FOR FURTHER INFORMATION AT THE COMPANY:
Julia Gouw
Chief Financial Officer
(626) 583-3512
EAST WEST BANCORP REPORTS RECORD
THIRD QUARTER 2005 EARNINGS OF $28.6 MILLION
San Marino, CA - October 18, 2005 - East West Bancorp, Inc. (Nasdaq: EWBC), parent company of East West Bank, one of the nation’s premier community banks, today reported financial results for the third quarter of 2005. Diluted earnings per share for the third quarter increased 33% to a record $0.52 from $0.39 in the prior year period.
Third Quarter Highlights
| · | Record net income of $28.6 million, up 40% from prior year |
| · | Record net interest income of $71.6 million, up 35% from prior year |
| · | Net interest margin up 7 basis points to 4.22% from prior quarter |
| · | Gross loans increased to a record $6.6 billion |
| · | Total deposits increased to a record $6.1 billion |
| · | Return on equity of 19.15% |
| · | Total nonperforming assets were 0.22% of total assets |
| · | Efficiency ratio of 35.19% |
| · | Closed the acquisition of United National Bank (“UNB”) |
Financial Summary
Third quarter net income was a record $28.6 million, 40% higher than the $20.4 million reported in the prior year period. Diluted earnings per share for the third quarter rose to a record $0.52, up 33% from $0.39 in the prior year period. Return on average equity for the third quarter of 2005 increased to 19.15% from 17.84% in the previous year, and return on average assets was 1.62%, an increase from 1.55% in the previous year. The effective tax rate for the quarter equaled 35.92% compared to 35.85% for the third quarter of 2004. Pretax income for the third quarter of 2005 totaled $44.6 million, a 40% increase over the year ago figure of $31.8 million. The increase in earnings in the third quarter of 2005 was a result of an increase in net interest income fueled by continuing strength in loan growth, as well as overall operating efficiencies.
“We are very proud of the results we accomplished this quarter. Once again, we achieved record quarterly earnings and are well underway to end 2005 as the 9th consecutive year of record earnings for East West,” commented Dominic Ng, Chairman, President and Chief Executive Officer of East West. “Loan and deposit growth continued to be robust during the quarter. Quarter-to-date organic loan growth was impressive; growing at a 24% annualized rate or $338.9 million, excluding the impact of the UNB acquisition. In addition, quarter-to-date deposit growth was very steady; growing at a 14% annualized rate or $180.7 million, excluding the impact of the UNB acquisition. Year-over-year, our balance sheet growth has been achieved while we have maintained excellent credit quality and have not lowered our commitment to sound underwriting practices,” continued Mr. Ng.
“With the successful close of the UNB acquisition on September 6th, we added eleven new branches and over 19,000 customer accounts, further solidifying our presence in the California marketplace and opening new opportunities for East West in Houston, Texas. The conversion of all UNB systems is underway and a full integration is scheduled for completion in early November,” continued Mr. Ng.
Management Guidance
Management has increased its EPS guidance for the full year of 2005 as a result of the year-to-date performance and the expected operating results for the fourth quarter of 2005. Mr. Ng remarked on the Bank’s forecast for 2005 earnings, “We now estimate that fully diluted earnings per share will be in the range of $1.94 to $1.95, up about 5% from the previous guidance of $1.85 to $1.87. This revised estimate represents an approximate increase of 30% from the prior year figure. This estimate is based on our current loan pipeline levels, a projected net interest margin of 4.20% to 4.25% for the fourth quarter of 2005 and includes the impact of the UNB acquisition,” concluded Mr. Ng.
Balance Sheet Summary
At September 30, 2005, total assets were $7.9 billion, a 32% increase above total assets of $6.0 billion at December 31, 2004. The growth in assets was primarily a result of the organic growth of our loan portfolio, as well as the impact of the acquisition of UNB. Gross loans at September 30, 2005 totaled $6.6 billion, a 29% increase from $5.1 billion at year-end 2004. Organic loan growth for the nine month period ended September 30, 2005 was $985.0 million, or an annualized increase of 26%, excluding the impact of the UNB acquisition, loan securitizations and loan sales. Growth incommercial real estate, multifamily and single family loans added the largest dollar impact to our organic growth, although almost all loan sectors grew at a double digit rate year-to-date.
Average earning assets for the third quarter of 2005 equaled $6.7 billion, 35% higher than the third quarter of 2004. The growth in average earning assets was driven by a 33% increase in average loans to $5.9 billion. The yield on average earning assets for the quarter was 6.27%, an increase of 93 basis points from 5.34% in the year ago quarter and 27 basis points from 6.00% in the previous quarter. The yield on average loans receivable for the quarter was 6.56%, an increase of 96 basis points from 5.60% in the year ago quarter and 27 basis points from 6.29% in the previous quarter. The rise in the yield on average earning assets was primarily attributable to increases in market interest rates and the corresponding repricing of our loan portfolio.
Total deposits at September 30, 2005 were $6.1 billion, a 36% increase over total deposits of $4.5 billion at December 31, 2004. Organic deposit growth for the nine month period ended September 30, 2005 was $742.5 million, or an annualized increase of 22%, excluding the impact of the UNB acquisition. Core deposits at September 30, 2005 totaled $3.0 billion or a 32% increase over year-end 2004. Excluding the impact of the UNB acquisition, organic core deposit growth for the nine month period ended September 30, 2005 was $378.0 million, an annualized increase of 22%.
