East West Bancorp Reports Net Income for Second Quarter of 2023 of $312 Million and Diluted Earnings Per Share of $2.20, Both Up 21% Year-Over-Year

East West Bancorp, Inc. (“East West” or the “Company”) (Nasdaq: EWBC), parent company of East West Bank, reported its financial results for the second quarter of 2023. Second quarter 2023 net income was $312.0 million, or $2.20 per diluted share, up from $258.3 million, or $1.81 per diluted share in the prior year period. Year-over-year, net income and earnings per share both increased 21%.

“We are pleased with our operating performance for the second quarter, which continues the strong trajectory from the first quarter of 2023. For the second quarter of 2023, both deposits and loans grew 7% linked quarter annualized, to $55.7 billion and $49.8 billion, respectively,” stated Dominic Ng, Chairman and Chief Executive Officer of East West. “For the second quarter of 2023, we earned industry-leading returns of 1.85% on average assets and 21.0% on average tangible common equity1. Net interest margin was 3.55%, a healthy margin in the current environment, and asset quality continued to be outstanding with net charge-offs of 0.06% annualized.”

“We remain focused on ensuring both the strength and stability of our balance sheet, capital, liquidity and earnings power. Our tangible common equity ratio1 increased to 8.80% and our common equity tier 1 capital ratio increased to 13.17% as of June 30, 2023. We believe that through the strength of our diversified business model and the growth opportunities we see in our markets, we will continue to generate strong returns for shareholders, for the remainder of 2023 and for years to come,” concluded Ng.

FINANCIAL HIGHLIGHTS

 

Quarter Ended

 

Quarter Ended

 

Year-over-Year Change

($ in millions, except per share data)

June 30, 2023

 

June 30, 2022

 

$

%

Total Loans

$

49,831

 

 

$

46,531

 

 

$

3,301

7

%

Total Deposits

 

55,659

 

 

 

54,343

 

 

 

1,315

2

 

Total Revenue

$

645

 

 

$

551

 

 

$

94

17

%

Adj. Pre-tax, Pre-provision Income2

 

440

 

 

 

370

 

 

 

70

19

 

Net Income

 

312

 

 

 

258

 

 

 

54

21

 

Diluted Earnings per Share

$

2.20

 

 

$

1.81

 

 

$

0.39

21

%

Return on Average Assets

 

1.85

%

 

 

1.66

%

 

+19 bps

Return on Average Common Equity

 

19.43

%

 

 

18.23

%

 

+120 bps

Return on Avg. Tang. Common Equity1

 

21.01

%

 

19.94

%

 

+107 bps

____________________

1

Tangible common equity ratio and return on average tangible common equity are non-GAAP financial measures. See reconciliation of GAAP to non-GAAP measures in Table 13.

2

Adjusted pre-tax, pre-provision income is a non-GAAP financial measure. See reconciliation of GAAP to non-GAAP measures in Table 12.

BALANCE SHEET

  • Total Assets – Total assets reached a record $68.5 billion as of June 30, 2023, an increase of $1.3 billion, or 2%, from $67.2 billion as of March 31, 2023.



    Second quarter 2023 average interest-earning assets of $64.1 billion were up $2.6 billion, or 4%, from $61.5 billion in the first quarter of 2023. Quarter-over-quarter, average loans grew $701.9 million and average interest-bearing cash and deposits with banks increased $1.8 billion.
  • Strong Capital Levels – As of June 30, 2023, stockholders’ equity was $6.5 billion, or $45.67 per share, both up 2% quarter-over-quarter. The stockholders’ equity to asset ratio was 9.43% as of June 30, 2023, an increase of five basis points quarter-over-quarter.



    As of June 30, 2023, tangible book value3 per share was $42.33, up 3% quarter-over-quarter. The tangible common equity ratio3 was 8.80%, an increase of six basis points quarter-over-quarter.



    All of East West’s regulatory capital ratios are well in excess of regulatory requirements for well-capitalized institutions, as well as above regional and national bank averages. The common equity tier 1 (“CET1”) capital ratio increased to 13.17%, and the total risk-based capital ratio increased to 14.60%, as of June 30, 2023.
  • Total Loans – Total loans reached a record $49.8 billion as of June 30, 2023, an increase of $906.3 million, or 2%, from $48.9 billion as of March 31, 2023. Year-over-year, total loans grew $3.3 billion, or 7%, from $46.5 billion as of June 30, 2022.



    Second quarter 2023 average loans of $48.9 billion grew $701.9 million, or 1.5%, from the first quarter of 2023. Growth in average residential mortgage and commercial real estate loans was partially offset by a decrease in average commercial and industrial loans.
  • Total Deposits – Total deposits were $55.7 billion as of June 30, 2023, an increase of $921.4 million, or 2%, from $54.7 billion as of March 31, 2023. Noninterest-bearing deposits made up 30% of our total deposits as of June 30, 2023, compared with 33% as of March 31, 2023. Year-over-year, deposits increased $1.3 billion, or 2%, from $54.3 billion as of June 30, 2022.



    Second quarter 2023 average deposits of $54.3 billion were down $669.0 million, or 1%, from the first quarter of 2023. During the second quarter, growth in average interest-bearing checking and time deposits was offset by declines in other deposit categories, which largely reflected customers seeking higher yields in a rising interest rate environment.

____________________

3

Tangible book value and the tangible common equity ratio are non-GAAP financial measures. See reconciliation of GAAP to non-GAAP measures in Table 13.

OPERATING RESULTS

Second Quarter Earnings – Second quarter 2023 net income was $312.0 million, and diluted earnings per share (“EPS”) were $2.20. Second quarter 2023 net income and EPS both decreased 3% from first quarter 2023 net income of $322.4 million and diluted EPS of $2.27. Second quarter 2023 net income and EPS both increased 21% from second quarter 2022 net income of $258.3 million and diluted EPS of $1.81.

Net income and diluted EPS for the six months ended June 30, 2023 were $634.5 million and $4.47, an increase of 28% and 29%, respectively, from the six months ended June 30, 2022.

Second Quarter 2023 Compared to First Quarter 2023

Net Interest Income and Net Interest Margin

Net interest income (“NII”) totaled $566.7 million, a decrease of 6% from $599.9 million. Net interest margin (“NIM”) of 3.55% declined 41 basis points from 3.96%.

  • The change in NIM was primarily driven by a higher cost of interest-bearing deposits and changes in the deposit mix in favor of higher-cost deposits, partially offset by higher loan volumes and expanding interest-earning asset yields.
  • The average loan yield was 6.33%, up 19 basis points from the first quarter. The average interest-earning asset yield was 5.67%, up 16 basis points from the first quarter.
  • The average cost of funds was 2.31%, up 62 basis points from the first quarter. The average cost of deposits was 2.12%, up 52 basis points from the first quarter.

Noninterest Income

Noninterest income totaled $78.6 million in the second quarter, an increase of $18.7 million, or 31%, from $60.0 million in the first quarter.

  • Fee income was $69.3 million, up $3.0 million, or 5%, from $66.3 million in the first quarter, reflecting growth across all fee income categories.
  • Interest rate contracts and other derivative income was $7.4 million in the second quarter, up from $2.6 million in the first quarter. The change reflected both growth in customer-driven revenue and a favorable change in mark-to-market adjustments.
  • Other investment income was $4.0 million for the second quarter, up $2.1 million from $1.9 million in the first quarter, reflecting higher income from Community Reinvestment Act investments during the second quarter.

Noninterest Expense

Noninterest expense totaled $261.8 million in the second quarter, compared with $218.4 million in the first quarter. Second quarter noninterest expense consisted of $205.4 million of adjusted noninterest expense4, $55.9 million in amortization of tax credit and other investments, and $0.5 million in amortization of core deposit intangibles.

  • Adjusted noninterest expense of $205.4 million increased $1.4 million, or 1%, from $204.0 million in the first quarter.
  • Compensation and employee benefits was $124.9 million, a decrease of $4.7 million or 4%, largely due to higher seasonal costs in the first quarter.
  • Amortization of tax credit and other investments totaled $55.9 million in the second quarter, compared with $10.1 million in the first quarter. Quarter-over-quarter variability in the amortization of tax credits and other investments primarily reflects the impact of investments that close in a given period and are projected to generate tax credits by the end of the year.
  • The efficiency ratio was 40.6% in the second quarter, compared with 33.1% in the first quarter and the adjusted efficiency ratio4 was 31.8% in the second quarter, compared with 30.5% in the first quarter.

____________________

4

Adjusted noninterest expense and the adjusted efficiency ratio are non-GAAP financial measures. See reconciliation of GAAP to non-GAAP measures in Table 12.

TAX RELATED ITEMS

Second quarter 2023 income tax expense was $45.6 million, and the effective tax rate was 12.7%, compared with 23.5% for the first quarter of 2023. The lower effective tax rate was mainly due to an additional $97 million of tax credits in renewable energy investments that closed during the second quarter. The effective tax rate for the first six months of 2023 was 18.6% compared with 22.4% for the first six months of 2022. We currently estimate that the full year tax rate for 2023 will be approximately 20%.

ASSET QUALITY

The asset quality of our loan portfolio continues to be strong. Second quarter 2023 provision for credit losses was $26.0 million, compared with $20.0 million in the first quarter of 2023.

