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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 18, 2019

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






Item 2.02. Results of Operations and Financial Condition
 
On April 18, 2019, East West Bancorp, Inc. (the “Company”) announced, via press release, its financial results for the quarter ended March 31, 2019 (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 the information provided in Item 2.02 of this report, including Exhibit 99.1, shall not be deemed “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. The information provided in Item 2.02 of this report, including Exhibit 99.1, shall not be deemed 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 18, 2019, the Company will hold a conference call to discuss its financial results for the quarter ended March 31, 2019, 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, or otherwise subject to the liabilities under that Section, nor shall the information or Exhibit 99.2 be deemed incorporated by reference in any filings the Company has made or may make under the Exchange Act, except as otherwise expressly stated in such filing.

Item 9.01. Financial Statements and Exhibits
 
(d) Exhibits
 
99.1           Press Release, dated April 18, 2019.
99.2           Presentation Materials, dated April 18, 2019.

 



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 18, 2019
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 18, 2019.
99.2
 
Presentation Materials, dated April 18, 2019.


4



(Back To Top)

Section 2: EX-99.1 (EXHIBIT 99.1)

Exhibit


 
Exhibit 99.1
 
 
397572519_ewbclogoa13.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


EAST WEST BANCORP REPORTS NET INCOME FOR FIRST QUARTER 2019
OF $164 MILLION AND DILUTED EARNINGS PER SHARE OF $1.12,
INCREASES QUARTERLY DIVIDEND BY 20%


Pasadena, California April 18, 2019 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 2019. For the first quarter of 2019, net income was $164.0 million or $1.12 per diluted share. First quarter 2019 return on average assets was 1.63% and return on average equity was 14.7%.

“We started off the year with solid balance sheet growth. Our total assets reached a record $42.1 billion. Total loans grew $478 million, or 6% annualized, to a record $32.9 billion from $32.4 billion as of December 31, 2018,” stated Dominic Ng, Chairman and Chief Executive Officer of East West. “Total deposits grew $834 million, or 10% annualized, to a record $36.3 billion from $35.4 billion at the end of 2018.”

“Our first quarter 2019 net interest margin, excluding the impact of accretion, was 3.77%1, a quarter-over-quarter increase of four basis points from 3.73%, and a year-over-year increase of 10 basis points from 3.67%,” continued Ng.

“Our balance sheet growth, the profitability of our business, and our capital levels are strong. As of March 31, 2019, our tangible equity to tangible assets ratio2 was 9.9%, an increase of 16 basis points quarter-over-quarter. I am pleased to announce that East West’s Board of Directors approved a 20% increase to the quarterly common stock dividend. Our quarterly dividend will increase to $0.275 per share, up from $0.23 per share. We are optimistic about the year ahead, and look forward to delivering another year of strong returns for our shareholders,” concluded Ng.













 
 
 
 
1 See reconciliation of GAAP to non-GAAP financial measures in Table 12.
2 See reconciliation of GAAP to non-GAAP financial measures in Table 13.

1



HIGHLIGHTS OF RESULTS

First Quarter Earnings First quarter net income was $164.0 million and diluted earnings per share (“EPS”) were $1.12, compared to fourth quarter 2018 net income of $173.0 million and diluted EPS of $1.18. Excluding an impairment charge in the first quarter, adjusted3 first quarter net income was $168.9 million and adjusted3 diluted EPS were $1.16.

During the first quarter, the Company recorded an impairment charge related to certain tax credit investments. Included in amortization of tax credit and other investments, this impairment charge reduced net income by $7.0 million before tax and $4.9 million after tax, impacting EPS by $0.04.

Dividend Increase Second quarter 2019 common stock dividend has increased by 20%, or 4.5 cents per share. The new quarterly dividend will be $0.275, up from $0.23 per share. At the new rate, the annualized dividend will be $1.10, compared to the previous annualized rate of $0.92 per share.

Net Interest Income and Net Interest Margin First quarter 2019 net interest income (“NII”) was $362.5 million, compared to $369.4 million in the fourth quarter of 2018. Excluding the impact of ASC 310-30 discount accretion income, first quarter 2019 adjusted4 NII was $360.3 million, compared to $363.6 million in the previous quarter. First quarter 2019 net interest margin (“NIM”) of 3.79% was unchanged linked quarter. Excluding the impact of ASC 310-30 discount accretion, adjusted4 NIM of 3.77% expanded by four basis points linked quarter from 3.73% in the fourth quarter of 2018.

Record Loans Total loans of $32.9 billion as of March 31, 2019 were up $477.8 million, or 6% linked quarter annualized, from $32.4 billion as of December 31, 2018. Total loans grew by $3.3 billion or 11% year-over-year.

Record Deposits Total deposits of $36.3 billion as of March 31, 2019 were up $834.3 million, or 10% linked quarter annualized, from $35.4 billion as of December 31, 2018. Total deposits grew by $3.7 billion or 11% year-over-year.

