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Section 1: 8-K (8-K)

Document




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)
January 25, 2018

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 January 25, 2018, East West Bancorp, Inc. (the “Company”) announced, via press release, its financial results for the quarter and full year ended December 31, 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 January 25, 2018, the Company will hold a conference call to discuss its financial results for the quarter and full year ended December 31, 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 January 25, 2018.
99.2           Presentation Materials, dated January 25, 2018.

 



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: January 25, 2018
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 January 25, 2018.
99.2
 
Presentation Materials, dated January 25, 2018.




4



(Back To Top)

Section 2: EX-99.1 (EXHIBIT 99.1)

Exhibit


 
Exhibit 99.1
 
 
391894223_ewbclogoa07.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 RECORD NET INCOME FOR FULL YEAR 2017
OF $505.6 MILLION AND DILUTED EARNINGS PER SHARE OF $3.47,
BOTH UP BY 17% FROM THE PRIOR YEAR


Pasadena, California - January 25, 2018 - 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 fourth quarter and full year of 2017. For the fourth quarter of 2017, net income was $84.9 million or $0.58 per diluted share. For the full year 2017, net income was $505.6 million or $3.47 per diluted share.

“Our full year 2017 record earnings increased by 17% year-over-year, reflecting strong revenue growth augmented by contained expenses and credit costs. In 2017, total loans grew $3.5 billion or 14% year-over-year, to a record $29.1 billion from $25.5 billion as of December 31, 2016,” stated Dominic Ng, Chairman and Chief Executive Officer of East West. “Total deposits grew $2.3 billion or 8% year-over-year, to a record $32.2 billion as of December 31, 2017 from $29.9 billion at the end of the previous year.”

“During the year, East West’s net interest margin expanded by 18 basis points, reflecting our loan growth, attractive deposit mix, and the benefits of higher interest rates on our asset sensitive balance sheet,” continued Ng. “This has been a key component of our profitability; in 2017, we earned a return on average assets of 1.41% and a return on average equity of 13.7%. I would like to thank our 3,000 associates for their dedication and diligence in delivering another year of strong earnings for our shareholders.”

“At East West, we focus on creating sustainable, expandable and profitable customer relationships. Our consistent financial results year after year reflect the value of this customer focus and our business model as the financial bridge between the East and the West. We are committed to investing in technology and human capital to drive our business forward, continuously strengthening our infrastructure to ensure prudent risk management and operational excellence,” concluded Ng.

1



HIGHLIGHTS OF RESULTS

Full Year and Fourth Quarter Earnings - Full year 2017 net income of $505.6 million grew by 17% year-over-year from $431.7 million; full year 2017 diluted earnings per share (“EPS”) of $3.47 grew by 17% from $2.97 in the previous year. Fourth quarter 2017 net income of $84.9 million and diluted EPS of $0.58 were reduced by $41.7 million1, or $0.291 per share, due to the enactment of the Tax Cuts and Jobs Act. This reduction in earnings was primarily attributable to the remeasurement of the net deferred tax asset as a result of the reduced corporate tax rate. Fourth quarter 2017 adjusted1 net income of $126.6 million and adjusted1 diluted EPS of $0.87 increased by 14% year-over-year, and decreased by 3% linked quarter.

Net Interest Income Growth and Net Interest Margin Expansion - Net interest income totaled $319.7 million for the fourth quarter of 2017, an increase of $16.5 million or 5% linked quarter. Accounting Standard Codification (“ASC”) 310-30 discount accretion income was $7.0 million for the fourth quarter of 2017, compared to $4.5 million for the third quarter of 2017. Excluding discount accretion income, fourth quarter 2017 adjusted2 net interest income of $312.7 million increased by $14.1 million or 5% sequentially, due to loan growth and the expansion of loan yields. Fourth quarter 2017 net interest margin (“NIM”) of 3.57% expanded by five basis points linked quarter; adjusted2 NIM of 3.49% expanded by three basis points linked quarter.

Record Loans - Total loans of $29.1 billion as of December 31, 2017 were up $528.4 million or 2%, from $28.5 billion as of September 30, 2017. Total loans grew by $3.5 billion or 14% year-over-year. Quarter-over-quarter, all major loan categories grew; the strongest sequential quarter loan growth came from the single-family residential mortgage portfolio.

Record Deposits - Total deposits of $32.2 billion as of December 31, 2017 were up $908.5 million or 3%, from $31.3 billion as of September 30, 2017. Total deposits grew by $2.3 billion or 8% year-over-year. The strongest sequential quarter deposit growth came from interest-bearing checking and money market deposits. Noninterest-bearing demand deposits of $10.9 billion made up 34% of deposits as of December 31, 2017.

Pending Sale of Desert Community Bank Branches - In November 2017, East West Bank announced the sale of its eight Desert Community Bank (“DCB”) branches and related assets and liabilities. As of December 31, 2017, branch assets held-for-sale (“HFS”) were $91.3 million, of which loans HFS were $78.1 million and deposits HFS were $605.1 million. Loans HFS were primarily commercial real estate and commercial and industrial loans. Deposits HFS were primarily composed of noninterest-bearing demand accounts and savings deposits. All regulatory approvals necessary for this transaction have been received, and the sale is expected to close in the first quarter of 2018.

