		12,372		—
Interest rate swap contracts		3,549		—		3,549		—
December 31, 2013
Financial Assets
Investment securities available-for-sale	$	106,488	$	—	$	106,488	$	—
Loans, net		922,591		—		—		926,500
Financial Liabilities
Certificates of deposit		63,581		—		63,680		0
Securities sold under agreements to repurchase		11,141		—		11,141		—
Subordinated debentures		9,379		—		12,372		—
Interest rate swap contracts		3,943		—		3,943		—

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Stock Options and Restricted Stock

6 Months Ended

Jun. 30, 2014

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Stock Options and Restricted Stock

Note 11 - Stock Options and Restricted Stock

Equity Compensation Plans

The Company’s 2007 Equity and Incentive Plan, the “Equity Plan,” was adopted by the Company in 2007 and replaced two prior equity compensation plans. The Equity Plan provides for significant flexibility in determining the types and terms of awards that may be made to participants. The Equity Plan was revised and approved by the Company’s shareholders in 2011 and adopted by the Company as part of the Bank holding company reorganization. The Equity Plan is designed to promote the interest of the Company in aiding the Company to attract and retain employees, officers and non-employee directors who are expected to contribute to the future success of the organization. The Equity Plan is intended to provide participants with incentives to maximize their efforts on behalf of the Company through stock-based awards that provide an opportunity for stock ownership. The Equity Plan provides the Company with a flexible equity incentive compensation program, which allows the Company to grant stock options, restricted stock, restricted stock award units and performance units. Certain options and share awards provide for accelerated vesting, if there is a change in control, as defined in the Equity Plan. The Equity Plan is described more fully in Note 16 - Stock Options and Restricted Stock in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013.

At June 30, 2014, future compensation expense related to un-vested stock option and un-vested restricted stock grants are reflected in the table below (dollars in thousands):

Future Stock Based Compensation Expense	Stock Options		Restricted Stock		Total
Remainder of 2014	$	3	$	761	$	764
2015		2		748		750
2016		—		206		206
2017		—		27		27
2018		—		6		6
Thereafter		—		—		—
Total	$	5	$	1,748	$	1,753

The estimated fair value of both incentive stock options and non-qualified stock options granted in prior years, have been calculated using the Black-Scholes option pricing model. The use of the Black-Scholes model and the variables and assumptions are described in Note 16 - Stock Options and Restricted Stock in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013.

Stock Options

There have been no stock options granted by the Company after 2010.

The following table summarizes the share option activity under the plans as of the date and for the period indicated:

	Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value (in thousands)
Outstanding stock options at December 31, 2013		434,740	$	13.89		2.1	$	1,913
Granted		—		—
Exercised		110,044		9.87
Forfeited		—		—
Expired		—		—
Outstanding stock options at June 30, 2014		324,696	$	15.25		1.9	$	1,456
Exercisable options at June 30, 2014		315,496	$	15.33		1.9	$	1,394
Unvested options at June 30, 2014		9,200	$	12.30		2.3	$	62
Outstanding, vested and expected to vest at June 30, 2014		324,696	$	15.25		1.9	$	1,456

The Company recorded stock option compensation expense of $2,000 and $3,000 for the three month period ended June 30, 2014 and 2013, and $6,000 and $12,000 for the six month period ended June 30, 2014 and 2013, respectively.

At December 31, 2013, there was one executive officer of the Company that had a remaining balance of 88,344 shares that were exercisable under Rule 10b5-1(c) (1) “10b5 Plan” under the Securities Exchange Act of 1934, as amended. This plan had been adopted by the executive officer in the fourth quarter of 2013. During the first quarter of 2014 all 88,344 options that remained outstanding were exercised and sold. In addition, there were an additional 21,700 options exercised by employees in the first and second quarters of 2014.

The total intrinsic value of options exercised during the six months ended June 30, 2014 was $894,000 and there were no options exercised during the six months ended June 30, 2013.

Restricted Stock

The weighted-average grant-date fair value per share in the table below is calculated by taking the total aggregate cost of the restricted shares issued divided by the number of shares of restricted stock issued. The aggregate cost of the restricted stock was calculated by multiplying the number of shares granted at each of the grant dates by the closing stock price of the Company’s common stock on the date of the grant. The following table summarizes the restricted stock activity under the Equity Plan for the period indicated:

	Number of Shares			Weighted-Average Grant-Date Fair Value per Share
Restricted Stock:
Unvested at December 31, 2013		266,050		$	13.49
Granted		45,900			18.17
Vested		(48,975	)		12.32
Cancelled and forfeited		(500	)		11.75
Unvested at June 30, 2014		262,475		$	14.53

Restricted stock compensation expense related to the restricted stock grants reflected in the table above was $477,000 and $414,000 for the three month period ended June 30, 2014 and 2013, and $881,000 and $463,000 for the six month period ended June 30, 2014 and 2013, respectively. Restricted stock awards reflected in the table above are valued at the closing stock price on the date of grant and are expensed to stock based compensation expense over the period for which the related service is performed.

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Qualified Affordable Housing Project Investments

6 Months Ended

Jun. 30, 2014

Federal Home Loan Banks [Abstract]

Qualified Affordable Housing Project Investments

Note 7 – Qualified Affordable Housing Project Investments

The Company’s investment in Qualified Affordable Housing Projects that generate Low Income Housing Tax Credits (“LIHTC”) at June 30, 2014 was $4.3 million, compared to $4.5 million at December 31, 2013. The decrease of $200,000 represents the amortization of the principal balance for the six months of 2014. The funding liability for the LIHTC at June 30, 2014 was $3.5 million compared to $4.0 million, at December 31, 2013. See Note 11 – Qualified Affordable Housing Project Investments in the Company’s 10-K financial statements at December 31, 2013 for additional detail regarding the Company’s investment in LIHTC.

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Subordinated Debentures Outstanding (Detail) (USD $) In Thousands, unless otherwise specified					6 Months Ended
	Jun. 30, 2014	Dec. 31, 2013	Jun. 30, 2014 Carrying (Reported) Amount, Fair Value Disclosure	Dec. 31, 2013 Carrying (Reported) Amount, Fair Value Disclosure	Jun. 30, 2014 Trust I	Jun. 30, 2014 Trust II	Jun. 30, 2014 Trust III
Financial Instruments Owned and Pledged as Collateral [Line Items]
Unamortized fair value adjustment	$ (2,913)
Amount	$ 9,459	$ 9,379	$ 12,372	$ 9,379	$ 6,186	$ 3,093	$ 3,093
Issuance Date					Dec. 10, 2004	Dec. 23, 2005	Jun. 30, 2006
Maturity Date					2035-03-15	2036-03-15	2036-09-15
Rate Index					3 month LIBOR + 2.05 %	3 month LIBOR + 1.75 %	3 month LIBOR + 1.85 %
Current Rate					2.28%	1.98%	2.08%
Next Reset Date					Sep. 15, 2014	Sep. 15, 2014	Sep. 15, 2014

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Investment Securities

6 Months Ended

Jun. 30, 2014

Investments Debt And Equity Securities [Abstract]

Investment Securities

Note 5 - Investment Securities

The investment securities portfolio has been classified as available-for-sale, and as such is recorded at estimated fair market value.

The following tables present the amortized cost and estimated fair values of investment securities by major category as of the dates indicated. There were no impaired securities at June 30, 2014 or December 31, 2013, and as such there were no other than temporary impairment losses in the securities portfolio for the periods indicated in the tables below (dollars in thousands):

			Gross Unrealized
June 30, 2014 – Available-for-sale:	Amortized Cost		Gains		Losses		Fair Market Value
U.S. Govt Agency and Sponsored Agency - Note Securities	$	3,084	$	7	$	—	$	3,091
U.S. Govt Agency - SBA Securities		52,487		742		448		52,781
U.S. Govt Agency - GNMA Mortgage-Backed Securities		24,938		268		538		24,668
U.S. Govt Sponsored Agency - CMO & Mortgage-Backed Securities		14,178		406		234		14,350
Corporate Securities		4,056		108		—		4,164
Municipal Securities		3,069		20		—		3,089
Total investment securities	$	101,812	$	1,551	$	1,220	$	102,143

			Gross Unrealized
December 31, 2013 – Available-for-sale:	Amortized Cost		Gains		Losses		Fair Market Value
U.S. Govt Agency and Sponsored Agency - Note Securities	$	4,153	$	1	$	2	$	4,152
U.S. Govt Agency - SBA Securities		50,521		875		491		50,905
U.S. Govt Agency - GNMA Mortgage-Backed Securities		28,107		180		909		27,378
U.S. Govt Sponsored Agency - CMO & Mortgage-Backed Securities		15,348		345		479		15,214
Corporate Securities		5,086		125		—		5,211
Municipal Securities		3,621		9		2		3,628
Total investment securities	$	106,836	$	1,535	$	1,883	$	106,488

The Company’s investment securities portfolio at June 30, 2014, consists of U.S. Agency and U.S. Sponsored Agency issued AAA and AA rated investment-grade securities, investment grade corporate bond securities, and municipal securities. Securities with a market value of $14.1 million and $11.8 million were pledged to secure securities sold under agreements to repurchase at June 30, 2014 and December 31, 2013, respectively. See Note 8 – Borrowings and Subordinated Debentures. Securities with a market value of $11.3 million and $11.0 million were pledged to secure a certificate of deposit of $10.0 million with the State of California Treasurer’s office at June 30, 2014 and December 31, 2013. Securities with a market value of $30.6 million and $29.3 million were pledged to secure outstanding standby letters of credit confirmed/issued by a correspondent bank for the benefit of our customers in the amount of $21.3 million and $21.9 million at June 30, 2014 and December 31, 2013, respectively. Securities with a market value of $947,000 and $275,000 were pledged to secure local agency deposits at June 30, 2014 and December 31, 2013, respectively.