Asset Quality Metrics The allowance for loan losses was $317.9 million, or 0.97% of loans held-for-investment (“HFI”), as of March 31, 2019, compared to 0.96% of loans HFI as of December 31, 2018, and 1.01% of loans HFI as of March 31, 2018. For the first quarter of 2019, net charge-offs were $14.4 million, or annualized 0.18% of average loans HFI, compared to annualized net charge-offs of 0.20% of average loans HFI for the previous quarter and 0.14% for the year-ago quarter. Non-purchased credit impaired (“Non-PCI”) nonperforming assets were $138.0 million, or 0.33% of total assets, as of March 31, 2019, compared to 0.23% of total assets as of December 31, 2018, and 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, 2019, stockholders’ equity was $4.6 billion, or $31.56 per share. Tangible equity5 per common share was $28.21 as of March 31, 2019, an increase of 4% linked quarter and 17% year-over-year. As of March 31, 2019, the tangible equity to tangible assets ratio was 9.9%, the common equity tier 1 (“CET1”) capital ratio was 12.4%, and the total risk-based capital ratio was 13.8%.


















 
 
 
 
3 See reconciliation of GAAP to non-GAAP financial measures in Table 10.
4 See reconciliation of GAAP to non-GAAP financial measures in Table 12.
5 See reconciliation of GAAP to non-GAAP financial measures in Table 13.

2



QUARTERLY RESULTS SUMMARY
 
 
 
Quarter Ended
($ in millions, except per share data and ratios)
 
March 31,
2019
 
December 31,
2018
 
March 31,
2018
Net income
 
$
164.0

 
$
173.0

 
$
187.0

Adjusted net income (1)
 
$
168.9

 
$
173.0

 
$
164.9

Earnings per share (diluted)
 
$
1.12

 
$
1.18

 
$
1.28

Adjusted earnings per share (diluted) (1)
 
$
1.16

 
$
1.18

 
$
1.13

Book value per common share
 
$
31.56

 
$
30.52

 
$
27.46

Tangible equity (1) per common share
 
$
28.21

 
$
27.15

 
$
24.07

Tangible equity to tangible assets ratio (1)
 
9.87
%
 
9.71
%
 
9.38
%
Return on average assets (2)
 
1.63
%
 
1.69
%
 
2.03
%
Return on average equity (2)
 
14.7
%
 
15.8
%
 
19.3
%
Return on average tangible equity (1)(2)
 
16.5
%
 
18.0
%
 
22.3
%
Adjusted return on average assets (1)(2)
 
1.68
%
 
1.69
%
 
1.79
%
Adjusted return on average equity (1)(2)
 
15.1
%
 
15.8
%
 
17.0
%
Adjusted return on average tangible equity (1)(2)
 
17.0
%
 
18.0
%
 
19.7
%
Adjusted pre-tax, pre-provision profitability ratio (1)(2)
 
2.43
%
 
2.50
%
 
2.38
%
Net interest income
 
$
362.5

 
$
369.4

 
$
326.7

Adjusted net interest income (1)
 
$
360.3

 
$
363.6

 
$
321.5

Net interest margin (2)
 
3.79
%
 
3.79
%
 
3.73
%
Adjusted net interest margin (1)(2)
 
3.77
%
 
3.73
%
 
3.67
%
Average loan yield (2)
 
5.30
%
 
5.22
%
 
4.69
%
Adjusted average loan yield (1)(2)
 
5.27
%
 
5.14
%
 
4.61
%
Cost of deposits (2)
 
1.07
%
 
0.90
%
 
0.49
%
Efficiency ratio
 
46.2
%
 
45.8
%
 
42.2
%
Adjusted efficiency ratio (1)
 
39.8
%
 
37.9
%
 
40.6
%
 
(1)
See reconciliation of GAAP to non-GAAP financial measures in Tables 10, 11, 12 and 13.
(2)
Annualized.

MANAGEMENT OUTLOOK FOR 2019

Our current outlook for the expected full year 2019 results, compared to our full year 2018 results, is unchanged relative to a quarter ago. The components are as follows:

End of Period Loans: increase by approximately 10%.

Net Interest Income (ex. ASC 310-30 discount accretion income): increase at a percentage rate in the low double-digits.

Net Interest Margin (ex. impact of ASC 310-30 discount accretion): between 3.75% and 3.80%.

Noninterest Expense (ex. amortization of tax credit investments & core deposit intangibles): increase at a percentage rate in the mid-single-digits.

Provision for Credit Losses: in the range of $80 million to $90 million.

Tax Items: projecting full year effective tax rate6 of approximately 15%, including the impact of tax credit investments, which reduce our tax liability from statutory rates.

Interest Rates: No changes to the fed funds rate in the year 2019.






 
 
 
 
6 The tax rate outlook does not include any ASC 740-10 uncertain tax position liabilities that the Company may potentially record related to tax credit investments related to DC Solar, as disclosed in the Company’s December 31, 2018 Form 10-K. The amount and timing of any future reserve remain uncertain at this time.


3



OPERATING RESULTS SUMMARY

First Quarter 2019 Compared to Fourth Quarter 2018

Net Interest Income and Net Interest Margin
Net interest income totaled $362.5 million, a 2% decrease from $369.4 million. Net interest margin remained unchanged at 3.79%.

Excluding the impact of ASC 310-30 discount accretion, adjusted NII of $360.3 million decreased by 1% and adjusted NIM of 3.77% increased by four basis points. ASC 310-30 discount accretion income was $2.2 million, a decrease from $5.8 million last quarter.

Average loans of $32.4 billion grew by $879.9 million, or 11% linked quarter annualized. Growth was broad-based across the major portfolios of commercial real estate, commercial, and consumer loans.

Average deposits of $34.9 billion declined by $61.7 million, or 1% linked quarter annualized.

