Exihibit 99.1
FOR FURTHER INFORMATION AT THE COMPANY:
Tom Tolda
Chief Financial Officer
(626) 768-6788
EAST WEST BANCORP REPORTS SECOND QUARTER 2009 RESULTS;
NONACCRUAL LOANS DOWN 35% TO 1.90% OF TOTAL LOANS; TOTAL DELINQUENT LOANS DOWN 39%;
NET INTEREST MARGIN INCREASED 24 BASIS POINTS
Pasadena, CA – July 15, 2009 – East West Bancorp, Inc. (Nasdaq: EWBC), parent company of East West Bank, today reported financial results for the second quarter of 2009 with a net loss of $92.1 million. The net loss was primarily driven by a $151.4 million provision for loan losses and $37.4 million other than temporary impairment on investment securities.
“Despite the strong economic headwinds we continue to face in this prolonged recessionary climate, East West made substantial progress in the second quarter 2009. Most significantly, we successfully completed a comprehensive stress test on our loan and investment portfolios, reduced nonaccrual loans by 35% to 1.90% of total loans and reduced total delinquent loans by 39% during the quarter. Our continued aggressive stance in dealing with problem loans resulted in $133.9 million in net chargeoffs for the quarter, and we took a $37.4 million write-down on our trust preferred securities. However, even with the ongoing economic challenges, we ended the quarter with record assets, record deposits, and strong levels of both capital and allowance for loan losses,” stated Dominic Ng, Chairman, President and Chief Executive Officer of East West.
“With our recent actions that have increased tangible common equity by $148.4 million, we believe that we have more than enough capital to withstand this prolonged downturn in the economy and will continue to work aggressively to reduce problem assets. While we are working through the current credit challenges, we are also looking ahead to future opportunities for growth and expansion,” concluded Ng.
Second Quarter 2009 Highlights
| · | Nonaccrual Loans Down 35% – Total nonaccrual loans decreased by 35% or $85.8 million to $162.2 million as of June 30, 2009. Nonaccrual loans were 1.90% of total loans as of quarter-end. |
| · | Total Delinquent Loans Down 39% – Total loans delinquent 30 or more days decreased by 39% or $188.0 million as of June 30, 2009. Loan delinquencies fell across all categories – 30 to 59 day delinquent loans decreased 69% or $130.9 million, 60 to 89 day delinquent loans decreased 22% or $25.8 million, and 90+ days delinquent loans decreased 18% or $31.3 million, quarter over quarter. |
| · | Increase in Net Interest Margin – Net interest income for the second quarter increased to $88.3 million, an 11% or $8.6 million increase over first quarter of 2009. The net interest margin for the quarter increased to 2.98%, up 24 basis points from the first quarter of 2009. |
| · | Allowance for Loan Losses Strengthened – Total allowance for loan losses increased to $223.7 million, representing 2.62% of outstanding loans compared to 2.42% of outstanding loans in the previous quarter. We continued to increase the allowance for loan losses, recording provision for loan losses of $151.4 million and total net charge-offs of $133.9 million for the quarter. The allowance for loan losses to nonaccrual loans ratio was 138% as of June 30, 2009 compared to 79% as of March 31, 2009. |
| · | Strong Deposit Growth – Total deposits grew to a record $8.7 billion as of June 30, 2009, up $204.8 million quarter over quarter. The strong increase in deposits was the result of a $203.4 million increase in core deposits quarter over quarter. Year over year, we have grown deposits by more than $1.1 billion through the introduction of new retail and commercial deposit products, while lowering the cost of deposits. The cost of deposits declined 34 basis points in the second quarter to 1.47%. |
| · | Strong Core Operating Earnings Growth – Core operating earnings, excluding the impact of provision for loan losses and nonrecurring FDIC assessments and investment security and REO expense, totaled $56.0 million for the second quarter, a 14% increase from first quarter. Core operating earnings are a non-GAAP financial measure. See reconciliation of the GAAP financial measure to this non-GAAP financial measure in the tables attached. |
| · | Capital Strengthened – On July 1, 2009, East West announced that it had entered into binding agreements with three shareholders of the Company’s Non-Cumulative Perpetual Convertible Preferred Stock, Series A (the “Series A Preferred Stock”) to exchange 8,127,990 shares of the Company’s common stock for 90,311 shares of the Series A Preferred Stock, or a total increase to tangible common equity of $90.3 million. Additionally, on July 14, 2009, in private placement transactions, two customers of East West purchased a total of 5,000,000 newly issued shares of the Company’s common stock at a price of $5.50 per share, for an additional increase to equity of $27.5 million. |
Reduction of Problem Assets
Throughout the course of 2008 and the first half of 2009, we have actively reduced exposure to land and construction loans. Since December 31, 2007, we reduced total exposure to land and construction loans by nearly 50%. The overall credit risk on the $479.8 million in land loans and $945.1 million in construction loans has been reduced substantially. The quality of many of these loans has improved as borrowers brought additional capital and collateral to the projects. In other situations which were not as flexible, we sold a significant number of loans to new borrowers with stronger credit profiles. Construction projects are well along to completion, further reducing inherent risk of unfinished projects. During the second quarter, we sold $55.8 million in OREO and $166.3 million in loans - a total of $222.1 million. Year to date, we sold $79.8 million in OREO and $183.5 million in loans – a total of $263.3 million.
Total nonperforming assets as of June 30, 2009 were $278.9 million or 2.19% of total assets, compared to $303.8 million or 2.42% of total assets at March 31, 2009 and $263.9 million or 2.12% of total assets at December 31, 2008. The decrease in nonperforming assets was largely due to a decrease in nonaccrual loans of $85.8 million, partially offset by an increase in A/B notes of $77.2 million described in more detail in the paragraph below. Nonaccrual loans decreased during the quarter due to the sale of problem loans, fewer migrations into nonaccrual loans and the payoff and resolution of problem loans. Nonperforming assets as of June 30, 2009 included nonaccrual loans totaling $162.2 million, other real estate owned totaling $27.2 million and total loans modified or restructured totaling $89.5 million.
Nonperforming Assets Trend
| (in millions) | | Quarter Ended | |
| | | December 31, 2008 | | | March 31, 2009 | | | June 30, 2009 | |
| Nonaccrual loans | | $ | 214.6 | | | $ | 248.0 | | | $ | 162.2 | |
| Modified or restructured loans | | | 11.0 | | | | 17.2 | | | | 12.3 | |
| A/B notes | | | - | | | | - | | | | 77.2 | |
| Total modified or restuctured loans | | | 11.0 | | | | 17.2 | | | | 89.5 | |
| REO | | | 38.3 | | | | 38.6 | | | | 27.2 | |
| Total nonperforming assets | | $ | 263.9 | | | $ | 303.8 | | | $ | 278.9 | |
| | | | | | | | | | | | | |
| Nonperforming assets to total assets | | | 2.12 | % | | | 2.42 | % | | | 2.19 | % |
| Nonaccrual loans to total loans | | | 2.60 | % | | | 3.08 | % | | | 1.90 | % |
| Allowance for loan losses to nonaccrual loans | | | 83 | % | | | 79 | % | | | 138 | % |
Modified or Restructured Loans - A/B Notes
As of June 30, 2009, total modified or restructured loans were $89.5 million. This included $77.2 million of performing, accrual loans at market interest rates that were structured as A/B notes. In these A/B notes, the original loan was restructured into two notes where the A note represents the portion of the original loan which allows for an acceptable loan-to-value and debt coverage on the collateral and is expected to be collected in full. The B note represents the portion of the original loan which was the shortfall in value and was fully charged off. The A/B notes balance of $77.2 million as of June 30, 2009 is comprised of the A note balances only. The A notes are performing loans at market interest rates with adequate collateral and cash flow, but are required to be disclosed as troubled debt restructurings in the year in which they are restructured. We anticipate that these loans will no longer be considered troubled debt restructurings or nonperforming assets under generally accepted accounting principles in the year 2010.
We have primarily utilized the A/B note restructures in two situations. First, $41.6 million or 54% of the restructures were for loans that were originally residential construction projects where the borrowers have made the decision to wait to sell the properties and rent them out until the market recovers. In these situations, we ordered new appraisals, valued the projects as rental properties and charged off any shortfalls in value as the B note. The resulting A notes are all current and have actual debt coverage and loan-to-value ratios that meet our underwriting guidelines. Second, $20.9 million or 27% of the restructures were to help preserve homeownership and keep responsible homeowners in their homes after steep declines in values have put them underwater.
These modifications were performed consistent with our own internal policies to assist homeowners and borrowers to keep their homes and businesses. Although these loans are reported as troubled debt restructurings in the current year, we believe that based on the underlying collateral and payment performance history, that we will receive full payment on these notes.
