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Section 1: 8-K (8-K)

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 8-K
  
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
 
Date of Report (Date of earliest event reported)
October 19, 2017

EAST WEST BANCORP, INC.
(Exact name of registrant as specified in its charter)



Delaware
 
000-24939
 
95-4703316
(State or other jurisdiction of incorporation)
 
(Commission File Number)
 
(IRS Employer Identification No.)
 
135 N Los Robles Ave., 7th Floor, Pasadena, California 91101
(Address of principal executive offices) (Zip code)
 
(626) 768-6000
(Registrant’s telephone number, including area code)
 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
¨
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
 
¨
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
 
¨
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
 
¨
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
¨
Emerging growth company.
 
 
¨
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.






1






East West Bancorp, Inc.
Current Report of Form 8-K


Item 2.02. Results of Operations and Financial Condition
 
On October 19, 2017, East West Bancorp, Inc. (the “Company”) announced, via press release, its financial results for the quarter ended September 30, 2017 (the “Press Release”). The Press Release is available on the Company’s website. The Press Release is “furnished” as Exhibit 99.1 to this Current Report on Form 8-K pursuant to General Instruction B.2 of Form 8-K and is not “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”), or otherwise subject to the liabilities under that Section. This exhibit shall not be incorporated by reference into any filings the Company has made or may make under the Securities Act of 1933 (the “Securities Act”) or Exchange Act, except as otherwise expressly stated in such filing.

Item 7.01. Regulation FD Disclosure

On October 19, 2017, the Company will hold a conference call to discuss its financial results for the quarter ended September 30, 2017, including the Press Release and other matters relating to the Company. The Company has also made available on its website presentation materials containing certain historical and forward-looking information relating to the Company (the “Presentation Materials”). The Presentation Materials are furnished as Exhibit 99.2 and are incorporated by reference in this Item 7.01. All information in Exhibit 99.2 is presented as of the particular date or dates referenced therein, and the Company does not undertake any obligation to, and disclaims any duty to, update any of the information provided. The information provided in Item 7.01 of this report, including Exhibit 99.2, shall not be deemed “filed” for purposes of Section 18 of the Exchange Act, nor shall the information or Exhibit 99.2 be deemed incorporated by reference in any filings under the Securities Act.

Item 9.01. Financial Statements and Exhibits
 
(d) Exhibits
 
99.1           Press Release, dated October 19, 2017.
99.2           Presentation Materials, dated October 19, 2017.

 



2






SIGNATURE
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 

 
 
EAST WEST BANCORP, INC.
 
 
Date: October 19, 2017
By:
/s/ Irene H. Oh
 
 
 
Irene H. Oh
 
 
Executive Vice President and Chief Financial Officer


3






EXHIBIT INDEX
 
Exhibit
Number
 
Description
99.1
 
Press Release, dated October 19, 2017.
99.2
 
Presentation Materials, dated October 19, 2017.




4



(Back To Top)

Section 2: EX-99.1 (EXHIBIT 99.1)

Exhibit


 
Exhibit 99.1
 
 
390700505_ewbclogoa06.jpg
East West Bancorp, Inc.
135 N. Los Robles Ave., 7th Fl.
Pasadena, CA 91101
Tel: 626.768.6000
NEWS RELEASE
 
 
 
 
 
 
FOR INVESTOR INQUIRIES, CONTACT:

Irene Oh
Julianna Balicka
 
Chief Financial Officer
Director of Strategy and Corporate Development
 
T: (626) 768-6360
T: (626) 768-6985
 
E: irene.oh@eastwestbank.com
E: julianna.balicka@eastwestbank.com
 

EAST WEST BANCORP REPORTS NET INCOME FOR THIRD QUARTER 2017
OF $132.7 MILLION and DILUTED EARNINGS PER SHARE OF $0.91,
BOTH UP BY 12% FROM THE PRIOR QUARTER


Pasadena, California - October 19, 2017 - East West Bancorp, Inc. (“East West” or the “Company”) (Nasdaq: EWBC), parent company of East West Bank, the financial bridge between the United States and Greater China, today reported its financial results for the third quarter of 2017. For the third quarter of 2017, net income was $132.7 million or $0.91 per diluted share. Third quarter 2017 return on average assets was 1.46%, return on average equity was 14.01% and return on average tangible equity1 was 16.33%.

“Our third quarter earnings per share increased by 12% quarter-over-quarter. This outstanding result was driven by strong loan growth across our major lending categories. In the third quarter of 2017, total loans grew $1.3 billion or 19% annualized to a record $28.5 billion from $27.2 billion as of June 30, 2017,” stated Dominic Ng, Chairman and Chief Executive Officer of East West. “Total deposits grew $157 million or 2% annualized to a record $31.3 billion as of September 30, 2017 from $31.2 billion at the end of the previous quarter. Importantly, our core deposits grew by 7% annualized, reflecting growth in noninterest-bearing demand accounts.”

“East West’s loan growth during the quarter supported net interest margin expansion and healthy revenue growth,” continued Ng. “Additionally, we continue to be vigilant about asset quality. Quarter-over-quarter, nonperforming assets declined by 12%, to 0.32% of total assets as of September 30, 2017 and the annualized net charge-off ratio was six basis points in the third quarter of 2017.”

“In conclusion, East West delivered high quality results in the third quarter of 2017 across key measures of loan growth, revenue and net income growth, and credit quality. We strive for sustainable, attractive profitability quarter after quarter, year after year. We are pleased that our third quarter operating results are consistent with this operating philosophy. We believe we are on track for another year of record earnings in 2017, reflecting the strong commitment and diligence of our 2,900 associates,” concluded Ng.












 
 
 
 
1 See reconciliation of GAAP to non-GAAP financial measures in Table 15.

1



HIGHLIGHTS OF RESULTS

Strong Earnings - Net income of $132.7 million for the third quarter of 2017 increased by 12% compared to $118.3 million for the second quarter of 2017, and diluted earnings per share (“EPS”) of $0.91 increased by 12% quarter-over-quarter from $0.81. Net income and diluted EPS for the third quarter of 2017 increased by 20% compared to net income of $110.1 million and EPS of $0.76 for the third quarter of 2016.
 
