10/21/2021 | Press release | Distributed by Public on 10/21/2021 07:57
Three Months Ended | Qtr-o-Qtr Change | Yr-o-Yr Change | |||
($ in millions) | September 30, 2021 | $ | % Ann. | $ | % |
Total Loans (incl. PPP) | $40,482 | $408 | 4% | $3,040 | 8% |
Total Loans (excl. PPP) | 39,674 | 1,034 | 11 | 4,005 | 11 |
Total Deposits | 53,356 | 774 | 6 | 11,676 | 28 |
Total Revenue | $469 | $24 | 21% | $90 | 24% |
Adj. Pre-tax Pre-provision Income1
|
302 | 19 | 26 | 78 | 35 |
Net Income | 225 | 1 | 1 | 66 | 41 |
1 See reconciliation of GAAP to non-GAAP financial measures in Table 12.
|
2 See reconciliation of GAAP to non-GAAP financial measures in Table 13.
|
3 See reconciliation of GAAP to non-GAAP financial measures in Table 13.
|
4 See reconciliation of GAAP to non-GAAP financial measures in Table 14.
|
5 See reconciliation of GAAP to non-GAAP financial measures in Table 12.
|
EWBC Risk-Based Capital Ratios | |||
($ in millions) |
September 30, 2021 (a)
|
June 30, 2021 (a)
|
September 30, 2020 (a)
|
CET1 capital ratio | 12.8% | 12.8% | 12.8% |
Tier 1 capital ratio | 12.8% | 12.8% | 12.8% |
Total capital ratio | 14.2% | 14.3% | 14.5% |
Leverage ratio | 8.8% | 9.1% | 9.8% |
Risk-Weighted Assets ("RWA") (b)
|
$42,128 | $40,609 | $36,922 |
EAST WEST BANCORP, INC. AND SUBSIDIARIES | |||||||||||
CONDENSED CONSOLIDATED BALANCE SHEET | |||||||||||
($ and shares in thousands, except per share data) | |||||||||||
(unaudited) | |||||||||||
Table 1 | |||||||||||
September 30, 2021 % or Basis Point Change |
|||||||||||
September 30, 2021 | June 30, 2021 | September 30, 2020 | Qtr-o-Qtr | Yr-o-Yr | |||||||
Assets | |||||||||||
Cash and due from banks | $ | 594,631 | $ | 626,716 | $ | 503,376 | (5.1) | % | 18.1 | % | |
Interest-bearing cash with banks | 4,258,270 | 5,371,089 | 4,003,565 | (20.7) | 6.4 | ||||||
Cash and cash equivalents | 4,852,901 | 5,997,805 | 4,506,941 | (19.1) | 7.7 | ||||||
Interest-bearing deposits with banks | 855,162 | 830,279 | 699,465 | 3.0 | 22.3 | ||||||
Assets purchased under resale agreements ("resale agreements") | 2,596,142 | 2,299,184 | 1,210,000 | 12.9 | 114.6 | ||||||
Available-for-sale ("AFS") debt securities (amortized cost of $9,783,180, $8,411,142 and $4,471,694) | 9,713,006 | 8,399,460 | 4,539,160 | 15.6 | 114.0 | ||||||
Federal Home Loan Bank ("FHLB") and Federal Reserve Bank ("FRB") stock
|
77,200 | 76,931 | 79,172 | 0.3 | (2.5) | ||||||
Loans held-for-sale ("HFS") | - | 1,819 | 4,148 | (100.0) | (100.0) | ||||||
Loans held-for-investment (''HFI'') (net of allowance for loan losses of $560,404, $585,724 and $618,252) | 39,921,301 | 39,485,775 | 36,818,877 | 1.1 | 8.4 | ||||||
Investments in qualified affordable housing partnerships, net
|
297,367 | 287,432 | 192,913 | 3.5 | 54.1 | ||||||
Investments in tax credit and other investments, net
|
367,428 | 364,187 | 254,512 | 0.9 | 44.4 | ||||||
Goodwill | 465,697 | 465,697 | 465,697 | - | - | ||||||
Operating lease right-of-use assets | 99,785 | 102,609 | 96,092 | (2.8) | 3.8 | ||||||
Other assets | 1,713,121 | 1,543,698 | 1,504,500 | 11.0 | 13.9 | ||||||
Total assets | $ | 60,959,110 | $ | 59,854,876 | $ | 50,371,477 | 1.8 | % | 21.0 | % | |
Liabilities and Stockholders' Equity | |||||||||||
Deposits | $ | 53,356,190 | $ | 52,582,575 | $ | 41,680,555 | 1.5 | % | 28.0 | % | |
Short-term borrowings | - | - | 59,613 | - | (100.0) | ||||||
FHLB advances | 248,898 | 248,464 | 657,185 | 0.2 | (62.1) | ||||||
Assets sold under repurchase agreements ("repurchase agreements") | 300,000 | 300,000 | 348,063 | - | (13.8) | ||||||
Long-term debt and finance lease liabilities | 151,795 | 151,997 | 1,579,317 |
(1)
|
(0.1) | (90.4) | |||||
Operating lease liabilities | 107,107 | 110,105 | 103,673 | (2.7) | 3.3 | ||||||
Accrued expenses and other liabilities | 1,104,919 | 914,187 | 816,965 | 20.9 | 35.2 | ||||||
Total liabilities | 55,268,909 | 54,307,328 | 45,245,371 | 1.8 | 22.2 | ||||||
Stockholders' equity | 5,690,201 | 5,547,548 | 5,126,106 | 2.6 | 11.0 | ||||||
Total liabilities and stockholders' equity | $ | 60,959,110 | $ | 59,854,876 | $ | 50,371,477 | 1.8 | % | 21.0 | % | |
Book value per common share | $ | 40.10 | $ | 39.10 | $ | 36.22 | 2.6 | % | 10.7 | % | |
Tangible equity (2) per common share
|
$ | 36.75 | $ | 35.75 | $ | 32.85 | 2.8 | 11.9 | |||
Number of common shares at period-end | 141,884 | 141,878 | 141,507 | 0.0 | 0.3 | ||||||
Tangible equity to tangible assets ratio (2)
|
8.62 | % | 8.54 | % | 9.32 | % | 8 | bps | (70) | bps | |
EAST WEST BANCORP, INC. AND SUBSIDIARIES | |||||||||||
TOTAL LOANS AND DEPOSITS DETAIL | |||||||||||
($ in thousands) | |||||||||||
(unaudited) | |||||||||||
Table 2 | |||||||||||
September 30, 2021 % Change |
|||||||||||
September 30, 2021 | June 30, 2021 | September 30, 2020 | Qtr-o-Qtr | Yr-o-Yr | |||||||
Loans: | |||||||||||
Commercial:
|
|||||||||||
Commercial and industrial ("C&I") (1)
|
$ | 13,831,649 | $ | 13,790,461 | $ | 13,305,024 | 0.3 | % | 4.0 | % | |
Commercial real estate ("CRE"):
|
|||||||||||
CRE
|
11,818,065 | 11,711,369 | 11,037,987 | 0.9 | 7.1 | ||||||
Multifamily residential
|
3,340,378 | 3,219,796 | 3,057,274 | 3.7 | 9.3 | ||||||
Construction and land
|
376,921 | 460,678 | 578,407 | (18.2) | (34.8) | ||||||
Total CRE
|
15,535,364 | 15,391,843 | 14,673,668 | 0.9 | 5.9 | ||||||
Consumer:
|
|||||||||||
Residential mortgage:
|
|||||||||||
Single-family residential
|
9,021,801 | 8,869,370 | 7,785,759 | 1.7 | 15.9 | ||||||
