East West Bancorp Increased Common Equity by $249 Million on Completion of Comprehensive Capital Plan
July 27 2009 - 6:50AM
Business Wire
East West Bancorp, Inc. (Nasdaq: EWBC), parent company of East
West Bank, today announced it has increased common equity by $249
million on completion of its comprehensive capital plan.
The company concluded its previously announced sale of common
stock, which raised $80.3 million through the issuance of
12,650,000 shares in a public offering last week. It has also
raised $27.5 million in private placements of common stock, and
increased common equity by $110.8 million from the exchanges of
convertible preferred stock to common stock and $30.6 million
from the desecuritization of private label MBS securitizations.
Combined, these initiatives have increased common equity by $249
million. The table below highlights the pro forma impact of these
actions on June 30, 2009 capital ratios, when combined with the
additional capital initiatives completed in the third quarter
2009:
(Dollars in millions)
2Q09
AsReported
2Q09
Pro Forma
Impact(1)
Well Capitalized
RegulatoryRequirement
Total Excess AboveWell
CapitalizedRequirement
Tier 1 leverage capital ratio 10.38% 11.22%
5.00% $768 Tier 1 risk-based capital ratio 12.25% 13.24% 6.00% $757
Total risk-based capital Ratio 14.28% 15.26% 10.00% $551 Tangible
common equity/risk weighted assets 6.16% 8.18% 4.00%(2)
$437(3)
(1)Includes impact of actions
taken in 3Q09 to complete comprehensive capital plan. (2)The
company has followed the tenets of the Supervisory Capital
Assessment Program (SCAP) and applied the “more adverse” stress
test guidelines to our loan and investment portfolios, under which
we can sustain the 4.00% tangible common equity/risk weight assets
ratio required under SCAP. East West Bank was not one of the banks
subject to the SCAP stress test, however, management believes it
was prudent risk management to conduct a similar test, with loss
assumptions similar to the indicative loss rates disclosed in the
SCAP white paper. (3)$437 million represents the amount of tangible
common equity in excess of the 4.00% SCAP requirement.
“The additional capital raised in the public offering, which was
over-subscribed fourfold, reflects the continued demand for our
common stock and, with the completion of our comprehensive capital
plan, we have achieved our capital objectives,” said Dominic Ng,
Chairman, President and Chief Executive Officer of East West. “The
$249 million increase in common equity will provide us with
flexibility to pursue new growth opportunities or aggressively
resolve problem assets, should economic conditions get worse,”
concluded Ng.
About East West
East West Bancorp is a publicly owned company with $12.7 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.
Forward-Looking Statements
This press release contains statements that the company believes
are “forward-looking statements” within the meaning of
Section 27A of the Securities Act of 1933, as amended, and
Rule 175 promulgated thereunder, and Section 21E of the
Securities Exchange Act of 1934, as amended, and Rule 3b-6
promulgated thereunder. These statements relate to our financial
condition, results of operations, plans, objectives, future
performance or business. They usually can be identified by the use
of forward-looking language such as “will likely result,” “may,”
“are expected to,” “is anticipated,” “estimate,” “forecast,”
“projected,” “intends to,” or may include other similar words or
phrases such as “believes,” “plans,” “trend,” “objective,”
“continue,” “remain,” or similar expressions, or future or
conditional verbs such as “will,” “would,” “should,” “could,”
“might,” “can,” or similar verbs. You should not place undue
reliance on these statements, as they are subject to risks and
uncertainties, including but not limited to those described in our
most recent Annual Report on Form 10-K, as updated by our
subsequently filed Quarterly Report on Form 10-Q and our Current
Reports on Form 8-K. When considering these forward-looking
statements, you should keep in mind these risks and uncertainties,
as well as any cautionary statements we may make. Moreover, you
should treat these statements as speaking only as of the date they
are made and based only on information then actually known to
us.
There are a number of important factors that could cause future
results to differ materially from historical performance and these
forward-looking statements. Factors that might cause such a
difference include, but are not limited to: (i) changes in our
borrowers’ performance on loans; (ii) changes in the
commercial and consumer real estate markets; (iii) changes in
our costs of operation, compliance and expansion; (iv) changes
in the economy, including inflation; (v) changes in government
interest rate policies; (vi) changes in laws or the regulatory
environment; (vii) changes in critical accounting policies and
judgments; (viii) changes in accounting policies or procedures
as may be required by the Financial Accounting Standards Board or
other regulatory agencies; (ix) changes in the equity and debt
securities markets; (x) changes in competitive pressures on
financial institutions; (xi) effect of additional provision
for loan losses; (xii) effect of any goodwill impairment;
(xiii) fluctuations of our stock price; (xiv) success and
timing of our business strategies; (xv) impact of reputational
risk created by these developments on such matters as business
generation and retention, funding and liquidity; (xvi) changes
in our ability to receive dividends from our subsidiaries; and
(xvii) political developments, wars or other hostilities that
may disrupt or increase volatility in securities or otherwise
affect economic conditions.
You should refer to our periodic and current reports filed with
the SEC for further information on other factors which could cause
actual results to be significantly different from those expressed
or implied by these forward-looking statements. Except as required
by law, East West does not undertake to update any such
forward-looking statements.
East West Bancorp (NASDAQ:EWBC)
Historical Stock Chart
From May 2024 to Jun 2024
East West Bancorp (NASDAQ:EWBC)
Historical Stock Chart
From Jun 2023 to Jun 2024