FOR FURTHER INFORMATION AT THE COMPANY:
Julia Gouw
Chief Financial Officer
(626) 768-6898
EAST WEST BANCORP REPORTS STRONG EARNINGS
OF $35.6 MILLION FOR THIRD QUARTER 2006
Pasadena, CA - October 18, 2006 - 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 2006. Fully diluted earnings per share for the third quarter increased 12% to $0.58 per share from $0.52 in the prior year period.
Highlights for the Third Quarter
· | Net income of $35.6 million, up 24% from prior year |
· | Record net interest income of $95.4 million, up 33% from prior year |
· | Net interest margin of 3.89% |
· | Return on equity of 14.94% |
· | Record total assets of $10.8 billion |
· | Record gross loans of $8.4 billion |
· | Total deposits of $7.1 billion |
· | Total nonperforming assets of 0.12% of total assets |
· | Efficiency ratio of 37.38% |
Financial Summary
Third quarter net income was $35.6 million, up 24% from $28.6 million reported in the prior year period. Diluted earnings per share for the third quarter of 2006 increased to $0.58, up 12% from $0.52 in the prior year period. For the quarter, return on average equity totaled 14.94% and return on average assets totaled 1.38%. The effective tax rate for the quarter equaled 38.76%, compared to 35.92% for the prior year period. Pretax income for the third quarter of 2006 rose to $58.1 million, a 30% or $13.5 million increase over the year ago figure. Earnings for the third quarter of 2006 increased due to our overall growth, with particularly strong growth in our lending business.
“We are pleased with the results of the third quarter of 2006. It was a demanding quarter due to the interest rate environment and continued market pressures. However, our operational strategy allows us to execute solid results in all types of economic and market conditions and we delivered in the third quarter,” stated Dominic Ng, Chairman, President and Chief Executive Officer of East West. “Loan growth was very healthy during the third quarter; gross loans increased by $574 million quarter-to-date, or 29% annualized. We are well positioned to end 2006 as our 10th consecutive year of record earnings. Looking ahead to the future, we intend to continue our strategy of carefully balancing long term growth and profitability,” continued Ng.
Management Guidance
Based on the year-to-date performance and management’s expectations for the fourth quarter of 2006, the Company has increased its guidance of earnings per share. Management now expects EPS to be in the range of $2.30 to $2.31 for the full year of 2006, representing fourth quarter EPS of $0.58 to $0.59. This is an increase from the previously estimated amount of $2.28 to $2.30 and an increase of approximately 17% from 2005.
The EPS guidance is based on the following assumptions:
· | Annualized loan growth of 15% to 17% for the fourth quarter of 2006 |
· | Annualized deposit growth of 8% to 10% for the fourth quarter of 2006 |
· | Noninterest expense to increase marginally from the third quarter |
· | Efficiency ratio of approximately 37% for the fourth quarter of 2006 |
· | Effective tax rate of approximately 39% for the fourth quarter of 2006 |
· | A stable or marginally increasing interest rate environment and a net interest margin between 3.80% and 3.90% for the fourth quarter |
Balance Sheet Summary
At September 30, 2006, total assets were $10.81 billion, a $2.53 billion increase above total assets of $8.28 billion at December 31, 2005. Gross loans at September 30, 2006 totaled $8.45 billion, up 32% annualized from $6.79 billion at year-end 2005. Excluding the impact of the Standard Bank acquisition and loan securitizations earlier this year, year-to-date organic growth was an outstanding $1.49 billion, or 29% annualized. Both year-to-date and quarter-to-date, all major areas of our lending business have grown at a double-digit rate, on an annualized basis.
Average earning assets for the third quarter of 2006 totaled $9.74 billion, 45% higher than the third quarter of 2005. The growth in average earning assets was driven by a 38% or $2.23 billion increase in average loans to $8.17 billion. The yield on average earning assets for the quarter was 7.22%, an increase of 95 basis points from the year ago quarter and an increase of 13 basis points from the previous quarter. The yield on average loans receivable for the quarter was 7.60%, an increase of 104 basis points from the year ago quarter and an increase of 15 basis points from the previous quarter. The yield on average earning assets has increased as interest rates have risen and our loan portfolio has continued to reprice.