Average total deposits for the third quarter totaled $5.3 billion, 36% above the figure for the prior year period, while average core deposits totaled $2.6 billion, 28% greater than a year ago. The growth in average deposits stemmed from strong increases in time deposits of 46% or $843.8 million, money market deposits of 59% or $273.3 million and demand deposits of 25% or $243.3 million. The year-over-year increase in average deposits was attributable to promotions at the retail branches targeted to smaller businesses and retail customers and the expansion of commercial relationships.
The average cost of deposits for the third quarter of 2005 was 1.89%, an 89 basis point increase from 1.00% in the year ago quarter and a 24 basis point increase from 1.65% in the previous quarter. The average cost of funds for the third quarter equaled 2.15%, a 97 basis point increase from 1.18% for the prior year period and a 21 basis point increase from 1.94% in the prior quarter. The increase in the cost of deposits for the year-over-year period was attributable to increased deposit competition and the resulting higher market interest rates. East West entered into long-term repurchase agreements totaling $200.0 million during the quarter. The repurchase agreements have enabled us to lower our reliance on FHLB borrowings and provide us with long-term borrowing at a lower cost.
Operating Results
Net interest income increased to a record $71.6 million, 35% or $18.7 million greater than the third quarter of 2004 and 10% or $6.6 million greater on a sequential quarter basis. The interest margin for the quarter reflected no change from the year ago margin of 4.22% and a 7 basis point increase from the previous quarter margin of 4.15%. The sequential quarter increase in the margin was primarily driven by an increase in the volume of earning assets and supported by an upward repricing of our loan portfolio as compared to deposit rate increases.
East West provided $4.5 million for loan losses during the third quarter of 2005, compared to $5.0 million during the third quarter of 2004 and $4.5 million during the previous quarter. The third quarter provision reflects the continued growth and quality of our loan portfolio. Based on the projected loan growth during the next quarter and the current trends in the loan portfolio, management believes that the provision for loan losses for the fourth quarter should remain consistent with the current level.
Noninterest income for the third quarter totaled $7.8 million, 9% or $619 thousand higher than the third quarter of 2004 and 2% or $137 thousand lower than the prior quarter. Core noninterest income, excluding the impact of gains on sales of investment securities and fixed assets, totaled $6.0 million during the quarter, 7% or $410 thousand higher than the prior year figure and 10% or $637 thousand lower than the sequential quarter. The year-over-year increase in noninterest income predominantly resulted from net gains on the sale of investment securities during the third quarter of 2005. The sequential quarter decrease was largely due to a decrease in income from secondary market activities, partially offset by increases in both loan and branch fees during the third quarter of 2005.
Noninterest expense totaled $30.3 million for the third quarter of 2005, 30% or $7.1 million higher than the year ago level and 7% or $1.9 million higher than the previous quarter. Cash operating expenses, which exclude the amortization of intangibles and investments in affordable housing partnerships, totaled $27.9 million for the quarter, a 34% or $7.1 million increase over the third quarter of 2004 and a 7% or $1.9 million increase from the sequential quarter. The increase from the third quarter of 2004 was largely due to higher compensation and occupancy expense associated with acquisitions as well as the overall organic growth of the Bank. Other expenses increased 30% from prior year, mainly due to higher commercial deposit-related costs resulting from growth in commercial deposits.
East West generated a 35.19% operating efficiency ratio for the third quarter of 2005, comparable to 34.78% a year ago and 35.78% in the second quarter of 2005. The efficiency ratio is a direct result of management’s efforts to increase efficiencies in the Bank’s operating platform. Management anticipates the efficiency ratio for the full year 2005 to be approximately 36%.
The effective tax rate for the third quarter was 35.92% compared to 35.85% a year ago and 36.38% in the previous quarter. Management anticipates an effective tax rate for the fourth quarter of approximately 37%.
Asset Quality
Total nonperforming assets were $17.4 million or 0.22% of total assets atSeptember 30, 2005. This compares with $5.9 million, or 0.10% of total assets at December 31, 2004, and $2.9 million, or 0.05% of total assets at September 30, 2004. Overall, our asset quality and loss rates continue to remain at very low levels, although nonperforming assets increased in this quarter from the recent historic lows. As of September 30, 2005, $16.1 million of the nonperforming assets were comprised of two secured commercial real estate loans, one secured construction loan and two trade finance loans that are fully guaranteed by Ex-Im Bank. Nonaccrual loans at September 30, 2005 were $12.8 million or 0.19% of total loans, compared to $4.9 million or 0.10% of total loans, at December 31, 2004, and $2.6 million or 0.06% of total loans at September 30, 2004.
Net chargeoffs for the quarter totaled $1.1 million or an annualized 0.08% of average loans, compared to $3.3 million, or an annualized 0.30% of average loans for the third quarter of 2004 and $2.4 million or an annualized 0.17% of average loans for the previous quarter.
