East West Bancorp, Inc. (Nasdaq:EWBC), parent company of East
West Bank, today reported financial results for the first quarter
2009 with a net loss of $22.5 million. The net loss for the first
quarter was largely a result of a $78.0 million provision for loan
losses.
During the quarter, East West achieved strong deposit momentum,
growing core deposits by $467.8 million, or 14% quarter over
quarter, while decreasing the cost of deposits by 33 basis points
to 1.81%. East West�s core profitability remains solid with total
revenue of $93.7 million offset by $51.4 million in noninterest
expense.
�From the onset of this prolonged economic downturn, our focus
has remained on ensuring the safety and soundness of the Bank and
our responsibility to customers and shareholders,� stated Dominic
Ng, Chairman, President and Chief Executive Officer of East West.
�Throughout 2008 we took decisive actions to do just that. We grew
excess liquidity to $3.3 billion. We increased our allowance for
loan losses by 101%. We raised over $500 million in capital and
ended 2008 with total risk-based capital of 15.83%, more than $600
million above the �well capitalized� regulatory requirement.�
�During the first quarter of 2009, we continued to take prudent
and appropriate measures to ensure that our balance sheet remains
strong,� continued Ng. �We actively grew core deposits by $467.8
million during the quarter and aggressively reduced credit
exposures while building the allowance for loan losses to 2.42% at
March 31, 2009. We believe that our strong core profitability,
along with strong capital, liquidity and allowance for loan losses
will serve as a foundation for strong earnings and growth when the
market turns,� concluded Ng.
First Quarter 2009 Highlights
- Strong Increase in Core
Deposits � Total deposits increased by $312.1 million, or 4%
quarter over quarter, to a record $8.5 billion at March 31, 2009,
primarily due to a $467.8 million, or 14% quarter over quarter
increase in core deposits. Since September 2008, we have
experienced strong deposit momentum through both our retail branch
network and our commercial deposit platforms.
- Strong Decrease in Cost of
Deposits - The cost of deposits decreased 33 basis points to
1.81% for the first quarter of 2009, largely due to the increase in
core deposits. The cost of deposits as of the month ended March 31,
2009 was 1.59%, a 42 basis point or 21% decrease from the cost of
deposits as of the month ended December 31, 2008.
- Improved Net Interest Income
�Net interest income for the first quarter totaled $79.7
million, a 4% or $2.8 million increase over fourth quarter of 2008.
The net interest margin for the quarter also increased to
2.74%.
- Allowance for Loan Losses
Strengthened � Total allowance for loan losses increased to
$195.5 million, or 2.42% of outstanding loans. We continued to
increase the allowance for loan losses, recording provision for
loan losses of $78.0 million and total net loan charge-offs of
$59.6 million for the quarter.
- Nonperforming Assets �
Nonperforming assets were $303.8 million or 2.42% of total assets,
a $39.9 million or 15% increase from $263.9 million or 2.12% of
total assets at December 31, 2008.
- Loan to Deposit Ratio �
Throughout the course of 2008 and 2009, East West decreased the
loan to deposit ratio in an effort to strengthen the balance sheet.
As of March 31, 2009, the loan to deposit ratio decreased
substantially to 95%, from 101% as of December 31, 2008 and 122% at
December 31, 2007.
- Loan Originations �
$305.6 million in loans to new and existing customers were made in
the first quarter of 2009, primarily to homeowners and small and
mid-sized businesses.
- Decrease in Borrowings �
FHLB advances decreased $120.0 million or 9% from December 31, 2008
as we continued to pay down higher cost borrowings. Cost of funds
decreased to 2.44% for the first quarter of 2009, a 33 basis point
decrease from 2.77% for the fourth quarter of 2008. We intend to
pay down higher cost FHLB advances for the remainder of 2009,
paying down $60.0 million at 5.05% in the second quarter, $250.0
million at 5.14% in the third quarter and $200.0 million at 4.43%
in the fourth quarter.
Capital Strength(Dollars in millions)
3/31/2009 � �
Well
CapitalizedRegulatoryRequirement
�
Total Excess AboveWell
CapitalizedRequirement
Leverage Capital Ratio 11.47 % 5.0 % 795.7 Tier 1 Capital Ratio
13.67 % 6.0 % 791.3 Total Risk-Based Capital Ratio 15.65 % 10.0 %
583.3 Tangible Capital Ratio 9.64 % N/A N/A
Tangible Common Equity Ratio
5.76 % N/A N/A �
East West has always been committed to maintaining strong
capital levels and has been well capitalized throughout this
economic cycle. As of the end of the first quarter, East West
significantly exceeds well capitalized minimums under all
regulatory guidelines.