Asset Quality Metrics - The allowance for loan losses was $287.1 million, or 0.99% of loans held-for-investment (“HFI”), as of December 31, 2017, compared to $285.9 million, or 1.00% of loans HFI, as of September 30, 2017. For the fourth quarter of 2017, annualized net charge-offs were 0.22% of average loans HFI, compared to annualized net charge-offs of 0.06% of average loans HFI for the previous quarter. Full year 2017 net charge-offs were 0.08% of average loans HFI. Non-purchased credit impaired (“Non-PCI”) nonperforming assets decreased to $115.1 million, or 0.31% of total assets, as of December 31, 2017, from $117.0 million, or 0.32% of total assets, as of September 30, 2017.

Capital Levels - Capital levels for East West continue to be strong. As of December 31, 2017, stockholders’ equity was $3.8 billion, or $26.58 per share. Tangible equity3 per common share was $23.13 as of December 31, 2017, an increase of 2% linked quarter and 14% year-over-year. As of December 31, 2017, the tangible equity to tangible assets ratio3 was 9.12%, the Common Equity Tier 1 (“CET1”) capital ratio was 11.4%, and the total risk-based capital ratio was 12.9%.










 
 
 
 
1 See reconciliation of GAAP to non-GAAP financial measures in Table 13.
2 See reconciliation of GAAP to non-GAAP financial measures in Table 15.
3 See reconciliation of GAAP to non-GAAP financial measures in Table 16

2



QUARTERLY RESULTS SUMMARY
 
 
 
Quarter Ended
($ in millions, except per share data)
 
December 31, 2017
 
September 30, 2017
 
December 31, 2016
 
 
 
 
 
 
 
Net income
 
$
84.9

 
$
132.7

 
$
110.7

Earnings per share (diluted)
 
$
0.58

 
$
0.91

 
$
0.76

Adjusted earnings per share (diluted) (1)
 
$
0.87

 
$
0.89

 
$
0.76

Book value per common share
 
$
26.58

 
$
26.17

 
$
23.78

Tangible equity (1) per common share
 
$
23.13

 
$
22.71

 
$
20.27

Tangible equity to tangible assets ratio(1)
 
9.12
%
 
9.17
%
 
8.52
%
Return on average assets (2)
 
0.90
%
 
1.46
%
 
1.27
%
Return on average equity (2)
 
8.73
%
 
14.01
%
 
12.87
%
Return on average tangible equity (1)(2)
 
10.17
%
 
16.33
%
 
15.26
%
Adjusted return on average assets (1)(2)
 
1.35
%
 
1.44
%
 
1.27
%
Adjusted return on average equity (1)(2)
 
13.02
%
 
13.78
%
 
12.87
%
Adjusted return on average tangible equity (1)(2)
 
15.10
%
 
16.06
%
 
15.26
%
Adjusted pre-tax, pre-provision profitability ratio (1)(2)
 
2.27
%
 
2.32
%
 
2.10
%
Net interest income
 
$
319.7

 
$
303.2

 
$
272.7

Adjusted net interest income (1)
 
$
312.7

 
$
298.6

 
$
261.1

Net interest margin (2)
 
3.57
%
 
3.52
%
 
3.31
%
Adjusted net interest margin (1)(2)
 
3.49
%
 
3.46
%
 
3.17
%
Cost of deposits (2)
 
0.43
%
 
0.40
%
 
0.31
%
Efficiency ratio
 
48.1
%
 
46.6
%
 
46.6
%
Adjusted efficiency ratio (1)
 
41.6
%
 
39.8
%
 
43.2
%
 
(1)
See reconciliation of GAAP to non-GAAP financial measures in Tables 13, 14, 15 and 16.
(2)
Annualized.

MANAGEMENT OUTLOOK FOR 2018

Our current outlook for the expected full year 2018 results, compared to our full year 2017 results, is as follows:

End of Period Loans: increase at a percentage rate of approximately 10%.
Net Interest Margin (excluding the impact of ASC 310-30 discount accretion): between 3.65% and 3.75%.
Noninterest Expense (excluding tax credit amortization & deposit premium amortization): increase at a percentage rate in the high single digits.
Provision for Credit Losses: in the range of $70 million to $80 million.
Tax Items: projecting investment in tax-advantaged credits of $105 million, excluding low income housing tax credits, and associated tax credit amortization expense of $85 million. Projecting full year effective tax rate of approximately 16%.
Interest Rates: our outlook incorporates the current forward rate curve; as such, it currently assumes three fed funds rate increases in the year 2018: in March, June and September.

3



OPERATING RESULTS SUMMARY

Fourth Quarter 2017 Compared to Third Quarter 2017

Net Interest Income
Net interest income totaled $319.7 million, a 5% increase from $303.2 million.
Adjusted net interest income, excluding ASC 310-30 discount accretion income, grew to $312.7 million, a 5% increase from $298.6 million.
Average loans of $28.6 billion grew by $1.1 billion or 16% annualized from $27.5 billion.
Average deposits of $32.3 billion grew by $1.2 billion or 15% annualized from $31.1 billion.
Average noninterest-bearing demand deposits of $11.5 billion grew by $875.3 million or 33% annualized from $10.7 billion.

