Exhibit 99.1
FOR FURTHER INFORMATION AT THE COMPANY:
Julia Gouw
Chief Financial Officer
(626) 768-6898
EAST WEST BANCORP REPORTS RECORD EARNINGS FOR 11TH
CONSECUTIVE YEAR; FOURTH QUARTER 2007 EARNINGS OF
$37.2 MILLION
Pasadena, CA – January 28, 2008 – 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 fourth quarter and full year 2007. Diluted earnings per share for the full year grew to a record $2.60, an increase of 11% from $2.35 in 2006. Net income for 2007 was a record $161.2 million, or a 12% increase from $143.4 million in 2006. For the fourth quarter 2007, net income was $37.2 million, or $0.59 per diluted share, compared with $39.1 million or $0.63 per diluted share for fourth quarter 2006.
“2007 marks the eleventh consecutive year of record earnings for East West. Earnings per share grew 11% in 2007, one of the highest EPS growth rates among our peer banks,” stated Dominic Ng, Chairman, President and Chief Executive Officer of East West. While we are pleased with our overall performance for 2007, our fourth quarter results reflect that we are not immune to the challenging economic environment facing the entire financial industry.”
“East West has historically been and remains an institution focused on delivering strong core profitability, maintaining strong capital levels and returning strong value to our shareholders. I believe that our experienced management team will effectively lead us through this current downturn to future successes. Despite the current environment, we delivered sound financial results and we believe we will continue to do so in 2008,” concluded Ng.
Full Year 2007 Summary
· Record diluted earnings per share of $2.60, up 11% from 2006
· Record net income of $161.2 million, up 12% from 2006
· Record net interest income of $408.0 million, up 11% from 2006
· Net interest margin of 3.94%, down 4 basis points from 2006
· Return on equity of 14.89%, down 6% from 2006
· Provision for loan losses of $12.0 million, up $5.8 million from 2006
- more -
· Total nonperforming assets were 0.57% of total assets
· Total net chargeoffs of $6.8 million or 0.08%, up from a net recovery of $484 thousand or 0.01% for 2006
· Gross loans grew to a record $8.8 billion, up $580 million or 7% from 2006
· Total deposits increased to $7.3 billion, up $44 million or 1% from 2006
Fourth Quarter Summary
· Diluted earnings per share of $0.59, down 6% from fourth quarter 2006
· Net income of $37.2 million, down 5% from fourth quarter 2006
· Record net interest income of $106.6 million, up 9% from fourth quarter 2006
· Net interest margin of 3.91%, up 10 basis points from fourth quarter 2006
· Return on equity of 12.68%, down 19% from fourth quarter 2006
· Provision for loan losses of $9.0 million, up $11.0 million from fourth quarter 2006
· Total net chargeoffs of $5.2 million or 0.24%, up from a net recovery of $875 thousand or 0.04% for the fourth quarter of 2006
Financial Summary
Fourth quarter net income totaled $37.2 million, a decrease of 5% from $39.1 million reported in the prior year period. Diluted earnings per share for the fourth quarter totaled $0.59, down 6% from $0.63 in the prior year period. Return on average equity for the quarter totaled 12.68%, while return on average assets for the quarter totaled 1.27%. Pretax income for the fourth quarter totaled $59.3 million, a 7% or $4.7 million decrease over the year ago figure. Despite an increase in provision expense during the fourth quarter of 2007 of $11.0 million compared to the prior year period, the Company posted solid earnings due to its strong, core profitability.
For the full year 2007, net income increased 12% to $161.2 million. Diluted earnings per share for the full year increased 11% to $2.60 from $2.35 in 2006. Return on average equity for the year equaled 14.89%, while return on average assets for the year equaled 1.45%. The effective tax rate for the full year 2007 was 38.55%, compared to 38.67% for 2006. Pretax income for the full year 2007 totaled $262.3 million, a 12% or $28.5 million increase over the year ago figure.
Management Guidance
The Company is providing initial guidance for the full year 2008. Given the uncertainty surrounding the economic environment, the Company has moderated its expectations for 2008. Management currently estimates that fully diluted earnings per share for the full year of 2008 will range from $2.05 to $2.10, or a decrease of approximately 20% from 2007. This EPS guidance is based on reduced expectations on loan and deposit growth during 2008 and also factors net interest margin compression resulting from the recent actions by the Federal Reserve to lower interest rates.
- more -
The 2008 EPS guidance is based on the following assumptions:
· Annual loan growth of approximately 3%
· Annual deposit growth of approximately 5%
· Annual increase in noninterest expense of approximately 18%
· Efficiency ratio of approximately 45%
· An effective tax rate between 38% and 40%
· Another 25 basis point decrease in the targeted Federal Funds rate, in addition to the recent 75 basis point decrease, resulting in a net interest margin between 3.60% and 3.70%
· Provision for loan losses of $24.0 million for the full year 2008
Balance Sheet Summary
At December 31, 2007, total assets were $11.9 billion, a 10% increase above total assets of $10.8 billion at December 31, 2006. Gross loans at December 31, 2006 totaled $8.8 billion, up 7% from year-end 2006. Organic loan growth for the year was $1.3 billion, or 16%, excluding the impact of $1.2 billion in loan securitizations and the Desert Community Bank acquisition. For the fourth quarter of 2007, organic loan growth was 19% annualized, excluding the impact of $112.9 million in residential loan securitizations.
