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East West Bancorp Reports Net Income for Full Year 2023 of $1.2 Billion and Diluted Earnings Per Share of $8.18; Increases Dividend by 15%

East West Bancorp, Inc. (“East West” or the “Company”) (Nasdaq: EWBC), parent company of East West Bank, reported its financial results for the full year and fourth quarter of 2023. Full year 2023 net income was $1.2 billion, or $8.18 per diluted share. Excluding $70 million pre-tax of FDIC Special Assessment-related expense (the “FDIC charge”) and $7 million of net losses on an AFS debt security, adjusted diluted earnings per share1 for the year were $8.56.

Fourth quarter 2023 net income was $239 million, or $1.69 per diluted share. Excluding the FDIC charge and a $3 million gain on the sale of an AFS debt security, adjusted earnings per diluted share were $2.02 for the fourth quarter. Return on average common equity was 18% in 2023, and book value per share grew 17% year-over-year.

“I am pleased to report that 2023 was another year of record revenue and earnings for East West,” stated Dominic Ng, Chairman and Chief Executive Officer of East West. “As I look back I am very proud of our strong performance, marked by an over 20% adjusted return on average tangible common equity and 18% growth in tangible book value per share. East West demonstrated the resilience of our business model and the loyalty of our customers through a tumultuous year.”2

“Thanks to the unwavering dedication of our colleagues to clients and the strength and diversification of our balance sheet, East West has emerged even stronger from the market disruption that characterized 2023. As we start a new year, we are pleased to announce a 15% increase in our common stock dividend. We remain committed to delivering top-tier shareholder returns, supported by prudent balance sheet growth, industry-leading efficiency, and sound risk management.”

FINANCIAL HIGHLIGHTS

 

 

 

 

 

 

 

 

 

 

 

Twelve Months Ended December 31,

 

Year-over-Year Change

($ in millions, except per share data)

 

2023

 

2022

 

$

 

%

 

 

 

 

 

 

 

 

 

Revenue

 

$2,608

 

$2,345

 

$263

 

11%

Adjusted Pre-tax, Pre-provision Income3

 

1,788

 

1,600

 

187

 

12

Net Income

 

1,161

 

1,128

 

33

 

3

Diluted Earnings per Share

 

$8.18

 

$7.92

 

$0.26

 

3%

Adjusted Diluted Earnings per Share1

 

$8.56

 

$7.92

 

$0.64

 

8%

Book Value per Share

 

$49.64

 

$42.46

 

$7.18

 

17%

Tangible Book Value2 per Share

 

$46.27

 

$39.10

 

$7.17

 

18%

Return on Average Common Equity

 

17.91%

 

19.51%

 

-160 bps

 

Adjusted Return on Average Tangible Common Equity2

 

20.25%

 

21.29%

 

-104 bps

 

Total Assets

 

$69,613

 

$64,112

 

$5,501

 

9%

 

1

Adjusted diluted earnings per share is a non-GAAP financial measure. See reconciliation of GAAP to non-GAAP measures in Table 15.

2

Adjusted return on average tangible common equity and tangible book value are non-GAAP financial measures. See reconciliation of GAAP to non-GAAP measures in Table 14.

3

Adjusted pre-tax, pre-provision income is a non-GAAP financial measure. See reconciliation of GAAP to non-GAAP financial measures in Table 13.

BALANCE SHEET

  • Total Assets – Total assets were $69.6 billion as of December 31, 2023, an increase of $1.3 billion from $68.3 billion as of September 30, 2023, primarily reflecting loan growth. Year-over-year, total assets grew $5.5 billion or 9% from $64.1 billion as of December 31, 2022.



    Fourth quarter 2023 average interest-earning assets of $65.5 billion were up nearly $0.5 billion, or 1%, from $65.1 billion in the third quarter of 2023, primarily due to an increase of $1.4 billion in average loans outstanding, partly offset by a $0.9 billion decrease in interest-bearing cash and deposits with banks.
  • Total Loans – Total loans reached a record $52.2 billion as of December 31, 2023, an increase of $1.3 billion, or 3%, from $50.9 billion as of September 30, 2023. Year-over-year, total loans were up $4.0 billion, or 8%, from $48.2 billion as of December 31, 2022.



    Fourth quarter 2023 average loans of $51.3 billion grew $1.4 billion, or 3%, from the third quarter of 2023. The increase was driven by growth across all our major loan portfolios.
  • Total Deposits – Total deposits were $56.1 billion as of December 31, 2023, an increase of $1.0 billion, or 2%, from $55.1 billion as of September 30, 2023, primarily reflecting an increase in customer deposits. Noninterest-bearing deposits made up 28% of our total deposits as of December 31, 2023, down from 29% as of September 30, 2023. Year-over-year, total deposits increased $125 million from $56.0 billion as of December 31, 2022.



    Fourth quarter 2023 average deposits of $55.4 billion increased $208 million from the third quarter of 2023, with growth in average money market and time deposits offset by declines in other deposit categories.
  • Strong Capital Levels – As of December 31, 2023, stockholders’ equity was $7.0 billion, up 5% quarter-over-quarter. The stockholders’ equity to asset ratio was 9.98% as of December 31, 2023, an increase of 32 basis points quarter-over-quarter.



    As of December 31, 2023, tangible book value2 per share was $46.27, up 7% quarter-over-quarter and 18% year-over-year. The tangible common equity ratio2 was 9.37%, an increase of 34 basis points quarter-over-quarter.



    All of East West’s regulatory capital ratios are well in excess of regulatory requirements for well-capitalized institutions, as well as above regional and national bank averages. The common equity tier 1 (“CET1”) capital ratio increased to 13.31%, and the total risk-based capital ratio increased slightly by 3 basis points to 14.76%, as of December 31, 2023.

OPERATING RESULTS

Full Year Earnings - Full year 2023 net income was a record $1.2 billion or $8.18 per diluted share, both up 3% year-over-year. Full year revenue was a record $2.6 billion, an increase of $263 million, or 11% year-over-year, and full year adjusted pre-tax, pre-provision income was a record $1.8 billion, an increase of $187 million, or 12% year-over-year.

Fourth Quarter Earnings – Fourth quarter 2023 net income was $239 million, and diluted earnings per share (“EPS”) were $1.69.

2

Tangible book value and the tangible common equity ratio are non-GAAP financial measures. See reconciliation of GAAP to non-GAAP measures in Table 14.

Fourth Quarter 2023 Compared to Third Quarter 2023

Net Interest Income and Net Interest Margin

Net interest income totaled $575 million in the fourth quarter, an increase of 1% from $571 million in the third quarter. Net interest margin (“NIM”) was 3.48%, unchanged from the third quarter.

  • NIM benefited from higher loan balances and a more favorable asset mix, offset by the higher cost of interest-bearing deposits and changes in the deposit mix in favor of higher-cost customer deposits.
  • The average loan yield was 6.61%, up 10 basis points from the third quarter. The average interest-earning asset yield was 6.00%, up 13 basis points from the third quarter.
  • The average cost of funds was 2.74%, up 15 basis points from the third quarter. The average cost of deposits was 2.60%, up 17 basis points from the third quarter.

Noninterest Income

Noninterest income totaled $80 million in the fourth quarter, an increase of $3 million, or 4%, from $77 million in the third quarter. Net gains on sales of loans were $4 million in the fourth quarter, primarily reflecting the sale of Small Business Administration loans within the quarter. Net gains on AFS debt securities were $3 million, representing a partial recovery against the $10 million pre-tax impairment loss taken in the first quarter of 2023 on a subordinated AFS debt security of a failed bank.

  • Fee income4 of $73 million was up $6 million, or 9%, from $67 million in the third quarter.
  • Customer derivative income (loss) was a loss of $1 million in the fourth quarter, compared with income of $11 million in the third quarter. The quarter-over-quarter decrease of close to $12 million was due to an unfavorable change in mark-to-market adjustments. The mark-to-market and credit valuation adjustments on customer and other derivatives was a loss of $7 million in the fourth quarter, compared with a gain of $5 million in the third quarter. Customer-driven derivative revenue of $6 million in the fourth quarter was essentially unchanged from the third quarter.
  • Foreign exchange income, wealth management fees, and lending fees each increased by $2 million, reflecting higher customer activity.

Noninterest Expense

Noninterest expense totaled $290 million in the fourth quarter, an increase of $38 million, or 15% from $252 million in the third quarter, including $70 million for the FDIC charge5. Fourth quarter noninterest expense consisted of $215 million of adjusted noninterest expense6, and $5 million in amortization expenses related to tax credit and other investments and core deposit intangibles.

