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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)
April 19, 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 April 19, 2018, East West Bancorp, Inc. (the “Company”) announced, via press release, its financial results for the quarter ended March 31, 2018 (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 the Exchange Act, except as otherwise expressly stated in such filing.

Item 7.01. Regulation FD Disclosure

On April 19, 2018, the Company will hold a conference call to discuss its financial results for the quarter ended March 31, 2018, 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 April 19, 2018.
99.2           Presentation Materials, dated April 19, 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: April 19, 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 April 19, 2018.
99.2
 
Presentation Materials, dated April 19, 2018.




4



(Back To Top)

Section 2: EX-99.1 (EXHIBIT 99.1)

Exhibit


 
Exhibit 99.1
 
 
393091364_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 NET INCOME FOR FIRST QUARTER 2018
OF $187 MILLION AND DILUTED EARNINGS PER SHARE OF $1.28,
BOTH UP BY 120% FROM THE PRIOR QUARTER


Pasadena, California - April 19, 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 first quarter of 2018. For the first quarter of 2018, net income was $187.0 million or $1.28 per diluted share. First quarter 2018 return on average assets was 2.03%, return on average equity was 19.3% and return on average tangible1 equity was 22.3%.

“We are pleased with the solid balance sheet growth in the first quarter of 2018. Total loans grew $547 million, or 8% annualized, to a record $29.6 billion from $29.1 billion as of December 31, 2017,” stated Dominic Ng, Chairman and Chief Executive Officer of East West. “Total deposits grew $389 million, or 5% annualized, to a record $32.6 billion as of March 31, 2018 from $32.2 billion at the end of 2017.”

“During the quarter, East West’s net interest margin expanded by 16 basis points to 3.73%, reflecting the benefits of higher interest rates on our asset sensitive balance sheet. The yield on average loans expanded by 17 basis points compared to an increase in the cost of deposits of six basis points,” continued Ng. “Upward repricing of variable rate loans drove the increase in yields. Margin expansion was additionally supported by our attractive deposit mix, 36% of which was noninterest-bearing demand deposits as of March 31, 2018. During this period of rising interest rates, our net interest margin has expanded over the past six consecutive quarters.”

“Net interest margin expansion in the first quarter of 2018 was the primary driver for the sequential quarter operating revenue growth, in excess of expense growth. Net interest income increased by 2%, or 9% annualized, from the fourth quarter of 2017. Noninterest expense decreased in the first quarter of 2018, compared to the fourth quarter of 2017; we continue to ensure strong expense discipline whilst making investments in talent and infrastructure to strengthen East West’s franchise and enhance our value proposition for our clients,” concluded Ng.












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

1



HIGHLIGHTS OF RESULTS

First Quarter Earnings - Net income of $187.0 million for the first quarter of 2018 increased by 120% compared to $84.9 million for the fourth quarter of 2017; diluted earnings per share (“EPS”) of $1.28 also increased by 120% linked quarter from $0.58. First quarter net income included $22.2 million of after tax gain on the sale of Desert Community Bank (“DCB”) branches, and fourth quarter net income included $41.7 million of additional income tax expense related to the enactment of the Tax Cuts and Jobs Act, impacting quarter-over-quarter comparisons. Excluding these items, adjusted2 net income of $164.9 million and adjusted2 diluted EPS of $1.13 for the first quarter of 2018 both increased by 30% from the fourth quarter of 2017.

Sale of Desert Community Bank Branches - In March 2018, East West Bank closed the sale of its eight DCB branches, including $613.7 million of deposits, $59.1 million of loans, and other related assets. In the first quarter of 2018, East West recognized a pre-tax gain on sale of $31.5 million or $22.2 million after tax. The diluted EPS impact from the DCB sale was $0.15, net of tax.

Net Interest Income Growth and Net Interest Margin Expansion - Net interest income totaled $326.7 million for the first quarter of 2018, an increase of $7.0 million, or 2% linked quarter, primarily due to the expansion of loan yields and loan growth. First quarter 2018 net interest margin (“NIM”) of 3.73% expanded by 16 basis points linked quarter.

Record Loans - Total loans of $29.6 billion as of March 31, 2018 were up $547.5 million or 2%, from $29.1 billion as of December 31, 2017. DCB loans sold did not materially impact linked quarter growth comparisons, which still would have been 2% had the loans not been sold. The strongest sequential quarter loan growth came from the single family mortgage portfolio; quarter-over-quarter, all commercial lending categories grew. Total loans grew by 12% year-over-year.

Record Deposits - Total deposits of $32.6 billion as of March 31, 2018 were up $388.6 million or 1%, from $32.2 billion as of December 31, 2017. Total deposits grew by 7% year-over-year. Deposit growth in the quarter more than offset the impact of the DCB branch sale. Adding back the $613.7 million of deposits sold, deposit growth would have been 3% linked quarter and 9% year-over-year. Noninterest-bearing demand deposits of $11.8 billion were 36% of total deposits as of March 31, 2018, an increase from 34% as of December 31, 2017.

