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East West Bancorp Reports Net Income For Third Quarter 2012 Of $71.1 Million, Up 14% From Prior Year, And Earnings Per Share Of $0.48, Up 17% From Prior Year

Stocks in this article: EWBC

East West Bancorp, Inc. (Nasdaq: EWBC), parent company of East West Bank, the financial bridge between the United States and Greater China, today reported financial results for the third quarter of 2012. For the third quarter of 2012, net income was $71.1 million or $0.48 per dilutive share. East West increased third quarter net income by $8.7 million or 14% and increased earnings per dilutive share $0.07 or 17% from the prior year period.

“We are pleased with our solid financial results for the third quarter of 2012. Third quarter earnings per share totaled $0.48, up 17% from the prior year period, and our seventh consecutive quarter of earnings per share growth,” stated Dominic Ng, Chairman and Chief Executive Officer of East West. “Our strong financial performance in the third quarter was driven by healthy growth in our loan and deposit portfolios, which resulted in increased total revenue, net income and earnings per share from both the prior quarter and prior year period. During the third quarter of 2012, East West grew non-covered commercial and trade finance loans by $314.1 million or 9%, and increased core deposits by $329.7 million or 3% to a record $11.4 billion from June 30, 2012.”

“Although the interest rate and economic environment continues to be challenging for East West and the banking industry, we are confident that we will continue to perform well. For the third quarter of 2012, our return on assets totaled 1.30%, up 17 basis points from the prior year period, and our return on equity totaled 12.43%, up 144 basis points from the prior year period,” continued Ng.

“At this point, we believe we are well on our way to another year of record earnings for East West for the full year 2012. As the premier financial bridge between the East and the West, we continue to win new business and grow our market share as evidenced by our solid financial results. As we look to 2013 and beyond, we are confident that we will be able to continue to deliver healthy financial results and return strong value to our shareholders,” concluded Ng.

               

Quarterly Results Summary

 
For the three months ended,
Dollars in millions, except per share September 30, 2012           June 30, 2012 September 30, 2011
Net income $ 71.11 $ 70.56 $ 62.43
Net income available to common shareholders $ 69.40 $ 68.84 $ 60.72
Earnings per share (diluted) $ 0.48 $ 0.47 $ 0.41
Tangible book value per common share $ 13.07 $ 12.67 $ 11.83
 
Return on average assets 1.30 % 1.32 % 1.13 %
Return on average common equity 12.43 % 12.46 % 10.99 %
 

Net interest margin, adjusted (1)

3.95 % 4.01 % 3.98 %
Cost of deposits 0.41 % 0.45 % 0.65 %
Efficiency ratio 42.20 % 41.54 % 41.19 %
 
 

Third Quarter 2012 Highlights

  • Strong Third Quarter Earnings – For the third quarter of 2012, net income was $71.1 million or $0.48 per dilutive share. Net income increased by $553 thousand from the second quarter of 2012 and $8.7 million or 14% from the third quarter of 2011. Earnings per dilutive share grew $0.01 or 2% from the second quarter of 2012 and $0.07 or 17% from the third quarter of 2011.
  • Repurchase of 2.3 Million Shares of Common Stock – During the third quarter of 2012, we repurchased 2.3 million shares of our common stock for a total cost of $50.0 million.
  • Strong Loan Growth – Quarter to date, non-covered loans, excluding loans held for sale, grew $360.3 million or 3%. This growth was largely due to increases in commercial and trade finance loans, commercial real estate loans and single family loans, which grew $314.1 million or 9%, $74.6 million or 2% and $47.7 million or 2%, respectively. Total loans, including loans covered under loss-share agreements grew $142.4 million or 1% quarter to date.
  • Strong Core Deposit Growth – Core deposit growth continued in the third quarter and increased by $329.7 million to a record $11.4 billion or 64% of total deposits. Total deposits increased to a record $17.7 billion, an increase of $324.6 million or 2% from $17.3 billion as of June 30, 2012.
  • Cost of Deposits Down 4 bps from Q2 2012 and Down 24 bps from Q3 2011 – The cost of deposits improved to 0.41% for the third quarter of 2012, down from 0.45% in the second quarter of 2012 and 0.65% in the third quarter of 2011. The cost of funds improved to 0.67% for the third quarter of 2012, down from 0.71% in the second quarter of 2012 and 0.93% in the third quarter of 2011.
  • Nonperforming Assets Down to 0.66% of Total Assets – Nonperforming assets decreased to $144.1 million, or 0.66% of total assets at September 30, 2012, an $11.6 million or 7% decrease from June 30, 2012 and a $24.8 million or 15% decrease from September 30, 2011.

Management Guidance

The Company is providing guidance for the fourth quarter and full year of 2012. Management currently estimates that fully diluted earnings per share for the full year of 2012 will range from $1.87 to $1.89, an increase of $0.27 to $0.29 or 17% to 18% from the full year of 2011.

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