Reduction of Delinquent Loans
Total loan delinquencies as of June 30, 2009 decreased by $188.0 million or 39% from prior quarter. Loan delinquency fell across all delinquency categories and loan types. In particular, loans delinquent 30 to 59 days decreased 69% or $130.9 million, to $59.1 million. Delinquent loans decreased during the quarter due to the sale of problem loans, fewer migrations into delinquency categories and the payoff and resolution of delinquent loans.
Delinquent Loans Trend
| (in millions) | | Quarter Ended | |
| | | December 31, 2008 | | | March 31, 2009 | | | June 30, 2009 | |
| Loans delinquent 30-59 days | | $ | 75.4 | | | $ | 189.9 | | | $ | 59.1 | |
| Loans delinquent 60-89 days | | | 69.5 | | | | 115.9 | | | | 90.1 | |
| Loans delinquent 90+ days | | | 182.1 | | | | 178.8 | | | | 147.4 | |
| Total delinquent loans | | $ | 327.0 | | | $ | 484.6 | | | $ | 296.6 | |
| Total loans receivable | | $ | 8,249.5 | | | $ | 8,064.3 | | | $ | 8,529.0 | |
| Delinquent loans to total loans ratio | | | 3.96 | % | | | 6.01 | % | | | 3.48 | % |
During the second quarter, we recorded $151.4 million provision for loan losses, increasing the allowance for loan losses at June 30, 2009 to $223.7 million or 2.62% of outstanding loans. This compares to $195.5 million or 2.42% of outstanding loans at March 31, 2009. For the second quarter of 2009, East West had net charge-offs of $133.9 million, largely resulting from land and construction loans. East West continues to record substantial provision for loan losses to ensure an adequate allowance for loan losses commensurate with the risk profile inherent in the loan portfolio.
Capital Adequacy and Results of East West Stress Test
Capital Strength
| (Dollars in millions) | | 6/30/09 Ratio | | | Well Capitalized Regulatory Requirement | | | Total Excess Above Well Capitalized Requirement | |
| | | | | | | | | | |
| Tier 1 leverage capital ratio | | | 10.38 | % | | | 5.00 | % | | $ | 664.5 | |
| Tier 1 risk-based capital ratio | | | 12.25 | % | | | 6.00 | % | | $ | 654.2 | |
| Total risk-based capital ratio | | | 14.28 | % | | | 10.00 | % | | $ | 447.4 | |
East West has always been committed to maintaining strong capital levels and has been well capitalized throughout this economic cycle. As of the end of the second quarter, East West significantly exceeded well capitalized requirements under all regulatory guidelines.
In this challenging economic environment, we recognize the importance of building capital and preparing for an even more severely stressed economic cycle. During the second quarter, management followed the tenets of the Supervisory Capital Assessment Program (SCAP) and applied the “more adverse” stress test guidelines to our loan and investment portfolios. East West was not one of the banks subject to the SCAP stress test; however, management believed that it was prudent risk management to conduct a similar test on our loan and investment portfolios. The loss assumptions we used in our stress test were similar to the indicative loss rates disclosed in the SCAP white paper.
Based on the result of our stress test, East West would remain more than well capitalized under all regulatory guidelines. The stress test simulates an economic downturn scenario that is more severe than what we are currently experiencing. Our stress test indicated that with additional tangible common equity of $101 million, we would have sufficient tangible common equity to maintain a 4.00% tangible common equity to risk-weighted assets ratio, even in a more severe economic environment.
Management took immediate actions to increase tangible common equity. In May 2009, we desecuritized our private label MBS securitizations, increasing tangible common equity by $30.6 million. In late June, we entered into agreements to exchange 90,311 shares of Series A Preferred Stock into common stock, increasing tangible common equity by an additional $90.3 million. Further, East West entered into private placement transactions on July 14, 2009 to sell 5,000,000 shares of common stock at a price of $5.50 per share. Through these transactions, which have all been executed as of today, tangible common equity has increased by a total of $148.4 million, $47.4 million in excess of our desired additional tangible common equity goal.
June 30, 2009 Pro Forma Capital Ratios After Completion of Private Preferred Stock Exchanges and Private Placement Common Stock Issuance
| | | 6/30/2009 Pro Forma Capital Ratios | |
| | | Actual Ratios | | + | After Impact of $90.3 Million Preferred Stock Exchanges (1) | | + | After Impact of $27.5 Million Private Placement Common Stock Issuance (2) | |
| Tier 1 leverage capital ratio | | | 10.38 | % | | | 10.38 | % | | | 10.59 | % |
| Tier 1 risk-based capital ratio | | | 12.25 | % | | | 12.25 | % | | | 12.50 | % |
| Total risk-based capital ratio | | | 14.28 | % | | | 14.28 | % | | | 14.52 | % |
| TCE/Risk-weighted assets | | | 6.16 | % | | | 7.00 | % | | | 7.25 | % |
_________
| (1) | The agreements for the exchanges of preferred stock totaling $90.3 million were entered into on June 29th and June 30th of 2009 but did not settle until after June 30, 2009. The impact to tangible common equity was not reflected until after the settlement dates, which occurred in early July 2009. |
| (2) | The $27.5 million private placement common stock issuance was executed on July 14, 2009 and settled on July 15, 2009. |
International and Green Initiatives
In the second quarter we launched many initiatives that will provide future growth opportunities. During the quarter, we obtained approval to open a Representative Office in Taipei. East West’s growing physical presence in Asia includes a full service branch in Hong Kong and Representative Offices in Beijing and Shanghai. With our increasing presence in Asia, we will be better able to facilitate our customers’ lending and overall banking needs. Additionally, during the quarter, we successfully launched a global foreign exchange initiative and built a foreign exchange trading platform to further expand our international banking services. East West has also embraced “Green” initiatives and has partnered with organizations including the Los Angeles Lakers, Southern California Edison and Sempra Energy to support programs that foster conservation and efficient energy usage. These partnerships have raised our visibility on our “Green” initiatives and resulted in many new lending and deposit relationships.
Strong Deposit Growth
Total deposits as of June 30, 2009 increased to a record $8.7 billion, up $204.8 million or 10% annualized from $8.5 billion at March 31, 2009. The increase in deposits resulted from a strong increase in core deposits of $203.4 million or 21% annualized quarter over quarter. We have successfully grown core deposits by introducing new deposit products, attracting new customers and expanding existing customer relationships. We continue to see strong growth in our retail banking division and have substantially increased small business accounts. Noninterest-bearing demand deposits totaled $1.3 billion as of June 30, 2009, or approximately 15% of total deposits.
With the success of increasing core deposits, the cost of deposits has decreased considerably. The cost of deposits for the second quarter decreased to 1.47%, a 34 basis point decrease from the first quarter of 2009.
Second Quarter 2009 Operating Results
Net interest income for the second quarter totaled $88.3 million, an 11% increase over first quarter of 2009. The net interest margin for the second quarter was 2.98%, a 24 basis point increase from 2.74% in the prior quarter. We believe that the margin will continue to strengthen throughout the remainder of 2009, benefiting from growing core deposits, increasing yields on loans and investment securities, pay-downs of higher cost term FHLB borrowings and ongoing downward repricing of maturing higher cost time deposits.
Currently, we estimate that the net interest margin will approximate 3.10% to 3.15% for the third quarter of 2009 and 3.20% to 3.25% for the fourth quarter of 2009.
Excluding the non-cash charge for impairment of investment securities and gains on sales of investment securities, noninterest income for the second quarter totaled $9.6 million, compared to $10.5 million in the first quarter of 2009. See reconciliation of the GAAP financial measure to this non-GAAP financial measure in the tables attached. In the second quarter of 2009, we recorded $37.4 million write-downs on investment securities for other-than-temporary impairment on bank pooled trust preferred securities. As of June 30, 2009, the book value of the pooled trust preferred securities was $84.9 million, 3% of the total $2.8 billion of investment securities and less than 1% of $12.7 billion in total assets.
Noninterest expense totaled $57.9 million for the second quarter 2009, an increase of $6.5 million from the first quarter of 2009. The increase in noninterest expense quarter over quarter was primarily due to a $5.7 million special deposit insurance assessment by the FDIC and OREO expenses which were $1.7 million greater than in the first quarter. The remaining noninterest expenses decreased $845 thousand or 2% quarter over quarter. See reconciliation of the GAAP financial measure to this non-GAAP financial measure in the tables attached. We will continue to manage down all operating costs for the remainder of 2009; however, further cost containment may be offset by higher FDIC assessments and OREO expenses.
Extraordinary Item
In the month of May, we desecuritized three private label mortgage-backed securitizations which had $330.7 million in single family loans and $304.9 million in multi-family loans as underlying assets. As a result of these transactions, the investment securities on our balance sheet were replaced by the underlying loans totaling $635.6 million and we recorded an extraordinary loss, net of tax, of $5.4 million. This extraordinary item was the result of recording an allowance for loan losses for these single family and multifamily loans.