Asset Quality Metrics - The allowance for loan losses was $297.7 million, or 1.01% of loans held-for-investment (“HFI”), as of March 31, 2018, compared to $287.1 million, or 0.99% of loans HFI, as of December 31, 2017. For the first quarter of 2018, annualized net charge-offs were 0.13% of average loans HFI, compared to annualized net charge-offs of 0.22% of average loans HFI for the previous quarter. Non-purchased credit impaired (“Non-PCI”) nonperforming assets were $131.0 million, or 0.35% of total assets, as of March 31, 2018.

Capital Levels - Capital levels for East West continue to be strong. As of March 31, 2018, stockholders’ equity was $4.0 billion, or $27.46 per share. Tangible equity3 per common share was $24.07 as of March 31, 2018, an increase of 4% linked quarter and 14% year-over-year. As of March 31, 2018, the tangible equity to tangible assets ratio3 was 9.37%, the Common Equity Tier 1 (“CET1”) capital ratio was 11.9%, and the total risk-based capital ratio was 13.4%.















 
 
 
 
2 See reconciliation of GAAP to non-GAAP financial measures in Table 10.
3 See reconciliation of GAAP to non-GAAP financial measures in Table 13.

2



QUARTERLY RESULTS SUMMARY
 
 
 
Quarter Ended
($ in millions, except per share data)
 
March 31, 2018
 
December 31, 2017
 
March 31, 2017
 
 
 
 
 
 
 
Net income
 
$
187.0

 
$
84.9

 
$
169.7

Adjusted net income (1)
 
$
164.9

 
$
126.6

 
$
128.2

Earnings per share (diluted)
 
$
1.28

 
$
0.58

 
$
1.16

Adjusted earnings per share (diluted) (1)
 
$
1.13

 
$
0.87

 
$
0.88

Book value per common share
 
$
27.46

 
$
26.58

 
$
24.68

Tangible equity (1) per common share
 
$
24.07

 
$
23.13

 
$
21.20

Tangible equity to tangible assets ratio (1)
 
9.37
%
 
9.12
%
 
8.79
%
Return on average assets (2)
 
2.03
%
 
0.90
%
 
1.97
%
Return on average equity (2)
 
19.34
%
 
8.73
%
 
19.71
%
Return on average tangible equity (1)(2)
 
22.30
%
 
10.17
%
 
23.21
%
Adjusted return on average assets (1)(2)
 
1.79
%
 
1.35
%
 
1.49
%
Adjusted return on average equity (1)(2)
 
17.04
%
 
13.02
%
 
14.88
%
Adjusted return on average tangible equity (1)(2)
 
19.68
%
 
15.10
%
 
17.57
%
Adjusted pre-tax, pre-provision profitability ratio (1)(2)
 
2.38
%
 
2.27
%
 
2.09
%
Net interest income
 
$
326.7

 
$
319.7

 
$
272.1

Net interest margin (2)
 
3.73
%
 
3.57
%
 
3.33
%
Cost of deposits (2)
 
0.49
%
 
0.43
%
 
0.32
%
Efficiency ratio
 
42.2
%
 
48.0
%
 
39.4
%
Adjusted efficiency ratio (1)
 
40.6
%
 
41.6
%
 
43.2
%
 
(1)
See reconciliation of GAAP to non-GAAP financial measures in Tables 10, 11, and 13.
(2)
Annualized.

MANAGEMENT OUTLOOK FOR 2018

We reaffirm our outlook for the full year 2018, the components of which are unchanged relative to a quarter ago. Compared to our full year 2017 results, our outlook for the expected full year 2018 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%. Including the impact of ASC 310-30 discount accretion, we expect our full year 2018 NIM to range between 3.70% and 3.80%.

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 two additional fed funds rate increases in 2018: in June and September.

3



OPERATING RESULTS SUMMARY

First Quarter 2018 Compared to Fourth Quarter 2017

Net Interest Income
Net interest income totaled $326.7 million, a 2% increase from $319.7 million.
Average loans of $29.2 billion grew by $565.4 million, or 8% annualized, from $28.6 billion.
Average deposits of $32.3 billion grew by $41.2 million, or 1% annualized, from $32.3 billion.

Net Interest Margin
Net interest margin expanded by 16 basis points to 3.73% from 3.57%.
The yield on loans expanded by 17 basis points to 4.69% from 4.52%.
The yield on earning assets expanded by 23 basis points to 4.25% from 4.02%.
The cost of deposits increased by six basis points to 0.49% from 0.43%.
The cost of funds increased by eight basis points to 0.56% from 0.48%.

Noninterest Income
Total noninterest income of $74.4 million included a $31.5 million gain on the sale of DCB branches. Excluding the impact of all gains on sales, total fees and other operating income of $38.2 million was flat relative to the fourth quarter of 2017.