Total deposits at September 30, 2006 were $7.10 billion, an $841.1 million or 18% annualized increase over total deposits of $6.26 billion at December 31, 2005. Excluding the impact of the Standard Bank acquisition earlier this year, year-to-date organic deposit growth was $112.6 million, or 2% annualized. Core deposits at September 30, 2006 totaled $3.30 billion. Excluding the impact of the Standard Bank acquisition, core deposits remained essentially unchanged from December 31, 2005.
Average total deposits for the third quarter were $6.92 billion, 30% above the figure for the prior year period, while average core deposits totaled $3.30 billion, 26% greater than a year ago. The average cost of deposits for the third quarter of 2006 was 3.09%, a 120 basis point increase from the year ago quarter and a 23 basis point increase from the previous quarter. The average cost of funds for the third quarter equaled 3.51%, a 136 basis point increase from the prior year and a 34 basis point increase from the prior quarter. The increase in the cost of deposits from both the prior year and the prior quarter period is due to continuing market competition for deposits.
Third Quarter Operating Results
Net interest income for the third quarter increased to a record $95.4 million, 33% or $23.8 million greater than the third quarter of 2005 and 4% or $3.8 million greater on a sequential quarter basis. The interest margin for the quarter was 3.89%, a decrease of 33 basis points from the year ago margin and a decrease of 19 basis points from the previous quarter margin. The decrease in margin from both the sequential quarter and the previous year is a result of the continued, aggressive pricing of loans and deposits from other financial institutions. We now expect the net interest margin for the fourth quarter to be in the range of 3.80% to 3.90%, as we do not foresee any near term change in loan and deposit competition.
East West provided $3.5 million for loan losses during the third quarter of 2006, compared to $4.5 million during the third quarter of 2005 and $1.3 million during the previous quarter. The provision for loan losses for the quarter reflects both the sound quality and the continued growth of our loan portfolio.
Noninterest income for the third quarter totaled $8.1 million, 4% or $276 thousand higher than the third quarter of 2005. Core noninterest income, excluding the impact of net gain on sales of investment securities, totaled $7.4 million during the quarter, 23% or $1.4 million higher than the prior year figure. The growth in core noninterest income from prior year reflects double-digit growth in branch fees and other operating income, partially offset by a decrease in income from secondary marketing activities. Noninterest income for the third quarter was flat compared to the sequential quarter while core noninterest income, excluding the impact of net gain on sales of investment securities was 7% or $543 thousand lower than the sequential quarter.
Noninterest expense totaled $41.9 million for the third quarter of 2006, 38% or $11.6 million higher than a year ago and 9% or $3.4 million higher than the previous quarter. Overall, noninterest expense has increased compared to the prior year period due to our growth and recent acquisitions. Specifically, compensation and employee benefits expense is 43% higher than a year ago and 17% higher than the previous quarter. The increase from both prior year and prior quarter is due to the addition of personnel as we continue to invest in our future and add employees to support our growth. Management anticipates that expenses for the fourth quarter may increase marginally from the third quarter.
As expected, the efficiency ratio increased from 35.19% a year ago to 37.38% for the third quarter. Management continues to believe that the efficiency ratio for the full year of 2006 will be approximately 37%.
Asset Quality
Total nonperforming assets were $13.5 million or 0.12% of total assets at September 30, 2006. This compares to $30.1 million, or 0.36% of total assets at December 31, 2005 and $10.5 million or 0.11% of total assets at June 30, 2006. Nonaccrual loans as of September 30, 2006 were $10.6 million or 0.13% of total loans, compared to $24.1 million or 0.36% of total loans at December 31, 2005 and $7.7 million or 0.10% of total loans at June 30, 2006.
Net chargeoffs for the quarter totaled $132 thousand or an annualized 0.01% of average loans. This compares to net chargeoffs of $1.1 million, or an annualized 0.08% of average loans for the third quarter of 2005 and net chargeoffs of $305 thousand or an annualized 0.02% of average loans for the previous quarter.
The allowance for loan losses at September 30, 2006 was $79.1 million or 0.94% of total loans and 745% of nonaccrual loans, compared to $68.6 million or 1.01% of total loans and 284% of nonaccrual loans at December 31, 2005. At September 30, 2006, the allowance for unfunded loan commitments and off-balance sheet credit exposures amounted to $12.5 million compared to $11.1 million at December 31, 2005. The allowance for loan losses and unfunded loan commitments to total loans was 1.08% at September 30, 2006, compared to 1.17% of total loans at December 31, 2005.