Average earning assets for the fourth quarter of 2007 equaled $10.9 billion, 7% higher than the fourth quarter of 2006. The growth in average earning assets was driven by a 5% or $376.9 million increase in average loans to $8.7 billion and an 18% or $293.7 million increase in investment securities. The yield on average earning assets for the quarter was 7.37%, an increase of 8 basis points from the year ago quarter and a decrease of 17 basis points from the previous quarter. The yield on average loans receivable for the quarter was 7.59%, a decrease of 14 basis points from the year ago quarter and a decrease of 27 basis points from the previous quarter.
Total deposits at December 31, 2007 were $7.3 billion, a 1% increase over total deposits of $7.2 billion at December 31, 2006. Core deposits at December 31, 2007 totaled $3.5 billion, reflecting no change from year-end 2006. At December 31, 2007, the Bank had $96.4 million in broker deposits, down $185.5 million from $281.9 million at December 31, 2006.
Average total deposits for the fourth quarter increased to $7.4 billion, or 6% above the figure for the prior year period, while average core deposits totaled $3.6 billion, or 12% greater than the year ago figure. The average cost of deposits for the fourth quarter of 2007 was 3.15%, a 12 basis point decrease from the year ago quarter and a 20 basis point decrease from the previous quarter. The average cost of funds for the fourth quarter equaled 3.63%, a 3 basis point decrease from the prior year and a 15 basis point decrease from the prior quarter.
- more -
Fourth Quarter Operating Results
Net interest income for the fourth quarter increased to a record $106.6 million, 9% or $9.2 million greater than the fourth quarter of 2006 and 3% or $2.8 million greater than the third quarter of 2007. The net interest margin for the quarter of 3.91% reflected an increase of 10 basis points from the year ago margin and a decrease of 4 basis points from the previous quarter margin.
East West provided $9.0 million for loan losses in the fourth quarter of 2007. In comparison, East West recaptured $2.0 million through loan losses during the fourth quarter of 2006 and provided $3.0 million in the third quarter of 2007. The increased provision in the fourth quarter was a result of factors including net loan charge-offs, nonaccrual loans, loan classifications and growth in the portfolio.
Noninterest income for the fourth quarter totaled $14.0 million, 51% or $4.7 million higher than the fourth quarter of 2006 and reflecting no change from the third quarter of 2007. Core noninterest income, excluding the impact of gain on sales of investment securities and other assets, totaled $11.3 million during the quarter, 21% or $2.0 million higher than the prior year figure and 13% or $1.3 million higher than the previous quarter. The increase in core noninterest income was primarily a result of increased branch fees, which grew to $4.4 million for the fourth quarter, up 47% from the prior year period and up 15% from the third quarter of 2007.
Noninterest expense totaled $52.3 million for the fourth quarter of 2007, 17% or $7.7 million higher than a year ago and 11% or $5.1 million higher than the previous quarter. The increases in noninterest expense from both prior year and prior quarter were largely due to higher compensation and occupancy costs associated with recent acquisitions, along with the organic expansion of the Bank.
East West generated a 40.49% efficiency ratio for the fourth quarter of 2007, compared to 39.05% a year ago. The effective tax rate for the fourth quarter was 37.20% compared to 38.92% in the prior year period.
Full Year 2007 Operating Results
For the full year 2007, net interest income climbed to $408.0 million, 11% or $40.5 million greater than prior year. The net interest margin for 2007 was 3.94%, a 4 basis point decrease from the year ago margin of 3.98%. Management anticipates that net interest margin pressures will continue in 2008 and estimates a net interest margin of 3.60% to 3.70% for 2008. This net interest margin estimate includes the expectation that the Federal Reserve will lower the targeted Federal Funds rate another 25 basis points, in addition to the recent 75 basis point decrease.
East West provided $12.0 million for loan losses during 2007, compared to $6.2 million during 2006. Management anticipates total provision for loan losses for 2008 will be $24.0 million for the full year 2008. The estimate for the 2008 provision expense reflects
- more -
Management’s current outlook that economic pressures will continue to mount and result in an increase in future problem assets.
Total noninterest income for 2007 was $51.3 million, an increase of $16.9 million over 2006. For the year, core noninterest income, excluding the impact of gain on sales of investment securities and other assets, totaled $40.4 million, or a 27% increase from $31.7 million earned in 2006. The increase in core noninterest income was primarily a result of increased branch fees, which grew to $15.1 million for 2007, up 34% from 2006. Management anticipates core noninterest income for the full year 2008 to remain at comparable levels to 2007.
Noninterest expense totaled $185.0 million for the full year 2007, 14% or $23.1 million higher than 2006. This increase from 2006 was largely due to higher compensation and occupancy costs from our recent acquisitions, and the overall growth of the Bank. Management currently estimates that 2008 noninterest expense will increase approximately 18% from 2007. Management current believes that that noninterest expense will grow at a higher rate than 2007, as the Company may incur additional expenditures resulting from the overall economic uncertainty. Additionally, the Company will continue to invest in its infrastructure in 2008 to drive long-term growth.