The following tables present investment securities with unrealized losses that are considered to be temporarily-impaired, summarized and classified according to the duration of the loss period as of the dates indicated (dollars in thousands).

	< 12 Continuous Months				> 12 Continuous Months				Total
June 30, 2014	Fair Value		Net Unrealized Loss		Fair Value		Net Unrealized Loss		Fair Value		Net Unrealized Loss
Temporarily-impaired available-for-sale investment securities:
U.S. Govt. - Agency and Sponsored Agency Note Securities	$	—	$	—	$	—	$	—	$	—	$	—
U.S. Govt. Agency SBA Securities		8,793		127		8,556		322		17,349		449
U.S. Govt. Agency – GNMA Mortgage-Backed Securities		7,905		71		7,373		337		15,278		408
U.S. Govt. Sponsored Agency – CMO & Mortgage-Backed Securities		—		—		9,642		363		9,642		363
Corporate Securities		—		—		—		—		—		—
Municipal Securities		—		—		—		—		—		—
Total temporarily-impaired available-for-sale investment securities	$	16,698	$	198	$	25,571	$	1,022	$	42,269	$	1,220

	< 12 Continuous Months				> 12 Continuous Months				Total
December 31, 2013	Fair Value		Net Unrealized Loss		Fair Value		Net Unrealized Loss		Fair Value		Net Unrealized Loss
Temporarily-impaired available-for-sale investment securities:
U.S. Govt. - Agency and Sponsored Agency Note Securities	$	1,041	$	2	$	—	$	—	$	1,041	$	2
U.S. Govt. Agency SBA Securities		11,686		491		—		—		11,686		491
U.S. Govt. Agency – GNMA Mortgage-Backed Securities		15,693		721		1,864		188		17,557		909
U.S. Govt. Sponsored Agency – CMO & Mortgage-Backed Securities		7,650		479		—		—		7,650		479
Corporate Securities		—		—		—		—		—		—
Municipal Securities		—		—		1,029		2		1,029		2
Total temporarily-impaired available-for-sale investment securities	$	36,070	$	1,693	$	2,893	$	190	$	38,963	$	1,883

The Company evaluates all securities for declines in the fair market values below the securities cost basis for possible impairment on each reporting date.

During the six months ended June 30, 2014, the Company did not recognize any gross gain or losses on sales of available-for-sale securities and recognized gross gains on sales of securities in the amount of $5,000 for the six months ended June 30, 2013 and $47,000 for the year ended December 31, 2013. The Company did not recognize any net proceeds from the sale of available-for-sale securities at June 30, 2014 and had net proceeds from the sale of available-for-sale securities of $2.9 million for the six months ended June 30, 2013 and $7.0 million for the year ended December 31, 2013.

The amortized cost, estimated fair value and average yield of debt securities at June 30, 2014, are reflected in the table below (dollars in thousands). Maturity categories are determined as follows:

• U.S. Govt. Agency and U.S. Govt. Sponsored Agency bonds and notes – maturity date

• U.S. Govt. Sponsored Agency CMO or Mortgage-Backed Securities, U.S. Govt. Agency GNMA Mortgage-Backed Securities and U.S. Gov. Agency SBA Securities – estimated cash flow taking into account estimated pre-payment speeds

• Investment grade Corporate Bonds and Municipal Securities – maturity date

Although, U.S. Government Agency and U.S. Government Sponsored Agency mortgage-backed and CMO securities have contractual maturities through 2048, the expected maturity will differ from the contractual maturities because borrowers or issuers may have the right to prepay such obligations without penalties.

	June 30, 2014
Maturities Schedule of Securities	Amortized Cost		Fair Value		Weighted Average Yield
Due through one year	$	18,136	$	18,208		1.52	%
Due after one year through five years		39,808		40,151		1.88	%
Due after five years through ten years		26,781		26,522		2.27	%
Due after ten years		17,087		17,262		2.71	%
Total	$	101,812	$	102,143		2.06	%

The weighted average yields in the above table are based on effective rates of book balances at the end of the period. Yields are derived by dividing interest income, adjusted for amortization of premiums and accretion of discounts, by total amortized cost.

Investment in FHLB Common Stock

The Company’s investment in the common stock of the FHLB of San Francisco is carried at cost and was $4.2 million as of June 30, 2014 and December 31, 2013. See Note 8—Borrowings and Subordinated Debentures for a detailed discussion regarding the Company’s borrowings and the requirements to purchase FHLB common stock. See Note 5—Investment Securities in the Company’s December 31, 2013 10-K for additional discussion on the Company’s evaluation and accounting for its investment in FHLB common stock.

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Loans

6 Months Ended

Jun. 30, 2014

Receivables [Abstract]

Loans

Note 6 - Loans

The following table presents the composition of the Company’s loan portfolio as of the dates indicated (dollars in thousands):

	June 30, 2014		December 31, 2013
Commercial and Industrial Loans:	$	303,870	$	299,473
Loans Secured by Real Estate:
Owner-Occupied Nonresidential Properties		208,936		197,605
Other Nonresidential Properties		296,629		271,818
Construction, Land Development and Other Land		61,165		47,074
1-4 Family Residential Properties		64,583		65,711
Multifamily Residential Properties		36,727		33,780
Total Loans Secured by Real Estate		668,040		615,988
Other Loans:		7,980		17,733
Total Loans	$	979,890	$	933,194

The following table is a breakout of the Company’s loan portfolio stratified by the industry concentration of the borrower by their respective NAICS code as of the dates indicated (dollars in thousands):

	June 30,		December 31,
	2014		2013
Real Estate	$	431,243	$	381,830
Manufacturing		86,350		83,319
Hotel/Lodging		82,787		76,143
Construction		69,935		62,835
Wholesale		57,195		60,291
Professional Services		45,745		49,739
Finance		52,615		46,393
Healthcare		32,756		38,662
Restaurant/Food Service		23,574		35,244
Other Services		23,781		21,448
Retail		17,856		23,157
Administrative Management		18,619		15,218
Information		10,635		11,709
Education		9,985		10,270
Transportation		10,562		9,531
Entertainment		5,195		6,207
Other		1,057		1,198
Total	$	979,890	$	933,194

SBA Loans

The Company originates loans under the guidelines of the Small Business Administration (“SBA”) program. The total portfolio of the SBA contractual loan balances being serviced by the Company at June 30, 2014 was $105 million, of which $73 million has been sold. Of the $32 million remaining on the Company’s books, $23 million is un-guaranteed and $9 million is guaranteed by the SBA.

For SBA guaranteed loans, a secondary market exists to purchase the guaranteed portion of these loans with the Company continuing to “service” the entire loan. The secondary market for guaranteed loans is comprised of investors seeking long term assets with yields that adapt to the prevailing interest rates. These investors are typically financial institutions, insurance companies, pension funds, and other types of investors specializing in the acquisition of this product. When a decision to sell the guaranteed portion of an SBA loan is made by the Company, bids are solicited from secondary market investors and the loan is normally sold to the highest bidder.

At June 30, 2014, there were no loans classified as held for sale. At June 30, 2014, the balance of unsold SBA 7a loans that have been originated in 2014 is $1.5 million, of which $1.1 million is guaranteed by the SBA. The Company does not currently plan on selling these loans, but it may choose to do so in the future.