Capitalization
East West continues to remain well capitalized under all regulatory guidelines. At September 30, 2006, our Tier I risk-based capital ratio was 9.18%, total risk-based capital ratio was 10.97% and Tier I leverage ratio was 8.22%. Total stockholders’ equity as of September 30, 2006 was $981.4 million, representing a book value of $16.03 per share.
About East West
East West Bancorp is a publicly owned company, with $10.8 billion in assets, whose stock is traded on the Nasdaq Global Select 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 62 branch locations. East West Bank serves the community with 61 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, 2005 (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, | % | |||||||
2006 | 2005 | Change | |||||||
Assets | |||||||||
Cash and cash equivalents | $ | 172,357 | $ | 151,192 | 14 | ||||
Interest bearing deposits in other banks | 99 | - | 100 | ||||||
Securities purchased under resale agreements | 100,000 | 50,000 | 100 | ||||||
Investment securities available-for-sale | 1,490,112 | 869,837 | 71 | ||||||
Loans receivable (net of allowance for loan losses | |||||||||
of $79,096 and $68,635) | 8,363,680 | 6,724,320 | 24 | ||||||
Premiums on deposits acquired, net | 22,193 | 18,853 | 18 | ||||||
Goodwill | 244,176 | 143,254 | 70 | ||||||
Other assets | 419,685 | 320,800 | 31 | ||||||
Total assets | $ | 10,812,302 | $ | 8,278,256 | 31 | ||||
Liabilities and Stockholders' Equity | |||||||||
Deposits | $ | 7,099,676 | $ | 6,258,587 | 13 | ||||
Fed funds purchased | 118,014 | 91,500 | 29 | ||||||
Federal Home Loan Bank advances | 1,499,879 | 617,682 | 143 | ||||||
Securities sold under repurchase agreements | 825,000 | 325,000 | 154 | ||||||
Notes payable | 6,460 | 8,833 | (27 | ) | |||||
Accrued expenses and other liabilities | 97,880 | 89,421 | 9 | ||||||
Long-term debt | 184,023 | 153,095 | 20 | ||||||
Total liabilities | 9,830,932 | 7,544,118 | 30 | ||||||
Stockholders' equity | 981,370 | 734,138 | 34 | ||||||
Total liabilities and stockholders' equity | $ | 10,812,302 | $ | 8,278,256 | 31 | ||||
Book value per share | $ | 16.03 | $ | 12.99 | 23 | ||||
Number of shares at period end | 61,207 | 56,519 | 8 | ||||||
Ending Balances | September 30, | December 31, | % | ||||||
2006 | 2005 | Change | |||||||
Loans receivable | |||||||||
Real estate - single family | $ | 617,176 | $ | 509,151 | 21 | ||||
Real estate - multifamily | 1,721,409 | 1,239,836 | 39 | ||||||
Real estate - commercial | 3,796,418 | 3,321,520 | 14 | ||||||
Real estate - construction | 1,015,069 | 640,654 | 58 | ||||||
Commercial | 856,779 | 643,296 | 33 | ||||||
Trade finance | 268,332 | 230,771 | 16 | ||||||
Consumer | 172,583 | 208,797 | (17 | ) | |||||
Total gross loans receivable | 8,447,766 | 6,794,025 | 24 | ||||||
Unearned fees, premiums and discounts | (4,990 | ) | (1,070 | ) | 366 | ||||
Allowance for loan losses | (79,096 | ) | (68,635 | ) | 15 | ||||
Net loans receivable | $ | 8,363,680 | $ | 6,724,320 | 24 | ||||
Deposits | |||||||||
Noninterest-bearing demand | $ | 1,353,195 | $ | 1,331,992 | 2 | ||||
Interest-bearing checking | 397,711 | 472,611 | (16 | ) | |||||
Money market | 1,155,925 | 978,678 | 18 | ||||||
Savings | 395,508 | 326,806 | 21 | ||||||