The yield on loans expanded by eight basis points to 5.30% from 5.22%. Excluding the impact of ASC 310-30 discount accretion, the adjusted7 yield on loans expanded by 13 basis points to 5.27% from 5.14%.

The yield on interest-earning assets expanded by 16 basis points to 4.85% from 4.69%.

The cost of deposits increased by 17 basis points to 1.07% from 0.90%.

The cost of funds increased by 17 basis points to 1.15% from 0.98%.

Noninterest Income
Noninterest income totaled $42.1 million, a 1% increase from $41.7 million.

Interest rate contracts and other derivative income, net gains on sales of AFS investment securities, wealth management fees, and deposit account fees increased linked quarter.

Foreign exchange income, net gains on sales of loans, and lending fees decreased linked quarter.

Noninterest Expense
Noninterest expense totaled $186.9 million, a 1% decrease from $188.1 million. First quarter noninterest expense consisted of $160.8 million of adjusted8 noninterest expense, $24.9 million in amortization of tax credit and other investments, and $1.2 million in amortization of core deposit intangibles.

Adjusted noninterest expense of $160.8 million increased by $5.0 million, or 3%, from $155.9 million in the fourth quarter of 2018. The linked quarter change primarily reflected seasonal first quarter increase in compensation and employee benefits, partially offset by decreased other operating expense.

Included in the first quarter 2019 amortization of tax credit and other investments was a $7.0 million impairment charge related to certain tax credit investments.

The adjusted8 efficiency ratio was 39.8% in the first quarter, compared to 37.9% in the previous quarter.



















 
 
 
 
7 See reconciliation of GAAP to non-GAAP financial measures in Table 12.
8 See reconciliation of GAAP to non-GAAP financial measures in Table 11.

4



TAX RELATED ITEMS

First quarter 2019 tax expense was $31.1 million and the effective tax rate was 16%, compared to a tax expense of $32.0 million and an effective tax rate of 16% in the fourth quarter of 2018.

For the full year 2019, the Company expects to continue to invest in tax credits and projects an effective tax rate of approximately 15%.

CREDIT QUALITY

The allowance for loan losses totaled $317.9 million, or 0.97% of loans HFI, as of March 31, 2019, compared to $311.3 million, or 0.96% of loans HFI, as of December 31, 2018, and $297.7 million, or 1.01% of loans HFI, as of March 31, 2018.

The provision for credit losses recorded for the current quarter was $22.6 million, compared to $18.0 million for the fourth quarter of 2018, and $20.2 million for the first quarter of 2018.

Net charge-offs for the current quarter were $14.4 million, or annualized 0.18% of average loans HFI. This compares to net charge-offs of $16.0 million, or annualized 0.20% of average loans HFI, for the fourth quarter of 2018, and net charge-offs of $9.8 million, or annualized 0.14% of average loans HFI, for the first quarter of 2018.

Non-PCI nonperforming assets were $138.0 million, or 0.33% of total assets, as of March 31, 2019, compared to $93.0 million, or 0.23% of total assets, as of December 31, 2018, and $131.0 million, or 0.35% of total assets, as of March 31, 2018. The quarter-over-quarter variance in nonperforming assets reflects an increase in commercial nonaccrual loans.

CAPITAL STRENGTH

Capital levels for East West continue to be strong. The following table presents the regulatory capital ratios for the quarters ended March 31, 2019, December 31, 2018, and March 31, 2018.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
EWBC Regulatory Capital Metrics
 
Basel III
($ in millions)
 
March 31,
2019 (a)
 
December 31,
2018
 
March 31,
2018
 
Minimum
Capital
Ratio
 
Well
Capitalized
Ratio
 
Minimum
Capital Ratio +
Conservation Buffer
(b)
 
 
 
 
 
 
 
 
 
 
 
 
 
CET1 capital ratio
 
12.4
%
 
12.2
%
 
11.9
%
 
4.5
%
 
6.5
%
 
7.0
%
Tier 1 risk-based capital ratio
 
12.4
%
 
12.2
%
 
11.9
%
 
6.0
%
 
8.0
%
 
8.5
%
Total risk-based capital ratio
 
13.8
%
 
13.7
%
 
13.4
%
 
8.0
%
 
10.0
%
 
10.5
%
Tier 1 leverage capital ratio
 
10.2
%
 
9.9
%
 
9.6
%
 
4.0
%
 
5.0
%
 
4.0
%
Risk-Weighted Assets (“RWA”) (c)
 
$
33,187

 
$
32,497

 
$
29,891

 
N/A

 
N/A

 
N/A

 
 
 
 
 
 
 

 
 

 
 

 
 
 
 
N/A Not applicable.
(a)
The Company’s March 31, 2019 regulatory capital ratios and RWA are preliminary.
(b)
An additional 2.5% capital conservation buffer above the minimum capital ratios is required in order to avoid limitations on distributions, including dividend payments and certain discretionary bonus payments to executive officers.
(c)
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.

5



DIVIDEND PAYOUT AND CAPITAL ACTIONS

East West’s Board of Directors has declared second quarter 2019 dividends for the Company’s common stock. The common stock cash dividend of $0.275 per share is payable on May 15, 2019 to shareholders of record on May 1, 2019. This represents a 20% increase, or 4.5 cents per share, to the quarterly common stock dividend, up from $0.23 per share previously. At the new rate, the annualized dividend is $1.10, compared to the previous annualized rate of $0.92 per share.