Induced Conversion of Series A Preferred Stock
The agreements we entered into on June 29 and June 30, 2009 to exchange 90,311 shares of Series A Preferred Stock into common stock are considered to be an induced conversion. For these induced conversions, consideration paid to holders above the carrying amount of the preferred stock on our balance sheet of $14.8 million in July was accounted for as a preferred dividend in the second quarter of 2009, as we had entered into binding agreements before the end of the second quarter.
Dividend Payout
East West Bancorp’s Board of Directors has declared third quarter dividends on the common stock and remaining Series A Preferred Stock. The common stock cash dividend of $0.01 is payable on or about August 26, 2009 to shareholders of record on August 12, 2009. The dividend on the Series A Preferred Stock of $20.00 per share is payable on August 1, 2009 to shareholders of record on July 15, 2009. We will continue to review the dividend policy quarterly in light of the current economic environment.
About East West
East West Bancorp is a publicly owned company with $12.7 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 71 branch locations. East West Bank serves the community with 69 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, 2008 (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 borrowers to perform as required under the terms of their loans; effect of additional provisions for loan losses; effect of any goodwill impairment, 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)
| | | June 30, 2009 | | | March 31, 2009 | | | December 31, 2008 | |
| Assets | | | | | | | | | |
| Cash and cash equivalents | | $ | 573,114 | | | $ | 541,066 | | | $ | 878,853 | |
| Short-term investments | | | 554,293 | | | | 329,288 | | | | 228,441 | |
| Securities purchased under resale agreements | | | 75,000 | | | | 50,000 | | | | 50,000 | |
| Investment securities held-to-maturity, at amortized cost | | | 794,840 | | | | 734,799 | | | | 122,317 | |
| Investment securities available-for-sale, at fair value | | | 1,381,810 | | | | 1,994,403 | | | | 2,040,194 | |
| Loans receivable (net of allowance for loan losses | | | | | | | | | | | | |
| of $223,700, $195,450 and $178,027) | | | 8,289,229 | | | | 7,865,925 | | | | 8,069,377 | |
| Other real estate owned, net | | | 27,188 | | | | 38,634 | | | | 38,302 | |
| Premiums on deposits acquired, net | | | 18,973 | | | | 20,065 | | | | 21,190 | |
| Goodwill | | | 337,438 | | | | 337,438 | | | | 337,438 | |
| Other assets | | | 667,630 | | | | 652,906 | | | | 636,704 | |
| Total assets | | $ | 12,719,515 | | | $ | 12,564,524 | | | $ | 12,422,816 | |
| | | | | | | | | | | | | |
| Liabilities and Stockholders' Equity | | | | | | | | | | | | |
| Deposits | | $ | 8,658,818 | | | $ | 8,454,059 | | | $ | 8,141,959 | |
| Federal funds purchased | | | 22 | | | | 22 | | | | 28,022 | |
| Federal Home Loan Bank advances | | | 1,173,238 | | | | 1,233,269 | | | | 1,353,307 | |
| Securities sold under repurchase agreements | | | 1,020,080 | | | | 998,061 | | | | 998,430 | |
| Notes payable | | | 11,578 | | | | 14,597 | | | | 16,506 | |
| Long-term debt | | | 235,570 | | | | 235,570 | | | | 235,570 | |
| Accrued expenses and other liabilities | | | 143,441 | | | | 93,753 | | | | 98,256 | |
| Total liabilities | | | 11,242,747 | | | | 11,029,331 | | | | 10,872,050 | |
| Stockholders' equity | | | 1,476,768 | | | | 1,535,193 | | | | 1,550,766 | |
| Total liabilities and stockholders' equity | | $ | 12,719,515 | | | $ | 12,564,524 | | | $ | 12,422,816 | |
| Book value per common share | | $ | 15.65 | | | $ | 16.60 | | | $ | 16.92 | |
| Number of common shares at period end | | | 64,032 | | | | 63,958 | | | | 63,746 | |
| | | | | | | | | | | | | |
| Ending Balances | | | | | | | | | | | | |
| | | June 30, 2009 | | | March 31, 2009 | | | December 31, 2008 | |
| Loans receivable | | | | | | | | | | | | |
| Real estate - single family | | $ | 883,447 | | | $ | 517,844 | | | $ | 491,315 | |
| Real estate - multifamily | | | 1,017,803 | | | | 689,728 | | | | 677,989 | |
| Real estate - commercial | | | 3,510,248 | | | | 3,510,749 | | | | 3,472,000 | |
| Real estate - land | | | 479,808 | | | | 544,892 | | | | 576,564 | |
| Real estate - construction | | | 945,107 | | | | 1,154,782 | | | | 1,260,724 | |
| Commercial | | | 1,143,526 | | | | 1,128,903 | | | | 1,210,260 | |
| Trade finance | | | 269,150 | | | | 292,816 | | | | 343,959 | |
| Consumer | | | 279,872 | | | | 224,601 | | | | 216,642 | |
| Total gross loans receivable | | | 8,528,961 | | | | 8,064,315 | | | | 8,249,453 | |
| Unearned fees, premiums and discounts | | | (16,032 | ) | | | (2,940 | ) | | | (2,049 | ) |
| Allowance for loan losses | | | (223,700 | ) | | | (195,450 | ) | | | (178,027 | ) |
| Net loans receivable | | $ | 8,289,229 | | | $ | 7,865,925 | | | $ | 8,069,377 | |
| | | | | | | | | | | | | |
| Deposits | | | | | | | | | | | | |
| Noninterest-bearing demand | | $ | 1,326,952 | | | $ | 1,297,151 | | | $ | 1,292,997 | |
| Interest-bearing checking | | | 338,696 | | | | 352,334 | | | | 363,285 | |
| Money market | | | 1,999,464 | | | | 1,806,985 | | | | 1,323,402 | |
| Savings | | | 405,837 | | | | 411,104 | | | | 420,133 | |
| Total core deposits | | | 4,070,949 | | | | 3,867,574 | | | | 3,399,817 | |
| Time deposits less than $100,000 | | | 1,121,648 | | | | 1,211,480 | | | | 1,521,988 | |
| Time deposits $100,000 or greater | | | 3,466,221 | | | | 3,375,005 | | | | 3,220,154 | |
| Total time deposits | | | 4,587,869 | | | | 4,586,485 | | | | 4,742,142 | |
| Total deposits | | $ | 8,658,818 | | | $ | 8,454,059 | | | $ | 8,141,959 | |
EAST WEST BANCORP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
(unaudited)
| | | Quarter Ended | |
| | | June 30, 2009 | | | March 31, 2009 | | | June 30, 2008 | |
| | | | | | | | | | |
| Interest and dividend income | | $ | 146,333 | | | $ | 144,923 | | | $ | 167,905 | |
| Interest expense | | | (58,073 | ) | | | (65,242 | ) | | | (75,729 | ) |
| Net interest income before provision for loan losses | | | 88,260 | | | | 79,681 | | | | 92,176 | |
| Provision for loan losses | | | (151,422 | ) | | | (78,000 | ) | | | (85,000 | ) |
| Net interest (loss) income after provision for loan losses | | | (63,162 | ) | | | 1,681 | | | | 7,176 | |
| Noninterest (loss) income | | | (26,199 | ) | | | 13,794 | | | | 3,438 | |
| Noninterest expense | | | (57,912 | ) | | | (51,406 | ) | | | (55,655 | ) |
| Loss before benefit for income taxes | | | (147,273 | ) | | | (35,931 | ) | | | (45,041 | ) |
| Benefit for income taxes | | | 60,548 | | | | 13,465 | | | | 19,154 | |
| Loss before extraordinary item | | $ | (86,725 | ) | | $ | (22,466 | ) | | $ | (25,887 | ) |
| Extraordinary item, net of tax | | | (5,366 | ) | | | - | | | | - | |
| Net loss after extraordinary item | | $ | (92,091 | ) | | $ | (22,466 | ) | | $ | (25,887 | ) |
| Preferred stock dividend, inducement, and amortization of preferred stock discount | | | (23,623 | ) | | | (8,743 | ) | | | - | |