Home equity lines of credit ("HELOCs") | 1,963,622 | 1,872,166 | 1,514,388 | 4.9 | 29.7 | ||||||
Total residential mortgage
|
10,985,423 | 10,741,536 | 9,300,147 | 2.3 | 18.1 | ||||||
Other consumer
|
129,269 | 147,659 | 158,290 | (12.5) | (18.3) | ||||||
Total loans HFI (2)
|
40,481,705 |
|
40,071,499 |
|
37,437,129 | 1.0 | 8.1 | ||||
Loans HFS
|
- | 1,819 | 4,148 | (100.0) | (100.0) | ||||||
Total loans (2)
|
40,481,705 | 40,073,318 | 37,441,277 | 1.0 | 8.1 | ||||||
Allowance for loan losses | (560,404) | (585,724) | (618,252) | (4.3) | (9.4) | ||||||
Net loans (2)
|
$ | 39,921,301 | $ | 39,487,594 | $ | 36,823,025 | 1.1 | 8.4 | |||
Deposits:
|
|||||||||||
Noninterest-bearing demand
|
$ | 23,175,471 | $ | 21,816,721 | $ | 14,924,917 | 6.2 | % | 55.3 | % | |
Interest-bearing checking
|
6,530,601 | 6,762,178 | 5,731,573 | (3.4) | 13.9 | ||||||
Money market
|
12,555,879 | 12,853,812 | 9,553,574 | (2.3) | 31.4 | ||||||
Savings
|
2,855,597 | 2,719,106 | 2,401,318 | 5.0 | 18.9 | ||||||
Time deposits
|
8,238,642 | 8,430,758 | 9,069,173 | (2.3) | (9.2) | ||||||
Total deposits
|
$ | 53,356,190 | $ | 52,582,575 | $ | 41,680,555 | 1.5 | % | 28.0 | % | |
EAST WEST BANCORP, INC. AND SUBSIDIARIES | |||||||||||
CONDENSED CONSOLIDATED STATEMENT OF INCOME | |||||||||||
($ and shares in thousands, except per share data) | |||||||||||
(unaudited) | |||||||||||
Table 3 | |||||||||||
Three Months Ended |
September 30, 2021 % Change |
||||||||||
September 30, 2021 | June 30, 2021 | September 30, 2020 | Qtr-o-Qtr | Yr-o-Yr | |||||||
Interest and dividend income (1)
|
$ | 415,307 | $ | 399,333 | $ | 365,728 | 4.0 | % | 13.6 | % | |
Interest expense
|
19,601 | 22,860 | 41,598 | (14.3) | (52.9) | ||||||
Net interest income before provision for credit losses
|
395,706 | 376,473 | 324,130 | 5.1 | 22.1 | ||||||
(Reversal of) provision for credit losses | (10,000) | (15,000) | 10,000 | (33.3) | NM | ||||||
Net interest income after provision for credit losses
|
405,706 | 391,473 | 314,130 | 3.6 | 29.2 | ||||||
Noninterest income | 73,109 | 68,431 | 54,503 |
(2)
|
6.8 | 34.1 | |||||
Noninterest expense | 205,384 | 189,523 | 172,573 |
(2)
|
8.4 | 19.0 | |||||
Income before income taxes
|
273,431 | 270,381 | 196,060 | 1.1 | 39.5 | ||||||
Income tax expense
|
47,982 | 45,639 | 36,523 | 5.1 | 31.4 | ||||||
Net income
|
$ | 225,449 | $ | 224,742 | $ | 159,537 | 0.3 | % | 41.3 | % | |
Earnings per share ("EPS")
|
|||||||||||
- Basic
|
$ | 1.59 | $ | 1.58 | $ | 1.13 | 0.3 | % | 40.9 | % | |
- Diluted
|
$ | 1.57 | $ | 1.57 | $ | 1.12 | 0.2 | 40.2 | |||
Weighted-average number of shares outstanding
|
|||||||||||
- Basic
|
141,880 | 141,868 | 141,498 | 0.0 | % | 0.3 | % | ||||
- Diluted
|
143,143 | 143,040 | 142,043 | 0.1 | 0.8 | ||||||
Three Months Ended |
September 30, 2021 % Change |
||||||||||
September 30, 2021 | June 30, 2021 | September 30, 2020 | Qtr-o-Qtr | Yr-o-Yr | |||||||
Noninterest income:
|
|||||||||||
Lending fees
|
$ | 17,516 | $ | 21,092 | $ | 18,736 | (17.0) | % | (6.5) | % | |
Deposit account fees | 18,508 | 17,342 | 12,573 | 6.7 | 47.2 | ||||||
Interest rate contracts and other derivative income (loss) | 7,156 | (3,172) | 5,538 | (325.6) | 29.2 | ||||||
Foreign exchange income
|
13,101 | 13,007 | 3,310 | 0.7 | 295.8 | ||||||
Wealth management fees
|
5,598 | 7,951 | 4,553 | (29.6) | 23.0 | ||||||
Net gains on sales of loans
|
3,329 | 1,491 | 361 | 123.3 | 822.2 | ||||||
Gains on sales of AFS debt securities
|
354 | 632 | 698 | (44.0) | (49.3) | ||||||
Other investment income | 5,349 | 7,596 | 5,239 |
(2)
|
(29.6) | 2.1 | |||||
Other income
|
2,198 | 2,492 | 3,495 | (11.8) | (37.1) | ||||||
Total noninterest income | $ | 73,109 | $ | 68,431 | $ | 54,503 |
(2)
|
6.8 | % | 34.1 | % |
Noninterest expense:
|
|||||||||||
Compensation and employee benefits
|
$ | 105,751 | $ | 105,426 | $ | 99,756 | 0.3 | % | 6.0 | % | |
Occupancy and equipment expense
|
15,851 | 15,377 | 16,648 | 3.1 | (4.8) | ||||||
Deposit insurance premiums and regulatory assessments
|
4,641 | 4,274 | 4,006 | 8.6 | 15.9 | ||||||
Deposit account expense | 4,136 | 3,817 | 3,113 | 8.4 | 32.9 | ||||||
Data processing | 3,575 | 4,035 | 3,590 | (11.4) | (0.4) | ||||||
Computer software expense | 8,426 | 7,521 | 8,539 | 12.0 | (1.3) | ||||||
Consulting expense | 1,635 | 1,868 | 1,224 | (12.5) | 33.6 | ||||||
Legal expense
|
2,363 | 1,975 | 1,366 | 19.6 | 73.0 | ||||||
Other operating expense
|
20,998 | 17,939 | 17,122 | 17.1 | 22.6 | ||||||
Amortization of tax credit and other investments | 38,008 | 27,291 | 17,209 |
(2)
|
39.3 | 120.9 | |||||
Total noninterest expense | $ | 205,384 | $ | 189,523 | $ | 172,573 |
(2)
|
8.4 | % | 19.0 | % |
EAST WEST BANCORP, INC. AND SUBSIDIARIES | ||||||
CONDENSED CONSOLIDATED STATEMENT OF INCOME | ||||||
($ and shares in thousands, except per share data) | ||||||
(unaudited) | ||||||
Table 4 | ||||||
Nine Months Ended |
September 30, 2021 % Change |
|||||
September 30, 2021 | September 30, 2020 | Yr-o-Yr | ||||
Interest and dividend income (1)
|
$ | 1,196,026 | $ | 1,213,694 | (1.5)% | |
Interest expense
|
70,152 | 183,082 | (61.7) | |||
Net interest income before provision for credit losses
|
1,125,874 | 1,030,612 | 9.2 | |||
(Reversal of ) provision for credit losses | (25,000) | 186,313 | (113.4) | |||
Net interest income after provision for credit losses
|
1,150,874 | 844,299 | 36.3 | |||
Noninterest income | 214,406 | 165,715 |
(2)
|
29.4 | ||
Noninterest expense | 585,984 | 537,671 |
(2)
|
9.0 | ||
Income before income taxes
|