Net Interest Margin
Net interest margin expanded by five basis points to 3.57% from 3.52%.
Excluding the impact of ASC 310-30 discount accretion income, adjusted NIM expanded by three basis points to 3.49% from 3.46%.
The yield on loans expanded by 10 basis points to 4.52% from 4.42%; the adjusted4 loan yield expanded by seven basis points to 4.42% from 4.35%.
The cost of deposits increased by three basis points to 0.43% from 0.40%.

Noninterest Income
Total noninterest income of $45.4 million was down by $4.3 million sequentially. Excluding the impact of all gains on sales, total fees and other operating income of $38.5 million was down by $2.3 million, or 6%, from $40.9 million for the third quarter of 2017. This decline was primarily from decreases in derivative fees and other income, as well as in wealth management fees, due to lower customer transaction volumes.

The following table presents total fees and other operating income for the three months ended December 31, 2017, September 30, 2017 and December 31, 2016.
($ in thousands)
 
Quarter Ended
 
December 31, 2017
 
September 30, 2017
 
December 31, 2016
Branch fees
 
$
10,691

 
$
10,803

 
$
10,195

Letters of credit fees and foreign exchange income
 
9,570

 
10,154

 
14,356

Ancillary loan fees and other income
 
6,457

 
5,987

 
5,355

Wealth management fees
 
2,950

 
3,615

 
3,378

Derivative fees and other income
 
4,737

 
6,663

 
7,003

Other fees and operating income
 
4,144

 
3,652

 
7,237

Total fees and other operating income
 
$
38,549

 
$
40,874

 
$
47,524

 
 
 
 
 
 
 
















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

4



Noninterest Expense
Noninterest expense of $175.4 million includes $151.9 million of adjusted5 noninterest expense, $21.9 million amortization of tax credit and other investments, and $1.6 million amortization of core deposit intangibles.
Adjusted noninterest expense of $151.9 million increased by $13.0 million, or 9% linked quarter. This growth was driven by a $10.8 million increase in compensation and employee benefits, largely reflecting increased hiring along with increases in bonus accrual and restricted stock compensation.
The adjusted5 efficiency ratio was 41.6% in the fourth quarter, compared to 39.8% in the third quarter, due to the growth in expenses.


TAX RELATED ITEMS

The Company’s full year 2017 effective tax rate was 31%, resulting in tax expense of $229.5 million, compared to an effective tax rate of 25% and tax expense of $140.5 million for the full year 2016. The effective tax rates for the full year and the fourth quarter of 2017 were elevated because of nonrecurring items related to the enactment of the Tax Cuts and Jobs Act, which lowered the federal corporate tax rate to 21% from 35%.
These nonrecurring items included a $33.1 million remeasurement of the net deferred tax asset and a $7.9 million remeasurement of investments in qualified affordable housing partnerships, recorded in the fourth quarter of 2017. These adjustments are management’s best estimate based on the information available as of this earnings release and are subject to change as final tax calculations are completed in conjunction with the filing of the Form 10-K.
Tax expense in the fourth quarter of 2017 was $89.2 million, compared to $42.6 million in the third quarter of 2017. The total impact of the Tax Cuts and Jobs Act was an increase in tax expense of $41.7 million, or $0.29 per share, in the fourth quarter of 2017. Excluding this impact, the adjusted6 tax expense for the fourth quarter of 2017 was $47.5 million and the adjusted6 effective tax rate was 27%. Adjusted6 tax expense for the full year 2017 was $187.8 million and the adjusted6 effective tax rate was 26%.
For the full year 2018, the Company is projecting an effective tax rate of approximately 16%.


CREDIT QUALITY

The allowance for loan losses totaled $287.1 million, or 0.99% of loans HFI, as of December 31, 2017, compared to $285.9 million, or 1.00% of loans HFI, as of September 30, 2017, and $260.5 million, or 1.02% of loans HFI, as of December 31, 2016.
The provision for credit losses recorded for the current quarter was $15.5 million, compared to $13.0 million for the third quarter of 2017, and $10.5 million for the fourth quarter of 2016.
For the fourth quarter of 2017, net charge-offs were $15.7 million or 0.22% of average loans HFI, annualized. This compares to net charge-offs of $3.8 million or 0.06% of average loans HFI, annualized, for the third quarter of 2017, and net charge-offs of $8.0 million or 0.13% of average loans HFI, annualized, for the fourth quarter of 2016. For the full year 2017, net charge-offs of $22.5 million were 0.08% of average loans HFI, compared to $36.2 million, or 0.15% of average loans HFI, for the full year 2016.
Non-PCI nonperforming assets of $115.1 million as of December 31, 2017, decreased by $1.9 million, or 2% linked quarter, from $117.0 million as of September 30, 2017, and decreased by $14.4 million, or 11% year-over-year, from $129.6 million as of December 31, 2016. Non-PCI nonperforming assets were equivalent to 0.31% of total assets at the end of 2017, compared to 0.32% at the end of the previous quarter and 0.37% at the end of 2016.











 
 
 
 
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 12.