  • The allowance for loan losses increased to $635.4 million, or 1.28% of loans held-for-investment (“HFI”), as of June 30, 2023, compared with $619.9 million, or 1.27% of loans HFI, as of March 31, 2023.
  • Second quarter 2023 net charge-offs were $7.5 million or annualized 0.06% of average loans HFI, compared with $0.6 million or annualized 0.01% of average loans HFI, for the first quarter of 2023.
  • The criticized loans ratio improved 24 basis points quarter-over-quarter to 1.63% of loans HFI as of June 30, 2023, compared with 1.87% as of March 31, 2023. Criticized loans decreased $102.3 million, or 11%, quarter-over-quarter to $811.8 million as of June 30, 2023, compared with $914.1 million as of March 31, 2023.
  • The nonperforming assets ratio was 0.17% of total assets as of June 30, 2023, compared with 0.14% of total assets as of March 31, 2023. Nonperforming assets increased $22.1 million, or 24%, quarter-over-quarter to $115.5 million as of June 30, 2023, from $93.4 million as of March 31, 2023.

CAPITAL STRENGTH

Capital levels for East West are strong and all capital ratios expanded quarter-over-quarter and year-over-year. The following table presents the regulatory capital metrics as of June 30, 2023, March 31, 2023 and June 30, 2022.

EWBC Capital

($ in millions)

 

June 30, 2023 (a)

 

March 31, 2023 (a)

 

June 30, 2022 (a)

Risk-Weighted Assets (“RWA”) (b)

 

$

51,689

 

 

$

50,229

 

 

$

48,499

 

Risk-based capital ratios:

 

 

 

 

 

 

CET1 capital ratio

 

 

13.17

%

 

 

13.06

%

 

 

11.97

%

Tier 1 capital ratio

 

 

13.17

%

 

 

13.06

%

 

 

11.97

%

Total capital ratio

 

 

14.60

%

 

 

14.50

%

 

 

13.25

%

Leverage ratio

 

 

10.03

%

 

 

10.02

%

 

 

9.31

%

Tangible common equity ratio (c)

 

 

8.80

%

 

 

8.74

%

 

 

8.29

%

(a)

The Company has elected to use the 2020 Current Expected Credit Losses (CECL) transition provision in the calculation of its June 30, 2023, March 31, 2023 and June 30, 2022 regulatory capital ratios. The Company’s June 30, 2023 regulatory capital ratios and RWA are preliminary.

(b)

Under regulatory guidelines, on-balance sheet assets and credit equivalent amounts of derivatives and off-balance sheet items are assigned to one of several broad risk categories based on the nature of the obligor, or, if relevant, the guarantor or the nature of any collateral. The aggregate dollar value in each risk category is then multiplied by the risk weight associated with that category. The resulting weighted values from each of the risk categories are aggregated for determining total RWA.

(c)

Tangible common equity ratio is a non-GAAP financial measure. See reconciliation of GAAP to non-GAAP measures in Table 13.

DIVIDEND PAYOUT AND CAPITAL ACTIONS

East West’s Board of Directors has declared third quarter 2023 dividends for the Company’s common stock. The common stock cash dividend of $0.48 per share is payable on August 15, 2023, to stockholders of record on August 1, 2023.

On March 3, 2020, East West’s Board of Directors authorized the repurchase of up to $500 million of East West’s common stock, of which $254 million remains available. East West did not repurchase any shares during the second quarter of 2023.

Conference Call

East West will host a conference call to discuss second quarter 2023 earnings with the public on Thursday, July 20, 2023, at 8:30 a.m. PT/11:30 a.m. ET. The public and investment community are invited to listen as management discusses second quarter 2023 results and operating developments.

  • The following dial-in information is provided for participation in the conference call: calls within the U.S. – (877) 506-6399; calls within Canada – (855) 669-9657; international calls – (412) 902-6699.
  • A presentation to accompany the earnings call will be available on the Investor Relations page of the Company’s website at www.eastwestbank.com/investors.
  • A listen-only live broadcast of the call will also be available on the Investor Relations page of the Company’s website at www.eastwestbank.com/investors.
  • A replay of the conference call will be available on July 20, 2023, at 11:30 a.m. PT/2:30 p.m. ET through August 20, 2023. The replay numbers are: within the U.S. – (877) 344-7529; within Canada – (855) 669-9658; international calls – (412) 317-0088; and the replay access code is: 5177099.

About East West

East West provides financial services that help customers reach further and connect to new opportunities. East West Bancorp, Inc. is a public company (Nasdaq: “EWBC”) with total assets of $68.5 billion. The Company’s wholly-owned subsidiary, East West Bank, is the largest independent bank headquartered in Southern California, and operates over 120 locations in the United States and Asia. The Bank’s markets in the United States include California, Georgia, Illinois, Massachusetts, Nevada, New York, Texas, and Washington. For more information on East West, visit www.eastwestbank.com.

Forward-Looking Statements

Certain matters set forth herein (including any exhibits hereto) contain forward-looking statements that are intended to be covered by the safe harbor for such statements provided by the Private Securities Litigation Reform Act of 1995. In addition, the Company may make forward-looking statements in other documents that it files with, or furnishes to, the U.S. Securities and Exchange Commission (“SEC”) and management may make forward-looking statements to analysts, investors, media members and others. Forward-looking statements are those that do not relate to historical facts and that are based on current assumptions, beliefs, estimates, expectations and projections, many of which, by their nature, are inherently uncertain and beyond the Company’s control. Forward-looking statements may relate to various matters, including the Company’s financial condition, results of operations, plans, objectives, future performance, business or industry, and usually can be identified by the use of forward-looking words, such as “anticipates,” “assumes,” “believes,” “can,” “continues,” “could,” “estimates,” “expects,” “forecasts,” “goal,” “intends,” “likely,” “may,” “might,” “objective,” “plans,” “potential,” “projects,” “remains,” “should,” “target,” “trend,” “will,” “would,” or similar expressions or variations thereof, and the negative thereof, but these terms are not the exclusive means of identifying such statements. You should not place undue reliance on forward-looking statements, as they are subject to risks and uncertainties, including, but not limited to, those described below. When considering these forward-looking statements, you should keep in mind these risks and uncertainties, as well as any cautionary statements the Company may make.

There are various important factors that could cause future results to differ materially from historical performance and any forward-looking statements. Factors that might cause such differences, include, but are not limited to: changes in the global economy, including an economic slowdown, capital or financial market disruption, supply chain disruption, level of inflation, interest rate environment, housing prices, employment levels, rate of growth and general business conditions, which could result in, among other things, reduced demand for loans, reduced availability of funding or increased funding costs, declines in asset values and /or recognition of allowance for credit losses; changes in local, regional and global business, economic and political conditions and geopolitical events, such as Russia’s invasion of Ukraine; the soundness of other financial institutions and the impacts related to or resulting from recent bank failures and other economic and industry volatility, including potential increased regulatory requirements, Federal Deposit Insurance Corporation (“FDIC”) insurance premiums, losses in the value of our investment portfolio, deposit withdrawals, or other adverse consequences of negative market perceptions of the banking industry or the Company; changes in laws or the regulatory environment, including regulatory reform initiatives and policies of the U.S. Department of the Treasury, the Board of Governors of the Federal Reserve System (“Federal Reserve”), the FDIC, the SEC, the Consumer Financial Protection Bureau (“CFPB”), the California Department of Financial Protection and Innovation — Division of Financial Institutions, the China Banking and Insurance Regulatory Commission, the Hong Kong Monetary Authority, the Hong Kong Securities and Futures Commission, and the Monetary Authority of Singapore; changes and effects thereof in trade, monetary and fiscal policies and laws, including the ongoing trade, economic and political disputes between the U.S. and the People’s Republic of China and the monetary policies of the Federal Reserve; changes in the commercial and consumer real estate markets; changes in consumer or commercial spending, savings and borrowing habits, and patterns and behaviors; the impact from potential changes to income tax laws and regulations, federal spending and economic stimulus programs; the impact of any future U.S. federal government shutdown and uncertainty regarding the U.S. federal government’s debt limit and credit rating; the Company’s ability to compete effectively against financial institutions and other entities, including as a result of emerging technologies; the success and timing of the Company’s business strategies; the Company’s ability to retain key officers and employees; the impact on the Company’s funding costs, net interest income and net interest margin from changes in key variable market interest rates, competition, regulatory requirements and the Company’s product mix; changes in the Company’s costs of operation, compliance and expansion; the Company’s ability to adopt and successfully integrate new technologies into its business in a strategic manner; the impact of the benchmark interest rate reform in the U.S. including the transition away from the U.S. dollar (“USD”) London Interbank Offered Rate (“LIBOR”) to alternative reference rates; the impact of communications or technology disruption, failure in, or breach of, the Company’s operational or security systems or infrastructure, or those of third party vendors with which the Company does business, including as a result of cyber-attacks; and other similar matters which could result in, among other things, confidential and/or proprietary information being disclosed or misused, and materially impact the Company’s ability to provide services to its clients; the adequacy of the Company’s risk management framework, disclosure controls and procedures and internal control over financial reporting; future credit quality and performance, including the Company’s expectations regarding future credit losses and allowance levels; the impact of adverse changes to the Company’s credit ratings from major credit rating agencies; the impact of adverse judgments or settlements in litigation; the impact on the Company’s operations due to political developments, pandemics, wars, civil unrest, terrorism or other hostilities that may disrupt or increase volatility in securities or otherwise affect business and economic conditions; heightened regulatory and governmental oversight and scrutiny of the Company’s business practices, including dealings with consumers; the impact of reputational risk from negative publicity, fines, penalties and other negative consequences from regulatory violations, legal actions and the Company’s interactions with business partners, counterparties, service providers and other third parties; the impact of regulatory investigations and enforcement actions; changes in accounting standards as may be required by the Financial Accounting Standards Board (“FASB”) or other regulatory agencies and their impact on the Company’s critical accounting policies and assumptions; the Company’s capital requirements and its ability to generate capital internally or raise capital on favorable terms; the impact on the Company’s liquidity due to changes in the Company’s ability to receive dividends from its subsidiaries; any strategic acquisitions or divestitures; changes in the equity and debt securities markets; fluctuations in the Company’s stock price; fluctuations in foreign currency exchange rates; the impact of increased focus on social, environmental and sustainability matters, which may affect the Company’s operations as well as those of its customers and the economy more broadly; and the impact of climate change, natural or man-made disasters or calamities, such as wildfires, droughts, hurricanes, flooding and earthquakes or other events that may directly or indirectly result in a negative impact on the Company’s financial performance.