East West generated an efficiency ratio of 37.71% for the full year 2007, compared to 37.16% for the year of 2006. Management expects the efficiency ratio for the full year 2008 to be approximately 45%.
For the full year 2007, the effective tax rate was 38.55% compared with 38.67% in the prior year. Management anticipates an effective tax rate for the full year 2008 to be approximately 38% to 40%.
Asset Quality
At December 31, 2007, total nonperforming assets were $67.5 million or 0.57%, compared to $19.9 million or 0.18% of total assets at December 31, 2006. Nonaccrual loans at December 31, 2007 were $63.9 million or 0.72% of total loans, compared to $17.1 million or 0.21% of total loans, at December 31, 2006. Nonperforming assets as of December 31, 2007 included other real estate owned totaling $1.5 million and loans modified or restructured totaling $2.1 million.
Net loan charge-offs were $6.8 million, or 0.08% of average loans for the full year 2007. This compares to a net recovery of $484 thousand or 0.01% of average loans for the full year 2006. For the fourth quarter of 2007, net loan charge-offs were $5.2 million, or an annualized 0.24% of average loans. This compares to a net recovery of $875 thousand or an annualized 0.04% of average loans for the fourth quarter of 2006 and a net charge-off of $853 thousand or an annualized 0.04% of average loans for the third quarter of 2007. The increase in net loan charge-offs for the fourth quarter of 2007 primarily resulted from charge-offs related to residential construction and commercial loans. Management currently believes that the overall level of asset quality remains sound and that net
- more -
chargeoffs for 2008 will be at manageable levels. Management also believes that net chargeoffs in 2008 should remain below the Company’s long-term benchmark of 0.35%.
As of December 31, 2007, loans delinquent 30 to 59 days totaled $41.4 million, down from $118.3 million at September 30, 2007. Loans delinquent 60 to 90 days totaled $21.2 million, compared to $18.2 million at September 30, 2007. Nonperforming loans delinquent 90 or more days totaled $63.9 million, compared to $42.8 million at September 30, 2007.
The allowance for loan losses at December 31, 2007 was $88.4 million or 1.00% of total loans, an increase from $78.2 million or 0.95% of total loans at December 31, 2006. The allowance for loan losses was 138% of nonaccrual loan at December 31, 2007. The Bank’s methodology for calculating the allowance for loan losses includes factors such as historical loss trends, asset classification, delinquency, credit concentrations and overall economic conditions. At December 31, 2007, the allowance for unfunded loan commitments and off-balance sheet credit exposures totaled $11.4 million, compared to $12.2 million at December 31, 2006. The allowance for loan losses and unfunded loan commitments to total loans was 1.13% at December 31, 2007, compared to 1.09% as of December 31, 2006.
Capitalization
East West continues to remain well capitalized under all regulatory guidelines. At December 31, 2007, our Tier I risk-based capital ratio was 8.95%, total risk-based capital ratio was 10.53% and Tier I leverage ratio was 8.73%. Total stockholders’ equity as of December 31, 2007 was $1.2 billion, representing a book value of $18.56 per share.
About East West
East West Bancorp is a publicly owned company with $11.9 billion in assets and 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 Southern California with 72 branch locations. East West Bank serves the community with 70 branch locations across Southern and Northern California and a branch location in Houston, Texas. East West Bank has three international locations in Greater China, including a full-service branch in Hong Kong and representative offices in Beijing and Shanghai. 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, 2006 (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
- more -
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.
- more -
EAST WEST BANCORP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except per share amounts)
(unaudited)
| | December 31, 2007 | | December 31, 2006 | | % Change | |
Assets | | | | | | | |
Cash and cash equivalents | | $ | 160,347 | | $ | 192,559 | | (17 | ) |
Securities purchased under resale agreements | | 150,000 | | 100,000 | | 50 | |
Investment securities available-for-sale | | 1,887,136 | | 1,647,080 | | 15 | |