The following table presents total fees and other operating income for the three months ended March 31, 2018, December 31, 2017 and March 31, 2017.
($ in thousands)
 
Quarter Ended
 
March 31, 2018
 
December 31, 2017
 
March 31, 2017
Branch fees
 
$
10,430

 
$
10,287

 
$
9,924

Letters of credit fees and foreign exchange income
 
9,602

 
9,974

 
11,441

Ancillary loan fees and other income
 
5,581

 
6,457

 
4,982

Wealth management fees
 
2,953

 
2,797

 
4,335

Derivative fees and other income
 
6,690

 
4,737

 
2,506

Other fees and operating income
 
2,921

 
4,144

 
5,405

Total fees and other operating income
 
$
38,177

 
$
38,396

 
$
38,593

 
 
 
 
 
 
 

Noninterest Expense
Noninterest expense of $169.1 million included $150.3 million of adjusted4 noninterest expense, $17.4 million in amortization of tax credit and other investments, and $1.5 million in amortization of core deposit intangibles.
Adjusted noninterest expense of $150.3 million decreased by $1.5 million, or 1%, linked quarter. A seasonal increase in compensation and employee benefits expense and an increase in computer software expense was more than offset by a linked quarter decline in consulting expense and a decrease in other operating expenses. The decrease in other operating expenses included a $1.9 million gain on the disposition of other real estate owned in the first quarter of 2018.
The adjusted4 efficiency ratio was 40.6% in the first quarter, compared to 41.6% in the fourth quarter.














 
 
 
 
4 See reconciliation of GAAP to non-GAAP financial measures in Table 11.

4



TAX RELATED ITEMS

Tax expense in the first quarter of 2018 was $24.8 million and the effective tax rate was 12%, compared to a tax expense of $58.3 million and an effective tax rate of 26% in the first quarter of 2017.
The lower effective tax rate in 2018 reflects the new federal corporate tax rate of 21%, following the enactment of the Tax Cuts and Jobs Act in December 2017.
Tax expense in the first quarter includes the impact of accounting for stock-based compensation in accordance with Accounting Standards Update 2016-09, which reduced tax expense by $4.8 million in 2018 compared to a reduction of $4.4 million in 2017.
Tax expense in the first quarter of 2018 was further reduced by the reversal of a liability related to state taxes for prior years. The reversal reduced tax expense by $3.9 million.
For the full year 2018, the Company is projecting an effective tax rate of approximately 16%.

CREDIT QUALITY

The allowance for loan losses totaled $297.7 million, or 1.01% of loans HFI, as of March 31, 2018, compared to $287.1 million, or 0.99% of loans HFI, as of December 31, 2017, and $263.1 million, or 0.99% of loans HFI, as of March 31, 2017.
The provision for credit losses recorded for the current quarter was $20.2 million, compared to $15.5 million for the fourth quarter of 2017, and $7.1 million for the first quarter of 2017.
For the first quarter of 2018, net charge-offs were $9.4 million, or annualized 0.13% of average loans HFI. This compares to net charge-offs of $15.7 million, or annualized 0.22% of average loans HFI, for the fourth quarter of 2017, and net charge-offs of $5.4 million, or annualized 0.08% of average loans HFI, for the first quarter of 2017.
Non-PCI nonperforming assets of $131.0 million as of March 31, 2018, increased from $115.1 million as of December 31, 2017, and decreased from $144.8 million as of March 31, 2017. Non-PCI nonperforming assets were equivalent to 0.35% of total assets at the end of the first quarter of 2018, compared to 0.31% at the end of the previous quarter and 0.41% at the end of the prior year quarter.

CAPITAL STRENGTH

Capital levels for East West continue to be strong. As of March 31, 2018, stockholders’ equity was $4.0 billion, or $27.46 per share. Tangible equity per common share was $24.07 as of March 31, 2018, an increase of 4% linked quarter and 14% year-over-year. The following table presents the regulatory capital ratios for the quarters ended March 31, 2018, December 31, 2017, and March 31, 2017.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Regulatory Capital Metrics
 
Basel III
($ in millions)
 
March 31, 2018 (a)
 
December 31, 2017
 
March 31, 2017
 
Minimum
Regulatory
Requirements
 
Well
Capitalized
Regulatory
Requirements
 
Fully Phased-
in Minimum
Regulatory
Requirements
 
 
 
 
 
 
 
 
 
 
 
 
 
CET1 capital ratio
 
11.9
%
 
11.4
%
 
11.1
%
 
4.5
%
 
6.5
%
 
7.0
%
Tier 1 risk-based capital ratio
 
11.9
%
 
11.4
%
 
11.1
%
 
6.0
%
 
8.0
%
 
8.5
%
Total risk-based capital ratio
 
13.4
%
 
12.9
%
 
12.6
%
 
8.0
%
 
10.0
%
 
10.5
%
Tier 1 leverage capital ratio
 
9.6
%
 
9.2
%
 
9.0
%
 
4.0
%
 
5.0
%
 
4.0
%
Risk-Weighted Assets (“RWA”) (b)
 
$
29,892

 
$
29,669

 
$
28,088

 
N/A

 
N/A

 
N/A

 
 
 
 
 
 
 

 
 

 
 

 
 
 
 
N/A Not applicable.
(a)
The Company’s March 31, 2018 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 second quarter 2018 dividends for the Company’s common stock. The common stock cash dividend of $0.20 per share is payable on May 15, 2018 to stockholders of record on May 1, 2018.