Managing Through the Credit Cycle
The $78.0 million provision for loan losses taken during the
first quarter of 2009 compared to $43.0 million in the fourth and
third quarters of 2008, $85.0 million in the second quarter of 2008
and $55.0 million in the first quarter of 2008. At March 31, 2009,
the allowance for loan losses increased to $195.5 million or 2.42%
of outstanding loans, compared to $178.0 million or 2.16% of
outstanding loans at December 31, 2008. For the first quarter of
2009, East West had net charge-offs of $59.6 million, compared to
$41.5 million during the fourth quarter of 2008.
Our loan portfolio continues to be impacted by the real estate
downturn and recessionary economy in California, as evidenced by
the increased level of net charge-offs, nonperforming assets and
delinquent loans. We believe that credit challenges will continue
throughout 2009, particularly for our residential construction and
land loan portfolios. Throughout the course of 2008 and the first
quarter of 2009, we have actively reduced exposure to land and
construction loans. We reduced outstanding loan balances on land
and construction loans by $137.6 million and total commitments on
construction loans by $202.0 million during the first quarter. This
reduction in land and construction loans was in addition to the
$1.0 billion decrease in total commitments on construction and land
loans in 2008.
Total nonperforming assets as of March 31, 2009 were $303.8
million or 2.42% of total assets, compared to $263.9 million or
2.12% of total assets at December 31, 2008. The increase in
nonperforming assets was largely driven by an increase in
nonaccrual loans of $33.4 million. Nonperforming assets as of March
31, 2009 included nonaccrual loans totaling $248.0 million, other
real estate owned totaling $38.6 million and loans modified or
restructured totaling $17.2 million.
Total nonaccrual loans as of March 31, 2009 were $248.0 million,
compared to $214.6 million at December 31, 2008. We believe that
the collateral values for the $248.0 million nonaccrual loans are
strong and have updated values totaling $344.5 million. All
nonaccrual loans are recorded at the lesser of the outstanding loan
balance or net realizable value.
The increase in nonaccrual loans was primarily due to one
lending relationship comprised of several loans, where the borrower
filed for bankruptcy towards the end of the first quarter. Although
payments on substantially all of these loans were current or under
90 days delinquent, these loans were classified as nonaccrual loans
as of the end of the first quarter. As of March 31, 2009, the net
book value of the total loans for this lending relationship was
$49.2 million and the collateral is comprised of 23 different
properties, all land, residential and income producing commercial
real estate located in the downtown Los Angeles region.
The quarter-to-date increase in nonaccrual commercial real
estate loans was $30.5 million from $24.7 million at December 31,
2008. The lending relationship noted in the paragraph above
comprised $34.8 million of the nonaccrual commercial real estate
loans at March 31, 2009. Excluding these loans, nonaccrual
commercial real estate loans would have decreased $4.3 million
quarter-to-date. The nonaccrual commercial real estate loans as of
March 31, 2009 were well collateralized, comprised of 25 loans and
had an average loan balance of $2.2 million.
Deposit Summary
Total deposits as of March 31, 2009 increased to a record $8.5
billion, up $312.1 million or 4% from $8.1 billion at December 31,
2008. The increase in deposits stemmed from a strong increase in
core deposits of $467.8 million or 14% quarter over quarter. Since
mid-2008, we have focused on attracting new customers and growing
deposits through our retail branch network and commercial deposit
platforms. Along with growing core deposits, we have also focused
on shifting our deposit base from higher cost time deposits to
lower cost core deposits. We successfully introduced new core
deposit products and substantially increased money market deposits
during the quarter.
Given the growth in core deposits and shift away from time
deposits, we were able to reduce our cost of deposits for the first
quarter of 2009 to 1.81%, a 33 basis point decrease from the fourth
quarter of 2008.