| Net loss available to common stockholders | | $ | (115,714 | ) | | $ | (31,209 | ) | | $ | (25,887 | ) |
| Net loss per share, basic | | $ | (1.83 | ) | | $ | (0.50 | ) | | $ | (0.41 | ) |
| Net loss per share, diluted | | $ | (1.83 | ) | | $ | (0.50 | ) | | $ | (0.41 | ) |
| Shares used to compute per share net loss: | | | | | | | | | | | | |
| - Basic | | | 63,105 | | | | 62,998 | | | | 62,599 | |
| - Diluted | | | 63,105 | | | | 62,998 | | | | 62,599 | |
| | | Quarter Ended | |
| | | June 30, 2009 | | | March 31, 2009 | | | June 30, 2008 | |
| Noninterest (loss) income: | | | | | | | | | |
| Impairment loss on investment securities | | $ | (37,447 | ) | | $ | (200 | ) | | $ | (9,945 | ) |
| Branch fees | | | 4,991 | | | | 4,793 | | | | 4,339 | |
| Letters of credit fees and commissions | | | 1,930 | | | | 1,854 | | | | 2,476 | |
| Net gain on sale of investment securities | | | 1,680 | | | | 3,521 | | | | 3,433 | |
| Ancillary loan fees | | | 1,356 | | | | 2,229 | | | | 984 | |
| Net gain on sale of loans | | | 3 | | | | 8 | | | | 273 | |
| Other operating income | | | 1,288 | | | | 1,589 | | | | 1,878 | |
| Total noninterest (loss) income | | $ | (26,199 | ) | | $ | 13,794 | | | $ | 3,438 | |
| | | | | | | | | | | | | |
| Noninterest expense: | | | | | | | | | | | | |
| Compensation and employee benefits | | $ | 16,509 | | | $ | 17,108 | | | $ | 25,790 | |
| Deposit insurance premiums and regulatory assessments | | | 9,568 | | | | 3,325 | | | | 2,321 | |
| Other real estate owned expense | | | 8,682 | | | | 7,031 | | | | 508 | |
| Occupancy and equipment expense | | | 6,297 | | | | 7,391 | | | | 6,539 | |
| Legal expense | | | 1,755 | | | | 1,778 | | | | 1,135 | |
| Amortization of investments in affordable housing partnerships | | | 1,652 | | | | 1,760 | | | | 1,920 | |
| Data processing | | | 1,141 | | | | 1,142 | | | | 1,135 | |
| Amortization and impairment writedowns of premiums on deposits acquired | | | 1,092 | | | | 1,125 | | | | 1,827 | |
| Consulting expense | | | 672 | | | | 448 | | | | 1,669 | |
| Other operating expense | | | 10,544 | | | | 10,298 | | | | 12,811 | |
| Total noninterest expense | | $ | 57,912 | | | $ | 51,406 | | | $ | 55,655 | |
EAST WEST BANCORP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
(unaudited)
| | | Year To Date | | | | |
| | | June 30, 2009 | | | June 30, 2008 | | | % Change | |
| | | | | | | | | | |
| Interest and dividend income | | $ | 291,256 | | | $ | 355,089 | | | | (18 | ) |
| Interest expense | | | (123,315 | ) | | | (163,294 | ) | | | (24 | ) |
| Net interest income before provision for loan losses | | | 167,941 | | | | 191,795 | | | | (12 | ) |
| Provision for loan losses | | | (229,422 | ) | | | (140,000 | ) | | | 64 | |
| Net interest (loss) income after provision for loan losses | | | (61,481 | ) | | | 51,795 | | | | (219 | ) |
| Noninterest (loss) income | | | (12,405 | ) | | | 19,351 | | | | (164 | ) |
| Noninterest expense | | | (109,318 | ) | | | (108,545 | ) | | | 1 | |
| Loss before benefit for income taxes | | | (183,204 | ) | | | (37,399 | ) | | | 390 | |
| Benefit for income taxes | | | 74,013 | | | | 16,556 | | | | 347 | |
| Net loss before extraordinary items | | $ | (109,191 | ) | | $ | (20,843 | ) | | | 424 | |
| Extraordinary item, net of tax | | $ | (5,366 | ) | | $ | - | | | NA | |
| Net loss after extraordinary item | | $ | (114,557 | ) | | $ | (20,843 | ) | | | 450 | |
| Preferred stock dividend, inducement, and amortization of preferred stock discount | | | (32,366 | ) | | | - | | | NA | |
| Net loss available to common stockholders | | $ | (146,923 | ) | | $ | (20,843 | ) | | | 605 | |
| Net loss per share, basic | | $ | (2.33 | ) | | $ | (0.33 | ) | | | 606 | |
| Net loss per share, diluted | | $ | (2.33 | ) | | $ | (0.33 | ) | | | 606 | |
| Shares used to compute per share net loss: | | | | | | | | | | | | |
| - Basic | | | 63,052 | | | | 62,542 | | | | 1 | |
| - Diluted | | | 63,052 | | | | 62,542 | | | | 1 | |
| | | Year To Date | | | | | |
| | | June 30, 2009 | | | June 30, 2008 | | | % Change | |
| Noninterest (loss) income: | | | | | | | | | | | | |
| Impairment loss on investment securities | | $ | (37,647 | ) | | $ | (9,945 | ) | | | 279 | |
| Branch fees | | | 9,784 | | | | 8,440 | | | | 16 | |
| Net gain on sale of investment securities | | | 5,201 | | | | 7,767 | | | | (33 | ) |
| Letters of credit fees and commissions | | | 3,784 | | | | 5,153 | | | | (27 | ) |
| Ancillary loan fees | | | 3,585 | | | | 2,125 | | | | 69 | |
| Net gain on sale of loans | | | 11 | | | | 2,128 | | | | (99 | ) |
| Other operating income | | | 2,877 | | | | 3,683 | | | | (22 | ) |
| Total noninterest (loss) income | | $ | (12,405 | ) | | $ | 19,351 | | | | (164 | ) |
| | | | | | | | | | | | | |
| Noninterest expense: | | | | | | | | | | | | |
| Compensation and employee benefits | | $ | 33,617 | | | $ | 49,058 | | | | (31 | ) |
| Other real estate owned expense | | | 15,713 | | | | 1,397 | | | | 1,025 | |
| Occupancy and equipment expense | | | 13,688 | | | | 13,547 | | | | 1 | |
| Deposit insurance premiums and regulatory assessments | | | 12,893 | | | | 3,513 | | | | 267 | |
| Legal expense | | | 3,533 | | | | 3,035 | | | | 16 | |
| Amortization of investments in affordable housing partnerships | | | 3,412 | | | | 3,635 | | | | (6 | ) |
| Data processing | | | 2,283 | | | | 2,331 | | | | (2 | ) |
| Amortization and impairment writedowns of premiums on deposits acquired | | | 2,217 | | | | 4,564 | | | | (51 | ) |
| Consulting expense | | | 1,120 | | | | 2,534 | | | | (56 | ) |
| Other operating expense | | | 20,842 | | | | 24,931 | | | | (16 | ) |
| Total noninterest expense | | $ | 109,318 | | | $ | 108,545 | | | | 1 | |
EAST WEST BANCORP, INC.
GAAP TO NON-GAAP RECONCILIATION
(In thousands)
(Unaudited)
| | | Quarter Ended | |
| | | June 30, 2009 | | | March 31, 2009 | |
| | | | | | | |
| Loss before benefit for income taxes | | $ | (147,273 | ) | | $ | (35,931 | ) |
| Add: | | | | | | | | |
| Provision for loan losses | | | 151,422 | | | | 78,000 | |
| Impairment loss on investment securities | | | 37,447 | | | | 200 | |
| FDIC special assessment | | | 5,700 | | | | - | |
| Other real estate owned expense | | | 8,682 | | | | 7,031 | |
| Core operating earnings (non-GAAP) | | $ | 55,978 | | | $ | 49,300 | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| Noninterest (loss) income | | $ | (26,199 | ) | | $ | 13,794 | |
| Add: | | | | | | | | |
| Impairment loss on investment securities | | | 37,447 | | | | 200 | |
| Net gain on sale of investment securities | | | (1,680 | ) | | | (3,521 | ) |
| Noninterest income (non-GAAP) | | $ | 9,568 | | | $ | 10,473 | |
| | | | | | | | | |
| Noninterest expense | | $ | 57,912 | | | $ | 51,406 | |
| Add: | | | | | | | | |
| Other real estate owned expense | | | (8,682 | ) | | | (7,031 | ) |
| FDIC special assessment | | | (5,700 | ) | | | - | |
| Core noninterest expense (non-GAAP) | | $ | 43,530 | | | $ | 44,375 | |
EAST WEST BANCORP, INC.