  • Adjusted noninterest expense of $215 million increased nearly $14 million, or 7%, from $202 million in the third quarter. This was driven primarily by an $8 million increase in compensation and employee benefits, reflecting higher commissions and incentive accruals, and a $6 million increase in other operating expense, primarily reflecting increases in legal expense, realized credit card fraud losses, and advertising.
  • Amortization of tax credit and other investments was $5 million in the fourth quarter, down from $50 million in the third quarter, The decrease was due to the sale of a tax credit investment and timing of certain renewable energy tax credit investments that were not placed into service in the fourth quarter.
  • The efficiency ratio was 44.4% in the fourth quarter, compared with 38.9% in the third quarter and the adjusted efficiency ratio6 was 33.1% in the fourth quarter, compared with 31.2% in the third quarter.

4

Fee income includes lending, deposit account and wealth management fees, foreign exchange income, and interest rate contracts and other derivative income. Refer to Table 5 for additional fee and noninterest income information.

5

In November 2023, the Federal Deposit Insurance Corporation (“FDIC”) approved a final rule to implement a special deposit insurance assessment to recover losses to the Deposit Insurance Fund arising from the protection of uninsured depositors following the receiverships of failed institutions in the spring of 2023. Under the final rule, the assessment base for the special assessment is equal to an insured depository institution’s estimated uninsured deposits, reported for the quarter ended December 31, 2022, minus the first $5 billion in estimated uninsured deposits. The FDIC will collect the special assessment over eight quarterly assessment periods starting with the first quarter of 2024, at a quarterly rate of 3.36 bps.

6

Adjusted noninterest expense and adjusted efficiency ratio are non-GAAP financial measures. See reconciliation of GAAP to non-GAAP measures in Table 13.

TAX RELATED ITEMS

Full year 2023 income tax expense was $299 million, and the effective tax rate was 20.5%, compared with income tax expense of $284 million and an effective tax rate of 20.1% for the full year of 2022. Fourth quarter 2023 income tax expense was $88 million, and the effective tax rate was 27.0%, compared with income tax expense of $66 million and 18.6% for the third quarter of 2023. The higher effective tax rate in the fourth quarter was mainly due to the sale of a tax credit investment and timing of certain renewable energy tax credit investments that were not placed into service in the fourth quarter.

ASSET QUALITY

As of December 31, 2023, the credit quality of our loan portfolio remained solid.

  • The criticized loans ratio decreased 14 basis points quarter-over-quarter to 1.87% of loans held-for-investment (“HFI”) as of December 31, 2023, compared with 2.01% as of September 30, 2023. Criticized loans decreased $43 million, or 4%, quarter-over-quarter to $1.0 billion as of December 31, 2023. The special mention loans ratio decreased 18 basis points quarter-over-quarter to 0.77% of loans HFI as of December 31, 2023, compared with 0.95% as of September 30, 2023, and the classified loans ratio increased four basis points to 1.10%.
  • The nonperforming assets ratio was 0.16% of total assets as of December 31, 2023, compared with 0.15% of total assets as of September 30, 2023. Nonperforming assets increased $10 million to $114 million as of December 31, 2023, from $104 million as of September 30, 2023.
  • Fourth quarter 2023 net charge-offs were $20 million, or annualized 0.15% of average loans HFI, compared with $18 million, or annualized 0.14% of average loans HFI, for the third quarter of 2023.
  • The allowance for loan losses increased to $669 million, or 1.28% of loans HFI, as of December 31, 2023, compared with $656 million, or 1.29% of loans HFI, as of September 30, 2023, primarily reflective of net loan growth.
  • Fourth quarter 2023 provision for credit losses was $37 million, compared with $42 million in the third quarter of 2023.

CAPITAL STRENGTH

Capital levels for East West remained strong. The following table presents capital metrics as of December 31, 2023, September 30, 2023 and December 31, 2022.

EWBC Capital

 

 

($ in millions)

 

December 31, 2023 (a)

 

September 30, 2023 (a)

 

December 31, 2022 (a)

Risk-Weighted Assets (“RWA”) (b)

 

$53,663

 

$52,951

 

$50,037

Risk-based capital ratios:

 

 

 

 

 

 

CET1 capital ratio

 

13.31%

 

13.30%

 

12.68%

Tier 1 capital ratio

 

13.31%

 

13.30%

 

12.68%

Total capital ratio

 

14.76%

 

14.73%

 

14.00%

Leverage ratio

 

10.21%

 

10.15%

 

9.80%

Tangible common equity ratio (c)

 

9.37%

 

9.03%

 

8.66%

 

(a)

The Company has elected to use the 2020 Current Expected Credit Losses (CECL) transition provision in the calculation of its December 31, 2023, September 30, 2023 and December 31, 2022 regulatory capital ratios. The Company’s December 31, 2023 regulatory capital ratios and RWA are preliminary.

(b)

Under regulatory guidelines, on-balance sheet assets and credit equivalent amounts of derivatives and off-balance sheet items are assigned to one of several broad risk categories based on the nature of the obligor, or, if relevant, the guarantor or the nature of any collateral. The aggregate dollar value in each risk category is then multiplied by the risk weight associated with that category. The resulting weighted values from each of the risk categories are aggregated for determining total RWA.

(c)

Tangible common equity ratio is a non-GAAP financial measure. See reconciliation of GAAP to non-GAAP measures in Table 14.

DIVIDEND PAYOUT AND CAPITAL ACTIONS

East West’s Board of Directors has declared first quarter 2024 dividends for the Company’s common stock. The common stock cash dividend of $0.55 per share is payable on February 15, 2024, to stockholders of record on February 2, 2024. This represents a 15% increase, or seven cents per share, to the quarterly common stock dividend, up from $0.48 per share previously. The new annual dividend equivalent is $2.20 per share, compared with $1.92 per share previously.

East West repurchased 1.5 million shares of common stock during the fourth quarter of 2023 for approximately $82 million. $172 million of East West’s share repurchase authorization remains available.

Conference Call

East West will host a conference call to discuss fourth quarter 2023 earnings with the public on Tuesday, January 23, 2024, at 2:00 p.m. PT/5:00 p.m. ET. The public and investment community are invited to listen as management discusses fourth quarter 2023 results and operating developments.

  • The following dial-in information is provided for participation in the conference call: calls within the U.S. – (877) 506-6399; calls within Canada – (855) 669-9657; international calls – (412) 902-6699.
  • A presentation to accompany the earnings call will be available on the Investor Relations page of the Company’s website at www.eastwestbank.com/investors.
  • A listen-only live broadcast of the call will also be available on the Investor Relations page of the Company’s website at www.eastwestbank.com/investors.
  • Information to access a replay of the call will be available one hour after the call on the Investor Relations site at www.eastwestbank.com/investors.

About East West

East West provides financial services that help customers reach further and connect to new opportunities. East West Bancorp, Inc. is a public company (Nasdaq: “EWBC”) with total assets of $69.6 billion as of December 31, 2023. The Company’s wholly-owned subsidiary, East West Bank, is the largest independent bank headquartered in Southern California, and operates over 120 locations in the United States and Asia. The Bank’s markets in the United States include California, Georgia, Illinois, Massachusetts, Nevada, New York, Texas, and Washington. For more information on East West, visit www.eastwestbank.com.

Forward-Looking Statements

Certain matters set forth herein (including any exhibits hereto) contain “forward-looking statements” that are intended to be covered by the safe harbor provisions for such statements provided by the Private Securities Litigation Reform Act of 1995. East West Bancorp, Inc. (referred to herein on an unconsolidated basis as “East West” and on a consolidated basis as the “Company,” “we,” “us,” “our” or “EWBC”) may make forward-looking statements in other documents that it files with, or furnishes to, the United States (“U.S.”) Securities and Exchange Commission (“SEC”) and management may make forward-looking statements to analysts, investors, media members and others. Forward-looking statements are those that do not relate to historical facts and that are based on current assumptions, beliefs, estimates, expectations and projections, many of which, by their nature, are inherently uncertain and beyond the Company’s control. Forward-looking statements may relate to various matters, including the Company’s financial condition, results of operations, plans, objectives, future performance, business or industry, and usually can be identified by the use of forward-looking words, such as “anticipates,” “assumes,” “believes,” “can,” “continues,” “could,” “estimates,” “expects,” “forecasts,” “goal,” “intends,” “likely,” “may,” “might,” “objective,” “plans,” “potential,” “projects,” “remains,” “should,” “target,” “trend,” “will,” “would,” or similar expressions or variations thereof, and the negative thereof, but these terms are not the exclusive means of identifying such statements. You should not place undue reliance on forward-looking statements, as they are subject to risks and uncertainties, including, but not limited to, those described below. When considering these forward-looking statements, you should keep in mind these risks and uncertainties, as well as any cautionary statements the Company may make.

