EX-99.1 3 exh99.htm EWBC EXH99.1 PRESS RELEASE DATED OCT 18, 2005 EWBC EXH99.1 PRESS RELEASE DATED OCT 18, 2005

FOR FURTHER INFORMATION AT THE COMPANY:

Julia Gouw   
Chief Financial Officer   
(626) 583-3512   

EAST WEST BANCORP REPORTS RECORD
THIRD QUARTER 2005 EARNINGS OF $28.6 MILLION
 
San Marino, CA - October 18, 2005 - East West Bancorp, Inc. (Nasdaq: EWBC), parent company of East West Bank, one of the nation’s premier community banks, today reported financial results for the third quarter of 2005. Diluted earnings per share for the third quarter increased 33% to a record $0.52 from $0.39 in the prior year period.

Third Quarter Highlights

·  
Record net income of $28.6 million, up 40% from prior year
·  
Record net interest income of $71.6 million, up 35% from prior year
·  
Net interest margin up 7 basis points to 4.22% from prior quarter
·  
Gross loans increased to a record $6.6 billion
·  
Total deposits increased to a record $6.1 billion
·  
Return on equity of 19.15%
·  
Total nonperforming assets were 0.22% of total assets
·  
Efficiency ratio of 35.19%
·  
Closed the acquisition of United National Bank (“UNB”)

Financial Summary

Third quarter net income was a record $28.6 million, 40% higher than the $20.4 million reported in the prior year period. Diluted earnings per share for the third quarter rose to a record $0.52, up 33% from $0.39 in the prior year period. Return on average equity for the third quarter of 2005 increased to 19.15% from 17.84% in the previous year, and return on average assets was 1.62%, an increase from 1.55% in the previous year. The effective tax rate for the quarter equaled 35.92% compared to 35.85% for the third quarter of 2004. Pretax income for the third quarter of 2005 totaled $44.6 million, a 40% increase over the year ago figure of $31.8 million. The increase in earnings in the third quarter of 2005 was a result of an increase in net interest income fueled by continuing strength in loan growth, as well as overall operating efficiencies.
 
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“We are very proud of the results we accomplished this quarter. Once again, we achieved record quarterly earnings and are well underway to end 2005 as the 9th consecutive year of record earnings for East West,” commented Dominic Ng, Chairman, President and Chief Executive Officer of East West. “Loan and deposit growth continued to be robust during the quarter. Quarter-to-date organic loan growth was impressive; growing at a 24% annualized rate or $338.9 million, excluding the impact of the UNB acquisition. In addition, quarter-to-date deposit growth was very steady; growing at a 14% annualized rate or $180.7 million, excluding the impact of the UNB acquisition. Year-over-year, our balance sheet growth has been achieved while we have maintained excellent credit quality and have not lowered our commitment to sound underwriting practices,” continued Mr. Ng.

“With the successful close of the UNB acquisition on September 6th, we added eleven new branches and over 19,000 customer accounts, further solidifying our presence in the California marketplace and opening new opportunities for East West in Houston, Texas. The conversion of all UNB systems is underway and a full integration is scheduled for completion in early November,” continued Mr. Ng.

Management Guidance

Management has increased its EPS guidance for the full year of 2005 as a result of the year-to-date performance and the expected operating results for the fourth quarter of 2005. Mr. Ng remarked on the Bank’s forecast for 2005 earnings, “We now estimate that fully diluted earnings per share will be in the range of $1.94 to $1.95, up about 5% from the previous guidance of $1.85 to $1.87. This revised estimate represents an approximate increase of 30% from the prior year figure. This estimate is based on our current loan pipeline levels, a projected net interest margin of 4.20% to 4.25% for the fourth quarter of 2005 and includes the impact of the UNB acquisition,” concluded Mr. Ng.
 
Balance Sheet Summary

At September 30, 2005, total assets were $7.9 billion, a 32% increase above total assets of $6.0 billion at December 31, 2004. The growth in assets was primarily a result of the organic growth of our loan portfolio, as well as the impact of the acquisition of UNB. Gross loans at September 30, 2005 totaled $6.6 billion, a 29% increase from $5.1 billion at year-end 2004. Organic loan growth for the nine month period ended September 30, 2005 was $985.0 million, or an annualized increase of 26%, excluding the impact of the UNB acquisition, loan securitizations and loan sales. Growth in commercial real estate, multifamily and single family loans added the largest dollar impact to our organic growth, although almost all loan sectors grew at a double digit rate year-to-date.
 