SELECTED FINANCIAL INFORMATION
(In thousands)
(unaudited)
| Average Balances | | Quarter Ended | |
| | | June 30, 2009 | | | March 31, 2009 | | | June 30, 2008 | |
| Loans receivable | | | | | | | | | |
| Real estate - single family | | $ | 686,073 | | | $ | 506,753 | | | $ | 458,021 | |
| Real estate - multifamily | | | 823,890 | | | | 692,885 | | | | 731,042 | |
| Real estate - commercial | | | 3,516,257 | | | | 3,465,505 | | | | 3,494,118 | |
| Real estate - land | | | 523,799 | | | | 582,649 | | | | 649,392 | |
| Real estate - construction | | | 1,072,319 | | | | 1,232,235 | | | | 1,566,562 | |
| Commercial | | | 1,112,869 | | | | 1,179,183 | | | | 1,227,891 | |
| Trade finance | | | 274,388 | | | | 309,586 | | | | 448,471 | |
| Consumer | | | 235,255 | | | | 228,377 | | | | 197,531 | |
| Total loans receivable | | | 8,244,850 | | | | 8,197,173 | | | | 8,773,028 | |
| Investment securities held-to-maturity | | | 792,209 | | | | 422,493 | | | | - | |
| Investment securities available-for-sale | | | 1,820,789 | | | | 2,280,766 | | | | 1,990,262 | |
| Earning assets | | | 11,909,122 | | | | 11,802,045 | | | | 11,125,104 | |
| Total assets | | | 12,619,022 | | | | 12,498,249 | | | | 11,771,136 | |
| | | | | | | | | | | | | |
| Deposits | | | | | | | | | | | | |
| Noninterest-bearing demand | | $ | 1,300,676 | | | $ | 1,238,551 | | | $ | 1,405,040 | |
| Interest-bearing checking | | | 356,756 | | | | 361,569 | | | | 412,422 | |
| Money market | | | 1,822,470 | | | | 1,487,178 | | | | 1,103,522 | |
| Savings | | | 415,828 | | | | 410,232 | | | | 468,541 | |
| Total core deposits | | | 3,895,730 | | | | 3,497,530 | | | | 3,389,525 | |
| Time deposits less than $100,000 | | | 1,162,205 | | | | 1,332,944 | | | | 964,196 | |
| Time deposits $100,000 or greater | | | 3,386,730 | | | | 3,482,074 | | | | 3,148,739 | |
| Total time deposits | | | 4,548,935 | | | | 4,815,018 | | | | 4,112,935 | |
| Total deposits | | | 8,444,665 | | | | 8,312,548 | | | | 7,502,460 | |
| Interest-bearing liabilities | | | 9,664,662 | | | | 9,595,665 | | | | 9,005,974 | |
| Stockholders' equity | | | 1,530,253 | | | | 1,540,948 | | | | 1,221,285 | |
| Selected Ratios | | Quarter Ended | |
| | | June 30, 2009 | | | March 31, 2009 | | | June 30, 2008 | |
| For The Period | | | | | | | | | | | | |
| Return on average assets | | | -2.92 | % | | | -0.72 | % | | | -0.88 | % |
| Return on average common equity | | | -43.81 | % | | | -11.69 | % | | | -8.48 | % |
| Interest rate spread (3) | | | 2.52 | % | | | 2.22 | % | | | 2.70 | % |
| Net interest margin (3) | | | 2.98 | % | | | 2.74 | % | | | 3.33 | % |
| Yield on earning assets (3) | | | 4.93 | % | | | 4.98 | % | | | 6.07 | % |
| Cost of deposits | | | 1.47 | % | | | 1.81 | % | | | 2.33 | % |
| Cost of funds | | | 2.12 | % | | | 2.44 | % | | | 2.92 | % |
| Noninterest expense/average assets (1) | | | 1.75 | % | | | 1.55 | % | | | 1.74 | % |
| Efficiency ratio (4) | | | 55.12 | % | | | 51.80 | % | | | 48.62 | % |
| Net chargeoffs to average loans (2) | | | 6.50 | % | | | 2.91 | % | | | 1.59 | % |
| Gross loan chargeoffs | | $ | 137,411 | | | $ | 60,140 | | | $ | 35,209 | |
| Loan recoveries | | $ | (3,535 | ) | | $ | (571 | ) | | $ | (366 | ) |
| Net loan chargeoffs | | $ | 133,876 | | | $ | 59,569 | | | $ | 34,843 | |
| (1) | Excludes the amortization of intangibles, amortization and impairment writedowns of premiums on deposits acquired, impairment writedown on goodwill, and amortization of investments in affordable housing partnerships. |
| (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. |
| (4) | Represents noninterest expense, excluding the amortization of intangibles, amortization and impairment writedowns of premiums on deposits acquired, impairment writedown on goodwill, and investments in affordable housing partnerships, divided by the aggregate of net interest income before provision for loan losses and noninterest income, excluding impairment writedowns on investment securities. |
EAST WEST BANCORP, INC.
SELECTED FINANCIAL INFORMATION
(In thousands)
(unaudited)
| Average Balances | | Year To Date June 30, | | | % | |
| | | 2009 | | | 2008 | | | Change | |
| Loans receivable | | | | | | | | | |
| Real estate - single family | | $ | 596,913 | | | $ | 451,081 | | | | 32 | |
| Real estate - multifamily | | | 758,744 | | | | 714,792 | | | | 6 | |
| Real estate - commercial | | | 3,491,166 | | | | 3,557,946 | | | | (2 | ) |
| Real estate - land | | | 552,917 | | | | 660,495 | | | | (16 | ) |
| Real estate - construction | | | 1,151,836 | | | | 1,575,306 | | | | (27 | ) |
| Commercial | | | 1,145,842 | | | | 1,255,352 | | | | (9 | ) |
| Trade finance | | | 291,890 | | | | 456,891 | | | | (36 | ) |
| Consumer | | | 231,835 | | | | 192,279 | | | | 21 | |
| Total loans receivable | | | 8,221,143 | | | | 8,864,142 | | | | (7 | ) |
| Investment securities held-to-maturity | | | 608,372 | | | | - | | | NA | |
| Investment securities available-for-sale | | | 2,050,106 | | | | 1,914,642 | | | | 7 | |
| Earning assets | | | 11,856,477 | | | | 11,087,927 | | | | 7 | |
| Total assets | | | 12,557,996 | | | | 11,780,012 | | | | 7 | |
| | | | | | | | | | | | | |
| Deposits | | | | | | | | | | | | |
| Noninterest-bearing demand | | $ | 1,270,716 | | | $ | 1,399,920 | | | | (9 | ) |
| Interest-bearing checking | | | 358,492 | | | | 407,631 | | | | (12 | ) |
| Money market | | | 1,655,476 | | | | 1,099,111 | | | | 51 | |
| Savings | | | 413,046 | | | | 469,989 | | | | (12 | ) |
| Total core deposits | | | 3,697,730 | | | | 3,376,651 | | | | 10 | |
| Time deposits less than $100,000 | | | 1,247,101 | | | | 951,241 | | | | 31 | |
| Time deposits $100,000 or greater | | | 3,434,140 | | | | 3,088,157 | | | | 11 | |
| Total time deposits | | | 4,681,241 | | | | 4,039,398 | | | | 16 | |
| Total deposits | | | 8,378,971 | | | | 7,416,049 | | | | 13 | |
| Interest-bearing liabilities | | | 9,629,422 | | | | 9,045,283 | | | | 6 | |
| Stockholders' equity | | | 1,535,532 | | | | 1,189,223 | | | | 29 | |
| Selected Ratios | | Year To Date June 30, | | | % | |
| | | 2009 | | | 2008 | | | Change | |
| For The Period | | | | | | | | | | | | |
| Return on average assets | | | -1.82 | % | | | -0.35 | % | | | 420 | |
| Return on average common equity | | | -27.66 | % | | | -3.51 | % | | | 689 | |
| Interest rate spread (3) | | | 2.38 | % | | | 2.82 | % | | | (16 | ) |
| Net interest margin (3) | | | 2.86 | % | | | 3.48 | % | | | (18 | ) |
| Yield on earning assets (3) | | | 4.96 | % | | | 6.44 | % | | | (23 | ) |
| Cost of deposits | | | 1.64 | % | | | 2.59 | % | | | (37 | ) |
| Cost of funds | | | 2.28 | % | | | 3.14 | % | | | (27 | ) |
| Noninterest expense/average assets (1) | | | 1.65 | % | | | 1.69 | % | | | (2 | ) |
| Efficiency ratio (4) | | | 53.51 | % | | | 45.12 | % | | | 19 | |
| Net chargeoffs to average loans (2) | | | 4.71 | % | | | 1.36 | % | | | 246 | |
| Gross loan chargeoffs | | $ | 197,551 | | | $ | 60,792 | | | | 225 | |
| Loan recoveries | | $ | (4,106 | ) | | $ | (566 | ) | | | 625 | |
| Net loan chargeoffs | | $ | 193,445 | | | $ | 60,226 | | | | 221 | |
| | | | | | | | | | | | | |
| Period End | | | | | | | | | | | | |
| Tier 1 risk-based capital ratio | | | 12.25 | % | | | 11.04 | % | | | 11 | |
| Total risk-based capital ratio | | | 14.28 | % | | | 13.01 | % | | | 10 | |
| Tier 1 leverage capital ratio | | | 10.38 | % | | | 10.01 | % | | | 4 | |
| (1) | Excludes the amortization of intangibles, amortization and impairment writedowns of premiums on deposits acquired, impairment writedown on goodwill, and amortization of investments in affordable housing partnerships. |
| (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. |
| (4) | Represents noninterest expense, excluding the amortization of intangibles, amortization and impairment writedowns of premiums on deposits acquired, impairment writedown on goodwill, and investments in affordable housing partnerships, divided by the aggregate of net interest income before provision for loan losses and noninterest income, excluding impairment writedowns on investment securities. |
EAST WEST BANCORP, INC.