First Quarter 2009 Operating Results(In thousands, except
per share amounts)
Quarter Ended March 31, 2009 Total Amount �
Per
Share Amount � Interest and dividend income $ 144,923 $ 2.30
Interest expense � (65,242 ) � (1.04 ) Net interest income before
provision for loan losses 79,681 1.26 Noninterest income before
impairment writedown on investment securities 13,994 0.22
Noninterest expense � (51,406 ) � (0.82 ) Income before provision
for loan losses and impairment writedown on investment securities
42,269 0.66 Provision for loan losses (78,000 ) (1.24 ) Impairment
writedown on investment securities � (200 ) � - � Loss before
benefit for income taxes (35,931 ) (0.58 ) Benefit for income taxes
� 13,465 � � 0.21 � Net loss (22,466 ) (0.37 ) Preferred stock
dividend and amortization of preferred stock discount � (8,743 ) �
(0.13 ) Net (loss) available to common stockholders $ (31,209 ) $
(0.50 )
Net Interest Income
Net interest income for the first quarter totaled $79.7 million,
a 4% increase over fourth quarter of 2008. The net interest margin
for the quarter totaled 2.74%, an increase from 2.72% in the prior
quarter. Overall, our continuing efforts to improve the margin
through growing core deposits, focusing on pricing, and increasing
loan and investment security yields have proven to be
successful.
The increase in the margin, which resulted from increased yields
on interest earning assets combined with the decreased cost of
deposits, was partially offset by the reversal of interest income
on nonperforming loans. Excluding the impact of $1.9 million in
reversals of interest income, the net interest margin would have
been seven basis points higher, at 2.81% for the first quarter.
Throughout the first quarter of 2009, we continued to drive down
the cost of deposits, as shown in the table below which shows the
monthly cost of deposits at March 31, 2009 and December 31,
2008:
As of the Month Ended March 31, 2009 �
December
31, 2008 Cost of Deposits 1.59 % 2.01 %
Currently, we estimate that the net interest margin will
approximate 2.85% for the second quarter of 2009.
Noninterest Income
Noninterest income for the first quarter totaled $13.8 million,
compared to a loss of $863 thousand in the fourth quarter of
2008.
In the first quarter of 2009, we recorded a $200 thousand
write-down of investment securities through earnings for
other-than-temporary impairment (OTTI), in accordance with FSP FAS
115-2 and FAS 124-2 issued by the FASB on April 9, 2009. This new
guidance requires that credit-related OTTI be recognized through
earnings while noncredit-related OTTI be recognized through equity.
Noncredit-related OTTI on securities of $9.7 million pre-tax was
recognized through equity.
Excluding the impact of credit-related impairment write-downs on
investment securities, noninterest income for the first quarter of
2009 totaled $14.0 million, an increase of $5.2 million or 59% from
$8.8 million in the fourth quarter of 2008. The increase from the
prior quarter was primarily due to increased gain on sale of
investment securities of $2.3 million, increased loan fees of $1.5
million and increased branch fees of $546 thousand.
Noninterest Expense
Noninterest expense totaled $51.4 million for the first quarter
2009, an increase of $7.2 million from the fourth quarter of 2008.
The primary driver for the increase in noninterest expense was an
increase in OREO expense of $4.5 million for the first quarter of
2009, due to higher write-downs and loss on sale of OREOs.
Additionally, deposit insurance premium expense increased to $3.3
million in the first quarter, in line with higher FDIC assessment
rates in 2009 across the industry. We will continue to manage down
base operating costs throughout 2009; however, these decreases may
be offset by higher FDIC assessment and OREO costs.
Dividend Payout
East West Bank�s Board of Directors has declared second quarter
dividends on the common and non-cumulative perpetual convertible
preferred stock, series A. The Board reduced the common stock cash
dividend from $0.02 to $0.01 per share as an additional measure of
preserving capital. The common stock cash dividend is payable on or
about May 26, 2009 to shareholders of record on May 18, 2009. The
dividend on the non-cumulative perpetual convertible preferred
stock, series A of $20.00 per depository share is payable on May 1,
2009 to shareholders of record on April 15, 2009. We will continue
to review the dividend policy quarterly, in light of the current
economic environment.
About East West
East West Bancorp is a publicly owned company with $12.6 billion
in assets and is traded on the Nasdaq Global Select Market under
the symbol �EWBC�. The Company�s wholly owned subsidiary, East West
Bank, is the second largest independent commercial bank
headquartered in Southern California with 71 branch locations. East
West Bank serves the community with 69 branch locations across
Southern and Northern California and a branch location in Houston,
Texas. East West Bank has three international locations in Greater
China, including a full-service branch in Hong Kong and
representative offices in Beijing and Shanghai. For more
information on East West Bancorp, visit the Company�s website at
www.eastwestbank.com.