Conference Call

East West will host a conference call to discuss first quarter 2019 earnings with the public on Thursday, April 18, 2019 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 2019 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 18, 2019 at 11:30 a.m. Pacific Time through May 18, 2019. 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: 10129569.

6



About East West

East West Bancorp, Inc. is a publicly owned company with total assets of $42.1 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.

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 our 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,” “assumes,” 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, and the negative thereof. 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; success and timing of our business strategies; our ability to retain key officers and employees; impact on our funding costs, net interest income and net interest margin due to changes in key variable market interest rates, competition, regulatory requirements and our product mix; changes in our costs of operation, compliance and expansion; our ability to adopt and successfully integrate new technologies into our business in a strategic manner; 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; future credit quality and performance, including our expectations regarding future credit losses and allowance levels; impact of adverse changes to our credit ratings from major credit rating agencies; impact of adverse judgments or settlements in litigation; changes in the commercial and consumer real estate markets; changes in consumer spending and savings habits; changes in the United States (“U.S.”) economy, including inflation, deflation, employment levels, rate of growth and general business conditions; changes in government interest rate policies; impact of benchmark interest rate reform in the U.S. that resulted in the Secured Overnight Financing Rate selected as the preferred alternative reference rate to the London Interbank Offered Rate; impact of political developments, wars or other hostilities that may disrupt or increase volatility in securities or otherwise affect economic conditions; 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 Office of the Comptroller of the Currency, the U.S. Securities and Exchange Commission, the Consumer Financial Protection Bureau and the California Department of Business Oversight Division of Financial Institutions; impact of the Dodd-Frank Wall Street Reform and Consumer Protection Act on our business, business practices, cost of operations and executive compensation; heightened regulatory and governmental oversight and scrutiny of our business practices, including dealings with consumers; impact of reputational risk from negative publicity, fines and penalties and other negative consequences from regulatory violations and legal actions and from our interactions with business partners, counterparties, service providers and other third parties; impact of regulatory enforcement actions; 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 income tax laws and regulations and the impact of the Tax Cuts and Jobs Act of 2017; impact of other potential federal tax changes and spending cuts; our capital requirements and our ability to generate capital internally or raise capital on favorable terms; changes in our ability to receive dividends from our subsidiaries; any future strategic acquisitions or divestitures; continuing consolidation in the financial services industry; changes in the equity and debt securities markets; fluctuations of our stock price; fluctuations in foreign currency exchange rates; 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 increases in funding costs, a reduction in 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; changes in the economy of and monetary policy in the People’s Republic of China; 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 our financial performance; and other factors set forth in our public reports including its Annual Report on Form 10-K for the year ended December 31, 2018, 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, our results could differ materially from those expressed in, implied or projected by such forward-looking statements. We assume no obligation to update or revise such forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by law.

7



EAST WEST BANCORP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
($ and shares in thousands, except per share data)
(unaudited)
Table 1
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
March 31, 2019
% or Basis Point Change
 
 
 
March 31, 2019
 
December 31, 2018
 
March 31, 2018
 
Qtr-o-Qtr
 
Yr-o-Yr
 
Assets
 
 
 
 
 
 
 
 
 
 
 
 
Cash and due from banks
 
$
462,254

 
$
516,291

 
$
413,017

 
(10.5
)%
 
11.9
%
 
 
Interest-bearing cash with banks
 
3,323,071

 
2,485,086

 
1,901,921

 
33.7

 
74.7

 
 
Cash and cash equivalents
 
3,785,325

 
3,001,377

 
2,314,938

 
26.1

 
63.5

 
 
Interest-bearing deposits with banks
 
134,000

 
371,000

 
478,871

 
(63.9
)
 
(72.0
)
 
 
Securities purchased under resale agreements (“resale agreements”) (1)
 
1,035,000

 
1,035,000

 
1,050,000

 

 
(1.4
)
 
 
Available-for-sale (“AFS”) investment securities
 
2,640,158

 
2,741,847

 
2,811,416

 
(3.7
)
 
(6.1
)
 
 
Federal Home Loan Bank (“FHLB”) and Federal Reserve Bank (“FRB”) stock
 
74,736

 
74,069

 
73,787

 
0.9

 
1.3

 
 
Loans held-for-sale (“HFS”)
 

 
275

 
46,181

 
(100.0
)
 
(100.0
)
 
 
Loans held-for-investment (net of allowance for loan losses of $317,894, $311,322 and $297,654)
 
32,545,392

 
32,073,867

 
29,257,594

 
1.5

 
11.2

 
 
Investments in qualified affordable housing partnerships, net
 
197,470

 
184,873

 
160,574

 
6.8

 
23.0

 
 
Investments in tax credit and other investments, net
 
217,445

 
231,635

 
246,183

 
(6.1
)
 
(11.7
)
 
 
Goodwill
 
465,697

 
465,547

 
465,547

 
0.0

 
0.0

 
 
Operating lease right-of-use assets (2)
 
104,289

 

 

 
100.0

 
100.0

 
 
Other assets
 
891,921

 
862,866

 
766,847

 
3.4

 
16.3

 
 
Total assets
 
$
42,091,433


$
41,042,356


$
37,671,938

 
2.6
%
 
11.7
%
 
 
 
 
 
 
 
 
 
 


 


 
Liabilities and Stockholders’ Equity
 
 

 
 

 
 

 


 


 
 