Total core deposits | 3,302,339 | 3,110,087 | 6 | ||||||
Time deposits less than $100,000 | 1,101,132 | 927,793 | 19 | ||||||
Time deposits $100,000 or greater | 2,696,205 | 2,220,707 | 21 | ||||||
Total time deposits | 3,797,337 | 3,148,500 | 21 | ||||||
Total deposits | $ | 7,099,676 | $ | 6,258,587 | 13 |
EAST WEST BANCORP, INC. | |||||||||
CONDENSED CONSOLIDATED STATEMENTS OF INCOME | |||||||||
(In thousands, except per share amounts) | |||||||||
(unaudited) | |||||||||
Three Months Ended September 30, | % | ||||||||
2006 | 2005 | Change | |||||||
Interest and dividend income | $ | 177,312 | $ | 106,287 | 67 | ||||
Interest expense | (81,895 | ) | (34,705 | ) | 136 | ||||
Net interest income before provision for loan losses | 95,417 | 71,582 | 33 | ||||||
Provision for loan losses | (3,500 | ) | (4,500 | ) | (22 | ) | |||
Net interest income after provision for loan losses | 91,917 | 67,082 | 37 | ||||||
Noninterest income | 8,103 | 7,827 | 4 | ||||||
Noninterest expense | (41,946 | ) | (30,306 | ) | 38 | ||||
Income before provision for income taxes | 58,074 | 44,603 | 30 | ||||||
Income taxes | (22,512 | ) | (16,020 | ) | 41 | ||||
Net income | $ | 35,562 | $ | 28,583 | 24 | ||||
Net income per share, basic | $ | 0.59 | $ | 0.54 | 9 | ||||
Net income per share, diluted | $ | 0.58 | $ | 0.52 | 12 | ||||
Shares used to compute per share net income: | |||||||||
- Basic | 60,536 | 53,261 | 14 | ||||||
- Diluted | 61,797 | 54,822 | 13 | ||||||
Three Months Ended September 30, | % | ||||||||
2006 | 2005 | Change | |||||||
Noninterest income: | |||||||||
Branch fees | $ | 2,837 | $ | 1,858 | 53 | ||||
Letters of credit fees and commissions | 2,065 | 2,029 | 2 | ||||||
Net gain on sales of investment securities available-for-sale | 676 | 1,786 | (62 | ) | |||||
Income from secondary market activities | 123 | 130 | (5 | ) | |||||
Other operating income | 2,402 | 2,024 | 19 | ||||||
Total noninterest income | $ | 8,103 | $ | 7,827 | 4 | ||||
Noninterest expense: | |||||||||
Compensation and employee benefits | $ | 18,589 | $ | 12,979 | 43 | ||||
Occupancy and equipment expense | 5,610 | 3,736 | 50 | ||||||
Amortization of premiums on deposits acquired | 1,691 | 782 | 116 | ||||||
Amortization of investments in affordable | |||||||||
housing partnerships | 1,555 | 1,581 | (2 | ) | |||||
Data processing | 890 | 717 | 24 | ||||||
Deposit insurance premiums and regulatory assessments | 339 | 258 | 31 | ||||||
Other operating expense | 13,272 | 10,253 | 29 | ||||||
Total noninterest expense | $ | 41,946 | $ | 30,306 | 38 | ||||
EAST WEST BANCORP, INC. | |||||||||
CONDENSED CONSOLIDATED STATEMENTS OF INCOME | |||||||||
(In thousands, except per share amounts) | |||||||||
(unaudited) | |||||||||
Nine Months Ended September 30, | % | ||||||||
2006 | 2005 | Change | |||||||
Interest and dividend income | $ | 473,862 | $ | 284,812 | 66 | �� | |||
Interest expense | (203,753 | ) | (86,048 | ) | 137 | ||||
Net interest income before provision for loan losses | 270,109 | 198,764 | 36 | ||||||
Provision for loan losses | (8,166 | ) | (13,370 | ) | (39 | ) | |||
Net interest income after provision for loan losses | 261,943 | 185,394 | 41 | ||||||
Noninterest income | 25,076 | 22,291 | 12 | ||||||