5



Conference Call

East West will host a conference call to discuss first quarter 2018 earnings with the public on Thursday, April 19, 2018 at 8:30 a.m. PT/11:30 a.m. ET. The public and investment community are invited to listen as management discusses first quarter 2018 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 April 19, 2018 at 11:30 a.m. Pacific Time through May 19, 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: 10118140.

About East West

East West Bancorp, Inc. is a publicly owned company with total assets of $37.7 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 and the impact of the Tax Cuts and Jobs Act; impact of other potential federal tax changes and spending cuts; 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 adverse judgments or settlements in litigation; impact 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; 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; the Company’s ability to retain key officers and employees; any future strategic acquisitions or divestitures; 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, 2017, 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
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
March 31, 2018
% Change
 
 
 
March 31, 2018
 
December 31, 2017
 
March 31, 2017
 
Qtr-o-Qtr
 
Yr-o-Yr
Assets
 
 
 
 
 
 
 
 
 
 
 
Cash and due from banks
 
$
413,017

 
$
457,181

 
$
346,005

 
(9.7
)%
 
19.4
%
 
Interest-bearing cash with banks
 
1,901,921

 
1,717,411

 
2,088,638

 
10.7

 
(8.9
)
 
Cash and cash equivalents
 
2,314,938

 
2,174,592

 
2,434,643

 
6.5

 
(4.9
)
 
Interest-bearing deposits with banks
 
478,871

 
398,422

 
249,849

 
20.2

 
91.7

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

 
1,050,000

 
1,650,000

 

 
(36.4
)
 
Investment securities
 
2,811,416

 
3,016,752

 
3,094,531

 
(6.8
)
 
(9.1
)
 
Federal Home Loan Bank (“FHLB”) and Federal Reserve Bank (“FRB”) stock
 
73,787

 
73,521

 
73,019

 
0.4

 
1.1

 
Loans held-for-sale (“HFS”)
 
46,181

 
85

 
28,931

 
NM

 
59.6

 
Loans held-for-investment (net of allowance for loan losses of $297,654, $287,128 and $263,094)
 
29,257,594

 
28,688,590

 
26,198,198

 
2.0

 
11.7

 
Investments in qualified affordable housing partnerships, net
 
160,574

 
162,824

 
176,965

 
(1.4
)
 
(9.3
)
 
Investments in tax credit and other investments, net
 
246,183

 
224,551

 
177,023

 
9.6

 
39.1

 
Goodwill
 
465,547

 
469,433

 
469,433

 
(0.8
)
 
(0.8
)
 
Branch assets HFS (2)
 

 
91,318

 

 
(100.0
)
 

 
Other assets
 
814,013

 
800,161

 
789,534

 
1.7

 
3.1

 
Total assets
 
$
37,719,104


$
37,150,249


$
35,342,126

 
1.5
%
 
6.7
%
 
 
 
 
 
 
 
 
 


 


Liabilities and Stockholders’ Equity
 
 

 
 

 
 

 


 


 
Deposits
 
$
32,608,777

 
$
31,615,063

 
$
30,542,975

 
3.1
%
 
6.8
%
 
Deposits HFS (2)
 

 
605,111

 

 
(100.0
)
 

 
Short-term borrowings
 
30,277

 

 
42,023

 
100.0

 
(28.0
)
 
FHLB advances
 
324,451

 
323,891

 
322,196

 
0.2

 
0.7

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

 
50,000

 
200,000

 

 
(75.0
)
 
Long-term debt
 
166,640

 
171,577

 
181,388

 
(2.9
)
 
(8.1
)
 
Accrued expenses and other liabilities
 
560,204

 
542,656

 
487,590

 
3.2

 
14.9

 
Total liabilities
 
33,740,349

 
33,308,298

 
31,776,172

 
1.3

 
6.2

 
Stockholders’ equity
 
3,978,755

 
3,841,951

 
3,565,954

 
3.6

 
11.6

 
Total liabilities and stockholders’ equity
 
$
37,719,104

 
$
37,150,249

 
$
35,342,126

 
1.5
%
 
6.7
%
 
 
 
 
 
 
 
 
 


 