There are various important factors that could cause future results to differ materially from historical performance and any forward-looking statements. Factors that might cause such differences, include, but are not limited to: changes in the global economy, including an economic slowdown, capital or financial market disruption, supply chain disruption, level of inflation, interest rate environment, residential and commercial property prices, employment levels, rate of growth and general business conditions, which could result in, among other things, reduced demand for loans, reduced availability of funding or increased funding costs, declines in asset values and/or recognition of allowance for credit losses; changes in local, regional and global business, economic and political conditions and geopolitical events, such as political unrest, wars and acts of terrorism; the soundness of other financial institutions and the impacts related to or resulting from bank failures and other economic and industry volatility, including potential increased regulatory requirements, Federal Deposit Insurance Corporation (“FDIC”) insurance premiums and assessments, losses in the value of our investment portfolio, deposit withdrawals, or other adverse consequences of negative market perceptions of the banking industry or us; changes in laws or the regulatory environment, including regulatory reform initiatives and policies of the U.S. Department of the Treasury, the Board of Governors of the Federal Reserve System (“Federal Reserve”), the FDIC, the SEC, the Consumer Financial Protection Bureau (“CFPB”), the California Department of Financial Protection and Innovation (“DFPI”) — Division of Financial Institutions, the People’s Bank of China (“PBOC”), China’s National Administration of Financial Regulation (“NAFR”), the Hong Kong Monetary Authority (“HKMA”), the Hong Kong Securities and Futures Commission (“HKSFC”), and the Monetary Authority of Singapore (“MAS”); changes and effects thereof in trade, monetary and fiscal policies and laws, including the ongoing trade, economic and political disputes between the U.S. and the People’s Republic of China and the monetary policies of the Federal Reserve; changes in the commercial and consumer real estate markets; changes in consumer or commercial spending, savings and borrowing habits, and patterns and behaviors; the impact from changes to income tax laws and regulations, federal spending and economic stimulus programs; the impact of any future U.S. federal government shutdown and uncertainty regarding the U.S. federal government’s debt limit and credit rating; the Company’s ability to compete effectively against financial institutions and other entities, including as a result of emerging technologies; the success and timing of the Company’s business strategies; the Company’s ability to retain key officers and employees; the impact on the Company’s funding costs, net interest income and net interest margin from changes in key variable market interest rates, competition, regulatory requirements and the Company’s product mix; changes in the Company’s costs of operation, compliance and expansion; the Company’s ability to adopt and successfully integrate new initiatives or technologies into its business in a strategic manner; the impact of communications or technology disruption, failure in, or breach of, the Company’s operational or security systems or infrastructure, or those of third party vendors with which the Company does business, including as a result of cyber-attacks, and other similar matters which could result in, among other things, confidential proprietary, or personally identifiable information being disclosed or misused, and materially impact the Company’s ability to provide services to its clients; the adequacy of the Company’s risk management framework, disclosure controls and procedures and internal control over financial reporting; future credit quality and performance, including the Company’s expectations regarding future credit losses and allowance levels; the impact of adverse changes to the Company’s credit ratings from major credit rating agencies; the impact of adverse judgments or settlements in litigation and other proceedings; the impact of political developments, pandemics, wars, civil unrest, terrorism or other hostilities that may disrupt or increase volatility in securities or otherwise affect business and economic conditions on the Company and its customers; heightened regulatory and governmental oversight and scrutiny of the Company’s business practices, including dealings with consumers; the impact of reputational risk from negative publicity, fines, penalties and other negative consequences from regulatory violations, legal actions and the Company’s interactions with business partners, counterparties, service providers and other third parties; the impact of regulatory investigations, regulatory agreements, supervisory criticisms, and enforcement actions; changes in accounting standards as may be required by the Financial Accounting Standards Board (“FASB”) or other regulatory agencies and their impact on the Company’s critical accounting policies and assumptions; the Company’s capital requirements and its ability to generate capital internally or raise capital on favorable terms; the impact on the Company’s liquidity due to changes in the Company’s ability to receive dividends from its subsidiaries; any strategic acquisitions or divestitures; changes in the equity and debt securities markets; fluctuations in the Company’s stock price; fluctuations in foreign currency exchange rates; the impact of increased focus on social, environmental and sustainability matters, which may affect the operations of the Company and its customers and the economy more broadly; and the impact of climate change, natural or man-made disasters or calamities, such as wildfires, droughts, hurricanes, flooding and earthquakes or other events that may directly or indirectly result in a negative impact on the financial performance of the Company and its customers.

For a more detailed discussion of some of the factors that might cause such differences, see the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 under the heading Item 1A. Risk Factors and the information set forth under Item 1A. Risk Factors in the Company’s Quarterly Reports on Form 10-Q. You should treat forward-looking statements as speaking only as of the date they are made and based only on information then actually known to the Company. The Company does not undertake, and specifically disclaims any obligation to update or revise any forward-looking statements to reflect the occurrence of events or circumstances after the date of such statements except as required by law.

EAST WEST BANCORP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEET

($ and shares in thousands, except per share data)

(unaudited)

Table 1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2023

% or Basis Point Change

 

 

December 31, 2023

 

September 30, 2023

 

December 31, 2022

 

Qtr-o-Qtr

 

Yr-o-Yr

 

Assets

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

4,614,984

 

 

$

4,561,178

 

 

$

3,481,784

 

 

1.2

%

 

32.5

%

 

Interest-bearing deposits with banks

 

 

10,498

 

 

 

17,213

 

 

 

139,021

 

 

(39.0

)

 

(92.4

)

 

Assets purchased under resale agreements (“resale agreements”)

 

 

785,000

 

 

 

785,000

 

 

 

792,192

 

 

 

 

(0.9

)

 

Available-for-sale (“AFS”) debt securities (amortized cost of $6,916,491, $6,976,331 and $6,879,225)

 

 

6,188,337

 

 

 

6,039,837

 

 

 

6,034,993

 

 

2.5

 

 

2.5

 

 

Held-to-maturity (“HTM”) debt securities, at amortized cost (fair value of $2,453,971, $2,308,048 and $2,455,171)

 

 

2,956,040

 

 

 

2,964,235

 

 

 

3,001,868

 

 

(0.3

)

 

(1.5

)

 

Loans held-for-sale (“HFS”)

 

 

116

 

 

 

4,762

 

 

 

25,644

 

 

(97.6

)

 

(99.5

)

 

Loans held-for-investment (“HFI”) (net of allowance for loan losses of $668,743, $655,523 and $595,645)

 

 

51,542,039

 

 

 

50,251,661

 

 

 

47,606,785

 

 

2.6

 

 

8.3

 

 

Investments in qualified affordable housing partnerships, tax credit and other investments, net

 

 

905,036

 

 

 

901,559

 

 

 

763,256

 

 

0.4

 

 

18.6

 

 

Goodwill

 

 

465,697

 

 

 

465,697

 

 

 

465,697

 

 

 

 

 

 

Operating lease right-of-use assets

 

 

94,024

 

 

 

97,782

 

 

 

103,681

 

 

(3.8

)

 

(9.3

)

 

Other assets

 

 

2,051,113

 

 

 

2,200,534

 

 

 

1,697,229

 

 

(6.8

)

 

20.9

 

 

Total assets

 

$

69,612,884

 

 

$

68,289,458

 

 

$

64,112,150

 

 

1.9

%

 

8.6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

$

56,092,438

 

 

$

55,087,031

 

 

$

55,967,849

 

 

1.8

%

 

0.2

%

 

Short-term borrowings

 

 

4,500,000

 

 

 

4,500,000

 

 

 

 

 

 

 

100.0

 

 

Assets sold under repurchase agreements (“repurchase agreements”)

 

 

 

 

 

 

 

 

300,000

 

 

 

 

(100.0

)

 

Long-term debt and finance lease liabilities

 

 

153,011

 

 

 

153,087

 

 

 

152,400

 

 

(0.0

)

 

0.4

 

 

Operating lease liabilities

 

 

102,353

 

 

 

107,695

 

 

 

111,931

 

 

(5.0

)

 

(8.6

)

 

Accrued expenses and other liabilities

 

 

1,814,248

 

 

 

1,844,939

 

 

 

1,595,358

 

 

(1.7

)

 

13.7

 

 

Total liabilities

 

 

62,662,050

 

 

 

61,692,752

 

 

 

58,127,538

 

 

1.6

 

 

7.8

 

 

Stockholders’ equity

 

 

6,950,834

 

 

 

6,596,706

 

 

 

5,984,612

 

 

5.4

 

 

16.1

 

 

Total liabilities and stockholders’ equity

 

$

69,612,884

 

 

$

68,289,458

 

 

$

64,112,150

 

 

1.9

%

 

8.6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Book value per share

 

$

49.64

 

 

$

46.62

 

 

$

42.46

 

 

6.5

%

 

16.9

%

 

Tangible book value (1) per share

 

$

46.27

 

 

$

43.29

 

 

$

39.10

 

 

6.9

 

 

18.3

 

 

Number of common shares at period-end

 

 

140,027

 

 

 

141,486

 

 

 

140,948

 

 

(1.0

)

 

(0.7

)

 

Total stockholders’ equity to assets ratio

 

 

9.98

%

 

 

9.66

%

 

 

9.33

%

 

32

 

bps

65

 

bps

Tangible common equity (“TCE”) ratio (1)

 

 

9.37

%

 

 

9.03

%

 

 

8.66

%

 

34

 

bps

71

 

bps

 

(1)

Tangible book value and the TCE ratio are non-GAAP financial measures. See reconciliation of GAAP to non-GAAP measures in Table 14.