779,296 | 472,343 | 65.0 | |||
Income tax expense
|
124,111 | 68,630 | 80.8 | |||
Net income
|
$ | 655,185 | $ | 403,713 | 62.3% | |
EPS
|
||||||
- Basic
|
$ | 4.62 | $ | 2.83 | 63.2% | |
- Diluted
|
$ | 4.58 | $ | 2.82 | 62.3 | |
Weighted-average number of shares outstanding
|
||||||
- Basic
|
141,799 | 142,595 | (0.6)% | |||
- Diluted
|
143,051 | 143,082 | (0.0) | |||
Nine Months Ended |
September 30, 2021 % Change |
|||||
September 30, 2021 | September 30, 2020 | Yr-o-Yr | ||||
Noninterest income:
|
||||||
Lending fees
|
$ | 56,965 | $ | 56,455 | 0.9% | |
Deposit account fees
|
51,233 | 33,892 | 51.2 | |||
Interest rate contracts and other derivative income | 20,981 | 18,718 | 12.1 | |||
Foreign exchange income
|
35,634 | 15,691 | 127.1 | |||
Wealth management fees
|
20,460 | 12,997 | 57.4 | |||
Net gains on sales of loans
|
6,601 | 1,443 | 357.4 | |||
Gains on sales of AFS debt securities | 1,178 | 11,867 | (90.1) | |||
Other investment income | 13,870 | 6,652 |
(2)
|
108.5 | ||
Other income
|
7,484 | 8,000 | (6.5) | |||
Total noninterest income | $ | 214,406 | $ | 165,715 |
(2)
|
29.4% |
Noninterest expense:
|
||||||
Compensation and employee benefits
|
$ | 318,985 | $ | 298,671 | 6.8% | |
Occupancy and equipment expense
|
47,150 | 49,941 | (5.6) | |||
Deposit insurance premiums and regulatory assessments
|
12,791 | 11,133 | 14.9 | |||
Deposit account expense | 11,845 | 10,029 | 18.1 | |||
Data processing
|
12,088 | 11,896 | 1.6 | |||
Computer software expense
|
23,106 | 22,006 | 5.0 | |||
Consulting expense
|
4,978 | 3,854 | 29.2 | |||
Legal expense
|
5,840 | 6,093 | (4.2) | |||
Other operating expense
|
58,544 | 57,489 | 1.8 | |||
Amortization of tax credit and other investments | 90,657 | 57,819 |
(2)
|
56.8 | ||
Repurchase agreements' extinguishment cost | - | 8,740 | (100.0) | |||
Total noninterest expense | $ | 585,984 | $ | 537,671 |
(2)
|
9.0% |
EAST WEST BANCORP, INC. AND SUBSIDIARIES | ||||||||||||||
SELECTED AVERAGE BALANCES | ||||||||||||||
($ in thousands) | ||||||||||||||
(unaudited) | ||||||||||||||
Table 5 | ||||||||||||||
Three Months Ended |
September 30, 2021 % Change |
Nine Months Ended |
September 30, 2021 % Change |
|||||||||||
September 30, 2021 |
June 30, 2021 |
September 30, 2020 | Qtr-o-Qtr | Yr-o-Yr | September 30, 2021 | September 30, 2020 | Yr-o-Yr | |||||||
Loans:
|
||||||||||||||
Commercial:
|
||||||||||||||
C&I (1)
|
$ | 13,531,338 | $ | 13,811,966 | $ | 13,235,845 | (2.0)% | 2.2% | $ | 13,678,462 | $ | 12,988,486 | 5.3% | |
CRE: | ||||||||||||||
CRE
|
11,747,607 | 11,616,916 | 10,942,780 | 1.1 | 7.4 | 11,564,946 | 10,747,669 | 7.6 | ||||||
Multifamily residential
|
3,248,281 | 3,125,001 | 3,107,294 | 3.9 | 4.5 | 3,139,209 | 2,995,227 | 4.8 | ||||||
Construction and land
|
415,812 | 477,860 | 564,219 | (13.0) | (26.3) | 480,514 | 599,957 | (19.9) | ||||||
Total CRE
|
15,411,700 | 15,219,777 | 14,614,293 | 1.3 | 5.5 | 15,184,669 | 14,342,853 | 5.9 | ||||||
Consumer:
|
||||||||||||||
Residential mortgage:
|
||||||||||||||
Single-family residential
|
8,962,533 | 8,650,706 | 7,695,838 | 3.6 | 16.5 | 8,645,135 | 7,487,347 | 15.5 | ||||||
HELOCs
|
1,912,629 | 1,800,213 | 1,475,098 | 6.2 | 29.7 | 1,793,928 | 1,454,237 | 23.4 | ||||||
Total residential mortgage
|
10,875,162 | 10,450,919 | 9,170,936 | 4.1 | 18.6 | 10,439,063 | 8,941,584 | 16.7 | ||||||
Other consumer
|
141,951 | 139,608 | 139,371 | 1.7 | 1.9 | 139,557 | 214,936 | (35.1) | ||||||
Total loans (2)
|
$ | 39,960,151 | $ | 39,622,270 | $ | 37,160,445 | 0.9% | 7.5% | $ | 39,441,751 | $ | 36,487,859 | 8.1% | |
Interest-earning assets
|
$ | 58,239,480 | $ | 54,901,209 | $ | 47,428,586 | 6.1% | 22.8% | $ | 55,350,645 | $ | 45,076,734 | 22.8% | |
Total assets
|
$ | 61,359,533 | $ | 57,771,837 | $ | 50,247,259 | 6.2% | 22.1% | $ | 58,263,002 | $ | 47,753,030 | 22.0% | |
Deposits: | ||||||||||||||
Noninterest-bearing demand
|
$ | 23,169,323 | $ | 19,717,315 | $ | 14,296,475 | 17.5% | 62.1% | $ | 20,345,370 | $ | 12,987,813 | 56.6% | |
Interest-bearing checking
|
6,646,515 | 6,671,358 | 5,663,873 | (0.4) | 17.3 | 6,571,231 | 5,119,568 | 28.4 | ||||||
Money market
|
12,604,827 | 12,596,515 | 9,981,704 | 0.1 | 26.3 | 12,262,173 | 9,630,918 | 27.3 | ||||||
Savings
|
2,792,702 | 2,676,865 | 2,259,788 | 4.3 | 23.6 | 2,715,114 | 2,162,365 | 25.6 | ||||||
Time deposits
|
8,283,265 | 8,518,936 | 9,008,907 | (2.8) | (8.1) | 8,635,249 | 9,633,582 | (10.4) | ||||||
Total deposits
|
$ | 53,496,632 | $ | 50,180,989 | $ | 41,210,747 | 6.6% | 29.8% | $ | 50,529,137 | $ | 39,534,246 | 27.8% | |
Interest-bearing liabilities
|
$ | 31,039,410 | $ | 31,394,114 | $ | 29,552,756 | (1.1)% | 5.0% | $ | 31,099,675 | $ | 28,506,736 | 9.1% | |
Stockholders' equity
|
$ | 5,680,306 | $ | 5,425,952 | $ | 5,079,351 | 4.7% | 11.8% | $ | 5,482,705 | $ | 5,028,122 | 9.0% | |
EAST WEST BANCORP, INC. AND SUBSIDIARIES | |||||||||||||
QUARTER-TO-DATE AVERAGE BALANCES, YIELDS AND RATES | |||||||||||||
($ in thousands) | |||||||||||||
(unaudited) | |||||||||||||
Table 6 | |||||||||||||
Three Months Ended | |||||||||||||
September 30, 2021 | June 30, 2021 | ||||||||||||
Average | Average | Average | Average | ||||||||||
Balance | Interest |
Yield/Rate (1)
|
Balance | Interest |
Yield/Rate (1)
|
||||||||
Assets
|
|||||||||||||
Interest-earning assets:
|
|||||||||||||
Interest-bearing cash and deposits with banks
|
$ | 7,036,823 | $ | 4,521 | 0.25 | % | $ | 5,072,225 | $ | 3,628 | 0.29 | % | |
Resale agreements | 2,382,741 | 8,957 | 1.49 | % | 2,129,567 | 8,021 | 1.51 | % | |||||