Loans receivable (net of allowance for loan losses of $88,407 and $78,201) | | 8,750,921 | | 8,182,172 | | 7 | |
Premiums on deposits acquired, net | | 28,459 | | 20,383 | | 40 | |
Goodwill | | 335,366 | | 244,259 | | 37 | |
Other assets | | 539,983 | | 437,258 | | 23 | |
Total assets | | $ | 11,852,212 | | $ | 10,823,711 | | 10 | |
| | | | | | | |
Liabilities and Stockholders’ Equity | | | | | | | |
Deposits | | $ | 7,278,914 | | $ | 7,235,042 | | 1 | |
Federal funds purchased | | 222,275 | | 151,000 | | 47 | |
Federal Home Loan Bank advances | | 1,808,419 | | 1,136,866 | | 59 | |
Securities sold under repurchase agreements | | 1,001,955 | | 975,000 | | 3 | |
Notes payable | | 16,242 | | 11,379 | | 43 | |
Accrued expenses and other liabilities | | 117,014 | | 111,011 | | 5 | |
Long-term debt | | 235,570 | | 184,023 | | 28 | |
Total liabilities | | 10,680,389 | | 9,804,321 | | 9 | |
Stockholders’ equity | | 1,171,823 | | 1,019,390 | | 15 | |
Total liabilities and stockholders’ equity | | $ | 11,852,212 | | $ | 10,823,711 | | 10 | |
Book value per share | | $ | 18.56 | | $ | 16.59 | | 12 | |
Number of shares at period end | | 63,137 | | 61,431 | | 3 | |
Ending Balances | | December 31, 2007 | | December 31, 2006 | | % Change | |
Loans receivable | | | | | | | |
Real estate - single family | | $ | 433,337 | | $ | 365,407 | | 19 | |
Real estate - multifamily | | 690,941 | | 1,584,674 | | (56 | ) |
Real estate - commercial | | 4,183,473 | | 3,766,634 | | 11 | |
Real estate - construction | | 1,547,082 | | 1,154,339 | | 34 | |
Commercial | | 1,314,068 | | 960,375 | | 37 | |
Trade finance | | 491,690 | | 271,795 | | 81 | |
Consumer | | 184,518 | | 162,008 | | 14 | |
Total gross loans receivable | | 8,845,109 | | 8,265,232 | | 7 | |
Unearned fees, premiums and discounts | | (5,781 | ) | (4,859 | ) | 19 | |
Allowance for loan losses | | (88,407 | ) | (78,201 | ) | 13 | |
Net loans receivable | | $ | 8,750,921 | | $ | 8,182,172 | | 7 | |
| | | | | | | |
Deposits | | | | | | | |
Noninterest-bearing demand | | $ | 1,431,730 | | $ | 1,353,734 | | 6 | |
Interest-bearing checking | | 472,943 | | 450,201 | | 5 | |
Money market | | 1,090,949 | | 1,280,651 | | (15 | ) |
Savings | | 477,779 | | 372,546 | | 28 | |
Total core deposits | | 3,473,401 | | 3,457,132 | | 0 | |
Time deposits less than $100,000 | | 926,459 | | 1,012,401 | | (8 | ) |
Time deposits $100,000 or greater | | 2,879,054 | | 2,765,509 | | 4 | |
Total time deposits | | 3,805,513 | | 3,777,910 | | 1 | |
Total deposits | | $ | 7,278,914 | | $ | 7,235,042 | | 1 | |
EAST WEST BANCORP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
(unaudited)
| | Quarter Ended December 31, | | % | |
| | 2007 | | 2006 | | Change | |
| | | | | | | |
Interest and dividend income | | $ | 201,448 | | $ | 186,188 | | 8 | |
Interest expense | | (94,840 | ) | $ | (88,815 | ) | 7 | |
Net interest income before provision for loan losses | | 106,608 | | 97,373 | | 9 | |
(Provision) recapture for loan losses | | (9,000 | ) | 2,000 | | (550 | ) |
Net interest income after provision for loan losses | | 97,608 | | 99,373 | | (2 | ) |
Noninterest income | | 13,978 | | 9,282 | | 51 | |
Noninterest expense | | (52,279 | ) | (44,624 | ) | 17 | |
Income before provision for income taxes | | 59,307 | | 64,031 | | (7 | ) |
Provision for income taxes | | (22,062 | ) | (24,920 | ) | (11 | ) |
Net income | | $ | 37,245 | | $ | 39,111 | | (5 | ) |
Net income per share, basic | | $ | 0.60 | | $ | 0.64 | | (6 | ) |
Net income per share, diluted | | $ | 0.59 | | $ | 0.63 | | (6 | ) |
Shares used to compute per share net income: | | | | | | | |
- Basic | | 62,437 | | 60,806 | | 3 | |
- Diluted | | 63,157 | | 61,926 | | 2 | |
| | Quarter Ended December 31, | | % | |
| | 2007 | | 2006 | | Change | |
Noninterest income: | | | | | | | |
Branch fees | | $ | 4,404 | | $ | 2,999 | | 47 | |
Net gain on sales of investment securities available-for-sale | | 2,615 | | — | | NA | |
Letters of credit fees and commissions | | 2,564 | | 2,277 | | 13 | |
Ancillary loan fees | | 1,609 | | 1,050 | | 53 | |
Income from secondary market activities | | 275 | | 202 | | 36 | |
Net gain on disposal of fixed assets | | 92 | | — | | NA | |
Other operating income | | 2,419 | | 2,754 | | (12 | ) |
Total noninterest income | | $ | 13,978 | | $ | 9,282 | | 51 | |
| | | | | | | |
Noninterest expense: | | | | | | | |
Compensation and employee benefits | | $ | 22,415 | | $ | 19,994 | | 12 | |
Occupancy and equipment expense | | 6,999 | | 5,624 | | 24 | |