EAST WEST BANCORP, INC. AND SUBSIDIARIES

TOTAL LOANS AND DEPOSITS DETAIL

($ in thousands)

(unaudited)

Table 2

 

 

 

 

 

 

 

 

 

December 31, 2023

% Change

 

 

December 31, 2023

 

September 30, 2023

 

December 31, 2022

 

Qtr-o-Qtr

 

Yr-o-Yr

Loans:

 

 

 

 

 

 

 

 

 

 

Commercial:

 

 

 

 

 

 

 

 

 

 

Commercial and industrial (“C&I”)

 

$

16,581,079

 

 

$

15,864,042

 

 

$

15,711,095

 

 

4.5

%

 

5.5

%

Commercial real estate (“CRE”):

 

 

 

 

 

 

 

 

 

 

CRE

 

 

14,777,081

 

 

 

14,667,378

 

 

 

13,857,870

 

 

0.7

 

 

6.6

 

Multifamily residential

 

 

5,023,163

 

 

 

4,900,097

 

 

 

4,573,068

 

 

2.5

 

 

9.8

 

Construction and land

 

 

663,868

 

 

 

798,190

 

 

 

638,420

 

 

(16.8

)

 

4.0

 

Total CRE

 

 

20,464,112

 

 

 

20,365,665

 

 

 

19,069,358

 

 

0.5

 

 

7.3

 

Consumer:

 

 

 

 

 

 

 

 

 

 

Residential mortgage:

 

 

 

 

 

 

 

 

 

 

Single-family residential

 

 

13,383,060

 

 

 

12,836,558

 

 

 

11,223,027

 

 

4.3

 

 

19.2

 

Home equity lines of credit (“HELOCs”)

 

 

1,722,204

 

 

 

1,776,665

 

 

 

2,122,655

 

 

(3.1

)

 

(18.9

)

Total residential mortgage

 

 

15,105,264

 

 

 

14,613,223

 

 

 

13,345,682

 

 

3.4

 

 

13.2

 

Other consumer

 

 

60,327

 

 

 

64,254

 

 

 

76,295

 

 

(6.1

)

 

(20.9

)

Total loans HFI (1)

 

 

52,210,782

 

 

 

50,907,184

 

 

 

48,202,430

 

 

2.6

 

 

8.3

 

Loans HFS

 

 

116

 

 

 

4,762

 

 

 

25,644

 

 

(97.6

)

 

(99.5

)

Total loans (1)

 

 

52,210,898

 

 

 

50,911,946

 

 

 

48,228,074

 

 

2.6

 

 

8.3

 

Allowance for loan losses

 

 

(668,743

)

 

 

(655,523

)

 

 

(595,645

)

 

2.0

 

 

12.3

 

Net loans (1)

 

$

51,542,155

 

 

$

50,256,423

 

 

$

47,632,429

 

 

2.6

%

 

8.2

%

 

 

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing demand

 

$

15,539,872

 

 

$

16,169,072

 

 

$

21,051,090

 

 

(3.9

)%

 

(26.2

)%

Interest-bearing checking

 

 

7,558,908

 

 

 

7,689,289

 

 

 

6,672,165

 

 

(1.7

)

 

13.3

 

Money market

 

 

13,108,727

 

 

 

12,613,827

 

 

 

12,265,024

 

 

3.9

 

 

6.9

 

Savings

 

 

1,841,467

 

 

 

1,963,766

 

 

 

2,649,037

 

 

(6.2

)

 

(30.5

)

Time deposits

 

 

18,043,464

 

 

 

16,651,077

 

 

 

13,330,533

 

 

8.4

 

 

35.4

 

Total deposits

 

$

56,092,438

 

 

$

55,087,031

 

 

$

55,967,849

 

 

1.8

%

 

0.2

%

 

(1)

Includes $71.2 million, $72.0 million and $70.4 million of net deferred loan fees and net unamortized premiums as of December 31, 2023, September 30, 2023 and December 31, 2022, respectively.

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

 

December 31, 2023

% Change

 

 

December 31, 2023

 

September 30, 2023

 

December 31, 2022

 

Qtr-o-Qtr

 

Yr-o-Yr

Interest and dividend income

 

$

990,378

 

 

$

961,787

 

 

$

761,212

 

 

3.0%

 

30.1%

Interest expense

 

 

415,544

 

 

 

390,974

 

 

 

155,705

 

 

6.3

 

166.9

Net interest income before provision for credit losses

 

 

574,834

 

 

 

570,813

 

 

 

605,507

 

 

0.7

 

(5.1)

Provision for credit losses

 

 

37,000

 

 

 

42,000

 

 

 

25,000

 

 

(11.9)

 

48.0

Net interest income after provision for credit losses

 

 

537,834

 

 

 

528,813

 

 

 

580,507

 

 

1.7

 

(7.4)

Noninterest income

 

 

79,903

 

 

 

76,752

 

 

 

64,927

 

 

4.1

 

23.1

Noninterest expense

 

 

290,498

 

 

 

252,014

 

 

 

257,110

 

 

15.3

 

13.0

Income before income taxes

 

 

327,239

 

 

 

353,551

 

 

 

388,324

 

 

(7.4)

 

(15.7)

Income tax expense

 

 

88,286

 

 

 

65,813

 

 

 

51,561

 

 

34.1

 

71.2

Net income

 

$

238,953

 

 

$

287,738

 

 

$

336,763

 

 

(17.0)%

 

(29.0)%

Earnings per share (“EPS”)

 

 

 

 

 

 

 

 

 

 

- Basic

 

$

1.70

 

 

$

2.03

 

 

$

2.39

 

 

(16.4)%

 

(28.9)%

- Diluted

 

$

1.69

 

 

$

2.02

 

 

$

2.37

 

 

(16.5)

 

(28.7)

Weighted-average number of shares outstanding

 

 

 

 

 

 

 

 

 

 

- Basic

 

 

140,595

 

 

 

141,485

 

 

 

140,947

 

 

(0.6)%

 

(0.2)%

- Diluted

 

 

141,409

 

 

 

142,122

 

 

 

142,138

 

 

(0.5)

 

(0.5)

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

December 31, 2023

% Change

 

 

December 31, 2023

 

September 30, 2023

 

December 31, 2022

 

Qtr-o-Qtr

 

Yr-o-Yr

Noninterest income:

 

 

 

 

 

 

 

 

 

 

Lending fees

 

$

22,077

 

 

$

20,312

 

 

$

19,339

 

 

8.7%

 

14.2%

Deposit account fees

 

 

22,996

 

 

 

22,622

 

 

 

22,112

 

 

1.7

 

4.0

Customer derivative (loss) income

 

 

(945

)

 

 

11,208

 

 

 

(638

)

 

NM

 

(48.1)

Foreign exchange income

 

 

14,236

 

 

 

12,334

 

 

 

14,015

 

 

15.4

 

1.6

Wealth management fees

 

 

7,735

 

 

 

5,877

 

 

 

6,071

 

 

31.6

 

27.4

Net gains (losses) on sales of loans

 

 

3,675

 

 

 

(12

)

 

 

443

 

 

NM

 

NM

Net gain on AFS debt security

 

 

3,138

 

 

 

 

 

 

 

 

100.0

 

100.0

Other investment income

 

 

1,673

 

 

 

1,751

 

 

 

1,127

 

 

(4.5)

 

48.4

Other income

 

 

5,318

 

 

 

2,660

 

 

 

2,458

 

 

99.9

 

116.4

Total noninterest income

 

$

79,903

 

 

$

76,752

 

 

$

64,927

 

 

4.1%

 

23.1%

Noninterest expense:

 

 

 

 

 

 

 

 

 

 

Compensation and employee benefits

 

$

130,794

 

 

$

123,153

 

 

$

120,422

 

 

6.2%

 

8.6%

Occupancy and equipment expense

 

 

15,735

 

 

 

15,353

 

 

 

15,648

 

 

2.5

 

0.6

Deposit insurance premiums and regulatory assessments

 

 

78,553

 

 

 

8,583

 

 

 

4,930

 

 

NM

 

NM

Deposit account expense

 

 

11,390

 

 

 

11,585

 

 

 

8,437

 

 

(1.7)

 

35.0

Computer software and data processing expenses

 

 

11,315

 

 

 

11,761

 

 

 

11,145

 

 

(3.8)

 

1.5

Other operating expense

 

 

38,130

 

 

 

31,885

 

 

 

31,923

 

 

19.6

 

19.4

Amortization of tax credit and other investments

 

 

4,581

 

 

 

49,694

 

 

 

64,605

 

 

(90.8)

 

(92.9)

Total noninterest expense

 

$

290,498

 

 

$

252,014

 

 

$

257,110

 

 

15.3%

 

13.0%

 

NM - Not meaningful.