Average earning assets for the third quarter of 2005 equaled $6.7 billion, 35% higher than the third quarter of 2004. The growth in average earning assets was driven by a 33% increase in average loans to $5.9 billion. The yield on average earning assets for the quarter was 6.27%, an increase of 93 basis points from 5.34% in the year ago quarter and 27 basis points from 6.00% in the previous quarter. The yield on average loans receivable for the quarter was 6.56%, an increase of 96 basis points from 5.60% in the year ago quarter and 27 basis points from 6.29% in the previous quarter. The rise in the yield on average earning assets was primarily attributable to increases in market interest rates and the corresponding repricing of our loan portfolio.
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Total deposits at September 30, 2005 were $6.1 billion, a 36% increase over total deposits of $4.5 billion at December 31, 2004. Organic deposit growth for the nine month period ended September 30, 2005 was $742.5 million, or an annualized increase of 22%, excluding the impact of the UNB acquisition. Core deposits at September 30, 2005 totaled $3.0 billion or a 32% increase over year-end 2004. Excluding the impact of the UNB acquisition, organic core deposit growth for the nine month period ended September 30, 2005 was $378.0 million, an annualized increase of 22%.

Average total deposits for the third quarter totaled $5.3 billion, 36% above the figure for the prior year period, while average core deposits totaled $2.6 billion, 28% greater than a year ago. The growth in average deposits stemmed from strong increases in time deposits of 46% or $843.8 million, money market deposits of 59% or $273.3 million and demand deposits of 25% or $243.3 million. The year-over-year increase in average deposits was attributable to promotions at the retail branches targeted to smaller businesses and retail customers and the expansion of commercial relationships.

The average cost of deposits for the third quarter of 2005 was 1.89%, an 89 basis point increase from 1.00% in the year ago quarter and a 24 basis point increase from 1.65% in the previous quarter. The average cost of funds for the third quarter equaled 2.15%, a 97 basis point increase from 1.18% for the prior year period and a 21 basis point increase from 1.94% in the prior quarter. The increase in the cost of deposits for the year-over-year period was attributable to increased deposit competition and the resulting higher market interest rates. East West entered into long-term repurchase agreements totaling $200.0 million during the quarter. The repurchase agreements have enabled us to lower our reliance on FHLB borrowings and provide us with long-term borrowing at a lower cost.
 
Operating Results
 
Net interest income increased to a record $71.6 million, 35% or $18.7 million greater than the third quarter of 2004 and 10% or $6.6 million greater on a sequential quarter basis. The interest margin for the quarter reflected no change from the year ago margin of 4.22% and a 7 basis point increase from the previous quarter margin of 4.15%. The sequential quarter increase in the margin was primarily driven by an increase in the volume of earning assets and supported by an upward repricing of our loan portfolio as compared to deposit rate increases.

East West provided $4.5 million for loan losses during the third quarter of 2005, compared to $5.0 million during the third quarter of 2004 and $4.5 million during the previous quarter. The third quarter provision reflects the continued growth and quality of our loan portfolio. Based on the projected loan growth during the next quarter and the current trends in the loan portfolio, management believes that the provision for loan losses for the fourth quarter should remain consistent with the current level.

Noninterest income for the third quarter totaled $7.8 million, 9% or $619 thousand higher than the third quarter of 2004 and 2% or $137 thousand lower than the prior quarter. Core noninterest income, excluding the impact of gains on sales of investment securities and fixed assets, totaled $6.0 million during the quarter, 7% or $410 thousand higher than the prior year figure and 10% or $637 thousand lower than the sequential quarter. The year-over-year increase in noninterest income predominantly resulted from net gains on the sale of investment securities during the third quarter of 2005. The sequential quarter decrease was largely due to a decrease in income from secondary market activities, partially offset by increases in both loan and branch fees during the third quarter of 2005.
 
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Noninterest expense totaled $30.3 million for the third quarter of 2005, 30% or $7.1 million higher than the year ago level and 7% or $1.9 million higher than the previous quarter. Cash operating expenses, which exclude the amortization of intangibles and investments in affordable housing partnerships, totaled $27.9 million for the quarter, a 34% or $7.1 million increase over the third quarter of 2004 and a 7% or $1.9 million increase from the sequential quarter. The increase from the third quarter of 2004 was largely due to higher compensation and occupancy expense associated with acquisitions as well as the overall organic growth of the Bank. Other expenses increased 30% from prior year, mainly due to higher commercial deposit-related costs resulting from growth in commercial deposits.

East West generated a 35.19% operating efficiency ratio for the third quarter of 2005, comparable to 34.78% a year ago and 35.78% in the second quarter of 2005. The efficiency ratio is a direct result of management’s efforts to increase efficiencies in the Bank’s operating platform. Management anticipates the efficiency ratio for the full year 2005 to be approximately 36%.

The effective tax rate for the third quarter was 35.92% compared to 35.85% a year ago and 36.38% in the previous quarter. Management anticipates an effective tax rate for the fourth quarter of approximately 37%.
 
Asset Quality

Total nonperforming assets were $17.4 million or 0.22% of total assets at September 30, 2005. This compares with $5.9 million, or 0.10% of total assets at December 31, 2004, and $2.9 million, or 0.05% of total assets at September 30, 2004. Overall, our asset quality and loss rates continue to remain at very low levels, although nonperforming assets increased in this quarter from the recent historic lows. As of September 30, 2005, $16.1 million of the nonperforming assets were comprised of two secured commercial real estate loans, one secured construction loan and two trade finance loans that are fully guaranteed by Ex-Im Bank. Nonaccrual loans at September 30, 2005 were $12.8 million or 0.19% of total loans, compared to $4.9 million or 0.10% of total loans, at December 31, 2004, and $2.6 million or 0.06% of total loans at September 30, 2004.