Amortization of premiums on deposits acquired | | 2,022 | | 1,810 | | 12 | |
Amortization of investments in affordable housing partnerships | | 1,437 | | 1,160 | | 24 | |
Data processing | | 1,415 | | 966 | | 46 | |
Deposit insurance premiums and regulatory assessments | | 378 | | 339 | | 12 | |
Other operating expense | | 17,613 | | 14,731 | | 20 | |
Total noninterest expense | | $ | 52,279 | | $ | 44,624 | | 17 | |
EAST WEST BANCORP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
(unaudited)
| | Year Ended December 31, | | % | |
| | 2007 | | 2006 | | Change | |
| | | | | | | |
Interest and dividend income | | $ | 773,607 | | $ | 660,050 | | 17 | |
Interest expense | | (365,613 | ) | (292,568 | ) | 25 | |
Net interest income before provision for loan losses | | 407,994 | | 367,482 | | 11 | |
Provision for loan losses | | (12,000 | ) | (6,166 | ) | 95 | |
Net interest income after provision for loan losses | | 395,994 | | 361,316 | | 10 | |
Noninterest income | | 51,268 | | 34,358 | | 49 | |
Noninterest expense | | (185,003 | ) | (161,893 | ) | 14 | |
Income before provision for income taxes | | 262,259 | | 233,781 | | 12 | |
Provision for income taxes | | (101,092 | ) | (90,412 | ) | 12 | |
Net income | | $ | 161,167 | | $ | 143,369 | | 12 | |
Net income per share, basic | | $ | 2.63 | | $ | 2.40 | | 10 | |
Net income per share, diluted | | $ | 2.60 | | $ | 2.35 | | 11 | |
Shares used to compute per share net income: | | | | | | | |
- Basic | | 61,180 | | 59,605 | | 3 | |
- Diluted | | 62,093 | | 60,909 | | 2 | |
| | Year Ended December 31, | | % | |
| | 2007 | | 2006 | | Change | |
Noninterest income: | | | | | | | |
Branch fees | | $ | 15,071 | | $ | 11,265 | | 34 | |
Letters of credit fees and commissions | | 10,252 | | 8,673 | | 18 | |
Net gain on sales of investment securities available-for-sale | | 7,833 | | 2,537 | | 209 | |
Ancillary loan fees | | 5,773 | | 3,885 | | 49 | |
Net gain on disposal of fixed assets | | 1,665 | | - | | NA | |
Income from secondary market activities | | 1,571 | | 698 | | 125 | |
Net gain on sale of real estate owned | | 1,344 | | 88 | | 1,427 | |
Other operating income | | 7,759 | | 7,212 | | 8 | |
Total noninterest income | | $ | 51,268 | | $ | 34,358 | | 49 | |
| | | | | | | |
Noninterest expense: | | | | | | | |
Compensation and employee benefits | | $ | 85,926 | | $ | 70,583 | | 22 | |
Occupancy and equipment expense | | 25,582 | | 21,350 | | 20 | |
Amortization of premiums on deposits acquired | | 6,846 | | 7,118 | | (4 | ) |
Amortization of investments in affordable housing partnerships | | 4,958 | | 5,441 | | (9 | ) |
Data processing | | 4,818 | | 3,644 | | 32 | |
Deposit insurance premiums and regulatory assessments | | 1,399 | | 1,360 | | 3 | |
Other operating expense | | 55,474 | | 52,397 | | 6 | |
Total noninterest expense | | $ | 185,003 | | $ | 161,893 | | 14 | |
EAST WEST BANCORP, INC.
SELECTED FINANCIAL INFORMATION
(In thousands)
(unaudited)
| | Quarter Ended December 31, | | % | |
Average Balances | | 2007 | | 2006 | | Change | |
Loans receivable | | | | | | | |
Real estate - single family | | $ | 384,271 | | $ | 484,321 | | (21 | ) |
Real estate - multifamily | | 753,235 | | 1,624,925 | | (54 | ) |
Real estate - commercial | | 4,127,958 | | 3,794,487 | | 9 | |
Real estate - construction | | 1,533,574 | | 1,082,083 | | 42 | |
Commercial | | 1,258,398 | | 908,835 | | 38 | |
Trade finance | | 467,632 | | 266,973 | | 75 | |
Consumer | | 180,195 | | 166,763 | | 8 | |
Total loans receivable | | 8,705,263 | | 8,328,387 | | 5 | |
Investment securities available-for-sale | | 1,893,193 | | 1,599,531 | | 18 | |
Earning assets | | 10,872,066 | | 10,131,418 | | 7 | |
Total assets | | 11,699,951 | | 10,752,852 | | 9 | |
| | | | | | | |
Deposits | | | | | | | |
Noninterest-bearing demand | | $ | 1,398,794 | | $ | 1,275,374 | | 10 | |
Interest-bearing checking | | 436,946 | | 400,868 | | 9 | |
Money market | | 1,280,265 | | 1,172,167 | | 9 | |
Savings | | 508,540 | | 377,956 | | 35 | |
Total core deposits | | 3,624,545 | | 3,226,365 | | 12 | |
Time deposits less than $100,000 | | 928,462 | | 1,063,442 | | (13 | ) |
Time deposits $100,000 or greater | | 2,879,172 | | 2,701,241 | | 7 | |
Total time deposits | | 3,807,634 | | 3,764,683 | | 1 | |
Total deposits | | 7,432,179 | | 6,991,048 | | 6 | |
Interest-bearing liabilities | | 8,971,407 | | 8,357,201 | | 7 | |
Stockholders’ equity | | 1,174,883 | | 995,048 | | 18 | |
EAST WEST BANCORP, INC.