EAST WEST BANCORP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF INCOME

($ and shares in thousands, except per share data)

(unaudited)

Table 4

 

 

 

Year Ended

 

December 31, 2023

% Change

 

 

December 31, 2023

 

December 31, 2022

 

Yr-o-Yr

Interest and dividend income

 

$

3,693,805

 

 

$

2,321,231

 

59.1%

Interest expense

 

 

1,381,551

 

 

 

275,350

 

 

401.7

Net interest income before provision for credit losses

 

 

2,312,254

 

 

 

2,045,881

 

 

13.0

Provision for credit losses

 

 

125,000

 

 

 

73,500

 

 

70.1

Net interest income after provision for credit losses

 

 

2,187,254

 

 

 

1,972,381

 

 

10.9

Noninterest income

 

 

295,264

 

 

 

298,666

 

 

(1.1)

Noninterest expense

 

 

1,022,748

 

 

 

859,393

 

 

19.0

Income before income taxes

 

 

1,459,770

 

 

 

1,411,654

 

 

3.4

Income tax expense

 

 

298,609

 

 

 

283,571

 

 

5.3

Net income

 

$

1,161,161

 

 

$

1,128,083

 

 

2.9%

EPS

 

 

 

 

 

 

- Basic

 

$

8.23

 

 

$

7.98

 

 

3.0%

- Diluted

 

$

8.18

 

 

$

7.92

 

 

3.4

Weighted-average number of shares outstanding

 

 

 

 

 

 

- Basic

 

 

141,164

 

 

 

141,326

 

 

(0.1)%

- Diluted

 

 

141,902

 

 

 

142,492

 

 

(0.4)

 

 

 

 

 

 

 

 

 

Year Ended

 

December 31, 2023

% Change

 

 

December 31, 2023

 

December 31, 2022

 

Yr-o-Yr

Noninterest income:

 

 

 

 

 

 

Lending fees

 

$

83,876

 

 

$

79,208

 

 

5.9%

Deposit account fees

 

 

89,606

 

 

 

88,435

 

 

1.3

Customer derivative income

 

 

20,200

 

 

 

29,057

 

 

(30.5)

Foreign exchange income

 

 

52,481

 

 

 

48,158

 

 

9.0

Wealth management fees

 

 

26,805

 

 

 

27,565

 

 

(2.8)

Net gains on sales of loans

 

 

3,634

 

 

 

6,411

 

 

(43.3)

Net (losses) gains on AFS debt securities

 

 

(6,862

)

 

 

1,306

 

 

NM

Other investment income

 

 

9,348

 

 

 

7,037

 

 

32.8

Other income

 

 

16,176

 

 

 

11,489

 

 

40.8

Total noninterest income

 

$

295,264

 

 

$

298,666

 

 

(1.1)%

Noninterest expense:

 

 

 

 

 

 

Compensation and employee benefits

 

$

508,538

 

 

$

477,635

 

 

6.5%

Occupancy and equipment expense

 

 

62,763

 

 

 

62,501

 

 

0.4

Deposit insurance premiums and regulatory assessments

 

 

103,308

 

 

 

19,449

 

 

431.2

Deposit account expense

 

 

43,143

 

 

 

25,508

 

 

69.1

Computer software and data processing expenses

 

 

44,475

 

 

 

42,776

 

 

4.0

Other operating expense (1)

 

 

140,222

 

 

 

118,166

 

 

18.7

Amortization of tax credit and other investments

 

 

120,299

 

 

 

113,358

 

 

6.1

Total noninterest expense

 

$

1,022,748

 

 

$

859,393

 

 

19.0%

 
NM - Not meaningful.

(1)

Includes $3.9 million of repurchase agreements’ extinguishment cost for the twelve months ended December 31, 2023.

EAST WEST BANCORP, INC. AND SUBSIDIARIES

FEE AND OTHER NONINTEREST INCOME

($ in thousands)

(unaudited)

Table 5

 

 

Three Months Ended

 

Year Ended

 

 

December 31,

2023

 

September 30,

2023

 

December 31,

2022

 

December 31,

2023

 

December 31,

2022

Customer derivative (loss) income:

 

 

 

 

 

 

 

 

 

 

Customer derivative revenue

 

$

6,297

 

 

$

5,894

 

 

$

3,984

 

 

$

23,216

 

 

$

14,986

Mark-to-market and credit valuation adjustments (“CVA”)

 

 

(7,242

)

 

 

5,314

 

 

 

(4,622

)

 

 

(3,016

)

 

 

14,071

 

Total customer derivative (loss) income

 

$

(945

)

 

$

11,208

 

 

$

(638

)

 

$

20,200

 

 

$

29,057

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Year Ended

 

 

December 31,

2023

 

September 30,

2023

 

December 31,

2022

 

December 31,

2023

 

December 31,

2022

Fee income:

 

 

 

 

 

 

 

 

 

 

Lending fees

 

$

22,077

 

 

$

20,312

 

 

$

19,339

 

 

$

83,876

 

 

$

79,208

 

Deposit account fees

 

 

22,996

 

 

 

22,622

 

 

 

22,112

 

 

 

89,606

 

 

 

88,435

 

Foreign exchange income

 

 

14,236

 

 

 

12,334

 

 

 

14,015

 

 

 

52,481

 

 

 

48,158

 

Wealth management fees

 

 

7,735

 

 

 

5,877

 

 

 

6,071

 

 

 

26,805

 

 

 

27,565

 

Customer derivative revenue

 

 

6,297

 

 

 

5,894

 

 

 

3,984

 

 

 

23,216

 

 

 

14,986

 

Total fee income

 

 

73,341

 

 

 

67,039

 

 

 

65,521

 

 

 

275,984

 

 

 

258,352

 

Mark-to-market and CVA

 

 

(7,242

)

 

 

5,314

 

 

 

(4,622

)

 

 

(3,016

)

 

 

14,071

 

Net gains (losses) on sale of loans

 

 

3,675

 

 

 

(12

)

 

 

443

 

 

 

3,634

 

 

 

6,411

 

Net gains (losses) on AFS debt securities

 

 

3,138

 

 

 

 

 

 

 

 

 

(6,862

)

 

 

1,306

 

Other investment income

 

 

1,673

 

 

 

1,751

 

 

 

1,127

 

 

 

9,348

 

 

 

7,037

 

Other income

 

 

5,318

 

 

 

2,660

 

 

 

2,458

 

 

 

16,176

 

 

 

11,489

 

Total noninterest income

 

$

79,903

 

 

$

76,752

 

 

$

64,927

 

 

$

295,264

 

 

$

298,666

 

 

 

 

 

 

EAST WEST BANCORP, INC. AND SUBSIDIARIES

SELECTED AVERAGE BALANCES

($ in thousands)

(unaudited)

Table 6

 

 

 

 

 

 

 

 

 

Three Months Ended

 

December 31, 2023

% Change

 

Year Ended

 

December 31, 2023

% Change

 

 

December 31, 2023

 

September 30, 2023

 

December 31, 2022

 

Qtr-o-Qtr

 

Yr-o-Yr

 

December 31, 2023

 

December 31, 2022

 

Yr-o-Yr

Loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

C&I

 

$

15,948,678

 

$

15,400,172

 

$

15,496,386

 

3.6%

 

2.9%

 

$

15,499,899

 

$

15,013,560

 

3.2%

CRE:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CRE

 

 

14,723,027

 

 

 

14,453,014

 

 

 

13,699,042

 

 

1.9

 

7.5

 

 

14,312,459

 

 

 

13,145,204

 

 

8.9

Multifamily residential

 

 

4,939,119

 

 

 

4,798,360

 

 

 

4,604,628

 

 

2.9

 

7.3

 

 

4,756,885

 

 

 

4,252,605

 

 

11.9

Construction and land

 

 

752,783

 

 

 

807,906

 

 

 

591,962

 

 

(6.8)

 

27.2

 

 

754,928

 

 

 

499,044

 

 

51.3

Total CRE

 

 

20,414,929

 

 

 

20,059,280

 

 

 

18,895,632

 

 

1.8

 

8.0

 

 

19,824,272

 

 

 

17,896,853

 

 