AFS debt securities
|
8,782,682 | 37,826 | 1.71 | % | 7,997,005 | 34,690 | 1.74 | % | |||||
Loans (2)
|
39,960,151 | 363,503 | 3.61 | % | 39,622,270 | 352,453 | 3.57 | % | |||||
FHLB and FRB stock
|
77,083 | 500 | 2.57 | % | 80,142 | 541 | 2.71 | % | |||||
Total interest-earning assets
|
58,239,480 | 415,307 | 2.83 | % | 54,901,209 | 399,333 | 2.92 | % | |||||
Noninterest-earning assets:
|
|||||||||||||
Cash and due from banks
|
627,640 | 600,053 | |||||||||||
Allowance for loan losses | (584,827) | (607,523) | |||||||||||
Other assets
|
3,077,240 | 2,878,098 | |||||||||||
Total assets
|
$ | 61,359,533 | $ | 57,771,837 | |||||||||
Liabilities and Stockholders' Equity
|
|||||||||||||
Interest-bearing liabilities:
|
|||||||||||||
Checking deposits
|
$ | 6,646,515 | $ | 3,186 | 0.19 | % | $ | 6,671,358 | $ | 3,777 | 0.23 | % | |
Money market deposits
|
12,604,827 | 3,446 | 0.11 | % | 12,596,515 | 3,712 | 0.12 | % | |||||
Savings deposits
|
2,792,702 | 1,943 | 0.28 | % | 2,676,865 | 2,078 | 0.31 | % | |||||
Time deposits
|
8,283,265 | 7,395 | 0.35 | % | 8,518,936 | 8,431 | 0.40 | % | |||||
Federal funds purchased and other short-term borrowings
|
620 | - | - | % | 336 | - | - | % | |||||
FHLB advances
|
248,614 | 857 | 1.37 | % | 474,887 | 2,099 | 1.77 | % | |||||
Repurchase agreements | 310,997 | 2,012 | 2.57 | % | 303,118 | 1,991 | 2.63 | % | |||||
Long-term debt and finance lease liabilities
|
151,870 | 762 | 1.99 | % | 152,099 | 772 | 2.04 | % | |||||
Total interest-bearing liabilities
|
31,039,410 | 19,601 | 0.25 | % | 31,394,114 | 22,860 | 0.29 | % | |||||
Noninterest-bearing liabilities and stockholders' equity:
|
|||||||||||||
Demand deposits
|
23,169,323 | 19,717,315 | |||||||||||
Accrued expenses and other liabilities
|
1,470,494 | 1,234,456 | |||||||||||
Stockholders' equity
|
5,680,306 | 5,425,952 | |||||||||||
Total liabilities and stockholders' equity
|
$ | 61,359,533 | $ | 57,771,837 | |||||||||
Interest rate spread
|
2.58 | % | 2.63 | % | |||||||||
Net interest income and net interest margin
|
$ | 395,706 | 2.70 | % | $ | 376,473 | 2.75 | % | |||||
Adjusted net interest income and adjusted net interest margin (3)
|
$ | 380,494 | 2.64 | % | $ | 361,096 | 2.73 | % | |||||
EAST WEST BANCORP, INC. AND SUBSIDIARIES | |||||||||||||
QUARTER-TO-DATE AVERAGE BALANCES, YIELDS AND RATES | |||||||||||||
($ in thousands) | |||||||||||||
(unaudited) | |||||||||||||
Table 7 | |||||||||||||
Three Months Ended | |||||||||||||
September 30, 2021 | September 30, 2020 | ||||||||||||
Average | Average | Average | Average | ||||||||||
Balance | Interest |
Yield/Rate (1)
|
Balance | Interest |
Yield/Rate (1)
|
||||||||
Assets
|
|||||||||||||
Interest-earning assets:
|
|||||||||||||
Interest-bearing cash and deposits with banks
|
$ | 7,036,823 | $ | 4,521 | 0.25 | % | $ | 4,904,394 | $ | 5,045 | 0.41 | % | |
Resale agreements | 2,382,741 | 8,957 | 1.49 | % | 1,225,217 | 5,295 | 1.72 | % | |||||
AFS debt securities
|
8,782,682 | 37,826 | 1.71 | % | 4,059,456 | 18,493 | 1.81 | % | |||||
Loans (2)
|
39,960,151 | 363,503 | 3.61 | % | 37,160,445 | 336,542 | 3.60 | % | |||||
FHLB and FRB stock
|
77,083 | 500 | 2.57 | % | 79,074 | 353 | 1.78 | % | |||||
Total interest-earning assets
|
58,239,480 | 415,307 | 2.83 | % | 47,428,586 | 365,728 | 3.07 | % | |||||
Noninterest-earning assets:
|
|||||||||||||
Cash and due from banks
|
627,640 | 522,699 | |||||||||||
Allowance for loan losses | (584,827) | (632,216) | |||||||||||
Other assets
|
3,077,240 | 2,928,190 | |||||||||||
Total assets
|
$ | 61,359,533 | $ | 50,247,259 | |||||||||
Liabilities and Stockholders' Equity
|
|||||||||||||
Interest-bearing liabilities:
|
|||||||||||||
Checking deposits
|
$ | 6,646,515 | $ | 3,186 | 0.19 | % | $ | 5,663,873 | $ | 4,345 | 0.31 | % | |
Money market deposits
|
12,604,827 | 3,446 | 0.11 | % | 9,981,704 | 6,837 | 0.27 | % | |||||
Savings deposits
|
2,792,702 | 1,943 | 0.28 | % | 2,259,788 | 1,481 | 0.26 | % | |||||
Time deposits
|
8,283,265 | 7,395 | 0.35 | % | 9,008,907 | 21,135 | 0.93 | % | |||||
Federal funds purchased and other short-term borrowings
|
620 | - | - | % | 84,858 | 407 | 1.91 | % | |||||
FHLB advances
|
248,614 | 857 | 1.37 | % | 656,906 | 3,146 | 1.91 | % | |||||
Repurchase agreements | 310,997 | 2,012 | 2.57 | % | 317,097 | 2,155 | 2.70 | % | |||||
Long-term debt and finance lease liabilities
|
151,870 | 762 | 1.99 | % | 1,579,623 |
(3)
|
2,092 | 0.53 | % | ||||
Total interest-bearing liabilities
|
31,039,410 | 19,601 | 0.25 | % | 29,552,756 | 41,598 | 0.56 | % | |||||
Noninterest-bearing liabilities and stockholders' equity:
|
|||||||||||||
Demand deposits
|
23,169,323 | 14,296,475 | |||||||||||
Accrued expenses and other liabilities
|
1,470,494 | 1,318,677 | |||||||||||
Stockholders' equity
|
5,680,306 | 5,079,351 | |||||||||||
Total liabilities and stockholders' equity
|
$ | 61,359,533 | $ | 50,247,259 | |||||||||
Interest rate spread
|
2.58 | % | 2.51 | % | |||||||||
Net interest income and net interest margin
|
$ | 395,706 | 2.70 | % | $ | 324,130 | 2.72 | % | |||||
Adjusted net interest income and adjusted net interest margin (4)
|
$ | 380,494 | 2.64 | % | $ | 317,611 | 2.77 | % | |||||
EAST WEST BANCORP, INC. AND SUBSIDIARIES | |||||||||||||
YEAR-TO-DATE AVERAGE BALANCES, YIELDS AND RATES | |||||||||||||
($ in thousands) | |||||||||||||
(unaudited) | |||||||||||||
Table 8 | |||||||||||||
Nine Months Ended | |||||||||||||
September 30, 2021 | September 30, 2020 | ||||||||||||
