Mail Stop 4561
August 3, 2005
By U.S. Mail and Facsimile to (818) 591-3838
C. G. Kum
President and Chief Executive Officer
FCB Bancorp
1100 Paseo Camarillo
Camarillo, California 93010
Re: FCB Bancorp
Form S-4 filed July 6, 2005
File No. 333-126401
Dear Mr. Kum:
We have reviewed your filing and have the following
comments.
Where indicated, we think you should revise your document in
response
to these comments. If you disagree, we will consider your
explanation as to why our comment is inapplicable or a revision is
unnecessary. Please be as detailed as necessary in your
explanation.
In some of our comments, we may ask you to provide us with
information so we may better understand your disclosure. After
reviewing this information, we may raise additional comments.
The purpose of our review process is to assist you in your
compliance with the applicable disclosure requirements and to
enhance
the overall disclosure in your filing. We look forward to working
with you in these respects. We welcome any questions you may have
about our comments or on any other aspect of our review. Feel
free
to call us at the telephone numbers listed at the end of this
letter.
General
1. We note the use of all-capital text for various legends and
text,
for example on page 5. All-capital text, rather than emphasizing
text, often makes it more difficult to read. In order to
emphasize
text, use bold text or italics. Please revise.
2. Please revise throughout to avoid the use of legalistic
definitions. As examples only we note the terms "meeting,"
"bank,"
"merger agreement," and "SCCB."
3. Please revise throughout to avoid using legalisms. As examples
only we note your use of thereof, thereafter, and/or, pursuant to,
therefore, herein, hereto, thereunder, and therein.
4. Please revise to avoid the generic terms "Bank" and "Holding
Company" for First California Bank and FCB Bancorp.
5. Please note the updating requirements of Rule 3-12 of
Regulation
S-X.
6. Please file updated consents for all audited financial
statements
included in your next filing.
Introduction
7. Please clarify the timing of the acquisition of South Coast,
whether the acquisition is conditional on the reorganization, and
whether shareholders of FCB Bancorp will vote on the acquisition.
Please revise throughout the document as necessary.
Adjournments, page 6
8. Revise the last paragraph to state that you will not use
discretionary authority granted by proxies voted against the
reorganization to adjourn the meeting to solicit additional votes.
Cautionary Statement Regarding Forward-Looking Statements, page 12
9. Please delete all reference to sections 27A of the Securities
Act
and 21E of the Exchange Act. They are inapplicable in this
context,
because FCB Bancorp is not currently a reporting company. See
section 27(a)(1) of the 1933 Securities Act.
Proposal 1 - Bank Holding Company Reorganization, page 15
10. Please delete the third paragraph or revise it to avoid the
implication that the discussion of the merger agreement cannot be
fully relied upon.
Directors, page 20
11. Please disclose any family relationships between James
Birchfield
and John Birchfield. Refer to Item 401(c) of Regulation S-B.
Management`s Discussion & Analysis of Financial Condition &
Results
of Operations - First California Bancorp
Critical Accounting Policies, page 31
12. Please revise here and in the notes to your consolidated
financials the critical accounting estimates section to include a
detailed description of your securitization valuation policies and
assumptions. Refer to SEC Interpretive Release No. 33-8350.
Financial Position
Loans, page 39
13. Please revise to include a detailed description of your
program
that purchases customer invoices on a recourse basis, including
but
not limited to the size of the portfolio (including dollar value
and
number of accounts), the allowance practices for the portfolio,
the
provision assumptions, and the income recognition policies.
Clearly
disclose where you classify these loans on your loan distribution
table which appears on page 40.
14. Revise to provide a fuller discussion of the characteristics
and
criteria for each loan type in your portfolio, and the risks
attaching to each type of loan.
Nonperforming Loans table, page 43
15. Please disclose that you had no restructured loans for the
periods presented or revise your table to quantify as necessary.
We
note Item III.C of Guide III.