Deposits
 
$
36,273,972

 
$
35,439,628

 
$
32,608,777

 
2.4
%
 
11.2
%
 
 
Short-term borrowings
 
39,550

 
57,638

 
30,277

 
(31.4
)
 
30.6

 
 
FHLB advances
 
344,657

 
326,172

 
324,451

 
5.7

 
6.2

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

 
50,000

 
50,000

 

 

 
 
Long-term debt and finance lease liabilities
 
152,433

 
146,835

 
166,640

 
3.8

 
(8.5
)
 
 
Operating lease liabilities (2)
 
112,843

 

 

 
100.0

 
100.0

 
 
Accrued expenses and other liabilities
 
526,048

 
598,109

 
513,038

 
(12.0
)
 
2.5

 
 
Total liabilities
 
37,499,503

 
36,618,382

 
33,693,183

 
2.4

 
11.3

 
 
Stockholders’ equity (2)
 
4,591,930

 
4,423,974

 
3,978,755

 
3.8

 
15.4

 
 
Total liabilities and stockholders’ equity
 
$
42,091,433

 
$
41,042,356

 
$
37,671,938

 
2.6
%
 
11.7
%
 
 
 
 
 
 
 
 
 
 


 


 
 
Book value per common share
 
$
31.56

 
$
30.52

 
$
27.46

 
3.4
%
 
14.9
%
 
 
Tangible equity (3) per common share
 
$
28.21

 
$
27.15

 
$
24.07

 
3.9

 
17.2

 
 
Number of common shares at period-end
 
145,501

 
144,961

 
144,873

 
0.4

 
0.4

 
 
Tangible equity to tangible assets ratio (3)
 
9.87
%
 
9.71
%
 
9.38
%
 
16

bps
49

bps
 
 
 
 
 
 
 
(1)
Resale and repurchase agreements have been reported net, pursuant to Accounting Standards Codification (“ASC”) 210-20-45-11, Balance Sheet Offsetting: Repurchase and Reverse Repurchase Agreements. As of each of March 31, 2019, December 31, 2018 and March 31, 2018, $400.0 million out of $450.0 million of gross repurchase agreements were eligible for netting against gross resale agreements.
(2)
The Company’s adoption of ASU 2016-02, Leases (Topic 842) in the first quarter of 2019 resulted in the recognition of $104.3 million and $112.8 million increase in right-of-use assets and associated lease liabilities, respectively, arising from operating leases in which the Company is the lessee. We adopted this guidance using the alternative transition method, which allows the adoption of the accounting standard prospectively without adjusting comparative prior period financial information and also recognized a cumulative effect adjustment of approximately $14.7 million that increased retained earnings related to deferred gains on our prior sale-leaseback transactions.
(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, 2019
% Change
 
 
 
March 31, 2019
 
December 31, 2018
 
March 31, 2018
 
Qtr-o-Qtr
 
Yr-o-Yr
Loans:
 
 
 
 
 
 
 
 
 
 
Commercial:
 
 
 
 
 
 
 
 
 
 
 
Commercial and industrial (“C&I”)
 
$
12,040,806

 
$
12,056,970

 
$
10,818,304

 
(0.1
)%
 
11.3
%
 
Commercial real estate (“CRE”)
 
9,636,338

 
9,449,835

 
9,022,746

 
2.0

 
6.8

 
Multifamily residential
 
2,270,590

 
2,281,032

 
1,954,855

 
(0.5
)
 
16.2

 
Construction and land
 
647,380

 
538,794

 
669,340

 
20.2

 
(3.3
)
Consumer:
 
 
 
 
 
 
 
 
 
 
 
Single-family residential
 
6,309,331

 
6,036,454

 
4,930,580

 
4.5

 
28.0

 
Home equity lines of credit (“HELOCs”)
 
1,626,222

 
1,690,834

 
1,775,443

 
(3.8
)
 
(8.4
)
 
Other consumer
 
332,619

 
331,270

 
383,980

 
0.4

 
(13.4
)
 
Total loans held-for-investment (1)(2)
 
32,863,286


32,385,189


29,555,248

 
1.5

 
11.2

Loans HFS
 

 
275

 
46,181

 
(100.0
)
 
(100.0
)
 
Total loans (1)(2)
 
32,863,286

 
32,385,464

 
29,601,429

 
1.5

 
11.0

Allowance for loan losses
 
(317,894
)
 
(311,322
)
 
(297,654
)
 
2.1

 
6.8

 
Net loans (1)(2)
 
$
32,545,392

 
$
32,074,142

 
$
29,303,775

 
1.5
%
 
11.1
%
 
 
 
 
 
 
 
 
 
 
 


Deposits:
 
 

 
 

 
 

 
 
 


 
Noninterest-bearing demand
 
$
10,011,533

 
$
11,377,009

 
$
11,763,936

 
(12.0
)%
 
(14.9
)%
 
Interest-bearing checking
 
6,123,681

 
4,584,447

 
4,428,952

 
33.6

 
38.3

 
Money market
 
8,243,003

 
8,262,677

 
7,913,040

 
(0.2
)
 
4.2

 
Savings
 
2,049,086

 
2,146,429

 
2,301,780

 
(4.5
)
 
(11.0
)
 
Total core deposits
 
26,427,303

 
26,370,562

 
26,407,708

 
0.2

 
0.1

 
Time deposits
 
9,846,669

 
9,069,066

 
6,201,069

 
8.6

 
58.8

 
Total deposits
 
$
36,273,972

 
$
35,439,628


$
32,608,777

 
2.4
%
 
11.2
%
 
(1)
Includes $(46.0) million, $(48.9) million and $(36.6) million as of March 31, 2019, December 31, 2018 and March 31, 2018, respectively, of net deferred loan fees, unearned fees, unamortized premiums and unaccreted discounts.
(2)
Includes ASC 310-30 discount of $20.4 million, $22.2 million and $32.2 million as of March 31, 2019, December 31, 2018 and March 31, 2018, respectively.


