East West Bancorp, Inc. (Nasdaq: EWBC), parent company of East
West Bank, the financial bridge between the United States and
Greater China, today reported financial results for the fourth
quarter and full year 2011. For the fourth quarter of 2011, net
income was $66.2 million or $0.43 per dilutive share. For the full
year 2011, net income was $245.2 million and net income available
to common stockholders was $1.60 per dilutive share.
“East West earned $245.2 million for the full year 2011, the
highest ever in our history,” stated Dominic Ng, Chairman and Chief
Executive Officer of East West. “In the fourth quarter of 2011,
East West earned net income of $66.2 million or $0.43 per share, up
from $62.4 million or $0.41 per share in the third quarter. In
fact, throughout 2011, East West consecutively increased both net
income and EPS each quarter.”
Ng continued, “These strong results for the fourth quarter and
full year 2011 were a direct result of our success in growing the
loan portfolio and core deposits to record levels, while
maintaining tight control on operating expenses and significantly
reducing credit costs. Although the current environment continues
to pose challenges for the financial services industry, East West
has been able to outperform many of its peers. During 2011, we grew
our noncovered commercial loan portfolio to $3.1 billion and
increased core deposits by 16% or $1.4 billion to $10.3 billion.
This growth was achieved while we maintained strong expense control
and improved the efficiency ratio to 43%.”
“East West ended 2011 with record assets of $22 billion and
record earnings of $245.2 million. Our balance sheet is healthy and
our capital levels are excellent. As such, I am pleased to announce
that the board of directors has approved a 100% increase in the
annual common stock dividend rate to $0.40 per share and has also
authorized the repurchase of $200 million of our common stock. As
we look to 2012, we are confident in our ability to prudently grow
the balance sheet, improve our earnings power and return strong
value to our shareholders,” concluded Ng.
2011 Quarterly Results Summary
For the three months ended, Dollars in
millions, except per share
December 31,2011
September 30,2011
June 30,2011
March 31,2011
Net income $ 66.2 $ 62.4 $ 60.5 $ 56.1 Net income available to
common shareholders 64.5 60.7 58.8 54.4 Earnings per share
(diluted) 0.43 0.41 0.39 0.37 Return on average assets 1.20
% 1.13 % 1.12 % 1.07 % Return on average common equity 11.54 %
10.99 % 11.06 % 10.50 % Tier 1 risk-based capital ratio 14.8
% 14.6 % 15.2 % 15.9 % Total risk-based capital ratio 16.4 % 16.2 %
17.0 % 17.7 %
Full Year 2011 Highlights
- Record Earnings – East West
increased net income each consecutive quarter of 2011. For the full
year 2011, net income totaled a record $245.2 million, a 49% or
$80.7 million increase from $164.6 million in 2010.
- Strong Loan Growth – Total
noncovered loans grew to a record $10.6 billion, an increase of 18%
or $1.6 billion during the full year 2011. The growth in noncovered
loans was fueled by strong growth in commercial and trade finance
loans and single family loans.
- Record Deposit Growth – Total
deposits grew to a record $17.5 billion, a 12% or $1.8 billion
increase during the full year 2011. Core deposits grew to a record
$10.3 billion, an increase of 16% or $1.4 billion year to
date.
- Improved Asset Quality –
Charge-offs and provision levels decreased each quarter of 2011.
Full year 2011 net charge-offs were $112.1 million, a 45% or $90.5
million decrease as compared to the full year 2010. Nonperforming
assets remained low at 0.80% of total assets.
- Strong Capital Levels – Capital
levels for East West remain high. As of December 31, 2011, East
West’s Tier 1 risk-based capital and total risk-based ratios were
14.8% and 16.4%, respectively, over $800 million greater than the
well capitalized requirements of 6% and 10%, respectively.
Fourth Quarter 2011 Highlights
- Strong Fourth Quarter Earnings –
For the fourth quarter of 2011, net income was $66.2 million or
$0.43 per dilutive share. Net income grew 6% or $3.8 million from
the third quarter of 2011 and 17% or $9.9 million from the fourth
quarter of 2010. Earnings per dilutive share grew 5% or $0.02 from
the third quarter of 2011 and 95% or $0.21 from the fourth quarter
of 2010.
- Strong Loan Growth – Quarter to
date, total loans receivable increased 2% or $291.1 million to
$14.5 billion. This increase was largely due to growth in the
noncovered loan portfolio. Specifically, noncovered commercial and
trade finance loans grew 4% or $130.3 million to $3.1 billion, and
noncovered single family loans grew 18% or $278.7 million to $1.8
billion quarter to date.
- Strong Deposit Growth – Quarter
to date, core deposits increased 5% or $482.7 million to a record
$10.3 billion and total deposits increased 1% or $144.3 million to
$17.5 billion.
- Strong Net Interest Margin – The
adjusted net interest margin for the fourth quarter totaled 4.13%,
as compared to 3.98% for the third quarter of 2011 and 4.43% for
the fourth quarter of 2010. 1
- Cost of Funds Down 10 bps from Q3
2011 and Down 20 bps from Q4 2010 – The cost of funds declined
10 basis points from the third quarter of 2011 and 20 basis points
from the fourth quarter of 2010 to 0.83% for the fourth quarter of
2011. Our cost of deposits declined 10 basis points from the third
quarter of 2011 and 12 basis points from the fourth quarter of 2010
to 0.55% for the quarter ended December 31, 2011.
- Net Charge-offs Down 10% from Q3
2011, Down 43% from Q4 2010 – Net charge-offs declined to $21.8
million, a decrease of $2.5 million or 10% from the prior quarter
and a decrease of $16.5 million or 43% from the fourth quarter of
2010.
- Nonperforming Assets Stable at 0.80%
of Total Assets – Nonperforming assets totaled $175.0 million,
or 0.80% of total assets at December 31, 2011, a 4% or $6.1 million
increase from September 30, 2011 and a 10% or $19.8 million
decrease from December 31, 2010. This is the ninth consecutive
quarter East West is reporting a nonperforming assets to total
assets ratio under 1.00%.
Management Guidance
The Company is providing initial guidance for the first quarter
and full year of 2012. The planned buyback of up to $200.0 million
of the Company’s common stock is not factored into this guidance
for the first quarter or full year of 2012. Management currently
estimates that fully diluted earnings per share for the full year
of 2012 will range from $1.72 to $1.76 or an increase of
approximately 7% to 10% from 2011. This EPS guidance is based on
overall asset growth of 2%, provision for loan losses of
approximately $60 million and an adjusted net interest margin of
approximately 3.85%1.