Forward-Looking Statements
This release may contain forward-looking statements, which are
included in accordance with the �safe harbor� provisions of the
Private Securities Litigation Reform Act of 1995 and accordingly,
the cautionary statements contained in East West Bancorp�s Annual
Report on Form 10-K for the year ended Dec. 31, 2008 (See Item I --
Business, and Item 7 -- Management�s Discussion and Analysis of
Consolidated Financial Condition and Results of Operations), and
other filings with the Securities and Exchange Commission are
incorporated herein by reference. These factors include, but are
not limited to: the effect of interest rate and currency exchange
fluctuations; competition in the financial services market for both
deposits and loans; EWBC�s ability to efficiently incorporate
acquisitions into its operations; the ability of borrowers to
perform as required under the terms of their loans; effect of
additional provisions for loan losses;�effect of any goodwill
impairment, the ability of EWBC and its subsidiaries to increase
its customer base; the effect of regulatory and legislative action,
including California tax legislation and an announcement by the
state�s Franchise Tax Board regarding the taxation of Registered
Investment Companies; and regional and general economic conditions.
Actual results and performance in future periods may be materially
different from any future results or performance suggested by the
forward-looking statements in this release. Such forward-looking
statements speak only as of the date of this release. East West
expressly disclaims any obligation to update or revise any
forward-looking statements found herein to reflect any changes in
the Bank�s expectations of results or any change in event.
EAST WEST BANCORP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands,
except per share amounts) (unaudited) � � �
March 31,
2009 December 31, 2008 % Change Assets Cash and
cash equivalents $ 541,066 $ 878,853 (38 ) Short-term investments
329,288 228,441 44 Securities purchased under resale agreements
50,000 50,000 0 Investment securities held-to-maturity, at
amortized cost 734,799 122,317 501 Investment securities
available-for-sale, at fair value 1,994,403 2,040,194 (2 ) Loans
receivable (net of allowance for loan losses of $195,450 and
$178,027) 7,865,925 8,069,377 (3 ) Other real estate owned, net
38,634 38,302 1 Premiums on deposits acquired, net 20,065 21,190 (5
) Goodwill 337,438 337,438 0 Other assets � 652,906 � � 636,704 � 3
Total assets $ 12,564,524 � $ 12,422,816 � 1 � Liabilities and
Stockholders' Equity Deposits $ 8,454,059 $ 8,141,959 4 Federal
funds purchased 22 28,022 (100 ) Federal Home Loan Bank advances
1,233,269 1,353,307 (9 ) Securities sold under repurchase
agreements 998,061 998,430 (0 ) Notes payable 14,597 16,506 (12 )
Long-term debt 235,570 235,570 0 Accrued expenses and other
liabilities � 93,753 � � 98,256 � (5 ) Total liabilities 11,029,331
10,872,050 1 Stockholders' equity � 1,535,193 � � 1,550,766 � (1 )
Total liabilities and stockholders' equity $ 12,564,524 � $
12,422,816 � 1 Book value per common share $ 16.60 $ 16.92 (2 )
Number of common shares at period end 63,952 63,746 0 �
Ending
Balances March 31, 2009 December 31, 2008 %
Change Loans receivable Real estate - single family $ 517,844 $
491,315 5 Real estate - multifamily 689,728 677,989 2 Real estate -
commercial 3,510,749 3,472,000 1 Real estate - land 544,892 576,564
