East West Bancorp, Inc. (Nasdaq:EWBC), parent company of East
West Bank, today reported financial results for the third quarter
of 2009 with a net loss of $68.5 million. The net loss was
primarily driven by a $159.2 million provision for loan losses and
$24.2 million impairment loss on investment securities.
“From the onset of the economic downturn, our strong capital
levels have allowed East West to accelerate the resolution of
problem assets compared to peers. During the third quarter, we
successfully worked towards our goal of putting our credit issues
behind us by the end of 2009,” stated Dominic Ng, Chairman,
President and Chief Executive Officer of East West. “We actively
reduced exposures to problem credits - lowering land and
construction loan balances by a substantial $355.6 million or 25%
quarter over quarter and selling $206.3 million of loans and real
estate owned.”
Ng continued, “For the banking industry in general, the economic
indicators signal that the next few quarters will still remain
challenging due to the weak economy and high levels of
unemployment. However, we believe that for East West, credit issues
have peaked in the third quarter of 2009. As a direct result of our
strategy to accelerate the resolution of problem loans, we have
substantially less credit issues and expect that both provision for
loan losses and charge-offs will be reduced in future
quarters.”
“With the proactive measures we have taken to reduce credit
exposures and increase capital levels, we are in a position to both
grow organically and through any potential acquisitions. The
measures we have taken to fortify our balance sheet are further
solidified by our strong core profitability of $63.0 million for
the quarter and growing net interest margin of 3.20% for the
quarter. We are in a position of strength to opportunistically
increase market share and to return to profitability in 2010,”
concluded Ng.
Third Quarter 2009 Highlights
- Reduction in Problem Credits
– Land and construction exposures decreased by 25% or $355.6
million in the third quarter. We continued to actively sell problem
loans and REO assets and sold a total of $206.3 million during the
quarter, which accelerated charge-offs by $60.1 million for the
quarter.
- Reduction in Delinquent
Loans - For the second consecutive quarter, loans delinquent 30
or more days decreased. As of September 30, 2009, loans 30 to 89
days delinquent fell to 1.01% of total loans. Loan delinquencies
fell across all categories – 30 to 59 day delinquent loans
decreased 63% or $37.3 million, 60 to 89 day delinquent loans
decreased $27.1 million or 30%, and 90+ days delinquent loans
decreased $7.4 million or 5.0%, quarter over quarter.
- Allowance for Loan Losses
Strengthened – Total allowance for loan losses increased to
$230.7 million, representing 2.74% of outstanding loans compared to
2.62% of outstanding loans in the previous quarter. We continued to
strengthen the allowance for loan losses, recording provision for
loan losses of $159.2 million and total net charge-offs of $151.2
million for the quarter. The allowance for loan losses to
nonaccrual loan ratio was 113% as of September 30, 2009.
- Strengthening Net Interest
Margin – Net interest income for the third quarter increased to
$95.9 million, a 9% or $7.6 million increase over second quarter of
2009 and a 20% or $16.2 million increase over first quarter of
2009. The net interest margin for third quarter increased to 3.20%,
up 22 basis points from 2.98% in the prior quarter.
- Strong Core Deposit Growth
– Total core deposits reached a record high of $4.4 billion as
of September 30, 2009, up 9% or $357.7 million from June 30, 2009.
With the strong core deposit growth, we reduced the cost of
deposits for the quarter to 1.24%, down 23 basis point from 1.47%
in the prior quarter.
- Strong Core Operating
Earnings – Core operating earnings, excluding the impact of
provision for loan losses, investment securities and REO
write-downs and nonrecurring FDIC assessments totaled $63.0 million
for the third quarter, a 12% or $7.0 million increase from second
quarter and a 28% or $13.7 million increase from first quarter. The
strong core operating earnings resulted in an efficiency ratio of
40% for the third quarter of 2009, down from 55% in the second
quarter of 2009.
- Capital Strengthened – In
July 2009, East West raised $80.3 million in an oversubscribed
common stock offering. During the second and third quarters of
2009, East West took actions to further strengthen capital and
increased tangible common equity by $249 million. As of September
30, 2009, East West’s Tier 1 risk-based capital ratio was 13.08%,
significantly higher than the well capitalized requirement of
6.00%.
Credit Quality
During the third quarter, East West continued to execute on its
strategy to de-risk the loan portfolio and reduce exposure to
problem credits. East West sold $180.6 million in loans and $25.7
million in REO assets, or a total of $206.3 million or 85 loans and
properties during the third quarter. These sales of problem loans
and REO assets resulted in additional charge-offs of $60.1 million
for the third quarter. East West has consistently applied its
strategy of accelerating the resolution of problem assets. Although
this approach has led to accelerated charge-offs, management
believes that these were prudent actions that significantly reduced
overall risk.
Excluding the land and construction portfolios which are
discussed in more detail below, both delinquent and nonaccrual
loans remain low for all other loan categories, as shown in the
table below. Both delinquent and nonaccrual loans are only 1% of
the total loan balance for income producing commercial real estate
loans.
Loan Credit Quality Composition at September 30, 2009
(in millions)
Loan Balance
Nonaccrual Loans Nonaccrual Loans % of Loans Total
Delinquent Loans Delinquent % of Loans Real estate -
single family $
912.4
$ 6.2 0.7 % $ 19.8 2.2 % Real estate - multifamily
1,036.9
11.9 1.1 % 24.5 2.4 % Real estate - commercial
3,624.5
33.4 0.9 % 43.5 1.2 % Real estate - land
415.2
57.2 13.8 % 43.2 10.4 % Real estate - construction
654.1
65.8 10.1 % 69.9 10.7 % Commercial
1,110.4
25.0 2.3 % 17.4 1.6 % Trade finance
233.1
3.9 1.7 % 5.5 2.4 % Consumer
432.9
1.0 0.2 % 1.0 * 0.2 % Total gross loans receivable $
8,419.5
$ 204.4 2.4 % $ 224.8 2.7 %
* Delinquent student loans that are fully guaranteed by the U.S.
government are excluded from these amounts.