Management currently estimates that fully diluted earnings per
share for the first quarter of 2012 will range from $0.41 to $0.43
per dilutive share. This EPS guidance is based on the following
assumptions:
- Stable balance sheet
- A stable interest rate environment and
an adjusted net interest margin of approximately 3.90%
- Provision for loan losses of
approximately $15 to $20 million
- Total noninterest expense of
approximately $100 million for the quarter, net of amounts to be
reimbursed by the FDIC
- Effective tax rate of approximately
36.5%
Balance Sheet Summary
As of December 31, 2011, total assets grew to $22.0 billion
compared to $21.8 billion at September 30, 2011, and $20.7 billion
at December 31, 2010. The increase in the balance sheet is
primarily due to loan growth of 2% or $291.1 million for the fourth
quarter and loan growth of 5% or $751.9 million for the full year
2011. This growth was funded with an increase in deposits of 1% or
$144.3 million for the fourth quarter and 12% or $1.8 billion for
the full year 2011.
Loans receivable increased to $14.5 billion at December 31,
2011, compared to $14.2 billion at September 30, 2011 and $13.7
billion at December 31, 2010. This increase in loans receivable was
due to growth in the noncovered loan portfolio. During the fourth
quarter, noncovered loan balances increased 5% or $507.9 million to
$10.6 billion at December 31, 2011. The increase in noncovered
loans during the fourth quarter was driven by growth in commercial
and trade finance loans, single family loans and consumer loans
which increased 4% or $130.3 million, 18% or $278.7 million, and
16% or $80.2 million, respectively.
Covered Loans
Covered loans totaled $3.9 billion as of December 31, 2011, a
decrease of 5% or $216.8 million from September 30, 2011. The
decrease in the covered loan portfolio was primarily due to payoffs
and paydown activity, as well as charge-offs.
The covered loan portfolio is comprised of loans acquired from
the FDIC-assisted acquisitions of United Commercial Bank (UCB) and
Washington First International Bank (WFIB) which are covered under
loss share agreements with the FDIC. During the fourth quarter, we
recorded a net decrease in the FDIC indemnification asset and
receivable included in noninterest income (loss) of $(20.4)
million, largely due to continued improved credit performance of
the UCB portfolio as compared to our original estimate.
Deposits
At December 31, 2011, total deposits equaled $17.5 billion as
compared to $17.3 billion at September 30, 2011 and $15.6 billion
at December 31, 2010. Throughout the year and continuing in the
fourth quarter of 2011, we focused on growing commercial and
low-cost core deposits and reducing our reliance on time deposits.
Core deposits increased to a record $10.3 billion at December 31,
2011, or an increase of 5% or $482.7 million from September 30,
2011. Quarter to date, all core deposit categories grew, with the
largest increases in money market deposits which increased 5% or
$243.4 million to $4.7 billion, and demand deposits which increased
3% or $115.2 million to a record $3.5 billion. Time deposits
totaled $7.1 billion at December 31, 2011, or a decrease of 5% or
$338.4 million from September 30, 2011.
Fourth Quarter 2011 Operating Results
Net Interest Income
The core net interest margin, excluding the net impact to
interest income of $25.0 million resulting from covered loan
activity and amortization of the FDIC indemnification asset,
remained strong at 4.13% for the fourth quarter of 2011, as
compared to 3.98% for the third quarter of 2011 and 4.43% for the
fourth quarter of 2010.1 Net interest income, adjusted for the net
income of covered loan dispositions, totaled $204.0 million for the
fourth quarter, an increase of 3% or $5.5 million from the third
quarter of 20111.
The increase in both the core net interest margin and adjusted
net interest income was primarily due to a reduction in the cost of
deposits and an increase in loans receivable. In addition, although
quarterly average interest-earning assets declined between the
third and fourth quarters of 2011, the composition of interest
earnings assets changed and thus resulted in an improvement in our
yield on total interest-earning assets. Average loan balances for
the fourth quarter totaled $14.3 billion, an increase of 2% or
$259.6 million from the average loan balances for the third
quarter. The impact of the increase in average loan balances was
partially offset by a decrease in the loan yield on noncovered
loans. The yield on noncovered loans was 4.76% for the fourth
quarter, compared to 4.87% in the prior quarter.
The cost of deposits decreased to 0.55% for the fourth quarter
of 2011, down 10 basis points from 0.65% in the third quarter of
2011. This improvement in the cost of deposits was primarily
achieved through actively managing down higher interest-bearing
deposit accounts, particularly time deposits. The average cost on
time deposits declined by 11 basis points in the fourth quarter to
1.01%, resulting in cost savings of $2.0 million as compared to the
third quarter of 2011.
Although operating in a low interest rate environment has been
challenging, East West is taking measures to maintain a strong net
interest margin while continuing prudent interest rate risk
management practices. Additionally, management is confident that
East West will continue to organically grow the loan portfolio. As
such, while the net interest margin may decrease from current
levels, management still expects to maintain a relatively stable
net interest margin and expects the adjusted net interest margin to
approximate 3.90% for the first quarter of 2012 and 3.85% for the
full year 2012.
Noninterest Income (Loss) & Expense
The Company reported total noninterest income for the fourth
quarter of 2011 of $937 thousand, compared to total noninterest
(loss) of ($13.5) million in the third quarter of 2011 and
noninterest (loss) of ($17.3) million in the fourth quarter of
2010. Branch fees, loan fees and letter of credit and foreign
exchange income totaled $15.8 million in the fourth quarter of
2011, as compared to $17.4 million in the third quarter of 2011 and
$13.7 million in the fourth quarter of 2010. Also included in
noninterest income for the fourth quarter of 2011 were gains on
sales of SBA loans of $1.4 million and gains on sales of investment
securities of $2.9 million.
Noninterest expense totaled $106.7 million for the fourth
quarter of 2011, an increase of $2.1 million from the third quarter
of 2011 and a decrease of $7.1 million from the fourth quarter of
2010.
Noninterest expense, excluding amounts to be reimbursed by the
FDIC, totaled $98.1 million for the fourth quarter of 2011.1 A
summary of the noninterest expenses for the fourth quarter 2011,
compared to the third quarter 2011 and fourth quarter 2010, is
detailed below:
Quarter Ended December 31,
2011 September 30, 2011 December 31, 2010 Total
noninterest expense: $ 106,672 $ 104,552 $ 113,743 Amounts to be
reimbursed on covered assets (80% of actual expense amount) 8,551
3,539 12,958 Prepayment penalties for FHLB advances and other
borrowings - 3,826 - Noninterest expense
excluding reimbursable amounts and prepayment penalties for FHLB
advances and other borrowings $ 98,121 $ 97,187 $ 100,785
Overall, noninterest expense for the fourth quarter, excluding
amounts to be reimbursed by the FDIC, was in line with the third
quarter of 2011. Compensation and employee benefits and occupancy
and equipment expense increased 3% or $1.2 million and 1% or $149
thousand, respectively, for the fourth quarter of 2011. Deposit
insurance premium expense increased in the fourth quarter 2011 as
compared to the prior quarter due to a third quarter adjustment
resulting from a lower actual assessment in that period. Credit
cycle costs including other real estate owned expense, loan related
expense, and legal expense totaled $21.9 million for the fourth
quarter 2011, as compared to $15.7 million for the third quarter
2011. Of total credit cycle costs incurred in the fourth quarter,
$10.7 million related to covered loans and real estate owned for
which we expect that 80% or $8.6 million is reimbursable by the
FDIC. Additionally, in the fourth quarter, amortization of
investments in affordable housing partnerships decreased $2.4
million to $2.9 million and consulting expense decreased $1.0
million to $1.1 million, as compared to the prior quarter.
