Note 11 - Borrowed Funds

3 Months Ended

Mar. 31, 2019

Notes to Financial Statements

Debt Disclosure [Text Block]

11.

Borrowed Funds

Borrowings from the Federal Home Loan Bank (“FHLB”) -

As of

March 31, 2019,

the Company had

no

over-night borrowings from the FHLB, compared to

$200

million at an average rate of

2.56%

as of

December 31, 2018.

Advances from the FHLB were

$420

million at an average rate of

2.47%

as of

March 31, 2019

and

$330

million at an average rate of

2.42%

as of

December 31, 2018.

As of

March 31, 2019,

FHLB advances of

$350

million will mature in

April 2019,

$50

million in

December 2019,

and

$20

million in

May 2023.

Other Borrowings -

The Company owes a residual payable balance of

$17.6

million to Bank SinoPac Co. related to the acquisition of SinoPac Bancorp, the parent of Far East National Bank. The remaining balance of

$17.6

million has an interest rate of

4.0%

(

three

month LIBOR rate plus

150

basis points) as of

March 31, 2019,

with

$10.6

million due

July 2019

and the remainder due in

July 2020.

Long-term Debt -

On

October 12, 2017,

the Bank entered into a term loan agreement of

$75.0

million with U.S. Bank. The loan has a floating rate of

one

-month LIBOR plus

175

basis points. As of

March 31, 2019,

the term loan has a remaining balance of

$55.3

million and an interest rate of

4.250%

compared to

4.125%

at

December 31, 2018.

The principal amount of the long-term debt from U.S. Bank is due and payable in consecutive quarterly installments in the amount of

$4.7

million each on the last day of each calendar quarter commencing

December 31, 2018,

with the final installment due and payable on

October 12, 2020.

The U.S. Bank loan proceeds were used to fund a portion of our acquisition of SinoPac Bancorp.

The Company established

three

special purpose trusts in

2003

and

two

in

2007

for the purpose of issuing Guaranteed Preferred Beneficial Interests in their Subordinated Debentures to outside investors (“Capital Securities”). The proceeds from the issuance of the Capital Securities as well as our purchase of the common stock of the special purpose trusts were invested in Junior Subordinated Notes of the Company (“Junior Subordinated Notes”). The trusts exist for the purpose of issuing the Capital Securities and investing in Junior Subordinated Notes. Subject to some limitations, payment of distributions out of the monies held by the trusts and payments on liquidation of the trusts, or the redemption of the Capital Securities, are guaranteed by the Company to the extent the trusts have funds on hand at such time. The obligations of the Company under the guarantees and the Junior Subordinated Notes are subordinate and junior in right of payment to all indebtedness of the Company and will be structurally subordinated to all liabilities and obligations of the Company’s subsidiaries. The Company has the right to defer payments of interest on the Junior Subordinated Notes at any time or from time to time for a period of up to

twenty

consecutive quarterly periods with respect to each deferral period. Under the terms of the Junior Subordinated Notes, the Company

may

not,

with certain exceptions, declare or pay any dividends or distributions on its capital stock or purchase or acquire any of its capital stock if it has deferred payment of interest on any Junior Subordinated Notes.

At

March 31, 2019,

Junior Subordinated Notes totaled

$119.1

million with a weighted average interest rate of

4.78%,

compared to

$119.1

million with a weighted average rate of

4.96%

at

December 31, 2018.

The Junior Subordinated Notes have a stated maturity term of

30

years.