Noninterest expense | (117,269 | ) | (86,425 | ) | 36 | ||||
Income before provision for income taxes | 169,750 | 121,260 | 40 | ||||||
Income taxes | (65,492 | ) | (43,695 | ) | 50 | ||||
Net income | $ | 104,258 | $ | 77,565 | 34 | ||||
Net income per share, basic | $ | 1.76 | $ | 1.47 | 20 | ||||
Net income per share, diluted | $ | 1.72 | $ | 1.43 | 20 | ||||
Shares used to compute per share net income: | |||||||||
- Basic | 59,204 | 52,615 | 13 | ||||||
- Diluted | 60,569 | 54,221 | 12 | ||||||
Nine Months Ended September 30, | % | ||||||||
2006 | 2005 | Change | |||||||
Noninterest income: | |||||||||
Branch fees | $ | 8,266 | $ | 5,143 | 61 | ||||
Letters of credit fees and commissions | 6,396 | 6,533 | (2 | ) | |||||
Net gain on sales of investment securities available-for-sale | 2,537 | 3,519 | (28 | ) | |||||
Income from secondary market activities | 496 | 1,314 | (62 | ) | |||||
Other operating income | 7,381 | 5,782 | 28 | ||||||
Total noninterest income | $ | 25,076 | $ | 22,291 | 12 | ||||
Noninterest expense: | |||||||||
Compensation and employee benefits | $ | 50,589 | $ | 38,318 | 32 | ||||
Occupancy and equipment expense | 15,726 | 10,426 | 51 | ||||||
Amortization of premiums on deposits acquired | 5,308 | 1,988 | 167 | ||||||
Amortization of investments in affordable | |||||||||
housing partnerships | 4,281 | 4,971 | (14 | ) | |||||
Data processing | 2,678 | 1,940 | 38 | ||||||
Deposit insurance premiums and regulatory assessments | 1,021 | 709 | 44 | ||||||
Other operating expense | 37,666 | 28,073 | 34 | ||||||
Total noninterest expense | $ | 117,269 | $ | 86,425 | 36 | ||||
SELECTED FINANCIAL INFORMATION | |||||||||
(Dollars in thousands) | |||||||||
(unaudited) | |||||||||
Average Balances | Three Months Ended September 30, | % | |||||||
2006 | 2005 | Change | |||||||
Loans receivable | |||||||||
Real estate - single family | $ | 571,051 | $ | 414,732 | 38 | ||||
Real estate - multifamily | 1,654,291 | 1,243,585 | 33 | ||||||
Real estate - commercial | 3,737,320 | 2,906,445 | 29 | ||||||
Real estate - construction | 932,661 | 470,967 | 98 | ||||||
Commercial | 825,527 | 517,591 | 59 | ||||||
Trade finance | 260,526 | 188,975 | 38 | ||||||
Consumer | 184,692 | 193,527 | (5 | ) | |||||
Total loans receivable | 8,166,068 | 5,935,822 | 38 | ||||||
Investment securities available-for-sale | 1,382,977 | 711,660 | 94 | ||||||
Earning assets | 9,737,428 | 6,730,519 | 45 | ||||||
Total assets | 10,324,398 | 7,077,746 | 46 | ||||||
Deposits | |||||||||
Noninterest-bearing demand | $ | 1,261,869 | $ | 1,208,118 | 4 | ||||
Interest-bearing checking | 393,218 | 338,523 | 16 | ||||||
Money market | 1,232,879 | 733,825 | 68 | ||||||
Savings | 407,904 | 337,370 | 21 | ||||||
Total core deposits | 3,295,870 | 2,617,836 | 26 | ||||||
Time deposits less than $100,000 | 1,113,057 | 853,497 | 30 | ||||||
Time deposits $100,000 or greater | 2,513,360 | 1,842,909 | 36 | ||||||
Total time deposits | 3,626,417 | 2,696,406 | 34 | ||||||
Total deposits | 6,922,287 | 5,314,242 | 30 | ||||||
Interest-bearing liabilities | 7,994,802 | 5,185,614 | 54 | ||||||
Stockholders' equity | 952,435 | 597,112 | 60 | ||||||
Average Balances | Nine Months Ended September 30, | % | |||||||
2006 | 2005 | Change | |||||||