Land and Construction Loan Exposures
(in millions)
December 31, 2007
December 31, 2008 June 30,
2009
September 30, 2009 Land $ 681 $ 577 $ 480 $ 415
Construction: Funded commitment (balance) 1,547 1,261 945 654
Unfunded commitment 994 372 176 128
Total construction exposure $ 2,541 $ 1,633 $ 1,121 $ 782 Total
land and construction exposure $ 3,222 $ 2,210 $ 1,601 $ 1,197
The aggressive actions East West has taken to reduce credit risk
has accelerated the timing of charge-offs but has resulted in a
significant decrease in the exposure to land and construction
loans, the loan categories that have shown the most weakness during
this prolonged economic recession. Since December 31, 2007, East
West has reduced total exposure to land and construction loans by
$2.0 billion or 63%. As of September 30, 2009, land and
construction loan balances were reduced to $415.2 million and
$654.1 million, respectively, down $355.6 million or 25% from June
30, 2009. Management has continued to decrease exposure to land and
construction loans through payoffs, pay downs and note sales and
anticipates that by the end of the fourth quarter of 2009, the
remaining exposures to these loan categories will be further
reduced.
Delinquent Loans Trend
(in millions)
As of the Quarter Ended March 31, 2009
June 30, 2009 September 30, 2009 Loans
delinquent 30-59 days $ 189.9 $ 59.1 $ 21.8 Loans delinquent 60-89
days 115.9 90.1 63.0 Loans delinquent 90+ Days 178.8
147.4 140.0 Total delinquent loans $
484.6 $ 296.6 $ 224.8 Total loans receivable $
8,064.3 $ 8,529.0 $ 8,419.5 Delinquent loans to total loans ratio
6.01 % 3.48 % 2.67 %
Total loan delinquencies as of September 30, 2009 decreased by
$71.8 million or 24% from the prior quarter, marking the second
consecutive quarter that loan delinquencies have decreased. Loan
delinquency fell across all delinquency categories and loan types,
but particularly for early stage delinquencies. The decrease in
delinquent loans is primarily due to fewer migrations into
delinquency categories, the sale of problem loans, and the payoff
and resolution of delinquent loans.
Total nonperforming assets as of September 30, 2009 were $230.2
million or 1.84% of total assets, compared to $189.4 million or
1.49% of total assets at June 30, 2009 and $286.6 million or 2.28%
of total assets at March 31, 2009. Nonperforming loans increased
quarter over quarter largely due to land loans that are current or
otherwise under 90 days delinquent that were placed on nonaccrual.
We continue to proactively recognize problem credits. All
nonaccrual loans are reviewed for potential impairment and
shortfalls in collateral are charged-off.
During the third quarter, we recorded $159.2 million provision
for loan losses, increasing the allowance for loan losses at
September 30, 2009 to $230.7 million or 2.74% of outstanding loans.
This compares to $223.7 million or 2.62% of outstanding loans at
June 30, 2009. For the third quarter of 2009, East West had net
charge-offs of $151.2 million, of which approximately two-thirds
related to land and construction loans. Management believes that
both provision for loan losses and charge-offs have peaked and that
although they may continue to be elevated in the near future, the
levels will be lower than third quarter of 2009.
The allowance for loan losses of $230.7 million was 113% of
nonaccrual loans and 103% of delinquent loans as of September 30,
2009. As of September 30, 2009, East West’s allowance coverage to
nonaccrual loans and delinquent loans is higher than peers,
reflecting our aggressive stance in removing problem credits from
our balance sheet and charging off shortfalls in collateral value.
Further, East West’s nonaccrual loan and nonperforming asset levels
are substantially below peers.
CRE Portfolio Performing Well
East West’s income producing commercial real estate loans
totaling $3.6 billion continues to perform well. Total delinquent
and nonaccrual loans in this category remain low at only 1% of
total loans. Total income producing commercial real estate loan
charge-offs totaled $23.1 million for the third quarter, largely
due to four loans which were sold during the quarter. These loans
were construction take-out loans or otherwise projects which never
fully leased up and not typical of our income producing commercial
real estate portfolio.
CRE Loan Portfolio LTV and Maturity Composition at September
30, 2009
LTV Distribution * Maturity Year
Less Than 50% 35 % 2009 5.5 % 50%-55% 12 % 2010 6.4 % 55%-60% 15 %
2011 6.9 % 60%-65% 19 % 2012 5.8 % 65%-70% 10 % 2013 7.0 % 70%-75%
6 % 2014 16.0 % 75% and Above 3 % 2015 and Beyond 52.4 % Total CRE
Loans 100 % Total CRE Loans 100.0 %
Weighted Average LTV
54 % Weighted Average Maturity 2015
* The LTV distribution is calculated based on the original
appraisal value at the origination date divided by the current loan
balance.
The vast majority of East West’s income producing commercial
real estate portfolio is comprised of low loan to value, seasoned
loans with full personal guarantees from borrowers. Refinance risk
for income producing commercial real estate loans maturing soon
remain a strong risk for the industry as real estate values have
fallen. For the East West income producing commercial real estate
portfolio, this risk is mitigated by the low loan to values.
Further, refinance risk is limited as we have single digit
maturities each year for the next five years. Of the total $3.6
billion income producing commercial real estate portfolio, 81% have
an original LTV of 65% or less, 68% have maturities in 2014 or
beyond and 85% are variable rate loans (where borrowers have
benefited from lowered debt service on their loans). Overall, we
believe that due to these strong credit metrics, our income
producing commercial real estate portfolio is resilient.
Loan Origination
We continue to prudently underwrite new loans, originating
$334.9 million in new loans for the third quarter of 2009. The
decrease in the total loan balance quarter over quarter was due to
new loan production being fully offset by the successful resolution
of problem loans. Year to date, we have originated a total of
$970.1 million in new loans. Overall, new loan originations have
steadily increased throughout 2009.