Management anticipates that in the first quarter of 2012,
noninterest expense will total approximately $100.0 million, net of
amounts reimbursable from the FDIC.
The effective tax rate for the fourth quarter was 35.9% as
compared to 36.1% in the prior quarter. The effective tax rate is
reduced from the statutory tax rate primarily due to the
utilization of tax credits related to affordable housing
investments.
Full Year 2011 Operating Results
For the full year 2011, adjusted net interest income reached a
record $779.4 million, an increase of 3% or $25.5 million from
20101. The adjusted net interest margin for 2011 totaled 4.02%
compared to 4.25% for 20101. Although the low interest rate
environment reduced our loan yields in 2011 as compared to 2010,
East West took actions throughout the year to reduce deposit and
borrowing costs. Our total cost of funds declined by 21 basis
points from 1.15% for the full year 2010 to 0.94% for the full year
2011.
Total fees and other operating income for the full year 2011
increased to $79.5 million, a 19% or $12.8 million increase from
full year 2010. As compared to 2010, branch fees increased 3% or
$1.1 million, letters of credit fees and foreign exchange income
increased 54% or $8.2 million, and other operating income increased
35% or $3.7 million. A summary of these fees and other income is
detailed below:
Year Ended % Change ($ in
thousands)
December 31, 2011 December 31, 2010
(Yr/Yr) Branch fees $ 33,776 $ 32,634 3 % Letters of credit
fees and foreign exchange income 23,140 14,987 54 % Ancillary loan
fees 8,350 8,526 -2 % Other operating income 14,270
10,568 35 % Total fees & other operating income $ 79,536 $
66,715 19 %
Noninterest expense totaled $435.6 million for the full year
2011, a decrease of 9% or $42.3 million as compared to 2010. The
decrease in noninterest expense was due to a reduction in credit
cycle costs and active expense control. As compared to full year
2010, other real estate owned expenses declined 34% or $21.1
million, compensation expense declined 6% or $10.0 million, deposit
insurance premium decreased 19% or $4.7 million, and data
processing expense decreased 19% or $2.0 million. These decreases
in the full year 2011 as compared to the full year 2010 were
partially offset by an increase in amortization of investments in
affordable housing partnerships of 73% or $7.3 million due to
increased investments.
Credit Quality
Credit quality continued to improve in the fourth quarter and
full year 2011. In each quarter of 2010 and 2011, East West reduced
charge-offs and maintained a nonperforming asset to total asset
ratio of less than 1.00%. The provision for loan losses was $20.0
million for the fourth quarter of 2011, a decrease of 9% or $2.0
million from the prior quarter, and a decrease of 33% or $9.8
million as compared to the fourth quarter of 2010. Total net
charge-offs decreased to $21.8 million for the fourth quarter of
2011, a decrease of 10% or $2.5 million from the previous quarter
and a decrease of 43% or $16.5 million compared to the prior year
quarter.
Additionally, total nonaccrual loans and total nonperforming
assets excluding covered assets, continued to remain low, with
total nonperforming assets excluding covered assets, to total
assets under 1.00% for the ninth consecutive quarter. Nonperforming
assets, totaled $175.0 million or 0.80% of total assets at December
31, 2011.
East West continues to maintain a strong allowance for
noncovered loan losses at $209.9 million or 2.04% of noncovered
loans receivable at December 31, 2011. This compares to an
allowance for noncovered loan losses of $211.7 million or 2.16% of
noncovered loans at September 30, 2011 and $230.4 million or 2.64%
of noncovered loans at December 31, 2010. Our allowance for loan
losses and provision for loan losses have declined for several
quarters as a result of credit quality improvement, partially
offset by increases in the allowance for loan losses on commercial
and trade finance loans and single family loans, commensurate with
the increases in these portfolios.
Capital Strength
(Dollars in millions) December 31,
2011
Well
CapitalizedRegulatoryRequirement
Total Excess AboveWell
CapitalizedRequirement
Tier 1 leverage capital ratio 9.7 % 5.00 % $ 1,001 Tier 1
risk-based capital ratio 14.8 % 6.00 % 1,232 Total risk-based
capital ratio 16.4 % 10.00 % 892 Tangible common equity to tangible
assets ratio 8.4 % N/A N/A Tangible common equity to risk weighted
assets ratio 12.9 % N/A N/A
Our capital ratios remain very strong. As of December 31, 2011,
our Tier 1 leverage capital ratio totaled 9.7%, our Tier 1
risk-based capital ratio totaled 14.8% and our total risk-based
capital ratio totaled 16.4%. East West exceeds well capitalized
requirements for all regulatory guidelines by over $800 million.
The Company is focused on active capital management and is
committed to maintaining strong capital levels that exceed
regulatory requirements while also supporting balance sheet growth
and providing a strong return to our shareholders.
In light of our commitment to our shareholders, our excellent
capital levels and our strong financial performance, the board of
directors for East West has approved an increase in our quarterly
common stock cash dividend to $0.10 per share from $0.05 per share.
Further, the board of directors has also authorized a new stock
repurchase program to buy back up to $200.0 million of the
Company’s common stock.
Dividend Payout
East West’s Board of Directors has declared first quarter
dividends on the common stock and Series A Preferred Stock. The
common stock cash dividend of $0.10 is payable on or about February
24, 2012 to shareholders of record on February 10, 2012. This
represents an increase of $0.05 per share, or a 100% increase from
the prior quarterly dividend of $0.05 per share. The dividend on
the Series A Preferred Stock of $20.00 per share is payable on
February 1, 2012 to shareholders of record on January 15, 2012.
Additionally, the Board has also authorized a new stock repurchase
program to buy back up to $200.0 million of the Company’s common
stock.