 
Book value per common share
 
$
27.46

 
$
26.58

 
$
24.68

 
3.3
%
 
11.3
%
 
Tangible equity (3) per common share
 
$
24.07

 
$
23.13

 
$
21.20

 
4.0

 
13.5

 
Tangible equity to tangible assets ratio (3)
 
9.37
%
 
9.12
%
 
8.79
%
 
2.7

 
6.6

 
Number of common shares at period-end
 
144,873

 
144,543

 
144,462

 
0.2

 
0.3

 
 
 
 
 
 
NM Not Meaningful
(1)
Resale and repurchase agreements are reported net pursuant to Accounting Standards Codification (“ASC”) 210-20-45, Balance Sheet Offsetting. As of March 31, 2018, December 31, 2017 and March 31, 2017, $400.0 million, $400.0 million and $250.0 million out of $450.0 million of gross repurchase agreements were eligible for netting against gross resale agreements, respectively.
(2)
Represents the DCB branch assets and deposits that were classified as HFS as of December 31, 2017. Branch assets HFS were primarily comprised of loans.
(3)
See reconciliation of GAAP to non-GAAP financial measures in Table 13.

8



EAST WEST BANCORP, INC. AND SUBSIDIARIES
TOTAL LOANS AND DEPOSITS DETAIL
($ in thousands)
(unaudited)
Table 2
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
March 31, 2018
% Change
 
 
 
March 31, 2018
 
December 31, 2017
 
March 31, 2017
 
Qtr-o-Qtr
 
Yr-o-Yr
Loans:
 
 
 
 
 
 
 
 
 
 
Commercial lending:
 
 
 
 
 
 
 
 
 
 
 
Commercial and industrial (“C&I”)
 
$
10,818,304

 
$
10,697,231

 
$
9,918,072

 
1.1
%
 
9.1
%
 
Commercial real estate (“CRE”)
 
9,022,746

 
8,936,897

 
8,302,098

 
1.0

 
8.7

 
Multifamily residential
 
1,954,855

 
1,916,176

 
1,732,695

 
2.0

 
12.8

 
Construction and land
 
669,340

 
659,697

 
684,792

 
1.5

 
(2.3
)
Consumer lending:
 
 
 
 
 
 
 
 
 
 
 
Single-family residential
 
4,930,580

 
4,646,289

 
3,700,072

 
6.1

 
33.3

 
Home equity lines of credit (“HELOCs”)
 
1,775,443

 
1,782,924

 
1,785,973

 
(0.4
)
 
(0.6
)
 
Other consumer
 
383,980

 
336,504

 
337,590

 
14.1

 
13.7

 
Total loans held-for-investment (1)(2)
 
29,555,248


28,975,718


26,461,292

 
2.0

 
11.7

Loans HFS
 
46,181

 
78,217

(3) 
28,931

 
(41.0
)
 
59.6

 
Total loans (1)(2)
 
29,601,429

 
29,053,935

 
26,490,223

 
1.9

 
11.7

Allowance for loan losses
 
(297,654
)
 
(287,128
)
 
(263,094
)
 
3.7

 
13.1

 
Net loans (1)(2)
 
$
29,303,775

 
$
28,766,807

 
$
26,227,129

 
1.9
%
 
11.7
%
 
 
 
 
 
 
 
 
 
 
 


Deposits:
 
 

 
 

 
 

 
 
 


 
Noninterest-bearing demand
 
$
11,763,936

 
$
10,887,306

 
$
10,658,946

 
8.1
%
 
10.4
%
 
Interest-bearing checking
 
4,428,952

 
4,419,089

 
3,803,710

 
0.2

 
16.4

 
Money market
 
7,913,040

 
8,359,425

 
7,990,253

 
(5.3
)
 
(1.0
)
 
Savings
 
2,301,780

 
2,308,494

 
2,247,902

 
(0.3
)
 
2.4

 
Total core deposits
 
26,407,708

 
25,974,314

 
24,700,811

 
1.7

 
6.9

 
Time deposits
 
6,201,069

 
5,640,749

 
5,842,164

 
9.9

 
6.1

Deposits HFS
 

 
605,111

 

 
(100.0
)
 

 
Total deposits
 
$
32,608,777

 
$
32,220,174


$
30,542,975

 
1.2
%
 
6.8
%
 
 
 
 
 
 
 
 
 
 
 
 
(1)
Includes $(36.6) million, $(34.0) million and $(4.7) million as of March 31, 2018, December 31, 2017 and March 31, 2017, respectively, of net deferred loan fees, unearned fees, unamortized premiums and unaccreted discounts.
(2)
Includes ASC 310-30 discount of $32.2 million, $35.3 million and $46.7 million as of March 31, 2018, December 31, 2017 and March 31, 2017, 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
 
March 31, 2018
% Change
 
 
 