Deposit Growth
(In billions)
December 31,
2008
June 30,
2009
September 30,
2009
Total core deposits $ 3.40 $ 4.07 $ 4.43 Total time deposits
4.74 4.59 4.24 Total deposits $
8.14 8.66 $ 8.67 Cost of deposits (for the quarter ended) 2.14 %
1.47 % 1.24 %
Total deposits increased to $8.7 billion as of September 30,
2009, $9.7 million higher compared to June 30, 2009. Total core
deposits reached a record high of $4.4 billion as of September 30,
2009, up 9% or $357.7 million from June 30, 2009. We experienced
growth in all core deposits - noninterest bearing demand, interest
checking, money market and savings. In particular, money market
deposits increased to a record $2.3 billion, a $263.9 million or
13% increase from June 30, 2009.
The deposit growth for the quarter was net of a $210.0 million
reduction in brokered deposits. We continue to reduce our reliance
on brokered deposits as we manage our cost of deposits and funding
needs.
The cost of deposits decreased to 1.24% for the third quarter of
2009, a decrease of 23 basis points from 1.47% in the second
quarter of 2009. The decrease in the cost of deposits was driven by
the substantial increase in core deposits and a decreased reliance
on time deposits.
Capital Strength
(Dollars in millions)
September 30,
2009
Well Capitalized
Regulatory Requirement
Total Excess Above
Well Capitalized Requirement
Tier 1 leverage capital ratio 10.62 % 5.00 % $ 691.70 Tier 1
risk-based capital ratio 13.08 % 6.00 % 707.50 Total risk-based
capital ratio 15.13 % 10.00 % 512.40 Tangible common equity to risk
weighted assets ratio 7.98 % 4.00 % * 397.96
* The tangible common equity to risk weighted asset ratio is a
non-GAAP disclosure. See reconciliation of the GAAP financial
measure to this non-GAAP financial measure in the tables attached.
As there is no stated regulatory guideline for this ratio, the
Supervisory Capital Assessment Program (SCAP) guideline of 4.00%
has been used.
East West has always been committed to maintaining strong
capital levels and has been well capitalized throughout this
economic cycle. During the second and third quarters of 2009, East
West took actions to further strengthen capital and increased
tangible common equity by $249 million. As of the end of the third
quarter, East West significantly exceeded well capitalized
requirements under all regulatory guidelines.
Third Quarter 2009 Operating Results
Net interest income for the third quarter totaled $95.9 million,
a 9% increase over second quarter of 2009. The net interest margin
for the third quarter was 3.20%, a 22 basis point increase from
2.98% in the prior quarter. The net interest margin continues to
strengthen due to increases in core deposits, ongoing downward
repricing of maturing higher cost time deposits and money market
deposits and the ongoing pay-downs of higher cost term FHLB
borrowings. During the third quarter, East West paid down $250.0
million in FHLB advances at an average cost of 5.14%. East West
expects to pay down another $200.0 million at an average cost of
4.43% in the fourth quarter of 2009.
Currently, we estimate that the net interest margin will be
approximately 3.35% to 3.40% for the fourth quarter of 2009.
Excluding the non-cash charge for impairment of investment
securities and gains on sales of investment securities, noninterest
income for the third quarter totaled $10.2 million, a 7% increased
from $9.6 million in the second quarter of 2009. See reconciliation
of the GAAP financial measure to this non-GAAP financial measure in
the tables attached. In the third quarter of 2009, we recorded
$24.2 million write-downs on investment securities for
other-than-temporary impairment on bank pooled trust preferred
securities. Previously, we recorded other-than-temporary impairment
on bank pooled trust preferred securities of $37.4 million in the
second quarter of 2009.
Noninterest expense totaled $46.1 million for the third quarter
2009, a decrease of $11.8 million from the second quarter of 2009.
The decrease in noninterest expense quarter over quarter was
primarily due to the reduction in OREO expense of $7.9 million. The
efficiency ratio continued to improve, totaling 40% for the third
quarter of 2009.
Dividend Payout
East West Bancorp’s Board of Directors has declared fourth
quarter dividends on the common stock and remaining Series A
Preferred Stock. The common stock cash dividend of $0.01 is payable
on or about November 24, 2009 to shareholders of record on November
10, 2009. The dividend on the Series A Preferred Stock of $20.00
per share is payable on November 1, 2009 to shareholders of record
on October 15, 2009. We will continue to review the dividend policy
quarterly in light of the current economic environment.
About East West
East West Bancorp [NASDAQ: EWBC] is a publicly owned
company with $12.5 billion in assets. The Company’s wholly owned
subsidiary, East West Bank, is FDIC insured and the second largest
full service commercial bank headquartered in Southern
California with 71 branch locations. East West Bank serves the
community with 69 branch locations throughout the counties of Los
Angeles, Orange, San Bernardino, Alameda, San Francisco, Santa
Clara, San Mateo and one branch location in Houston,
Texas. East West Bank has four international locations in Greater
China, which include a full service branch in Hong Kong and
representative offices in Beijing, Shanghai and Taipei. In addition
to serving the mainstream market, East West is also one of the
largest financial institutions in the nation serving the
