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East West Bancorp Reports Record Net Income For Full Year 2011 Of $245 Million; Increase In Annual Dividend Rate To $0.40 And New $200 Million Common Stock Repurchase Program

Stocks in this article: EWBC

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 Capitalized Regulatory Requirement


Total Excess Above Well Capitalized Requirement

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.

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