The allowance for loan losses at September 30, 2005 was $67.4 million or 1.02% of total loans and 525% of nonaccrual loans, compared to $50.9 million or 0.99% of total loans and 1,033% of nonaccrual loans at December 31, 2004 and $46.9 million or 0.99% of total loans and 1,804% of nonaccrual loans atSeptember30, 2004. At September 30, 2005, the allowance for unfunded loan commitments and off-balance sheet credit exposures amounted to $10.2 million, compared to $7.7 million at December 31, 2004 and $7.5 million at September 30, 2004. The allowance for unfunded loan commitments and off-balance sheet credit exposures is included in accrued expenses and other liabilities on the balance sheet.
Capitalization
East West continues to remain well capitalized under all regulatory guidelines. At September 30, 2005, our Tier I risk-based capital ratio was 8.74%, total risk-based capital ratio was 10.93% and Tier I leverage ratio was 8.83%. During the quarter, we issued $25.0 million in subordinated debt, which qualifies for Tier II capital. We also issued $20.0 million in junior subordinated debt securities through a pooled trust preferred offering, which qualifies for Tier I capital. Both of these transactions were undertaken to augment our liquidity and capital resources. Furthermore, we issued 3,138,701 shares of common stock in connection with the acquisition of UNB. East West did not repurchase any shares during the quarter. Total stockholders’ equity as of September 30, 2005 was $696.9 million, representing a book value of $12.43 per share.
About East West
East West Bancorp is a publicly owned company, with $7.9 billion in assets, whose stock is traded on the Nasdaq National Market under the symbol “EWBC”. The company’s wholly owned subsidiary, East West Bank, is the second largest independent commercial bank headquartered in Los Angeles with 56 total branch locations. East West Bank serves the community with 55 branch locations across Southern and Northern California, one branch location in Houston, Texas and a Beijing Representative Office in China. 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, 2004 (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 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.
| EAST WEST BANCORP, INC. |
| CONDENSED CONSOLIDATED BALANCE SHEETS |
| (In thousands, except per share amounts) |
| (unaudited) |
| | | | | | | | |
| | | September 30, | | | December 31, | | | % | |
| | | | 2005 | | | 2004 | | | Change | |
| Assets | | | | | | | | | | |
| Cash and cash equivalents | | $ | 136,834 | | $ | 93,075 | | | 47 | |
| Securities purchased under resale agreements | | | 50,000 | | | - | | | 100 | |
| Investment securities available-for-sale | | | 718,556 | | | 534,552 | | | 34 | |
| Loans receivable (net of allowance for loan losses | | | | | | | | | | |
| of $67,414 and $50,884) | | | 6,556,315 | | | 5,080,454 | | | 29 | |
| Premiums on deposits acquired, net | | | 20,778 | | | 7,723 | | | 169 | |
| Goodwill | | | 144,490 | | | 43,702 | | | 231 | |
| Other assets | | | 311,405 | | | 269,374 | | | 16 | |
| Total assets | | $ | 7,938,378 | | $ | 6,028,880 | | | 32 | |
| | | | | | | | | | | |
| Liabilities and Stockholders' Equity | | | | | | | | | | |
| Deposits | | $ | 6,130,129 | | $ | 4,522,517 | | | 36 | |
| Short-term borrowings | | | 182,000 | | | - | | | 100 | |
| Federal Home Loan Bank advances | | | 482,756 | | | 860,803 | | | (44) | |
| Securities sold under repurchase agreements | | | 200,000 | | | - | | | 100 | |
| Notes payable | | | 9,195 | | | 11,018 | | | (17) | |
| Accrued expenses and other liabilities | | | 84,328 | | | 62,757 | | | 34 | |
| Long-term debt | | | 153,095 | | | 57,476 | | | 166 | |
| Total liabilities | | | 7,241,503 | | | 5,514,571 | | | 31 | |
| Stockholders' equity | | | 696,875 | | | 514,309 | | | 35 | |
| Total liabilities and stockholders' equity | | $ | 7,938,378 | | $ | 6,028,880 | | | 32 | |
| Book value per share | | $ | 12.43 | | $ | 9.80 | | | 27 | |
| Number of shares at period end | | | 56,074 | | | 52,501 | | | 7 | |
| | | | | | | | | | | |
Ending Balances | | | September 30, | | | December 31, | | | % | |
| | | | 2005 | | | 2004 | | | Change | |
| Loans receivable | | | | | | | | | | |
