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East West Bancorp Reports Net Income For Full Year 2012 Of $281.7 Million, Up 15% From Prior Year, And Earnings Per Share Of $1.89, Up 18% From Prior Year

Stocks in this article: EWBC

The cost of funds decreased 3 basis points from 0.67% in the third quarter of 2012 to 0.64% in the fourth quarter of 2012. The reduction in the cost of funds and interest expense is primarily due to management’s ongoing actions to reduce higher cost funding and time deposits, and grow core deposits. The Company increased core deposit balances by 7%, quarter over quarter. These combined actions resulted in an overall reduction in the cost of deposits of 1 basis point to 0.40% for the fourth quarter of 2012 from 0.41% in the prior quarter.

Noninterest (Loss)/ Income & Expense

The Company reported total noninterest (loss)/income for the fourth quarter of 2012 of ($18.5) million, a decrease from noninterest income of $2.8 million in the third quarter of 2012 and $937 thousand in the fourth quarter of 2011. The decrease in noninterest (loss)/income from the prior quarter and prior year is primarily attributable to an increase in the net reduction of the FDIC indemnification asset and FDIC receivable.

Branch fees, letter of credit and foreign exchange income, ancillary loan fees and other operating income increased to $26.9 million in the fourth quarter of 2012, an increase from $24.0 million in the third quarter of 2012 and $17.2 million in the fourth quarter of 2011. In addition, included in noninterest income for the fourth quarter of 2012 were net gains on sales of fixed assets of $4.2 million. A summary of fees and other operating income for the fourth quarter of 2012, compared to the third quarter of 2012 and fourth quarter of 2011 is detailed below:

  Quarter Ended     % Change  
($ in thousands) December 31, 2012     September 30, 2012     December 31, 2011 (Yr/Yr)
Branch fees $ 8,322 $ 8,347 $ 8,072 3 %
Letters of credit fees and foreign exchange income 7,932 7,166 5,504 44 %
Ancillary loan fees 2,818 1,817 2,228 26 %
Other operating income   7,788   6,699   1,393 459 %
Total fees & other operating income $ 26,860 $ 24,029 $ 17,197 56 %

Noninterest expense totaled $105.2 million for the fourth quarter of 2012, an increase of $4.3 million from the third quarter of 2012 and a decrease of $1.5 million from the fourth quarter of 2011.

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