Conference Call
East West will host a conference call to discuss fourth quarter
2011 earnings with the public on Friday, January 20, 2012 at 8:30
a.m. PST/11:30 a.m. EST. The public and investment community are
invited to listen as management discusses fourth quarter results
and operating developments. The following dial-in information is
provided for participation in the conference call: Local call
within the US – (877) 317-6789; Call within Canada – (866)
605-3852; International call – (412) 317-6789. A listen-only live
broadcast of the call also will be available on the investor
relations page of the Company's website at
www.eastwestbank.com.
About East West
East West Bancorp is a publicly owned company with $22.0 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 one of the largest banks in the United States.
Headquartered in California, East West is the premier bank focused
exclusively on the United States and Greater China markets. The
bank operates with over 130 locations worldwide, including the
United States markets of California, New York, Georgia,
Massachusetts, Texas and Washington. In Greater China, East West’s
presence includes a full service branch in Hong Kong and
representative offices in Beijing, Shenzhen and Taipei. Through a
wholly-owned subsidiary bank, East West’s presence in Greater China
also includes full service branches in Shanghai and Shantou and a
representative office in Guangzhou. 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, 2010 (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.
1 See reconciliation of the GAAP financial measure to the
non-GAAP financial measure in the tables attached.
EAST WEST BANCORP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands,
except per share amounts) (unaudited) December
31, 2011 September 30, 2011 December 31, 2010
Assets Cash and cash equivalents $ 1,431,185 $ 1,135,888 $
1,333,949 Short-term investments 61,834 66,009 143,560 Securities
purchased under resale agreements 786,434 951,824 500,000
Investment securities 3,072,578 3,279,592 2,875,941 Loans
receivable, excluding covered loans (net of allowance for loan
losses of $209,876, $211,738 and $230,408) 10,340,391 9,830,686
8,650,254 Covered loans, net 3,923,142
4,139,902 4,800,876 Total loans receivable,
net 14,263,533 13,970,588 13,451,130 Federal Home Loan Bank and
Federal Reserve Bank stock 184,409 190,765 210,090 FDIC
indemnification asset 511,135 569,157 785,035 Other real estate
owned, net 29,350 21,178 21,865 Other real estate owned covered,
net 63,624 87,298 123,902 Premiums on deposits acquired, net 67,190
70,115 79,518 Goodwill 337,438 337,438 337,438 Other assets
1,159,957 1,133,194 838,109
Total assets $ 21,968,667 $ 21,813,046 $ 20,700,537
Liabilities and Stockholders' Equity Deposits $
17,453,002 $ 17,308,700 $ 15,641,259 Federal Home Loan Bank
advances 455,251 457,075 1,214,148 Securities sold under repurchase
agreements 1,020,208 1,024,949 1,083,545 Long-term debt 212,178
214,178 235,570 Other borrowings - 4,955 10,996 Accrued expenses
and other liabilities 516,285 542,020
401,088 Total liabilities 19,656,924 19,551,877
18,586,606 Stockholders' equity 2,311,743
2,261,169 2,113,931 Total liabilities and
stockholders' equity $ 21,968,667 $ 21,813,046 $
20,700,537 Book value per common share $ 14.92 $ 14.62 $
13.67 Number of common shares at period end 149,328 148,962 148,543
Ending Balances December 31, 2011 September
30, 2011 December 31, 2010 Loans receivable Real estate
- single family $ 1,796,635 $ 1,517,954 $ 1,119,024 Real estate -
multifamily 933,168 942,428 974,745 Real estate - commercial
3,487,866 3,459,001 3,392,984 Real estate - land and construction
344,500 372,140 513,754 Commercial 3,142,472 3,012,152 1,983,355
Consumer 583,785 503,575 733,526
Total noncovered loans receivable, excluding loans held for
sale 10,288,426 9,807,250 8,717,388 Loans held for sale 278,603
251,920 220,055 Covered loans, net 3,923,142
4,139,902 4,800,876 Total loans receivable
14,490,171 14,199,072 13,738,319 Unearned fees, premiums and
discounts (16,762 ) (16,746 ) (56,781 ) Allowance for loan losses
on non-covered loans (209,876 ) (211,738 )
(230,408 ) Net loans receivable $ 14,263,533 $ 13,970,588 $
13,451,130 Deposits Noninterest-bearing demand $ 3,492,795 $
3,377,559 $ 2,676,466 Interest-bearing checking 971,179 948,679
757,446 Money market 4,678,409 4,434,983 4,457,376 Savings
1,164,618 1,063,086 984,518
Total core deposits 10,307,001 9,824,307 8,875,806 Time deposits
7,146,001 7,484,393 6,765,453
Total deposits $ 17,453,002 $ 17,308,700 $ 15,641,259
EAST WEST BANCORP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (In
thousands, except per share amounts) (unaudited)
Quarter Ended December 31, 2011 September 30,
2011 December 31, 2010 Interest and dividend
income $ 268,904 $ 282,741 $ 292,195 Interest expense
(39,830 ) (44,959 ) (45,633 ) Net interest income
before provision for loan losses 229,074 237,782 246,562 Provision
for loan losses (20,000 ) (22,000 ) (29,834 )
Net interest income after provision for loan losses 209,074 215,782
216,728 Noninterest income (loss) 937 (13,545 ) (17,279 )
Noninterest expense (106,672 ) (104,552 )
(113,743 ) Income before provision for income taxes 103,339 97,685
85,706 Provision for income taxes 37,133
35,253 29,357 Net income 66,206 62,432 56,349
Preferred stock dividend and amortization of preferred stock
discount (1,714 ) (1,714 ) (24,109 ) Net
income available to common stockholders $ 64,492 $ 60,718 $ 32,240
Net income per share, basic $ 0.44 $ 0.41 $ 0.22 Net income per
share, diluted $ 0.43 $ 0.41 $ 0.22 Shares used to compute per
share net income: - Basic 147,332 147,162 146,625 - Diluted 153,761
153,453 147,524
Quarter Ended December 31,
2011 September 30, 2011 December 31, 2010
Noninterest income (loss): Branch fees $ 8,072 $ 8,872 $ 7,681