| Real estate - single family | | $ | 443,736 | | $ | 327,554 | | | 35 | |
| Real estate - multifamily | | | 1,296,344 | | | 1,121,107 | | | 16 | |
| Real estate - commercial | | | 3,309,761 | | | 2,556,827 | | | 29 | |
| Real estate - construction | | | 570,935 | | | 348,501 | | | 64 | |
| Commercial | | | 586,174 | | | 438,537 | | | 34 | |
| Trade finance | | | 213,760 | | | 155,809 | | | 37 | |
| Consumer | | | 205,398 | | | 185,159 | | | 11 | |
| Total gross loans receivable | | $ | 6,626,108 | | $ | 5,133,494 | | | 29 | |
| Unearned fees, premiums and discounts | | | (2,379 | ) | | (2,156 | ) | | 10 | |
| Allowance for loan losses | | | (67,414 | ) | | (50,884 | ) | | 32 | |
| Net loans receivable | | $ | 6,556,315 | | $ | 5,080,454 | | | 29 | |
| | | | | | | | | | | |
| Deposits | | | | | | | | | | |
| Noninterest-bearing demand | | $ | 1,380,330 | | $ | 1,097,851 | | | 26 | |
| Interest-bearing checking | | | 360,472 | | | 334,747 | | | 8 | |
| Money market | | | 881,074 | | | 507,949 | | | 73 | |
| Savings | | | 391,533 | | | 340,399 | | | 15 | |
| Total core deposits | | | 3,013,409 | | | 2,280,946 | | | 32 | |
| Time deposits less than $100,000 | | | 952,943 | | | 747,858 | | | 27 | |
| Time deposits $100,000 or greater | | | 2,163,777 | | | 1,493,713 | | | 45 | |
| Total time deposits | | | 3,116,720 | | | 2,241,571 | | | 39 | |
| Total deposits | | $ | 6,130,129 | | $ | 4,522,517 | | | 36 | |
EAST WEST BANCORP, INC. | |
CONDENSED CONSOLIDATED STATEMENTS OF INCOME | |
(In thousands, except per share amounts) | |
(unaudited) | |
| | | | | | | | | | |
| | | | | Three Months Ended September 30, | | % | |
| | | | | 2005 | | 2004 | | Change | |
| | | | | | | | | | |
| Interest and dividend income | | | | | $ | 106,287 | | $ | 66,815 | | | 59 | |
| Interest expense | | | | | | (34,705 | ) | | (13,980 | ) | | 148 | |
| Net interest income before provision for loan losses | | | | | | 71,582 | | | 52,835 | | | 35 | |
| Provision for loan losses | | | | | | (4,500 | ) | | (5,000 | ) | | (10) | |
| Net interest income after provision for loan losses | | | | | | 67,082 | | | 47,835 | | | 40 | |
| Noninterest income | | | | | | 7,827 | | | 7,208 | | | 9 | |
| Noninterest expense | | | | | | (30,306 | ) | | (23,242 | ) | | 30 | |
| Income before provision for income taxes | | | | | | 44,603 | | | 31,801 | | | 40 | |
| Income taxes | | | | | | (16,020 | ) | | (11,402 | ) | | 41 | |
| Net income | | | | | $ | 28,583 | | $ | 20,399 | | | 40 | |
| Net income per share, basic | | | | | $ | 0.54 | | $ | 0.40 | | | 35 | |
| Net income per share, diluted | | | | | $ | 0.52 | | $ | 0.39 | | | 33 | |
Shares used to computeper share net income: | | | | | | | | | | | | | |
| - Basic | | | | | | 53,261 | | | 51,210 | | | 4 | |
| - Diluted | | | | | | 54,822 | | | 52,884 | | | 4 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | Three Months Ended September 30, | | % | |
| | | | | | | 2005 | | | 2004 | | | Change | |
| Noninterest income: | | | | | | | | | | | | | |
| Letters of credit fees and commissions | | | | | $ | 2,029 | | $ | 1,782 | | | 14 | |
| Branch fees | | | | | | 1,858 | | | 1,693 | | | 10 | |
| Net gain on investment securities available-for-sale | | | | | | 1,786 | | | 678 | | | 163 | |
| Ancillary loan fees | | | | | | 816 | | | 848 | | | (4) | |
| (Loss) income from secondary market activities | | | | | | (41 | ) | | 82 | | | (150) | |
| Net gain on sale of fixed assets | | | | | | 12 | | | 911 | | | (99) | |
| Other operating income | | | | | | 1,367 | | | 1,214 | | | 13 | |
| Total noninterest income | | | | | $ | 7,827 | | $ | 7,208 | | | 9 | |
| | | | | | | | | | | | | | |
| Noninterest expense: | | | | | | | | | | | | | |
| Compensation and employee benefits | | | | | $ | 12,979 | | $ | 9,386 | | | 38 | |
| Occupancy and equipment expense | | | | | | 3,736 | | | 2,812 | | | 33 | |
| Amortization of investments in affordable | | | | | | | | | | | | | |
| housing partnerships | | | | | | 1,581 | | | 1,784 | | | (11) | |
| Amortization of premiums on deposits acquired | | | | | | 782 | | | 575 | | | 36 | |
| Data processing | | | | | | 717 | | | 566 | | | 27 | |
| Deposit insurance premiums and regulatory | | | | | | | | | | | | | |
| assessments | | | | | | 258 | | | 211 | | | 22 | |