QUARTER TO DATE AVERAGE BALANCES, YIELDS AND RATES PAID
(In thousands)
(unaudited)
| | | Quarter Ended | |
| | | June 30, 2009 | | | March 31, 2009 | |
| | | Average | | | | | | | | | Average | | | | | | | |
| | | Volume | | | Interest | | | Yield (1) | | | Volume | | | Interest | | | Yield (1) | |
| | | | | | | | | | | | | | | | | | | |
| ASSETS | | | | | | | | | | | | | | | | | | |
| Interest-earning assets: | | | | | | | | | | | | | | | | | | |
| Short-term investments | | $ | 876,386 | | | $ | 2,509 | | | | 1.15 | % | | $ | 731,573 | | | $ | 2,976 | | | | 1.65 | % |
| Securities purchased under resale agreements (term) | | | 51,374 | | | | 1,292 | | | | 9.95 | % | | | 50,000 | | | | 1,250 | | | | 10.00 | % |
| Investment securities held-to-maturity | | | | | | | | | | | | | | | | | | | | | | | | |
| Taxable | | | 769,432 | | | | 11,883 | | | | 6.18 | % | | | 405,851 | | | | 6,695 | | | | 6.60 | % |
| Tax-exempt (2) | | | 22,777 | | | | 374 | | | | 6.57 | % | | | 16,642 | | | | 277 | | | | 6.66 | % |
| Investment securities available-for-sale | | | 1,820,789 | | | | 18,183 | | | | 4.01 | % | | | 2,280,766 | | | | 22,493 | | | | 4.00 | % |
| Loans receivable | | | 8,244,850 | | | | 111,669 | | | | 5.43 | % | | | 8,197,173 | | | | 110,816 | | | | 5.48 | % |
| Federal Home Loan Bank and Federal Reserve | | | | | | | | | | | | | | | | | | | | | |
| Bank stocks | | | 123,514 | | | | 545 | | | | 1.76 | % | | | 120,040 | | | | 506 | | | | 1.69 | % |
| Total interest-earning assets | | | 11,909,122 | | | | 146,455 | | | | 4.93 | % | | | 11,802,045 | | | | 145,013 | | | | 4.98 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Noninterest-earning assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Cash and due from banks | | | 113,853 | | | | | | | | | | | | 122,899 | | | | | | | | | |
| Allowance for loan losses | | | (198,802 | ) | | | | | | | | | | | (186,058 | ) | | | | | | | | |
| Other assets | | | 794,849 | | | | | | | | | | | | 759,363 | | | | | | | | | |
| Total assets | | $ | 12,619,022 | | | | | | | | | | | $ | 12,498,249 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| LIABILITIES AND STOCKHOLDERS' EQUITY | | | | | | | | | | | | | | | | | | | | | |
| Interest-bearing liabilities: | | | | | | | | | | | | | | | | | | | | | | | | |
| Checking accounts | | | 356,756 | | | | 324 | | | | 0.36 | % | | | 361,569 | | | | 393 | | | | 0.44 | % |
| Money market accounts | | | 1,822,470 | | | | 6,140 | | | | 1.35 | % | | | 1,487,178 | | | | 5,694 | | | | 1.55 | % |
| Savings deposits | | | 415,828 | | | | 659 | | | | 0.64 | % | | | 410,232 | | | | 702 | | | | 0.69 | % |
| Time deposits less than $100,000 | | | 1,162,205 | | | | 6,947 | | | | 2.40 | % | | | 1,332,944 | | | | 9,618 | | | | 2.93 | % |
| Time deposits $100,000 or greater | | | 3,386,730 | | | | 16,820 | | | | 1.99 | % | | | 3,482,074 | | | | 20,666 | | | | 2.41 | % |
| Federal funds purchased | | | 4,849 | | | | 3 | | | | 0.24 | % | | | 2,445 | | | | 3 | | | | 0.49 | % |
| Federal Home Loan Bank advances | | | 1,273,640 | | | | 13,142 | | | | 4.14 | % | | | 1,285,070 | | | | 13,877 | | | | 4.38 | % |
| Securities sold under repurchase agreements | | | 1,006,614 | | | | 12,004 | | | | 4.72 | % | | | 998,583 | | | | 11,872 | | | | 4.76 | % |
| Long-term debt | | | 235,570 | | | | 2,034 | | | | 3.42 | % | | | 235,570 | | | | 2,417 | | | | 4.10 | % |
| Total interest-bearing liabilities | | | 9,664,662 | | | | 58,073 | | | | 2.41 | % | | | 9,595,665 | | | | 65,242 | | | | 2.76 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Noninterest-bearing liabilities: | | | | | | | | | | | | | | | | | | | | | | | | |
| Demand deposits | | | 1,300,676 | | | | | | | | | | | | 1,238,551 | | | | | | | | | |
| Other liabilities | | | 123,431 | | | | | | | | | | | | 123,085 | | | | | | | | | |
| Stockholders' equity | | | 1,530,253 | | | | | | | | | | | | 1,540,948 | | | | | | | | | |
| Total liabilities and stockholders' equity | | $ | 12,619,022 | | | | | | | | | | | $ | 12,498,249 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Interest rate spread | | | | | | | | | | | 2.52 | % | | | | | | | | | | | 2.22 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Net interest income and net yield | | | | | | | | | | | | | | | | | | | | | | | | |
| on interest-earning assets (2) | | | | | | $ | 88,382 | | | | 2.98 | % | | | | | | $ | 79,771 | | | | 2.74 | % |
| (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)
| | | Year To Date June 30, | |
| | | 2009 | | | 2008 | |
| | | Average | | | | | | | | | Average | | | | | | | |
| | | Volume | | | Interest | | | Yield (1) | | | Volume | | | Interest | | | Yield (1) | |
| | | | | | | | | | | | | | | | | | | |
| ASSETS | | | | | | | | | | | | | | | | | | |
| Interest-earning assets: | | | | | | | | | | | | | | | | | | |
| Short-term investments (2) | | $ | 804,379 | | | $ | 5,485 | | | | 1.38 | % | | $ | 135,373 | | | $ | 1,589 | | | | 2.35 | % |
| Securities purchased under resale agreements (term) | | | 50,691 | | | | 2,542 | | | | 9.97 | % | | | 57,143 | | | | 3,817 | | | | 13.40 | % |
| Investment securities held-to-maturity | | | | | | | | | | | | | | | | | | | | | | | | |
| Taxable | | | 588,646 | | | | 18,578 | | | | 6.31 | % | | | - | | | | - | | | | - | |
| Tax-exempt (3) | | | 19,726 | | | | 651 | | | | 6.60 | % | | | - | | | | - | | | | - | |
| Investment securities available-for-sale (4) | | | 2,050,106 | | | | 40,676 | | | | 4.00 | % | | | 1,914,642 | | | | 53,499 | | | | 5.60 | % |
| Loans receivable | | | 8,221,143 | | | | 222,485 | | | | 5.46 | % | | | 8,864,142 | | | | 293,431 | | | | 6.64 | % |
| Federal Home Loan Bank and Federal Reserve | | | | | | | | | | | | | | | | | | | | | | | | |
| Bank stocks | | | 121,786 | | | | 1,051 | | | | 1.73 | % | | | 116,627 | | | | 3,472 | | | | 5.97 | % |
| Total interest-earning assets | | | 11,856,477 | | | | 291,468 | | | | 4.96 | % | | | 11,087,927 | | | | 355,808 | | | | 6.44 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Noninterest-earning assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Cash and due from banks | | | 118,351 | | | | | | | | | | | | 137,057 | | | | | | | | | |
| Allowance for loan losses | | | (192,465 | ) | | | | | | | | | | | (113,098 | ) | | | | | | | | |
| Other assets | | | 775,633 | | | | | | | | | | | | 668,126 | | | | | | | | | |
| Total assets | | $ | 12,557,996 | | | | | | | | | | | $ | 11,780,012 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| LIABILITIES AND STOCKHOLDERS' EQUITY | | | | | | | | | | | | | | | | | | | | | |
| Interest-bearing liabilities: | | | | | | | | | | | | | | | | | | | | | | | | |
| Checking accounts | | | 358,492 | | | | 717 | | | | 0.40 | % | | | 407,631 | | | | 2,048 | | | | 1.01 | % |
| Money market accounts | | | 1,655,476 | | | | 11,834 | | | | 1.44 | % | | | 1,099,111 | | | | 14,582 | | | | 2.66 | % |
| Savings deposits | | | 413,046 | | | | 1,361 | | | | 0.66 | % | | | 469,989 | | | | 2,412 | | | | 1.03 | % |
| Time deposits less than $100,000 | | | 1,247,101 | | | | 16,565 | | | | 2.68 | % | | | 951,241 | | | | 16,401 | | | | 3.46 | % |
| Time deposits $100,000 or greater | | | 3,434,140 | | | | 37,486 | | | | 2.20 | % | | | 3,088,157 | | | | 60,346 | | | | 3.92 | % |
| Federal funds purchased | | | 3,653 | | | | 6 | | | | 0.33 | % | | | 129,405 | | | | 1,746 | | | | 2.71 | % |
| Federal Home Loan Bank advances | | | 1,279,323 | | | | 27,019 | | | | 4.26 | % | | | 1,663,188 | | | | 37,223 | | | | 4.49 | % |
| Securities sold under repurchase agreements | | | 1,002,621 | | | | 23,876 | | | | 4.74 | % | | | 1,000,991 | | | | 21,819 | | | | 4.37 | % |
| Long-term debt | | | 235,570 | | | | 4,451 | | | | 3.76 | % | | | 235,570 | | | | 6,717 | | | | 5.72 | % |
| Total interest-bearing liabilities | | | 9,629,422 | | | | 123,315 | | | | 2.58 | % | | | 9,045,283 | | | | 163,294 | | | | 3.62 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Noninterest-bearing liabilities: | | | | | | | | | | | | | | | | | | | | | | | | |
| Demand deposits | | | 1,270,716 | | | | | | | | | | | | 1,399,920 | | | | | | | | | |
| Other liabilities | | | 122,326 | | | | | | | | | | | | 145,586 | | | | | | | | | |
| Stockholders' equity | | | 1,535,532 | | | | | | | | | | | | 1,189,223 | | | | | | | | | |
| Total liabilities and stockholders' equity | | $ | 12,557,996 | | | | | | | | | | | $ | 11,780,012 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Interest rate spread | | | | | | | | | | | 2.38 | % | | | | | | | | | | | 2.82 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Net interest income and net yield | | | | | | | | | | | | | | | | | | | | | | | | |
| on interest-earning assets (3) | | | | | | $ | 168,153 | | | | 2.86 | % | | | | | | $ | 192,514 | | | | 3.48 | % |
| (2) | Year to date June 30, 2008, includes short-term securities purchased under resale agreements. |
| (3) | Amounts calculated on a fully taxable equivalent basis using the current statutory federal tax rate. |
| (4) | Year to date June 30, 2008, amounts calculated on a fully taxable equivalent basis using the current statutory federal tax rate. |
EAST WEST BANCORP, INC.