March 31, 2018
 
December 31, 2017
 
March 31, 2017
 
Qtr-o-Qtr
 
Yr-o-Yr
Interest and dividend income
 
$
371,873

 
$
359,765

 
$
302,669

 
3.4
%
 
22.9
%
Interest expense
 
45,180

 
40,064

 
30,547

 
12.8

 
47.9

Net interest income before provision for credit losses
 
326,693

 
319,701

 
272,122

 
2.2

 
20.1

Provision for credit losses
 
20,218

 
15,517

 
7,068

 
30.3

 
186.0

Net interest income after provision for credit losses
 
306,475

 
304,184

 
265,054

 
0.8

 
15.6

Noninterest income
 
74,444

 
45,206

 
115,828

 
64.7

 
(35.7
)
Noninterest expense
 
169,135

 
175,263

 
152,878

 
(3.5
)
 
10.6

Income before income taxes
 
211,784

 
174,127

 
228,004

 
21.6

 
(7.1
)
Income tax expense
 
24,752

 
89,229

 
58,268

 
(72.3
)
 
(57.5
)
Net income
 
$
187,032

 
$
84,898

 
$
169,736

 
120.3
%
 
10.2
%
Earnings per share (“EPS”)
 
 

 
 

 
 

 


 


- Basic
 
$
1.29

 
$
0.59

 
$
1.18

 
120.1
%
 
9.9
%
- Diluted
 
$
1.28

 
$
0.58

 
$
1.16

 
120.4

 
10.0

Weighted average number of shares outstanding
 
 
 
 
 
 
 


 


- Basic
 
144,664

 
144,542

 
144,249

 
0.1
%
 
0.3
%
- Diluted
 
145,939

 
146,030

 
145,732

 
(0.1
)
 
0.1

 
 
 
 
 
 
 
 
 


 


 
 
 
Quarter Ended
 
March 31, 2018
% Change
 
 
 
March 31, 2018
 
December 31, 2017
 
March 31, 2017
 
Qtr-o-Qtr
 
Yr-o-Yr
Noninterest income:
 
 

 
 

 
 

 


 


 
Branch fees
 
$
10,430

 
$
10,287

 
$
9,924

 
1.4
%
 
5.1
%
 
Letters of credit fees and foreign exchange income
 
9,602

 
9,974

 
11,441

 
(3.7
)
 
(16.1
)
 
Ancillary loan fees and other income
 
5,581

 
6,457

 
4,982

 
(13.6
)
 
12.0

 
Wealth management fees
 
2,953

 
2,797

 
4,335

 
5.6

 
(31.9
)
 
Derivative fees and other income
 
6,690

 
4,737

 
2,506

 
41.2

 
167.0

 
Net gains on sales of loans
 
1,582

 
2,210

 
2,754

 
(28.4
)
 
(42.6
)
 
Net gains on sales of available-for-sale investment securities
 
2,129

 
1,304

 
2,474

 
63.3

 
(13.9
)
 
Net gains on sales of fixed assets
 
1,086

 
3,296

 
72,007

 
(67.1
)
 
(98.5
)
 
Net gain on sale of business
 
31,470

 

 

 
100.0

 
100.0

 
Other fees and operating income
 
2,921

 
4,144

 
5,405

 
(29.5
)
 
(46.0
)
Total noninterest income
 
$
74,444

 
$
45,206

 
$
115,828

 
64.7
%
 
(35.7
)%
Noninterest expense:
 
 

 
 

 
 

 


 


 
Compensation and employee benefits
 
$
95,234

 
$
90,361

 
$
84,603

 
5.4
%
 
12.6
%
 
Occupancy and equipment expense
 
16,880

 
17,092

 
15,640

 
(1.2
)
 
7.9

 
Deposit insurance premiums and regulatory assessments
 
6,273

 
6,351

 
5,929

 
(1.2
)
 
5.8

 
Legal expense
 
2,255

 
2,514

 
3,062

 
(10.3
)
 
(26.4
)
 
Data processing
 
3,401

 
3,084

 
2,947

 
10.3

 
15.4

 
Consulting expense
 
2,352

 
4,147

 
1,919

 
(43.3
)
 
22.6

 
Deposit related expense
 
2,679

 
2,655

 
2,365

 
0.9

 
13.3

 
Computer software expense
 
5,054

 
4,360

 
3,968

 
15.9

 
27.4

 
Other operating expense
 
17,607

 
22,808

 
18,085

 
(22.8
)
 
(2.6
)
 
Amortization of tax credit and other investments
 
17,400

 
21,891

 
14,360

 
(20.5
)
 
21.2

Total noninterest expense
 
$
169,135

 
$
175,263

 
$
152,878

 
(3.5
)%
 
10.6
%
 
 
 
 
 
 
 
 
 
 
 
 


10



EAST WEST BANCORP, INC. AND SUBSIDIARIES
SELECTED AVERAGE BALANCES
($ in thousands)
(unaudited)
Table 4
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Quarter Ended
 
March 31, 2018
% Change
 
 
 