Decrease in FDIC indemnification asset and FDIC receivable (20,441
) (43,451 ) (36,043 ) Net gain on sales of loans 1,432 5,452 6,265
Letters of credit fees and foreign exchange income 5,504 6,450
3,963 Net gain on sales of investment securities 2,880 3,191 6,488
Net gain (loss) on sale of fixed assets 38 30 (266 ) Impairment
loss on investment securities (169 ) - (6,340 ) Ancillary loan fees
2,228 2,076 2,101 Loss on acquisition - - (4,697 ) Other operating
income 1,393 3,835 3,569
Total noninterest income (loss)
$ 937 $ (13,545 ) $ (17,279 ) Noninterest expense:
Compensation and employee benefits $ 41,068 $ 39,885 $ 39,001
Occupancy and equipment expense 12,729 12,580 13,051 Loan related
expenses 6,788 5,208 6,503 Other real estate owned expense 10,697
4,489 16,879 Deposit insurance premiums and regulatory assessments
4,077 2,430 3,416 Prepayment penalties for FHLB advances and other
borrowings - 3,826 - Legal expense 4,407 6,028 5,186 Amortization
of premiums on deposits acquired 2,924 3,067 3,237 Data processing
2,068 1,827 2,441 Consulting expense 1,053 2,094 2,312 Amortization
of investments in affordable housing partnerships 2,914 5,287 2,915
Other operating expense 17,947 17,831
18,802 Total noninterest expense $ 106,672 $ 104,552
$ 113,743
EAST WEST BANCORP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (In
thousands, except per share amounts) (unaudited)
Year To Date December 31, 2011 December 31,
2010 Interest and dividend income $ 1,080,448 $
1,095,831 Interest expense (177,422 ) (201,117 ) Net
interest income before provision for loan losses 903,026 894,714
Provision for loan losses (95,006 ) (200,159 ) Net
interest income after provision for loan losses 808,020 694,555
Noninterest income 10,924 39,270 Noninterest expense
(435,610 ) (477,916 ) Income before provision for income
taxes 383,334 255,909 Provision for income taxes 138,100
91,345 Net income 245,234 164,564 Preferred
stock dividend and amortization of preferred stock discount
(6,857 ) (43,126 ) Net income available to common
stockholders $ 238,377 $ 121,438 Net income per share, basic $ 1.62
$ 0.88 Net income per share, diluted $ 1.60 $ 0.83 Shares used to
compute per share net income: - Basic 147,093 137,478 - Diluted
153,467 147,102
Year To Date December 31,
2011 December 31, 2010 Noninterest income: Branch fees $
33,776 $ 32,634 Decrease in FDIC indemnification asset and FDIC
receivable (100,141 ) (83,213 ) Net gain on sales of loans 20,185
18,515 Letters of credit fees and foreign exchange income 23,140
14,987 Net gain on sales of investment securities 9,703 31,237 Net
gain (loss) on sale of fixed assets 2,274 (189 ) Impairment loss on
investment securities (633 ) (16,669 ) Ancillary loan fees 8,350
8,526 Gain on acquisition - 22,874 Other operating income
14,270 10,568 Total noninterest income $
10,924 $ 39,270 Noninterest expense: Compensation and
employee benefits $ 160,093 $ 170,052 Occupancy and equipment
expense 50,082 52,073 Loan related expenses 19,379 21,070 Other
real estate owned expense 40,435 61,568 Deposit insurance premiums
and regulatory assessments 20,531 25,201 Prepayment penalties for
FHLB advances and other borrowings 12,281 13,832 Legal expense
21,327 19,577 Amortization of premiums on deposits acquired 12,327
13,283 Data processing 8,598 10,615 Consulting expense 7,151 7,984
Amortization of investments in affordable housing partnerships
17,324 10,032 Other operating expense 66,082
72,629 Total noninterest expense $ 435,610 $ 477,916
EAST WEST BANCORP, INC.
SELECTED FINANCIAL INFORMATION (In thousands)
(unaudited) Average Balances Quarter
Ended
December 31, 2011 September 30, 2011 December 31,
2010 Loans receivable Real estate - single family $ 1,655,379 $
1,382,715 $ 1,091,042 Real estate - multifamily 937,841 945,007
969,801 Real estate - commercial 3,475,800 3,447,983 3,430,009 Real
estate - land and construction 370,577 416,640 548,088 Commercial
3,073,612 2,859,985 1,834,920 Consumer 777,201
773,229 992,408 Total loans receivable,
excluding covered loans 10,290,410 9,825,559 8,866,268 Covered
loans 4,048,407 4,253,687
4,866,915 Total loans receivable 14,338,817 14,079,246
13,733,183 Investment securities 3,166,140 3,255,701 2,876,561
Earning assets 19,616,560 19,810,633 18,144,027 Total assets
21,837,593 21,978,123 20,467,482 Deposits
Noninterest-bearing demand $ 3,448,119 $ 3,236,683 $ 2,649,912
Interest-bearing checking 953,668 895,223 756,741 Money market
4,514,598 4,453,224 4,275,692 Savings 1,126,647
1,048,004 957,781 Total core deposits
10,043,032 9,633,134 8,640,126 Time deposits 7,233,069
7,665,429 6,664,058 Total
deposits 17,276,101 17,298,563 15,304,184 Interest-bearing
liabilities 15,556,295 15,842,752 15,004,890 Stockholders' equity
2,300,991 2,275,803 2,416,463
Selected Ratios
Quarter Ended December 31, 2011 September 30,
2011 December 31, 2010 For The Period Return on average
assets 1.20 % 1.13 % 1.10 % Return on average common equity 11.54 %
10.99 % 6.28 % Interest rate spread 4.42 % 4.53 % 5.18 % Net
interest margin 4.63 % 4.76 % 5.39 % Yield on earning assets 5.44 %
5.66 % 6.39 % Cost of deposits 0.55 % 0.65 % 0.67 % Cost of funds
0.83 % 0.93 % 1.03 % Noninterest expense/average assets (1) 1.83 %
1.67 % 2.10 % Efficiency ratio (2) 43.81 % 41.19 % 44.77 %
(1) Excludes the amortization of intangibles, amortization of
premiums on deposits acquired, amortization of investments in
affordable housing partnerships and prepayment penalties for FHLB
advances and other borrowings. (2) Represents noninterest
expense, excluding the amortization of intangibles, amortization of
premiums on deposits acquired, amortization of investments in
affordable housing partnerships and prepayment penalties for FHLB
advances and other borrowings, divided by the aggregate of net
interest income before provision for loan losses and noninterest
income, excluding items that are non-recurring in nature.