Allowance for Loan Loss

The following table is a summary of the activity for the allowance for loan loss for the periods indicated (dollars in thousands):

	Three Months Ended June 30,						Six Months Ended June 30,
	2014			2013			2014			2013
Allowance for loan loss at beginning of period	$	10,823		$	8,841		$	10,603		$	8,803
Provision for loan losses		408			1,153			483			1,287
Net (charge-offs) recoveries:
Charge-offs		(157	)		(616	)		(157	)		(737	)
Recoveries		210			34			355			59
Net (charge-offs) recoveries		53			(582	)		198			(678	)
Allowance for loan loss at end of period	$	11,284		$	9,412		$	11,284		$	9,412
Net (charge-offs) recoveries to average loans		0.00	%		(0.07	)%		0.02	%		(0.08	)%

	June 30, 2014			December 30, 2013
Allowance for loan loss to total loans		1.15	%		1.14	%
Allowance for loan loss to total loans accounted for at historical cost, which excludes loans and the related allowance for loans acquired through acquisition		1.45	%		1.50	%

The allowance for losses on unfunded loan commitments to extend credit is primarily related to commercial lines of credit and construction loans. The amount of unfunded loan commitments at June 30, 2014 and December 31, 2013 was $417.1 million and $345.9 million, respectively. The inherent risk associated with a loan is evaluated at the same time the credit is extended. However, the allowance held for the commitments is reported in other liabilities within the accompanying balance sheets and not as part of the allowance for loan loss in the above table. The allowance for losses on unfunded loan commitments to extend credit was $403,000 and $329,000 at June 30, 2014 and December 31, 2013, respectively.

The following tables present, by portfolio segment, the changes in the allowance for loan loss and the recorded investment in loans as of the dates and for the periods indicated (dollars in thousands):

	Commercial and Industrial			Construction, Land Development and Other Land		Commercial and Other Real Estate			Other			Total
Three Months Ended June 30, 2014
Allowance for loan loss – Beginning balance	$	5,278		$	1,334	$	4,161		$	50		$	10,823
Provision for loan losses		91			88		228			1			408
Net (charge-offs) recoveries:
Charge-offs		(93	)		—		(64	)		—			(157	)
Recoveries		109			—		101			—			210
Net recoveries		16			—		37			—			53
Ending balance	$	5,385		$	1,422	$	4,426		$	51		$	11,284
Three Months Ended June 30, 2013
Allowance for loan loss – Beginning balance	$	4,187		$	2,147	$	2,400		$	107		$	8,841
Provision for loan losses		1,014			213		(6	)		68			1,153
Net (charge-offs) recoveries:
Charge-offs		(569	)		—		(47	)		—			(616	)
Recoveries		27			—		4			3			34
Net (charge-offs) recoveries		(542	)		—		(43	)		3			(582	)
Ending balance	$	4,659		$	2,360	$	2,351		$	42		$	9,412
	Commercial and Industrial			Construction, Land Development and Other Land		Commercial and Other Real Estate			Other			Total
Six Months Ended June 30, 2014
Allowance for loan loss – Beginning balance	$	5,534		$	1,120	$	3,886		$	63		$	10,603
Provision for loan losses		(308	)		302		501			(12	)		483
Net (charge-offs) recoveries:
Charge-offs		(93	)		—		(64	)		—			(157	)
Recoveries		252			—		103			—			355
Net recoveries		159			—		39			—			198
Ending balance	$	5,385		$	1,422	$	4,426		$	51		$	11,284
Six Months Ended June 30, 2013
Allowance for loan loss – Beginning balance	$	4,572		$	2,035	$	2,084		$	112		$	8,803
Provision for loan losses		650			325		379			(67	)		1,287
Net (charge-offs) recoveries:
Charge-offs		(612	)		—		(117	)		(8	)		(737	)
Recoveries		49			—		5			5			59
Net (charge-offs)		(563	)		—		(112	)		(3	)		(678	)
Ending balance	$	4,659		$	2,360	$	2,351		$	42		$	9,412

The following tables present both the allowance for loan loss and the associated loan balance classified by loan portfolio segment and by credit evaluation methodology (dollars in thousands):

	Commercial and Industrial		Construction, Land Development and Other Land		Commercial and Other Real Estate		Other		Total
June 30, 2014
Allowance for loan loss:
Individually evaluated for impairment	$	240	$	—	$	—	$	—	$	240
Collectively evaluated for impairment		5,143		1,422		4,426		51		11,042
Purchased credit impaired (loans acquired with deteriorated credit quality)		2		—	$	—	$	—		2
Total Allowance for Loan Loss	$	5,385	$	1,422	$	4,426	$	51	$	11,284
Loans receivable:
Individually evaluated for impairment	$	2,582	$	—	$	2,960	$	—	$	5,542
Collectively evaluated for impairment		300,730		61,165		601,877		7,980		971,752
Purchased credit impaired (loans acquired with deteriorated credit quality)		558		—		2,038		—		2,596
Total Loans Receivable	$	303,870	$	61,165	$	606,875	$	7,980	$	979,890
	Commercial and Industrial		Construction, Land Development and Other Land		Commercial and Other Real Estate		Other		Total
December 31, 2013
Allowance for loan loss:
Individually evaluated for impairment	$	4	$	—	$	—	$	—	$	4
Collectively evaluated for impairment		5,520		1,120		3,886		63		10,589
Purchased credit impaired (loans acquired with deteriorated credit quality)		10		—		—		—		10
Total Allowance for Loan Loss	$	5,534	$	1,120	$	3,886	$	63	$	10,603
Loans receivable:
Individually evaluated for impairment	$	2,640	$	—	$	3,680	$	—	$	6,320
Collectively evaluated for impairment		295,787		47,074		561,952		17,733		922,546
Purchased credit impaired (loans acquired with deteriorated credit quality)		1,046		—		3,282		—		4,328
Total Loans Receivable	$	299,473	$	47,074	$	568,914	$	17,733	$	933,194

Credit Quality of Loans

The Company utilizes an internal loan classification system as a means of reporting problem and potential problem loans. Under the Company’s loan risk rating system, loans are classified as “Pass,” with problem and potential problem loans as “Special Mention,” “Substandard,” “Doubtful” and “Loss”. Individual loan risk ratings are updated continuously or at any time the situation warrants. In addition, management regularly reviews problem loans to determine whether any loan requires a classification change, in accordance with the Company’s policy and applicable regulations. The grading analysis estimates the capability of the borrower to repay the contractual obligations of the loan agreements as scheduled or at all. The internal loan classification risk grading system is based on experiences with similarly graded loans.

The Company’s internally assigned grades are as follows:

• Pass – loans which are protected by the current net worth and paying capacity of the obligor or by the value of the underlying collateral. There are several different levels of Pass rated credits, including “Watch” which is considered a transitory grade for pass rated loans that require greater monitoring. Loans not meeting the criteria of special mention, substandard, doubtful or loss that have been analyzed individually as part of the above described process are considered to be pass-rated loans.

• Special Mention – loans where a potential weakness or risk exists, which could cause a more serious problem if not corrected. Special Mention loans do not currently expose the Company to sufficient risk to warrant classification as a Substandard, Doubtful or Loss classification, but possess weaknesses that deserve management’s close attention.

• Substandard – loans that have a well-defined weakness based on objective evidence and can be characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected.

• Doubtful – loans classified as doubtful have all the weaknesses inherent in those classified as substandard with the added characteristic that the weaknesses present make collection or liquidation in full, on the basis of currently existing facts, conditions and values, highly questionable and improbable.

• Loss – loans classified as a loss are considered uncollectible, or of such value that continuance as an asset is not warranted.

The following tables present the risk category of loans by class of loans based on the most recent internal loan classification as of the dates indicated (dollars in thousands):

	Commercial and Industrial		Construction, Land Development and Other Land		Commercial and Other Real Estate		Other		Total
June 30, 2014
Pass	$	292,219	$	61,165	$	585,390	$	7,979	$	946,753
Special Mention		2,200		—		4,035		—		6,235
Substandard		9,451		—		17,450		1		26,902
Doubtful		—		—		—		—		—
Total	$	303,870	$	61,165	$	606,875	$	7,980	$	979,890
December 31, 2013
Pass	$	289,594	$	47,074	$	547,600	$	17,731	$	901,999
Special Mention		1,540		—		2,613		—		4,153
Substandard		8,339		—		18,701		2		27,042
Doubtful		—		—		—		—		—
Total	$	299,473	$	47,074	$	568,914	$	17,733	$	933,194

Age Analysis of Past Due and Non-Accrual Loans

The following tables present an aging analysis of the recorded investment of past due loans and non-accrual loans as of the dates indicated (dollars in thousands):

	31-60 Days Past Due		61-90 Days Past Due		Greater than 90 Days Past Due and Accruing		Total Past Due and Accruing		Total Non Accrual		Current		Total Loans
June 30, 2014
Commercial and Industrial	$	340	$	—	$	—	$	340	$	3,136	$	300,394	$	303,870
Construction, Land Development and Other Land		—		—		—		—		—		61,165		61,165
Commercial and Other Real Estate		631		—		—		631		3,892		602,352		606,875
Other		—		—		—		—		—		7,980		7,980
Total	$	971	$	—	$	—	$	971	$	7,028	$	971,891	$	979,890
	31-60 Days Past Due		61-90 Days Past Due		Greater than 90 Days Past Due and Accruing		Total Past Due and Accruing		Total Non Accrual		Current		Total Loans
December 31, 2013
Commercial and Industrial	$	—	$	241	$	—	$	241	$	3,682	$	295,550	$	299,473
Construction, Land Development and Other Land		—		—		—		—		—		47,074		47,074
Commercial and Other Real Estate		—		—		—		—		5,874		563,040		568,914
Other		—		—		—		—		—		17,733		17,733
Total	$	—	$	241	$	—	$	241	$	9,556	$	923,397	$	933,194

Impaired Loans

Impaired loans are evaluated by comparing the fair value of the collateral, if the loan is collateral dependent, and the present value of the expected future cash flows discounted at the loan’s effective interest rate, if the loan is not collateral dependent.