Chinese-American community. 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; risks inherent in possible acquisitions and
FDIC-assisted transactions; 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) September 30, 2009
June 30, 2009 December 31, 2008 Assets Cash and due
from banks $ 132,569 $ 148,913 $ 144,486 Short-term investments
460,665 424,201 734,367 Interest-bearing deposits in other banks
320,860 554,293 228,441 Securities purchased under resale
agreements 75,000 75,000 50,000 Investment securities
held-to-maturity, at amortized cost 781,331 794,840 122,317
Investment securities available-for-sale, at fair value 1,457,023
1,381,810 2,040,194 Loans receivable (net of allowance for loan
losses of $230,650, $223,700 and $178,027) 8,156,838 8,289,229
8,069,377 Other real estate owned, net 24,185 27,188 38,302
Premiums on deposits acquired, net 17,904 18,973 21,190 Goodwill
337,438 337,438 337,438 Other assets 722,117
667,630 636,704 Total assets $ 12,485,930
$ 12,719,515 $ 12,422,816 Liabilities
and Stockholders' Equity Deposits $ 8,668,557 $ 8,658,818 $
8,141,959 Federal funds purchased 3,022 22 28,022 Federal Home Loan
Bank advances 923,216 1,173,238 1,353,307 Securities sold under
repurchase agreements 1,019,450 1,020,080 998,430 Notes payable
7,111 11,578 16,506 Long-term debt 235,570 235,570 235,570 Accrued
expenses and other liabilities 107,222 143,441
98,256 Total liabilities 10,964,148 11,242,747
10,872,050 Stockholders' equity 1,521,782
1,476,768 1,550,766 Total liabilities and
stockholders' equity $ 12,485,930 $ 12,719,515 $
12,422,816 Book value per common share $ 12.58 $ 15.65 $
16.92 Number of common shares at period end 91,694 64,032 63,746
Ending Balances September 30, 2009 June 30,
2009 December 31, 2008 Loans receivable Real estate -
single family $ 912,391 $ 883,447 $ 491,315 Real estate -
multifamily 1,036,932 1,017,803 677,989 Real estate - commercial
3,624,469 3,510,248 3,472,000 Real estate - land 415,228 479,808
576,564 Real estate - construction 654,115 945,107 1,260,724
Commercial 1,110,373 1,143,526 1,210,260 Trade finance 233,123
269,150 343,959 Consumer 432,844 279,872
216,642 Total gross loans receivable 8,419,475
8,528,961 8,249,453 Unearned fees, premiums and discounts (31,987 )
(16,032 ) (2,049 ) Allowance for loan losses (230,650 )
(223,700 ) (178,027 ) Net loans receivable $
8,156,838 $ 8,289,229 $ 8,069,377 Deposits
Noninterest-bearing demand $ 1,397,217 $ 1,326,952 $ 1,292,997
Interest-bearing checking 347,745 338,696 363,285 Money market
2,263,319 1,999,464 1,323,402 Savings 420,365
405,837 420,133 Total core deposits 4,428,646
4,070,949 3,399,817 Time deposits less than $100,000 1,062,575
1,121,648 1,521,988 Time deposits $100,000 or greater
3,177,336 3,466,221 3,220,154
Total time deposits 4,239,911 4,587,869
4,742,142 Total deposits $ 8,668,557 $ 8,658,818 $
8,141,959
EAST WEST BANCORP, INC. CONDENSED
CONSOLIDATED STATEMENTS OF INCOME (In thousands, except per
share amounts) (unaudited) Quarter
Ended September 30, 2009 June 30, 2009
September 30, 2008 Interest and dividend
income $ 147,924 $ 146,333 $ 159,862 Interest expense
(52,044 ) (58,073 ) (73,347 ) Net interest income
before provision for loan losses 95,880 88,260
86,515 Provision for loan losses (159,244 ) (151,422
) (43,000 ) Net interest (loss) income after provision for
loan losses (63,364 ) (63,162 )
43,515 Noninterest (loss) income (11,880 ) (26,199 ) (43,550 )
Noninterest expense (46,064 ) (57,912 )
(48,526 ) Loss before benefit for income taxes (121,308 ) (147,273
) (48,561 ) Benefit for income taxes 52,777
60,548 17,355 Loss before extraordinary item $
(68,531 ) $ (86,725 ) $ (31,206 ) Extraordinary item, net of tax
- (5,366 ) - Net loss after
extraordinary item $ (68,531 ) $ (92,091 ) $ (31,206 ) Preferred
stock dividend, inducement, and amortization of preferred stock
discount (10,620 ) (23,623 ) (4,089 ) Net loss
available to common stockholders $ (79,151 ) $ (115,714 ) $ (35,295
) Net loss per share, basic $ (0.91 ) $ (1.83 ) $ (0.56 ) Net loss
per share, diluted $ (0.91 ) $ (1.83 ) $ (0.56 ) Shares used to
compute per share net loss: - Basic 86,538 63,105 62,675 - Diluted
86,538 63,105 62,675
Quarter Ended
September 30, 2009 June 30, 2009 September 30,
2008 Noninterest (loss) income: Impairment loss on investment
securities $ (24,249 ) $ (37,447 ) $ (53,567 ) Branch fees 4,679
4,991 4,285 Net gain on sale of investment securities 2,177 1,680 -
Letters of credit fees and commissions 1,984 1,930 2,319 Ancillary
loan fees 1,227 1,356 1,783 Net gain on sale of loans 8 3 144 Other
operating income 2,294 1,288
1,486 Total noninterest (loss) income $ (11,880 ) $ (26,199
) $ (43,550 ) Noninterest expense: Compensation and employee
benefits $ 15,875 $ 16,509 $ 17,520 Occupancy and equipment expense
6,262 6,297 6,817 Deposit insurance premiums and regulatory
assessments 6,057 9,568 1,678 Amortization of investments in
affordable housing partnerships 1,709 1,652 1,886 Legal expense
1,323 1,755 855 Data processing 1,079 1,141 1,055 Amortization and
impairment loss of premiums on deposits acquired 1,069 1,092 1,581
Other real estate owned expense 767 8,682 2,123 Consulting expense
759 672 1,254 Other operating expense 11,164
10,544 13,757 Total noninterest expense $
46,064 $ 57,912 $ 48,526
EAST WEST BANCORP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (In
thousands, except per share amounts) (unaudited)
Year To Date September 30, 2009
September 30, 2008 % Change Interest
and dividend income $ 439,180 $ 514,951 (15 ) Interest expense
(175,359 ) (236,641 ) (26 ) Net interest income
