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Subordinated Debentures | 9 Months Ended
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Sep. 30, 2014
Subordinated Borrowings [Abstract] |
Subordinated Debentures | Subordinated Debentures At September 30, 2014, 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 Corporation 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 $4 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 Bank which issued $15 million of trust preferred securities, which the Company redeemed on March 14, 2014. 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. The Company’s obligations under the subordinated debentures and related documents, taken together, constitute a full and unconditional guarantee by the Company 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. The Company 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. The Company 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 September 30, 2014:
Issuance Trust |  | Issuance Date |  | Trust Preferred Security Amount |  | Carrying Value of Subordinated Debentures |  | Rate Type |  | Initial Rate |  | Coupon Rate at September 30, 2014 |  | Maturity Date
|  |  |  | (Dollars in thousands) |  |  |  |  |  |  |  |
Nara Capital Trust III |  | 6/5/2003 |  | $ | 5,000 |  |  | $ | 5,155 |  |  | Variable |  | 4.44 | % |  | 3.38 | % |  | 6/15/2033
Nara Statutory Trust IV |  | 12/22/2003 |  | 5,000 |  |  | 5,155 |  |  | Variable |  | 4.02 | % |  | 3.08 | % |  | 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 | % |  | 1.88 | % |  | 6/15/2037
Center Capital Trust I |  | 12/30/2003 |  | 18,000 |  |  | 13,249 |  |  | Variable |  | 4.01 | % |  | 3.08 | % | (1) | 1/7/2034
TOTAL ISSUANCE |  |  |  | $ | 46,000 |  |  | $ | 42,117 |  |  |  |  |  |  |  |  |
(1) The Center Capital Trust I trust preferred security was assumed in the merger with Center Financial Corporation. The remaining discount was $5.3 million at September 30, 2014 and the effective rate of the security, including the effect of the discount accretion, was 5.54% at September 30, 2014. The Company’s investment in the common trust securities of the issuer trusts of $1.6 million and $1.9 million at September 30, 2014 and December 31, 2013, 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 September 30, 2014, $40.7 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 September 30, 2014, we will be able to continue to include existing trust preferred securities in Tier 1 capital under the Dodd-Frank Act.

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- Definition The entire disclosure for borrowings under subordinated debt agreements that qualify as available in computing net capital under SEC's uniform net capital rule, including restrictive covenants, collateral, interest rates and due dates, amounts due by date and amount owed in total. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 942 -SubTopic 470 -Section 45 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6479118&loc=d3e64650-112822 + Details
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