5



CAPITAL STRENGTH

Capital levels for East West continue to be strong. As of December 31, 2017, stockholders’ equity was $3.8 billion, or $26.58 per share. Tangible equity per common share was $23.13 as of December 31, 2017, an increase of 2% linked quarter and 14% year-over-year. The following table presents the regulatory capital ratios for the quarters ended December 31, 2017, September 30, 2017, and December 31, 2016.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Regulatory Capital Metrics
 
Basel III
($ in millions)
 
December 31, 2017 (a)
 
September 30, 2017
 
December 31, 2016
 
Minimum
Regulatory
Requirements
 
Well
Capitalized
Regulatory
Requirements
 
Fully Phased-
in Minimum
Regulatory
Requirements
 
 
 
 
 
 
 
 
 
 
 
 
 
CET1 capital ratio
 
11.4
%
 
11.4
%
 
10.9
%
 
4.5
%
 
6.5
%
 
7.0
%
Tier 1 risk-based capital ratio
 
11.4
%
 
11.4
%
 
10.9
%
 
6.0
%
 
8.0
%
 
8.5
%
Total risk-based capital ratio
 
12.9
%
 
12.9
%
 
12.4
%
 
8.0
%
 
10.0
%
 
10.5
%
Tier 1 leverage capital ratio
 
9.2
%
 
9.4
%
 
8.7
%
 
4.0
%
 
5.0
%
 
4.0
%
Risk-Weighted Assets (“RWA”) (b)
 
$
29,669

 
$
29,178

 
$
27,358

 
N/A

 
N/A

 
N/A

 
 
 
 
 
 
 

 
 

 
 

 
 
 
 
N/A Not applicable.
(a)
The Company’s December 31, 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.


DIVIDEND PAYOUT AND CAPITAL ACTIONS

East West’s Board of Directors has declared first quarter 2018 dividends for the Company’s common stock. The common stock cash dividend of $0.20 per share is payable on February 15, 2018 to shareholders of record on February 5, 2018.


Conference Call

East West will host a conference call to discuss fourth quarter and full year 2017 earnings with the public on Thursday, January 25, 2018 at 8:30 a.m. PT/11:30 a.m. ET. The public and investment community are invited to listen as management discusses fourth quarter and full year 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 January 25, 2018 at 11:30 a.m. Pacific Time through February 25, 2018. 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: 10115137.


About East West

East West Bancorp, Inc. is a publicly owned company with total assets of $37.2 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 consumers; changes in the economy of and monetary policy in the People’s Republic of China; changes in income tax laws and regulations including, but not limited to, under the Tax Cuts and Jobs Act; 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 result in a negative impact on 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. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
($ and shares in thousands, except per share data)
(unaudited)
Table 1
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2017
% Change
 
 
 
December 31, 2017
 
September 30, 2017
 
December 31, 2016
 
Qtr-o-Qtr
 
Yr-o-Yr
Assets
 
 
 
 
 
 
 
 
 
 
 
Cash and due from banks
 
$
457,181

 
$
364,328

 
$
460,559

 
25.5
%
 
(0.7
)%
 
Interest-bearing cash with banks
 
1,717,411

 
1,372,421

 
1,417,944

 
25.1

 
21.1

 
Cash and cash equivalents
 
2,174,592

 
1,736,749

 
1,878,503

 
25.2

 
15.8

 
Interest-bearing deposits with banks
 
398,422

 
404,946

 
323,148

 
(1.6
)
 
23.3

 
Securities purchased under resale agreements (“resale agreements”) (1)
 
1,050,000

 
1,250,000

 
2,000,000

 
(16.0
)
 
(47.5
)
 
Investment securities
 
3,016,752

 
2,956,776

 
3,479,766

 
2.0

 
(13.3
)
 
Federal Home Loan Bank (“FHLB”) and Federal Reserve Bank (“FRB”) stock
 
73,521

 
73,322

 
72,775

 
0.3

 
1.0

 
Loans held-for-sale (“HFS”)
 
85

 
178

 
23,076

 
(52.2
)
 
(99.6
)
 
Loans held-for-investment (net of allowance for loan losses of $287,128, $285,926 and $260,520)
 
28,688,590

 
28,239,431

 
25,242,619

 
1.6

 
13.7

 
Investments in qualified affordable housing partnerships, net
 
162,824

 
178,344

 
183,917

 
(8.7
)
 
(11.5
)
 
Investments in tax credit and other investments, net
 
224,551

 
203,758

 
173,280

 
10.2

 
29.6

 
Goodwill
 
469,433

 
469,433

 
469,433

 

 

 
Branch assets HFS (2)
 
91,318

 

 

 
100.0

 
100.0

 
Other assets
 
800,161

 
795,029

 
942,323

 
0.6

 
(15.1
)
 
Total assets
 
$
37,150,249


$
36,307,966


$
34,788,840

 
2.3
%
 
6.8
%
 
 
 
 
 
 
 
 
 


 


Liabilities and Stockholders’ Equity
 
 

 
 

 
 

 


 


 
Deposits
 
$
31,615,063

 
$
31,311,662

 
$
29,890,983

 
1.0
%
 
5.8
%
 
Deposits HFS (2)
 