before provision for loan losses 263,821 278,310 (5 ) Provision for
loan losses (388,666 ) (183,000 ) 112 Net interest
(loss) income after provision for loan losses (124,845 ) 95,310
(231 ) Noninterest loss (24,285 ) (24,199 ) 0 Noninterest expense
(155,382 ) (157,071 ) (1 ) Loss before benefit for
income taxes (304,512 ) (85,960 ) 254 Benefit for income taxes
126,790 33,911 274 Net loss before
extraordinary items $ (177,722 ) $ (52,049 ) 241 Extraordinary
item, net of tax $ (5,366 ) $ - NA Net loss after
extraordinary item $ (183,088 ) $ (52,049 ) 252 Preferred stock
dividend, inducement, and amortization of preferred stock discount
(42,986 ) (4,089 ) 951 Net loss available to common
stockholders $ (226,074 ) $ (56,138 ) 303 Net loss per share, basic
$ (3.19 ) $ (0.90 ) 254 Net loss per share, diluted $ (3.19 ) $
(0.90 ) 254 Shares used to compute per share net loss: - Basic
70,967 62,586 13 - Diluted 70,967 62,586 13
Year
To Date September 30, 2009 September 30, 2008
% Change Noninterest loss: Impairment loss on
investment securities $ (61,896 ) $ (63,512 ) (3 ) Branch fees
14,463 12,725 14 Net gain on sale of investment securities 7,378
7,767 (5 ) Letters of credit fees and commissions 5,768 7,472 (23 )
Ancillary loan fees 4,812 3,908 23 Net gain on sale of loans 19
2,272 (99 ) Other operating income 5,171 5,169
0 Total noninterest loss $ (24,285 ) $ (24,199 ) (0 )
Noninterest expense: Compensation and employee benefits $ 49,492 $
66,578 (26 ) Occupancy and equipment expense 19,950 20,364 (2 )
Deposit insurance premiums and regulatory assessments 18,950 5,191
265 Other real estate owned expense 16,480 3,520 368 Amortization
of investments in affordable housing partnerships 5,121 5,521 (7 )
Legal expense 4,856 3,890 25 Data processing 3,362 3,386 (1 )
Amortization and impairment loss of premiums on deposits acquired
3,286 6,145 (47 ) Consulting expense 1,879 3,788 (50 ) Other
operating expense 32,006 38,688 (17 )
Total noninterest expense $ 155,382 $ 157,071 (1 )
EAST
WEST BANCORP, INC DELINQUENT LOANS BY LOAN CATEGORIES
(in thousands) (unaudited) As of September
30, 2009 Loan Type
30-59 Days Delinquent 60-89 Days
Delinquent 90+ Days Delinquent Total Delinquent
Loans Real estate - single family $ - $ 13,577 $ 6,189 $ 19,766
Real estate - multifamily 4,811 8,506 11,211 24,528 Real estate -
commercial 9,184 16,896 17,381 43,461 Real estate - land 1,521
18,135 23,568 43,224 Real estate - residential construction - 3,971
55,130 59,101 Real estate - commercial construction - - 10,784
10,784 Commercial 4,235 1,363 11,783 17,381 Trade finance 1,785 32
3,666 5,483 Consumer (1) 277 470 293
1,040 Total Delinquent Loans $ 21,813 $ 62,950 $ 140,005 $ 224,768
(1) This figure excludes
delinquent student loans that are fully guaranteed by the U.S.
government. As of September 30, 2009, $13.8 million of student
loans were 30-59 days delinquent and $17.0 million student loans
were 60-89 days delinquent. There were no student loans 90+ days
delinquent.
As of June 30, 2009 Loan Type
30-59 Days
Delinquent 60-89 Days Delinquent 90+ Days
Delinquent Total Delinquent Loans Real estate - single
family $ 553 $ 6,775 $ 5,181 $ 12,509 Real estate - multifamily
1,960 5,618 7,938 15,516 Real estate - commercial 33,416 28,341
19,786 81,543 Real estate - land 1,570 22,190 35,660 59,420 Real
estate - residential construction 17,331 6,789 46,176 70,296 Real
estate - commercial construction - - 20,629 20,629 Commercial 4,021
19,480 8,034 31,535 Trade finance - 408 3,706 4,114 Consumer
244 458 339 1,041 Total Delinquent Loans $
59,095 $ 90,059 $ 147,449 $ 296,603
As of March 31,
2009 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
As of December 31, 2008 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
EAST WEST BANCORP, INC TOTAL NON-PERFORMING
ASSETS (in thousands) (unaudited)
As of September 30, 2009
Total Nonaccrual Loans 90+ Days Delinquent Under
90+ Days Delinquent Total Nonaccrual Loans
90+ Days
Delinquent Not
On Nonaccrual
Total Non-performing Loans REO Assets Total
Non-Performing Assets
Loan Type Real estate - single family $ 6,189 $ - $ 6,189
$
-
$ 6,189 $ 648 $ 6,837 Real estate - multifamily 11,211 652 11,863
-
11,863 1,147 13,010 Real estate - commercial 17,381 16,040 33,421
-
33,421 2,330 35,751 Real estate - land 23,568 33,610 57,178
-
57,178 4,020 61,198 Real estate - residential construction 55,130 -
55,130
-
55,130 12,238 67,368 Real estate - commercial construction 10,784 -
10,784
-
10,784 3,680 14,464 Commercial 11,783 13,227 25,010
-
25,010 122 25,132 Trade Finance
2,110
1,785
3,895
1,556
5,451 - 5,451 Consumer 293 676 969
-
969 - 969 Total
$ 140,005
$ 65,990 $ 205,995
$
1,556
$ 205,995 $ 24,185 $
230,180
As of June 30, 2009 Total Nonaccrual Loans
90+ Days Delinquent
Under 90+ Days Delinquent Total Nonaccrual Loans
90+ Days
Delinquent Not
On Nonaccrual
Total Non-performing Loans REO Assets Total
Non-Performing Assets
Loan Type Real estate - single family $ 5,181 $ - $ 5,181
$
-
$ 5,181 $ 4,921 $ 10,102 Real estate - multifamily 7,938 - 7,938
-
7,938 281 8,219 Real estate - commercial 19,786 4,590 24,376
-
24,376 2,887 27,263 Real estate - land 35,660 1,656 37,316
-
37,316 13,307 50,623 Real estate - residential construction 46,176
- 46,176
-
46,176 4,154 50,330 Real estate - commercial construction 20,629 -
20,629
-
20,629 - 20,629 Commercial 8,034 8,067 16,101
-
16,101 626 16,727 Trade Finance 3,706 - 3,706
-
3,706 211 3,917 Consumer 339 412 751
-
751 801 1,552 Total
$ 147,449
$ 14,725 $ 162,174
$
-
$ 162,174 $ 27,188 $
189,362 As of March 31, 2009 Total
Nonaccrual Loans 90+ Days Delinquent Under 90+ Days