Net Interest Income Growth and Net Interest Margin Expansion - Net interest income totaled $303.2 million for the third quarter of 2017, an increase of $13.1 million or 5% linked quarter. Accounting Standard Codification (“ASC”) 310-30 discount accretion income was $4.5 million this quarter, compared to $6.3 million in the prior quarter. Excluding this discount accretion income, third quarter 2017 adjusted2 net interest income of $298.6 million increased by $14.8 million or 5% sequentially, primarily due to growth in the loan portfolio. Third quarter 2017 net interest margin (“NIM”) of 3.52% expanded by three basis points linked quarter; the adjusted2 NIM of 3.46% expanded by five basis points linked quarter.

Revenue Growth - Third quarter 2017 revenue of $352.8 million increased by 5% compared to $337.5 million in the second quarter of 2017. During the third quarter of 2017, East West sold its insurance brokerage business, East West Insurance Services, Inc. (“EWIS”) for a pre-tax gain of $3.8 million or $0.02 per share after-tax. Excluding this sale, third quarter 2017 adjusted3 revenue of $349.0 million increased by 3% compared to $337.5 million in the second quarter of 2017. Year-over-year, adjusted revenue increased by 15% compared to $303.5 million in the third quarter of 2016.

Record Loans - Total loans of $28.5 billion as of September 30, 2017 were up $1.3 billion or 19% annualized from $27.2 billion as of June 30, 2017. Total loans grew by 15% year-over-year. The sequential quarter loan growth was broad-based across all of our major business lines.

Record Deposits - Total deposits of $31.3 billion as of September 30, 2017 were up $157 million or 2% annualized from $31.2 billion as of June 30, 2017. Total deposits grew by 10% year-over-year. Core deposits of $25.5 billion as of September 30, 2017 were up $436 million or 7% annualized from $25.1 billion as of June 30, 2017. The sequential quarter growth in deposits was primarily due to increases in noninterest-bearing demand accounts, partially offset by decreases in money market and time deposits. Noninterest-bearing demand deposits increased by $532 million to $11.0 billion as of September 30, 2017, comprising 35% of total deposits, compared to 34% as of June 30, 2017.

Steady Asset Quality - The allowance for loan losses increased to $285.9 million, or 1.00% of loans held-for-investment (“HFI”) as of September 30, 2017, compared to $276.3 million, or 1.02% of loans HFI as of June 30, 2017. In the third quarter of 2017, annualized net charge-offs were 0.06% of average loans HFI, compared to annualized net recoveries of 0.04% in the prior quarter. Non-purchased credit impaired (“Non-PCI”) nonperforming assets decreased to $117.0 million, or 0.32% of total assets, as of September 30, 2017, compared to $133.0 million, or 0.37% of total assets as of June 30, 2017.

Capital Ratios - Capital levels for East West continue to be solid. Tangible equity per common share as of September 30, 2017 was $22.71, an increase of 4% linked quarter and 14% year-over-year. As of September 30, 2017, the tangible equity to tangible assets ratio4 was 9.17%, the Common Equity Tier 1 (“CET1”) capital ratio was 11.2%, and the total risk-based capital ratio was 12.8%.










 
 
 
 
2 See reconciliation of GAAP to non-GAAP financial measures in Table 14.
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 15.

2



QUARTERLY RESULTS SUMMARY
 
 
 
Three Months Ended
($ in millions, except per share data)
 
September 30, 2017
 
June 30, 2017
 
September 30, 2016
 
 
 
 
 
 
 
Net income
 
$
132.66

 
$
118.33

 
$
110.14

Earnings per share (diluted)
 
$
0.91

 
$
0.81

 
$
0.76

Adjusted earnings per share (diluted) (1)
 
$
0.89

 
$
0.81

 
$
0.76

Tangible equity (1) per common share
 
$
22.71

 
$
21.93

 
$
19.92

Tangible equity (1) to tangible assets
 
9.17
%
 
8.95
%
 
8.77
%
Return on average assets (2)
 
1.46
%
 
1.36
%
 
1.33
%
Return on average equity (2)
 
14.01
%
 
13.05
%
 
13.08
%
Return on average tangible equity (1)(2)
 
16.33
%
 
15.30
%
 
15.51
%
Adjusted return on average assets (1)(2)
 
1.44
%
 
1.36
%
 
1.33
%
Adjusted return on average equity (1)(2)
 
13.78
%
 
13.05
%
 
13.08
%
Adjusted return on average tangible equity (1)(2)
 
16.06
%
 
15.30
%
 
15.51
%
Adjusted pre-tax, pre-provision profitability ratio (1)(2)
 
2.32
%
 
2.27
%
 
2.03
%
Net interest income
 
$
303.16

 
$
290.09

 
$
254.15

Adjusted net interest income (1)
 
$
298.62

 
$
283.83

 
$
246.98

Net interest margin (2)
 
3.52
%
 
3.49
%
 
3.26
%
Adjusted net interest margin (1)(2)
 
3.46
%
 
3.41
%
 
3.16
%
Cost of deposits (2)
 
0.40
%
 
0.36
%
 
0.30
%
Adjusted efficiency ratio (1)
 
39.81
%
 
41.33
%
 
44.77
%
 
(1)
See reconciliation of the GAAP to non-GAAP financial measures in Tables 12, 13, 14 and 15.
(2)
Annualized.


MANAGEMENT OUTLOOK FOR 2017

We reaffirm our 2017 outlook provided with last quarter’s earnings release. We continue to expect end-of-period loans to increase at a percentage rate in the low double digits for the full year, and are tightening the range of our anticipated full-year net interest margin, excluding the impact of ASC 310-30 discount accretion income, to 3.40%-3.45% from 3.35%-3.45% previously, and revising the full-year effective tax rate from 26% to 25%.





3



OPERATING RESULTS SUMMARY

Third Quarter 2017 Compared to Second Quarter 2017

Net Interest Income
Net interest income totaled $303.2 million, a 5% increase from $290.1 million.
Adjusted net interest income, excluding ASC 310-30 discount accretion income, grew to $298.6 million, a 5% increase from $283.8 million.
Average loans of $27.5 billion grew by $831 million or 12% annualized from $26.7 billion.
Average deposits of $31.1 billion grew by $867 million or 11% annualized from $30.2 billion.
Average noninterest-bearing demand deposits of $10.7 billion grew by $460 million or 18% annualized from $10.2 billion.