For a more detailed discussion of some of the factors that might cause such differences, see the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 under the heading Item 1A. Risk Factors and the information set forth under Item 1A. Risk Factors in the Company’s Quarterly Reports on Form 10-Q. You should treat forward-looking statements as speaking only as of the date they are made and based only on information then actually known to the Company. The Company does not undertake, and specifically disclaims any obligation to update or revise any forward-looking statements to reflect the occurrence of events or circumstances after the date of such statements except as required by law.

EAST WEST BANCORP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEET

($ and shares in thousands, except per share data)

(unaudited)

Table 1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

June 30, 2023

% or Basis Point Change

 

 

June 30, 2023

 

March 31, 2023

 

June 30, 2022

 

Qtr-o-Qtr

Yr-o-Yr

Assets

 

 

 

 

 

 

 

 

 

 

 

Cash and due from banks

 

$

614,053

 

 

$

760,317

 

 

$

688,936

 

 

(19.2

)%

 

(10.9

)%

 

Interest-bearing cash with banks

 

 

5,763,834

 

 

 

5,173,877

 

 

 

1,213,117

 

 

11.4

 

 

375.1

 

 

Cash and cash equivalents

 

 

6,377,887

 

 

 

5,934,194

 

 

 

1,902,053

 

 

7.5

 

 

235.3

 

 

Interest-bearing deposits with banks

 

 

17,169

 

 

 

10,249

 

 

 

712,709

 

 

67.5

 

 

(97.6

)

 

Assets purchased under resale agreements (“resale agreements”)

 

 

635,000

 

 

 

654,288

 

 

 

1,422,794

 

 

(2.9

)

 

(55.4

)

 

Available-for-sale (“AFS”) debt securities (amortized cost of $6,820,569, $7,072,240 and $6,891,522)

 

 

5,987,258

 

 

 

6,300,868

 

 

 

6,255,504

 

 

(5.0

)

 

(4.3

)

 

Held-to-maturity (“HTM”) debt securities, at amortized cost (fair value of $2,440,484, $2,502,674 and $2,656,549)

 

 

2,975,933

 

 

 

2,993,421

 

 

 

3,028,302

 

 

(0.6

)

 

(1.7

)

 

Loans held-for-sale (“HFS”)

 

 

2,830

 

 

 

6,861

 

 

 

28,464

 

 

(58.8

)

 

(90.1

)

 

Loans held-for-investment (“HFI”) (net of allowance for loan losses of $635,400, $619,893 and $563,270)

 

 

49,192,964

 

 

 

48,298,155

 

 

 

45,938,806

 

 

1.9

 

 

7.1

 

 

Investments in qualified affordable housing partnerships, tax credit and other investments, net

 

 

815,471

 

 

 

741,354

 

 

 

634,304

 

 

10.0

 

 

28.6

 

 

Goodwill

 

 

465,697

 

 

 

465,697

 

 

 

465,697

 

 

 

 

 

 

Operating lease right-of-use assets

 

 

100,500

 

 

 

103,114

 

 

 

107,588

 

 

(2.5

)

 

(6.6

)

 

Other assets

 

 

1,961,972

 

 

 

1,736,697

 

 

 

1,898,062

 

 

13.0

 

 

3.4

 

 

Total assets

 

$

68,532,681

 

 

$

67,244,898

 

 

$

62,394,283

 

 

1.9

%

 

9.8

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

$

55,658,786

 

 

$

54,737,402

 

 

$

54,343,354

 

 

1.7

%

 

2.4

%

 

Short-term borrowings

 

 

4,500,000

 

 

 

4,500,000

 

 

 

 

 

 

 

100.0

 

 

FHLB advances

 

 

 

 

 

 

 

 

174,776

 

 

 

 

(100.0

)

 

Assets sold under repurchase agreements (“repurchase agreements”)

 

 

 

 

 

 

 

 

611,785

 

 

 

 

(100.0

)

 

Long-term debt and finance lease liabilities

 

 

152,951

 

 

 

152,467

 

 

 

152,663

 

 

0.3

 

 

0.2

 

 

Operating lease liabilities

 

 

110,383

 

 

 

112,676

 

 

 

115,387

 

 

(2.0

)

 

(4.3

)

 

Accrued expenses and other liabilities

 

 

1,648,864

 

 

 

1,433,022

 

 

 

1,386,836

 

 

15.1

 

 

18.9

 

 

Total liabilities

 

 

62,070,984

 

 

 

60,935,567

 

 

 

56,784,801

 

 

1.9

 

 

9.3

 

 

Stockholders’ equity

 

 

6,461,697

 

 

 

6,309,331

 

 

 

5,609,482

 

 

2.4

 

 

15.2

 

 

Total liabilities and stockholders’ equity

 

$

68,532,681

 

 

$

67,244,898

 

 

$

62,394,283

 

 

1.9

%

 

9.8

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Book value per share

 

$

45.67

 

 

$

44.62

 

 

$

39.81

 

 

2.4

%

 

14.7

%

 

Tangible book value (1) per share

 

$

42.33

 

 

$

41.28

 

 

$

36.44

 

 

2.6

 

 

16.2

 

 

Number of common shares at period-end

 

 

141,484

 

 

 

141,396

 

 

 

140,917

 

 

0.1

 

 

0.4

 

 

Total stockholders’ equity to assets ratio

 

 

9.43

%

 

 

9.38

%

 

 

8.99

%

 

5

 

bps

44

 

bps

Tangible common equity (“TCE”) ratio (1)

 

 

8.80

%

 

 

8.74

%

 

 

8.29

%

 

6

 

bps

51

 

bps

 

 

 

 

 

 

(1)

Tangible book value and the TCE ratio are non-GAAP financial measures. See reconciliation of GAAP to non-GAAP measures in Table 13.

EAST WEST BANCORP, INC. AND SUBSIDIARIES

TOTAL LOANS AND DEPOSITS DETAIL

($ in thousands)

(unaudited)

Table 2

 

 

 

 

 

 

 

 

 

June 30, 2023

% Change

 

 

June 30, 2023

 

March 31, 2023

 

June 30, 2022

 

Qtr-o-Qtr

 

Yr-o-Yr

Loans:

 

 

 

 

 

 

 

 

 

 

Commercial:

 

 

 

 

 

 

 

 

 

 

Commercial and industrial (“C&I”)

 

$

15,670,084

 

 

$

15,641,840

 

 

$

15,377,117

 

 

0.2

%

 

1.9

%

Commercial real estate (“CRE”):

 

 

 

 

 

 

 

 

 

 

CRE

 

 

14,373,385

 

 

 

14,019,136

 

 

 

13,566,748

 

 

2.5

 

 

5.9

 

Multifamily residential

 

 

4,764,180

 

 

 

4,682,280

 

 

 

4,443,704

 

 

1.7

 

 

7.2

 

Construction and land

 

 

781,068

 

 

 

731,394

 

 

 

515,857

 

 

6.8

 

 

51.4

 

Total CRE

 

 

19,918,633

 

 

 

19,432,810

 

 

 

18,526,309

 

 

2.5

 

 

7.5

 

Consumer:

 

 

 

 

 

 

 

 

 

 

Residential mortgage:

 

 

 

 

 

 

 

 

 

 

Single-family residential

 

 

12,308,613

 

 

 

11,786,998

 

 

 

10,234,473

 

 

4.4

 

 

20.3

 

Home equity lines of credit (“HELOCs”)

 

 

1,862,928

 

 

 

1,988,881

 

 

 

2,280,080

 

 

(6.3

)

 

(18.3

)

Total residential mortgage

 

 

14,171,541

 

 

 

13,775,879

 

 

 

12,514,553

 

 

2.9

 

 

13.2

 

Other consumer

 

 

68,106

 

 

 

67,519

 

 

 

84,097

 

 

0.9

 

 

(19.0

)

Total loans HFI (1)

 

 

49,828,364

 

 

 

48,918,048

 

 

 

46,502,076

 

 

1.9

 

 

7.2

 

Loans HFS

 

 

2,830

 

 

 

6,861

 

 

 

28,464

 

 

(58.8

)

 

(90.1

)

Total loans (1)

 

 

49,831,194

 

 

 

48,924,909

 

 

 

46,530,540

 

 

1.9

 

 

7.1

 

Allowance for loan losses

 

 

(635,400

)

 

 

(619,893

)

 

 

(563,270

)

 

2.5

 

 

12.8

 

Net loans (1)

 

$

49,195,794

 

 

$

48,305,016

 

 

$

45,967,270

 

 

1.8

 

 

7.0

 

 

 

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing demand

 

$

16,741,099

 

 

$

18,327,320

 

 

$

23,028,831

 

 

(8.7

)%

 

(27.3

)%

Interest-bearing checking

 

 

8,348,587

 

 

 

8,742,580

 

 

 

7,094,726

 

 

(4.5

)

 

17.7

 

Money market

 

 

11,486,473

 

 

 

9,293,114

 

 

 

11,814,402

 

 

23.6

 

 

(2.8

)

Savings

 

 

2,102,850

 

 

 

2,280,562

 

 

 

3,027,819

 

 

(7.8

)

 

(30.5

)

Time deposits

 

 

16,979,777

 

 

 

16,093,826

 

 

 

9,377,576

 

 

5.5

 

 

81.1

 

Total deposits

 

$

55,658,786

 

 

$

54,737,402

 

 

$

54,343,354

 

 

1.7

%

 

2.4

%

 

(1)

Includes $(74.0) million, $(75.4) million and $(56.2) million of net deferred loan fees and net unamortized premiums as of June 30, 2023, March 31, 2023 and June 30, 2022, respectively.