605,111

 

 

 
100.0

 
100.0

 
Short-term borrowings
 

 
24,813

 
60,050

 
(100.0
)
 
(100.0
)
 
FHLB advances
 
323,891

 
323,323

 
321,643

 
0.2

 
0.7

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

 
50,000

 
350,000

 

 
(85.7
)
 
Long-term debt
 
171,577

 
176,513

 
186,327

 
(2.8
)
 
(7.9
)
 
Accrued expenses and other liabilities
 
542,656

 
639,759

 
552,096

 
(15.2
)
 
(1.7
)
 
Total liabilities
 
33,308,298

 
32,526,070

 
31,361,099

 
2.4

 
6.2

 
Stockholders’ equity
 
3,841,951

 
3,781,896

 
3,427,741

 
1.6

 
12.1

 
Total liabilities and stockholders’ equity
 
$
37,150,249

 
$
36,307,966

 
$
34,788,840

 
2.3
%
 
6.8
%
 
 
 
 
 
 
 
 
 


 


 
Book value per common share
 
$
26.58

 
$
26.17

 
$
23.78

 
1.6
%
 
11.8
%
 
Tangible equity (3) per common share
 
$
23.13

 
$
22.71

 
$
20.27

 
1.9

 
14.1

 
Tangible equity to tangible assets ratio (3)
 
9.12
%
 
9.17
%
 
8.52
%
 
(0.5
)
 
7.0

 
Number of common shares at period-end
 
144,543

 
144,511

 
144,167

 
0.0

 
0.3

 
 
 
 
 
 
(1)
Resale and repurchase agreements are reported net pursuant to Accounting Standards Codification (“ASC”) 210-20-45, Balance Sheet Offsetting. As of December 31, 2017, September 30, 2017, and December 31, 2016, $400.0 million, $400.0 million and $100.0 million out of $450.0 million of gross repurchase agreements were eligible for netting against resale agreements, respectively.
(2)
Represents the DCB branch assets and deposits that were classified as HFS as of December 31, 2017. Branch assets HFS primarily comprised $78.1 million in loans.
(3)
See reconciliation of GAAP to non-GAAP financial measures in Table 16.

8



EAST WEST BANCORP, INC. AND SUBSIDIARIES
TOTAL LOANS AND DEPOSITS DETAIL
($ in thousands)
(unaudited)
Table 2
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2017
% Change
 
 
 
December 31, 2017
 
September 30, 2017
 
December 31, 2016
 
Qtr-o-Qtr
 
Yr-o-Yr
Loans:
 
 
 
 
 
 
 
 
 
 
Commercial lending:
 
 
 
 
 
 
 
 
 
 
 
Commercial and industrial (“C&I”)
 
$
10,697,231

 
$
10,645,156

 
$
9,640,563

 
0.5
%
 
11.0
%
 
Commercial real estate (“CRE”)
 
8,936,897

 
8,843,776

 
8,016,109

 
1.1

 
11.5

 
Multifamily residential
 
1,916,176

 
1,876,956

 
1,585,939

 
2.1

 
20.8

 
Construction and land
 
659,697

 
683,404

 
674,754

 
(3.5
)
 
(2.2
)
Consumer lending:
 
 
 
 
 
 
 
 
 
 
 
Single-family residential
 
4,646,289

 
4,356,009

 
3,509,779

 
6.7

 
32.4

 
Home equity lines of credit (“HELOCs”)
 
1,782,924

 
1,767,419

 
1,760,776

 
0.9

 
1.3

 
Other consumer
 
336,504

 
352,637

 
315,219

 
(4.6
)
 
6.8

 
Total loans held-for-investment (1)(2)
 
28,975,718


28,525,357


25,503,139

 
1.6

 
13.6

Loans HFS (3)
 
78,217

 
178

 
23,076

 
      NM

 
239.0

 
Total loans (1)(2)
 
29,053,935

 
28,525,535

 
25,526,215

 
1.9

 
13.8

Allowance for loan losses
 
(287,128
)
 
(285,926
)
 
(260,520
)
 
0.4

 
10.2

 
Net loans (1)(2)
 
$
28,766,807

 
$
28,239,609

 
$
25,265,695

 
1.9
%
 
13.9
 %
 
 
 
 
 
 
 
 
 
 
 


Deposits:
 
 

 
 

 
 

 
 
 


 
Noninterest-bearing demand
 
$
10,887,306

 
$
10,992,674

 
$
10,183,946

 
(1.0
)%
 
6.9
%
 
Interest-bearing checking
 
4,419,089

 
4,108,859

 
3,674,417

 
7.6

 
20.3

 
Money market
 
8,359,425

 
7,939,031

 
8,174,854

 
5.3

 
2.3

 
Savings
 
2,308,494

 
2,476,557

 
2,242,497

 
(6.8
)
 
2.9

 
Total core deposits
 
25,974,314

 
25,517,121

 
24,275,714

 
1.8

 
7.0

 
Time deposits
 
5,640,749

 
5,794,541

 
5,615,269

 
(2.7
)
 
0.5

Deposits HFS
 
605,111

 

 

 
100.0

 
100.0

 
Total deposits
 
$
32,220,174

 
$
31,311,662


$
29,890,983

 
2.9
%
 
7.8
 %
 
 
 
 
 
 
 
 
 
 
 
 
NM Not Meaningful
(1)
Includes $(34.0) million, $(29.2) million and $1.2 million as of December 31, 2017, September 30, 2017 and December 31, 2016, respectively, of net deferred loan fees, unearned fees, unamortized premiums and unaccreted discounts.
(2)
Includes ASC 310-30 discount of $35.3 million, $39.1 million and $49.4 million as of December 31, 2017, September 30, 2017 and December 31, 2016, respectively.
(3)
Includes $78.1 million of loans HFS in branch assets HFS.