Average | Average | Average | Average | ||||||||||
Balance | Interest |
Yield/Rate (1)
|
Balance | Interest |
Yield/Rate (1)
|
||||||||
Assets
|
|||||||||||||
Interest-earning assets:
|
|||||||||||||
Interest-bearing cash and deposits with banks
|
$ | 6,078,982 | $ | 11,781 | 0.26 | % | $ | 3,775,242 | $ | 20,717 | 0.73 | % | |
Resale agreements (2)
|
1,994,776 | 23,077 | 1.55 | % | 1,048,923 | 16,434 | 2.09 | % | |||||
AFS debt securities | 7,755,029 | 101,616 | 1.75 | % | 3,685,837 | 59,639 | 2.16 | % | |||||
Loans (3)
|
39,441,751 | 1,057,964 | 3.59 | % | 36,487,859 | 1,115,804 | 4.08 | % | |||||
FHLB and FRB stock
|
80,107 | 1,588 | 2.65 | % | 78,873 | 1,100 | 1.86 | % | |||||
Total interest-earning assets
|
55,350,645 | 1,196,026 | 2.89 | % | 45,076,734 | 1,213,694 | 3.60 | % | |||||
Noninterest-earning assets:
|
|||||||||||||
Cash and due from banks
|
602,830 | 510,750 | |||||||||||
Allowance for loan losses
|
(603,523) | (563,912) | |||||||||||
Other assets
|
2,913,050 | 2,729,458 | |||||||||||
Total assets
|
$ | 58,263,002 | $ | 47,753,030 | |||||||||
Liabilities and Stockholders' Equity
|
|||||||||||||
Interest-bearing liabilities:
|
|||||||||||||
Checking deposits
|
$ | 6,571,231 | $ | 11,177 | 0.23 | % | $ | 5,119,568 | $ | 19,995 | 0.52 | % | |
Money market deposits
|
12,262,173 | 11,869 | 0.13 | % | 9,630,918 | 37,178 | 0.52 | % | |||||
Savings deposits
|
2,715,114 | 5,762 | 0.28 | % | 2,162,365 | 4,743 | 0.29 | % | |||||
Time deposits
|
8,635,250 | 26,982 | 0.42 | % | 9,633,582 | 94,684 | 1.31 | % | |||||
Federal funds purchased and other short-term borrowings
|
1,871 | 42 | 3.00 | % | 128,846 | 1,228 | 1.27 | % | |||||
FHLB advances
|
457,273 | 6,025 | 1.76 | % | 667,935 | 10,655 | 2.13 | % | |||||
Repurchase agreements (2)
|
304,745 | 5,981 | 2.62 | % | 355,923 | 9,686 | 3.64 | % | |||||
Long-term debt and finance lease liabilities
|
152,018 | 2,314 | 2.04 | % | 807,599 |
(4)
|
4,913 | 0.81 | % | ||||
Total interest-bearing liabilities
|
31,099,675 | 70,152 | 0.30 | % | 28,506,736 | 183,082 | 0.86 | % | |||||
Noninterest-bearing liabilities and stockholders' equity:
|
|||||||||||||
Demand deposits
|
20,345,370 | 12,987,813 | |||||||||||
Accrued expenses and other liabilities
|
1,335,252 | 1,230,359 | |||||||||||
Stockholders' equity
|
5,482,705 | 5,028,122 | |||||||||||
Total liabilities and stockholders' equity
|
$ | 58,263,002 | $ | 47,753,030 | |||||||||
Interest rate spread
|
2.59 | % | 2.74 | % | |||||||||
Net interest income and net interest margin
|
$ | 1,125,874 | 2.72 | % | $ | 1,030,612 | 3.05 | % | |||||
Adjusted net interest income and adjusted net interest margin (5)
|
$ | 1,080,268 | 2.69 | % | $ | 1,003,267 | 3.05 | % | |||||
EAST WEST BANCORP, INC. AND SUBSIDIARIES | |||||||||||
SELECTED RATIOS | |||||||||||
(unaudited) | |||||||||||
Table 9 | |||||||||||
Three Months Ended (1)
|
September 30, 2021 Basis Point Change |
||||||||||
September 30, 2021 |
June 30, 2021 |
September 30, 2020 |
Qtr-o-Qtr | Yr-o-Yr | |||||||
Return on average assets
|
1.46 | % | 1.56 | % | 1.26 | % | (10) | bps | 20 | bps | |
Return on average equity
|
15.75 | % | 16.61 | % | 12.50 | % | (86) | 325 | |||
Return on average tangible equity (2)
|
17.25 | % | 18.28 | % | 13.88 | % | (103) | 337 | |||
Interest rate spread
|
2.58 | % | 2.63 | % | 2.51 | % | (5) | 7 | |||
Net interest margin
|
2.70 | % | 2.75 | % | 2.72 | % | (5) | (2) | |||
Adjusted net interest margin (2)
|
2.64 | % | 2.73 | % | 2.77 | % | (9) | (13) | |||
Average loan yield
|
3.61 | % | 3.57 | % | 3.60 | % | 4 | 1 | |||
Adjusted average loan yield (2)
|
3.56 | % | 3.58 | % | 3.70 | % | (2) | (14) | |||
Yield on average interest-earning assets
|
2.83 | % | 2.92 | % | 3.07 | % | (9) | (24) | |||
Average cost of interest-bearing deposits
|
0.21 | % | 0.24 | % | 0.50 | % | (3) | (29) | |||
Average cost of deposits
|
0.12 | % | 0.14 | % | 0.33 | % | (2) | (21) | |||
Average cost of funds
|
0.14 | % | 0.18 | % | 0.38 | % | (4) | (24) | |||
Adjusted pre-tax, pre-provision profitability ratio (2)
|
1.95 | % | 1.97 | % | 1.78 | % | (2) | 17 | |||
Adjusted noninterest expense/average assets (2)
|
1.08 | % | 1.12 | % | 1.22 | % | (4) | (14) | |||
Efficiency ratio
|
43.81 | % | 42.60 | % | 45.58 | % | 121 | (177) | |||
Adjusted efficiency ratio (2)
|
35.55 | % | 36.30 | % | 40.79 | % | (75) | bps | (524) | bps | |
Nine Months Ended (1)
|
September 30, 2021 Basis Point Change |
||||||||||
September 30, 2021 |
September 30, 2020 |
Yr-o-Yr | |||||||||
Return on average assets
|
1.50 | % | 1.13 | % | 37 | bps | |||||
Return on average equity
|
15.98 | % | 10.73 | % | 525 | ||||||
Return on average tangible equity (2)
|
17.56 | % | 11.95 | % | 561 | ||||||
Interest rate spread
|
2.59 | % | 2.74 | % | (15) | ||||||
Net interest margin
|
2.72 | % | 3.05 | % | (33) | ||||||
Adjusted net interest margin (2)
|
2.69 | % | 3.05 | % | (36) | ||||||
Average loan yield
|
3.59 | % | 4.08 | % | (49) | ||||||
Adjusted average loan yield (2)
|
3.58 | % | 4.10 | % | (52) | ||||||
Yield on average interest-earning assets
|
2.89 | % | 3.60 | % | (71) | ||||||
Average cost of interest-bearing deposits
|
0.25 | % | 0.79 | % | (54) | ||||||
Average cost of deposits
|
0.15 | % | 0.53 | % | (38) | ||||||
Average cost of funds
|
0.18 | % | 0.59 | % | (41) | ||||||
Adjusted pre-tax, pre-provision profitability ratio (2)
|
1.94 | % | 2.04 | % | (10) | ||||||
Adjusted noninterest expense/average assets (2)
|
1.13 | % | 1.31 | % | (18) | ||||||