EAST WEST BANCORP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF INCOME

($ and shares in thousands, except per share data)

(unaudited)

Table 3

 

 

 

Three Months Ended

 

June 30, 2023

% Change

 

 

June 30, 2023

 

March 31, 2023

 

June 30, 2022

 

Qtr-o-Qtr

 

Yr-o-Yr

Interest and dividend income

 

$

906,134

 

 

$

835,506

 

 

$

499,754

 

8.5

%

 

81.3

%

Interest expense

 

 

339,388

 

 

 

235,645

 

 

 

26,802

 

 

44.0

 

 

NM

 

Net interest income before provision for credit losses

 

 

566,746

 

 

 

599,861

 

 

 

472,952

 

 

(5.5

)

 

19.8

 

Provision for credit losses

 

 

26,000

 

 

 

20,000

 

 

 

13,500

 

 

30.0

 

 

92.6

 

Net interest income after provision for credit losses

 

 

540,746

 

 

 

579,861

 

 

 

459,452

 

 

(6.7

)

 

17.7

 

Noninterest income

 

 

78,631

 

 

 

59,978

 

 

 

78,444

 

 

31.1

 

 

0.2

 

Noninterest expense

 

 

261,789

 

 

 

218,447

 

 

 

196,860

 

 

19.8

 

 

33.0

 

Income before income taxes

 

 

357,588

 

 

 

421,392

 

 

 

341,036

 

 

(15.1

)

 

4.9

 

Income tax expense

 

 

45,557

 

 

 

98,953

 

 

 

82,707

 

 

(54.0

)

 

(44.9

)

Net income

 

$

312,031

 

 

$

322,439

 

 

$

258,329

 

 

(3.2

)%

 

20.8

%

Earnings per share (“EPS”)

 

 

 

 

 

 

 

 

 

 

- Basic

 

$

2.21

 

 

$

2.28

 

 

$

1.83

 

 

(3.5

)%

 

20.8

%

- Diluted

 

$

2.20

 

 

$

2.27

 

 

$

1.81

 

 

(3.2

)

 

21.2

 

Weighted-average number of shares outstanding

 

 

 

 

 

 

 

 

 

 

- Basic

 

 

141,468

 

 

 

141,112

 

 

 

141,429

 

 

0.3

%

 

0.0

%

- Diluted

 

 

141,876

 

 

 

141,913

 

 

 

142,372

 

 

0.0

 

 

(0.3

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

June 30, 2023

% Change

 

 

June 30, 2023

 

March 31, 2023

 

June 30, 2022

 

Qtr-o-Qtr

 

Yr-o-Yr

Noninterest income:

 

 

 

 

 

 

 

 

 

 

Lending fees

 

$

20,901

 

 

$

20,586

 

 

$

20,142

 

 

1.5

%

 

3.8

%

Deposit account fees

 

 

22,285

 

 

 

21,703

 

 

 

22,372

 

 

2.7

 

 

(0.4

)

Interest rate contracts and other derivative income

 

 

7,373

 

 

 

2,564

 

 

 

9,801

 

 

187.6

 

 

(24.8

)

Foreign exchange income

 

 

13,251

 

 

 

12,660

 

 

 

11,361

 

 

4.7

 

 

16.6

 

Wealth management fees

 

 

6,889

 

 

 

6,304

 

 

 

6,539

 

 

9.3

 

 

5.4

 

Net (losses) gains on sales of loans

 

 

(7

)

 

 

(22

)

 

 

917

 

 

NM

 

 

NM

 

Net realized (losses) gains on AFS debt securities

 

 

 

 

 

(10,000

)

 

 

28

 

 

NM

 

 

(100.0

)

Other investment income

 

 

4,003

 

 

 

1,921

 

 

 

4,863

 

 

108.4

 

 

(17.7

)

Other income

 

 

3,936

 

 

 

4,262

 

 

 

2,421

 

 

(7.6

)

 

62.6

 

Total noninterest income

 

$

78,631

 

 

$

59,978

 

 

$

78,444

 

 

31.1

%

 

0.2

%

Noninterest expense:

 

 

 

 

 

 

 

 

 

 

Compensation and employee benefits

 

$

124,937

 

 

$

129,654

 

 

$

113,364

 

 

(3.6

)%

 

10.2

%

Occupancy and equipment expense

 

 

16,088

 

 

 

15,587

 

 

 

15,469

 

 

3.2

 

 

4.0

 

Deposit insurance premiums and regulatory assessments

 

 

8,262

 

 

 

7,910

 

 

 

4,927

 

 

4.5

 

 

67.7

 

Deposit account expense

 

 

10,559

 

 

 

9,609

 

 

 

5,671

 

 

9.9

 

 

86.2

 

Data processing

 

 

3,213

 

 

 

3,347

 

 

 

3,486

 

 

(4.0

)

 

(7.8

)

Computer software expense

 

 

7,479

 

 

 

7,360

 

 

 

6,572

 

 

1.6

 

 

13.8

 

Other operating expense (1)

 

 

35,337

 

 

 

34,870

 

 

 

32,392

 

 

1.3

 

 

9.1

 

Amortization of tax credit and other investments

 

 

55,914

 

 

 

10,110

 

 

 

14,979

 

 

453.1

 

 

273.3

 

Total noninterest expense

 

$

261,789

 

 

$

218,447

 

 

$

196,860

 

 

19.8

%

 

33.0

%

 

NM - Not meaningful.

(1)

Includes $3.9 million of repurchase agreements’ extinguishment cost for the three months ended March 31, 2023.

EAST WEST BANCORP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF INCOME

($ and shares in thousands, except per share data)

(unaudited)

Table 4

 

 

 

Six Months Ended

 

June 30, 2023

% Change

 

 

June 30, 2023

 

June 30, 2022

 

Yr-o-Yr

Interest and dividend income

 

$

1,741,640

 

 

$

931,783

 

86.9%

Interest expense

 

 

575,033

 

 

 

43,218

 

 

NM

Net interest income before provision for credit losses

 

 

1,166,607

 

 

 

888,565

 

 

31.3

Provision for credit losses

 

 

46,000

 

 

 

21,500

 

 

114.0

Net interest income after provision for credit losses

 

 

1,120,607

 

 

 

867,065

 

 

29.2

Noninterest income

 

 

138,609

 

 

 

158,187

 

 

(12.4)

Noninterest expense

 

 

480,236

 

 

 

386,310

 

 

24.3

Income before income taxes

 

 

778,980

 

 

 

638,942

 

 

21.9

Income tax expense

 

 

144,510

 

 

 

142,961

 

 

1.1

Net income

 

$

634,470

 

 

$

495,981

 

 

27.9%

EPS

 

 

 

 

 

 

- Basic

 

$

4.49

 

 

$

3.50

 

 

28.3%

- Diluted

 

$

4.47

 

 

$

3.47

 

 

28.8

Weighted-average number of shares outstanding

 

 

 

 

 

 

- Basic

 

 

141,291

 

 

 

141,725

 

 

(0.3)%

- Diluted

 

 

141,910

 

 

 

142,838

 

 

(0.6)

 

 

 

 

 

 

 

 

 

Six Months Ended

 

June 30, 2023

% Change

 

 

June 30, 2023

 

June 30, 2022

 

Yr-o-Yr

Noninterest income:

 

 

 

 

 

 

Lending fees

 

$

41,487

 

 

$

39,580

 

 

4.8%

Deposit account fees

 

 

43,988

 

 

 

42,687

 

 

3.0

Interest rate contracts and other derivative income

 

 

9,937

 

 

 

20,934

 

 

(52.5)

Foreign exchange income

 

 

25,911

 

 

 

24,060

 

 

7.7

Wealth management fees

 

 

13,193

 

 

 

12,591

 

 

4.8

Net (losses) gains on sales of loans

 

 

(29

)

 

 

3,839

 

 

NM

Net realized (losses) gains on AFS debt securities

 

 

(10,000

)

 

 

1,306

 

 

NM

Other investment income

 

 

5,924

 

 

 

6,490

 

 

(8.7)

Other income

 

 

8,198

 

 

 

6,700

 

 

22.4

Total noninterest income

 

$

138,609

 

 

$

158,187

 

 

(12.4)%

Noninterest expense:

 

 

 

 

 

 

Compensation and employee benefits

 

$

254,591

 

 

$

229,633

 

 

10.9%

Occupancy and equipment expense

 

 

31,675

 

 

 

30,933

 

 

2.4

Deposit insurance premiums and regulatory assessments

 

 

16,172

 

 

 

9,644

 

 

67.7

Deposit account expense

 

 

20,168

 

 

 

10,364

 

 

94.6

Data processing

 

 

6,560

 

 

 

7,151

 

 

(8.3)

Computer software expense

 

 

14,839

 

 

 

13,866

 

 

7.0

Other operating expense (1)

 

 

70,207

 

 

 

55,840

 

 

25.7

Amortization of tax credit and other investments

 

 

66,024

 

 

 

28,879

 

 

128.6

Total noninterest expense

 

$

480,236

 

 

$

386,310

 

 

24.3%

 

(1)

Includes $3.9 million of repurchase agreements’ extinguishment cost for the six months ended June 30, 2023.