Delinquent Total Nonaccrual Loans
90+ Days
Delinquent Not
On Nonaccrual
Total Non-performing Loans REO Assets Total
Non-Performing Assets
Loan Type Real estate - single family $ 18,515 $ 634 $ 19,149
$
-
$ 19,149 $ 671 $ 19,820 Real estate - multifamily 9,863 - 9,863
-
9,863 887 10,750 Real estate - commercial 12,465 42,724 55,189
-
55,189 4,240 59,429 Real estate - land 63,052 6,233 69,285
-
69,285 17,934 87,219 Real estate - residential construction 28,433
14,196 42,629
-
42,629 13,278 55,907 Real estate - commercial construction 28,604 -
28,604
-
28,604 - 28,604 Commercial 16,798 5,000 21,798
-
21,798 1,236 23,034 Trade Finance 177 - 177
-
177 270 447 Consumer 839 482 1,321
-
1,321 118 1,439 Total
$ 178,746
$ 69,269 $ 248,015
$
-
$ 248,015 $ 38,634 $
286,649 As of December 31, 2008 Total
Nonaccrual Loans 90+ Days Delinquent Under 90+ Days
Delinquent Total Nonaccrual Loans
90+ Days
Delinquent Not
On Nonaccrual
Total Non-performing Loans REO Assets Total
Non-Performing Assets
Loan Type Real estate - single family $ 13,519 $ - $ 13,519
$
-
$ 13,519 $ 419 $ 13,938 Real estate - multifamily 11,845 - 11,845
-
11,845 1,136 12,981 Real estate - commercial 24,680 - 24,680
-
24,680 4,882 29,562 Real estate - land 66,185 12,892 79,077
-
79,077 10,307 89,384 Real estate - residential construction 27,052
8,766 35,818
-
35,818 21,146 56,964 Real estate - commercial construction 30,581 -
30,581
-
30,581 - 30,581 Commercial 6,570 10,604 17,174
-
17,174 142 17,316 Trade Finance 65 - 65
-
65 270 335 Consumer 1,654 194 1,848
-
1,848 - 1,848 Total
$ 182,151
$ 32,456 $ 214,607
$
-
$ 214,607 $ 38,302 $
252,909 EAST WEST BANCORP, INC. QUARTERLY
ALLOWANCE FOR LOAN LOSSES RECAP (In thousands)
(unaudited)
Quarter Ended
9/30/2009 6/30/2009
3/31/2009 LOANS Allowance balance,
beginning of period $ 223,700 $ 195,450 $ 178,027 Allowance for
unfunded loan commitments and letters of credit (1,051 ) 1,442
(1,008 ) Provision for loan losses 159,244 151,422 78,000 Impact of
desecuritization - 9,262 - Net Charge-offs: Real estate -
single family 8,034 14,058 3,832 Real estate - multifamily 7,231
2,256 1,624 Real estate - commercial 23,105 12,472 2,790 Real
estate - land 39,988 33,183 12,523 Real estate - residential
construction 32,535 30,634 16,347 Real estate - commercial
construction 23,051 28,602 1,977 Commercial 14,956 11,577 18,146
Trade finance 2,256 774 1,032 Consumer 87 320
1,298 Total net charge-offs 151,243
133,876 59,569 Allowance
balance, end of period $ 230,650 $ 223,700 $ 195,450
UNFUNDED LOAN COMMITMENTS AND LETTERS OF
CREDIT: Allowance balance, beginning of period $ 5,907 $ 7,349
$ 6,341 Provision for unfunded loan commitments and letters of
credit 1,051 (1,442 ) 1,008
Allowance balance, end of period $ 6,958 $ 5,907 $
7,349 GRAND TOTAL, END OF PERIOD $ 237,608 $ 229,607
$ 202,799 Nonperforming assets to total assets
1.84 % 1.49 % 2.28 % Allowance for loan losses to total gross loans
at end of period 2.74 % 2.62 % 2.42 % Allowance for loan losses and
unfunded loan commitments to total gross loans at end of period
2.82 % 2.69 % 2.51 % Allowance to nonaccrual loans at end of period
112.82 % 137.94 % 78.81 % Nonaccrual loans to total loans 2.43 %
1.90 % 3.08 %
EAST WEST BANCORP, INC. QUARTER TO
DATE AVERAGE BALANCES, YIELDS AND RATES PAID (In thousands)
(unaudited)
Quarter Ended
September 30, 2009 June 30, 2009 Average
Average Volume Interest Yield (1)
Volume Interest Yield (1)
ASSETS Interest-earning assets:
Short-term investments $ 387,753 $ 402 0.41 % $ 340,142 $ 613 0.72
% Interest bearing deposits in other banks 509,774 1,454 1.12 %
536,244 1,896 1.42 % Securities purchased under resale agreements
91,033 2,153 9.25 % 51,374 1,292 9.95 % Investment securities
held-to-maturity Taxable 761,615 11,886 6.24 % 769,432 11,883 6.18
% Tax-exempt (2) 22,727 256 4.51 % 22,777 374 6.57 % Investment
securities available-for-sale 1,543,004 16,425 4.22 % 1,820,789
18,183 4.01 % Loans receivable 8,471,766 114,512 5.36 % 8,244,850
111,669 5.43 % Federal Home Loan Bank and Federal Reserve Bank
stocks 123,514 918 2.97 % 123,514
545 1.76 % Total interest-earning assets
11,911,186 148,006 4.93 % 11,909,122
146,455 4.93 %
Noninterest-earning assets:
Cash and due from banks 124,708 113,853 Allowance for loan losses
(244,542 ) (198,802 ) Other assets 843,925
794,849 Total assets $ 12,635,277 $ 12,619,022
LIABILITIES AND STOCKHOLDERS'
EQUITY Interest-bearing liabilities: Checking
accounts 342,922 286 0.33 % 356,756 324 0.36 % Money market
accounts 2,160,722 6,830 1.25 % 1,822,470 6,140 1.35 % Savings
deposits 421,844 608 0.57 % 415,828 659 0.64 % Time deposits less
than $100,000 1,090,647 5,572 2.03 % 1,162,205 6,947 2.40 % Time
deposits $100,000 or greater 3,308,057 13,674 1.64 % 3,386,730
16,820 1.99 % Federal funds purchased 1,385 2 0.57 % 4,849 3 0.24 %
Federal Home Loan Bank advances 1,046,056 11,172 4.24 % 1,273,640
13,142 4.14 % Securities sold under repurchase agreements 1,018,321
12,140 4.66 % 1,006,614 12,004 4.72 % Long-term debt 235,570
1,760 2.92 % 235,570 2,034 3.42
% Total interest-bearing liabilities 9,625,524
52,044 2.15 % 9,664,662 58,073 2.41 %
Noninterest-bearing liabilities: Demand deposits 1,335,131
1,300,676 Other liabilities 130,800 123,431 Stockholders' equity
1,543,822 1,530,253 Total liabilities
and stockholders' equity $ 12,635,277 $ 12,619,022
Interest rate spread 2.78 % 2.52 % Net interest
income and net yield on interest-earning assets (2) $ 95,962 3.20 %
$ 88,382 2.98 % (1) Annualized (2) Amounts calculated
on a fully taxable equivalent basis using the current statutory
federal tax rate.