Net Interest Margin
Net interest margin expanded by three basis points to 3.52% from 3.49%.
Excluding the impact of ASC 310-30 discount accretion income, adjusted NIM expanded by five basis points to 3.46% from 3.41%.
The yield on average loans expanded by two basis points to 4.42% from 4.40%; the adjusted5 loan yield expanded by five basis points to 4.35% from 4.30%.
The cost of deposits increased by four basis points to 0.40% from 0.36%.

Noninterest Income
Total noninterest income of $49.6 million includes the pre-tax gain on the sale of EWIS of $3.8 million; excluding this sale, adjusted6 noninterest income of $45.8 million was down by $1.6 million sequentially, or 3%, from $47.4 million in the second quarter of 2017. Excluding the impact of all gains on sales, total fees and other operating income of $40.9 million decreased by $1.2 million or 3% from $42.1 million in the second quarter of 2017.
The linked quarter increase in derivative fees and other income reflected a higher volume of transactions from assisting customers with interest rate swaps.
The decrease in letters of credit fees and foreign exchange income reflected a quarter-over-quarter decrease in customer-related foreign exchange fees, as well as mark-to-market changes associated with currency hedges.
The decrease in other fees and operating income reflected the decline in insurance commissions due to the sale of EWIS, and a decrease in other operating income as gains from other investments were elevated in the second quarter of 2017.

The following table presents total fees and other operating income for the three months ended September 30, 2017, June 30, 2017 and September 30, 2016.
 
 
 
 
 
 
 
($ in thousands)
 
Three Months Ended
 
September 30, 2017
 
June 30, 2017
 
September 30, 2016
 
 
 
 
 
 
 
Branch fees
 
$
10,803

 
$
10,700

 
$
10,408

Letters of credit fees and foreign exchange income
 
10,154

 
11,986

 
10,908

Ancillary loan fees and other income
 
5,987

 
5,907

 
6,135

Wealth management fees
 
3,615

 
3,537

 
4,033

Derivative fees and other income
 
6,663

 
3,765

 
5,791

Other fees and operating income
 
3,652

 
6,198

 
7,632

Total fees and other operating income
 
$
40,874

 
$
42,093

 
$
44,907

 
 
 
 
 
 
 









 
 
 
 
5 See reconciliation of GAAP to non-GAAP financial measures in Table 14.
6 See reconciliation of GAAP to non-GAAP financial measures in Table 13.

4



Noninterest Expense & Effective Tax Rate
Noninterest expense totaled $164.5 million, comprising $138.9 million of adjusted7 noninterest expense, $23.8 million of amortization of tax credit and other investments, and $1.7 million of amortization of core deposit intangibles.
Adjusted noninterest expense of $138.9 million decreased by $0.6 million linked quarter. The adjusted7 efficiency ratio of 39.8% improved by 152 basis points from 41.3%, largely due to the increase in net interest income.
The Company’s effective tax rate was 24.3%, compared to an effective tax rate of 25.0% in the prior quarter.
During the third quarter of 2017, amortization of tax credit and other investments was $23.8 million. For the remainder of the year, the amortization of tax credit and other investments is projected to be approximately $23 million, and the full year 2017 effective tax rate is projected to be 25%.


CREDIT QUALITY

The allowance for loan losses totaled $285.9 million or 1.00% of loans HFI as of September 30, 2017, compared to $276.3 million or 1.02% of loans HFI, and $255.8 million or 1.03% of loans HFI as of June 30, 2017 and September 30, 2016, respectively.
The Company recorded a provision for credit losses of $13.0 million in the current quarter, compared to $10.7 million in the second quarter of 2017, and $9.5 million in the third quarter of 2016. The provision for credit losses of $13.0 million in the third quarter was largely a result of additional allowance for loan losses recorded for the loan originations during the quarter.
In the third quarter of 2017, net charge-offs were $3.8 million or 0.06% of average loans HFI, annualized, compared to net recoveries of $2.6 million or 0.04% of average loans HFI, annualized, in the second quarter of 2017, and net charge-offs of $22.5 million or 0.37% of average loans HFI, annualized, in the third quarter of 2016.
Non-PCI nonperforming assets decreased by $16.0 million, or 12% linked quarter, to $117.0 million, or 0.32% of total assets, as of September 30, 2017, compared to 0.37% as of June 30, 2017 and 0.39% as of September 30, 2016.


CAPITAL STRENGTH

Capital levels for East West continue to be solid. Tangible equity per common share as of September 30, 2017 was $22.71, an increase of 4% linked quarter and 14% year-over-year. The following table presents the regulatory capital ratios for the quarters ended September 30, 2017, June 30, 2017 and September 30, 2016.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Regulatory Capital Metrics
 
Basel III

 
($ in millions)
 
September 30,
2017
(a)
 
June 30, 2017
 
September 30,
2016
 
Minimum
Regulatory
Requirements
 
Well Capitalized Regulatory Requirements
 
Fully Phased-
in Minimum
Regulatory
Requirements
 
 
 
 
 
 
 
 
 
 
 
 
 
CET1 capital ratio
 
11.2
%
 
11.3
%
 
10.9
%
 
4.5
%
 
6.5
%
 
7.0
%
Tier 1 risk-based capital ratio
 
11.2
%
 
11.3
%
 
10.9
%
 
6.0
%
 
8.0
%
 
8.5
%
Total risk-based capital ratio
 
12.8
%
 
12.8
%
 
12.5
%
 
8.0
%
 
10.0
%
 
10.5
%
Tier 1 leverage capital ratio
 
9.4
%
 
9.3
%
 
8.9
%
 
4.0
%
 
5.0
%
 
4.0
%
Risk-Weighted Assets (“RWA”) (b)
 
$
29,535

 
$
28,445

 
$
26,480

 
N/A

 
N/A

 
N/A

 
 
 
 
 
 
 

 
 

 
 

 
 
 
 
N/A Not applicable.
(a)
The Company’s September 30, 2017 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.