EAST WEST BANCORP, INC. QUARTER TO DATE AVERAGE
BALANCES, YIELDS AND RATES PAID (In thousands) (unaudited)
Quarter Ended December 31, 2011
December 31, 2010 Average Average
Volume Interest
Yield(1)
Volume
Interest
Yield(1)
ASSETS
Interest-earning assets: Due from banks and short-term
investments $ 918,784 $ 7,469 3.23 % $ 571,557 $ 2,229 1.55 %
Securities purchased under resale agreements 1,005,363 4,773 1.88 %
749,384 2,905 1.52 % Investment securities available-for-sale
3,166,140 22,856 2.86 % 2,876,561 19,410 2.68 % Loans receivable
10,290,410 123,478 4.76 % 8,866,268 124,478 5.57 % Loans receivable
- covered 4,048,407 109,498 10.73 % 4,866,915 142,298 11.60 %
Federal Home Loan Bank and Federal Reserve Bank stock
187,456 830
1.76 % 213,342
875 1.64 % Total
interest-earning assets 19,616,560
268,904 5.44 %
18,144,027 292,195
6.39 %
Noninterest-earning
assets: Cash and cash equivalents 276,416 392,139 Allowance for
loan losses (222,642 ) (246,871 ) Other assets 2,167,259
2,178,187 Total assets $ 21,837,593 $
20,467,482
LIABILITIES AND
STOCKHOLDERS' EQUITY
Interest-bearing liabilities: Checking accounts 953,668 726
0.30 % 756,741 658 0.34 % Money market accounts 4,514,598 3,989
0.35 % 4,275,692 6,109 0.57 % Savings deposits 1,126,647 567 0.20 %
957,781 752 0.31 % Time deposits 7,233,069 18,500 1.01 % 6,664,058
18,139 1.08 % Federal Home Loan Bank advances 465,408 2,715 2.31 %
1,018,491 5,736 2.23 % Securities sold under repurchase agreements
1,028,323 12,210 4.71 % 1,069,208 12,218 4.47 % Long-term debt
214,113 1,049 1.94 % 235,570 1,597 2.65 % Other borrowings
20,469 74
1.43 % 27,349
424 6.07 % Total
interest-bearing liabilities 15,556,295
39,830 1.02 %
15,004,890 45,633
1.21 %
Noninterest-bearing
liabilities: Demand deposits 3,448,119 2,649,912 Other
liabilities 532,188 396,217 Stockholders' equity 2,300,991
2,416,463
Total liabilities and stockholders'
equity
$ 21,837,593 $ 20,467,482 Interest rate spread
4.42 % 5.18 % Net interest income and net interest margin $
229,074 4.63 % $ 246,562 5.39 %
Net interest income and net interest
margin, adjusted(2)
$ 204,036 4.13 % $ 202,779 4.43 % (1) Annualized.
(2) Amounts exclude the net impact of
covered loan dispositions and amortization of the FDIC
indemnification asset of $25.0 million and $43.8 million for the
three months ended December 31, 2011 and 2010, respectively.
EAST WEST BANCORP, INC.
SELECTED FINANCIAL INFORMATION (In thousands)
(unaudited) Average Balances Year To
Date December 31, 2011 December 31, 2010 Loans
receivable Real estate - single family $ 1,359,223 $ 1,016,669 Real
estate - multifamily 948,750 1,005,790 Real estate - commercial
3,424,414 3,502,013 Real estate - land and construction 437,843
666,992 Commercial 2,613,692 1,599,057 Consumer 884,184
843,762 Total loans receivable, excluding
covered loans 9,668,106 8,634,283 Covered loans 4,369,320
5,074,631 Total loans receivable 14,037,426
13,708,914 Investment securities 3,116,671 2,439,034 Earning assets
19,393,404 17,725,514 Total assets 21,573,121 20,178,109
Deposits Noninterest-bearing demand $ 3,087,777 $ 2,418,816
Interest-bearing checking 854,079 677,529 Money market 4,429,567
3,974,936 Savings 1,045,546 967,953
Total core deposits 9,416,969 8,039,234 Time deposits
7,423,695 6,851,461 Total deposits 16,840,664
14,890,695 Interest-bearing liabilities 15,727,853 15,131,431
Stockholders' equity 2,233,962 2,345,578
Selected
Ratios Year To Date December 31, 2011 December
31, 2010 For The Period Return on average assets 1.14 % 0.82 %
Return on average common equity 11.08 % 6.42 % Interest rate spread
4.44 % 4.85 % Net interest margin 4.66 % 5.05 % Yield on earning
assets 5.57 % 6.18 % Cost of deposits 0.64 % 0.78 % Cost of funds
0.94 % 1.15 % Noninterest expense/average assets (1) 1.82 % 2.18 %
Efficiency ratio (2) 43.04 % 47.51 % (1) Excludes the
amortization of intangibles, amortization of premiums on deposits
acquired, amortization of investments in affordable housing
partnerships and prepayment penalties for FHLB advances and other
borrowings. (2) Represents noninterest expense, excluding
the amortization of intangibles, amortization of premiums on
deposits acquired, amortization of investments in affordable
housing partnerships and prepayment penalties for FHLB advances and
other borrowings, divided by the aggregate of net interest income
before provision for loan losses and noninterest income, excluding
items that are non-recurring in nature.
EAST WEST
BANCORP, INC. YEAR TO DATE AVERAGE BALANCES, YIELDS AND
RATES PAID (In thousands) (unaudited)
Year To
Date December 31, 2011 December
31, 2010 Average Average Volume
Interest Yield
Volume
Interest Yield
ASSETS
Interest-earning assets: Due from banks and short-term
investments $ 1,018,490 $ 22,575 2.22 % $ 828,039 $ 9,634 1.16 %
Securities purchased under resale agreements 1,023,043 19,216 1.88
% 529,817 14,208 2.64 % Investment securities available-for-sale
3,116,671 89,469 2.87 % 2,439,034 70,052 2.87 % Loans receivable
9,668,106 478,724 4.95 % 8,634,283 479,451 5.55 % Loans receivable
- covered 4,369,320 467,074 10.69 % 5,074,631 519,138 10.23 %
Federal Home Loan Bank and Federal Reserve Bank stock
197,774 3,390
1.71 % 219,710
3,348 1.52 % Total
interest-earning assets 19,393,404
1,080,448 5.57 %
17,725,514
1,095,831 6.18 %
Noninterest-earning
assets: Cash and cash equivalents 271,393 365,041 Allowance for
loan losses (228,160 ) (252,318 ) Other assets 2,136,484
2,339,872 Total assets $ 21,573,121 $
20,178,109
LIABILITIES AND
STOCKHOLDERS' EQUITY
Interest-bearing liabilities: Checking accounts 854,079
3,009 0.35 % 677,529 2,349 0.35 % Money market accounts 4,429,567
20,610 0.47 % 3,974,936 29,514 0.74 % Savings deposits 1,045,546
2,988 0.29 % 967,953 3,986 0.41 % Time deposits 7,423,695 80,503
1.08 % 6,851,461 80,888 1.18 % Federal Home Loan Bank advances
679,630 15,461 2.27 % 1,324,709 26,641 2.01 % Securities sold under
repurchase agreements 1,051,844 48,561 4.62 % 1,047,090 48,993 4.61
% Long-term debt 226,808 5,832 2.57 % 235,570 6,420 2.69 % Other
borrowings 16,684 458
2.75 % 52,183
2,326 4.47
% Total interest-bearing liabilities 15,727,853
177,422 1.13 %
15,131,431
201,117 1.33 %
Noninterest-bearing liabilities: Demand deposits 3,087,777
2,418,816 Other liabilities 523,529 282,284 Stockholders' equity
2,233,962 2,345,578 Total liabilities
and stockholders' equity $ 21,573,121 $ 20,178,109
Interest rate spread 4.44 % 4.85 % Net interest
income and net interest margin $ 903,026 4.66 % $ 894,714 5.05 %
Net interest income and net interest
margin, adjusted(1)
$ 779,388 4.02 % $ 753,845 4.25 %
(1) Amounts exclude the net impact of
covered loan dispositions and amortization of the FDIC
indemnification asset of $123.6 million and $140.9 million for the
twelve months ended December 31, 2011 and 2010, respectively.