9



EAST WEST BANCORP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF INCOME
($ and shares in thousands, except per share data)
(unaudited)
Table 3
 
 
 
 
 
Three Months Ended
 
March 31, 2019
% Change
 
 
 
March 31, 2019
 
December 31, 2018
 
March 31, 2018
 
Qtr-o-Qtr
 
Yr-o-Yr
Interest and dividend income
 
$
463,311

 
$
457,334

 
$
371,873

 
1.3
%
 
24.6
%
Interest expense
 
100,850

 
87,918

 
45,180

 
14.7

 
123.2

Net interest income before provision for credit losses
 
362,461

 
369,416

 
326,693

 
(1.9
)
 
10.9

Provision for credit losses
 
22,579

 
17,959

 
20,218

 
25.7

 
11.7

Net interest income after provision for credit losses
 
339,882

 
351,457

 
306,475

 
(3.3
)
 
10.9

Noninterest income
 
42,131

 
41,695

 
74,444

 
1.0

 
(43.4
)
Noninterest expense
 
186,922

 
188,097

 
169,135

 
(0.6
)
 
10.5

Income before income taxes
 
195,091

 
205,055

 
211,784

 
(4.9
)
 
(7.9
)
Income tax expense
 
31,067

 
32,037

 
24,752

 
(3.0
)
 
25.5

Net income
 
$
164,024

 
$
173,018

 
$
187,032

 
(5.2
)%
 
(12.3
)%
Earnings per share (“EPS”)
 
 

 
 

 
 

 


 


- Basic
 
$
1.13

 
$
1.19

 
$
1.29

 
(5.4
)%
 
(12.7
)%
- Diluted
 
$
1.12

 
$
1.18

 
$
1.28

 
(5.1
)
 
(12.3
)
Weighted average number of shares outstanding
 
 
 
 
 
 
 


 


- Basic
 
145,256

 
144,960

 
144,664

 
0.2
%
 
0.4
%
- Diluted
 
145,921

 
146,133

 
145,939

 
(0.1
)
 
0.0

 
 
 
 
 
 
 
 
 


 


 
 
 
Three Months Ended
 
March 31, 2019
% Change
 
 
 
March 31, 2019
 
December 31, 2018
 
March 31, 2018
 
Qtr-o-Qtr
 
Yr-o-Yr
Noninterest income:
 
 

 
 

 
 

 


 


 
Lending fees
 
$
14,796

 
$
15,002

 
$
14,012

 
(1.4
)%
 
5.6
%
 
Deposit account fees
 
9,641

 
9,512

 
10,430

 
1.4

 
(7.6
)
 
Foreign exchange income
 
5,015

 
7,191

 
1,171

 
(30.3
)
 
328.3

 
Wealth management fees
 
3,812

 
2,796

 
2,953

 
36.3

 
29.1

 
Interest rate contracts and other derivative income
 
3,216

 
1,125

 
6,690

 
185.9

 
(51.9
)
 
Net gains on sales of loans
 
915

 
1,509

 
1,582

 
(39.4
)
 
(42.2
)
 
Net gains on sales of AFS investment securities
 
1,561

 
161

 
2,129

 
     NM

 
(26.7
)
 
Net gain on sale of business
 

 

 
31,470

 

 
(100.0
)
 
Other income
 
3,175

 
4,399

 
4,007

 
(27.8
)
 
(20.8
)
Total noninterest income
 
$
42,131

 
$
41,695

 
$
74,444

 
1.0
%
 
(43.4
)%
Noninterest expense:
 
 

 
 

 
 

 


 


 
Compensation and employee benefits
 
$
102,299

 
$
93,790

 
$
95,234

 
9.1
%
 
7.4
%
 
Occupancy and equipment expense
 
17,318

 
18,017

 
16,880

 
(3.9
)
 
2.6

 
Deposit insurance premiums and regulatory assessments
 
3,088

 
3,093

 
6,273

 
(0.2
)
 
(50.8
)
 
Legal expense
 
2,225

 
2,145

 
2,255

 
3.7

 
(1.3
)
 
Data processing
 
3,157

 
3,160

 
3,401

 
(0.1
)
 
(7.2
)
 
Consulting expense
 
2,059

 
1,424

 
2,352

 
44.6

 
(12.5
)
 
Deposit related expense
 
3,504

 
3,043

 
2,679

 
15.1

 
30.8

 
Computer software expense
 
6,078

 
6,205

 
5,054

 
(2.0
)
 
20.3

 
Other operating expense
 
22,289

 
26,262

 
17,607

 
(15.1
)
 
26.6

 
Amortization of tax credit and other investments
 
24,905

 
30,958

 
17,400

 
(19.6
)
 
43.1

Total noninterest expense
 
$
186,922

 
$
188,097

 
$
169,135

 
(0.6
)%
 
10.5
%
 
NM Not Meaningful


10



EAST WEST BANCORP, INC. AND SUBSIDIARIES
SELECTED AVERAGE BALANCES
($ in thousands)
(unaudited)
Table 4
 