9



EAST WEST BANCORP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF INCOME
($ and shares in thousands, except per share data)
(unaudited)
Table 3
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Quarter Ended
 
December 31, 2017
% Change
 
 
 
December 31, 2017
 
September 30, 2017
 
December 31, 2016
 
Qtr-o-Qtr
 
Yr-o-Yr
Interest and dividend income
 
$
359,765

 
$
339,910

 
$
302,127

 
5.8
%
 
19.1
%
Interest expense
 
40,064

 
36,755

 
29,425

 
9.0

 
36.2

Net interest income before provision for credit losses
 
319,701

 
303,155

 
272,702

 
5.5

 
17.2

Provision for credit losses
 
15,517

 
12,996

 
10,461

 
19.4

 
48.3

Net interest income after provision for credit losses
 
304,184

 
290,159

 
262,241

 
4.8

 
16.0

Noninterest income
 
45,359

 
49,624

 
48,800

 
(8.6
)
 
(7.1
)
Noninterest expense
 
175,416

 
164,499

 
149,904

 
6.6

 
17.0

Income before income taxes
 
174,127

 
175,284

 
161,137

 
(0.7
)
 
8.1

Income tax expense
 
89,229

 
42,624

 
50,403

 
109.3

 
77.0

Net income
 
$
84,898

 
$
132,660

 
$
110,734

 
(36.0
)%
 
(23.3
)%
Earnings per share (“EPS”)
 
 

 
 

 
 

 


 


- Basic
 
$
0.59

 
$
0.92

 
$
0.77

 
(36.0
)%
 
(23.5
)%
- Diluted
 
$
0.58

 
$
0.91

 
$
0.76

 
(36.1
)
 
(23.6
)
Weighted average number of shares outstanding
 
 
 
 
 
 
 


 


- Basic
 
144,542

 
144,498

 
144,166

 
0.0
%
 
0.3
%
- Diluted
 
146,030

 
145,882

 
145,428

 
0.1

 
0.4

 
 
 
 
 
 
 
 
 


 


 
 
 
Quarter Ended
 
December 31, 2017
% Change
 
 
 
December 31, 2017
 
September 30, 2017
 
December 31, 2016
 
Qtr-o-Qtr
 
Yr-o-Yr
Noninterest income:
 
 

 
 

 
 

 


 


 
Branch fees
 
$
10,691

 
$
10,803

 
$
10,195

 
(1.0
)%
 
4.9
%
 
Letters of credit fees and foreign exchange income
 
9,570

 
10,154

 
14,356

 
(5.8
)
 
(33.3
)
 
Ancillary loan fees and other income
 
6,457

 
5,987

 
5,355

 
7.9

 
20.6

 
Wealth management fees
 
2,950

 
3,615

 
3,378

 
(18.4
)
 
(12.7
)
 
Derivative fees and other income
 
4,737

 
6,663

 
7,003

 
(28.9
)
 
(32.4
)
 
Net gains (losses) on sales of loans
 
2,210

 
2,361

 
(880
)
 
(6.4
)
 
       NM

 
Net gains on sales of available-for-sale investment securities
 
1,304

 
1,539

 
1,894

 
(15.3
)
 
(31.2
)
 
Net gains on sales of fixed assets
 
3,296

 
1,043

 
262

 
216.0

 
1,158.0

 
Net gain on sale of business
 

 
3,807

 

 
(100.0
)
 

 
Other fees and operating income
 
4,144

 
3,652

 
7,237

 
13.5

 
(42.7
)
Total noninterest income
 
$
45,359

 
$
49,624

 
$
48,800

 
(8.6
)%
 
(7.1
)%
Noninterest expense:
 
 

 
 

 
 

 


 


 
Compensation and employee benefits
 
$
90,361

 
$
79,583

 
$
79,949

 
13.5
%
 
13.0
%
 
Occupancy and equipment expense
 
17,092

 
16,635

 
15,834

 
2.7

 
7.9

 
Deposit insurance premiums and regulatory assessments
 
6,351

 
5,676

 
5,938

 
11.9

 
7.0

 
Legal expense
 
2,514

 
3,316

 
(9,873
)
 
(24.2
)
 
       NM

 
Data processing
 
3,084

 
3,004

 
2,971

 
2.7

 
3.8

 
Consulting expense
 
4,147

 
4,087

 
3,715

 
1.5

 
11.6

 
Deposit related expense
 
2,655

 
2,413

 
2,719

 
10.0

 
(2.4
)
 
Computer software expense
 
4,360

 
4,393

 
3,647

 
(0.8
)
 