 
 
 
 
7 See reconciliation of GAAP to non-GAAP financial measures in Table 13.


5



DIVIDEND PAYOUT AND CAPITAL ACTIONS

East West’s Board of Directors has declared fourth quarter 2017 dividends for the Company’s common stock. The common stock cash dividend of $0.20 per share is payable on November 15, 2017 to shareholders of record on November 1, 2017.


Conference Call

East West will host a conference call to discuss third quarter 2017 earnings with the public on Thursday, October 19, 2017 at 8:30 a.m. PT/11:30 a.m. ET. The public and investment community are invited to listen as management discusses third quarter 2017 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.
A replay of the conference call will be available on October 19, 2017 at 11:30 a.m. Pacific Time through November 19, 2017. The replay numbers are: within the U.S. - (877) 344-7529; within Canada - (855) 669-9658; International calls - (412) 317-0088; and the replay access code is: 10112096.


About East West

East West Bancorp, Inc. is a publicly owned company with total assets of $36.3 billion and is traded on the Nasdaq Global Select Market under the symbol “EWBC”. The Company’s wholly-owned subsidiary, East West Bank, is one of the largest independent banks headquartered in California. East West is a premier bank focused exclusively on the United States and Greater China markets and operates over 130 locations worldwide, including in the United States markets of California, Georgia, Massachusetts, Nevada, New York, Texas and Washington. In Greater China, East West’s presence includes full service branches in Hong Kong, Shanghai, Shantou and Shenzhen, and representative offices in Beijing, Chongqing, Guangzhou, Taipei and Xiamen. For more information on East West, visit the Company’s website at www.eastwestbank.com.



6



Forward-Looking Statements
Certain matters set forth herein (including any exhibits hereto) constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, including forward-looking statements relating to the Company’s current business plans and expectations regarding future operating results. Forward-looking statements may include, but are not limited to, the use of forward-looking language, such as “likely result in,” “expects,” “anticipates,” “estimates,” “forecasts,” “projects,” “intends to,” or may include other similar words or phrases, such as “believes,” “plans,” “trend,” “objective,” “continues,” “remains,” or similar expressions, or future or conditional verbs, such as “will,” “would,” “should,” “could,” “may,” “might,” “can,” or similar verbs. These forward-looking statements are subject to risks and uncertainties that could cause actual results, performance or achievements to differ materially from those projected. These risks and uncertainties, some of which are beyond our control, include, but are not limited to, our ability to compete effectively against other financial institutions in our banking markets; changes in the commercial and consumer real estate markets; changes in our costs of operation, compliance and expansion; changes in the U.S. economy, including inflation, employment levels, rate of growth and general business conditions; changes in government interest rate policies; changes in laws or the regulatory environment including regulatory reform initiatives and policies of the U.S. Department of Treasury, the Board of Governors of the Federal Reserve Board System, the Federal Deposit Insurance Corporation, the U.S. Securities and Exchange Commission, the Consumer Financial Protection Bureau and California Department of Business Oversight - Division of Financial Institutions; heightened regulatory and governmental oversight and scrutiny of the Company’s business practices, including dealings with retail customers; changes in the economy of and monetary policy in the People’s Republic of China; changes in income tax laws and regulations; changes in accounting standards as may be required by the Financial Accounting Standards Board or other regulatory agencies and their impact on critical accounting policies and assumptions; changes in the equity and debt securities markets; future credit quality and performance, including our expectations regarding future credit losses and allowance levels; fluctuations of our stock price; fluctuations in foreign currency exchange rates; success and timing of our business strategies; our ability to adopt and successfully integrate new technologies into our business in a strategic manner; impact of reputational risk from negative publicity, fines and penalties and other negative consequences from regulatory violations and legal actions; impact of potential federal tax changes and spending cuts; impact of adverse judgments or settlements in litigation or of regulatory enforcement actions; changes in our ability to receive dividends from our subsidiaries; impact of political developments, wars or other hostilities that may disrupt or increase volatility in securities or otherwise affect economic conditions; impact of natural or man-made disasters or calamities or conflicts or other events that may directly or indirectly cause unanticipated declines in the Company’s financial performance; continuing consolidation in the financial services industry; our capital requirements and our ability to generate capital internally or raise capital on favorable terms; impact of the Dodd-Frank Wall Street Reform and Consumer Protection Act on our business, business practices and cost of operations; impact of adverse changes to our credit ratings from the major credit rating agencies; impact of failure in, or breach of, our operational or security systems or infrastructure, or those of third parties with whom we do business, including as a result of cyber attacks; and other similar matters which could result in, among other things, confidential and/or proprietary information being disclosed or misused; adequacy of our risk management framework, disclosure controls and procedures and internal control over financial reporting; the effect of the current low interest rate environment or changes in interest rates on our net interest income and net interest margin; the effect of changes in the level of checking or savings account deposits on our funding costs and net interest margin; a recurrence of significant turbulence or disruption in the capital or financial markets, which could result in, among other things, a reduction in the availability of funding or increased funding costs, reduced investor demand for mortgage loans and declines in asset values and/ or recognition of other-than-temporary impairment on securities held in our available-for-sale investment securities portfolio; and other factors set forth in the Company’s public reports including its Annual Report on Form 10-K for the year ended December 31, 2016, and particularly the discussion of risk factors within that document. If any of these risks or uncertainties materializes or if any of the assumptions underlying such forward-looking statements proves to be incorrect, the Company’s results could differ materially from those expressed in, implied or projected by such forward-looking statements. The Company assumes no obligation to update such forward-looking statements.