 
 
Three Months Ended
 
March 31, 2019
% Change
 
 
 
March 31, 2019
 
December 31, 2018
 
March 31, 2018
 
Qtr-o-Qtr
 
Yr-o-Yr
Loans:
 
 
 
 
 
 
 
 
 
 
Commercial:
 
 
 
 
 
 
 
 
 
 
 
C&I
 
$
11,845,860

 
$
11,554,737

 
$
10,712,583

 
2.5
%
 
10.6
%
 
CRE
 
9,568,571

 
9,363,625

 
9,006,593

 
2.2

 
6.2

 
Multifamily residential
 
2,307,374

 
2,162,877

 
1,944,516

 
6.7

 
18.7

 
Construction and land
 
584,445

 
582,311

 
657,568

 
0.4

 
(11.1
)
Consumer:
 
 
 
 
 
 
 
 
 
 
 
Single-family residential
 
6,151,550

 
5,854,551

 
4,771,427

 
5.1

 
28.9

 
HELOCs
 
1,652,211

 
1,709,022

 
1,779,242

 
(3.3
)
 
(7.1
)
 
Other consumer
 
304,774

 
307,752

 
339,977

 
(1.0
)
 
(10.4
)
 
Total loans (1)(2)
 
$
32,414,785

 
$
31,534,875

 
$
29,211,906

 
2.8
%
 
11.0
%
 
 
 
 
 
 
 
 
 
 
 
 
AFS investment securities
 
$
2,642,299

 
$
2,777,381

 
$
2,854,335

 
(4.9
)%
 
(7.4
)%
Interest-earning assets
 
$
38,745,004

 
$
38,688,647

 
$
35,513,663

 
0.1
%
 
9.1
%
Total assets
 
$
40,738,404

 
$
40,525,188

 
$
37,381,098

 
0.5
%
 
9.0
%
 
 
 
 
 
 
 
 
 
 
 
Deposits:
 
 

 
 

 
 

 
 
 
 
 
Noninterest-bearing demand
 
$
10,071,370

 
$
11,447,345

 
$
11,289,512

 
(12.0
)%
 
(10.8
)%
 
Interest-bearing checking
 
5,270,855

 
4,449,541

 
4,559,695

 
18.5

 
15.6

 
Money market
 
8,080,848

 
8,180,426

 
8,273,160

 
(1.2
)
 
(2.3
)
 
Savings
 
2,091,406

 
2,124,697

 
2,452,452

 
(1.6
)
 
(14.7
)
 
Total core deposits
 
25,514,479

 
26,202,009

 
26,574,819

 
(2.6
)
 
(4.0
)
 
Time deposits
 
9,408,897

 
8,783,068

 
5,716,638

 
7.1

 
64.6

 
Total deposits
 
$
34,923,376

 
$
34,985,077

 
$
32,291,457

(3) 
(0.2
)%
 
8.2
%
 
 
 
 
 
 
 
 
 
 
 
 
Interest-bearing liabilities
 
$
25,452,835

 
$
24,122,509

 
$
21,553,595

 
5.5
%
 
18.1
%
Stockholders’ equity
 
$
4,537,301

 
$
4,335,110

 
$
3,922,926

 
4.7
%
 
15.7
%
 
(1)
Includes ASC 310-30 discount of $21.6 million, $23.8 million and $34.1 million for the three months ended March 31, 2019, December 31, 2018 and March 31, 2018, 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
 
 
 
 
Three Months Ended
 
 
 
March 31, 2019
 
December 31, 2018
 
 
 
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
 
$
2,578,686

 
$
15,470

 
2.43
%
 
$
3,267,484

 
$
18,791

 
2.28
%
 
Resale agreements (2)
 
1,035,000

 
7,846

 
3.07
%
 
1,035,000

 
7,819

 
3.00
%
 
AFS investment securities
 
2,642,299

 
15,748

 
2.42
%
 
2,777,381

 
15,216

 
2.17
%
 
Loans (3)
 
32,414,785

 
423,534

 
5.30
%
 
31,534,875

 
414,517

 
5.22
%
 
FHLB and FRB stock
 
74,234

 
713

 
3.90
%
 
73,907

 
991

 
5.32
%
 
Total interest-earning assets
 
38,745,004

 
463,311

 
4.85
%
 
38,688,647

 
457,334

 
4.69
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Noninterest-earning assets:
 
 

 
 

 
 

 
 

 
 

 
 

 
Cash and due from banks
 
468,159

 
 
 
 
 
482,767

 
 

 
 

 
Allowance for loan losses
 
(314,446
)
 
 
 
 
 
(314,019
)
 
 

 
 

 
Other assets
 
1,839,687

 
 
 
 
 
1,667,793

 
 

 
 

 
Total assets
 
$
40,738,404

 
 

 
 

 
$
40,525,188

 
 

 
 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Liabilities and Stockholders’ Equity
 
 
 
 

 
 

 
 

 
 

 
 

Interest-bearing liabilities:
 
 

 
 

 
 

 
 

 
 

 
 