A valuation allowance is established for an impaired loan when the fair value of the loan is less than the recorded investment. In certain cases, portions of impaired loans are charged-off to realizable value instead of establishing a valuation allowance and are included, when applicable, in the table below as impaired loans “with no specific allowance recorded.” The valuation allowance disclosed below is included in the allowance for loan loss reported in the consolidated balance sheets as of June 30, 2014 and December 31, 2013.

The following tables present, by loan category, the recorded investment and unpaid principal balances for impaired loans with the associated allowance amount, if applicable, for the dates and periods indicated (dollars in thousands). This table excludes purchased credit impaired loans (loans acquired in acquisitions with deteriorated credit quality) of $2.6 million and $4.3 million at June 30, 2014 and December 31, 2013, respectively.

	June 30, 2014						December 31, 2013
	Recorded Investment		Unpaid Principal Balance		Related Allowance		Recorded Investment		Unpaid Principal Balance		Related Allowance
With no specific allowance recorded:
Commercial and Industrial	$	1,060	$	1,138	$	—	$	2,540	$	5,347	$	—
Commercial and Other Real Estate		2,960		3,864		—		3,680		6,112		—
With a specific allowance recorded:
Commercial and Industrial		1,522		1,929		240		100		355		4
Total
Commercial and Industrial		2,582		3,067		240		2,640		5,702		4
Commercial and Other Real Estate		2,960		3,864		—		3,680		6,112		—
Total	$	5,542	$	6,931	$	240	$	6,320	$	11,814	$	4

	Three Months Ended June 30,								Six Months Ended June 30,
	2014				2013				2014				2013
	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
With no specific allowance recorded:
Commercial and Industrial	$	1,008	$	34	$	1,500	$	—	$	1,027	$	34	$	994	$	—
Construction, Land Development and Other Land		—		—		1,159		—		—		—		1,179		—
Commercial and Other Real Estate		2,981		—		3,340		—		3,325		—		3,398		—
With a specific allowance recorded:
Commercial and Industrial		1,535		—		488		—		1,553		—		319		—
Total:
Commercial and Industrial		2,543		34		1,988		—		2,580		34		1,313		—
Construction, Land Development and Other Land		1,535		—		1,159		—		—		—		1,179		—
Commercial and Other Real Estate		2,981		—		3,340		—		3,325		—		3,398		—
Total	$	5,524	$	34	$	6,487	$	—	$	5,905	$	34	$	5,890	$	—

The following is a summary of additional information pertaining to impaired loans for the periods indicated (dollars in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2014		2013		2014		2013
Interest foregone on impaired loans	$	103	$	141	$	274	$	230
Cash collections applied to reduce principal balance	$	2,763	$	110	$	2,871	$	152
Interest income recognized on cash collections	$	34	$	—	$	34	$	—

Troubled Debt Restructuring

The Company’s loan portfolio contains certain loans that have been modified in a Troubled Debt Restructuring (“TDR”), where economic concessions have been granted to borrowers experiencing financial difficulties. Loans are restructured in an effort to maximize collections. Economic concessions can include: reductions to the interest rate, payment extensions, forgiveness of principal or other actions.

The modification process includes evaluation of impairment based on the present value of expected future cash flows, discounted at the contractual interest rate of the original loan agreement, except when the sole (remaining) source of repayment for the loan is the operation or liquidation of the loan collateral. In these cases, management uses the current fair value of the collateral, less selling costs, to evaluate the loan for impairment. If management determines that the value of the modified loan is less than the recorded investment in the loan (net of previous charge-offs and unamortized premium or discount), impairment is recognized through a specific allowance or a charge-off.

The following tables include the recorded investment and unpaid principal balances for troubled debt restructured loans for the periods ending June 30, 2014 and December 31, 2013 (dollars in thousands). These tables include TDR loans that were purchased credit impaired (PCI). As of June 30, 2014, there were three PCI loans with a recorded investment of $304,000 and unpaid principal balances of $491,000.

Period ended June 30, 2014	Recorded Investment		Unpaid Principal Balance		Interest Income Recognized
Commercial and Industrial	$	746	$	1,183	$	—
Commercial and Other Real Estate		2,109		2,785		—
Total	$	2,855	$	3,968	$	—
Year ended December 31, 2013	Recorded Investment		Unpaid Principal Balance		Interest Income Recognized
Commercial and Industrial	$	541	$	843	$	—
Commercial and Other Real Estate		2,173		2,785		—
Total	$	2,714	$	3,628	$	—

The following table shows the pre- and post-modification recorded investment in TDR loans by loan segment that have occurred during the periods indicated (dollars in thousands):

	Three Months Ended June 30,
	2014						2013
	Number of Loans		Pre-Modification Recorded Investment		Post- Modification Recorded Investment		Number of Loans		Pre-Modification Recorded Investment		Post- Modification Recorded Investment
Troubled Debt Restructured Loans:
Commercial and Industrial		1		224		224		—		—		—
Total		1	$	224	$	224		—	$	—	$	—
	Six Months Ended June 30,
	2014						2013
	Number of Loans		Pre-Modification Recorded Investment		Post- Modification Recorded Investment		Number of Loans		Pre-Modification Recorded Investment		Post- Modification Recorded Investment
Troubled Debt Restructured Loans:
Commercial and Industrial		1		224		224		1		310		310
Total		1	$	224	$	224		1	$	310	$	310

Loans are restructured in an effort to maximize collections. There was no financial impact for specific reserves or from charge-offs for the modified loans included in the table above. Impairment analyses are performed on the Company’s troubled debt restructured loans in conjunction with the normal allowance for loan loss process. The Company’s troubled debt restructured loans are analyzed to ensure adequate cash flow or collateral supports the outstanding loan balance.

There have been no payment defaults in the six months ended June 30, 2014 or June 30, 2013 subsequent to modification on troubled debt restructured loans that have been modified within the last twelve months.

Loans Acquired Through Acquisition

The following table reflects the accretable net discount for loans acquired through acquisition, for the periods indicated (dollars in thousands):

	Three Months Ended June 30,						Six Months Ended June 30,
	2014			2013			2014			2013
Balance, beginning of period	$	7,350		$	11,269		$	7,912		$	12,189
Accretion, included in interest income		(889	)		(1,139	)		(1,451	)		(2,083	)
Reclassifications (to) from non-accretable yield		(49	)		—			(49	)		24
Balance, end of period	$	6,412		$	10,130		$	6,412		$	10,130

The above table reflects the fair value adjustment on the loans acquired from mergers that will be amortized to loan interest income based on the effective yield method over the remaining life of the loans. These amounts do not include the fair value adjustments on the purchased credit impaired loans acquired from mergers.

Purchased Credit Impaired Loans

Purchased Credit Impaired Loans (“PCI”) loans are acquired loans with evidence of deterioration of credit quality since origination and it is probable at the acquisition date, that the Company will not be able to collect all contractually required amounts.

When the timing and/or amounts of expected cash flows on such loans are not reasonably estimable, no interest is accreted and the loan is reported as a non-accrual loan; otherwise, if the timing and amounts of expected cash flows for PCI loans are reasonably estimable, then interest is accreted and the loans are reported as accruing loans.

The non-accretable difference represents the difference between the undiscounted contractual cash flows and the undiscounted expected cash flows, and also reflects the estimated credit losses in the acquired loan portfolio at the acquisition date and can fluctuate due to changes in expected cash flows during the life of the PCI loans.

The following table reflects the outstanding balance and related carrying value of PCI loans as of the dates indicated (dollars in thousands):

	June 30, 2014				December 31, 2013
	Unpaid Principal Balance		Carrying Value		Unpaid Principal Balance		Carrying Value
Commercial and Industrial	$	935	$	558	$	1,599	$	1,046
Commercial and Other Real Estate		3,321		2,038		5,611		3,282
Other		—		—		—		—
Total	$	4,256	$	2,596	$	7,210	$	4,328

The following table reflects the activities in the accretable net discount for PCI loans for the period indicated (dollars in thousands):

	Three Months Ended June 30,						Six Months Ended June 30,
	2014			2013			2014			2013
Balance, beginning of period	$	378		$	9		$	395		$	9
Accretion, included in interest income		(18	)		(9	)		(35	)		(9	)
Reclassifications from non-accretable yield		—			428			—			428
Balance, end of period	$	360		$	428		$	360		$	428

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Borrowings and Subordinated Debentures

6 Months Ended

Jun. 30, 2014

Brokers And Dealers [Abstract]

Borrowings and Subordinated Debentures

Note 8 - Borrowings and Subordinated Debentures

Securities Sold Under Agreements to Repurchase

The Company enters into certain transactions, the legal form of which are sales of securities under agreements to repurchase (“Repos”) at a later date at a set price. Securities sold under agreements to repurchase generally mature within 1 day to 180 days from the issue date and are routinely renewed.