7



EAST WEST BANCORP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
($ and shares in thousands, except per share data)
(unaudited)
Table 1
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
September 30, 2017
% Change
 
 
 
September 30, 2017
 
June 30, 2017
 
September 30, 2016
 
Qtr-o-Qtr
 
Yr-o-Yr
Assets
 
 
 
 
 
 
 
 
 
 
 
Cash and due from banks
 
$
364,328

 
$
429,121

 
$
344,746

 
(15.1
)%
 
5.7
 %
 
Interest-bearing cash with banks
 
1,372,421

 
2,323,355

 
1,322,086

 
(40.9
)
 
3.8

 
Cash and cash equivalents
 
1,736,749

 
2,752,476

 
1,666,832

 
(36.9
)
 
4.2

 
Interest-bearing deposits with banks
 
404,946

 
296,679

 
307,473

 
36.5

 
31.7

 
Securities purchased under resale agreements (“resale agreements”) (1)
 
1,250,000

 
1,300,000

 
1,500,000

 
(3.8
)
 
(16.7
)
 
Investment securities
 
2,956,776

 
2,943,856

 
3,391,085

 
0.4

 
(12.8
)
 
Federal Home Loan Bank (“FHLB”) and Federal Reserve Bank (“FRB”) stock
 
73,322

 
73,173

 
72,605

 
0.2

 
1.0

 
Loans held-for-sale
 
178

 
11,649

 
47,719

 
(98.5
)
 
(99.6
)
 
Loans held-for-investment (net of allowance for loan losses of $285,926, $276,316 and $255,812)
 
28,239,431

 
26,934,350

 
24,476,150

 
4.8

 
15.4

 
Investments in qualified affordable housing partnerships, net
 
178,344

 
169,103

 
173,045

 
5.5

 
3.1

 
Investments in tax credit and other investments, net
 
203,758

 
189,405

 
172,216

 
7.6

 
18.3

 
Goodwill
 
469,433

 
469,433

 
469,433

 

 

 
Other assets
 
795,029

 
777,493

 
978,717

 
2.3

 
(18.8
)
 
Total assets
 
$
36,307,966

 
$
35,917,617

 
$
33,255,275

 
1.1
%
 
9.2
 %
 
 
 
 
 
 
 
 
 


 


Liabilities and Stockholders’ Equity
 
 

 
 

 
 

 


 


 
Customer deposits
 
$
31,311,662

 
$
31,154,287

 
$
28,592,441

 
0.5
%
 
9.5
 %
 
Short-term borrowings
 
24,813

 
24,426

 
36,992

 
1.6

 
(32.9
)
 
FHLB advances
 
323,323

 
322,756

 
321,084

 
0.2

 
0.7

 
Securities sold under repurchase agreements (“repurchase agreements”) (1)
 
50,000

 
50,000

 
200,000

 

 
(75.0
)
 
Long-term debt
 
176,513

 
176,450

 
191,265

 

 
(7.7
)
 
Accrued expenses and other liabilities
 
639,759

 
519,437

 
535,439

 
23.2

 
19.5

 
Total liabilities
 
32,526,070

 
32,247,356

 
29,877,221

 
0.9

 
8.9

 
Stockholders’ equity
 
3,781,896

 
3,670,261

 
3,378,054

 
3.0

 
12.0

 
Total liabilities and stockholders’ equity
 
$
36,307,966

 
$
35,917,617

 
$
33,255,275

 
1.1
%
 
9.2
 %
 
 
 
 
 
 
 
 
 


 


 
Book value per common share
 
$
26.17

 
$
25.40

 
$
23.44

 
3.0
%
 
11.7
 %
 
Tangible equity (2) per common share
 
$
22.71

 
$
21.93

 
$
19.92

 
3.6

 
14.0

 
Tangible equity to tangible assets ratio (2)
 
9.17
%
 
8.95
%
 
8.77
%
 
2.4

 
4.5

 
Number of common shares at period-end
 
144,511

 
144,486

 
144,133

 

 
0.3

 
 
 
 
 
 
(1)
Resale and repurchase agreements are reported net pursuant to Accounting Standards Codification (“ASC”) 210-20-45, Balance Sheet Offsetting. As of September 30, 2017, June 30, 2017, and September 30, 2016, $400.0 million, $400.0 million and $250.0 million out of $450.0 million of gross repurchase agreements were eligible for netting against resale agreements, respectively.
(2)
See reconciliation of the GAAP to non-GAAP financial measures in Table 15.

8



EAST WEST BANCORP, INC.
TOTAL LOANS AND DEPOSITS DETAIL
($ in thousands)
(unaudited)
Table 2
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
September 30, 2017
% Change
 
 
 
September 30, 2017
 
June 30, 2017
 
September 30, 2016
 
Qtr-o-Qtr
 
Yr-o-Yr
Loans:
 
 
 
 
 
 
 
 
 
 
 
Real estate - commercial
 
$
8,843,776

 
$
8,465,030

 
$
7,775,787

 
4.5
 %
 
13.7
 %
 
Real estate - land and construction
 
683,404

 
660,819

 
730,610

 
3.4

 
(6.5
)
 
Commercial
 
10,645,156

 
10,187,349

 
9,340,999

 
4.5

 
14.0

 
Real estate - single-family
 
4,356,009

 
4,001,488

 
3,383,106

 
8.9

 
28.8

 
Real estate - multifamily
 
1,876,956

 
1,772,741

 
1,421,401

 
5.9

 
32.0

 
Consumer
 
2,120,056

 
2,123,239

 
2,080,059

 
(0.1
)
 
1.9

 
Total loans held-for-investment (1)(2)
 
28,525,357

 
27,210,666

 
24,731,962

 
4.8

 
15.3

Loans held-for-sale
 
178

 
11,649

 
47,719

 
(98.5
)
 
(99.6
)
 
Total loans (1)(2), including loans held-for-sale
 
28,525,535

 
27,222,315

 
24,779,681

 
4.8

 
15.1

Allowance for loan losses
 
(285,926
)
 
(276,316
)
 
(255,812
)
 
3.5

 
11.8

 
Net loans (1)(2)
 
$
28,239,609

 
$
26,945,999

 
$
24,523,869

 
4.8
 %
 
15.2
 %
 
 
 
 
 
 
 
 
 
 
 


Customer deposits:
 
 

 
 

 
 

 
 
 


 
Noninterest-bearing demand
 
$
10,992,674

 
$
10,460,230

 
$
9,524,021

 
5.1
 %
 
15.4
 %
 
Interest-bearing checking
 
4,108,859

 
4,059,046

 
3,550,101

 
1.2

 
15.7

 
Money market
 
7,939,031

 
8,193,086

 
7,684,085

 
(3.1
)
 