(5 ) Real estate - construction 1,154,782 1,260,724 (8 ) Commercial
1,128,903 1,210,260 (7 ) Trade finance 292,816 343,959 (15 )
Consumer � 224,601 � � 216,642 � 4 Total gross loans receivable
8,064,315 8,249,453 (2 ) Unearned fees, premiums and discounts
(2,940 ) (2,049 ) 43 Allowance for loan losses � (195,450 ) �
(178,027 ) 10 Net loans receivable $ 7,865,925 $ 8,069,377 (3 ) �
Deposits Noninterest-bearing demand $ 1,297,151 $ 1,292,997 0
Interest-bearing checking 352,334 363,285 (3 ) Money market
1,806,985 1,323,402 37 Savings � 411,104 � � 420,133 � (2 ) Total
core deposits 3,867,574 3,399,817 14 Time deposits less than
$100,000 1,211,480 1,521,988 (20 ) Time deposits $100,000 or
greater � 3,375,005 � � 3,220,154 � 5 Total time deposits �
4,586,485 � � 4,742,142 � (3 ) Total deposits $ 8,454,059 $
8,141,959 4 � �
EAST WEST BANCORP, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF INCOME
(In thousands, except per share
amounts)
(unaudited)
�
Quarter Ended �
March 31, 2009 �
December 31,
2008 �
March 31, 2008 � Interest and dividend income $
144,923 $ 149,907 $ 187,184 Interest expense � (65,242 ) � (73,053
) � (87,565 ) Net interest income before provision for loan losses
79,681 76,854 99,619 Provision for loan losses � (78,000 ) �
(43,000 ) � (55,000 ) Net interest income after provision for loan
losses 1,681 33,854 44,619 Noninterest income (loss) 13,794 (863 )
15,913 Noninterest expense � (51,406 ) � (44,199 ) � (52,890 )
(Loss) income before benefit (provision) for income taxes (35,931 )
(11,208 ) 7,642 Benefit (provision) for income taxes � 13,465 � �
13,574 � � (2,598 ) Net (loss) income $ (22,466 ) $ 2,366 $ 5,044
Preferred stock dividend and amortization of preferred stock
discount � (8,743 ) � (5,385 ) � - � Net (loss) income available to
common stockholders $ (31,209 ) $ (3,019 ) $ 5,044 Net (loss)
income per share, basic $ (0.50 ) $ (0.05 ) $ 0.08 Net (loss)
income per share, diluted $ (0.50 ) $ (0.05 ) $ 0.08 Shares used to
compute per share net (loss) income: - Basic 62,998 62,932 62,485 -
Diluted 62,998 62,932 62,949 � �
Quarter Ended March 31,
2009 December 31, 2008 March 31, 2008 Noninterest
income (loss): Impairment writedown on investment securities $ (200
) $ (9,653 ) $ - Branch fees 4,793 4,247 4,101 Net gain on sale of
investment securities available-for-sale 3,521 1,238 4,334
Ancillary loan fees 2,229 738 1,141 Letters of credit fees and
commissions 1,854 2,267 2,677 Net gain on sale of loans 8 3 1,855
Other operating income � 1,589 � � 297 � � 1,805 � Total
noninterest income (loss) $ 13,794 $ (863 ) $ 15,913 � Noninterest
expense: Compensation and employee benefits 17,108 15,658 23,268
Occupancy and equipment expense 7,391 6,627 7,008 Other real estate
owned expense 7,031 2,493 889 Deposit insurance premiums and
regulatory assessments 3,325 2,032 1,192 Legal expense 1,778 1,687
1,900 Amortization of investments in affordable housing
partnerships 1,760 1,751 1,715 Data processing 1,142 1,108 1,196
Amortization and impairment writedowns of premiums on deposits
acquired 1,125 1,125 2,737 Other operating expense � 10,746 � �
11,718 � � 12,985 � Total noninterest expense $ 51,406 $ 44,199 $
52,890 �
EAST WEST BANCORP, INC. SELECTED FINANCIAL
INFORMATION (In thousands) (unaudited) � � �
Average Balances Quarter Ended March 31, % �
2009 � �
2008 �
Change � Loans receivable Real
estate - single family $ 506,753 $ 444,153 14 Real estate -
multifamily 692,885 698,529 (1 ) Real estate - commercial 3,465,505