Loans receivable | |||||||||
Real estate - single family | $ | 551,429 | $ | 393,667 | 40 | ||||
Real estate - multifamily | 1,538,361 | 1,190,840 | 29 | ||||||
Real estate - commercial | 3,559,884 | 2,749,805 | 29 | ||||||
Real estate - construction | 815,273 | 422,910 | 93 | ||||||
Commercial | 770,345 | 461,306 | 67 | ||||||
Trade finance | 232,315 | 177,022 | 31 | ||||||
Consumer | 192,538 | 186,887 | 3 | ||||||
Total loans receivable | 7,660,145 | 5,582,437 | 37 | ||||||
Investment securities available-for-sale | 1,113,006 | 639,763 | 74 | ||||||
Earning assets | 8,944,862 | 6,295,001 | 42 | ||||||
Total assets | 9,497,712 | 6,613,071 | 44 | ||||||
Deposits | |||||||||
Noninterest-bearing demand | $ | 1,241,363 | $ | 1,115,316 | 11 | ||||
Interest-bearing checking | 418,524 | 334,127 | 25 | ||||||
Money market | 1,163,839 | 651,005 | 79 | ||||||
Savings | 391,773 | 327,775 | 20 | ||||||
Total core deposits | 3,215,499 | 2,428,223 | 32 | ||||||
Time deposits less than $100,000 | 1,087,945 | 809,061 | 34 | ||||||
Time deposits $100,000 or greater | 2,407,942 | 1,647,462 | 46 | ||||||
Total time deposits | 3,495,887 | 2,456,523 | 42 | ||||||
Total deposits | 6,711,386 | 4,884,746 | 37 | ||||||
Interest-bearing liabilities | 7,266,885 | 4,863,928 | 49 | ||||||
Stockholders' equity | 879,490 | 553,794 | 59 |
SELECTED FINANCIAL INFORMATION | |||||||||||
(Dollars in thousands) | |||||||||||
(unaudited) | |||||||||||
Selected Ratios | Three Months Ended September 30, | % | |||||||||
2006 | 2005 | Change | |||||||||
For The Period | |||||||||||
Return on average assets | 1.38 | % | 1.62 | % | (15 | ) | |||||
Return on average equity | 14.94 | % | 19.15 | % | (22 | ) | |||||
Interest rate spread | 3.16 | % | 3.61 | % | (12 | ) | |||||
Net interest margin | 3.89 | % | 4.22 | % | (8 | ) | |||||
Yield on earning assets | 7.22 | % | 6.27 | % | 15 | ||||||
Cost of deposits | 3.09 | % | 1.89 | % | 63 | ||||||
Cost of funds | 3.51 | % | 2.15 | % | 63 | ||||||
Noninterest expense/average assets (1) | 1.50 | % | 1.58 | % | (5 | ) | |||||
Efficiency ratio (1) | 37.38 | % | 35.19 | % | 6 | ||||||
Net chargeoffs to average loans (2) | 0.01 | % | 0.08 | % | (88 | ) | |||||
Nine Months Ended September 30, | |||||||||||
2006 | 2005 | % Change | |||||||||
For The Period | |||||||||||
Return on average assets | 1.46 | % | 1.56 | % | (6 | ) | |||||
Return on average equity | 15.81 | % | 18.67 | % | (15 | ) | |||||
Interest rate spread | 3.33 | % | 3.68 | % | (10 | ) | |||||
Net interest margin | 4.04 | % | 4.22 | % | (4 | ) | |||||
Yield on earning assets | 7.08 | % | 6.05 | % | 17 | ||||||
Cost of deposits | 2.84 | % | 1.67 | % | 70 | ||||||
Cost of funds | 3.20 | % | 1.92 | % | 67 | ||||||
Noninterest expense/average assets (1) | 1.51 | % | 1.60 | % | (6 | ) | |||||
Efficiency ratio (1) | 36.48 | % | 35.95 | % | 1 | ||||||
Net chargeoffs to average loans (2) | 0.01 | % | 0.10 | % | (90 | ) | |||||
Period End | |||||||||||
Tier 1 risk-based capital ratio | 9.18 | % | 8.74 | % | 5 | ||||||
Total risk-based capital ratio | 10.97 | % | 10.93 | % | 0 | ||||||
Tier 1 leverage capital ratio | 8.22 | % | 8.83 | % | (7 | ) | |||||
Nonperforming assets to total assets | 0.12 | % | 0.22 | % | (45 | ) | |||||