3.3

 
Savings
 
2,476,557

 
2,368,611

 
2,235,847

 
4.6

 
10.8

 
Total core deposits
 
25,517,121

 
25,080,973

 
22,994,054

 
1.7

 
11.0

 
Time deposits
 
5,794,541

 
6,073,314

 
5,598,387

 
(4.6
)
 
3.5

 
Total deposits
 
$
31,311,662

 
$
31,154,287


$
28,592,441

 
0.5
 %
 
9.5
 %
 
 
 
 
 
 
 
 
 
 
 
 
(1)
Includes $(29.2) million, $(9.6) million and $7.4 million as of September 30, 2017, June 30, 2017 and September 30, 2016, respectively, of net deferred loan fees, unearned income, unamortized premiums and unaccreted discounts.
(2)
Includes ASC 310-30 discount of $39.1 million, $42.9 million and $56.4 million as of September 30, 2017, June 30, 2017 and September 30, 2016, respectively.

















9



EAST WEST BANCORP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
($ and shares in thousands, except per share data)
(unaudited)
Table 3
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
September 30, 2017
% Change
 
 
 
September 30, 2017
 
June 30, 2017
 
September 30, 2016
 
Qtr-o-Qtr
 
Yr-o-Yr
Interest and dividend income
 
$
339,910

 
$
322,775

 
$
280,317

 
5.3
%
 
21.3
%
Interest expense
 
36,755

 
32,684

 
26,169

 
12.5

 
40.5

Net interest income before provision for credit losses
 
303,155

 
290,091

 
254,148

 
4.5

 
19.3

Provision for credit losses
 
12,996

 
10,685

 
9,525

 
21.6

 
36.4

Net interest income after provision for credit losses
 
290,159

 
279,406

 
244,623

 
3.8

 
18.6

Noninterest income
 
49,624

 
47,400

 
49,341

 
4.7

 
0.6

Noninterest expense
 
164,499

 
169,121

 
170,500

 
(2.7
)
 
(3.5
)
Income before income taxes
 
175,284

 
157,685

 
123,464

 
11.2

 
42.0

Income tax expense
 
42,624

 
39,355

 
13,321

 
8.3

 
220.0

Net income
 
$
132,660

 
$
118,330

 
$
110,143

 
12.1
%
 
20.4
%
Earnings per share (“EPS”)
 
 

 
 

 
 

 


 


- Basic
 
$
0.92

 
$
0.82

 
$
0.76

 
12.1
%
 
20.1
%
- Diluted
 
$
0.91

 
$
0.81

 
$
0.76

 
12.0

 
19.9

Weighted average number of shares outstanding
 
 
 
 
 
 
 


 


- Basic
 
144,498

 
144,485

 
144,122

 
%
 
0.3
%
- Diluted
 
145,882

 
145,740

 
145,238

 
0.1

 
0.4

 
 
 
 
 
 
 
 
 


 


 
 
 
Three Months Ended
 
September 30, 2017
% Change
 
 
 
September 30, 2017
 
June 30, 2017
 
September 30, 2016
 
Qtr-o-Qtr
 
Yr-o-Yr
Noninterest income:
 
 

 
 

 
 

 


 


 
Branch fees
 
$
10,803

 
$
10,700

 
$
10,408

 
1.0
%
 
3.8
%
 
Letters of credit fees and foreign exchange income
 
10,154

 
11,986

 
10,908

 
(15.3
)
 
(6.9
)
 
Ancillary loan fees and other income
 
5,987

 
5,907

 
6,135

 
1.4

 
(2.4
)
 
Wealth management fees
 
3,615

 
3,537

 
4,033

 
2.2

 
(10.4
)
 
Derivative fees and other income
 
6,663

 
3,765

 
5,791

 
77.0

 
15.1

 
Net gains on sales of loans
 
2,361

 
1,545

 
2,158

 
52.8

 
9.4

 
Net gains on sales of available-for-sale investment securities
 
1,539

 
2,720

 
1,790

 
(43.4
)
 
(14.0
)
 
Net gains on sales of fixed assets
 
1,043

 
1,042

 
486

 
0.1

 
114.6

 
Net gain on sale of business
 
3,807

 

 

 
NM

 
NM

 
Other fees and operating income
 
3,652

 
6,198

 
7,632

 
(41.1
)
 
(52.1
)
Total noninterest income
 
$
49,624

 
$
47,400

 
$
49,341

 
4.7
%
 
0.6
%
Noninterest expense:
 
 

 
 

 
 

 


 


 
Compensation and employee benefits
 
$
79,583

 
$
80,744

 
$
75,042

 
(1.4
)%
 
6.1
%
 
Occupancy and equipment expense
 
16,635

 
15,554

 
15,456

 
6.9

 
7.6

 
Deposit insurance premiums and regulatory assessments
 
5,676

 
5,779

 
6,450

 
(1.8
)
 
(12.0
)
 
Legal expense
 
3,316

 
2,552

 
5,361

 
29.9

 
(38.1
)
 
Data processing
 
3,004

 
3,058

 
2,729

 
(1.8
)
 
10.1

 
Consulting expense
 
4,087

 
4,769

 
4,594

 
(14.3
)
 
(11.0
)
 
Deposit related expense
 
2,413

 
2,505

 
3,082

 
(3.7
)
 
(21.7
)
 
Computer software expense
 
4,393

 
5,462

 
3,331

 
(19.6
)
 
31.9

 
Other operating expense
 
19,830

 
19,064

 
19,814

 
4.0

 
0.1

 
Amortization of tax credit and other investments
 
23,827

 
27,872

 
32,618

 
(14.5
)
 
(27.0
)
 
Amortization of core deposit intangibles
 
1,735

 
1,762

 
2,023

 
(1.5
)
 
(14.2
)
Total noninterest expense
 
$
164,499

 
$
169,121

 
$
170,500

 
(2.7
)%
 
(3.5
)%
 
 
 
 
 
 
 
 
 
 
 
 
NM Not Meaningful

10



EAST WEST BANCORP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
($ and shares in thousands, except per share data)
(unaudited)
Table 4
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Nine Months Ended
 
