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 $98.1 million for the fourth quarter of 2011. 1 A summary of the noninterest expenses for the fourth quarter 2011, compared to the third quarter 2011 and fourth quarter 2010, is detailed below:
|December 31, 2011||September 30, 2011||December 31, 2010|
|Total noninterest expense:||$||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|