Deposits, page 45
16. We note that as of March 31, 2005, 100% of your certificates
of
deposits with balances greater than $100,000 mature with in the
next
12 months. Please revise to include a discussion of your strategy
to
fund, retain and/or replace these deposit amounts. Disclose the
estimated impact on your liquidity.
Interest Rate Risk, page 48
17. We note your discussion regarding Board-approved policies and
procedures for interest rate risk. Please tell us whether the
significant asset-sensitive gap percentages which exceeded 25% for
both 0-3 month measurement periods presented are within the range
of
approved policies and procedures. Revise the discussion if they
are
not and disclose corrective action measures undertaken by
management,
as appropriate. Provide a similar analysis for the 4-12 month
measurement periods, which we note is significantly liability
sensitive.
Dividends, page 62
18. Please revise to clarify the company`s dividend policy for
the
immediate future. If the company has not yet determined its
policy,
please state this clearly. Please also include a clear statement
in
this regard in the Introduction section.
Termination Fee, page 70
19. If possible, please summarize the various sections of the
acquisition agreement referred to in this paragraph.
Management`s Discussion and Analysis of Financial Condition and
Results of Operations - South Coast Bancorp.
Critical Accounting Polices, page 72
20. Please revise here and in the notes to your consolidated
financial statements the critical accounting estimates section to
include a detailed description of your securitization valuation
policies and assumptions and income tax provision assumptions.
Refer
to SEC Interpretive Release No. 33-8350.
Provision (Credit) for Loan Losses, page 75
21. Please revise to include a detailed description of the process
you use for determining the credits for loan losses which have
been
recorded annually since 2002. In your revision, please discuss
this
process in relation to your asset quality and to your significant
loan concentrations in commercial real estate loans.
Loans, page 77
22. Please include a detailed explanation of your underwriting
standards for all types of commercial real estate loans secured by
commercial, retail and industrial properties. Given your
significant
concentration of loans in this area, please fully explain how you
evaluate creditworthiness of borrowers especially for borrowers
without a significant credit history and/or where collateral is
difficult to evaluate or value.
Selected Historical Financial Data, page 84
23. Please consider including the ratio of allowance for loan
losses
to non-performing loans in the tables.
Unaudited Pro Forma Combined Consolidated Financial Information
Pro Forma Combined Consolidated Balance Sheet, page 88
24. We note the total cash proceeds received by FCB Bancorp, as
described in note 2 on page 91, is $35.6 million while the actual
adjustment to cash and due from banks on the face of the pro forma
balance sheet is $30.6 million. Please revise footnote 2 to
reflect
that the $5.0 million cash dividend from First California Bank
will
not be included as an adjustment to cash and due from bank or
consolidated capital.
Pro Forma Income Statements, pages 88 and 89
25. Please revise to include historical earnings per share and
number
of shares used for these calculations for South Coast Bancorp,
Inc.
Employment Agreements, page 96
26. Please revise to disclose the triggering events in these
agreements, as well as all material details.
First California Bank December 31, 2004, 2003 and 2002 Financial
Statements
Note C, page F-12
27. We note gross unrealized losses on your available for sale
securities approximately doubled from $713,000 at December 31,
2004
to $1,406,000 at March 31, 2005. Please provide us your analysis
supporting your belief that an other than temporary impairment did
not exist at either balance sheet dates. We note the guidance in
paragraph 16 of SFAS No. 115 and SAB Topic 5:M. In your response,
please ensure that you provide sufficient details for both periods
including name of security, purchase date and price, current
amortized cost, respective unrealized losses and other information
you consider in your periodic analysis.
Income Statements, page F-21
28. We note you had net servicing fees of $42 thousand as of
December
31, 2004. Please provide us with descriptions of the types of
fees
represented and if these servicing fees fall with in the scope of
SFAS No. 140. We are unable to determine from your current
disclosures whether or not servicing assets have been recorded.
Please also revise filing disclosures and/or your accounting, if
necessary.