QUARTERLY ALLOWANCE FOR LOAN LOSSES RECAP
(In thousands)
(unaudited)
| | | Quarter Ended | |
| | | 6/30/2009 | | | 3/31/2009 | | | 12/31/2008 | | | 9/30/2008 | | | 6/30/2008 | |
| LOANS | | | | | | | | | | | | | | | |
| Allowance balance, beginning of period | | $ | 195,450 | | | $ | 178,027 | | | $ | 177,155 | | | $ | 168,413 | | | $ | 117,120 | |
| Allowance for unfunded loan commitments and letters of credit | | | 1,442 | | | | (1,008 | ) | | | (625 | ) | | | 5,437 | | | | 1,136 | |
| Provision for loan losses | | | 151,423 | | | | 78,000 | | | | 43,000 | | | | 43,000 | | | | 85,000 | |
| Impact of desecuritization | | | 9,262 | | | | - | | | | - | | | | - | | | | - | |
| | | | | | | | | | | | | | | | | | | | | |
| Net Charge-offs: | | | | | | | | | | | | | | | | | | | | |
| Real estate - single family | | | 14,058 | | | | 3,832 | | | | 1,756 | | | | 1,022 | | | | 632 | |
| Real estate - multifamily | | | 2,256 | | | | 1,624 | | | | 524 | | | | 1,006 | | | | 436 | |
| Real estate - commercial | | | 12,472 | | | | 2,790 | | | | 750 | | | | 663 | | | | (3 | ) |
| Real estate - land | | | 33,183 | | | | 12,523 | | | | 9,039 | | | | 19,128 | | | | 16,337 | |
| Real estate - residential construction | | | 30,634 | | | | 16,347 | | | | 17,127 | | | | 13,557 | | | | 15,726 | |
| Real estate - commercial construction | | | 28,602 | | | | 1,977 | | | | - | | | | - | | | | - | |
| Commercial | | | 11,577 | | | | 18,146 | | | | 8,054 | | | | 3,474 | | | | 640 | |
| Trade finance | | | 774 | | | | 1,032 | | | | 4,026 | | | | 750 | | | | 922 | |
| Consumer | | | 320 | | | | 1,298 | | | | 227 | | | | 95 | | | | 153 | |
| Total net charge-offs | | | 133,876 | | | | 59,569 | | | | 41,503 | | | | 39,695 | | | | 34,843 | |
| Allowance balance, end of period | | $ | 223,700 | | | $ | 195,450 | | | $ | 178,027 | | | $ | 177,155 | | | $ | 168,413 | |
| | | | | | | | | | | | | | | | | | | | | |
| UNFUNDED LOAN COMMITMENTS AND LETTERS OF CREDIT: | | | | | | | | | | | | | |
| Allowance balance, beginning of period | | $ | 7,349 | | | $ | 6,341 | | | $ | 5,716 | | | $ | 11,153 | | | $ | 12,289 | |
| Provision for unfunded loan commitments and letters of credit | | | (1,442 | ) | | | 1,008 | | | | 625 | | | | (5,437 | ) | | | (1,136 | ) |
| Allowance balance, end of period | | $ | 5,907 | | | $ | 7,349 | | | $ | 6,341 | | | $ | 5,716 | | | $ | 11,153 | |
| GRAND TOTAL, END OF PERIOD | | $ | 229,607 | | | $ | 202,799 | | | $ | 184,368 | | | $ | 182,871 | | | $ | 179,566 | |
| | | | | | | | | | | | | | | | | | | | | |
| Nonperforming assets to total assets | | | 2.19 | % | | | 2.42 | % | | | 2.12 | % | | | 1.71 | % | | | 1.64 | % |
| Allowance for loan losses to total gross loans at end of period | | | 2.62 | % | | | 2.42 | % | | | 2.16 | % | | | 2.14 | % | | | 1.95 | % |
| Allowance for loan losses and unfunded loan commitments to total gross loans at end of period | | | 2.69 | % | | | 2.51 | % | | | 2.23 | % | | | 2.21 | % | | | 2.07 | % |
| Allowance to nonaccrual loans at end of period | | | 137.94 | % | | | 78.81 | % | | | 82.95 | % | | | 99.92 | % | | | 98.59 | % |
| Nonaccrual loans to total loans | | | 1.90 | % | | | 3.08 | % | | | 2.60 | % | | | 2.14 | % | | | 1.97 | % |
EAST WEST BANCORP, INC
TOTAL NON-PERFORMING ASSETS AS OF JUNE 30, 2009
(in thousands)
(unaudited)
| | | Total Nonaccrual Loans | | | | | | Total Modified or Restructured Loans | | | | | | | | | | |
| | | 90+ Days Delinquent | | | Under 90+ Days Delinquent | | | Total Nonaccrual Loans (1) | | | Modified or Restructured Loans | | | A/B Loans | | | Total Modified or Restructured Loans | | | REO Assets | | | Total Non-Performing Assets | |
| Loan Type | | | | | | | | | | | | | | | | | | | | | | | | |
| Real estate - single family | | $ | 5,181 | | | $ | - | | | $ | 5,181 | | | $ | 376 | | | $ | 14,121 | | | $ | 14,497 | | | $ | 4,921 | | | $ | 24,599 | |
| Real estate - multifamily | | | 7,938 | | | | - | | | | 7,938 | | | | 2,720 | | | | 46,418 | | | | 49,138 | | | | 281 | | | | 57,357 | |
| Real estate - commercial | | | 19,786 | | | | 4,590 | | | | 24,376 | | | | 2,178 | | | | 8,277 | | | | 10,455 | | | | 2,887 | | | | 37,718 | |
| Real estate - land | | | 35,660 | | | | 1,656 | | | | 37,316 | | | | - | | | | 375 | | | | 375 | | | | 13,307 | | | | 50,998 | |
| Real estate - residential construction | | | 46,176 | | | | - | | | | 46,176 | | | | - | | | | - | | | | - | | | | 4,154 | | | | 50,330 | |
| Real estate - commercial construction | | | 20,629 | | | | - | | | | 20,629 | | | | - | | | | 8,022 | | | | 8,022 | | | | - | | | | 28,651 | |
| Commercial | | | 8,034 | | | | 8,067 | | | | 16,101 | | | | 7,001 | | | | - | | | | 7,001 | | | | 626 | | | | 23,728 | |
| Trade Finance | | | 3,706 | | | | - | | | | 3,706 | | | | - | | | | - | | | | - | | | | 211 | | | | 3,917 | |
| Consumer | | | 339 | | | | 412 | | | | 751 | | | | - | | | | - | | | | - | | | | 801 | | | | 1,552 | |
| Total | | $ | 147,449 | | | $ | 14,725 | | | $ | 162,174 | | | | 12,275 | | | | 77,213 | | | | 89,488 | | | $ | 27,188 | | | $ | 278,850 | |
(1) Total TDR loans included in Nonaccrual loans $5,236.