| Other operating expense | | | | | | 10,253 | | | 7,908 | | | 30 | |
| Total noninterest expense | | | | | $ | 30,306 | | $ | 23,242 | | | 30 | |
EAST WEST BANCORP, INC. | |
CONDENSED CONSOLIDATED STATEMENTS OF INCOME | |
(In thousands, except per share amounts) | |
(unaudited) | |
| | | | | | | | | | |
| | | | | Nine Months Ended September 30, | | % | |
| | | | | 2005 | | 2004 | | Change | |
| | | | | | | | | | |
| Interest and dividend income | | | | | $ | 284,812 | | $ | 175,307 | | | 62 | |
| Interest expense | | | | | | (86,048 | ) | | (35,385 | ) | | 143 | |
| Net interest income before provision for loan losses | | | | | | 198,764 | | | 139,922 | | | 42 | |
| Provision for loan losses | | | | | | (13,370 | ) | | (11,750 | ) | | 14 | |
| Net interest income after provision for loan losses | | | | | | 185,394 | | | 128,172 | | | 45 | |
| Noninterest income | | | | | | 22,291 | | | 21,499 | | | 4 | |
| Noninterest expense | | | | | | (86,425 | ) | | (64,110 | ) | | 35 | |
| Income before provision for income taxes | | | | | | 121,260 | | | 85,561 | | | 42 | |
| Income taxes | | | | | | (43,695 | ) | | (30,188 | ) | | 45 | |
| Net income | | | | | $ | 77,565 | | $ | 55,373 | | | 40 | |
| Net income per share, basic | | | | | $ | 1.47 | | $ | 1.10 | | | 34 | |
| Net income per share, diluted | | | | | $ | 1.43 | | $ | 1.07 | | | 34 | |
Shares used to computeper share net income: | | | | | | | | | | | | | |
| - Basic | | | | | | 52,615 | | | 50,137 | | | 5 | |
| - Diluted | | | | | | 54,221 | | | 51,752 | | | 5 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| | | | | Nine Months Ended September 30, | | | % | |
| | | | | | | 2005 | | | 2004 | | | Change | |
| Noninterest income: | | | | | | | | | | | | | |
| Letters of credit fees and commissions | | | | | $ | 6,533 | | $ | 5,971 | | | 9 | |
| Branch fees | | | | | | 5,143 | | | 5,327 | | | (3) | |
| Net gain on investment securities available-for-sale | | | | | | 3,519 | | | 1,481 | | | 138 | |
| Ancillary loan fees | | | | | | 1,945 | | | 2,242 | | | (13) | |
| Income from secondary market activities | | | | | | 1,143 | | | 1,133 | | | 1 | |
| Net gain on sale of fixed assets | | | | | | 40 | | | 931 | | | (96) | |
| Other operating income | | | | | | 3,968 | | | 4,414 | | | (10) | |
| Total noninterest income | | | | | $ | 22,291 | | $ | 21,499 | | | 4 | |
| | | | | | | | | | | | | | |
| Noninterest expense: | | | | | | | | | | | | | |
| Compensation and employee benefits | | | | | $ | 38,318 | | $ | 27,693 | | | 38 | |
| Occupancy and equipment expense | | | | | | 10,426 | | | 7,748 | | | 35 | |
| Amortization of investments in affordable | | | | | | | | | | | | | |
| housing partnerships | | | | | | 4,971 | | | 5,559 | | | (11) | |
| Amortization of premiums on deposits acquired | | | | | | 1,988 | | | 1,612 | | | 23 | |
| Data processing | | | | | | 1,940 | | | 1,534 | | | 26 | |
| Deposit insurance premiums and regulatory | | | | | | | | | | | | | |
| assessments | | | | | | 709 | | | 572 | | | 24 | |
| Other operating expense | | | | | | 28,073 | | | 19,392 | | | 45 | |
| Total noninterest expense | | | | | $ | 86,425 | | $ | 64,110 | | | 35 | |
EAST WEST BANCORP, INC. | |
SELECTED FINANCIAL INFORMATION | |
(Dollars in thousands) | |
(unaudited) | |
| Average Balances | | | | Three Months Ended September 30, | | % | |
| | | | | 2005 | | 2004 | | Change | |
| Loans receivable | | | | | | | | | | | | | |
| Real estate - single family | | | | | $ | 414,732 | | $ | 246,482 | | | 68 | |
| Real estate - multifamily | | | | | | 1,243,585 | | | 1,006,020 | | | 24 | |
| Real estate - commercial | | | | | | 2,906,445 | | | 2,223,589 | | | 31 | |
| Real estate - construction | | | | | | 470,967 | | | 292,499 | | | 61 | |
| Commercial | | | | | | 517,591 | | | 375,378 | | | 38 | |
| Trade finance | | | | | | 188,975 | | | 134,231 | | | 41 | |
| Consumer | | | | | | 193,527 | | | 169,900 | | | 14 | |
| Total loans receivable | | | | | | 5,935,822 | | | 4,448,099 | | | 33 | |
| Investment securities available-for-sale | | | | | | 711,660 | | | 469,550 | | | 52 | |
| Earning assets | | | | | | 6,730,519 | | | 4,980,691 | | | 35 | |
| Total assets | | | | | | 7,077,746 | | | 5,272,107 | | | 34 | |
| | | | | | | | | | | | | | |