SELECTED FINANCIAL INFORMATION
(In thousands)
(unaudited)
| | Year Ended December 31, | | % | |
Average Balances | | 2007 | | 2006 | | Change | |
Loans receivable | | | | | | | |
Real estate - single family | | $ | 349,230 | | $ | 534,517 | | (35 | ) |
Real estate - multifamily | | 1,083,245 | | 1,560,177 | | (31 | ) |
Real estate - commercial | | 3,894,397 | | 3,619,017 | | 8 | |
Real estate - construction | | 1,371,983 | | 882,523 | | 55 | |
Commercial | | 1,115,882 | | 805,252 | | 39 | |
Trade finance | | 376,934 | | 241,051 | | 56 | |
Consumer | | 163,318 | | 186,042 | | (12 | ) |
Total loans receivable | | 8,354,989 | | 7,828,579 | | 7 | |
Investment securities available-for-sale | | 1,727,961 | | 1,235,633 | | 40 | |
Earning assets | | 10,368,051 | | 9,243,937 | | 12 | |
Total assets | | 11,079,770 | | 9,814,076 | | 13 | |
| | | | | | | |
Deposits | | | | | | | |
Noninterest-bearing demand | | $ | 1,312,709 | | $ | 1,249,935 | | 5 | |
Interest-bearing checking | | 412,550 | | 414,074 | | (0 | ) |
Money market | | 1,302,898 | | 1,165,938 | | 12 | |
Savings | | 412,272 | | 388,291 | | 6 | |
Total core deposits | | 3,440,429 | | 3,218,238 | | 7 | |
Time deposits less than $100,000 | | 956,203 | | 1,081,768 | | (12 | ) |
Time deposits $100,000 or greater | | 2,862,017 | | 2,481,870 | | 15 | |
Total time deposits | | 3,818,220 | | 3,563,638 | | 7 | |
Total deposits | | 7,258,649 | | 6,781,876 | | 7 | |
Interest-bearing liabilities | | 8,540,086 | | 7,541,705 | | 13 | |
Stockholders’ equity | | 1,082,561 | | 908,617 | | 19 | |
EAST WEST BANCORP, INC.
SELECTED FINANCIAL INFORMATION
(In thousands)
(unaudited)
| | Quarter Ended December 31, | | % | |
Selected Ratios | | 2007 | | 2006 | | Change | |
| | | | | | | |
For The Period | | | | | | | |
Return on average assets | | 1.27 | % | 1.45 | % | (12 | ) |
Return on average equity | | 12.68 | % | 15.72 | % | (19 | ) |
Interest rate spread (3) | | 3.18 | % | 3.07 | % | 4 | |
Net interest margin (3) | | 3.91 | % | 3.81 | % | 2 | |
Yield on earning assets (3) | | 7.37 | % | 7.29 | % | 1 | |
Cost of deposits | | 3.15 | % | 3.27 | % | (3 | ) |
Cost of funds | | 3.63 | % | 3.66 | % | (1 | ) |
Noninterest expense/average assets (1) | | 1.67 | % | 1.55 | % | 8 | |
Efficiency ratio (1) | | 40.49 | % | 39.05 | % | 4 | |
Net chargeoffs (recoveries) to average loans (2) | | 0.24 | % | -0.04 | % | (666 | ) |
Gross loan chargeoffs | | $ | 5,241 | | $ | 7 | | 74,771 | |
Loan recoveries | | $ | (66 | ) | $ | (882 | ) | (93 | ) |
Net loan chargeoffs (recoveries) | | $ | 5,175 | | $ | (875 | ) | (691 | ) |
| | Year Ended December 31, | | % | |
Selected Ratios | | 2007 | | 2006 | | Change | |
| | | | | | | |
For The Period | | | | | | | |
Return on average assets | | 1.45 | % | 1.46 | % | (1 | ) |
Return on average equity | | 14.89 | % | 15.78 | % | (6 | ) |
Interest rate spread (3) | | 3.19 | % | 3.26 | % | (2 | ) |
Net interest margin (3) | | 3.94 | % | 3.98 | % | (1 | ) |
Yield on earning assets (3) | | 7.47 | % | 7.14 | % | 5 | |
Cost of deposits | | 3.32 | % | 2.95 | % | 12 | |
Cost of funds | | 3.71 | % | 3.33 | % | 12 | |
Noninterest expense/average assets (1) | | 1.56 | % | 1.52 | % | 3 | |
Efficiency ratio (1) | | 37.71 | % | 37.16 | % | 1 | |
Net chargeoffs (recoveries) to average loans | | 0.08 | % | -0.01 | % | (1,409 | ) |
Gross loan chargeoffs | | $ | 7,206 | | $ | 515 | | 1,299 | |
Loan recoveries | | $ | (445 | ) | $ | (999 | ) | (55 | ) |
Net loan chargeoffs (recoveries) | | $ | 6,761 | | $ | (484 | ) | (1,497 | ) |
| | | | | | | |
Period End | | | | | | | |
Tier 1 risk-based capital ratio | | 8.95 | % | 9.56 | % | (6 | ) |
Total risk-based capital ratio | | 10.53 | % | 11.23 | % | (6 | ) |
Tier 1 leverage capital ratio | | 8.73 | % | 8.28 | % | 5 | |
Nonperforming assets to total assets | | 0.57 | % | 0.18 | % | 216 | |
Nonaccrual loans to total loans | | 0.72 | % | 0.21 | % | 244 | |
Allowance for loan losses to total loans | | 1.00 | % | 0.95 | % | 5 | |
Allowance for loan losses and unfunded loan commitments to total loans | | 1.13 | % | 1.09 | % | 4 | |
Allowance for loan losses to nonaccrual loans | | 138.39 | % | 457.29 | % | (70 | ) |
(1) Excludes the amortization of intangibles and investments in affordable housing partnerships.