As discussed in Note 5 – Investment Securities, the Company has pledged certain investments as collateral for these agreements. Securities with a fair value of $14.1 million and $11.8 million were pledged to secure the Repos at June 30, 2014 and December 31, 2013, respectively. The Company segregates both the principal and accrued interest on these securities with the Company’s third party safekeeping custodians. All principal and interest payments on the investment securities that are pledged as collateral on the Repo program are received directly by the safekeeping custodian.

The tables below describe the terms and maturity of the Company’s securities sold under agreements to repurchase as of the dates indicated (dollars in thousands):

	June 30, 2014
Date Issued	Amount		Interest Rate			Original Term		Maturity Date
June 30, 2014	$	13,852		0.10% – 0.38	%		1 day	July 1, 2014
Total	$	13,852		0.25	%
	December 31, 2013
Date Issued	Amount		Interest Rate			Original Term		Maturity Date
December 3, 2013	$	750		0.10	%		62 days	February 3, 2014
December 31, 2013		10,391		0.10% – 0.40	%		2 days	January 2, 2014
Total	$	11,141		0.30	%

Federal Home Loan Bank Borrowings

The Company maintains a secured credit facility with the Federal Home Loan Bank of San Francisco “FHLB”, allowing the Company to borrow on an overnight and term basis. The Company’s credit facility with the FHLB is $345.4 million, which represents approximately 25% of the Bank’s total assets, as reported by the Bank in its March 31, 2014 FFIEC Call Report.

As of June 30, 2014, the Company had $582 million of loan collateral pledged with the FHLB which provides $249.9 million in borrowing capacity. The Company has no investment securities pledged with the FHLB to support this credit facility. In addition, the Company must maintain an investment in the Capital Stock of the FHLB. Under the FHLB Act, the FHLB has a statutory lien on the FHLB capital stock that the Company owns and the FHLB capital stock serves as further collateral under the borrowing line.

The Company had no outstanding advances (borrowings) with the FHLB as of June 30, 2014 or December 31, 2013.

Subordinated Debentures

The following table summarizes the terms of each issuance of subordinated debentures outstanding as of June 30, 2014:

Series	Amount (in thousands)			Issuance Date		Maturity Date		Rate Index			Current Rate			Next Reset Date
Trust I	$	6,186			12/10/04		03/15/35		3 month LIBOR + 2.05	%		2.28	%		9/15/14
Trust II		3,093			12/23/05		03/15/36		3 month LIBOR + 1.75	%		1.98	%		9/15/14
Trust III		3,093			06/30/06		09/15/36		3 month LIBOR + 1.85	%		2.08	%		9/15/14
Subtotal		12,372
Unamortized fair value adjustment		(2,913	)
Net	$	9,459

The Company had an aggregate outstanding contractual balance of $12.4 million in subordinated debentures at June 30, 2014. These subordinated debentures were issued in three separate series. Each issuance had a maturity of 30 years from their approximate date of issue. All three subordinated debentures are variable rate instruments that reprice quarterly based on the three month LIBOR plus a margin (see tables above). All three subordinated debentures had their interest rates reset in June 2014 at the current three month LIBOR plus their spread, and will continue to reprice quarterly through their maturity date. All three subordinated debentures are currently callable at par with no prepayment penalties.

The Company currently includes in Tier 1 capital an amount of subordinated debentures equal to no more than 25% of the sum of all core capital elements, which is generally defined as shareholders’ equity less goodwill, core deposit and leasehold right intangibles and a portion of the SBA servicing assets.

Interest payments made by the Company on subordinated debentures are considered dividend payments under FRB regulations. Notification to the FRB is required prior to the Company declaring and paying a dividend during any period in which the Company’s quarterly net earnings are insufficient to fund the dividend amount. This notification requirement is included in regulatory guidance regarding safety and soundness surrounding capital and includes other non-financial measures such as asset quality, financial condition, capital adequacy, liquidity, future earnings projections, capital planning and credit concentrations. Should the FRB object to the dividend payments, the Company would be precluded from paying interest on the subordinated debentures after giving notice within 15 days before the payment date. Payments would not commence until approval is received or the Company no longer needs to provide notice under applicable guidance. The Company has the right, assuming no default has occurred, to defer payments of interest on the subordinated debentures at any time for a period not to exceed 20 consecutive quarters. The Company has not deferred any interest payments.

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Securities Sold under Repurchase Agreements and Derivatives Securities Offset in Consolidated Financial Statements Due to an Enforceable Master Netting Arrangement (Detail) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Offsetting [Abstract]
Interest rate swap contracts fair value - Gross Amounts Recognized in the Consolidated Balance Sheets	$ 3,549	$ 3,943
Interest rate swap contracts fair value - Gross Amounts Offset in the Consolidated Balance Sheets
Interest rate swap contracts fair value - Net Amounts of Assets Presented in the Consolidated Balance Sheets	3,549	3,943
Interest rate swap contracts fair value - Gross Amounts Not Offset in the Consolidated Balance Sheets - Financial Instruments	3,549	3,943
Interest rate swap contracts fair value - Gross Amounts Not Offset in the Consolidated Balance Sheets - Collateral Pledged	3,814	4,194
Interest rate swap contracts fair value - Net Amount (Collateral over liability balance required to be pledged)	265	251
Securities sold under agreements to repurchase - Gross Amounts Recognized in the Consolidated Balance Sheets	13,852	11,141
Securities sold under agreements to repurchase - Gross Amounts Offset in the Consolidated Balance Sheets
Securities sold under agreements to repurchase - Net Amounts of Assets Presented in the Consolidated Balance Sheets	13,852	11,141
Securities sold under agreements to repurchase - Gross Amounts Not Offset in the Consolidated Balance Sheets - Financial Instruments	13,852	11,141
Securities sold under agreements to repurchase - Gross Amounts Not Offset in the Consolidated Balance Sheets - Collateral Pledged	14,129	11,750
Securities sold under agreements to repurchase - Net Amount (Collateral over liability balance required to be pledged)	277	609
Total - Gross Amounts Recognized in the Consolidated Balance Sheets	17,401	15,084
Total - Gross Amounts Offset in the Consolidated Balance Sheets
Total - Net Amounts of Assets Presented in the Consolidated Balance Sheets	17,401	15,084
Total - Gross Amounts Not Offset in the Consolidated Balance Sheets - Financial Instruments	17,401	15,084
Total - Gross Amounts Not Offset in the Consolidated Balance Sheets - Collateral Pledged	17,943	15,944
Total - Net Amount (Collateral over liability balance required to be pledged)	$ 542	$ 860

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Stock Options and Restricted Stock - Additional Information (Detail) (USD $)	3 Months Ended		6 Months Ended		12 Months Ended	42 Months Ended	3 Months Ended				6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013	Dec. 31, 2013	Jun. 30, 2014	Jun. 30, 2014 10b5 Plan	Mar. 31, 2014 10b5 Plan	Jun. 30, 2014 Restricted Stock	Jun. 30, 2013 Restricted Stock	Jun. 30, 2014 Restricted Stock	Jun. 30, 2013 Restricted Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share based compensation, options granted						0
Stock based compensation expense	$ 2,000	$ 3,000	$ 6,000	$ 12,000
Options outstanding	324,696		324,696		434,740	324,696	88,344
Options exercised			110,044	0	282,031		21,700	21,700
Total intrinsic value of options exercised			894,000
Stock based compensation expense									$ 477,000	$ 414,000	$ 881,000	$ 463,000

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Effect of Derivative Instruments on Consolidated Statements of Income (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Derivatives not Designated as Hedging Instruments
Derivative [Line Items]
Net (decrease) increase in other non-interest income	$ (36)	$ 86	$ (43)	$ 61
Derivatives not Designated as Hedging Instruments | Loans
Derivative [Line Items]
Increase in fair value of interest rate swap contracts	32	155	93	217
Payment on interest rate swap contracts on loans	(68)	(69)	(136)	(156)
Net (decrease) increase in other non-interest income	(36)	86	(43)	61
Derivatives not Designated as Hedging Instruments | Subordinated debentures
Derivative [Line Items]
Increase in fair value of interest rate swap contracts				70
Payment on interest rate swap contracts on loans				(70)
Net (decrease) increase in other non-interest income
Derivatives Designated as Hedging Instruments | Loans
Derivative [Line Items]
Increase in fair value of interest rate swap contracts	118	851	301	1,196
Increase (decrease) in fair value of hedged loans	165	(521)	238	(590)
Payment on interest rate swap contracts on loans	(317)	(331)	(633)	(633)
Net (decrease) increase in other non-interest income	$ (34)	$ (1)	$ (94)	$ (27)

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Fair Value of Assets and Liabilities (Tables)