Efficiency ratio
|
43.72 | % | 44.94 | % | (122) | ||||||
Adjusted efficiency ratio (2)
|
36.80 | % | 39.14 | % | (234) | bps | |||||
EAST WEST BANCORP, INC. AND SUBSIDIARIES | ||||||||||
ALLOWANCE FOR LOAN LOSSES & OFF-BALANCE-SHEET CREDIT EXPOSURES | ||||||||||
($ in thousands) | ||||||||||
(unaudited) | ||||||||||
Table 10 | ||||||||||
Three Months Ended September 30, 2021 | ||||||||||
Commercial | Consumer | |||||||||
C&I | Total CRE | Total Residential Mortgage | Other Consumer | Total | ||||||
Allowance for loan losses, June 30, 2021 | $ | 362,528 | $ | 199,530 | $ | 19,468 | $ | 4,198 | $ | 585,724 |
(Reversal of) provision for credit losses on loans | (a) | (23,365) | 8,527 | 2,972 | 130 | (11,736) | ||||
Gross charge-offs | (1,154) | (16,903) | (912) | (10) | (18,979) | |||||
Gross recoveries | 4,203 | 1,106 | 156 | - | 5,465 | |||||
Total net recoveries (charge-offs) | 3,049 | (15,797) | (756) | (10) | (13,514) | |||||
Foreign currency translation adjustment | (70) | - | - | - | (70) | |||||
Allowance for loan losses, September 30, 2021 | $ | 342,142 | $ | 192,260 | $ | 21,684 | $ | 4,318 | $ | 560,404 |
Three Months Ended June 30, 2021 | ||||||||||
Commercial | Consumer | |||||||||
C&I | Total CRE | Total Residential Mortgage | Other Consumer | Total | ||||||
Allowance for loan losses, March 31, 2021 | $ | 394,084 | $ | 192,895 | $ | 18,509 | $ | 2,018 | $ | 607,506 |
(Reversal of) provision for credit losses on loans | (a) | (22,586) | 10,747 | 859 | 2,209 | (8,771) | ||||
Gross charge-offs | (10,572) | (4,456) | - | (32) | (15,060) | |||||
Gross recoveries | 1,338 | 344 | 100 | 3 | 1,785 | |||||
Total net (charge-offs) recoveries | (9,234) | (4,112) | 100 | (29) | (13,275) | |||||
Foreign currency translation adjustment | 264 | - | - | - | 264 | |||||
Allowance for loan losses, June 30, 2021 | $ | 362,528 | $ | 199,530 | $ | 19,468 | $ | 4,198 | $ | 585,724 |
Three Months Ended September 30, 2020 | ||||||||||
Commercial | Consumer | |||||||||
C&I | Total CRE | Total Residential Mortgage | Other Consumer | Total | ||||||
Allowance for loan losses, June 30, 2020 | $ | 380,723 | $ | 219,649 | $ | 29,181 | $ | 2,518 | $ | 632,071 |
Provision for (reversal of) credit losses on loans | (a) | 31,691 | (18,397) | (3,329) | (76) | 9,889 | ||||
Gross charge-offs | (25,111) | (1,414) | - | (124) | (26,649) | |||||
Gross recoveries | 1,218 | 1,180 | 43 | - | 2,441 | |||||
Total net (charge-offs) recoveries | (23,893) | (234) | 43 | (124) | (24,208) | |||||
Foreign currency translation adjustment | 500 | - | - | - | 500 | |||||
Allowance for loan losses, September 30, 2020 | $ | 389,021 | $ | 201,018 | $ | 25,895 | $ | 2,318 | $ | 618,252 |
EAST WEST BANCORP, INC. AND SUBSIDIARIES | ||||||||||
ALLOWANCE FOR LOAN LOSSES & OFF-BALANCE-SHEET CREDIT EXPOSURES | ||||||||||
($ in thousands) | ||||||||||
(unaudited) | ||||||||||
Table 10 (continued) | ||||||||||
Nine Months Ended September 30, 2021 | ||||||||||
Commercial | Consumer | |||||||||
C&I | Total CRE | Total Residential Mortgage | Other Consumer | Total | ||||||
Allowance for loan losses, December 31, 2020 | $ | 398,040 | $ | 201,603 | $ | 18,210 | $ | 2,130 | $ | 619,983 |
(Reversal of) provision for credit losses on loans | (a) | (42,112) | 16,198 | 4,229 | 2,226 | (19,459) | ||||
Gross charge-offs | (20,162) | (28,642) | (1,091) | (43) | (49,938) | |||||
Gross recoveries | 6,301 | 3,101 | 336 | 5 | 9,743 | |||||
Total net charge-offs | (13,861) | (25,541) | (755) | (38) | (40,195) | |||||
Foreign currency translation adjustment | 75 | - | - | - | 75 | |||||
Allowance for loan losses, September 30, 2021 | $ | 342,142 | $ | 192,260 | $ | 21,684 | $ | 4,318 | $ | 560,404 |
Nine Months Ended September 30, 2020 | ||||||||||
Commercial | Consumer | |||||||||
C&I | Total CRE | Total Residential Mortgage | Other Consumer | Total | ||||||
Allowance for loan losses, December 31, 2019 | $ | 238,376 | $ | 82,739 | $ | 33,792 | $ | 3,380 | $ | 358,287 |
Impact of ASU 2016-13 adoption | 74,237 | 54,168 | (5,468) | 2,221 | 125,158 | |||||
Allowance for loan losses, January 1, 2020 | $ | 312,613 | $ | 136,907 | $ | 28,324 | $ | 5,601 | $ | 483,445 |
Provision for (reversal of) credit losses on loans | (a) | 130,171 | 54,550 | (2,679) | (3,197) | 178,845 | ||||
Gross charge-offs | (57,466) | (2,688) | (221) | (180) | (60,555) | |||||
Gross recoveries | 3,395 | 12,249 | 471 | 94 | 16,209 | |||||
Total net (charge-offs) recoveries | (54,071) | 9,561 | 250 | (86) | (44,346) | |||||
Foreign currency translation adjustment | 308 | - | - | - | 308 | |||||
Allowance for loan losses, September 30, 2020 | $ | 389,021 | $ | 201,018 | $ | 25,895 | $ | 2,318 | $ | 618,252 |
Three Months Ended | Nine Months Ended | ||||||||||
September 30, 2021 |
June 30, 2021 |
September 30, 2020 |
September 30, 2021 |
September 30, 2020 |
|||||||
Unfunded Credit Facilities | |||||||||||
Allowance for unfunded credit commitments, beginning of period (1)
|
$ | 26,300 | $ | 32,529 | $ | 28,972 | $ | 33,577 | $ | 11,158 | |
Impact of ASU 2016-13 adoption | - | - | - | - | 10,457 | ||||||
Provision for (reversal of) credit losses on unfunded credit commitments | (b) | 1,736 | (6,229) | 111 | (5,541) | 7,468 | |||||
Allowance for unfunded credit commitments, end of period (1)
|
$ | 28,036 | $ | 26,300 | $ | 29,083 | $ | 28,036 | $ | 29,083 | |
(Reversal of) provision for credit losses | (a)+(b) | $ | (10,000) | $ | (15,000) | $ | 10,000 | $ | (25,000) | $ | 186,313 |