| Deposits | | | | | | | | | | | | | |
| Noninterest-bearing demand | | | | | $ | 1,208,118 | | $ | 964,794 | | | 25 | |
| Interest-bearing checking | | | | | | 338,523 | | | 287,506 | | | 18 | |
| Money market | | | | | | 733,825 | | | 460,529 | | | 59 | |
| Savings | | | | | | 337,370 | | | 329,466 | | | 2 | |
| Total core deposits | | | | | | 2,617,836 | | | 2,042,295 | | | 28 | |
| Time deposits less than $100,000 | | | | | | 853,497 | | | 715,932 | | | 19 | |
| Time deposits $100,000 or greater | | | | | | 1,842,909 | | | 1,136,633 | | | 62 | |
| Total time deposits | | | | | | 2,696,406 | | | 1,852,565 | | | 46 | |
| Total deposits | | | | | | 5,314,242 | | | 3,894,860 | | | 36 | |
| Interest-bearing liabilities | | | | | | 5,185,614 | | | 3,747,094 | | | 38 | |
| Stockholders' equity | | | | | | 597,112 | | | 457,446 | | | 31 | |
| | | | | | | | | | | | | |
| | | | | Nine Months Ended September 30, | | | % | |
| | | | | | | 2005 | | | 2004 | | | Change | |
| Loans receivable | | | | | | | | | | | | | |
| Real estate - single family | | | | | $ | 393,667 | | $ | 190,982 | | | 106 | |
| Real estate - multifamily | | | | | | 1,190,840 | | | 906,945 | | | 31 | |
| Real estate - commercial | | | | | | 2,749,805 | | | 1,939,907 | | | 42 | |
| Real estate - construction | | | | | | 422,910 | | | 244,497 | | | 73 | |
| Commercial | | | | | | 461,306 | | | 345,609 | | | 33 | |
| Trade finance | | | | | | 177,022 | | | 125,912 | | | 41 | |
| Consumer | | | | | | 186,887 | | | 160,203 | | | 17 | |
| Total loans receivable | | | | | | 5,582,437 | | | 3,914,055 | | | 43 | |
| Investment securities available-for-sale | | | | | | 639,791 | | | 431,451 | | | 48 | |
| Earning assets | | | | | | 6,295,001 | | | 4,447,684 | | | 42 | |
| Total assets | | | | | | 6,613,071 | | | 4,718,172 | | | 40 | |
| | | | | | | | | | | | | | |
| Deposits | | | | | | | | | | | | | |
| Noninterest-bearing demand | | | | | $ | 1,115,316 | | $ | 926,339 | | | 20 | |
| Interest-bearing checking | | | | | | 334,127 | | | 283,054 | | | 18 | |
| Money market | | | | | | 651,005 | | | 381,914 | | | 70 | |
| Savings | | | | | | 327,775 | | | 316,116 | | | 4 | |
| Total core deposits | | | | | | 2,428,223 | | | 1,907,423 | | | 27 | |
| Time deposits less than $100,000 | | | | | | 809,061 | | | 694,952 | | | 16 | |
| Time deposits $100,000 or greater | | | | | | 1,647,462 | | | 1,009,866 | | | 63 | |
| Total time deposits | | | | | | 2,456,523 | | | 1,704,818 | | | 44 | |
| Total deposits | | | | | | 4,884,746 | | | 3,612,241 | | | 35 | |
| Interest-bearing liabilities | | | | | | 4,863,928 | | | 3,304,249 | | | 47 | |
| Stockholders' equity | | | | | | 553,794 | | | 415,588 | | | 33 | |
EAST WEST BANCORP, INC. |
SELECTED FINANCIAL INFORMATION |
(unaudited) |
| | | | | | | | | | |
| Selected Ratios | | | | Three Months Ended September 30, | | % | |
| | | | | 2005 | | 2004 | | Change | |
| For The Period | | | | | | | | | | | | | |
| Return on average assets | | | | | | 1.62 | % | | 1.55 | % | | 4 | |
| Return on average equity | | | | | | 19.15 | % | | 17.84 | % | | 7 | |
| Interest rate spread | | | | | | 3.61 | % | | 3.85 | % | | (6) | |
| Net interest margin | | | | | | 4.22 | % | | 4.22 | % | | - | |
| Yield on earning assets | | | | | | 6.27 | % | | 5.34 | % | | 17 | |
| Cost of deposits | | | | | | 1.89 | % | | 1.00 | % | | 89 | |
| Cost of funds | | | | | | 2.15 | % | | 1.18 | % | | 82 | |
| Noninterest expense/average assets (1) | | | | | | 1.58 | % | | 1.58 | % | | - | |
| Efficiency ratio (1) | | | | | | 35.19 | % | | 34.78 | % | | 1 | |
| Net chargeoffs to average loans (2) | | | | | | 0.08 | % | | 0.30 | % | | (73) | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| | | | | Nine Months Ended September 30, | | | % | |
| | | | | | | 2005 | | | 2004 | | | Change | |
| For The Period | | | | | | | | | | | | | |
| Return on average assets | | | | | | 1.56 | % | | 1.56 | % | | - | |
| Return on average equity | | | | | | 18.67 | % | | 17.77 | % | | 5 | |
| Interest rate spread | | | | | | 3.68 | % | | 3.83 | % | | (4) | |
| Net interest margin | | | | | | 4.22 | % | | 4.20 | % | | - | |
| Yield on earning assets | | | | | | 6.05 | % | | 5.26 | % | | 15 | |
| Cost of deposits | | | | | | 1.67 | % | | 0.94 | % | | 78 | |