6 Months Ended

Jun. 30, 2014

Fair Value Disclosures [Abstract]

Financial Assets and Financial Liabilities Measured at Fair Value on Recurring Basis

The following table summarizes the financial assets and financial liabilities measured at fair value on a recurring basis as of the dates indicated, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value (dollars in thousands):

	Fair Value		(Level 1)		(Level 2)		(Level 3)
Financial Assets – June 30, 2014
Investment securities available-for-sale	$	102,143	$	—	$	102,143	$	—
Financial Liabilities – June 30, 2014
Interest Rate Swap Contracts	$	3,549	$	—	$	3,549	$	—
Financial Assets – December 31, 2013
Investment securities available-for-sale	$	106,488	$	—	$	106,488	$	—
Financial Liabilities – December 31, 2013
Interest Rate Swap Contracts	$	3,943	$	—	$	3,943	$	—

Roll-Forward of All Assets and Liabilities and Additional Information about Financial Assets Measured at Fair Value

The following table presents a roll forward of all assets and liabilities and additional information about the financial assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the date and period indicated (dollars in thousands):

Financial Assets – Measured at Fair Value on a Recurring Basis using Unobservable Inputs	Balance at January 1		Included in Earnings			Included in Other Comprehensive Income (Loss)		Purchases, Issuances, Sales, Settlements			Transfers into (out of) Level 3		Balance at June 30
Period ended June 30, 2013
Private Issue CMO Securities	$	2,910	$	(20	)	$	—	$	(2,890	)	$	—	$	—
Total	$	2,910	$	(20	)	$	—	$	(2,890	)	$	—	$	—

Balances of Assets and Liabilities Measured at Fair Value on Non-Recurring Basis

The following table presents the balances of assets and liabilities measured at fair value on a non-recurring basis by caption and by level within the fair value hierarchy as of the dates indicated (dollars in thousands):

	Recorded Investment Carrying Value		(Level 1)		(Level 2)		(Level 3)
Financial Assets – June 30, 2014
Other real estate owned, net	$	219	$	—	$	—	$	219
		219		—		—		219
Financial Assets – December 31, 2013
Collateral dependent impaired loans with specific valuation allowance and/or partial charge-offs (non-purchased credit impaired loans)	$	264	$	—	$	—	$	264
Total	$	264	$	—	$	—	$	264

Significant Unobservable Inputs Used in Fair Value Measurements for Level 3 Assets and Liabilities Measured at Fair Value on Recurring or Non-Recurring Basis

The following table presents the significant unobservable inputs used in the fair value measurements for Level 3 assets and liabilities measured at fair value on a recurring or non-recurring basis as of the dates indicated (dollars in thousands):

	Fair Value		Valuation Methodology	Valuation Model and/or Factors	Unobservable Input Values
Financial Assets – June 30, 2014
Other real estate, net	$	219	Commercial real estate appraisal	Sales approach (3)
				Estimated selling costs		8	%
Financial Assets – December 31, 2013
Collateral dependent impaired loans with specific valuation allowance and/or partial charge-off (1)	$	45	Credit loss estimate of aged accounts receivable collateral	Credit loss factors on aging of accounts receivable collateral		80	%
	$	219	Commercial real estate appraisal	Sales approach (2)
				Estimated selling costs		8	%

(1) The Company has recorded total charge-offs of $605,000 on the principal balance on two of the loans included in the balance in the above table. These charge-offs were recorded in 2013.

(2) For the one commercial real estate loan included in the above table at December 31, 2013, the Company established the fair value of the loan based on a recent commercial real estate appraisal. The Company selected the “sales approach” for valuing the collateral.

(3) For the one commercial real estate property included in other real estate owned at June 30, 2014 as reflected in the above table, the Company established the fair value of this property based on a recent commercial real estate appraisal. The Company selected the “sales approach” for valuing the collateral.

Level in Fair Value Hierarchy for Financial Instruments Estimated Fair Values

The table below presents the carrying amounts and fair values of financial instruments based on their fair value hierarchy indicated (dollars in thousands):

			Fair Value
	Recorded Investment Carrying Value		(Level 1)		(Level 2)		(Level 3)
June 30, 2014
Financial Assets
Investment securities available-for-sale	$	102,143	$	—	$	102,143	$	—
Loans, net		968,606		—		—		972,960
Financial Liabilities
Certificates of deposit		57,732		—		57,775		—
Securities sold under agreements to repurchase		13,852		—		13,852		—
Subordinated debentures		9,459		—		12,372		—
Interest rate swap contracts		3,549		—		3,549		—
December 31, 2013
Financial Assets
Investment securities available-for-sale	$	106,488	$	—	$	106,488	$	—
Loans, net		922,591		—		—		926,500
Financial Liabilities
Certificates of deposit		63,581		—		63,680		0
Securities sold under agreements to repurchase		11,141		—		11,141		—
Subordinated debentures		9,379		—		12,372		—
Interest rate swap contracts		3,943		—		3,943		—

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Additional Information on Impaired Loans (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Receivables [Abstract]
Interest foregone on impaired loans	$ 103	$ 141	$ 274	$ 230
Cash collections applied to reduce principal balance	2,763	110	2,871	152
Interest income recognized on cash collections	$ 34		$ 34

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Other Comprehensive Income (Loss)

6 Months Ended

Jun. 30, 2014

Text Block [Abstract]

Other Comprehensive Income (Loss)

Note 13 - Other Comprehensive Income (Loss)

The following table presents the changes in accumulated other comprehensive income (loss) by component for the periods indicated (dollars in thousands):

	Before Tax			Tax Effect			Net of Tax
Three Months Ended – June 30, 2014
Net unrealized gains (losses) on investment securities:
Beginning balance	$	(80	)	$	(33	)	$	(47	)
Net unrealized gains arising during the period		411			169			242
Reclassification adjustment for gains realized in net income		0			0			0
Net other comprehensive income		411			169			242
Ending balance	$	331		$	136		$	195
	Before Tax			Tax Effect			Net of Tax
Three Months Ended – June 30, 2013
Net unrealized gains on investment securities:
Beginning balance	$	2,243		$	923		$	1,320
Non-credit portion of other-than-temporary impairments arising during the period		—			—			—
Net unrealized losses arising during the period		(1,247	)		(513	)		(734	)
Net other comprehensive loss		(1,247	)		(513	)		(734	)
Ending balance	$	996		$	410		$	586
	Before Tax			Tax Effect			Net of Tax
Six Months Ended – June 30, 2014
Net unrealized gains (losses) on investment securities:
Beginning balance	$	(348	)	$	(143	)	$	(205	)
Net unrealized gains arising during the period		679			279			400
Reclassification adjustment for gains realized in net income		0			0			0
Net other comprehensive income		679			279			400
Ending balance	$	331		$	136		$	195
	Before Tax			Tax Effect			Net of Tax
Six Months Ended – June 30, 2013
Net unrealized gains on investment securities:
Beginning balance	$	2,369		$	975		$	1,394
Non-credit portion of other-than-temporary impairments arising during the period		(32	)		(13	)		(19	)
Net unrealized losses arising during the period		(1,336	)		(550	)		(786	)
Other comprehensive loss before reclassifications		(1,368	)		(563	)		(805	)
Reclassification adjustment for gains realized in net income		(5	)		(2	)		(3	)
Net other comprehensive loss		(1,373	)		(565	)		(808	)
Ending balance	$	996		$	410		$	586

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Computation of Earnings per Common Share (Tables)

6 Months Ended

Jun. 30, 2014

Earnings Per Share [Abstract]

Basic and Diluted Earnings Per Common Share Computations

The following table shows weighted average basic shares outstanding, potential dilutive shares related to stock options, unvested restricted stock, and weighted average diluted shares for the periods indicated (dollars in thousands, except share and per share data):

	Three Months Ended June 30,				Six Months Ended June 30,
	2014		2013		2014		2013
Net Income	$	2,386	$	2,321	$	5,052	$	4,476
Weighted average basic common shares outstanding		10,952,087		10,501,504		10,913,227		10,493,846
Dilutive effect of potential common share issuances from stock options and restricted stock		206,479		281,774		213,313		194,859
Weighted average diluted common shares outstanding		11,158,566		10,783,278		11,126,540		10,688,705
Income per common share
Basic	$	0.22	$	0.22	$	0.46	$	0.43
Diluted	$	0.21	$	0.22	$	0.45	$	0.42
Anti-dilutive shares not included in the calculation of diluted earnings per share		82,154		203,176		83,437		209,655

