THIRD FORBEARANCE AGREEMENT

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Exhibit 10.1

THIS THIRD FORBEARANCE AGREEMENT (this “ Agreement ”), is made effective as of September 29, 2011, by and between: (i) NORTHERN CALIFORNIA BANCORP, INC., a California corporation (“ Borrower ); and (ii) BMO Harris Bank N.A., as successor to M&I Marshall & Ilsley Bank (“ Lender ”).

Factual Background

A. Lender made a loan to Borrower (the “ Loan ”), as evidenced by the following documents:

1. The Letter Agreement, dated April 1, 2008, executed by Borrower and Lender (the “ Original Letter Agreement ”), the Letter Agreement, dated June 29, 2009, executed by Borrower and Lender (the “ Second Letter Agreement ”), the Extension and Modification Agreement, dated December 28, 2009, executed by Borrower and Lender (the “ Extension Agreement ”), the Forbearance and Modification Agreement, dated June 30, 2010, executed by Borrower and Lender (the “ Forbearance Agreement ”), and the Forbearance and Fourth Modification Agreement, dated December 3, 2010, executed by Borrower and Lender (the “ Fourth Modification Agreement ”).

2. The Promissory Note, dated April 1, 2008, in the stated principal amount of $3,000,000.00, executed by Borrower, in favor of Lender, as amended by the Promissory Note, dated April 1, 2009, in the stated principal amount of $3,000,000.00, executed by Borrower, in favor of Lender (collectively, the “ Note ”).

B. The Loan is secured by 100% of the common stock issued by Monterey County Bank (the “ Bank ”), as described in the Commercial Pledge Agreement, dated April 1, 2008, executed by Borrower in favor of Lender (the “ Pledge Agreement ”).

C. As of the date of this Agreement, the current outstanding principal balance of the Loan is $2,700,000.00.

D. As used herein, the term “ Loan Documents ” means the Original Letter Agreement, the Second Letter Agreement, the Extension Agreement, the Forbearance Agreement, the Fourth Modification Agreement, the Note, the Pledge Agreement and each and every other document which evidences, guaranties, secures or modifies the Loan, as any or all of them may have been amended to date.

E. As of the date of this Agreement, the following defaults have occurred under the Loan Documents, including, without limitation, the following (collectively, the “ Existing Defaults ”):

1. For the quarter ending March 31, 2011, Bank failed to maintain at all times an ROAA which is not less than .75%, as required by Section 3(b)(i) of the Fourth Modification Agreement.

2. For the quarters ending December 31, 2010 and March 31, 2011, Bank failed to maintain at all times a ratio of Non-Performing Loans to Total Loans less than or equal to 3.00%, as required by Section 4(e) of the Fourth Modification Agreement.

3. For the quarters ending December 31, 2010 and March 31, 2011, Bank failed to maintain at all times a ratio of Non-Performing Assets to Tangible Capital plus Loan Loss Reserve of less than 130% for the fiscal period ending December 31, 2010 and less than 125% for the fiscal period ending March 31, 2011, as required by Section 4(g) of the Fourth Modification Agreement.

4. For the quarter ending March 31, 2011, Bank failed to maintain at all times a Tier 1 Leverage Ratio greater than 9%, as required by Section 4(f) of the Fourth Modification Agreement

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