SUBORDINATED DEBENTURES

At December 31, 2013, four wholly-owned subsidiary grantor trusts established by former Nara Bancorp had issued $28 million of pooled Trust Preferred Securities (“trust preferred securities”) and one wholly-owned subsidiary grantor trust established by former Center Financial had issued $18 million of trust preferred securities. Upon the acquisition of PIB, the Company assumed one grantor trust established by former PIB which issued $15 million of trust preferred securities, which the Company redeemed on June 17, 2013. Upon the acquisition of Foster, the Company assumed one grantor trust established by former Foster which issued $15 million of trust preferred securities. Trust preferred securities accrue and pay distributions periodically at specified annual rates as provided in the indentures. The trusts used the net proceeds from the offering to purchase a like amount of subordinated debentures (the “Debentures”) of BBCN Bancorp. The Debentures are the sole assets of the trusts. BBCN Bancorp’s obligations under the subordinated debentures and related documents, taken together, constitute a full and unconditional guarantee by BBCN Bancorp of the obligations of the trusts. The trust preferred securities are mandatorily redeemable upon the maturity of the Debentures, or upon earlier redemption as provided in the indentures. BBCN Bancorp has the right to redeem the Debentures in whole (but not in part) on or after specific dates, at a redemption price specified in the indentures plus any accrued but unpaid interest to the redemption date. BBCN Bancorp also has a right to defer consecutive payments of interest on the debentures for up to five years.

The following table is a summary of trust preferred securities and debentures at December 31, 2013:



Issuance Trust	Issuance Date	Trust Preferred Security Amount		Subordinated Debentures Amount		Rate Type	Initial Rate		Coupon Rate at December 31, 2013			Maturity Date
		(Dollars in thousands)
Nara Capital Trust III	6/5/2003	$	5,000	$	5,155	Variable	4.44	%	3.39	%		6/15/2033
Nara Statutory Trust IV	12/22/2003	5,000		5,155		Variable	4.02	%	3.09	%		1/7/2034
Nara Statutory Trust V	12/17/2003	10,000		10,310		Variable	4.12	%	3.19	%		12/17/2033
Nara Statutory Trust VI	3/22/2007	8,000		8,248		Variable	7.00	%	1.89	%		6/15/2037
Center Capital Trust I	12/30/2003	18,000		13,130		Variable	4.01	%	3.09	%	⁽¹⁾	1/7/2034
Foster Capital Trust I	7/8/2005	15,000		15,412		Variable	1.70	%	1.94	%	⁽²⁾	7/8/2035
TOTAL ISSUANCE		$	61,000	$	57,410


⁽¹⁾	The Center Capital Trust I trust preferred security was assumed in the merger. The remaining discount was $5.4 million at December 31, 2013 and the effective rate of the security, including the effect of the discount accretion, was 5.31% at December 31, 2013.


⁽²⁾	The Foster Capital Trust I trust preferred security was assumed in the merger with Foster. The remaining discount was $52 thousand at December 31, 2013 and the effective rate of the security, including the effect of the discount accretion, was 3.49% at December 31, 2013.

The Company’s investment in the common trust securities of the issuer trusts of $1.9 million and $1.4 million at December 31, 2013 and December 31, 2012, respectively, is included in other assets. Although the subordinated debt issued by the trusts are not included as a component of stockholders' equity in the consolidated balance sheets, the debt is treated as capital for regulatory purposes. The trust preferred security debt issuances are includable in Tier I capital up to a maximum of 25% of capital on an aggregate basis. Any amount that exceeds 25% qualifies as Tier 2 capital. At December 31, 2013, $55.5 million of the trusts’ securities qualified as Tier 1 capital. In July 2010, the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) was signed into law which, among other things, limits the ability of bank holding companies with total assets of more than $15 billion to treat trust preferred security debt issuances as Tier 1 capital. Since the Company had less than $15 billion in assets at December 31, 2013, we will be able to continue to include its existing trust preferred securities in Tier 1 capital under the Dodd-Frank Act.