South Coast Bancorp, Inc. December 31, 2004 and 2003 Audited
Financial Statements
General
29. We note you provided audited financial statements for the two
years ended December 31, 2004. Please provide us your analysis of
the computational details in Article 1-02(w) of Regulation S-X and
how you concluded that audited financial statements for the three
years ended December 31, 2004 were not required, or revise the
financial statements accordingly. We note Item 17.B of the Form
S-4
form requirements and Articles 3-05 and 11 of Regulation S-X.
Report of Independent Certified Public Accountants, page F-60
30. Please revise the second paragraph of the audit report to
include
the language prescribed by the Public Company Accounting Oversight
Board (PCAOB). Please refer to Auditing and Related Professional
Practice Standards, Audition Standard No. 1.
Notes to Consolidated Financial Statements
Note 1 - Summary of Significant Accounting Policies
I. Stock Grants, page F-69
31. Please review paragraphs 45-48 of SFAS No. 123 to ensure that
you
are in compliance with the disclosure requirements. Tell us why
you
continue to believe your presentation is appropriate and/or revise
filing disclosures as necessary.
Note 2 - Investment Securities, page F-71
32. Please revise to include a statement specifically addressing
the
impact of other than temporary impairments on your available-for-
sale
securities. Please refer paragraph 6-19 of EITF Abstracts No. 03-
1.
* * *
Closing Comments
As appropriate, please amend your registration statement in
response to these comments. You may wish to provide us with
marked
copies of the amendment to expedite our review. Please furnish a
cover letter with your amendment that keys your responses to our
comments and provides any requested supplemental information.
Detailed cover letters greatly facilitate our review. Please
understand that we may have additional comments after reviewing
your
amendment and responses to our comments.
We direct your attention to Rules 460 and 461 regarding
requesting acceleration of a registration statement. Please allow
adequate time after the filing of any amendment for further review
before submitting a request for acceleration. Please provide this
request at least two business days in advance of the requested
effective date.
We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filings reviewed by the staff to
be
certain that they have provided all information investors require
for
an informed decision. Since the company and its management are in
possession of all facts relating to a company`s disclosure, they
are
responsible for the accuracy and adequacy of the disclosures they
have made.
Notwithstanding our comments, in the event the company
requests
acceleration of the effective date of the pending registration
statement, it should furnish a letter, at the time of such
request,
acknowledging that
* should the Commission or the staff, acting pursuant to delegated
authority, declare the filing effective, it does not foreclose the
Commission from taking any action with respect to the filing;
* the action of the Commission or the staff, acting pursuant to
delegated authority, in declaring the filing effective, does not
relieve the company from its full responsibility for the adequacy
and
accuracy of the disclosure in the filing; and
* the company may not assert this action as defense in any
proceeding
initiated by the Commission or any person under the federal
securities laws of the United States.
In addition, please be advised that the Division of
Enforcement
has access to all information you provide to the staff of the
Division of Corporation Finance in connection with our review of
your
filing or in response to our comments on your filing.
We will consider a written request for acceleration of the
effective date of the registration statement as a confirmation of
the
fact that those requesting acceleration are aware of their
respective
responsibilities under the Securities Act of 1933 and the
Securities
Exchange Act of 1934 as they relate to the proposed public
offering
of the securities specified in the above registration statement.
We
will act on the request and, pursuant to delegated authority,
grant
acceleration of the effective date.
You may contact Paula Smith, Staff Accountant, at (202) 551-
3696 or John Nolan, Accounting Branch Chief, at (202) 551-3492 if
you
have questions regarding accounting-related matters. Please
contact
Gregory Dundas at (202) 551-3436 or me at (202) 551-3418 with any
other questions.
Sincerely,
William Friar
Senior Financial Analyst
cc: Gary M. Horgan, Esq.
Young H. Park, Esq.
Horgan, Rosen, Beckham & Coren, L.L.P.
23975 Park Sorrento, Suite 200
Calabasas, California 91302
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FCB Bancorp
C.G. Kum
August 3, 2005
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