EAST WEST BANCORP, INC. AND SUBSIDIARIES

SELECTED AVERAGE BALANCES

($ in thousands)

(unaudited)

Table 5

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

June 30, 2023

% Change

 

Six Months Ended

 

June 30, 2023

% Change

 

 

June 30,

2023

 

March 31,

2023

 

June 30,

2022

 

Qtr-o-Qtr

 

Yr-o-Yr

 

June 30,

2023

 

June 30,

2022

 

Yr-o-Yr

Loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

C&I

 

$

15,244,826

 

$

15,400,996

 

$

14,986,876

 

(1.0)%

 

1.7%

 

$

15,322,480

 

$

14,631,365

 

4.7%

CRE:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CRE

 

 

14,130,811

 

 

13,932,758

 

 

13,049,058

 

1.4

 

8.3

 

 

14,032,331

 

 

12,666,338

 

10.8

Multifamily residential

 

 

4,685,786

 

 

4,600,094

 

 

4,112,411

 

1.9

 

13.9

 

 

4,643,177

 

 

3,931,993

 

18.1

Construction and land

 

 

782,541

 

 

675,047

 

 

475,933

 

15.9

 

64.4

 

 

729,091

 

 

434,657

 

67.7

Total CRE

 

 

19,599,138

 

 

19,207,899

 

 

17,637,402

 

2.0

 

11.1

 

 

19,404,599

 

 

17,032,988

 

13.9

Consumer:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Residential mortgage:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Single-family residential

 

 

12,014,513

 

 

11,417,477

 

 

9,624,242

 

5.2

 

24.8

 

 

11,717,644

 

 

9,369,132

 

25.1

HELOCs

 

 

1,928,208

 

 

2,050,778

 

 

2,290,378

 

(6.0)

 

(15.8)

 

 

1,989,154

 

 

2,237,025

 

(11.1)

Total residential mortgage

 

 

13,942,721

 

 

13,468,255

 

 

11,914,620

 

3.5

 

17.0

 

 

13,706,798

 

 

11,606,157

 

18.1

Other consumer

 

 

65,035

 

 

72,687

 

 

87,590

 

(10.5)

 

(25.8)

 

 

68,840

 

 

105,888

 

(35.0)

Total loans (1)

 

$

48,851,720

 

$

48,149,837

 

$

44,626,488

 

1.5%

 

9.5%

 

$

48,502,717

 

$

43,376,398

 

11.8%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-earning assets

 

$

64,061,569

 

$

61,483,533

 

$

58,668,677

 

4.2%

 

9.2%

 

$

62,779,673

 

$

58,680,456

 

7.0%

Total assets

 

$

67,497,367

 

$

65,113,604

 

$

62,232,841

 

3.7%

 

8.5%

 

$

66,312,070

 

$

61,996,756

 

7.0%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing demand

 

$

16,926,937

 

$

19,709,980

 

$

23,887,452

 

(14.1)%

 

(29.1)%

 

$

18,310,770

 

$

23,661,355

 

(22.6)%

Interest-bearing checking

 

 

8,434,655

 

 

6,493,865

 

 

6,712,890

 

29.9

 

25.6

 

 

7,469,621

 

 

6,680,657

 

11.8

Money market

 

 

10,433,839

 

 

11,260,715

 

 

12,319,930

 

(7.3)

 

(15.3)

 

 

10,844,993

 

 

12,614,994

 

(14.0)

Savings

 

 

2,200,124

 

 

2,436,587

 

 

2,970,007

 

(9.7)

 

(25.9)

 

 

2,317,702

 

 

2,950,268

 

(21.4)

Time deposits

 

 

16,289,320

 

 

15,052,762

 

 

8,239,571

 

8.2

 

97.7

 

 

15,674,457

 

 

8,170,613

 

91.8

Total deposits

 

$

54,284,875

 

$

54,953,909

 

$

54,129,850

 

(1.2)%

 

0.3%

 

$

54,617,543

 

$

54,077,887

 

1.0%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing liabilities

 

$

42,026,844

 

$

36,814,685

 

$

30,957,475

 

14.2%

 

35.8%

 

$

39,435,162

 

$

31,087,256

 

26.9%

Stockholders’ equity

 

$

6,440,996

 

$

6,183,324

 

$

5,682,427

 

4.2%

 

13.3%

 

$

6,312,872

 

$

5,762,078

 

9.6%

 

(1)

Includes loans HFS.

EAST WEST BANCORP, INC. AND SUBSIDIARIES

QUARTER-TO-DATE AVERAGE BALANCES, YIELDS AND RATES

($ in thousands)

(unaudited)

Table 6

 

 

 

Three Months Ended

 

 

June 30, 2023

 

March 31, 2023

 

 

Average

 

 

 

Average

 

Average

 

 

 

Average

 

 

Balance

 

Interest

 

Yield/Rate (1)

 

Balance

 

Interest

 

Yield/Rate (1)

Assets

 

 

 

 

 

 

 

 

 

 

 

 

Interest-earning assets:

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing cash and deposits with banks

 

$

5,247,755

 

 

$

60,995

 

4.66

%

 

$

3,449,626

 

 

$

35,647

 

4.19

%

Resale agreements

 

 

641,939

 

 

 

3,969

 

 

2.48

%

 

 

688,778

 

 

 

4,503

 

 

2.65

%

AFS debt securities

 

 

6,257,397

 

 

 

56,292

 

 

3.61

%

 

 

6,108,825

 

 

 

53,197

 

 

3.53

%

HTM debt securities

 

 

2,983,780

 

 

 

12,678

 

 

1.70

%

 

 

2,995,677

 

 

 

12,734

 

 

1.72

%

Loans (2)

 

 

48,851,720

 

 

 

771,264

 

 

6.33

%

 

 

48,149,837

 

 

 

728,386

 

 

6.14

%

FHLB and FRB stock

 

 

78,978

 

 

 

936

 

 

4.75

%

 

 

90,790

 

 

 

1,039

 

 

4.64

%

Total interest-earning assets

 

$

64,061,569

 

 

$

906,134

 

 

5.67

%

 

$

61,483,533

 

 

$

835,506

 

 

5.51

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-earning assets:

 

 

 

 

 

 

 

 

 

 

 

 

Cash and due from banks

 

 

569,227

 

 

 

 

 

 

 

621,104

 

 

 

 

 

Allowance for loan losses

 

 

(619,868

)

 

 

 

 

 

 

(602,754

)

 

 

 

 

Other assets

 

 

3,486,439

 

 

 

 

 

 

 

3,611,721

 

 

 

 

 

Total assets

 

$

67,497,367

 

 

 

 

 

 

$

65,113,604

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Checking deposits

 

$

8,434,655

 

 

$

49,571

 

 

2.36

%

 

$

6,493,865

 

 

$

23,174

 

 

1.45

%

Money market deposits

 

 

10,433,839

 

 

 

86,419

 

 

3.32

%

 

 

11,260,715

 

 

 

76,102

 

 

2.74

%

Savings deposits

 

 

2,200,124

 

 

 

3,963

 

 

0.72

%

 

 

2,436,587

 

 

 

3,669

 

 

0.61

%

Time deposits

 

 

16,289,320

 

 

 

147,524

 

 

3.63

%

 

 

15,052,762

 

 

 

113,849

 

 

3.07

%

Federal funds purchased and other short-term borrowings

 

 

4,500,566

 

 

 

49,032

 

 

4.37

%

 

 

811,551

 

 

 

8,825

 

 

4.41

%

FHLB advances

 

 

1

 

 

 

 

 

%

 

 

500,000

 

 

 

6,430

 

 

5.22

%

Repurchase agreements

 

 

15,579

 

 

 

211

 

 

5.43

%

 

 

106,785

 

 

 

1,052

 

 

4.00

%

Long-term debt and finance lease liabilities

 

 

152,760

 

 

 

2,668

 

 

7.01

%

 

 

152,420

 

 

 

2,544

 

 

6.77

%

Total interest-bearing liabilities

 

$

42,026,844

 

 

$

339,388

 

 

3.24

%

 

$

36,814,685

 

 

$

235,645

 

 

2.60

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing liabilities and stockholders’ equity:

 

 

 

 

 

 

 

 

 

 

 

 

Demand deposits

 

 

16,926,937

 

 

 

 

 

 

 

19,709,980

 

 

 

 

 

Accrued expenses and other liabilities

 

 

2,102,590

 

 

 

 

 

 

 

2,405,615

 

 

 

 

 

Stockholders’ equity

 

 

6,440,996

 

 

 

 

 

 

 

6,183,324

 

 

 

 

 

Total liabilities and stockholders’ equity

 

$

67,497,367

 

 

 

 

 

 

$

65,113,604

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest rate spread

 

 

 

 

 

2.43

%

 

 

 

 

 

2.91

%

Net interest income and net interest margin

 

 

 

$

566,746

 

 

3.55

%

 

 

 

$

599,861

 

 

3.96

%

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)

Annualized.