19.6

 
Other operating expense
 
21,340

 
19,830

 
20,428

 
7.6

 
4.5

 
Amortization of tax credit and other investments
 
21,891

 
23,827

 
22,667

 
(8.1
)
 
(3.4
)
 
Amortization of core deposit intangibles
 
1,621

 
1,735

 
1,909

 
(6.6
)
 
(15.1
)
Total noninterest expense
 
$
175,416

 
$
164,499

 
$
149,904

 
6.6
%
 
17.0
%
 
 
 
 
 
 
 
 
 
 
 
 
NM Not Meaningful

10



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, 2017
% Change
 
 
 
December 31, 2017
 
December 31, 2016
 
Yr-o-Yr
Interest and dividend income
 
$
1,325,119

 
$
1,137,481

 
16.5
 %
Interest expense
 
140,050

 
104,843

 
33.6

Net interest income before provision for credit losses
 
1,185,069

 
1,032,638

 
14.8

Provision for credit losses
 
46,266

 
27,479

 
68.4

Net interest income after provision for credit losses
 
1,138,803

 
1,005,159

 
13.3

Noninterest income
 
258,406

 
182,918

 
41.3

Noninterest expense
 
662,109

 
615,889

 
7.5

Income before income taxes
 
735,100

 
572,188

 
28.5

Income tax expense
 
229,476

 
140,511

 
63.3

Net income
 
$
505,624

 
$
431,677

 
17.1
 %
EPS
 
 

 
 

 


- Basic
 
$
3.50

 
$
3.00

 
16.8
 %
- Diluted
 
$
3.47

 
$
2.97

 
16.5

Weighted average number of shares outstanding
 
 
 
 
 


- Basic
 
144,444

 
144,087

 
0.2
 %
- Diluted
 
145,913

 
145,172

 
0.5

 
 
 
 
 
 
 
 
 
 
 
Year Ended
 
December 31, 2017
% Change
 
 
 
December 31, 2017
 
December 31, 2016
 
Yr-o-Yr
Noninterest income:
 
 

 
 

 
 
 
Branch fees
 
$
42,490

 
$
41,178

 
3.2
 %
 
Letters of credit fees and foreign exchange income
 
42,779

 
45,760

 
(6.5
)
 
Ancillary loan fees and other income
 
23,333

 
19,352

 
20.6

 
Wealth management fees
 
14,632

 
13,240

 
10.5

 
Derivative fees and other income
 
17,671

 
16,781

 
5.3

 
Net gains on sales of loans
 
8,870

 
6,085

 
45.8

 
Net gains on sales of available-for-sale investment securities
 
8,037

 
10,362

 
(22.4
)
 
Net gains on sales of fixed assets
 
77,388

 
3,178

 
2,335.1

 
Net gain on sale of business
 
3,807

 

 
100.0

 
Other fees and operating income
 
19,399

 
26,982

 
(28.1
)
Total noninterest income
 
$
258,406


$
182,918

 
41.3
 %
Noninterest expense:
 
 

 
 

 


 
Compensation and employee benefits
 
$
335,291

 
$
300,115

 
11.7
 %
 
Occupancy and equipment expense
 
64,921

 
61,453

 
5.6

 
Deposit insurance premiums and regulatory assessments
 
23,735

 
23,279

 
2.0

 
Legal expense
 
11,444

 
2,841

 
302.8

 
Data processing
 
12,093

 
11,683

 
3.5

 
Consulting expense
 
14,922

 
22,742

 
(34.4
)
 
Deposit related expense
 
9,938

 
10,394

 
(4.4
)
 
Computer software expense
 
18,183

 
12,914

 
40.8

 
Other operating expense
 
76,697

 
78,936

 
(2.8
)
 
Amortization of tax credit and other investments
 
87,950

 
83,446

 
5.4

 
Amortization of core deposit intangibles
 
6,935

 
8,086

 
(14.2
)
Total noninterest expense
 
$
662,109

 
$
615,889

 
7.5
 %
 
 
 
 
 
 
 
 

11



EAST WEST BANCORP, INC. AND SUBSIDIARIES
SELECTED AVERAGE BALANCES
($ in thousands)
(unaudited)
Table 5
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Quarter Ended
 
December 31, 2017
% Change
 
Year Ended
 
December 31, 2017
% Change
 
 
 
December 31, 2017
 
September 30, 2017
 
December 31, 2016
 
Qtr-o-Qtr
 
Yr-o-Yr
 
December 31, 2017
 
December 31, 2016
 
Yr-o-Yr
Loans:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial lending:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
C&I
 
$
10,518,121

 
$
10,259,807

 
$
9,454,884

 
2.5
%
 
11.2
%
 
$
10,180,582

 
$
9,091,532

 
12.0
%
 
CRE
 
8,917,681

 
8,518,461

 
7,869,979

 
4.7

 
13.3

 
8,485,323

 
7,795,690

 
8.8

 
Multifamily residential
 
1,909,933

 
1,808,236

 
1,467,978

 
5.6

 
30.1

 
1,785,210

 
1,433,142

 
24.6

 
Construction and land
 
674,337

 
672,875

 
734,081

 
0.2

 
(8.1
)
 
