First, we would like to caution you that during the course of the call, management may make projections or other forward-looking statements regarding events or future financial performance of the company within the meaning of the Safe Harbor provision of the Private Securities Litigation Reform Act of 1995. These forward-looking statements may differ materially from the actual results due to a number of risks and uncertainties. For a more detailed description of factors that affect the company’s operating results, please refer to our filings with the Securities and Exchange Commission included in our annual report on Form 10-K for the year ended December 31, 2010.Today’s call is also being recorded and will be available in replay format at eastwestbank.com and streetevents.com. I will now turn the call over to Dominic. Dominic Ng Thank you, Kelly. Good morning, and thank you all for joining us for our earnings call. Yesterday afternoon we were pleased to report the financial results for the fourth quarter and full year of 2011. East West reported strong earnings of $66 million, or $0.43 per diluted share, for the fourth quarter of 2011. As compared to the prior quarter, East West grew earnings by 6%, or $4 million, and increased earnings per share by 5% to $0.02. For the full year, East West reported record earnings of $245 million, or $1.60 per diluted share. As compared to the full year of 2010, East West increased net income by $81 million, or 49%, and also increased earnings per diluted share 93%, or $0.77. East West achieved many financial successes in 2011. We finished the year with record assets of $22 billion, the highest annual net income in the history of our bank. The full year of 2011, total adjusted net interest income increased to a record $779 million. Despite the low interest rate environment, net interest margin for the full year remained stable at 4.02%, driven by strong growth in both loans and low-cost core deposits.
Total loans grew 5,%, or $752 million, year-to-date to a record $14.5 billion. Core deposits increased an impressive 16%, or $1.4 billion, for a record $10.3 billion.Growth in loan cost core deposit result in a 14 basis point reduction in the cost of deposit, to 64 basis points for the full year. Additionally, other related costs and noninterest expense decreased substantially in 2011. Credit quality improved for the provision for loan losses down 53%, or $105 million, and net charge-offs down 45%, or $91 million, from a year ago. At East West, we have always held a tradition of achieving strong operational efficiency by carefully evaluating expenditures and prudently making critical investments. In 2011, we were able to reduce operating expenses by 6%, or $25 million, from 2010, after adjustments for FDIC prepayment penalties and amounts to be reimbursed from the FDIC under the loss sharing agreement. These cost reductions supported by our strong loans and deposit growth resulted in an increase in net income for each consecutive quarter in 2011 to a record of $245 million for the full year. I'm pleased to report that across the board, all our key financial metrics and ratios remain strong or improved throughout the past year. Our return on average assets and our return on average common equity improved to 1.14% and 11.08%, respectively, in 2011. During 2011, we provided shareholders with a higher return by increasing the dividend. And as announced in our earnings release yesterday, the Board has approved a further 100% increase in the annual dividend rate to $0.40 per share effective in the first quarter of 2012. Additionally, the Board has authorized a new stock repurchase program, and we expect to repurchase up to $200 million of common stock. These actions can be achieved due to the strength of our capital levels, balance sheet and profitability. Read the rest of this transcript for free on seekingalpha.com