Nonaccrual loans to total loans | 0.13 | % | 0.19 | % | (32 | ) | |||||
Allowance for loan losses to total loans | 0.94 | % | 1.02 | % | (8 | ) | |||||
Allowance for loan losses and unfunded loan | |||||||||||
commitments to total loans | 1.08 | % | 1.17 | % | (8 | ) | |||||
Allowance for loan losses to nonaccrual loans | 744.85 | % | 525.00 | % | 42 | ||||||
(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 | |||||||||||||||||||
(Dollar in thousands) | |||||||||||||||||||
(unaudited) | |||||||||||||||||||
Three Months Ended September 30, | |||||||||||||||||||
2006 | 2005 | ||||||||||||||||||
Average | Average | ||||||||||||||||||
Volume | Interest | Yield (1) | Volume | Interest | Yield (1) | ||||||||||||||
ASSETS | |||||||||||||||||||
Interest-earning assets: | |||||||||||||||||||
Short-term investments | $ | 7,257 | $ | 92 | 5.03 | % | $ | 9,655 | $ | 78 | 3.21 | % | |||||||
Interest bearing deposit in other banks | 455 | 4 | 3.49 | % | - | - | - | ||||||||||||
Securities purchased under resale agreements | 100,000 | 1,917 | 7.61 | % | 12,500 | 224 | 7.11 | % | |||||||||||
Investment securities available-for-sale | 1,382,977 | 17,860 | 5.12 | % | 711,660 | 7,181 | 4.00 | % | |||||||||||
Loans receivable | 8,166,068 | 156,333 | 7.60 | % | 5,935,822 | 98,110 | 6.56 | % | |||||||||||
FHLB/FRB stock | 80,671 | 1,106 | 5.44 | % | 60,882 | 694 | 4.52 | % | |||||||||||
Total interest-earning assets | 9,737,428 | 177,312 | 7.22 | % | 6,730,519 | 106,287 | 6.27 | % | |||||||||||
Noninterest-earning assets: | |||||||||||||||||||
Cash and due from banks | 124,641 | 110,124 | |||||||||||||||||
Allowance for loan losses | (77,804 | ) | (59,976 | ) | |||||||||||||||
Other assets | 540,133 | 297,079 | |||||||||||||||||
Total assets | $ | 10,324,398 | $ | 7,077,746 | |||||||||||||||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||||||||||||
Interest-bearing liabilities: | |||||||||||||||||||
Checking accounts | 393,218 | 1,393 | 1.41 | % | 338,523 | 662 | 0.78 | % | |||||||||||
Money market accounts | 1,232,879 | 12,342 | 3.97 | % | 733,825 | 4,162 | 2.25 | % | |||||||||||
Savings deposits | 407,904 | 746 | 0.73 | % | 337,370 | 267 | 0.31 | % | |||||||||||
Time deposits less than $100,000 | 1,113,057 | 11,303 | 4.03 | % | 853,497 | 4,915 | 2.28 | % | |||||||||||
Time deposits $100,000 or greater | 2,513,360 | 28,112 | 4.44 | % | 1,842,909 | 15,269 | 3.29 | % | |||||||||||
Fed funds purchased | 107,639 | 1,462 | 5.39 | % | 68,701 | 637 | 3.68 | % | |||||||||||
Federal Home Loan Bank advances | 1,291,627 | 16,081 | 4.94 | % | 803,688 | 6,290 | 3.11 | % | |||||||||||
Securities sold under repurchase agreement | 751,095 | 7,024 | 3.71 | % | 91,848 | 693 | 2.99 | % | |||||||||||
Long-term debt | 184,023 | 3,432 | 7.40 | % | 115,253 | 1,810 | 6.23 | % | |||||||||||
Total interest-bearing liabilities | 7,994,802 | 81,895 | 4.06 | % | 5,185,614 | 34,705 | 2.66 | % | |||||||||||
Noninterest-bearing liabilities: | |||||||||||||||||||
Demand deposits | 1,261,869 | 1,208,118 | |||||||||||||||||
Other liabilities | 115,292 | 86,902 | |||||||||||||||||
Stockholders' equity | 952,435 | 597,112 | |||||||||||||||||
Total liabilities and stockholders' equity | $ | 10,324,398 | $ | 7,077,746 | |||||||||||||||
Interest rate spread | 3.16 | % | 3.61 | % | |||||||||||||||
