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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

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+ Days Delinquent

Under 90+ Days Delinquent

Total Nonaccrual Loans

REO Assets

Total Non-Performing Assets

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+ Days Delinquent

Under 90+ Days Delinquent

Total Nonaccrual Loans

REO Assets

Total Non-Performing Assets

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+ Days Delinquent

Under 90+ Days Delinquent

Total Nonaccrual Loans

REO Assets

Total Non-Performing Assets

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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