March 31, 2018
 
December 31, 2017
 
March 31, 2017
 
Qtr-o-Qtr
 
Yr-o-Yr
Loans:
 
 
 
 
 
 
 
 
 
 
Commercial lending:
 
 
 
 
 
 
 
 
 
 
 
C&I
 
$
10,712,583

 
$
10,518,121

 
$
9,954,311

 
1.8
%
 
7.6
%
 
CRE
 
9,006,593

 
8,917,681

 
8,144,892

 
1.0

 
10.6

 
Multifamily residential
 
1,944,516

 
1,909,933

 
1,655,048

 
1.8

 
17.5

 
Construction and land
 
657,568

 
674,337

 
673,441

 
(2.5
)
 
(2.4
)
Consumer lending:
 
 
 
 
 
 
 
 
 
 
 
Single-family residential
 
4,771,427

 
4,498,180

 
3,553,488

 
6.1

 
34.3

 
HELOCs
 
1,779,242

 
1,783,762

 
1,768,733

 
(0.3
)
 
0.6

 
Other consumer
 
339,977

 
344,447

 
337,265

 
(1.3
)
 
0.8

 
Total loans (1)(2)
 
$
29,211,906

 
$
28,646,461

 
$
26,087,178

 
2.0
%
 
12.0
%
 
 
 
 
 
 
 
 
 
 
 
 
Investment securities
 
$
2,854,335

 
$
2,925,817

 
$
3,260,004

 
(2.4
)%
 
(12.4
)%
Interest-earning assets
 
$
35,513,663

 
$
35,491,424

 
$
33,095,396

 
0.1
%
 
7.3
%
Total assets
 
$
37,381,386

 
$
37,262,618

 
$
34,928,031

 
0.3
%
 
7.0
%
 
 
 
 
 
 
 
 
 
 
 
Deposits:
 
 

 
 

 
 

 
 
 
 
 
Noninterest-bearing demand
 
$
11,289,512

 
$
11,531,181

 
$
10,112,174

 
(2.1
)%
 
11.6
%
 
Interest-bearing checking
 
4,559,695

 
4,313,732

 
3,598,809

 
5.7

 
26.7

 
Money market
 
8,273,160

 
8,198,133

 
7,942,833

 
0.9

 
4.2

 
Savings
 
2,452,452

 
2,472,207

 
2,284,116

 
(0.8
)
 
7.4

 
Total core deposits
 
26,574,819

 
26,515,253

 
23,937,932

 
0.2

 
11.0

 
Time deposits
 
5,716,638

 
5,735,014

 
5,771,387

 
(0.3
)
 
(0.9
)
 
Total deposits
 
$
32,291,457

(3) 
$
32,250,267

(3) 
$
29,709,319

 
0.1
%
 
8.7
%
 
 
 
 
 
 
 
 
 
 
 
 
Interest-bearing liabilities
 
$
21,553,595

 
$
21,280,348

 
$
20,786,169

 
1.3
%
 
3.7
%
Stockholders’ equity
 
$
3,922,926

 
$
3,856,802

 
$
3,493,396

 
1.7
%
 
12.3
%
 
 
 
 
 
 
 
 
 
 
 
(1)
Includes ASC 310-30 discount of $34.1 million, $37.7 million and $48.6 million for the quarters ended March 31, 2018, December 31, 2017 and March 31, 2017, respectively.
(2)
Includes loans HFS.
(3)
Includes deposits HFS.

11



EAST WEST BANCORP, INC. AND SUBSIDIARIES
QUARTER-TO-DATE AVERAGE BALANCES, YIELDS AND RATES
($ in thousands)
(unaudited)
Table 5
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Quarter Ended
 
 
 
March 31, 2018
 
December 31, 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
 
$
2,323,771

 
$
10,945

 
1.91
%
 
$
2,743,548

 
$
11,092

 
1.60
%
 
Resale agreements (2)
 
1,050,000

 
6,934

 
2.68
%
 
1,102,174

 
6,873

 
2.47
%
 
Investment securities
 
2,854,335

 
15,456

 
2.20
%
 
2,925,817

 
14,734

 
2.00
%
 
Loans (3)
 
29,211,906

 
337,904

 
4.69
%
 
28,646,461

 
326,401

 
4.52
%
 
FHLB and FRB stock
 
73,651

 
634

 
3.49
%
 
73,424

 
665

 
3.59
%
 
Total interest-earning assets
 
35,513,663

 
371,873

 
4.25
%
 
35,491,424

 
359,765

 
4.02
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Noninterest-earning assets:
 
 

 
 

 
 

 
 

 
 

 
 

 
Cash and due from banks
 
443,357

 
 
 
 
 
417,798

 
 

 
 

 
Allowance for loan losses
 
(285,836
)
 
 
 
 
 
(285,490
)
 
 

 
 

 
Other assets
 
1,710,202

 
 
 
 
 
1,638,886

 
 