September 30, 2017
% Change
 
 
 
September 30, 2017
 
September 30, 2016
 
Yr-o-Yr
Interest and dividend income
 
$
965,354

 
$
835,354

 
15.6
 %
Interest expense
 
99,986

 
75,418

 
32.6

Net interest income before provision for credit losses
 
865,368

 
759,936

 
13.9

Provision for credit losses
 
30,749

 
17,018

 
80.7

Net interest income after provision for credit losses
 
834,619

 
742,918

 
12.3

Noninterest income
 
213,047

 
134,118

 
58.9

Noninterest expense
 
486,693

 
465,985

 
4.4

Income before income taxes
 
560,973

 
411,051

 
36.5

Income tax expense
 
140,247

 
90,108

 
55.6

Net income
 
$
420,726

 
$
320,943

 
31.1
 %
EPS
 
 

 
 

 


- Basic
 
$
2.91

 
$
2.23

 
30.8
 %
- Diluted
 
$
2.88

 
$
2.21

 
30.4

Weighted average number of shares outstanding
 
 
 
 
 


- Basic
 
144,412

 
144,061

 
0.2
 %
- Diluted
 
145,849

 
145,086

 
0.5

 
 
 
 
 
 
 
 
 
 
 
Nine Months Ended
 
September 30, 2017
% Change
 
 
 
September 30, 2017
 
September 30, 2016
 
Yr-o-Yr
Noninterest income:
 
 

 
 

 
 
 
Branch fees
 
$
31,799

 
$
30,983

 
2.6
 %
 
Letters of credit fees and foreign exchange income
 
33,209

 
31,404

 
5.7

 
Ancillary loan fees and other income
 
16,876

 
13,997

 
20.6

 
Wealth management fees
 
11,682

 
9,862

 
18.5

 
Derivative fees and other income
 
12,934

 
9,778

 
32.3

 
Net gains on sales of loans
 
6,660

 
6,965

 
(4.4
)
 
Net gains on sales of available-for-sale investment securities
 
6,733

 
8,468

 
(20.5
)
 
Net gains on sales of fixed assets
 
74,092

 
2,916

 
NM

 
Net gain on sale of business
 
3,807

 

 
NM

 
Other fees and operating income
 
15,255

 
19,745

 
(22.7
)
Total noninterest income
 
$
213,047


$
134,118

 
58.9
 %
Noninterest expense:
 
 

 
 

 


 
Compensation and employee benefits
 
$
244,930

 
$
220,166

 
11.2
 %
 
Occupancy and equipment expense
 
47,829

 
45,619

 
4.8

 
Deposit insurance premiums and regulatory assessments
 
17,384

 
17,341

 
0.2

 
Legal expense
 
8,930

 
12,714

 
(29.8
)
 
Data processing
 
9,009

 
8,712

 
3.4

 
Consulting expense
 
10,775

 
19,027

 
(43.4
)
 
Deposit related expense
 
7,283

 
7,675

 
(5.1
)
 
Computer software expense
 
13,823

 
9,267

 
49.2

 
Other operating expense
 
55,357

 
58,508

 
(5.4
)
 
Amortization of tax credit and other investments
 
66,059

 
60,779

 
8.7

 
Amortization of core deposit intangibles
 
5,314

 
6,177

 
(14.0
)
Total noninterest expense
 
$
486,693

 
$
465,985

 
4.4
 %
 
 
 
 
 
 
 
 
NM Not Meaningful

11



EAST WEST BANCORP, INC.
SELECTED FINANCIAL INFORMATION
($ in thousands)
(unaudited)
Table 5
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Average Balances
 
Three Months Ended
 
September 30, 2017
% Change
 
 
 
September 30, 2017
 
June 30, 2017
 
September 30, 2016
 
Qtr-o-Qtr
 
Yr-o-Yr
Loans:
 
 
 
 
 
 
 
 
 
 
 
Real estate - commercial
 
$
8,518,461

 
$
8,351,403

 
$
7,768,534

 
2.0
 %
 
9.7
%
 
Real estate - land and construction
 
672,875

 
655,588

 
706,406

 
2.6

 
(4.7
)
 
Commercial
 
10,259,807

 
9,975,216

 
9,169,433

 
2.9

 
11.9

 
Real estate - single-family
 
4,163,900

 
3,816,572

 
3,203,603

 
9.1

 
30.0

 
Real estate - multifamily
 
1,808,236

 
1,764,720

 
1,371,871

 
2.5

 
31.8

 
Consumer
 
2,106,500

 
2,135,288

 
2,089,466

 
(1.3
)
 
0.8

 
Total loans (1)
 
$
27,529,779

 
$
26,698,787

 
$
24,309,313

 
3.1
 %
 
13.2
%
 
 
 
 
 
 
 
 
 
 
 
 
Investment securities
 
$
2,963,122

 
$
2,962,201

 
$
3,273,861

 
 %
 
(9.5
)%
Interest-earning assets
 
$
34,208,533

 
$
33,295,012

 
$
31,055,354

 
2.7
 %
 
10.2
%
Total assets
 
$
35,937,567

 
$
34,994,935

 
$
32,906,533

 
2.7
 %
 
9.2
%
 
 
 
 
 
 
 
 
 
 
 
Customer deposits:
 
 

 
 

 
 

 
 
 
 
 
Noninterest-bearing demand
 
$
10,655,860

 
$
10,195,755

 
$
9,413,031

 
4.5
 %
 
13.2
%
 
Interest-bearing checking
 
4,014,290

 
3,872,347

 
3,553,477

 
3.7

 
13.0

 
Money market
 
7,997,648

 
7,964,286

 
7,548,835

 
0.4

 
5.9

 
Savings
 
2,423,312

 
2,295,299

 
2,133,036

 
5.6

 
13.6

 
Total core deposits
 
25,091,110

 
24,327,687

 
22,648,379

 
3.1

 
10.8

 
Time deposits
 
5,974,793

 
5,871,236

 
5,627,084

 
1.8

 
6.2

 
Total deposits
 
$
31,065,903

 
$
30,198,923

 
$
28,275,463

 
2.9
 %
 
9.9
%
 
 
 