 
Checking deposits
 
$
5,270,855

 
$
14,255

 
1.10
%
 
$
4,449,541

 
$
9,963

 
0.89
%
 
Money market deposits
 
8,080,848

 
30,234

 
1.52
%
 
8,180,426

 
27,640

 
1.34
%
 
Savings deposits
 
2,091,406

 
2,227

 
0.43
%
 
2,124,697

 
2,257

 
0.42
%
 
Time deposits
 
9,408,897

 
45,289

 
1.95
%
 
8,783,068

 
39,459

 
1.78
%
 
Federal funds purchased and other short-term borrowings
 
60,442

 
616

 
4.13
%
 
57,198

 
624

 
4.33
%
 
FHLB advances
 
338,027

 
2,979

 
3.57
%
 
325,826

 
2,903

 
3.53
%
 
Repurchase agreements (2)
 
50,000

 
3,492

 
28.32
%
 
50,000

 
3,396

 
26.95
%
 
Long-term debt and finance lease liabilities
 
152,360

 
1,758

 
4.68
%
 
151,753

 
1,676

 
4.38
%
 
Total interest-bearing liabilities
 
25,452,835

 
100,850

 
1.61
%
 
24,122,509

 
87,918

 
1.45
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Noninterest-bearing liabilities and stockholders’ equity:
 
 
 
 

 
 

 
 

 
 

 
 

 
Demand deposits
 
10,071,370

 
 
 
 
 
11,447,345

 
 
 
 
 
Accrued expenses and other liabilities
 
676,898

 
 
 
 
 
620,224

 
 
 
 
 
Stockholders’ equity
 
4,537,301

 
 
 
 
 
4,335,110

 
 
 
 
 
Total liabilities and stockholders’ equity
 
$
40,738,404

 
 
 
 
 
$
40,525,188

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest rate spread
 
 

 
 
 
3.24
%
 
 
 
 
 
3.24
%
Net interest income and net interest margin
 
 

 
$
362,461

 
3.79
%
 
 
 
$
369,416

 
3.79
%
Adjusted net interest income and adjusted net interest margin (4)
 
 

 
$
360,283

 
3.77
%
 
 
 
$
363,606

 
3.73
%
 
(1)
Annualized.
(2)
Average balances of resale and repurchase agreements have been reported net, pursuant to ASC 210-20-45-11, Balance Sheet Offsetting: Repurchase and Reverse Repurchase Agreements. The weighted-average yields of gross resale agreements were 2.80% and 2.72% for the three months ended March 31, 2019 and December 31, 2018, respectively. The weighted-average interest rates of gross repurchase agreements were 5.01% and 4.77% for the three months ended March 31, 2019 and December 31, 2018, respectively.
(3)
Includes loans HFS. ASC 310-30 discount was $21.6 million and $23.8 million for the three months ended March 31, 2019 and December 31, 2018, respectively.
(4)
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
 
 
 
Three Months Ended
 
March 31, 2019
 
March 31, 2018
 
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
 
$
2,578,686

 
$
15,470

 
2.43
%
 
$
2,323,771

 
$
10,945

 
1.91
%
 
Resale agreements (2)
 
1,035,000

 
7,846

 
3.07
%
 
1,050,000

 
6,934

 
2.68
%
 
AFS investment securities
 
2,642,299

 
15,748

 
2.42
%
 
2,854,335

 
15,456

 
2.20
%
 
Loans (3)
 
32,414,785

 
423,534

 
5.30
%
 
29,211,906

 
337,904

 
4.69
%
 
FHLB and FRB stock
 
74,234

 
713

 
3.90
%
 
73,651

 
634

 
3.49
%
 
Total interest-earning assets
 
38,745,004

 
463,311

 
4.85
%
 
35,513,663

 
371,873

 
4.25
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Noninterest-earning assets:
 
 

 
 

 
 

 
 

 
 

 
 

 
Cash and due from banks
 
468,159

 
 
 
 
 
443,357

 
 

 
 

 
Allowance for loan losses
 
(314,446
)
 
 
 
 
 
(285,836
)
 
 

 
 

 
Other assets
 
1,839,687

 
 
 
 
 
1,709,914

 
 

 
 

 
Total assets
 
$
40,738,404

 
 

 
 

 
$
37,381,098

 
 

 
 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Liabilities and Stockholders’ Equity
 
 
 
 

 
 

 
 

 
 

 
 

Interest-bearing liabilities:
 
 

 
 

 
 

 
 

 
 

 
 

 
Checking deposits
 
$
5,270,855

 
$
14,255

 
1.10
%
 
$
4,559,695

(4) 
$
6,727

 
0.60
%
 
Money market deposits
 
8,080,848

 
30,234

 
1.52
%
 
8,273,160

(4) 
15,840

 
0.78
%
 
Savings deposits
 
2,091,406

 
2,227

 
0.43
%
 
2,452,452

(4) 
2,021

 
0.33
%
 
Time deposits
 
9,408,897

 
45,289

 
1.95
%
 
5,716,638

(4) 
14,548

 
1.03
%
 
Federal funds purchased and other short-term borrowings
 
60,442

 
616

 
4.13
%
 
871

 
7

 
3.26
%
 
FHLB advances
 
338,027

 
2,979

 
3.57
%
 
334,121

 
2,260

 
2.74
%
 
Repurchase agreements (2)
 
50,000

 
3,492

 
28.32
%
 
50,000

 
2,306

 
18.70
%
 
Long-term debt and finance lease liabilities
 
152,360

 
1,758

 
4.68
%
 
166,658

 
1,471

 
3.58
%
 
Total interest-bearing liabilities
 
25,452,835

 
100,850

 
1.61
%
 
21,553,595

 
45,180