10.8

Consumer:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Residential mortgage:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Single-family residential

 

 

13,097,056

 

 

 

12,548,593

 

 

 

10,988,102

 

 

4.4

 

19.2

 

 

12,274,776

 

 

 

10,106,609

 

 

21.5

HELOCs

 

 

1,732,348

 

 

 

1,816,900

 

 

 

2,145,416

 

 

(4.7)

 

(19.3)

 

 

1,881,008

 

 

 

2,208,725

 

 

(14.8)

Total residential mortgage

 

 

14,829,404

 

 

 

14,365,493

 

 

 

13,133,518

 

 

3.2

 

12.9

 

 

14,155,784

 

 

 

12,315,334

 

 

14.9

Other consumer

 

 

59,245

 

 

 

63,917

 

 

 

81,596

 

 

(7.3)

 

(27.4)

 

 

65,181

 

 

 

93,711

 

 

(30.4)

Total loans (1)

 

$

51,252,256

 

 

$

49,888,862

 

 

$

47,607,132

 

 

2.7%

 

7.7%

 

$

49,545,136

 

 

$

45,319,458

 

 

9.3%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-earning assets

 

$

65,505,724

 

 

$

65,051,461

 

 

$

60,376,151

 

 

0.7%

 

8.5%

 

$

64,039,402

 

 

$

59,309,062

 

 

8.0%

Total assets

 

$

69,421,959

 

 

$

68,936,786

 

 

$

64,252,730

 

 

0.7%

 

8.0%

 

$

67,757,505

 

 

$

62,838,282

 

 

7.8%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing demand

 

$

15,884,525

 

 

$

16,302,296

 

 

$

21,419,290

 

 

(2.6)%

 

(25.8)%

 

$

17,192,978

 

 

$

22,784,258

 

 

(24.5)%

Interest-bearing checking

 

 

7,608,234

 

 

 

8,080,025

 

 

 

6,543,349

 

 

(5.8)

 

16.3

 

 

7,658,414

 

 

 

6,696,200

 

 

14.4

Money market

 

 

12,824,121

 

 

 

12,180,806

 

 

 

12,197,782

 

 

5.3

 

5.1

 

 

11,680,540

 

 

 

12,443,437

 

 

(6.1)

Savings

 

 

1,873,276

 

 

 

2,013,246

 

 

 

2,747,166

 

 

(7.0)

 

(31.8)

 

 

2,128,943

 

 

 

2,901,940

 

 

(26.6)

Time deposits

 

 

17,216,367

 

 

 

16,621,683

 

 

 

12,076,193

 

 

3.6

 

42.6

 

 

16,301,856

 

 

 

9,473,744

 

 

72.1

Total deposits

 

$

55,406,523

 

 

$

55,198,056

 

 

$

54,983,780

 

 

0.4%

 

0.8%

 

$

54,962,731

 

 

$

54,299,579

 

 

1.2%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing liabilities

 

$

44,178,360

 

 

$

43,563,947

 

 

$

34,372,853

 

 

1.4%

 

28.5%

 

$

41,671,388

 

 

$

32,322,744

 

 

28.9%

Stockholders’ equity

 

$

6,695,852

 

 

$

6,604,798

 

 

$

5,834,623

 

 

1.4%

 

14.8%

 

$

6,482,985

 

 

$

5,783,025

 

 

12.1%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)

Includes loans HFS.

EAST WEST BANCORP, INC. AND SUBSIDIARIES

QUARTER-TO-DATE AVERAGE BALANCES, YIELDS AND RATES

($ in thousands)

(unaudited)

Table 7

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

December 31, 2023

 

September 30, 2023

 

 

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

 

$

4,445,115

 

 

$

56,250

 

5.02

%

 

$

5,392,795

 

 

$

67,751

 

4.98

%

Resale agreements

 

 

785,000

 

 

 

7,232

 

 

3.66

%

 

 

648,587

 

 

 

4,460

 

 

2.73

%

AFS debt securities

 

 

5,985,361

 

 

 

58,926

 

 

3.91

%

 

 

6,074,119

 

 

 

57,177

 

 

3.73

%

HTM debt securities

 

 

2,958,294

 

 

 

12,585

 

 

1.69

%

 

 

2,967,703

 

 

 

12,601

 

 

1.68

%

Loans:

 

 

 

 

 

 

 

 

 

 

 

 

C&I

 

 

15,948,678

 

 

 

321,026

 

 

7.99

%

 

 

15,400,172

 

 

 

306,542

 

 

7.90

%

CRE

 

 

20,414,929

 

 

 

327,194

 

 

6.36

%

 

 

20,059,280

 

 

 

317,416

 

 

6.28

%

Residential mortgage

 

 

14,829,404

 

 

 

205,371

 

 

5.49

%

 

 

14,365,493

 

 

 

193,913

 

 

5.36

%

Other consumer

 

 

59,245

 

 

 

786

 

 

5.26

%

 

 

63,917

 

 

 

848

 

 

5.26

%

Total Loans (2)

 

 

51,252,256

 

 

 

854,377

 

 

6.61

%

 

 

49,888,862

 

 

 

818,719

 

 

6.51

%

FHLB and FRB stock

 

 

79,698

 

 

 

1,008

 

 

5.02

%

 

 

79,395

 

 

 

1,079

 

 

5.39

%

Total interest-earning assets

 

$

65,505,724

 

 

$

990,378

 

 

6.00

%

 

$

65,051,461

 

 

$

961,787

 

 

5.87

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-earning assets:

 

 

 

 

 

 

 

 

 

 

 

 

Cash and due from banks

 

 

489,055

 

 

 

 

 

 

 

544,939

 

 

 

 

 

Allowance for loan losses

 

 

(650,724

)

 

 

 

 

 

 

(629,229

)

 

 

 

 

Other assets

 

 

4,077,904

 

 

 

 

 

 

 

3,969,615

 

 

 

 

 

Total assets

 

$

69,421,959

 

 

 

 

 

 

$

68,936,786

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Checking deposits

 

$

7,608,234

 

 

$

52,170

 

 

2.72

%

 

$

8,080,025

 

 

$

54,285

 

 

2.67

%

Money market deposits

 

 

12,824,121

 

 

 

123,744

 

 

3.83

%

 

 

12,180,806

 

 

 

113,217

 

 

3.69

%

Savings deposits

 

 

1,873,276

 

 

 

3,894

 

 

0.82

%

 

 

2,013,246

 

 

 

4,047

 

 

0.80

%

Time deposits

 

 

17,216,367

 

 

 

183,175

 

 

4.22

%

 

 

16,621,683

 

 

 

166,747

 

 

3.98

%

Federal funds purchased and other short-term borrowings

 

 

4,500,475

 

 

 

49,570

 

 

4.37

%

 

 

4,501,327

 

 

 

49,575

 

 

4.37

%

FHLB advances

 

 

1

 

 

 

 

 

%

 

 

1

 

 

 

 

 

%

Repurchase agreements

 

 

2,876

 

 

 

41

 

 

5.66

%

 

 

13,897

 

 

 

193

 

 

5.51

%

Long-term debt and finance lease liabilities

 

 

153,010

 

 

 

2,950

 

 

7.65

%

 

 

152,962

 

 

 

2,910

 

 

7.55

%

Total interest-bearing liabilities

 

$

44,178,360

 

 

$

415,544

 

 

3.73

%

 

$

43,563,947

 

 

$

390,974

 

 

3.56

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing liabilities and stockholders’ equity:

 

 

 

 

 

 

 

 

 

 

 

 

Demand deposits

 

 

15,884,525

 

 

 

 

 

 

 

16,302,296

 

 

 

 

 

Accrued expenses and other liabilities

 

 

2,663,222

 

 

 

 

 

 

 

2,465,745

 

 

 

 

 

Stockholders’ equity

 

 

6,695,852

 

 

 

 

 

 

 

6,604,798

 

 

 

 

 

Total liabilities and stockholders’ equity

 

$

69,421,959

 

 

 

 

 

 

$

68,936,786

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest rate spread

 

 

 

 

 

2.27

%

 

 

 

 

 

2.31

%

Net interest income and net interest margin

 

 

 

$

574,834

 

 

3.48

%

 

 

 

$

570,813

 

 

3.48

%

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)

Annualized.

(2)

Includes loans HFS.