EAST
WEST BANCORP, INC. QUARTERLY ALLOWANCE FOR LOAN LOSSES
RECAP (In thousands) (unaudited)
Quarter Ended 12/31/2011
9/30/2011 6/30/2011
3/31/2011
12/31/2010 LOANS Allowance balance, beginning of
period $ 218,172 $ 220,556 $ 226,161 $ 234,633 $ 244,186 Allowance
for unfunded loan commitments and letters of credit 197 - (487 )
(758 ) (1,043 ) Provision for loan losses 20,000 22,000 26,500
26,506 29,834 Net Charge-offs (Recoveries): Real estate -
single family 1 1,563 1,120 928 1,770 Real estate - multifamily
3,787 2,069 1,081 2,178 5,048 Real estate - commercial 5,443 1,157
2,164 4,603 13,557 Real estate - land and construction 12,923
12,855 18,143 16,824 11,816 Commercial (426 ) 6,487 8,844 8,660
5,981 Consumer 118 253
266
1,027 172 Total
net charge-offs 21,846
24,384 31,618
34,220
38,344 Allowance balance, end of period (3) $ 216,523
$ 218,172 $
220,556 $ 226,161
$ 234,633
UNFUNDED LOAN COMMITMENTS AND
LETTERS OF CREDIT: Allowance balance, beginning of period $
11,197 $ 11,197 $ 10,710 $ 9,952 $ 8,909 Provision for unfunded
loan commitments and letters of credit (197 )
- 487
758
1,043 Allowance balance, end of period $ 11,000
$ 11,197 $ 11,197
$ 10,710 $
9,952 GRAND TOTAL, END OF PERIOD $ 227,523
$ 229,369 $ 231,753
$ 236,871 $
244,585 Nonperforming assets to total assets (1) 0.80
% 0.77 % 0.83 % 0.89 % 0.94 % Allowance for loan losses on
non-covered loans to total gross non-covered loans held for
investment at end of period 2.04 % 2.16 % 2.29 % 2.50 % 2.64 %
Allowance for loan losses on non-covered loans and unfunded loan
commitments to total gross non-covered loans held for investment at
end of period 2.15 % 2.27 % 2.41 % 2.62 % 2.76 % Allowance on
non-covered loans to non-covered nonaccrual loans at end of period
144.11 % 143.35 % 129.80 % 127.59 % 133.24 % Nonaccrual loans to
total loans (2) 1.00 % 1.04 % 1.17 % 1.26 % 1.26 %
(1)
Nonperforming assets excludes covered
loans and covered REOs. Total assets includes covered assets.
(2)
Nonaccrual loans excludes covered loans.
Total loans includes covered loans.
(3)
Included in the allowance is $6.6 million,
$6.4 million, $6.7 million, $5.8 million and $4.2 million related
to covered loans as of December 31, 2011, September 30, 2011, June
30, 2011, March 31, 2011 and December 31, 2010, respectively. This
allowance is related to drawdowns on commitments that were in
existence as of the acquisition dates and therefore, are covered
under the loss share agreements with the FDIC. Allowance on these
subsequent drawdowns is accounted for as part of the general
allowance.
EAST WEST BANCORP,
INC. TOTAL NON-PERFORMING ASSETS, EXCLUDING COVERED
ASSETS (In thousands) (unaudited) AS OF
DECEMBER 31, 2011 Total Nonaccrual Loans
90+ DaysDelinquent
Under
90+DaysDelinquent
TotalNonaccrualLoans
REO Assets
TotalNon-PerformingAssets
Loan Type Real estate - single family $ 5,055 $ - $ 5,055 $
5,882 $ 10,937 Real estate - multifamily 11,306 6,889 18,195 609
18,804 Real estate - commercial 38,046 6,885 44,931 8,014 52,945
Real estate - land and construction 36,090 27,618 63,708 14,285
77,993 Commercial 6,843 4,394 11,237 74 11,311 Consumer
2,506 - 2,506 486 2,992
Total
$ 99,846 $ 45,786 $
145,632 $ 29,350 $ 174,982
AS OF SEPTEMBER 30, 2011 Total Nonaccrual
Loans
90+ DaysDelinquent
Under
90+DaysDelinquent
TotalNonaccrualLoans
REO Assets
TotalNon-PerformingAssets
Loan Type Real estate - single family $ 7,173 $ 99 $ 7,272 $
4,118 $ 11,390 Real estate - multifamily 12,906 5,468 18,374 -
18,374 Real estate - commercial 40,063 17,544 57,607 6,188 63,795
Real estate - land and construction 43,593 3,532 47,125 10,654
57,779 Commercial 11,121 3,275 14,396 142 14,538 Consumer
2,935 - 2,935 76 3,011
Total
$ 117,791 $ 29,918 $
147,709 $ 21,178 $ 168,887
AS OF DECEMBER 31, 2010 Total Nonaccrual Loans
90+ DaysDelinquent
Under
90+DaysDelinquent
TotalNonaccrualLoans
REO Assets
TotalNon-PerformingAssets
Loan Type Real estate - single family $ 7,058 $ 355 $ 7,413
$ 556 $ 7,969 Real estate - multifamily 9,687 7,694 17,381 468
17,849 Real estate - commercial 48,096 7,962 56,058 3,566 59,624
Real estate - land and construction 22,336 46,449 68,785 17,052
85,837 Commercial 8,235 14,437 22,672 223 22,895 Consumer
620 - 620 - 620
Total $
96,032 $ 76,897 $ 172,929
$ 21,865 $ 194,794
EAST WEST BANCORP, INC. GAAP TO NON-GAAP
RECONCILIATION (In thousands) (unaudited)
The tangible common equity to risk weighted assets and tangible
common equity to tangible assets ratios are non-GAAP disclosures.
The Company uses certain non-GAAP financial measures to provide
supplemental information regarding the Company's performance to
provide additional disclosure. As the use of tangible common equity
to tangible assets ratio is more prevalent in the banking industry
and with banking regulators and analysts, we have included the
tangible common equity to risk-weighted assets and tangible common
equity to tangible assets ratios.