(2)

Includes loans HFS.

EAST WEST BANCORP, INC. AND SUBSIDIARIES

QUARTER-TO-DATE AVERAGE BALANCES, YIELDS AND RATES

($ in thousands)

(unaudited)

Table 7

 

 

 

Three Months Ended

 

June 30, 2023

 

June 30, 2022

 

Average

 

 

 

Average

 

Average

 

 

 

Average

 

Balance

 

Interest

 

Yield/Rate (1)

 

Balance

 

Interest

 

Yield/Rate (1)

Assets

 

 

 

 

 

 

 

 

 

 

 

 

Interest-earning assets:

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing cash and deposits with banks

 

$

5,247,755

 

 

$

60,995

 

4.66

%

 

$

2,797,711

 

 

$

4,787

 

0.69

%

Resale agreements

 

 

641,939

 

 

 

3,969

 

 

2.48

%

 

 

1,641,723

 

 

 

8,553

 

 

2.09

%

AFS debt securities

 

 

6,257,397

 

 

 

56,292

 

 

3.61

%

 

 

6,503,677

 

 

 

33,438

 

 

2.06

%

HTM debt securities

 

 

2,983,780

 

 

 

12,678

 

 

1.70

%

 

 

3,021,239

 

 

 

12,738

 

 

1.69

%

Loans (2)

 

 

48,851,720

 

 

 

771,264

 

 

6.33

%

 

 

44,626,488

 

 

 

439,416

 

 

3.95

%

FHLB and FRB stock

 

 

78,978

 

 

 

936

 

 

4.75

%

 

 

77,839

 

 

 

822

 

 

4.24

%

Total interest-earning assets

 

$

64,061,569

 

 

$

906,134

 

 

5.67

%

 

$

58,668,677

 

 

$

499,754

 

 

3.42

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-earning assets:

 

 

 

 

 

 

 

 

 

 

 

 

Cash and due from banks

 

 

569,227

 

 

 

 

 

 

 

712,884

 

 

 

 

 

Allowance for loan losses

 

 

(619,868

)

 

 

 

 

 

 

(545,489

)

 

 

 

 

Other assets

 

 

3,486,439

 

 

 

 

 

 

 

3,396,769

 

 

 

 

 

Total assets

 

$

67,497,367

 

 

 

 

 

 

$

62,232,841

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Checking deposits

 

$

8,434,655

 

 

$

49,571

 

 

2.36

%

 

$

6,712,890

 

 

$

3,178

 

 

0.19

%

Money market deposits

 

 

10,433,839

 

 

 

86,419

 

 

3.32

%

 

 

12,319,930

 

 

 

8,892

 

 

0.29

%

Savings deposits

 

 

2,200,124

 

 

 

3,963

 

 

0.72

%

 

 

2,970,007

 

 

 

1,864

 

 

0.25

%

Time deposits

 

 

16,289,320

 

 

 

147,524

 

 

3.63

%

 

 

8,239,571

 

 

 

8,554

 

 

0.42

%

Federal funds purchased and other short-term borrowings

 

 

4,500,566

 

 

 

49,032

 

 

4.37

%

 

 

64,145

 

 

 

241

 

 

1.51

%

FHLB advances

 

 

1

 

 

 

 

 

%

 

 

138,960

 

 

 

559

 

 

1.61

%

Repurchase agreements

 

 

15,579

 

 

 

211

 

 

5.43

%

 

 

359,778

 

 

 

2,418

 

 

2.70

%

Long-term debt and finance lease liabilities

 

 

152,760

 

 

 

2,668

 

 

7.01

%

 

 

152,194

 

 

 

1,096

 

 

2.89

%

Total interest-bearing liabilities

 

$

42,026,844

 

 

$

339,388

 

 

3.24

%

 

$

30,957,475

 

 

$

26,802

 

 

0.35

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing liabilities and stockholders’ equity:

 

 

 

 

 

 

 

 

 

 

 

 

Demand deposits

 

 

16,926,937

 

 

 

 

 

 

 

23,887,452

 

 

 

 

 

Accrued expenses and other liabilities

 

 

2,102,590

 

 

 

 

 

 

 

1,705,487

 

 

 

 

 

Stockholders’ equity

 

 

6,440,996

 

 

 

 

 

 

 

5,682,427

 

 

 

 

 

Total liabilities and stockholders’ equity

 

$

67,497,367

 

 

 

 

 

 

$

62,232,841

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest rate spread

 

 

 

 

 

2.43

%

 

 

 

 

 

3.07

%

Net interest income and net interest margin

 

 

 

$

566,746

 

 

3.55

%

 

 

 

$

472,952

 

 

3.23

%

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)

Annualized.

(2)

Includes loans HFS.

EAST WEST BANCORP, INC. AND SUBSIDIARIES

YEAR-TO-DATE AVERAGE BALANCES, YIELDS AND RATES

($ in thousands)

(unaudited)

Table 8

 

 

Six Months Ended

 

June 30, 2023

 

June 30, 2022

 

Average

 

 

 

Average

 

Average

 

 

 

Average

 

Balance

 

Interest

 

Yield/Rate(1)

 

Balance

 

Interest

 

Yield/Rate(1)

Assets

 

 

 

 

 

 

 

 

 

 

 

 

Interest-earning assets:

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing cash and deposits with banks

 

$

4,353,658

 

 

$

96,642

 

4.48

%

 

$

3,627,253

 

 

$

8,047

 

0.45

%

Resale agreements

 

 

665,229

 

 

 

8,472

 

 

2.57

%

 

 

1,868,600

 

 

 

16,936

 

 

1.83

%

AFS debt securities

 

 

6,183,522

 

 

 

109,489

 

 

3.57

%

 

 

7,232,686

 

 

 

67,907

 

 

1.89

%

HTM debt securities

 

 

2,989,695

 

 

 

25,412

 

 

1.71

%

 

 

2,497,811

 

 

 

20,936

 

 

1.69

%

Loans (2)

 

 

48,502,717

 

 

 

1,499,650

 

 

6.24

%

 

 

43,376,398

 

 

 

816,526

 

 

3.80

%

FHLB and FRB stock

 

 

84,852

 

 

 

1,975

 

 

4.69

%

 

 

77,708

 

 

 

1,431

 

 

3.71

%

Total interest-earning assets

 

$

62,779,673

 

 

$

1,741,640

 

 

5.59

%

 

$

58,680,456

 

 

$

931,783

 

 

3.20

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-earning assets:

 

 

 

 

 

 

 

 

 

 

 

 

Cash and due from banks

 

 

595,022

 

 

 

 

 

 

 

677,579

 

 

 

 

 

Allowance for loan losses

 

 

(611,358

)

 

 

 

 

 

 

(544,423

)

 

 

 

 

Other assets

 

 

3,548,733

 

 

 

 

 

 

 

3,183,144

 

 

 

 

 

Total assets

 

$

66,312,070

 

 

 

 

 

 

$

61,996,756

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Checking deposits

 

$

7,469,621

 

 

$

72,745

 

 

1.96

%

 

$

6,680,657

 

 

$

4,580

 

 

0.14

%

Money market deposits

 

 

10,844,992

 

 

 

162,521

 

 

3.02

%

 

 

12,614,994

 

 

 

12,095

 

 

0.19

%

Savings deposits

 

 

2,317,702

 

 

 

7,632

 

 

0.66

%

 

 

2,950,268

 

 

 

3,568

 

 

0.24

%

Time deposits

 

 

15,674,457

 

 

 

261,373

 

 

3.36

%

 

 

8,170,613

 

 

 

15,234

 

 

0.38

%

Federal funds purchased and other short-term borrowings

 

 

2,666,249

 

 

 

57,857

 

 

4.38

%

 

 

33,177

 

 

 

250

 

 

1.52

%

FHLB advances

 

 

248,619

 

 

 

6,430

 

 

5.22

%

 

 

149,431

 

 

 

1,137

 

 

1.53

%

Repurchase agreements

 

 

60,931

 

 

 

1,263

 

 

4.18

%

 

 

336,013

 

 

 

4,434

 

 

2.66

%

Long-term debt and finance lease liabilities

 

 

152,591

 

 

 

5,212

 

 

6.89

%

 

 

152,103

 

 

 

1,920

 

 

2.55

%

Total interest-bearing liabilities

 

$

39,435,162

 

 

$

575,033

 

 

2.94

%

 

$

31,087,256

 

 

$

43,218

 

 

0.28

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing liabilities and stockholders’ equity:

 

 

 

 

 

 

 

 

 

 

 

 

Demand deposits

 

 

18,310,770

 

 

 

 

 

 

 

23,661,355

 

 

 

 

 

Accrued expenses and other liabilities

 

 

2,253,266

 

 

 

 

 

 

 

1,486,067

 

 

 

 

 

Stockholders’ equity

 

 

6,312,872

 

 

 

 

 

 

 

5,762,078

 

 

 

 

 

Total liabilities and stockholders’ equity

 

$

66,312,070

 

 

 

 

 

 

$

61,996,756

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest rate spread

 

 

 

 

 

2.65

%

 

 

 

 

 

2.92

%

Net interest income and net interest margin

 

 

 

$

1,166,607

 

 

3.75

%

 

 

 

$

888,565

 

 

3.05

%

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)

Annualized.

(2)

Includes loans HFS.