EAST WEST BANCORP, INC. AND SUBSIDIARIES

QUARTER-TO-DATE AVERAGE BALANCES, YIELDS AND RATES

($ in thousands)

(unaudited)

Table 8

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

December 31, 2023

 

December 31, 2022

 

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

 

$

4,445,115

 

 

$

56,250

 

5.02

%

 

$

2,983,726

 

 

$

23,986

 

3.19

%

Resale agreements

 

 

785,000

 

 

 

7,232

 

 

3.66

%

 

 

833,170

 

 

 

6,062

 

 

2.89

%

AFS debt securities

 

 

5,985,361

 

 

 

58,926

 

 

3.91

%

 

 

5,869,336

 

 

 

46,224

 

 

3.12

%

HTM debt securities

 

 

2,958,294

 

 

 

12,585

 

 

1.69

%

 

 

3,004,412

 

 

 

12,747

 

 

1.68

%

Loans:

 

 

 

 

 

 

 

 

 

 

 

 

C&I

 

 

15,948,678

 

 

 

321,026

 

 

7.99

%

 

 

15,496,386

 

 

 

250,451

 

 

6.41

%

CRE

 

 

20,414,929

 

 

 

327,194

 

 

6.36

%

 

 

18,895,632

 

 

 

262,327

 

 

5.51

%

Residential mortgage

 

 

14,829,404

 

 

 

205,371

 

 

5.49

%

 

 

13,133,518

 

 

 

157,696

 

 

4.76

%

Other consumer

 

 

59,245

 

 

 

786

 

 

5.26

%

 

 

81,596

 

 

 

849

 

 

4.13

%

Total Loans (2)

 

 

51,252,256

 

 

 

854,377

 

 

6.61

%

 

 

47,607,132

 

 

 

671,323

 

 

5.59

%

FHLB and FRB stock

 

 

79,698

 

 

 

1,008

 

 

5.02

%

 

 

78,375

 

 

 

870

 

 

4.40

%

Total interest-earning assets

 

$

65,505,724

 

 

$

990,378

 

 

6.00

%

 

$

60,376,151

 

 

$

761,212

 

 

5.00

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-earning assets:

 

 

 

 

 

 

 

 

 

 

 

 

Cash and due from banks

 

 

489,055

 

 

 

 

 

 

 

640,509

 

 

 

 

 

Allowance for loan losses

 

 

(650,724

)

 

 

 

 

 

 

(583,271

)

 

 

 

 

Other assets

 

 

4,077,904

 

 

 

 

 

 

 

3,819,341

 

 

 

 

 

Total assets

 

$

69,421,959

 

 

 

 

 

 

$

64,252,730

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Checking deposits

 

$

7,608,234

 

 

$

52,170

 

 

2.72

%

 

$

6,543,349

 

 

$

16,735

 

 

1.01

%

Money market deposits

 

 

12,824,121

 

 

 

123,744

 

 

3.83

%

 

 

12,197,782

 

 

 

62,246

 

 

2.02

%

Savings deposits

 

 

1,873,276

 

 

 

3,894

 

 

0.82

%

 

 

2,747,166

 

 

 

2,714

 

 

0.39

%

Time deposits

 

 

17,216,367

 

 

 

183,175

 

 

4.22

%

 

 

12,076,193

 

 

 

65,772

 

 

2.16

%

Federal funds purchased and other short-term borrowings

 

 

4,500,475

 

 

 

49,570

 

 

4.37

%

 

 

47,142

 

 

 

374

 

 

3.15

%

FHLB advances

 

 

1

 

 

 

 

 

%

 

 

40,178

 

 

 

225

 

 

2.22

%

Repurchase agreements

 

 

2,876

 

 

 

41

 

 

5.66

%

 

 

568,520

 

 

 

5,507

 

 

3.84

%

Long-term debt and finance lease liabilities

 

 

153,010

 

 

 

2,950

 

 

7.65

%

 

 

152,523

 

 

 

2,132

 

 

5.55

%

Total interest-bearing liabilities

 

$

44,178,360

 

 

$

415,544

 

 

3.73

%

 

$

34,372,853

 

 

$

155,705

 

 

1.80

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing liabilities and stockholders’ equity:

 

 

 

 

 

 

 

 

 

 

 

 

Demand deposits

 

 

15,884,525

 

 

 

 

 

 

 

21,419,290

 

 

 

 

 

Accrued expenses and other liabilities

 

 

2,663,222

 

 

 

 

 

 

 

2,625,964

 

 

 

 

 

Stockholders’ equity

 

 

6,695,852

 

 

 

 

 

 

 

5,834,623

 

 

 

 

 

Total liabilities and stockholders’ equity

 

$

69,421,959

 

 

 

 

 

 

$

64,252,730

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest rate spread

 

 

 

 

 

2.27

%

 

 

 

 

 

3.20

%

Net interest income and net interest margin

 

 

 

$

574,834

 

 

3.48

%

 

 

 

$

605,507

 

 

3.98

%

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)

Annualized.

(2)

Includes loans HFS.

EAST WEST BANCORP, INC. AND SUBSIDIARIES

YEAR-TO-DATE AVERAGE BALANCES, YIELDS AND RATES

($ in thousands)

(unaudited)

Table 9

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended

 

December 31, 2023

 

December 31, 2022

 

Average

 

 

 

Average

 

Average

 

 

 

Average

 

Balance

 

Interest

 

Yield/Rate

 

Balance

 

Interest

 

Yield/Rate

Assets

 

 

 

 

 

 

 

 

 

 

 

 

Interest-earning assets:

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing cash and deposits with banks

 

$

4,638,630

 

 

$

220,643

 

4.76

%

 

$

3,127,234

 

 

$

41,113

 

1.31

%

Resale agreements

 

 

691,223

 

 

 

20,164

 

 

2.92

%

 

 

1,398,080

 

 

 

29,767

 

 

2.13

%

AFS debt securities

 

 

6,105,999

 

 

 

225,592

 

 

3.69

%

 

 

6,629,945

 

 

 

152,514

 

 

2.30

%

HTM debt securities

 

 

2,976,237

 

 

 

50,598

 

 

1.70

%

 

 

2,756,382

 

 

 

46,392

 

 

1.68

%

Loans:

 

 

 

 

 

 

 

 

 

 

 

 

C&I

 

 

15,499,899

 

 

 

1,190,940

 

 

7.68

%

 

 

15,013,560

 

 

 

715,778

 

 

4.77

%

CRE

 

 

19,824,272

 

 

 

1,227,795

 

 

6.19

%

 

 

17,896,853

 

 

 

791,839

 

 

4.42

%

Residential mortgage

 

 

14,155,784

 

 

 

750,813

 

 

5.30

%

 

 

12,315,334

 

 

 

538,255

 

 

4.37

%

Other consumer

 

 

65,181

 

 

 

3,198

 

 

4.91

%

 

 

93,711

 

 

 

2,429

 

 

2.59

%

Total Loans (1)

 

 

49,545,136

 

 

 

3,172,746

 

 

6.40

%

 

 

45,319,458

 

 

 

2,048,301

 

 

4.52

%

FHLB and FRB stock

 

 

82,177

 

 

 

4,062

 

 

4.94

%

 

 

77,963

 

 

 

3,144

 

 

4.03

%

Total interest-earning assets

 

$

64,039,402

 

 

$

3,693,805

 

 

5.77

%

 

$

59,309,062

 

 

$

2,321,231

 

 

3.91

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-earning assets:

 

 

 

 

 

 

 

 

 

 

 

 

Cash and due from banks

 

 

555,689

 

 

 

 

 

 

 

652,673

 

 

 

 

 

Allowance for loan losses

 

 

(625,785

)

 

 

 

 

 

 

(559,746

)

 

 

 

 

Other assets

 

 

3,788,199

 

 

 

 

 

 

 

3,436,293

 

 

 

 

 

Total assets

 

$

67,757,505

 

 

 

 

 

 

$

62,838,282

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Checking deposits

 

$

7,658,414

 

 

$

179,200

 

 

2.34

%

 

$

6,696,200

 

 

$

29,808

 

 

0.45

%

Money market deposits

 

 

11,680,540

 

 

 

399,482

 

 

3.42

%

 

 

12,443,437

 

 

 

107,442

 

 

0.86

%

Savings deposits

 

 

2,128,943

 

 

 

15,573

 

 

0.73

%

 

 

2,901,940

 

 

 

8,550

 

 

0.29

%

Time deposits

 

 

16,301,856

 

 

 

611,295

 

 

3.75

%

 

 

9,473,744

 

 

 

106,038

 

 

1.12

%

Federal funds purchased and other short-term borrowings

 

 

3,591,114

 

 

 

157,002

 

 

4.37

%

 

 

81,719

 

 

 

1,801

 

 

2.20

%

FHLB advances

 

 

123,288

 

 

 

6,430

 

 

5.22

%

 

 

105,966

 

 

 

1,754

 

 

1.66

%

Repurchase agreements

 

 

34,443

 

 

 

1,497

 

 

4.35

%

 

 

467,413

 

 

 

14,362

 

 

3.07

%

Long-term debt and finance lease liabilities

 

 

152,790

 

 

 

11,072

 

 

7.25

%

 

 

152,325

 

 

 

5,595

 

 

3.67

%

Total interest-bearing liabilities

 

$

41,671,388

 

 

$

1,381,551

 

 

3.32

%

 

$

32,322,744

 

 

$

275,350

 

 

0.85

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing liabilities and stockholders’ equity:

 

 

 

 

 

 

 

 

 

 

 

 

Demand deposits

 

 

17,192,978

 

 

 

 

 

 

 

22,784,258

 

 

 

 

 

Accrued expenses and other liabilities

 

 

2,410,154

 

 

 

 

 

 

 

1,948,255

 

 

 

 

 

Stockholders’ equity

 

 

6,482,985

 

 

 

 

 

 

 

5,783,025

 

 

 

 

 

Total liabilities and stockholders’ equity

 

$

67,757,505

 

 

 

 

 

 

$

62,838,282

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest rate spread

 

 

 

 

 

2.45

%

 

 

 

 

 

3.06

%

Net interest income and net interest margin

 

 

 

$

2,312,254

 

 

3.61

%

 

 

 

$

2,045,881

 

 

3.45

%

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)

Includes loans HFS.