(2) Annualized.
(3) Yields on certain securities have been adjusted upward to a “fully taxable equivalent” basis in order to reflect the effect of income which is exempt from federal income taxation at the current statutory tax rate.
EAST WEST BANCORP, INC.
QUARTER TO DATE AVERAGE BALANCES, YIELDS AND RATES PAID
(In thousands)
(unaudited)
| | Three Months Ended December 31, | |
| | 2007 | | 2006 | |
| | Average | | | | | | Average | | | | | |
| | Volume | | Interest | | Yield (1) | | Volume | | Interest | | Yield (1) | |
| | | | | | | | | | | | | |
ASSETS | | | | | | | | | | | | | |
Interest-earning assets: | | | | | | | | | | | | | |
Short-term investments | | $ | 28,878 | | $ | 340 | | 4.67 | % | $ | 8,642 | | $ | 111 | | 5.10 | % |
Securities purchased under resale agreements | | 150,000 | | 3,322 | | 8.79 | % | 100,000 | | 1,916 | | 7.60 | % |
Investment securities | | | | | | | | | | | | | |
Taxable | | 1,824,393 | | 28,742 | | 6.25 | % | 1,594,883 | | 20,520 | | 5.10 | % |
Tax-exempt (2) | | 68,800 | | 1,506 | | 8.76 | % | 4,648 | | 86 | | 7.40 | % |
Loans receivable | | 8,705,263 | | 166,644 | | 7.59 | % | 8,328,387 | | 162,201 | | 7.73 | % |
Federal Home Loan Bank and Federal Reserve | | | | | | | | | | | | | |
Bank stocks | | 94,732 | | 1,306 | | 5.47 | % | 94,858 | | 1,377 | | 5.76 | % |
Total interest-earning assets | | 10,872,066 | | 201,860 | | 7.37 | % | 10,131,418 | | 186,211 | | 7.29 | % |
| | | | | | | | | | | | | |
Noninterest-earning assets: | | | | | | | | | | | | | |
Cash and due from banks | | 177,071 | | | | | | 146,847 | | | | | |
Allowance for loan losses | | (85,944 | ) | | | | | (79,542 | ) | | | | |
Other assets | | 736,758 | | | | | | 554,129 | | | | | |
Total assets | | $ | 11,699,951 | | | | | | $ | 10,752,852 | | | | | |
| | | | | | | | | | | | | |
LIABILITIES AND STOCKHOLDERS’ EQUITY | | | | | | | | | | | | | |
Interest-bearing liabilities: | | | | | | | | | | | | | |
Checking accounts | | 436,946 | | 1,692 | | 1.54 | % | 400,868 | | 1,598 | | 1.58 | % |
Money market accounts | | 1,280,265 | | 12,142 | | 3.76 | % | 1,172,167 | | 11,972 | | 4.05 | % |
Savings deposits | | 508,540 | | 1,989 | | 1.55 | % | 377,956 | | 678 | | 0.71 | % |
Time deposits less than $100,000 | | 928,462 | | 8,595 | | 3.67 | % | 1,063,442 | | 10,709 | | 4.00 | % |
Time deposits $100,000 or greater | | 2,879,172 | | 34,640 | | 4.77 | % | 2,701,241 | | 32,584 | | 4.79 | % |
Federal funds purchased | | 213,121 | | 2,568 | | 4.78 | % | 133,181 | | 1,808 | | 5.39 | % |
Federal Home Loan Bank advances | | 1,486,975 | | 18,155 | | 4.84 | % | 1,403,093 | | 17,836 | | 5.04 | % |
Securities sold under resale agreements | | 1,002,356 | | 10,691 | | 4.23 | % | 921,230 | | 8,177 | | 3.52 | % |
Long-term debt | | 235,570 | | 4,368 | | 7.36 | % | 184,023 | | 3,453 | | 7.44 | % |
Total interest-bearing liabilities | | 8,971,407 | | 94,840 | | 4.19 | % | 8,357,201 | | 88,815 | | 4.22 | % |
| | | | | | | | | | | | | |
Noninterest-bearing liabilities: | | | | | | | | | | | | | |
Demand deposits | | 1,398,794 | | | | | | 1,275,374 | | | | | |
Other liabilities | | 154,867 | | | | | | 125,229 | | | | | |
Stockholders’ equity | | 1,174,883 | | | | | | 995,048 | | | | | |
Total liabilities and stockholders’ equity | | $ | 11,699,951 | | | | | | $ | 10,752,852 | | | | | |
| | | | | | | | | | | | | |
Interest rate spread | | | | | | 3.18 | % | | | | | 3.07 | % |
| | | | | | | | | | | | | |
Net interest income and net yield on interest-earning assets (2) | | | | $ | 107,020 | | 3.91 | % | | | $ | 97,396 | | 3.81 | % |
(1) Annualized
(2) Amounts calculated on a fully taxable equivalent basis using the current statutory federal tax rate.