EAST WEST BANCORP, INC. AND SUBSIDIARIES | ||||||
CRITICIZED LOANS, NONPERFORMING ASSETS AND CREDIT QUALITY RATIOS | ||||||
($ in thousands) | ||||||
(unaudited) | ||||||
Table 11 | ||||||
Criticized Loans | September 30, 2021 | June 30, 2021 | September 30, 2020 | |||
Special mention loans | $ | 448,497 | $ | 386,807 | $ | 722,920 |
Classified loans | 561,787 | 645,180 | 758,496 | |||
Total criticized loans | $ | 1,010,284 | $ | 1,031,987 | $ | 1,481,416 |
Nonperforming Assets
|
September 30, 2021 | June 30, 2021 | September 30, 2020 | |||
Nonaccrual loans: | ||||||
Commercial: | ||||||
C&I | $ | 97,157 | $ | 83,225 | $ | 145,986 |
Total CRE | 15,359 | 81,573 | 59,724 | |||
Consumer: | ||||||
Total residential mortgage | 18,153 | 30,489 | 28,289 | |||
Other consumer | 2,491 | 2,503 | 2,495 | |||
Total nonaccrual loans | 133,160 | 197,790 | 236,494 | |||
Other real estate owned, net | 28,800 | 14,914 | 19,504 | |||
Other nonperforming assets | 10,681 | 13,025 | 3,890 | |||
Total nonperforming assets | $ | 172,641 | $ | 225,729 | $ | 259,888 |
Credit Quality Ratios | September 30, 2021 | June 30, 2021 | September 30, 2020 | |||
Annualized quarterly net charge-offs to average loans HFI
|
0.13 | % | 0.13 | % | 0.26 | % |
Special mention loans to loans HFI | 1.11 | % | 0.97 | % | 1.93 | % |
Classified loans to loans HFI | 1.39 | % | 1.61 | % | 2.03 | % |
Criticized loans to loans HFI | 2.50 | % | 2.58 | % | 3.96 | % |
Nonperforming assets to total assets | 0.28 | % | 0.38 | % | 0.52 | % |
Nonaccrual loans to loans HFI | 0.33 | % | 0.49 | % | 0.63 | % |
Allowance for loan losses to loans HFI | 1.38 | % | 1.46 | % | 1.65 | % |
EAST WEST BANCORP, INC. AND SUBSIDIARIES | |||||||
GAAP TO NON-GAAP RECONCILIATION | |||||||
($ in thousands) | |||||||
(unaudited) | |||||||
Table 12 | |||||||
Adjusted efficiency ratio represents adjusted noninterest expense divided by revenue. Adjusted pre-tax, pre-provision profitability ratio represents revenue less adjusted noninterest expense, divided by average total assets. Adjusted noninterest expense excludes the amortization of tax credit and other investments, the amortization of core deposit intangibles and the extinguishment cost on repurchase agreements. Management believes that the measures and ratios presented below provide clarity to financial statement users regarding the ongoing performance of the Company and allow comparability to prior periods. | |||||||
Three Months Ended | |||||||
September 30, 2021 | June 30, 2021 | September 30, 2020 | |||||
Net interest income before provision for credit losses | (a) | $ | 395,706 | $ | 376,473 | $ | 324,130 |
Total noninterest income (1)
|
73,109 | 68,431 | 54,503 | ||||
Total revenue | (b) | $ | 468,815 | $ | 444,904 | $ | 378,633 |
Total noninterest expense (1)
|
(c) | $ | 205,384 | $ | 189,523 | $ | 172,573 |
Less: Amortization of tax credit and other investments (1)
|
(38,008) | (27,291) | (17,209) | ||||
Amortization of core deposit intangibles | (705) | (710) | (927) | ||||
Adjusted noninterest expense | (d) | $ | 166,671 | $ | 161,522 | $ | 154,437 |
Efficiency ratio | (c)/(b) | 43.81 | % | 42.60 | % | 45.58 | % |
Adjusted efficiency ratio | (d)/(b) | 35.55 | % | 36.30 | % | 40.79 | % |
Adjusted pre-tax, pre-provision income | (b)-(d) = (e) | $ | 302,144 | $ | 283,382 | $ | 224,196 |
Average total assets | (f) | $ | 61,359,533 | $ | 57,771,837 | $ | 50,247,259 |
Adjusted pre-tax, pre-provision profitability ratio (2)
|
(e)/(f) | 1.95 | % | 1.97 | % | 1.78 | % |
Adjusted noninterest expense/average assets (2)
|
(d)/(f) | 1.08 | % | 1.12 | % | 1.22 | % |
Nine Months Ended | |||||||
September 30, 2021 | September 30, 2020 | ||||||
Net interest income before provision for credit losses | (g) | $ | 1,125,874 | $ | 1,030,612 | ||
Total noninterest income (1)
|
214,406 | 165,715 | |||||
Total revenue | (h) | $ | 1,340,280 | $ | 1,196,327 | ||
Total noninterest expense (1)
|
(i) | $ | 585,984 | $ | 537,671 | ||
Less: Amortization of tax credit and other investments (1)
|
(90,657) | (57,819) | |||||
Amortization of core deposit intangibles | (2,147) | (2,811) | |||||
Repurchase agreements' extinguishment cost | - | (8,740) | |||||
Adjusted noninterest expense | (j) | $ | 493,180 | $ | 468,301 | ||
Efficiency ratio | (i)/(h) | 43.72 | % | 44.94 | % | ||
Adjusted efficiency ratio | (j)/(h) | 36.80 | % | 39.14 | % | ||
Adjusted pre-tax, pre-provision income | (h)-(j) = (k) | $ | 847,100 | $ | 728,026 | ||
Average total assets | (l) | $ | 58,263,002 | $ | 47,753,030 | ||
Adjusted pre-tax, pre-provision profitability ratio (2)
|
(k)/(l) | 1.94 | % | 2.04 | % | ||
Adjusted noninterest expense/average assets (2)
|
(j)/(l) | 1.13 | % | 1.31 | % | ||
EAST WEST BANCORP, INC. AND SUBSIDIARIES | |||||||
GAAP TO NON-GAAP RECONCILIATION | |||||||
($ in thousands) | |||||||
(unaudited) | |||||||
Table 13 | |||||||
The Company uses certain non-GAAP financial measures to provide supplemental information regarding the Company's performance. Tangible equity and tangible equity to tangible assets ratio are non-GAAP financial measures. Tangible equity and tangible assets represent stockholders' equity and total assets, respectively, which have been reduced by goodwill and other intangible assets. Given that the use of such measures and ratios is more prevalent in the banking industry, and such measures and ratios are used by banking regulators and analysts, the Company has included them below for discussion.
