CAPITAL RESOURCES AND OTHER LONG-TERM DEBT

12 Months Ended

Dec. 31, 2013

CAPITAL RESOURCES AND OTHER LONG-TERM DEBT

CAPITAL RESOURCES AND OTHER LONG-TERM DEBT

NOTE 17—CAPITAL RESOURCES AND OTHER LONG-TERM DEBT

Junior Subordinated Debt—As of December 31, 2013, the Company has six statutory business trusts for the purpose of issuing junior subordinated debt to third party investors. Junior subordinated debt is recorded as a component of long-term debt and includes the value of the common stock issued by the Trusts to the Company in conjunction with these transactions. The common stock is recorded in other assets for the amount issued in connection with these junior subordinated debt issuances. Junior subordinated debt outstanding, issued by the Trusts to the Company, totaled $123.0 million at December 31, 2013, compared to $133.0 million at December 31, 2012. The junior subordinated debt of one statutory business trust was called during 2013 in order to reduce higher interest-bearing debt and the phase-out of trust preferred securities as Tier I regulatory capital. The related common stock outstanding, issued by the Trust to the Company amounted to $3.9 million and $4.2 million at December 31, 2013 and 2012, respectively.

The proceeds from these issuances represent liabilities of the Company to the Trusts and are reported in the consolidated balance sheets as a component of long-term debt. Interest payments on these securities are made either quarterly or semi-annually and are deductible for tax purposes. Under the Dodd-Frank Wall Street Reform and Consumer Protection Act, bank holding companies with more than $15 billion in total consolidated assets are no longer able to include trust preferred securities as Tier I regulatory capital which commenced in 2013 with phase-out complete by 2016. The junior subordinated debt is being phased out 25% each year, over the four year period, from Tier I capital into Tier II capital for regulatory purposes. This junior subordinated debt was issued in connection with our various pooled trust preferred securities offerings.

The table below summarizes pertinent information related to outstanding junior subordinated debt issued by each Trust as of December 31, 2013 and 2012:

			Rate at	Balance at
		Stated	December 31,	December 31,
Trust Name	Maturity Date (1)	Interest Rate	2013	2013	2012
				(Dollars in thousands)
East West Capital Statutory Trust III	December 2033	3-month Libor + 2.85%	—	—	10,000
East West Capital Trust IV	July 2034	3-month Libor + 2.55%	2.79%	10,000	10,000
East West Capital Trust V	November 2034	3-month Libor + 1.80%	2.04%	15,000	15,000
East West Capital Trust VI	September 2035	3-month Libor + 1.50%	1.74%	20,000	20,000
East West Capital Trust VII	June 2036	3-month Libor + 1.35%	1.59%	30,000	30,000
East West Capital Trust VIII	June 2037	3-month Libor + 1.40%	1.64%	18,000	18,000
East West Capital Trust IX	September 2037	3-month Libor + 1.90%	2.14%	30,000	30,000
				$123,000	$133,000

(1) All of the above debt instruments are subject to various call options.

Other Long-Term Debt—During the third quarter of 2013, the Company entered into a three-year term loan agreement for $100.0 million. The three-year term loan will mature on July 1, 2016 and is payable in quarterly installments commencing on March 31, 2014. The interest rate is 1.75% at December 31, 2013, which is based on the three-month LIBOR plus 150 basis points. As of December 31, 2013, the Company advanced the full $100.0 million.  The term loan agreement is included in long-term debt in the consolidated balance sheets.