3,583,906 (3 ) Real estate - land 582,649 709,466 (18 ) Real estate
- construction 1,232,235 1,584,050 (22 ) Commercial 1,179,183
1,282,814 (8 ) Trade finance 309,586 465,311 (33 ) Consumer �
228,377 � � 187,028 � 22 Total loans receivable 8,197,173 8,955,257
(8 ) Investment securities held-to-maturity 422,493 -
N/A
Investment securities available-for-sale 2,280,766 1,839,080 24
Earning assets 11,802,045 11,050,809 7 Total assets 12,498,249
11,788,891 6 � Deposits Noninterest-bearing demand $ 1,238,551 $
1,359,837 (9 ) Interest-bearing checking 361,569 437,804 (17 )
Money market 1,487,178 1,094,698 36 Savings � 410,232 � � 471,437 �
(13 ) Total core deposits 3,497,530 3,363,776 4 Time deposits less
than $100,000 1,332,944 938,282 42 Time deposits $100,000 or
greater � 3,482,074 � � 3,027,580 � 15 Total time deposits �
4,815,018 � � 3,965,862 � 21 Total deposits 8,312,548 7,329,638 13
Interest-bearing liabilities 9,595,665 9,119,556 5 Stockholders'
equity 1,540,948 1,157,160 33 �
Selected Ratios Quarter
Ended March 31, % �
2009 � �
2008 �
Change � For The Period Return on average assets -0.72 %
0.17 % (524 ) Return on average common equity -11.69 % 1.74 % (770
) Interest rate spread (3) 2.22 % 2.96 % (25 ) Net interest margin
(3) 2.74 % 3.63 % (24 ) Yield on earning assets (3) 4.98 % 6.81 %
(27 ) Cost of deposits 1.81 % 2.86 % (37 ) Cost of funds 2.44 %
3.35 % (27 ) Noninterest expense/average assets (1) 1.55 % 1.64 %
(5 ) Efficiency ratio (4) 51.80 % 41.93 % 24 Net chargeoffs to
average loans (2) 2.91 % 1.13 % 156 Gross loan chargeoffs $ 60,140
$ 25,583 135 Loan recoveries $ (571 ) $ (200 ) 186 Net loan
chargeoffs $ 59,569 � $ 25,383 � 135 � Period End Tier 1 risk-based
capital ratio 13.67 % 8.78 % 56 Total risk-based capital ratio
15.65 % 10.59 % 48 Tier 1 leverage capital ratio 11.47 % 8.58 % 34
� (1) Excludes the amortization of intangibles, amortization and
impairment writedowns of premiums on deposits acquired, impairment
writedown on goodwill, and amortization of investments in
affordable housing partnerships. � (2) Annualized. (3) Yields on
certain securities have been adjusted upward to a "fully taxable
equivalent" basis in order to reflect the effect of income which is
exempt from federal income taxation at the current statutory tax
rate. � (4) Represents noninterest expense, excluding the
amortization of intangibles, amortization and impairment writedowns
of premiums on deposits acquired, impairment writedown on goodwill,
and investments in affordable housing partnerships, divided by the
aggregate of net interest income before provision for loan losses
and noninterest income, excluding impairment writedowns on
investment securities. � � � �
EAST WEST BANCORP, INC.
QUARTER TO DATE AVERAGE BALANCES, YIELDS AND RATES PAID (In
thousands) (unaudited) � � � � �
Quarter Ended March 31,
2009 2008 Average Average Volume
Interest Yield (1) Volume Interest
Yield (1) �
ASSETS Interest-earning
assets: Short-term investments (2) $ 731,573 $ 2,976 1.65 % $
76,540 $ 538 2.82 % Securities purchased under resale agreements
(term) 50,000 1,250 10.00 % 64,286 2,553 15.93 % Investment
securities held-to-maturity Taxable 405,851 6,695 6.60 % - - -
Tax-exempt (3) 16,642 277 6.66 % - - - Investment securities
available-for-sale (4) 2,280,766 22,493 4.00 % 1,839,080 27,445
5.99 % Loans receivable 8,197,173 110,816 5.48 % 8,955,257 155,434
6.96 % Federal Home Loan Bank and Federal Reserve Bank stocks �
120,040 � � 506 1.69 % � 115,646 � � 1,609 5.58 % Total