EAST WEST BANCORP, INC. YEAR TO
DATE AVERAGE BALANCES, YIELDS AND RATES PAID (In thousands)
(unaudited)
Year To Date
September 30, 2009 2008 Average
Average Volume Interest Yield (1)
Volume Interest Yield (1)
ASSETS Interest-earning assets:
Short-term investments $ 405,387 $ 2,663 0.88 % $ 181,675 $ 3,093
2.27 % Interest bearing deposits in other banks 430,382 4,678 1.45
% 495 14 3.77 % Securities purchased under resale agreements 64,286
4,695 9.63 % 76,898 5,533 9.58 % Investment securities
held-to-maturity Taxable 646,936 30,464 6.28 % - - - Tax-exempt (2)
20,737 907 5.83 % - - - Investment securities available-for-sale
(3) 1,878,815 57,101 4.06 % 1,986,124 76,814 5.15 % Loans
receivable 8,305,602 336,997 5.42 % 8,725,596 425,113 6.49 %
Federal Home Loan Bank and Federal Reserve Bank stocks
122,369 1,969 2.15 % 115,839
5,275 6.07 % Total interest-earning assets 11,874,514
439,474 4.95 % 11,086,627 515,842 6.20
%
Noninterest-earning assets: Cash and due from banks
120,493 136,708 Allowance for loan losses (210,015 ) (132,548 )
Other assets 799,008 664,711 Total
assets $ 12,584,000 $ 11,755,498
LIABILITIES AND STOCKHOLDERS' EQUITY
Interest-bearing liabilities: Checking accounts 351,933
1,003 0.38 % 416,636 2,707 0.87 % Money market accounts 1,826,626
18,664 1.37 % 1,081,520 20,246 2.49 % Savings deposits 416,011
1,969 0.63 % 463,172 3,341 0.96 % Time deposits less than $100,000
1,194,374 22,137 2.48 % 1,018,609 24,333 3.18 % Time deposits
$100,000 or greater 3,391,653 51,160 2.02 % 3,073,775 85,919 3.72 %
Federal funds purchased 2,889 8 0.37 % 115,370 2,176 2.51 % Federal
Home Loan Bank advances 1,200,713 38,191 4.25 % 1,622,429 54,363
4.46 % Securities sold under repurchase agreements 1,007,912 36,016
4.71 % 1,000,750 33,881 4.51 % Long-term debt 235,570
6,211 3.48 % 235,570 9,675 5.47 % Total
interest-bearing liabilities 9,627,681 175,359
2.44 % 9,027,831 236,641 3.49 %
Noninterest-bearing liabilities: Demand deposits 1,292,852
1,379,975 Other liabilities 125,183 141,275 Stockholders' equity
1,538,284 1,206,417 Total liabilities
and stockholders' equity $ 12,584,000 $ 11,755,498
Interest rate spread 2.51 % 2.71 % Net interest
income and net yield on interest-earning assets (2) $ 264,115 2.97
% $ 279,201 3.35 % (1) Annualized (2) Amounts
calculated on a fully taxable equivalent basis using the current
statutory federal tax rate.
(3) Year to date September 30,
2008, amounts calculated on a fully taxable equivalent basis using
the current statutory federal tax rate
EAST WEST BANCORP, INC. SELECTED FINANCIAL
INFORMATION (In thousands) (unaudited)
Average Balances Quarter Ended
% September 30, 2009 June 30, 2009
September 30, 2008 Change Loans receivable Real
estate - single family $ 888,106 $ 686,073 $ 474,983 87 Real estate
- multifamily 1,036,080 823,890 718,633 44 Real estate - commercial
3,552,897 3,516,257 3,411,068 4 Real estate - land 460,256 523,799
628,100 (27 ) Real estate - construction 855,446 1,072,319
1,464,801 (42 ) Commercial 1,111,414 1,112,869 1,144,602 (3 ) Trade
finance 248,809 274,388 411,310 (40 ) Consumer 318,758
235,255 198,020 61 Total loans
receivable 8,471,766 8,244,850 8,451,517 0 Investment securities
held-to-maturity 784,342 792,209 - NA Investment securities
available-for-sale 1,543,004 1,820,789 2,126,894 (27 ) Earning
assets 11,911,186 11,909,122 11,083,415 7 Total assets 12,635,277
12,619,022 11,709,144 8 Deposits Noninterest-bearing demand
$ 1,335,131 $ 1,300,676 $ 1,375,103 (3 ) Interest-bearing checking
342,922 356,756 399,866 (14 ) Money market 2,160,722 1,822,470
1,046,721 106 Savings 421,844 415,828
449,687 (6 ) Total core deposits 4,260,619 3,895,730
3,271,377 30 Time deposits less than $100,000 1,090,647 1,162,205
1,151,876 (5 ) Time deposits $100,000 or greater 3,308,057
3,386,730 3,045,325 9 Total time
deposits 4,398,704 4,548,935
4,197,201 5 Total deposits 8,659,323 8,444,665 7,468,578 16
Interest-bearing liabilities 9,625,524 9,664,662 8,958,723 7
Stockholders' equity 1,543,822 1,530,253 1,240,509 24
Selected Ratios Quarter Ended % September
30, 2009 June 30, 2009 September 30, 2008
Change For The Period Return on average assets -2.17 % -2.92
% -1.07 % 103 Return on average common equity -27.12 % -43.81 %
-13.49 % 101 Interest rate spread (3) 2.78 % 2.52 % 2.48 % 12 Net
interest margin (3) 3.20 % 2.98 % 3.10 % 3 Yield on earning assets
(3) 4.93 % 4.93 % 5.73 % (14 ) Cost of deposits 1.24 % 1.47 % 2.17
% (43 ) Cost of funds 1.88 % 2.12 % 2.82 % (33 ) Noninterest
expense/average assets (1) 1.37 % 1.75 % 1.53 % (10 ) Efficiency
ratio (4) 39.99 % 55.12 % 46.40 % (14 ) Net chargeoffs to average
loans (2) 7.14 % 6.50 % 1.88 % 280 Gross loan chargeoffs $ 153,883
$ 137,411 $ 44,355 247 Loan recoveries $ (2,640 ) $ (3,535 ) $
(4,660 ) (43 ) Net loan chargeoffs $ 151,243 $ 133,876
$ 39,695 281 (1) Excludes the amortization of
intangibles, amortization and impairment loss of premiums on
deposits acquired, impairment loss 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 loss
of premiums on deposits acquired, impairment loss 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 loss on investment
securities.