 
 

 
Total assets
 
$
37,381,386

 
 

 
 

 
$
37,262,618

 
 

 
 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Liabilities and Stockholders’ Equity
 
 
 
 

 
 

 
 

 
 

 
 

Interest-bearing liabilities:
 
 

 
 

 
 

 
 

 
 

 
 

 
Checking deposits (4)
 
$
4,559,695

 
$
6,727

 
0.60
%
 
$
4,313,732

 
$
5,767

 
0.53
%
 
Money market deposits (4)
 
8,273,160

 
15,840

 
0.78
%
 
8,198,133

 
13,772

 
0.67
%
 
Savings deposits (4)
 
2,452,452

 
2,021

 
0.33
%
 
2,472,207

 
1,906

 
0.31
%
 
Time deposits (4)
 
5,716,638

 
14,548

 
1.03
%
 
5,735,014

 
13,143

 
0.91
%
 
Federal funds purchased and other short-term borrowings
 
871

 
7

 
3.26
%
 
16,070

 
126

 
3.11
%
 
FHLB advances
 
334,121

 
2,260

 
2.74
%
 
323,598

 
2,013

 
2.47
%
 
Repurchase agreements (2)
 
50,000

 
2,306

 
18.70
%
 
50,000

 
1,938

 
15.38
%
 
Long-term debt
 
166,658

 
1,471

 
3.58
%
 
171,594

 
1,399

 
3.23
%
 
Total interest-bearing liabilities
 
21,553,595

 
45,180

 
0.85
%
 
21,280,348

 
40,064

 
0.75
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Noninterest-bearing liabilities and stockholders’ equity:
 
 

 
 

 
 

 
 

 
 

 
 

 
Demand deposits (4)
 
11,289,512

 
 
 
 
 
11,531,181

 
 
 
 
 
Accrued expenses and other liabilities
 
615,353

 
 
 
 
 
594,287

 
 
 
 
 
Stockholders’ equity
 
3,922,926

 
 
 
 
 
3,856,802

 
 
 
 
 
Total liabilities and stockholders’ equity
 
$
37,381,386

 
 
 
 
 
$
37,262,618

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest rate spread
 
 

 
 
 
3.40
%
 
 
 
 
 
3.27
%
Net interest income and net interest margin
 
 

 
$
326,693

 
3.73
%
 
 
 
$
319,701

 
3.57
%
Adjusted net interest income and adjusted net interest margin (5)
 
 

 
$
321,493

 
3.67
%
 
 
 
$
312,677

 
3.49
%
 
 
(1)
Annualized.
(2)
Average balances of resale and repurchase agreements are reported net, pursuant to ASC 210-20-45, Balance Sheet Offsetting.
(3)
Includes loans HFS, and ASC 310-30 discount of $34.1 million and $37.7 million for the quarters ended March 31, 2018 and December 31, 2017, respectively.
(4)
Includes deposits HFS.
(5)
See reconciliation of GAAP to non-GAAP financial measures in Table 12.

12



EAST WEST BANCORP, INC. AND SUBSIDIARIES
QUARTER-TO-DATE AVERAGE BALANCES, YIELDS AND RATES
($ in thousands)
(unaudited)
Table 6
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Quarter Ended
 
 
 
March 31, 2018
 
March 31, 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
 
$
2,323,771

 
$
10,945

 
1.91
%
 
$
1,676,333

 
$
5,116

 
1.24
%
 
Resale agreements (2)
 
1,050,000

 
6,934

 
2.68
%
 
1,997,222

 
9,468

 
1.92
%
 
Investment securities
 
2,854,335

 
15,456

 
2.20
%
 
3,260,004

 
15,247

 
1.90
%
 
Loans (3)
 
29,211,906

 
337,904

 
4.69
%
 
26,087,178

 
272,061

 
4.23
%
 
FHLB and FRB stock
 
73,651

 
634

 
3.49
%
 
74,659

 
777

 
4.22
%
 
Total interest-earning assets
 
35,513,663

 
371,873

 
4.25
%
 
33,095,396

 
302,669

 
3.71
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Noninterest-earning assets:
 
 

 
 

 
 

 
 

 
 

 
 

 
Cash and due from banks
 
443,357

 
 
 
 
 
388,410

 
 

 
 

 
Allowance for loan losses
 
(285,836
)
 
 
 
 
 
(263,957
)
 
 

 
 

 
Other assets
 
1,710,202

 
 
 
 
 
1,708,182

 
 

 
 

 
Total assets
 
$
37,381,386

 
 

 
 

 
$
34,928,031

 
 

 
 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Liabilities and Stockholders’ Equity
 
 
 
 

 
 

 
 

 
 

 
 

Interest-bearing liabilities:
 
 

 
 

 
 

 
 

 
 

 
 

 
Checking deposits
 
$
4,559,695

(4) 
$
6,727

 
0.60
%
 
$