Net interest income and net margin | $ | 95,417 | 3.89 | % | $ | 71,582 | 4.22 | % | |||||||||||
(1) Annualized. |
EAST WEST BANCORP, INC. | |||||||||||||||||||
YEAR TO DATE AVERAGE BALANCES, YIELDS AND RATES PAID | |||||||||||||||||||
(Dollar in thousands) | |||||||||||||||||||
(unaudited) | |||||||||||||||||||
Nine Months Ended September 30, | |||||||||||||||||||
2006 | 2005 | ||||||||||||||||||
Average | Average | ||||||||||||||||||
Volume | Interest | Yield (1) | Volume | Interest | Yield (1) | ||||||||||||||
ASSETS | |||||||||||||||||||
Interest-earning assets: | |||||||||||||||||||
Short-term investments | $ | 10,735 | $ | 320 | 3.99 | % | $ | 8,173 | $ | 177 | 2.90 | % | |||||||
Interest bearing deposit in other banks | 432 | 12 | 3.71 | % | - | - | - | ||||||||||||
Securities purchased under resale agreements | 93,040 | 5,160 | 7.41 | % | 4,213 | 224 | 7.11 | % | |||||||||||
Investment securities available-for-sale | 1,113,006 | 40,024 | 4.81 | % | 639,763 | 18,020 | 3.77 | % | |||||||||||
Loans receivable | 7,660,145 | 425,630 | 7.43 | % | 5,582,437 | 264,340 | 6.33 | % | |||||||||||
FHLB/FRB stock | 67,504 | 2,716 | 5.38 | % | 60,415 | 2,051 | 4.54 | % | |||||||||||
Total interest-earning assets | 8,944,862 | 473,862 | 7.08 | % | 6,295,001 | 284,812 | 6.05 | % | |||||||||||
Noninterest-earning assets: | |||||||||||||||||||
Cash and due from banks | 129,914 | 104,035 | |||||||||||||||||
Allowance for loan losses | (74,765 | ) | (56,021 | ) | |||||||||||||||
Other assets | 497,701 | 270,056 | |||||||||||||||||
Total assets | $ | 9,497,712 | $ | 6,613,071 | |||||||||||||||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||||||||||||
Interest-bearing liabilities: | |||||||||||||||||||
Checking accounts | 418,524 | 4,095 | 1.31 | % | 334,127 | 1,909 | 0.76 | % | |||||||||||
Money market accounts | 1,163,839 | 31,261 | 3.59 | % | 651,005 | 10,175 | 2.09 | % | |||||||||||
Savings deposits | 391,773 | 1,948 | 0.66 | % | 327,775 | 657 | 0.27 | % | |||||||||||
Time deposits less than $100,000 | 1,087,945 | 29,810 | 3.66 | % | 809,061 | 13,430 | 2.22 | % | |||||||||||
Time deposits $100,000 or greater | 2,407,942 | 75,610 | 4.20 | % | 1,647,462 | 34,789 | 2.82 | % | |||||||||||
Fed funds purchased | 102,343 | 3,789 | 4.95 | % | 27,242 | 739 | 3.63 | % | |||||||||||
Federal Home Loan Bank advances | 983,001 | 32,988 | 4.49 | % | 947,819 | 19,361 | 2.73 | % | |||||||||||
Securities sold under repurchase agreement | 535,992 | 14,906 | 3.72 | % | 30,952 | 693 | 2.99 | % | |||||||||||
Long-term debt | 175,526 | 9,346 | 7.12 | % | 88,485 | 4,295 | 6.49 | % | |||||||||||
Total interest-bearing liabilities | 7,266,885 | 203,753 | 3.75 | % | 4,863,928 | 86,048 | 2.37 | % | |||||||||||
Noninterest-bearing liabilities: | |||||||||||||||||||
Demand deposits | 1,241,363 | 1,115,316 | |||||||||||||||||
Other liabilities | 109,974 | 80,033 | |||||||||||||||||
Stockholders' equity | 879,490 | 553,794 | |||||||||||||||||
Total liabilities and stockholders' equity | $ | 9,497,712 | $ | 6,613,071 | |||||||||||||||
Interest rate spread | 3.33 | % | 3.68 | % | |||||||||||||||
Net interest income and net margin | $ | 270,109 | 4.04 | % | $ | 198,764 | 4.22 | % | |||||||||||
(1) Annualized. |