EAST WEST BANCORP, INC
TOTAL NON-PERFORMING ASSETS AS OF MARCH 31, 2009
(in thousands)
(unaudited)
| | | Total Nonaccrual Loans | | | | | | | | | | | | | |
| | | 90+ Days Delinquent | | | Under 90+ Days Delinquent | | | Total Nonaccrual Loans (1) | | | Modified or Restructured Loans | | | REO Assets | | | Total Non- Performing Assets | |
| Loan Type | | | | | | | | | | | | | | | | | | |
| Real estate - single family | | $ | 18,515 | | | $ | 634 | | | $ | 19,149 | | | $ | 2,793 | | | $ | 671 | | | $ | 22,613 | |
| Real estate - multifamily | | | 9,863 | | | | - | | | | 9,863 | | | | 4,481 | | | | 887 | | | | 15,231 | |
| Real estate - commercial | | | 12,465 | | | | 42,724 | | | | 55,189 | | | | 3,270 | | | | 4,240 | | | | 62,699 | |
| Real estate - land | | | 63,052 | | | | 6,233 | | | | 69,285 | | | | - | | | | 17,934 | | | | 87,219 | |
| Real estate - residential construction | | | 28,433 | | | | 14,196 | | | | 42,629 | | | | - | | | | 13,278 | | | | 55,907 | |
| Real estate - commercial construction | | | 28,604 | | | | - | | | | 28,604 | | | | - | | | | - | | | | 28,604 | |
| Commercial | | | 16,798 | | | | 5,000 | | | | 21,798 | | | | 6,602 | | | | 1,236 | | | | 29,636 | |
| Trade Finance | | | 177 | | | | - | | | | 177 | | | | - | | | | 270 | | | | 447 | |
| Consumer | | | 839 | | | | 482 | | | | 1,321 | | | | - | | | | 118 | | | | 1,439 | |
| Total | | $ | 178,746 | | | $ | 69,269 | | | $ | 248,015 | | | $ | 17,146 | | | $ | 38,634 | | | $ | 303,795 | |
(1) Total TDR loans included in Nonaccrual loans $2,508.
EAST WEST BANCORP, INC
TOTAL NON-PERFORMING ASSETS AS OF DECEMBER 31, 2008
(in thousands)
(unaudited)
| | | Total Nonaccrual Loans | | | | | | | | | | | | | |
| | | 90+ Days Delinquent | | | Under 90+ Days Delinquent | | | Total Nonaccrual Loans (1) | | | Modified or Restructured Loans | | | REO Assets | | | Total Non- Performing Assets | |
| Loan Type | | | | | | | | | | | | | | | | | | |
| Real estate - single family | | $ | 13,519 | | | $ | - | | | $ | 13,519 | | | $ | 1,201 | | | $ | 419 | | | $ | 15,139 | |
| Real estate - multifamily | | | 11,845 | | | | - | | | | 11,845 | | | | 3,519 | | | | 1,136 | | | | 16,500 | |
| Real estate - commercial | | | 24,680 | | | | - | | | | 24,680 | | | | 2,406 | | | | 4,882 | | | | 31,968 | |
| Real estate - land | | | 66,185 | | | | 12,892 | | | | 79,077 | | | | - | | | | 10,307 | | | | 89,384 | |
| Real estate - residential construction | | | 27,052 | | | | 8,766 | | | | 35,818 | | | | - | | | | 21,146 | | | | 56,964 | |
| Real estate - commercial construction | | | 30,581 | | | | - | | | | 30,581 | | | | - | | | | - | | | | 30,581 | |
| Commercial | | | 6,570 | | | | 10,604 | | | | 17,174 | | | | 3,866 | | | | 142 | | | | 21,182 | |
| Trade Finance | | | 65 | | | | - | | | | 65 | | | | - | | | | 270 | | | | 335 | |
| Consumer | | | 1,654 | | | | 194 | | | | 1,848 | | | | - | | | | - | | | | 1,848 | |
| Total | | $ | 182,151 | | | $ | 32,456 | | | $ | 214,607 | | | $ | 10,992 | | | $ | 38,302 | | | $ | 263,901 | |
(1) Total TDR loans included in Nonaccrual loans $42.
EAST WEST BANCORP, INC
DELINQUENT LOANS BY LOAN CATEGORIES AS OF JUNE 30, 2009
(in thousands)
(unaudited)
| Loan Type | | 30-59 Days Delinquent | | | 60-89 Days Delinquent | | | 90+ Days Delinquent | | | Total Delinquent Loans | |
| Real estate - single family | | $ | 553 | | | $ | 6,775 | | | $ | 5,181 | | | $ | 12,509 | |
| Real estate - multifamily | | | 1,960 | | | | 5,618 | | | | 7,938 | | | | 15,516 | |
| Real estate - commercial | | | 33,416 | | | | 28,341 | | | | 19,786 | | | | 81,543 | |
| Real estate - land | | | 1,570 | | | | 22,190 | | | | 35,660 | | | | 59,420 | |
| Real estate - residential construction | | | 17,331 | | | | 6,789 | | | | 46,176 | | | | 70,296 | |
| Real estate - commercial construction | | | - | | | | - | | | | 20,629 | | | | 20,629 | |
| Commercial | | | 4,021 | | | | 19,480 | | | | 8,034 | | | | 31,535 | |
| Trade finance | | | - | | | | 408 | | | | 3,706 | | | | 4,114 | |
| Consumer | | | 244 | | | | 458 | | | | 339 | | | | 1,041 | |
| Total Delinquent Loans | | $ | 59,095 | | | $ | 90,059 | | | $ | 147,449 | | | $ | 296,603 | |
EAST WEST BANCORP, INC
DELINQUENT LOANS BY LOAN CATEGORIES AS OF MARCH 31, 2009
(in thousands)
(unaudited)
| Loan Type | | 30-59 Days Delinquent | | | 60-89 Days Delinquent | | | 90+ Days Delinquent | | | Total Delinquent Loans | |
| Real estate - single family | | $ | 31,105 | | | $ | 4,226 | | | $ | 18,515 | | | $ | 53,846 | |
| Real estate - multifamily | | | 17,310 | | | | 2,585 | | | | 9,863 | | | | 29,758 | |
| Real estate - commercial | | | 68,964 | | | | 25,929 | | | | 12,465 | | | | 107,358 | |
| Real estate - land | | | 12,835 | | | | 8,969 | | | | 63,052 | | | | 84,856 | |
| Real estate - residential construction | | | 31,166 | | | | 61,286 | | | | 28,433 | | | | 120,885 | |
| Real estate - commercial construction | | | 19,512 | | | | 4,545 | | | | 28,604 | | | | 52,661 | |
| Commercial | | | 4,317 | | | | 3,751 | | | | 16,798 | | | | 24,866 | |
| Trade finance | | | 4,123 | | | | 4,468 | | | | 177 | | | | 8,768 | |
| Consumer | | | 613 | | | | 110 | | | | 839 | | | | 1,562 | |
| Total Delinquent Loans | | $ | 189,945 | | | $ | 115,869 | | | $ | 178,746 | | | $ | 484,560 | |
EAST WEST BANCORP, INC
DELINQUENT LOANS BY LOAN CATEGORIES AS OF DECEMBER 31, 2008
(in thousands)
(unaudited)
| Loan Type | | 30-59 Days Delinquent | | | 60-89 Days Delinquent | | | 90+ Days Delinquent | | | Total Delinquent Loans | |
| Real estate - single family | | $ | 16,708 | | | $ | 6,237 | | | $ | 13,519 | | | $ | 36,464 | |
| Real estate - multifamily | | | 9,372 | | | | 2,382 | | | | 11,845 | | | | 23,599 | |
| Real estate - commercial | | | 21,036 | | | | 18,364 | | | | 24,680 | | | | 64,080 | |
| Real estate - land | | | 9,335 | | | | 19,002 | | | | 66,185 | | | | 94,522 | |
| Real estate - residential construction | | | 13,242 | | | | 9,379 | | | | 27,052 | | | | 49,673 | |
| Real estate - commercial construction | | | - | | | | - | | | | 30,581 | | | | 30,581 | |
| Commercial | | | 3,970 | | | | 13,918 | | | | 6,570 | | | | 24,458 | |
| Trade finance | | | 374 | | | | - | | | | 65 | | | | 439 | |
| Consumer | | | 1,326 | | | | 252 | | | | 1,654 | | | | 3,232 | |
| Total Delinquent Loans | | $ | 75,363 | | | $ | 69,534 | | | $ | 182,151 | | | $ | 327,048 | |