EAST WEST BANCORP, INC. AND SUBSIDIARIES

SELECTED RATIOS

(unaudited)

Table 9

 

 

 

Three Months Ended (1)

 

June 30, 2023

Basis Point Change

 

 

June 30, 2023

 

March 31, 2023

 

June 30, 2022

 

Qtr-o-Qtr

 

Yr-o-Yr

 

Return on average assets

 

1.85

%

 

2.01

%

 

1.66

%

 

(16

)

bps

19

 

bps

Adjusted return on average assets (2)

 

1.85

%

 

2.05

%

 

1.66

%

 

(20

)

 

19

 

 

Return on average common equity

 

19.43

%

 

21.15

%

 

18.23

%

 

(172

)

 

120

 

 

Adjusted return on average common equity (2)

 

19.43

%

 

21.61

%

 

18.23

%

 

(218

)

 

120

 

 

Return on average TCE (3)

 

21.01

%

 

22.94

%

 

19.94

%

 

(193

)

 

107

 

 

Adjusted return on average TCE (3)

 

21.01

%

 

23.44

%

 

19.94

%

 

(243

)

 

107

 

 

Interest rate spread

 

2.43

%

 

2.91

%

 

3.07

%

 

(48

)

 

(64

)

 

Net interest margin

 

3.55

%

 

3.96

%

 

3.23

%

 

(41

)

 

32

 

 

Average loan yield

 

6.33

%

 

6.14

%

 

3.95

%

 

19

 

 

238

 

 

Yield on average interest-earning assets

 

5.67

%

 

5.51

%

 

3.42

%

 

16

 

 

225

 

 

Average cost of interest-bearing deposits

 

3.09

%

 

2.49

%

 

0.30

%

 

60

 

 

279

 

 

Average cost of deposits

 

2.12

%

 

1.60

%

 

0.17

%

 

52

 

 

195

 

 

Average cost of funds

 

2.31

%

 

1.69

%

 

0.20

%

 

62

 

 

211

 

 

Adjusted pre-tax, pre-provision profitability ratio (4)

 

2.61

%

 

2.90

%

 

2.38

%

 

(29

)

 

23

 

 

Adjusted noninterest expense/average assets (4)

 

1.22

%

 

1.27

%

 

1.17

%

 

(5

)

 

5

 

 

Efficiency ratio

 

40.56

%

 

33.11

%

 

35.70

%

 

745

 

 

486

 

 

Adjusted efficiency ratio (4)

 

31.83

%

 

30.46

%

 

32.90

%

 

137

 

bps

(107

)

bps

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six Months Ended (1)

 

June 30, 2023

Basis Point Change

 

 

 

 

 

 

June 30, 2023

 

June 30, 2022

 

Yr-o-Yr

 

 

 

 

 

Return on average assets

 

1.93

%

 

1.61

%

 

32

 

bps

 

 

 

 

Adjusted return on average assets (2)

 

1.95

%

 

1.61

%

 

34

 

 

 

 

 

 

Return on average common equity

 

20.27

%

 

17.36

%

 

291

 

 

 

 

 

 

Adjusted return on average common equity (2)

 

20.49

%

 

17.36

%

 

313

 

 

 

 

 

 

Return on average TCE (3)

 

21.95

%

 

18.96

%

 

299

 

 

 

 

 

 

Adjusted return on average TCE (3)

 

22.19

%

 

18.96

%

 

323

 

 

 

 

 

 

Interest rate spread

 

2.65

%

 

2.92

%

 

(27

)

 

 

 

 

 

Net interest margin

 

3.75

%

 

3.05

%

 

70

 

 

 

 

 

 

Average loan yield

 

6.24

%

 

3.80

%

 

244

 

 

 

 

 

 

Yield on average interest-earning assets

 

5.59

%

 

3.20

%

 

239

 

 

 

 

 

 

Average cost of interest-bearing deposits

 

2.80

%

 

0.24

%

 

256

 

 

 

 

 

 

Average cost of deposits

 

1.86

%

 

0.13

%

 

173

 

 

 

 

 

 

Average cost of funds

 

2.01

%

 

0.16

%

 

185

 

 

 

 

 

 

Adjusted pre-tax, pre-provision profitability ratio (4)

 

2.75

%

 

2.25

%

 

50

 

 

 

 

 

 

Adjusted noninterest expense/average assets (4)

 

1.25

%

 

1.16

%

 

9

 

 

 

 

 

 

Efficiency ratio

 

36.79

%

 

36.91

%

 

(12

)

 

 

 

 

 

Adjusted efficiency ratio (4)

 

31.13

%

 

34.05

%

 

(292

)

bps

 

 

 

 

 

(1)

Annualized except for efficiency ratio.

(2)

Adjusted return on average assets and adjusted return on average common equity are non-GAAP financial measures. See reconciliation of GAAP to non-GAAP measures in Table 14.

(3)

Return on average TCE and adjusted return on average TCE are non-GAAP financial measures. See reconciliation of GAAP to non-GAAP measures in Table 13.

(4)

Adjusted pre-tax, pre-provision profitability ratio, adjusted noninterest expense/average assets and the adjusted efficiency ratio are non-GAAP financial measures. See reconciliation of GAAP to non-GAAP measures in Table 12.

EAST WEST BANCORP, INC. AND SUBSIDIARIES

ALLOWANCE FOR LOAN LOSSES & OFF-BALANCE SHEET CREDIT EXPOSURES

($ in thousands)

(unaudited)

Table 10

 

 

 

 

Three Months Ended June 30, 2023

 

 

 

Commercial

 

Consumer

 

 

 

 

 

C&I

 

Total CRE

 

Total Residential

Mortgage

 

Other Consumer

 

Total

Allowance for loan losses, March 31, 2023

 

 

$

376,325

 

 

$

188,915

 

 

$

52,978

 

 

$

1,675

 

 

$

619,893

 

Provision for (reversal of) credit losses on loans

(a)

 

 

5,259

 

 

 

16,076

 

 

 

3,057

 

 

 

(367

)

 

 

24,025

 

Gross charge-offs

 

 

 

(7,335

)

 

 

(2,366

)

 

 

(6

)

 

 

(48

)

 

 

(9,755

)

Gross recoveries

 

 

 

2,065

 

 

 

143

 

 

 

10

 

 

 

 

 

 

2,218

 

Total net (charge-offs) recoveries

 

 

 

(5,270

)

 

 

(2,223

)

 

 

4

 

 

 

(48

)

 

 

(7,537

)

Foreign currency translation adjustment

 

 

 

(981

)

 

 

 

 

 

 

 

 

 

 

 

(981

)

Allowance for loan losses, June 30, 2023

 

 

$

375,333

 

 

$

202,768

 

 

$

56,039

 

 

$

1,260

 

 

$

635,400

 

 

 

Three Months Ended March 31, 2023

 

 

 

Commercial

 

Consumer

 

 

 

 

 

C&I

 

Total CRE

 

Total Residential

Mortgage

 

Other Consumer

 

Total

Allowance for loan losses, December 31, 2022

 

 

$

371,700

 

 

$

182,346

 

 

$

40,039

 

 

$

1,560

 

 

$

595,645

 

Impact of ASU 2022-02 adoption

 

 

 

5,683

 

 

 

343

 

 

 

2

 

 

 

 

 

 

6,028

 

Allowance for loan losses, January 1, 2023

 

 

$

377,383

 

 

$

182,689

 

 

$

40,041

 

 

$

1,560

 

 

$

601,673

 

(Reversal of) provision for credit losses on loans

(a)

 

 

(678

)

 

 

6,021

 

 

 

13,022

 

 

 

155

 

 

 

18,520

 

Gross charge-offs

 

 

 

(1,900

)

 

 

(6

)

 

 

(91

)

 

 

(40

)

 

 

(2,037

)

Gross recoveries

 

 

 

1,211

 

 

 

211

 

 

 

6

 

 

 

 

 

 

1,428

 

Total net (charge-offs) recoveries

 

 

 

(689

)

 

 

205

 

 

 

(85

)

 

 

(40

)

 

 

(609

)

Foreign currency translation adjustment

 

 

 

309

 

 

 

 

 

 

 

 

 

 

 

 

309

 

Allowance for loan losses, March 31, 2023

 

 

$

376,325

 

 

$

188,915

 

 

$

52,978

 

 

$

1,675

 

 

$

619,893

 

 

 

Three Months Ended June 30, 2022

 

 

 

Commercial

 

Consumer

 

 

 

 

 

C&I

 

Total CRE

 

Total Residential Mortgage

 

Other Consumer

 

Total

Allowance for loan losses, March 31, 2022

 

 

$

339,446

 

 

$

182,296

 

 

$

21,958

 

 

$

1,985

 

 

$

545,685

 

Provision for (reversal of) credit losses on loans

(a)

 

 

19,030

 

 

 

(9,181

)

 

 

3,122

 

 

 

(502

)

 

 

12,469

 

Gross charge-offs

 

 

 

(240

)

 

 

(679

)

 

 

(193

)

 

 

(34

)

 

 

(1,146

)

Gross recoveries

 

 

 

6,514

 

 

 

1,043

 

 

 

173

 

 

 

 

 

 

7,730

 

Total net recoveries (charge-offs)

 

 

 

6,274

 

 

 

364

 

 

 

(20

)

 

 

(34

)

 

 

6,584

 

Foreign currency translation adjustment

 

 

 

(1,468

)

 

 

 

 

 

 

 

 

 

 

 

(1,468

)