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Aging Analysis of Recorded Investment (Detail) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Loans Receivable [Line Items]
31-60 Days Past Due	$ 971	$ 0
61-90 Days Past Due	0	241
Greater than 90 Days Past Due and Accruing	0	0
Total Past Due and Accruing	971	241
Total Non Accrual	7,028	9,556
Current	971,891	923,397
Total Loans	979,890	933,194
Commercial and Industrial
Loans Receivable [Line Items]
31-60 Days Past Due	340	0
61-90 Days Past Due	0	241
Greater than 90 Days Past Due and Accruing	0	0
Total Past Due and Accruing	340	241
Total Non Accrual	3,136	3,682
Current	300,394	295,550
Total Loans	303,870	299,473
Construction, Land Development and Other Land
Loans Receivable [Line Items]
Total Past Due and Accruing	0	0
Total Non Accrual	0	0
Current	61,165	47,074
Total Loans	61,165	47,074
Commercial and Other Real Estate
Loans Receivable [Line Items]
31-60 Days Past Due	631
61-90 Days Past Due	0
Greater than 90 Days Past Due and Accruing	0
Total Past Due and Accruing	631
Total Non Accrual	3,892	5,874
Current	602,352	563,040
Total Loans	606,875	568,914
Other
Loans Receivable [Line Items]
Total Past Due and Accruing	0	0
Total Non Accrual	0	0
Current	7,980	17,733
Total Loans	$ 7,980	$ 17,733

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Maturities Schedule of Securities (Detail) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2014	Dec. 31, 2013
Investments Debt And Equity Securities [Abstract]
Due through one year, Amortized Cost	$ 18,136
Due after one year through five years, Amortized Cost	39,808
Due after five years through ten years, Amortized Cost	26,781
Due after ten years, Amortized Cost	17,087
Available-for-sale Securities, Amortized Cost	101,812	106,836
Due through one year, Fair Value	18,208
Due after one year through five years, Fair Value	40,151
Due after five years through ten years, Fair Value	26,522
Due after ten years, Fair Value	17,262
Fair Market Value	$ 102,143	$ 106,488
Due through one year, Weighted Average Yield	1.52%
Due after one year through five years, Weighted Average Yield	1.88%
Due after five years through ten years, Weighted Average Yield	2.27%
Due after ten years, Weighted Average Yield	2.71%
Total, Weighted Average Yield	2.06%

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Consolidated Statements of Income (Unaudited) (Parenthetical) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Income Statement [Abstract]
Stock based compensation expense	$ 479	$ 217	$ 887	$ 475

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Recent Accounting Pronouncements

6 Months Ended

Jun. 30, 2014

Accounting Changes And Error Corrections [Abstract]

Recent Accounting Pronouncements

Note 2 - Recent Accounting Pronouncements

In January 2014, the FASB issued ASU No. 2014-01, Investments – Equity Method and Joint Ventures (Topic 323): Accounting for Investments in Qualified Affordable Housing Projects (a consensus of the FASB Emerging Issues Task Force). ASU 2014-01 modifies the conditions that a reporting entity must meet to be eligible to use a method other than the equity or cost methods to account for qualified affordable housing project investments. If the modified conditions are met, the amendments permit an entity to amortize the initial cost of the investment in proportion to the amount of the tax credits and other tax benefits received and recognize the net investment performance in the income statement as a component of income tax expense (benefit). Additionally, ASU 2014-01 introduces new recurring disclosures about all investments in qualified affordable housing projects irrespective of the method used to account for the investments. Prior to these amendments, a reporting entity that invests in qualified affordable housing projects may elect to account for that investment using the level yield method if specific conditions are met. For investments that are not accounted for using the effective yield method, the investment must be accounted for under either the equity method or the cost method. Because the conditions which allow an entity to utilize the effective yield method were overly restrictive, this prevented many investors from using the effective yield method. Under the effective yield method, all tax credits, tax benefits, and the write-down of the investments are accounted for net of taxes as a component of income tax expense (benefit). This method more fairly represents the economics of the transaction than accounting under the equity method or cost method. The amendments in ASU 2014-01 are expected to enable more entities to qualify for the proportional amortization method to account for affordable housing project investments than the number of entities that currently qualify for the effective yield method. The amendments are effective for public business entities for annual periods and interim reporting periods within those annual periods, beginning after December 15, 2014. For all entities other than public business entities, the amendments are effective for annual periods beginning after December 15, 2014, and interim periods within annual reporting periods beginning after December 15, 2015. Early adoption is permitted. The Company early adopted ASU 2014-01 in the fourth quarter of 2013. See Note 11 – Investments in Qualified Affordable Housing Projects, in the Company’s 2013 Form 10-K, for the Company’s disclosures on its investments in LIHTC projects required under ASU 2014-01.

In January 2014, the FASB issued ASU No. 2014-04, Receivables – Troubled Debt Restructurings by Creditors (Subtopic 310-40): Reclassification of Residential Real Estate Collateralized Consumer Mortgage Loans upon foreclosure (a consensus of the FASB Emerging Issues Task Force). The objective of this Update is to reduce diversity in practice by clarifying when an in substance repossession or foreclosure occurs, that is, when a creditor should be considered to have received physical possession of residential real estate property collateralizing a consumer mortgage loan such that the loan receivable should be derecognized and the real estate property recognized. ASU 2014-04 clarifies that an in substance repossession or foreclosure occurs, and a creditor is considered to have received physical possession of residential real estate property collateralizing a consumer mortgage loan, upon either (1) the creditor obtaining legal title to the residential real estate property upon completion of a foreclosure or (2) the borrower conveying all interest in the residential real estate property to the creditor to satisfy that loan through completion of a deed in lieu of foreclosure or through a similar legal agreement. Additionally, the amendments require interim and annual disclosure of both (1) the amount of foreclosed residential real estate property held by the creditor and (2) the recorded investment in consumer mortgage loans collateralized by residential real estate property that are in the process of foreclosure according to local requirements of the applicable jurisdiction. These amendments are effective for public business entities for annual periods, and interim periods within those annual periods, beginning after December 15, 2014. For entities other than public business entities, the amendments are effective for annual periods beginning after December 15, 2014, and interim periods within annual periods beginning after December 15, 2015. An entity can elect to adopt these amendments using either a modified retrospective transition method or a prospective transition method. Early adoption is permitted. We do not expect the adoption of this ASU to have a material impact on the Company’s financial position or results of operations.

In June 2014, the FASB issued ASU No. 2014-11, Transfers and Servicing (Topic 860): Repurchase-to-Maturity Transactions, Repurchase Financings, and Disclosures, to address investor concerns about the distinction in generally accepted accounting principles between repurchase agreements that settle at the same time as the maturity of the transferred financial asset and those that settle any time before maturity. ASU 2014-11 aligns the accounting for repurchase-to-maturity transactions and repurchase agreements executed as a repurchase financing with the accounting for other typical repurchase agreements. Going forward, these transactions all will be accounted for as secured borrowings. The new guidance eliminates sale accounting for repurchase-to-maturity transactions and supersedes the guidance under which a transfer of a financial asset and a contemporaneous repurchase financing could be accounted for on a combined basis as a forward agreement, which has resulted in outcomes referred to as off-balance-sheet accounting. ASU 2014-11 also requires a new disclosure for transactions economically similar to repurchase agreements in which the transferor retains substantially all of the exposure to the economic return on the transferred financial assets throughout the term of the transaction. Further, the ASU requires expanded disclosures about the nature of collateral pledged in repurchase agreements and similar transactions accounted for as secured borrowings. The accounting changes are effective for public companies for the first interim or annual period beginning after December 15, 2014. In addition, for public companies, the disclosure for certain transactions accounted for as a sale is effective for the first interim or annual period beginning after December 15, 2014, and the disclosure for transactions accounted for as secured borrowings is required to be presented for annual periods beginning after December 15, 2014, and interim periods beginning after March 15, 2014. For all other entities, all changes are effective for annual periods beginning after December 14, 2014, and interim periods beginning after December 15, 2015. Earlier application for a public company is prohibited, but all other companies and organizations may elect to apply the requirements for interim periods beginning after December 15, 2014. We do not expect the adoption of this ASU to have an impact on the Company’s financial position or results of operations.