EAST WEST BANCORP, INC. AND SUBSIDIARIES

SELECTED RATIOS

(unaudited)

Table 10

 

 

 

Three Months Ended (1)

 

December 31, 2023

Basis Point Change

 

 

December 31,

2023

 

September 30,

2023

 

December 31,

2022

 

Qtr-o-Qtr

 

Yr-o-Yr

 

Return on average assets

 

1.37

%

 

1.66

%

 

2.08

%

 

(29

)

bps

(71

)

bps

Adjusted return on average assets (2)

 

1.63

%

 

1.66

%

 

2.08

%

 

(3

)

 

(45

)

 

Return on average common equity

 

14.16

%

 

17.28

%

 

22.90

%

 

(312

)

 

(874

)

 

Adjusted return on average common equity (2)

 

16.95

%

 

17.28

%

 

22.90

%

 

(33

)

 

(595

)

 

Return on average TCE (3)

 

15.26

%

 

18.65

%

 

24.96

%

 

(339

)

 

(970

)

 

Adjusted return on average TCE (3)

 

18.26

%

 

18.65

%

 

24.96

%

 

(39

)

 

(670

)

 

Interest rate spread

 

2.27

%

 

2.31

%

 

3.20

%

 

(4

)

 

(93

)

 

Net interest margin

 

3.48

%

 

3.48

%

 

3.98

%

 

 

 

(50

)

 

Average loan yield

 

6.61

%

 

6.51

%

 

5.59

%

 

10

 

 

102

 

 

Yield on average interest-earning assets

 

6.00

%

 

5.87

%

 

5.00

%

 

13

 

 

100

 

 

Average cost of interest-bearing deposits

 

3.64

%

 

3.45

%

 

1.74

%

 

19

 

 

190

 

 

Average cost of deposits

 

2.60

%

 

2.43

%

 

1.06

%

 

17

 

 

154

 

 

Average cost of funds

 

2.74

%

 

2.59

%

 

1.11

%

 

15

 

 

163

 

 

Adjusted pre-tax, pre-provision profitability ratio (4)

 

2.49

%

 

2.56

%

 

2.95

%

 

(7

)

 

(46

)

 

Adjusted noninterest expense/average assets (4)

 

1.23

%

 

1.16

%

 

1.19

%

 

7

 

 

4

 

 

Efficiency ratio

 

44.37

%

 

38.92

%

 

38.35

%

 

545

 

 

602

 

 

Adjusted efficiency ratio (4)

 

33.07

%

 

31.18

%

 

28.66

%

 

189

 

bps

441

 

bps

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended

 

December 31, 2023

Basis Point Change

 

 

 

 

 

 

December 31,

2023

 

December 31,

2022

 

Yr-o-Yr

 

 

 

 

 

Return on average assets

 

1.71

%

 

1.80

%

 

(9

)

bps

 

 

 

Adjusted return on average assets (2)

 

1.79

%

 

1.80

%

 

(1

)

 

 

 

 

 

Return on average common equity

 

17.91

%

 

19.51

%

 

(160

)

 

 

 

 

 

Adjusted return on average common equity (2)

 

18.75

%

 

19.51

%

 

(76

)

 

 

 

 

 

Return on average TCE (3)

 

19.35

%

 

21.29

%

 

(194

)

 

 

 

 

 

Adjusted return on average TCE (3)

 

20.25

%

 

21.29

%

 

(104

)

 

 

 

 

 

Interest rate spread

 

2.45

%

 

3.06

%

 

(61

)

 

 

 

 

 

Net interest margin

 

3.61

%

 

3.45

%

 

16

 

 

 

 

 

 

Average loan yield

 

6.40

%

 

4.52

%

 

188

 

 

 

 

 

 

Yield on average interest-earning assets

 

5.77

%

 

3.91

%

 

186

 

 

 

 

 

 

Average cost of interest-bearing deposits

 

3.19

%

 

0.80

%

 

239

 

 

 

 

 

 

Average cost of deposits

 

2.19

%

 

0.46

%

 

173

 

 

 

 

 

 

Average cost of funds

 

2.35

%

 

0.50

%

 

185

 

 

 

 

 

 

Adjusted pre-tax, pre-provision profitability ratio (4)

 

2.64

%

 

2.55

%

 

9

 

 

 

 

 

 

Adjusted noninterest expense/average assets (4)

 

1.22

%

 

1.18

%

 

4

 

 

 

 

 

 

Efficiency ratio

 

39.22

%

 

36.65

%

 

257

 

 

 

 

 

 

Adjusted efficiency ratio (4)

 

31.63

%

 

31.74

%

 

(11

)

bps

 

 

 

 

(1)

Annualized except for efficiency ratio and adjusted efficiency ratio.

(2)

Adjusted return on average assets and adjusted return on average common equity are non-GAAP financial measures. See reconciliation of GAAP to non-GAAP measures in Table 15.

(3)

Return on average TCE and adjusted return on average TCE are non-GAAP financial measures. See reconciliation of GAAP to non-GAAP measures in Table 14.

(4)

Adjusted pre-tax, pre-provision profitability ratio, adjusted noninterest expense/average assets and adjusted efficiency ratio are non-GAAP financial measures. See reconciliation of GAAP to non-GAAP measures in Table 13.

EAST WEST BANCORP, INC. AND SUBSIDIARIES

ALLOWANCE FOR LOAN LOSSES & OFF-BALANCE SHEET CREDIT EXPOSURES

($ in thousands)

(unaudited)

Table 11

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended December 31, 2023

 

 

 

Commercial

 

Consumer

 

 

 

 

 

C&I

 

Total CRE

 

Total Residential

Mortgage

 

Other Consumer

 

Total

Allowance for loan losses, September 30, 2023

 

 

$

383,677

 

 

$

211,418

 

 

$

58,725

 

$

1,703

 

 

$

655,523

 

Provision for credit losses on loans

(a)

 

 

27,732

 

 

 

4,875

 

 

 

233

 

 

 

50

 

 

 

32,890

 

Gross charge-offs

 

 

 

(20,264

)

 

 

(1,213

)

 

 

 

 

 

(96

)

 

 

(21,573

)

Gross recoveries

 

 

 

1,248

 

 

 

356

 

 

 

7

 

 

 

 

 

 

1,611

 

Total net (charge-offs) recoveries

 

 

 

(19,016

)

 

 

(857

)

 

 

7

 

 

 

(96

)

 

 

(19,962

)

Foreign currency translation adjustment

 

 

 

292

 

 

 

 

 

 

 

 

 

 

 

 

292

 

Allowance for loan losses, December 31, 2023

 

 

$

392,685

 

 

$

215,436

 

 

$

58,965

 

 

$

1,657

 

 

$

668,743

 

 

 

 

Three Months Ended September 30, 2023

 

 

 

Commercial

 

Consumer

 

 

 

 

 

C&I

 

Total CRE

 

Total Residential

Mortgage

 

Other Consumer

 

Total

Allowance for loan losses, June 30, 2023

 

 

$

375,333

 

 

$

202,768

 

 

$

56,039

 

 

$

1,260

 

 

$

635,400

 

Provision for credit losses on loans

(a)

 

 

13,006

 

 

 

22,026

 

 

 

2,648

 

 

 

456

 

 

 

38,136

 

Gross charge-offs

 

 

 

(7,074

)

 

 

(13,879

)

 

 

(41

)

 

 

(13

)

 

 

(21,007

)

Gross recoveries

 

 

 

2,279

 

 

 

503

 

 

 

79

 

 

 

 

 

 

2,861

 

Total net (charge-offs) recoveries

 

 

 

(4,795

)

 

 

(13,376

)

 

 

38

 

 

 

(13

)

 

 

(18,146

)

Foreign currency translation adjustment