EAST WEST BANCORP, INC. SELECTED FINANCIAL
INFORMATION (In thousands) (unaudited)
Average Balances Year To Date September
30, % 2009 2008
Change Loans receivable Real estate - single family $
695,034 $ 459,112 51 Real estate - multifamily 852,216 716,076 19
Real estate - commercial 3,511,979 3,508,629 0 Real estate - land
521,696 649,618 (20 ) Real estate - construction 1,051,940
1,538,202 (32 ) Commercial 1,134,238 1,223,128 (7 ) Trade finance
277,371 441,586 (37 ) Consumer 261,128
189,245 38 Total loans receivable 8,305,602 8,725,596 (5 )
Investment securities held-to-maturity 667,673 - NA Investment
securities available-for-sale 1,878,815 1,986,124 (5 ) Earning
assets 11,874,514 11,086,627 7 Total assets 12,584,000 11,755,498 7
Deposits Noninterest-bearing demand $ 1,292,852 $ 1,379,975
(6 ) Interest-bearing checking 351,933 416,636 (16 ) Money market
1,826,626 1,081,520 69 Savings 416,011 463,172
(10 ) Total core deposits 3,887,422 3,341,303 16 Time
deposits less than $100,000 1,194,374 1,018,609 17 Time deposits
$100,000 or greater 3,391,653 3,073,775
10 Total time deposits 4,586,027 4,092,384
12 Total deposits 8,473,449 7,433,687 14 Interest-bearing
liabilities 9,627,681 9,027,831 7 Stockholders' equity 1,538,284
1,206,417 28
Selected Ratios Year To Date
September 30, % 2009
2008 Change For The Period Return on average
assets -1.94 % -0.59 % 229 Return on average common equity -27.46 %
-6.83 % 302 Interest rate spread (3) 2.51 % 2.71 % (7 ) Net
interest margin (3) 2.97 % 3.35 % (11 ) Yield on earning assets (3)
4.95 % 6.20 % (20 ) Cost of deposits 1.50 % 2.45 % (39 ) Cost of
funds 2.15 % 3.03 % (29 ) Noninterest expense/average assets (1)
1.56 % 1.64 % (5 ) Efficiency ratio (4) 48.67 % 45.51 % 7 Net
chargeoffs to average loans (2) 5.53 % 1.53 % 262 Gross loan
chargeoffs $ 351,435 $ 105,147 234 Loan recoveries $ (6,746 ) $
(5,226 ) 29 Net loan chargeoffs $ 344,689 $ 99,921
245 Period End Tier 1 risk-based capital ratio 13.08 % 11.12
% 18 Total risk-based capital ratio 15.13 % 13.12 % 15 Tier 1
leverage capital ratio 10.62 % 9.84 % 8 (1) Excludes the
amortization of intangibles, amortization and impairment loss of
premiums on deposits acquired, impairment loss 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 loss of premiums on deposits acquired, impairment
loss 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 loss on investment securities.
EAST WEST
BANCORP, INC. GAAP TO NON-GAAP RECONCILIATION (In
thousands) (Unaudited) Quarter Ended
September 30, 2009 June 30, 2009 Loss
before benefit for income taxes $ (121,308 ) $ (147,273 ) Add:
Provision for loan losses 159,244 151,422 Impairment loss on
investment securities 24,249 37,447 FDIC special assessment - 5,700
Other real estate owned expense 767 8,682
Operating earnings (non-GAAP) $ 62,952 $ 55,978
Noninterest (loss) income $ (11,880 ) $ (26,199 )
Add: Impairment loss on investment securities 24,249 37,447 Net
gain on sale of investment securities (2,177 ) (1,680
) Operating noninterest income (non-GAAP) $ 10,192 $ 9,568
As of September 30, 2009 Stockholders'
Equity $ 1,521,782 Less: Preferred equity (367,922 ) Goodwill and
other intangible assets (356,256 ) Tangible common equity $
797,604 Risk-weighted assets *
$ 9,991,031
Tangible Common Equity to risk-weighted assets / (non-GAAP)
7.98 % * In accordance with applicable bank regulatory
guidelines, the company calculates risk-weighted assets by
assigning assets, credit equivalent amounts and off-balance sheet
items to one of several broad risk categories. The aggregate dollar
amount of each risk category is then multiplied by the risk weight
associated with the category. The resulting weighted values from
each of the risk categories are added together for determining
risk-weighted assets.
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