EAST WEST BANCORP, INC.
YEAR TO DATE AVERAGE BALANCES, YIELDS AND RATES PAID
(In thousands)
(unaudited)
| | Twelve Months Ended December 31, | |
| | 2007 | | 2006 | |
| | Average | | | | | | Average | | | | | |
| | Volume | | Interest | | Yield | | Volume | | Interest | | Yield | |
| | | | | | | | | | | | | |
ASSETS | | | | | | | | | | | | | |
Interest-earning assets: | | | | | | | | | | | | | |
Short-term investments | | $ | 18,576 | | $ | 904 | | 4.87 | % | $ | 10,531 | | $ | 443 | | 4.21 | % |
Securities purchased under resale agreements | | 182,055 | | 15,064 | | 8.27 | % | 94,795 | | 7,076 | | 7.46 | % |
Investment securities | | | | | | | | | | | | | |
Taxable | | 1,693,236 | | 100,218 | | 5.92 | % | 1,230,283 | | 60,366 | | 4.91 | % |
Tax-exempt (1) | | 34,725 | | 2,923 | | 8.42 | % | 5,350 | | 332 | | 6.21 | % |
Loans receivable | | 8,354,989 | | 650,717 | | 7.79 | % | 7,828,579 | | 587,831 | | 7.51 | % |
Federal Home Loan Bank and Federal Reserve | | | | | | | | | | | | | |
Bank stocks | | 84,470 | | 4,581 | | 5.42 | % | 74,399 | | 4,093 | | 5.50 | % |
Total interest-earning assets | | 10,368,051 | | 774,407 | | 7.47 | % | 9,243,937 | | 660,141 | | 7.14 | % |
| | | | | | | | | | | | | |
Noninterest-earning assets: | | | | | | | | | | | | | |
Cash and due from banks | | 156,081 | | | | | | 134,182 | | | | | |
Allowance for loan losses | | (80,161 | ) | | | | | (75,969 | ) | | | | |
Other assets | | 635,799 | | | | | | 511,926 | | | | | |
Total assets | | $ | 11,079,770 | | | | | | $ | 9,814,076 | | | | | |
| | | | | | | | | | | | | |
LIABILITIES AND STOCKHOLDERS’ EQUITY | | | | | | | | | | | | | |
Interest-bearing liabilities: | | | | | | | | | | | | | |
Checking accounts | | 412,550 | | 6,646 | | 1.61 | % | 414,074 | | 5,693 | | 1.37 | % |
Money market accounts | | 1,302,898 | | 53,021 | | 4.07 | % | 1,165,938 | | 43,233 | | 3.71 | % |
Savings deposits | | 412,272 | | 4,400 | | 1.07 | % | 388,291 | | 2,626 | | 0.68 | % |
Time deposits less than $100,000 | | 956,203 | | 37,164 | | 3.89 | % | 1,081,768 | | 40,519 | | 3.75 | % |
Time deposits $100,000 or greater | | 2,862,017 | | 139,804 | | 4.88 | % | 2,481,870 | | 108,194 | | 4.36 | % |
Federal funds purchased | | 173,103 | | 8,899 | | 5.14 | % | 110,116 | | 5,597 | | 5.08 | % |
Federal Home Loan Bank advances | | 1,230,940 | | 61,710 | | 5.01 | % | 1,088,887 | | 50,824 | | 4.67 | % |
Securities sold under repurchase agreements | | 978,739 | | 38,366 | | 3.92 | % | 633,093 | | 23,083 | | 3.65 | % |
Long-term debt | | 211,364 | | 15,603 | | 7.38 | % | 177,668 | | 12,799 | | 7.20 | % |
Total interest-bearing liabilities | | 8,540,086 | | 365,613 | | 4.28 | % | 7,541,705 | | 292,568 | | 3.88 | % |
| | | | | | | | | | | | | |
Noninterest-bearing liabilities: | | | | | | | | | | | | | |
Demand deposits | | 1,312,709 | | | | | | 1,249,935 | | | | | |
Other liabilities | | 144,414 | | | | | | 113,819 | | | | | |
Stockholders’ equity | | 1,082,561 | | | | | | 908,617 | | | | | |
Total liabilities and stockholders’ equity | | $ | 11,079,770 | | | | | | $ | 9,814,076 | | | | | |
| | | | | | | | | | | | | |
Interest rate spread | | | | | | 3.19 | % | | | | | 3.26 | % |
| | | | | | | | | | | | | |
Net interest income and net yield on interest-earning assets (1) | | | | $ | 408,794 | | 3.94 | % | | | $ | 367,573 | | 3.98 | % |
(1) Amounts calculated on a fully taxable equivalent basis using the current statutory federal tax rate.