 
 
 
 
 
 
 
 
 
Interest-bearing liabilities
 
$
20,989,149

 
$
20,662,124

 
$
19,611,482

 
1.6
 %
 
7.0
%
Stockholders’ equity
 
$
3,756,207

 
$
3,637,695

 
$
3,349,241

 
3.3
 %
 
12.2
%
 
 
 
 
 
 
 
 
 
 
 
Selected Ratios (2)
 
Three Months Ended
 
September 30, 2017
Basis Point Change
 
 
 
September 30,
2017
 
June 30,
2017
 
September 30,
2016
 
Qtr-o-Qtr
 
Yr-o-Yr
 
Return on average assets
 
1.46
%
 
1.36
%
 
1.33
%
 
10

bps
 
13

bps
 
Adjusted return on average assets (3)
 
1.44
%
 
1.36
%
 
1.33
%
 
8

 
 
11

 
 
Return on average equity
 
14.01
%
 
13.05
%
 
13.08
%
 
96

 
 
93

 
 
Adjusted return on average equity (3)
 
13.78
%
 
13.05
%
 
13.08
%
 
73

 
 
70

 
 
Return on average tangible equity (3)
 
16.33
%
 
15.30
%
 
15.51
%
 
103

 
 
82

 
 
Adjusted return on average tangible equity (3)
 
16.06
%
 
15.30
%
 
15.51
%
 
76

 
 
55

 
 
Interest rate spread
 
3.25
%
 
3.26
%
 
3.06
%
 
(1
)
 
 
19

 
 
Net interest margin
 
3.52
%
 
3.49
%
 
3.26
%
 
3

 
 
26

 
 
Adjusted net interest margin (3)
 
3.46
%
 
3.41
%
 
3.16
%
 
5

 
 
30

 
 
Average loan yield
 
4.42
%
 
4.40
%
 
4.18
%
 
2

 
 
24

 
 
Adjusted average loan yield (3)
 
4.35
%
 
4.30
%
 
4.05
%
 
5

 
 
30

 
 
Yield on average interest-earning assets
 
3.94
%
 
3.89
%
 
3.59
%
 
5

 
 
35

 
 
Cost of interest-bearing deposits
 
0.60
%
 
0.54
%
 
0.44
%
 
6

 
 
16

 
 
Cost of deposits
 
0.40
%
 
0.36
%
 
0.30
%
 
4

 
 
10

 
 
Cost of funds
 
0.46
%
 
0.42
%
 
0.36
%
 
4

 
 
10

 
 
Adjusted pre-tax, pre-provision profitability ratio (3)
 
2.32
%
 
2.27
%
 
2.03
%
 
5

 
 
29

 
 
Adjusted noninterest expense/average assets (3)
 
1.53
%
 
1.60
%
 
1.64
%
 
(7
)
 
 
(11
)
 
 
Adjusted efficiency ratio (3)
 
39.81
%
 
41.33
%
 
44.77
%
 
(152
)
bps
 
(496
)
bps
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1)
Includes average balances of ASC 310-30 discount of $41.9 million, $45.4 million and $60.1 million for the three months ended September 30, 2017, June 30, 2017 and September 30, 2016, respectively.
(2)
Annualized except for efficiency ratio.
(3)
See reconciliation of the GAAP to non-GAAP financial measures in Tables 12, 13, 14 and 15.

12



EAST WEST BANCORP, INC.
SELECTED FINANCIAL INFORMATION
($ in thousands)
(unaudited)
Table 6
 
 
 
 
 
 
 
 
 
 
 
 
 
Average Balances
 
Nine Months Ended
 
September 30, 2017
% Change
 
 
 
September 30, 2017
 
September 30, 2016
 
Yr-o-Yr
Loans:
 
 
 
 
 
 
 
Real estate - commercial
 
$
8,339,620

 
$
7,770,747

 
7.3
%
 
Real estate - land and construction
 
667,299

 
664,429

 
0.4

 
Commercial
 
10,066,832

 
8,969,530

 
12.2

 
Real estate - single-family
 
3,850,221

 
3,110,032

 
23.8

 
Real estate - multifamily
 
1,743,179

 
1,421,445

 
22.6

 
Consumer
 
2,115,931

 
2,070,743

 
2.2

 
Total loans (1)
 
$
26,783,082

 
$
24,006,926

 
11.6
%
 
 
 
 
 
 
 
 
Investment securities
 
$
3,060,688

 
$
3,289,014

 
(6.9
)%
Interest-earning assets
 
$
33,542,941

 
$
30,813,307

 
8.9
%
Total assets
 
$
35,290,542

 
$
32,662,445

 
8.0
%
 
 
 
 
 
 
 
Customer deposits:
 
 

 
 

 
 
 
Noninterest-bearing demand
 
$
10,323,254

 
$
9,107,051

 
13.4
%
 
Interest-bearing checking
 
3,830,004

 
3,445,996

 
11.1

 
Money market
 
7,968,457

 
7,519,261

 
6.0

 
Savings
 
2,334,752

 
2,043,547

 
14.2

 
Total core deposits
 
24,456,467

 
22,115,855

 
10.6

 
Time deposits
 
5,873,217

 
5,941,760

 
(1.2
)
 
Total deposits
 
$
30,329,684

 
$
28,057,615

 
8.1
%
 
 
 
 
 
 
 
 
Interest-bearing liabilities
 
$
20,813,224

 
$
19,754,340

 
5.4
%
Stockholders’ equity
 
$
3,630,062

 
$
3,266,485

 
11.1
%
 
 
 
 
 
 
 
Selected Ratios (2)
 
Nine Months Ended
 
September 30, 2017 Basis Point Change
 
 
 
September 30, 2017
 
September 30, 2016
 
Yr-o-Yr
 
Return on average assets
 
1.59
%
 
1.31
%
 
28

bps
 
Adjusted return on average assets (3)
 
1.43
%
 
1.31
%
 
12

 
 
Return on average equity
 
15.50
%
 
13.12
%
 
238

 
 
Adjusted return on average equity (3)
 
13.89
%
 
13.12
%
 
77

 
 
Return on average tangible equity (3)
 
18.15