669,073

 
681,937

 
(1.9
)
Consumer lending:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Single-family residential
 
4,498,180

 
4,163,900

 
3,407,615

 
8.0

 
32.0

 
4,013,542

 
3,184,834

 
26.0

 
HELOCs
 
1,783,762

 
1,768,951

 
1,762,191

 
0.8

 
1.2

 
1,780,377

 
1,755,649

 
1.4

 
Other consumer
 
344,447

 
337,549

 
336,468

 
2.0

 
2.4

 
338,649

 
322,111

 
5.1

 
Total loans (1)
 
$
28,646,461

(2) 
$
27,529,779

 
$
25,033,196

 
4.1
%
 
14.4
%
 
$
27,252,756

(2) 
$
24,264,895

 
12.3
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Investment securities
 
$
2,925,817

 
$
2,963,122

 
$
3,551,863

 
(1.3
)%
 
(17.6
)%
 
$
3,026,693

 
$
3,355,086

 
(9.8
)%
Interest-earning assets
 
$
35,491,424

 
$
34,208,533

 
$
32,736,669

 
3.8
%
 
8.4
%
 
$
34,034,065

 
$
31,296,775

 
8.7
%
Total assets
 
$
37,262,618

 
$
35,937,567

 
$
34,679,137

 
3.7
%
 
7.4
%
 
$
35,787,613

 
$
33,169,373

 
7.9
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Deposits:
 
 

 
 

 
 

 
 
 
 
 
 

 
 

 
 
 
Noninterest-bearing demand
 
$
11,531,181

 
$
10,655,860

 
$
10,159,022

 
8.2
%
 
13.5
%
 
$
10,627,718

 
$
9,371,481

 
13.4
%
 
Interest-bearing checking
 
4,313,732

 
4,014,290

 
3,641,320

 
7.5

 
18.5

 
3,951,930

 
3,495,094

 
13.1

 
Money market
 
8,198,133

 
7,997,648

 
8,157,508

 
2.5

 
0.5

 
8,026,347

 
7,679,695

 
4.5

 
Savings
 
2,472,207

 
2,423,312

 
2,284,282

 
2.0

 
8.2

 
2,369,398

 
2,104,060

 
12.6

 
Total core deposits
 
26,515,253

 
25,091,110

 
24,242,132

 
5.7

 
9.4

 
24,975,393

 
22,650,330

 
10.3

 
Time deposits
 
5,735,014

 
5,974,793

 
5,584,838

 
(4.0
)
 
2.7

 
5,838,382

 
5,852,042

 
(0.2
)
 
Total deposits
 
$
32,250,267

(3) 
$
31,065,903

 
$
29,826,970

 
3.8
%
 
8.1
%
 
$
30,813,775

(3) 
$
28,502,372

 
8.1
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest-bearing liabilities
 
$
21,280,348

 
$
20,989,149

 
$
20,522,442

 
1.4
%
 
3.7
%
 
$
20,930,965

 
$
19,947,414

 
4.9
%
Stockholders’ equity
 
$
3,856,802

 
$
3,756,207

 
$
3,423,405

 
2.7
%
 
12.7
%
 
$
3,687,213

 
$
3,305,929

 
11.5
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1)
Includes ASC 310-30 discount of $37.7 million, $41.9 million and $54.7 million for the quarters ended December 31, 2017, September 30, 2017 and December 31, 2016, respectively, and $43.3 million and $64.3 million for the years ended December 31, 2017 and 2016, respectively.
(2)
Includes loans HFS.
(3)
Includes deposits HFS.

12



EAST WEST BANCORP, INC. AND SUBSIDIARIES
QUARTER-TO-DATE AVERAGE BALANCES, YIELDS AND RATES
($ in thousands)
(unaudited)
Table 6
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Quarter Ended
 
 
 
December 31, 2017
 
September 30, 2017
 
 
 
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
 
$
2,743,548

 
$
11,092

 
1.60
%
 
$
2,344,561

 
$
9,630

 
1.63
%
 
Resale agreements (2)
 
1,102,174

 
6,873

 
2.47
%
 
1,297,826

 
7,901

 
2.42
%
 
Investment securities
 
2,925,817

 
14,734

 
2.00
%
 
2,963,122

 
14,828

 
1.99
%
 
Loans (3)
 
28,646,461

 
326,401

 
4.52
%
 
27,529,779

 
306,939

 
4.42
%
 
FHLB and FRB stock
 
73,424

 
665

 
3.59
%
 
73,245

 
612

 
3.31
%
 
Total interest-earning assets
 
35,491,424

 
359,765

 
4.02
%
 
34,208,533

 
339,910

 
3.94
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Noninterest-earning assets:
 
 

 
 

 
 

 
 

 
 

 
 

 
Cash and due from banks
 
417,798

 
 
 
 
 
387,705

 
 

 
 

 
Allowance for loan losses
 
(285,490
)
 
 
 
 
 
(276,467
)
 
 

 
 

 
Other assets
 
1,638,886

 
 
 
 
 
1,617,796

 
 

 
 

 
Total assets
 
$
37,262,618

 
 

 
 

 
$
35,937,567