As of December
31, 2011 Stockholders' equity $ 2,311,743 Less: Preferred
equity (83,027 ) Goodwill and other intangible assets
(411,512 ) Tangible common equity $ 1,817,204
Risk-weighted assets 14,042,662 Tangible
common equity to risk-weighted assets ratio 12.9 %
As of December 31, 2011 Total assets $ 21,968,667
Less: Goodwill and other intangible assets (411,512 )
Tangible assets $ 21,557,155 Tangible common equity
to tangible assets ratio 8.4 %
EAST WEST
BANCORP, INC. GAAP TO NON-GAAP RECONCILIATION (In
thousands) (unaudited) Operating noninterest
expense is a non-GAAP disclosure. The Company uses certain non-GAAP
financial measures to provide supplemental information regarding
the Company's performance to provide additional disclosure. These
are noninterest expense line items that are non-core in nature.
Operating noninterest expense excludes such non-core noninterest
expense line items. The Company believes that presenting operating
noninterest expense provides more clarity to the users of financial
statements regarding the core noninterest expense amounts.
Quarter Ended December 31, 2011 Total noninterest
expense: $ 106,672 Amounts to be reimbursed on covered assets (80%
of actual expense amount) 8,551 Prepayment penalties for FHLB
advances and other borrowings - Noninterest expense
excluding reimbursable amounts and prepayment penalties for FHLB
advances and other borrowings $ 98,121
Quarter Ended
September 30, 2011 Total noninterest expense: $ 104,552
Amounts to be reimbursed on covered assets (80% of actual expense
amount) 3,539 Prepayment penalties for FHLB advances and other
borrowings 3,826 Noninterest expense excluding reimbursable
amounts and prepayment penalties for FHLB advances and other
borrowings $ 97,187
Quarter Ended December 31,
2010 Total noninterest expense: $ 113,743 Amounts to be
reimbursed on covered assets (80% of actual expense amount) 12,958
Prepayment penalties for FHLB advances and other borrowings
- Noninterest expense excluding reimbursable amounts and prepayment
penalties for FHLB advances and other borrowings $ 100,785
EAST WEST BANCORP, INC.
GAAP TO NON-GAAP RECONCILIATION (In thousands)
(unaudited) The Company uses certain non-GAAP
financial measures to provide supplemental information regarding
the Company's performance to provide additional disclosure. The net
interest income on covered loans includes amounts that are non-core
in nature. As such, the Company believes that presenting the net
interest income on covered loans excluding such non-core items
provides additional clarity to the users of financial statements
regarding the covered loan yield, comparability to prior periods
and the ongoing performance of the Company.
Quarter Ended
December 31, 2011 Average Volume
Interest
Yield(1)
Loans receivable - covered $ 4,048,407 $ 109,498 10.73 %
Less net impact of covered loan
dispositions and amortization of the FDIC indemnification asset
(25,038 )
Covered loans excluding net impact of
covered loan dispositions and amortization of the FDIC
indemnification asset
$ 84,460 8.28 %
Quarter Ended September 30,
2011 Average Volume Interest
Yield(1)
Loans receivable - covered $ 4,253,687 $ 123,927 11.56 %
Less net impact of covered loan
dispositions and amortization of the FDIC indemnification asset
(39,293 )
Covered loans excluding net impact of
covered loan dispositions and amortization of the FDIC
indemnification asset
$ 84,634 7.89 % (1) Annualized.
EAST WEST BANCORP, INC. GAAP TO
NON-GAAP RECONCILIATION (In thousands)
(unaudited) The Company uses certain non-GAAP
financial measures to provide supplemental information regarding
the Company's performance to provide additional disclosure. The net
interest margin includes amounts that are non-core in nature. As
such, the Company believes that presenting the net interest income
and net interest margin excluding such non-core items provides
additional clarity to the users of financial statements regarding
the core net interest income and net interest margin, comparability
to prior periods and the ongoing performance of the Company.
Quarter Ended December 31, 2011 Average Volume
Interest
Yield(1)
Total interest-earning assets $ 19,616,560 $ 268,904 5.44 % Net
interest income and net interest margin $ 229,074 4.63 %
Less net impact of covered loan
dispositions and amortization of the FDIC indemnification asset
(25,038 )
Net interest income and net interest
margin, excluding net impact of covered loan dispositions and
amortization of the FDIC indemnification asset
$ 204,036 4.13 %
Quarter Ended September 30,
2011 Average Volume Interest
Yield(1)
Total interest-earning assets $ 19,810,633 $ 282,741 5.66 % Net
interest income and net interest margin $ 237,782 4.76 %
Less net impact of covered loan
dispositions and amortization of the FDIC indemnification asset
(39,293 )
Net interest income and net interest
margin, excluding net impact of covered loan dispositions and
amortization of the FDIC indemnification asset
$ 198,489 3.98 %
Quarter Ended December 31,
2010 Average Volume Interest
Yield(1)
Total interest-earning assets $ 18,144,027 $ 292,195 6.39 % Net
interest income and net interest margin $ 246,562 5.39 %
Less net impact of covered loan
dispositions and amortization of the FDIC indemnification asset
(43,783 )
Net interest income and net interest
margin, excluding net impact of covered loan dispositions and
amortization of the FDIC indemnification asset
$ 202,779 4.43 % (1) Annualized.
EAST WEST BANCORP, INC. GAAP TO
NON-GAAP RECONCILIATION (In thousands)
(unaudited) The Company uses certain non-GAAP
financial measures to provide supplemental information regarding
the Company's performance to provide additional disclosure. The net
interest margin includes amounts that are non-core in nature. As
such, the Company believes that presenting the net interest income
and net interest margin excluding such non-core items provides
additional clarity to the users of financial statements regarding
the core net interest income and net interest margin, comparability
to prior periods and the ongoing performance of the Company.
Year Ended December 31, 2011 Average Volume
Interest
Yield Total interest-earning assets $ 19,393,404 $ 1,080,448 5.57 %
Net interest income and net interest margin $ 903,026 4.66 %
Less net impact of covered loan
dispositions and amortization of the FDIC indemnification asset
(123,638 )
Net interest income and net interest
margin, excluding net impact of covered loan dispositions and
amortization of the FDIC indemnification asset
$ 779,388 4.02 %
Year Ended December 31, 2010
Average Volume Interest
Yield Total interest-earning assets $
17,725,514 $ 1,095,831 6.18 % Net interest income and net interest
margin $ 894,714 5.05 %
Less net impact of covered loan
dispositions and amortization of the FDIC indemnification asset
(140,869 )
Net interest income and net interest
margin, excluding net impact of covered loan dispositions and
amortization of the FDIC indemnification asset
$ 753,845 4.25 %
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