Regulatory Matters

3 Months Ended

Mar. 31, 2013

Regulatory Matters

Regulatory Matters

Note 13.  Regulatory Matters

Memorandums of Understanding

Since April 2012, the Bank has operated under a Memorandum of Understanding (“MOU”) with the FDIC and California Department of Financial Institutions (“DFI”), which replaced the Consent Order entered into in 2010. In the MOU, the Company committed to, among other things, continue to make progress in improving credit quality and processes as well as to continue to comply with the 10% Leverage Ratio as originally established by the Order. See Note 14. Subsequent Events of these Condensed Consolidated Financial Statements for an updated discussion of the termination of the MOU.

Since July 2012, the Company has operated under an MOU with the FRB, which replaced the Written Agreement entered into in 2010.  In the MOU the Company committed among other things to continue to seek FRB approval prior to: paying any dividends on its common and preferred stock; paying interest, principal or other sums on subordinated debt or trust preferred securities; or incurring, increasing, or guaranteeing any debt. While the Company believes it has complied with all elements of the MOU, such compliance will ultimately be determined by the FRB as part of its next regularly scheduled review.