| Cost of funds | | | | | | 1.92 | % | | 1.12 | % | | 71 | |
| Noninterest expense/average assets (1) | | | | | | 1.60 | % | | 1.61 | % | | - | |
| Efficiency ratio (1) | | | | | | 35.95 | % | | 35.27 | % | | 2 | |
| Net chargeoffs to average loans (2) | | | | | | 0.10 | % | | 0.15 | % | | (33) | |
| | | | | | | | | | | | | | |
| Period End | | | | | | | | | | | | | |
| Tier 1 risk-based capital ratio | | | | | | 8.74 | % | | 9.63 | % | | (9) | |
| Total risk-based capital ratio | | | | | | 10.93 | % | | 10.70 | % | | 2 | |
| Tier 1 leverage capital ratio | | | | | | 8.83 | % | | 9.18 | % | | (4) | |
| Nonperforming assets to total assets | | | | | | 0.22 | % | | 0.05 | % | | 340 | |
| Nonaccrual loans to total loans | | | | | | 0.19 | % | | 0.06 | % | | 217 | |
| Allowance for loan losses to total loans | | | | | | 1.02 | % | | 0.99 | % | | 2 | |
| Allowance for loan losses and unfunded loan | | | | | | | | | | | | | |
| commitments to total loans | | | | | | 1.17 | % | | 1.15 | % | | 2 | |
| Allowance for loan losses to nonaccrual loans | | | | | | 525 | % | | 1804 | % | | (71) | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| (1) Excludes the amortization of intangibles and investments in affordable housing partnerships. | | | | | | | |
| (2) Annualized. | | | | | | | | | | | | | |
EAST WEST BANCORP, INC. | |
QUARTER TO DATE AVERAGE BALANCES, YIELDS AND RATES PAID | |
(Dollars in thousands) | |
(unaudited) | |
| | | | | | | | | | | | | | |
| | | Quarter Ended September 30, | |
| | | 2005 | | 2004 | |
| | | Average | | | | Yield | | Average | | | | Yield | |
| | | Volume | | Interest | | (1) | | Volume | | Interest | | (1) | |
| Assets | | | | | | | | | | | | | | | | | | | |
| Interest-earning assets: | | | | | | | | | | | | | | | | | | | |
| Short-term investments | | $ | 9,655 | | $ | 78 | | | 3.21 | % | $ | 22,712 | | $ | 85 | | | 1.49 | % |
| Securities purchased under resale agreements | | | 12,500 | | | 224 | | | 7.11 | % | | - | | | - | | | - | |
| Investment securities available-for-sale | | | 711,660 | | | 7,181 | | | 4.00 | % | | 469,550 | | | 3,563 | | | 3.02 | % |
| Loans receivable | | | 5,935,822 | | | 98,110 | | | 6.56 | % | | 4,448,099 | | | 62,655 | | | 5.60 | % |
| FHLB and FRB stock | | | 60,882 | | | 694 | | | 4.52 | % | | 40,330 | | | 512 | | | 5.05 | % |
| Total interest-earning assets | | | 6,730,519 | | | 106,287 | | | 6.27 | % | | 4,980,691 | | | 66,815 | | | 5.34 | % |
| | | | | | | | | | | | | | | | | | | | |
| Noninterest-earning assets: | | | | | | | | | | | | | | | | | | | |
| Cash and due from banks | | | 110,124 | | | | | | | | | 92,808 | | | | | | | |
| Allowance for loan losses | | | (59,976 | ) | | | | | | | | (44,806 | ) | | | | | | |
| Other assets | | | 297,079 | | | | | | | | | 243,414 | | | | | | | |
| Total assets | | $ | 7,077,746 | | | | | | | | $ | 5,272,107 | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
| Liabilities and stockholders' equity | | | | | | | | | | | | | | | | | | | |
| Interest-bearing liabilities: | | | | | | | | | | | | | | | | | | | |
| Checking accounts | | $ | 338,523 | | $ | 662 | | | 0.78 | % | $ | 287,506 | | $ | 275 | | | 0.38 | % |
| Money market accounts | | | 733,825 | | | 4,162 | | | 2.25 | % | | 460,529 | | | 1,285 | | | 1.11 | % |
| Savings deposits | | | 337,370 | | | 267 | | | 0.31 | % | | 329,466 | | | 123 | | | 0.15 | % |
| Time deposits less than $100,000 | | | 853,497 | | | 4,915 | | | 2.28 | % | | 715,932 | | | 3,014 | | | 1.67 | % |
| Time deposits $100,000 or greater | | | 1,842,909 | | | 15,269 | | | 3.29 | % | | 1,136,633 | | | 5,088 | | | 1.78 | % |
| Short-term borrowings | | | 68,701 | | | 637 | | | 3.68 | % | | 4,014 | | | 18 | | | 1.78 | % |
| Federal Home Loan Bank advances | | | 803,688 | | | 6,290 | | | 3.11 | % | | 771,002 | | | 3,367 | | | 1.74 | % |
| Securities sold under repurchase agreements | | | 91,848 | | | 693 | | | 2.99 | % | | - | | | - | | | - | |
| Long-term debt | | | 115,253 | | | 1,810 | | | 6.23 | % | | 42,012 | | | 810 | | | 7.67 | % |
| Total interest-bearing liabilities | | | 5,185,614 | | | 34,705 | | | 2.66 | % | | 3,747,094 | | | 13,980 | | | 1.49 | % |
| | | | | | | | | | | | | | | | | | | | |
| Noninterest-bearing liabilities: | | | | | | | | | | | | | | | | | | | |