|
|||||||
September 30, 2021 | June 30, 2021 | September 30, 2020 | |||||
Stockholders' equity | (a) | $ | 5,690,201 | $ | 5,547,548 | $ | 5,126,106 |
Less: Goodwill | (465,697) | (465,697) | (465,697) | ||||
Other intangible assets (1)
|
(9,849) | (10,309) | (12,369) | ||||
Tangible equity | (b) | $ | 5,214,655 | $ | 5,071,542 | $ | 4,648,040 |
Total assets | (c) | $ | 60,959,110 | $ | 59,854,876 | $ | 50,371,477 |
Less: Goodwill | (465,697) | (465,697) | (465,697) | ||||
Other intangible assets (1)
|
(9,849) | (10,309) | (12,369) | ||||
Tangible assets | (d) | $ | 60,483,564 | $ | 59,378,870 | $ | 49,893,411 |
Total stockholders' equity to total assets ratio | (a)/(c) | 9.33 | % | 9.27 | % | 10.18 | % |
Tangible equity to tangible assets ratio | (b)/(d) | 8.62 | % | 8.54 | % | 9.32 | % |
Return on average tangible equity represents tangible net income divided by average tangible equity. Tangible net income excludes the after-tax impacts of the amortization of core deposit intangibles and mortgage servicing assets. Given that the use of such measures and ratios is more prevalent in the banking industry, and such measures and ratios are used by banking regulators and analysts, the Company has included them below for discussion. | |||||||||||
Three Months Ended | Nine Months Ended | ||||||||||
September 30, 2021 |
June 30, 2021 |
September 30, 2020 |
September 30, 2021 |
September 30, 2020 |
|||||||
Net Income | $ | 225,449 | $ | 224,742 | $ | 159,537 | $ | 655,185 | $ | 403,713 | |
Add: Amortization of core deposit intangibles
|
705 | 710 | 927 | 2,147 | 2,811 | ||||||
Amortization of mortgage servicing assets
|
430 | 420 | 450 | 1,264 | 1,492 | ||||||
Tax effect of amortization adjustments (2)
|
(322) | (321) | (390) | (968) | (1,220) | ||||||
Tangible net income | (e) | $ | 226,262 | $ | 225,551 | $ | 160,524 | $ | 657,628 | $ | 406,796 |
Average stockholders' equity | $ | 5,680,306 | $ | 5,425,952 | $ | 5,079,351 | $ | 5,482,705 | $ | 5,028,122 | |
Less: Average goodwill | (465,697) | (465,697) | (465,697) | (465,697) | (465,697) | ||||||
Average other intangible assets (1)
|
(10,135) | (10,827) | (13,083) | (10,847) | (14,302) | ||||||
Average tangible equity | (f) | $ | 5,204,474 | $ | 4,949,428 | $ | 4,600,571 | $ | 5,006,161 | $ | 4,548,123 |
Return on average tangible equity (3)
|
(e)/(f) | 17.25 | % | 18.28 | % | 13.88 | % | 17.56 | % | 11.95 | % |
EAST WEST BANCORP, INC. AND SUBSIDIARIES | |||||||||||
GAAP TO NON-GAAP RECONCILIATION | |||||||||||
($ in thousands) | |||||||||||
(unaudited) | |||||||||||
Table 14 | |||||||||||
In April 2020, the Company started accepting applications under the PPP administered by the Small Business Administration ("SBA") under the Coronavirus Aid, Relief, and Economic Security Act and began to originate loans to qualified small businesses. In January 2021, the Company began processing applications under the second round of the SBA's PPP in response to the Consolidated Appropriations Act, 2021 signed by the President on December 27, 2020. The PPP ended on May 31, 2021.
These loans are included in the Company's C&I portfolio, have an interest rate of one percent and are 100% guaranteed by the SBA. Loan processing fees paid to the Company from the SBA are accounted for as loan origination fees, where net deferred fees are recognized on a straight line basis over the estimated life of the loan as a yield adjustment on the loans. If a loan is paid off or forgiven by the SBA prior to its projected estimated life, the remaining unamortized deferred fees will be recognized as interest income in that period. The Company drew down $1.44 billion from the PPPLF during the second quarter of 2020. The remaining balance of $1.43 billion as of September 2020 was repaid in full during the fourth quarter of 2020.
Adjusted loan yield and adjusted net interest margin for the three and nine months ended September 30, 2021 and 2020, and three months ended June 30, 2020 exclude the impact of PPP loans. Net interest margin for the three and nine months ended September 30, 2020 has also been adjusted for advances from the PPPLF. Management believes that presenting the adjusted average loan yield and adjusted net interest margin provide comparability to prior periods and these non-GAAP financial measures provide supplemental information regarding the Company's performance.
|
|||||||||||
Three Months Ended | Nine Months Ended | ||||||||||
Yield on Average Loans |
September 30, 2021 |
June 30, 2021 |
September 30, 2020 |
September 30, 2021 |
September 30, 2020 |
||||||
Interest income on loans | (a) | $ | 363,503 | $ | 352,453 | $ | 336,542 | $ | 1,057,964 | $ | 1,115,804 |
Less: Interest income on PPP loans
|
(15,212) | (15,377) | (7,778) | (45,606) | (29,067) | ||||||
Adjusted interest income on loans | (b) | $ | 348,291 | $ | 337,076 | $ | 328,764 | $ | 1,012,358 | $ | 1,086,737 |
Average loans | (c) | $ | 39,960,151 | $ | 39,622,270 | $ | 37,160,445 | $ | 39,441,751 | $ | 36,487,859 |
Less: Average PPP loans | (1,111,404) | (1,870,385) | (1,764,411) | (1,634,617) | (1,078,985) | ||||||
Adjusted average loans | (d) | $ | 38,848,747 | $ | 37,751,885 | $ | 35,396,034 | $ | 37,807,134 | $ | 35,408,874 |
Average loan yield (1)
|
(a)/(c) | 3.61 | % | 3.57 | % | 3.60 | % | 3.59 | % | 4.08 | % |
Adjusted average loan yield (1)
|
(b)/(d) | 3.56 | % | 3.58 | % | 3.70 | % | 3.58 | % | 4.10 | % |
Net Interest Margin | |||||||||||
Net interest income before provision for credit losses | (e) | $ | 395,706 | $ | 376,473 | $ | 324,130 | $ | 1,125,874 | $ | 1,030,612 |
Less: Interest income on PPP loans
|
(15,212) | (15,377) | (7,778) | (45,606) | (29,067) | ||||||
Add: Interest expense on advances from the PPPLF | - | - | 1,259 | - | 1,722 | ||||||
Adjusted net interest income | (f) | $ | 380,494 | $ | 361,096 | $ | 317,611 | $ | 1,080,268 | $ | 1,003,267 |
Average interest-earning assets | (g) | $ | 58,239,480 | $ | 54,901,209 | $ | 47,428,586 | $ | 55,350,645 | $ | 45,076,734 |
Less: Average PPP loans | (1,111,404) | (1,870,385) | (1,764,411) | (1,634,617) | (1,078,985) | ||||||
Adjusted average interest-earning assets
|
(h) | $ | 57,128,076 | $ | 53,030,824 | $ | 45,664,175 | $ | 53,716,028 | $ | 43,997,749 |
Net interest margin (1)
|
(e)/(g) | 2.70 | % | 2.75 | % | 2.72 | % | 2.72 | % | 3.05 | % |
Adjusted net interest margin (1)
|
(f)/(h) | 2.64 | % | 2.73 | % | 2.77 | % | 2.69 | % | 3.05 | % |