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Borrowings and Subordinated Debentures - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	6 Months Ended
	Jun. 30, 2014	Mar. 31, 2014	Dec. 31, 2013
Borrowings [Line Items]
Securities with a fair market value	$ 14.1		$ 11.8
Credit facility, percentage of Bank's total assets		25.00%
Credit facility, maximum borrowing capacity		345.4
Credit facility, loan collateral pledge	582
Credit facility borrowings collateral amount	249.9
Investment securities pledged with FHLB	0
Outstanding advances (borrowings) with FHLB	0		0
Issuance maturity period from its date of issue	30 years
Trust preferred securities tier one capital	25.00%
Subordinate debentures, interest payment terms	The Company has the right, assuming no default has occurred, to defer payments of interest on the subordinated debentures at any time for a period not to exceed 20 consecutive quarters.
Trust I
Borrowings [Line Items]
Prepayment penalties	0
Trust II
Borrowings [Line Items]
Prepayment penalties	0
Trust III
Borrowings [Line Items]
Prepayment penalties	0
PC Bancorp
Borrowings [Line Items]
Subordinated debentures	$ 12.4
Minimum
Borrowings [Line Items]
Repurchase maturity date	1 day
Maximum
Borrowings [Line Items]
Repurchase maturity date	180 days

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Common Stock - Additional Information (Detail) (USD $)	6 Months Ended		12 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Dec. 31, 2013
Class of Stock [Line Items]
Outstanding common stock increased	140,871
Common stock, shares outstanding	11,222,235		11,081,364
Shares issued during period upon exercise of stock options	110,044	0	282,031
Shares issued during period upon exercise of stock options for total value	$ 1,085,000		$ 2,790,000
Shares of restricted stock issued to employees	45,900
Share based compensation, unvested restricted shares cancelled			28,791
Shares repurchased of restricted stock value	242,000		422,000
Share based compensation, restricted shares issued	30,827		69,450
Share based compensation, unvested restricted shares cancelled value			422,000
Restricted Stock
Class of Stock [Line Items]
Shares of restricted stock issued to employees	45,900		81,050
Shares repurchased of restricted stock	14,573
Shares repurchased of restricted stock value	$ 242,000
Unvested Restricted Stock
Class of Stock [Line Items]
Share based compensation, unvested restricted shares cancelled	500		11,600

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Investment Securities (Tables)

6 Months Ended

Jun. 30, 2014

Investments Debt And Equity Securities [Abstract]

Amortized Cost and Estimated Fair Values of Investment Securities

The following tables present the amortized cost and estimated fair values of investment securities by major category as of the dates indicated. There were no impaired securities at June 30, 2014 or December 31, 2013, and as such there were no other than temporary impairment losses in the securities portfolio for the periods indicated in the tables below (dollars in thousands):

			Gross Unrealized
June 30, 2014 – Available-for-sale:	Amortized Cost		Gains		Losses		Fair Market Value
U.S. Govt Agency and Sponsored Agency - Note Securities	$	3,084	$	7	$	—	$	3,091
U.S. Govt Agency - SBA Securities		52,487		742		448		52,781
U.S. Govt Agency - GNMA Mortgage-Backed Securities		24,938		268		538		24,668
U.S. Govt Sponsored Agency - CMO & Mortgage-Backed Securities		14,178		406		234		14,350
Corporate Securities		4,056		108		—		4,164
Municipal Securities		3,069		20		—		3,089
Total investment securities	$	101,812	$	1,551	$	1,220	$	102,143

			Gross Unrealized
December 31, 2013 – Available-for-sale:	Amortized Cost		Gains		Losses		Fair Market Value
U.S. Govt Agency and Sponsored Agency - Note Securities	$	4,153	$	1	$	2	$	4,152
U.S. Govt Agency - SBA Securities		50,521		875		491		50,905
U.S. Govt Agency - GNMA Mortgage-Backed Securities		28,107		180		909		27,378
U.S. Govt Sponsored Agency - CMO & Mortgage-Backed Securities		15,348		345		479		15,214
Corporate Securities		5,086		125		—		5,211
Municipal Securities		3,621		9		2		3,628
Total investment securities	$	106,836	$	1,535	$	1,883	$	106,488

Investment Securities with Unrealized Losses that are Considered to be Temporarily-impaired

The following tables present investment securities with unrealized losses that are considered to be temporarily-impaired, summarized and classified according to the duration of the loss period as of the dates indicated (dollars in thousands).

	< 12 Continuous Months				> 12 Continuous Months				Total
June 30, 2014	Fair Value		Net Unrealized Loss		Fair Value		Net Unrealized Loss		Fair Value		Net Unrealized Loss
Temporarily-impaired available-for-sale investment securities:
U.S. Govt. - Agency and Sponsored Agency Note Securities	$	—	$	—	$	—	$	—	$	—	$	—
U.S. Govt. Agency SBA Securities		8,793		127		8,556		322		17,349		449
U.S. Govt. Agency – GNMA Mortgage-Backed Securities		7,905		71		7,373		337		15,278		408
U.S. Govt. Sponsored Agency – CMO & Mortgage-Backed Securities		—		—		9,642		363		9,642		363
Corporate Securities		—		—		—		—		—		—
Municipal Securities		—		—		—		—		—		—
Total temporarily-impaired available-for-sale investment securities	$	16,698	$	198	$	25,571	$	1,022	$	42,269	$	1,220

	< 12 Continuous Months				> 12 Continuous Months				Total
December 31, 2013	Fair Value		Net Unrealized Loss		Fair Value		Net Unrealized Loss		Fair Value		Net Unrealized Loss
Temporarily-impaired available-for-sale investment securities:
U.S. Govt. - Agency and Sponsored Agency Note Securities	$	1,041	$	2	$	—	$	—	$	1,041	$	2
U.S. Govt. Agency SBA Securities		11,686		491		—		—		11,686		491
U.S. Govt. Agency – GNMA Mortgage-Backed Securities		15,693		721		1,864		188		17,557		909
U.S. Govt. Sponsored Agency – CMO & Mortgage-Backed Securities		7,650		479		—		—		7,650		479
Corporate Securities		—		—		—		—		—		—
Municipal Securities		—		—		1,029		2		1,029		2
Total temporarily-impaired available-for-sale investment securities	$	36,070	$	1,693	$	2,893	$	190	$	38,963	$	1,883

Maturities Schedule of Securities

	June 30, 2014
Maturities Schedule of Securities	Amortized Cost		Fair Value		Weighted Average Yield
Due through one year	$	18,136	$	18,208		1.52	%
Due after one year through five years		39,808		40,151		1.88	%
Due after five years through ten years		26,781		26,522		2.27	%
Due after ten years		17,087		17,262		2.71	%
Total	$	101,812	$	102,143		2.06	%

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Roll-Forward of All Assets and Liabilities and Additional Information about Financial Assets Measured at Fair Value (Detail) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2014
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value Measurement With Unobservable Inputs Reconciliation Recurring Basis Asset Value	$ 2,910
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Gain (Loss) Included in Earnings	(20)
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Gain (Loss) Included in Other Comprehensive Income (Loss)	0
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Purchases, Issuances, Settlements	(2,890)
Fair Value Measurement with Unobservable Inputs Reconciliation Recurring Basis Asset Transfers (out of) or into Level 3	0
Fair Value Measurement With Unobservable Inputs Reconciliation Recurring Basis Asset Value	0
Private Issue CMO Securities
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value Measurement With Unobservable Inputs Reconciliation Recurring Basis Asset Value	2,910
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Gain (Loss) Included in Earnings	(20)
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Gain (Loss) Included in Other Comprehensive Income (Loss)	0
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Purchases, Issuances, Settlements	(2,890)
Fair Value Measurement with Unobservable Inputs Reconciliation Recurring Basis Asset Transfers (out of) or into Level 3	0
Fair Value Measurement With Unobservable Inputs Reconciliation Recurring Basis Asset Value	$ 0

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Investment Securities - Additional Information (Detail) (USD $)	6 Months Ended		12 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Dec. 31, 2013
Investments Debt And Equity Securities [Abstract]
Impaired securities	$ 0		$ 0
Other than temporary impairment gains or losses	0		0
Market value of securities pledged to secure securities sold under agreements to repurchase	14,100,000		11,800,000
Market value of securities pledged to secure a certificate of deposit	11,300,000		11,000,000
Certificate of deposit	10,000,000		10,000,000
Market value of securities pledged to secure standby letters of credit	30,600,000		29,300,000
Outstanding standby letters	21,300,000		21,900,000
Market value of securities pledged to secure local agency deposits	947,000		275,000
Gain (losses) on sale of securities, net		5,000	47,000
Net proceeds from sale of available-for-sale securities		2,900,000	7,000,000
Investment securities, maturity year	2048
Company's investment in the common stock of the FHLB	$ 4,200,000		$ 4,200,000

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Common Stock

6 Months Ended

Jun. 30, 2014

Text Block [Abstract]

Common Stock

Note 12 – Common Stock

During the first and second quarters of 2014, the Company’s outstanding common stock increased by 140,871 shares to 11,222,235 at June 30, 2014. The components of this increase are as follows: The Company issued 110,044 shares of stock from the exercise of employee stock options for a total value of $1.1 million. The Company issued 45,900 shares of restricted stock to the Company’s employees, cancelled 500 shares of unvested restricted stock related to employee turnover and repurchased 14,573 shares of restricted stock that had a value of $242,000 related to employees electing to pay their tax obligation via the repurchase of the stock by the Company. The net issuance of restricted stock for 2014 was 30,827 shares. See Note 11 – Stock Options and Restricted Stock for additional detail related to the issuances of these shares.

During 2013, the Company issued 282,031 shares of stock from the exercise of employee stock options for a total value of $2.8 million. The Company issued 81,050 shares of restricted stock to the Company’s directors and employees, cancelled 11,600 shares of unvested restricted stock related to employee turnover and cancelled 28,791 shares of restricted stock that had a value of $422,000, when employees elected to pay their tax obligation via the repurchase of the stock by the Company. The net issuance of restricted stock for 2013 was 69,450 shares.