Allowance for loan losses, June 30, 2022

 

 

$

363,282

 

 

$

173,479

 

 

$

25,060

 

 

$

1,449

 

 

$

563,270

 

 

EAST WEST BANCORP, INC. AND SUBSIDIARIES

ALLOWANCE FOR LOAN LOSSES & OFF-BALANCE-SHEET CREDIT EXPOSURES

($ in thousands)

(unaudited)

Table 10 (continued)

 

 

 

 

Six Months Ended June 30, 2023

 

 

 

Commercial

 

Consumer

 

 

 

 

 

C&I

 

Total CRE

 

Total Residential

Mortgage

 

Other Consumer

 

Total

Allowance for loan losses, December 31, 2022

 

 

$

371,700

 

 

$

182,346

 

 

$

40,039

 

 

$

1,560

 

 

$

595,645

 

Impact of ASU 2022-02 adoption

 

 

 

5,683

 

 

 

343

 

 

 

2

 

 

 

 

 

 

6,028

 

Allowance for loan losses, January 1, 2023

 

 

$

377,383

 

 

$

182,689

 

 

$

40,041

 

 

$

1,560

 

 

$

601,673

 

Provision for (reversal of) credit losses on loans

(a)

 

 

4,581

 

 

 

22,097

 

 

 

16,079

 

 

 

(212

)

 

 

42,545

 

Gross charge-offs

 

 

 

(9,235

)

 

 

(2,372

)

 

 

(97

)

 

 

(88

)

 

 

(11,792

)

Gross recoveries

 

 

 

3,276

 

 

 

354

 

 

 

16

 

 

 

 

 

 

3,646

 

Total net charge-offs

 

 

 

(5,959

)

 

 

(2,018

)

 

 

(81

)

 

 

(88

)

 

 

(8,146

)

Foreign currency translation adjustment

 

 

 

(672

)

 

 

 

 

 

 

 

 

 

 

 

(672

)

Allowance for loan losses, June 30, 2023

 

 

$

375,333

 

 

$

202,768

 

 

$

56,039

 

 

$

1,260

 

 

$

635,400

 

 

 

 

Six Months Ended June 30, 2022

 

 

 

Commercial

 

Consumer

 

 

 

 

 

C&I

 

Total CRE

 

Total Residential

Mortgage

 

Other Consumer

 

Total

Allowance for loan losses, December 31, 2021

 

 

$

338,252

 

 

$

180,808

 

 

$

20,595

 

 

$

1,924

 

 

$

541,579

 

Provision for (reversal of) credit losses on loans

(a)

 

 

28,292

 

 

 

(7,523

)

 

 

4,347

 

 

 

(395

)

 

 

24,721

 

Gross charge-offs

 

 

 

(11,428

)

 

 

(1,078

)

 

 

(193

)

 

 

(80

)

 

 

(12,779

)

Gross recoveries

 

 

 

9,516

 

 

 

1,272

 

 

 

311

 

 

 

 

 

 

11,099

 

Total net (charge-offs) recoveries

 

 

 

(1,912

)

 

 

194

 

 

 

118

 

 

 

(80

)

 

 

(1,680

)

Foreign currency translation adjustment

 

 

 

(1,350

)

 

 

 

 

 

 

 

 

 

 

 

(1,350

)

Allowance for loan losses, June 30, 2022

 

 

$

363,282

 

 

$

173,479

 

 

$

25,060

 

 

$

1,449

 

 

$

563,270

 

 

 

 

Three Months Ended

 

Six Months Ended

 

 

 

June 30,

2023

 

March 31,

2023

 

June 30,

2022

 

June 30,

2023

 

June 30,

2022

Unfunded Credit Facilities

 

 

 

 

 

 

 

 

 

 

 

Allowance for unfunded credit commitments, beginning of period (1)

 

 

$

27,741

 

$

26,264

 

 

$

23,262

 

$

26,264

 

$

27,514

 

Provision for (reversal of) credit losses on unfunded credit commitments

(b)

 

 

1,975

 

 

 

1,480

 

 

 

1,031

 

 

 

3,455

 

 

 

(3,221

)

Foreign currency translation adjustment

 

 

 

12

 

 

 

(3

)

 

 

11

 

 

 

9

 

 

 

11

 

Allowance for unfunded credit commitments, end of period (1)

 

 

$

29,728

 

 

$

27,741

 

 

$

24,304

 

 

$

29,728

 

 

$

24,304

 

 

 

 

 

 

 

 

 

 

 

 

 

Provision for credit losses

(a)+(b)

 

$

26,000

 

 

$

20,000

 

 

$

13,500

 

 

$

46,000

 

 

$

21,500

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)

Included in Accrued expenses and other liabilities on the Condensed Consolidated Balance Sheet.

EAST WEST BANCORP, INC. AND SUBSIDIARIES

CRITICIZED LOANS, NONPERFORMING ASSETS AND CREDIT QUALITY RATIOS

($ in thousands)

(unaudited)

Table 11

 

Criticized Loans

 

June 30, 2023

 

March 31, 2023

 

June 30, 2022

Special mention loans

 

$

330,741

 

 

$

461,356

 

 

$

590,227

 

Classified loans

 

 

481,051

 

 

 

452,715

 

 

 

432,414

 

Total criticized loans (1)

 

$

811,792

 

 

$

914,071

 

 

$

1,022,641

 

 

 

 

Nonperforming Assets

 

June 30, 2023

 

March 31, 2023

 

June 30, 2022

Nonaccrual loans:

 

 

 

 

 

 

Commercial:

 

 

 

 

 

 

C&I

 

$

61,879

 

 

$

43,747

 

 

$

40,053

 

Total CRE

 

 

20,598

 

 

 

19,427

 

 

 

12,742

 

Consumer:

 

 

 

 

 

 

Total residential mortgage

 

 

33,032

 

 

 

29,585

 

 

 

37,129

 

Other consumer

 

 

24

 

 

 

366

 

 

 

11

 

Total nonaccrual loans

 

 

115,533

 

 

 

93,125

 

 

 

89,935

 

Other real estate owned, net

 

 

 

 

 

270

 

 

 

 

Total nonperforming assets

 

$

115,533

 

 

$

93,395

 

 

$

89,935

 

 

 

 

Credit Quality Ratios

 

June 30, 2023

 

March 31, 2023

 

June 30, 2022

Annualized quarterly net charge-offs (recoveries) to average loans HFI

 

 

0.06

%

 

 

0.01

%

 

 

(0.06

)%

Special mention loans to loans HFI

 

 

0.66

%

 

 

0.94

%

 

 

1.27

%

Classified loans to loans HFI

 

 

0.97

%

 

 

0.93

%

 

 

0.93

%

Criticized loans to loans HFI

 

 

1.63

%

 

 

1.87

%

 

 

2.20

%

Nonperforming assets to total assets

 

 

0.17

%

 

 

0.14

%

 

 

0.14

%

Nonaccrual loans to loans HFI

 

 

0.23

%

 

 

0.19

%

 

 

0.19

%

Allowance for loan losses to loans HFI

 

 

1.28

%

 

 

1.27

%

 

 

1.21

%

 

(1)

Excludes loans HFS.

EAST WEST BANCORP, INC. AND SUBSIDIARIES

GAAP TO NON-GAAP RECONCILIATION

($ in thousands)

(unaudited)

Table 12

The Company uses certain non-GAAP financial measures to provide supplemental information regarding the Company’s performance. Adjusted efficiency ratio represents adjusted noninterest expense divided by adjusted revenue. Adjusted pre-tax, pre-provision profitability ratio represents total adjusted revenue less adjusted noninterest expense, divided by average total assets. Adjusted revenue excludes the write-off of an AFS debt security (where applicable). Adjusted noninterest expense excludes the amortization of tax credit and other investments, the amortization of core deposit intangibles and the repurchase agreements’ extinguishment cost (where applicable). Management believes that the measures and ratios presented below provide clarity to financial statement users regarding the ongoing performance of the Company and allow comparability to prior periods.

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Six Months Ended

 

 

 

 

June 30,

2023

 

March 31,

2023

 

June 30,

2022

 

June 30,

2023

 

June 30,

2022

Net interest income before provision for credit losses

 

(a)

 

$

566,746

 

 

$

599,861

 

 

$

472,952

 

 

$

1,166,607

 

 

$

888,565

 

Total noninterest income

 

 

 

 

78,631

 

 

 

59,978

 

 

 

78,444

 

 

 

138,609

 

 

 

158,187

 

Total revenue

 

(b)

 

$

645,377

 

 

$

659,839

 

 

$

551,396

 

 

$

1,305,216

 

 

$

1,046,752

 

Noninterest income

 

 

 

 

78,631

 

 

 

59,978

 

 

 

78,444

 

 

 

138,609

 

 

 

158,187

 

Add: Write-off of AFS debt security

 

 

 

 

 

 

 

10,000

 

 

 

 

 

 

10,000

 

 

 

 

Adjusted noninterest income

 

(c)

 

 

78,631

 

 

 

69,978

 

 

 

78,444

 

 

 

148,609

 

 

 

158,187

 

Adjusted revenue

 

(a)+(c) = (d)

 

$

645,377

 

 

$

669,839

 

 

$

551,396

 

 

$

1,315,216

 

 

$

1,046,752

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total noninterest expense

 

(e)

 

$

261,789

 

 

$

218,447

 

 

$

196,860

 

 

$

480,236

 

 

$

386,310

 

Less: Amortization of tax credit and other investments

 

 

 

 

(55,914

)