interest-earning assets � 11,802,045 � � 145,013 4.98 % �
11,050,809 � � 187,579 6.81 % �
Noninterest-earning assets:
Cash and due from banks 122,899 150,469 Allowance for loan losses
(186,058 ) (90,086 ) Other assets � 759,363 � � 677,699 � Total
assets $ 12,498,249 � $ 11,788,891 � � �
LIABILITIES AND
STOCKHOLDERS' EQUITY Interest-bearing
liabilities: Checking accounts 361,569 393 0.44 % 437,804 1,367
1.25 % Money market accounts 1,487,178 5,694 1.55 % 1,094,698 8,464
3.10 % Savings deposits 410,232 702 0.69 % 471,437 1,454 1.24 %
Time deposits less than $100,000 1,332,944 9,618 2.93 % 938,282
8,841 3.78 % Time deposits $100,000 or greater 3,482,074 20,666
2.41 % 3,027,580 32,127 4.26 % Federal funds purchased 2,445 3 0.49
% 165,686 1,378 3.34 % Federal Home Loan Bank advances 1,285,070
13,877 4.38 % 1,747,313 19,682 4.52 % Securities sold under
repurchase agreements 998,583 11,872 4.76 % 1,001,186 10,529 4.22 %
Long-term debt � 235,570 � � 2,417 4.10 % � 235,570 � � 3,723 6.34
% Total interest-bearing liabilities � 9,595,665 � � 65,242 2.76 %
� 9,119,556 � � 87,565 3.85 % �
Noninterest-bearing
liabilities: Demand deposits 1,238,551 1,359,837 Other
liabilities 123,085 152,338 Stockholders' equity � 1,540,948 � �
1,157,160 � Total liabilities and stockholders' equity $ 12,498,249
� $ 11,788,891 � � Interest rate spread 2.22 % 2.96 % � Net
interest income and net yield on interest-earning assets (3) $
79,771 2.74 % $ 100,014 3.63 % � � (1) Annualized (2) Quarter ended
March 31, 2008, includes short-term securities purchased under
resale agreements. (3) Amounts calculated on a fully taxable
equivalent basis using the current statutory federal tax rate. (4)
Quarter ended March 31, 2008, amounts calculated on a fully taxable
equivalent basis using the current statutory federal tax rate. �
EAST WEST BANCORP, INC. QUARTERLY ALLOWANCE FOR LOAN
LOSSES RECAP (In thousands) (unaudited) �
Quarter Ended March 31, 2009 �
December 31,
2008 �
September 30, 2008 �
June 30, 2008 �
March 31, 2008 LOANS Allowance balance, beginning of
period $ 178,027 $ 177,155 $ 168,413 $ 117,120 $ 88,407 Allowance
for unfunded loan commitments and letters of credit (1,008 ) (625 )
5,437 1,136 (904 ) Provision for loan losses 78,000 43,000 43,000
85,000 55,000 Net Charge-offs: Real estate - single family 3,832
1,756 1,022 632 75 Real estate - multifamily 1,624 524 1,006 436 -
Real estate - commercial 2,790 750 663 (3 ) - Real estate - land
12,523 9,039 19,128 16,337 5,078 Real estate - residential
construction 16,347 17,127 13,557 15,726 8,565 Real estate -
commercial construction 1,977 - - - - Commercial 18,146 8,054 3,474
640 11,636 Trade finance 1,032 4,026 750 922 - Consumer � 1,298 � �
227 � � 95 � � 153 � � 29 � Total net charge-offs � 59,569 � �
41,503 � � 39,695 � � 34,843 � � 25,383 � Allowance balance, end of
period $ 195,450 � $ 178,027 � $ 177,155 � $ 168,413 � $ 117,120 �
�
UNFUNDED LOAN COMMITMENTS AND LETTERS OF CREDIT: Allowance
balance, beginning of period $ 6,341 $ 5,716 $ 11,153 $ 12,289 $
11,385 Provision for unfunded loan commitments and letters of
credit � 1,008 � � 625 � � (5,437 ) � (1,136 ) � 904 � Allowance
balance, end of period $ 7,349 � $ 6,341 � $ 5,716 � $ 11,153 � $
12,289 � GRAND TOTAL, END OF PERIOD $ 202,799 � $ 184,368 � $
182,871 � $ 179,566 � $ 129,409 � � Nonperforming assets to total
assets 2.42 % 2.12 % 1.71 % 1.64 % 0.63 % Allowance for loan losses
to total gross loans at end of period 2.42 % 2.16 % 2.14 % 1.95 %