| Demand deposits | | | 1,208,118 | | | | | | | | | 964,794 | | | | | | | |
| Other liabilities | | | 86,902 | | | | | | | | | 102,773 | | | | | | | |
| Stockholders' equity | | | 597,112 | | | | | | | | | 457,446 | | | | | | | |
| Total liabilities and stockholders' equity | | $ | 7,077,746 | | | | | | | | $ | 5,272,107 | | | | | | | |
| Interest rate spread | | | | | | | | | 3.61 | % | | | | | | | | 3.85 | % |
| Net interest income and net margin | | | | | $ | 71,582 | | | 4.22 | % | | | | $ | 52,835 | | | 4.22 | % |
| | | | | | | | | | | | | | | | | | | | |
| (1) Annualized. | | | | | | | | | | | | | | | | | | | |
EAST WEST BANCORP, INC. | |
YEAR TO DATE AVERAGE BALANCES, YIELDS AND RATES PAID | |
(Dollars in thousands) | |
(unaudited) | |
| | | | | | | | | | | | | | |
| | | Nine Months Ended September 30, | |
| | | 2005 | | 2004 | |
| | | Average | | | | Yield | | Average | | | | Yield | |
| | | Volume | | Interest | | (1) | | Volume | | Interest | | (1) | |
| Assets | | | | | | | | | | | | | | | | | | | |
| Interest-earning assets: | | | | | | | | | | | | | | | | | | | |
| Short-term investments | | $ | 8,173 | | $ | 177 | | | 2.90 | % | $ | 70,890 | | $ | 607 | | | 1.14 | % |
| Securities purchased under resale agreements | | | 4,213 | | | 224 | | | 7.11 | % | | - | | | - | | | - | |
| Investment securities available-for-sale | | | 639,763 | | | 18,020 | | | 3.77 | % | | 431,451 | | | 10,791 | | | 3.34 | % |
| Loans receivable | | | 5,582,437 | | | 264,340 | | | 6.33 | % | | 3,914,055 | | | 162,895 | | | 5.56 | % |
| FHLB and FRB stock | | | 60,415 | | | 2,051 | | | 4.54 | % | | 31,288 | | | 1,014 | | | 4.33 | % |
| Total interest-earning assets | | | 6,295,001 | | | 284,812 | | | 6.05 | % | | 4,447,684 | | | 175,307 | | | 5.26 | % |
| | | | | | | | | | | | | | | | | | | | |
| Noninterest-earning assets: | | | | | | | | | | | | | | | | | | | |
| Cash and due from banks | | | 104,035 | | | | | | | | | 87,556 | | | | | | | |
| Allowance for loan losses | | | (56,021 | ) | | | | | | | | (42,807 | ) | | | | | | |
| Other assets | | | 270,056 | | | | | | | | | 225,739 | | | | | | | |
| Total assets | | $ | 6,613,071 | | | | | | | | $ | 4,718,172 | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
| Liabilities and stockholders' equity | | | | | | | | | | | | | | | | | | | |
| Interest-bearing liabilities: | | | | | | | | | | | | | | | | | | | |
| Checking accounts | | $ | 334,127 | | $ | 1,909 | | | 0.76 | % | $ | 283,054 | | $ | 743 | | | 0.35 | % |
| Money market accounts | | | 651,005 | | | 10,175 | | | 2.09 | % | | 381,914 | | | 2,836 | | | 0.99 | % |
| Savings deposits | | | 327,775 | | | 657 | | | 0.27 | % | | 316,116 | | | 338 | | | 0.14 | % |
| Time deposits less than $100,000 | | | 809,061 | | | 13,430 | | | 2.22 | % | | 694,952 | | | 8,310 | | | 1.60 | % |
| Time deposits $100,000 or greater | | | 1,647,462 | | | 34,789 | | | 2.82 | % | | 1,009,866 | | | 13,323 | | | 1.76 | % |
| Short-term borrowings | | | 27,242 | | | 739 | | | 3.63 | % | | 2,545 | | | 31 | | | 1.63 | % |
| Federal Home Loan Bank advances | | | 947,819 | | | 19,361 | | | 2.73 | % | | 579,886 | | | 7,594 | | | 1.75 | % |
| Securities sold under repurchase agreements | | | 30,952 | | | 693 | | | 2.99 | % | | - | | | - | | | - | |
| Long-term debt | | | 88,485 | | | 4,295 | | | 6.49 | % | | 35,916 | | | 2,210 | | | 8.22 | % |
| Total interest-bearing liabilities | | | 4,863,928 | | | 86,048 | | | 2.37 | % | | 3,304,249 | | | 35,385 | | | 1.43 | % |
| | | | | | | | | | | | | | | | | | | | |
| Noninterest-bearing liabilities: | | | | | | | | | | | | | | | | | | | |
| Demand deposits | | | 1,115,316 | | | | | | | | | 926,339 | | | | | | | |
| Other liabilities | | | 80,033 | | | | | | | | | 71,996 | | | | | | | |
| Stockholders' equity | | | 553,794 | | | | | | | | | 415,588 | | | | | | | |
| Total liabilities and stockholders' equity | | $ | 6,613,071 | | | | | | | | $ | 4,718,172 | | | | | | | |
| Interest rate spread | | | | | | | | | 3.68 | % | | | | | | | | 3.83 | % |
| Net interest income and net margin | | | | | $ | 198,764 | | | 4.22 | % | | | | $ | 139,922 | | | 4.20 | % |
| | | | | | | | | | | | | | | | | | | | |
| (1) Annualized. | | | | | | | | | | | | | | | | | | | |