1.32 % Allowance for loan losses and unfunded loan commitments to
total gross loans at end of period 2.51 % 2.23 % 2.21 % 2.07 % 1.46
% Allowance to nonaccrual loans at end of period 78.81 % 82.95 %
99.92 % 98.59 % 202.41 % Nonaccrual loans to total loans 3.08 %
2.60 % 2.14 % 1.97 % 0.65 % �
EAST WEST BANCORP, INC
TOTAL NON-PERFORMING ASSETS AS OF MARCH 31, 2009 (in
thousands) (unaudited) � � � � �
Total Nonaccrual
Loans
90+ Days
Delinquent
Under 90+
DaysDelinquent
TotalNonaccrual
Loans
Modified
orRestructuredLoans
REO Assets
TotalNon-PerformingAssets
�
Loan Type Real estate - single family $ 18,515 $ 634 $
19,149 $ 2,793 $
671
$
22,613
Real estate - multifamily 9,863 - 9,863 4,481
887
15,231
Real estate - commercial 12,465 42,724 55,189 3,270
4,240
62,699
Real estate - land 63,052 6,233 69,285 -
17,934
87,219
Real estate - residential construction 28,433 14,196 42,629 -
13,278
55,907
Real estate - commercial construction 28,604 - 28,604 - - 28,604
Commercial 16,798 5,000 21,798 6,602
1,236
29,636
Trade Finance 177 - 177 -
270
447
Consumer � 839 � � 482 � 1,321 � - � �
118
�
1,439
Total $ 178,746 $ 69,269
$ 248,015 $ 17,146 $
38,634 $ 303,795 �
EAST WEST BANCORP,
INC TOTAL NON-PERFORMING ASSETS AS OF DECEMBER 31, 2008
(in thousands) (unaudited) �
Total Nonaccrual
Loans
90+ Days
Delinquent
Under 90+
DaysDelinquent
TotalNonaccrual
Loans
Modified
orRestructuredLoans
REO Assets
TotalNon-PerformingAssets
�
Loan Type Real estate - single family $ 13,519 $ - $ 13,519
$ 1,201 $ 419 $ 15,139 Real estate - multifamily 11,845 - 11,845
3,519 1,136 16,500 Real estate - commercial 24,680 - 24,680 2,406
4,882 31,968 Real estate - land 66,185 12,892 79,077 - 10,307
89,384 Real estate - residential construction 27,052 8,766 35,818 -
21,146 56,964 Real estate - commercial construction 30,581 - 30,581
- - 30,581 Commercial 6,570 10,604 17,174 3,866 142 21,182 Trade
Finance 65 - 65 - 270 335 Consumer � 1,654 � 194 � 1,848 � - � - �
1,848
Total $ 182,151 $ 32,456
$ 214,607 $ 10,992 $
38,302 $ 263,901 EAST WEST BANCORP, INC
DELINQUENT LOANS BY LOAN CATEGORIES AS OF MARCH 31, 2009
(in thousands) (unaudited) � � �
Loan Type
30-59 Days
Delinquent
60-89 Days
Delinquent
90+ Days
Delinquent
Total Delinquent
Loans
Real estate - single family 31,105 $ 4,226 $ 18,515 $ 53,846 Real
estate - multifamily 17,310 2,585 9,863 29,758 Real estate -
commercial 68,964 25,929 12,465 107,358 Real estate - land 12,835
8,969 63,052 84,856 Real estate - residential construction 31,166
61,286 28,433 120,885 Real estate - commercial construction 19,512
4,545 28,604 52,661 Commercial 4,317 3,751 16,798 24,866 Trade
finance 4,123 4,468 177 8,768 Consumer � 613 � 110 � 839 � 1,562
Total Delinquent Loans $ 189,945 $ 115,869 $ 178,746 $
484,560 � � � �
EAST WEST BANCORP, INC DELINQUENT LOANS
BY LOAN CATEGORIES AS OF DECEMBER 31, 2008 (in
thousands) (unaudited) �
Loan Type
30-59 Days
Delinquent
60-89 Days
Delinquent
90+ Days
Delinquent
Total Delinquent
Loans
Real estate - single family 16,708 $ 6,237 $ 13,519 $ 36,464 Real
estate - multifamily 9,372 2,382 11,845 23,599 Real estate -
commercial 21,036 18,364 24,680 64,080 Real estate - land 9,335
19,002 66,185 94,522 Real estate - residential construction 13,242
9,379 27,052 49,673 Real estate - commercial construction - -
30,581 30,581 Commercial 3,970 13,918 6,570 24,458 Trade finance
374 - 65 439 Consumer � 1,326 � 252 � 1,654 � 3,232
Total
Delinquent Loans $ 75,363 $ 69,534 $ 182,151 $ 327,048
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