Net chargeoffs for the quarter totaled $1.1 million or an annualized 0.08% of average loans, compared to $3.3 million, or an annualized 0.30% of average loans for the third quarter of 2004 and $2.4 million or an annualized 0.17% of average loans for the previous quarter.

The allowance for loan losses at September 30, 2005 was $67.4 million or 1.02% of total loans and 525% of nonaccrual loans, compared to $50.9 million or 0.99% of total loans and 1,033% of nonaccrual loans at December 31, 2004 and $46.9 million or 0.99% of total loans and 1,804% of nonaccrual loans at September 30, 2004. At September 30, 2005, the allowance for unfunded loan commitments and off-balance sheet credit exposures amounted to $10.2 million, compared to $7.7 million at December 31, 2004 and $7.5 million at September 30, 2004. The allowance for unfunded loan commitments and off-balance sheet credit exposures is included in accrued expenses and other liabilities on the balance sheet.
 
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Capitalization

East West continues to remain well capitalized under all regulatory guidelines. At September 30, 2005, our Tier I risk-based capital ratio was 8.74%, total risk-based capital ratio was 10.93% and Tier I leverage ratio was 8.83%. During the quarter, we issued $25.0 million in subordinated debt, which qualifies for Tier II capital. We also issued $20.0 million in junior subordinated debt securities through a pooled trust preferred offering, which qualifies for Tier I capital. Both of these transactions were undertaken to augment our liquidity and capital resources. Furthermore, we issued 3,138,701 shares of common stock in connection with the acquisition of UNB. East West did not repurchase any shares during the quarter. Total stockholders’ equity as of September 30, 2005 was $696.9 million, representing a book value of $12.43 per share.
 
About East West

East West Bancorp is a publicly owned company, with $7.9 billion in assets, whose stock is traded on the Nasdaq National Market under the symbol “EWBC”. The company’s wholly owned subsidiary, East West Bank, is the second largest independent commercial bank headquartered in Los Angeles with 56 total branch locations. East West Bank serves the community with 55 branch locations across Southern and Northern California, one branch location in Houston, Texas and a Beijing Representative Office in China. For more information on East West Bancorp, visit the company’s website at www.eastwestbank.com.
Forward-Looking Statements

This release may contain forward-looking statements, which are included in accordance with the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995 and accordingly, the cautionary statements contained in East West Bancorp’s Annual Report on Form 10-K for the year ended Dec. 31, 2004 (See Item I -- Business, and Item 7 -- Management’s Discussion and Analysis of Consolidated Financial Condition and Results of Operations), and other filings with the Securities and Exchange Commission are incorporated herein by reference. These factors include, but are not limited to: the effect of interest rate and currency exchange fluctuations; competition in the financial services market for both deposits and loans; EWBC’s ability to efficiently incorporate acquisitions into its operations; the ability of EWBC and its subsidiaries to increase its customer base; the effect of regulatory and legislative action, including California tax legislation and an announcement by the state’s Franchise Tax Board regarding the taxation of Registered Investment Companies; and regional and general economic conditions. Actual results and performance in future periods may be materially different from any future results or performance suggested by the forward-looking statements in this release. Such forward-looking statements speak only as of the date of this release. East West expressly disclaims any obligation to update or revise any forward-looking statements found herein to reflect any changes in the Bank’s expectations of results or any change in event.
 
 
 
- # # # -

 EAST WEST BANCORP, INC. 
 CONDENSED CONSOLIDATED BALANCE SHEETS 
 (In thousands, except per share amounts) 
 (unaudited) 
               
   
September 30,
    
December 31,
 
  
% 
  
     
2005
    
2004
    
Change
  
Assets
                    
Cash and cash equivalents
  
$
136,834
  
$
93,075
    
47
 
Securities purchased under resale agreements
    
50,000
   
-
   
100
 
Investment securities available-for-sale
    
718,556
   
534,552
   
34
 
Loans receivable (net of allowance for loan losses
                
 
  
     of $67,414 and $50,884)
    
6,556,315
   
5,080,454
   
29
 
Premiums on deposits acquired, net
    
20,778
   
7,723
   
169
 
Goodwill
    
144,490
   
43,702
   
231
 
Other assets
    
311,405
   
269,374
   
16
 
Total assets
  
$
7,938,378
  
$
6,028,880
    
32
 
                 
 
  
Liabilities and Stockholders' Equity
                
 
  
Deposits
  
$
6,130,129
  
$
4,522,517
    
36
 
Short-term borrowings
    
182,000
   
-
   
100
  
Federal Home Loan Bank advances
    
482,756
   
860,803
   
(44)
 
Securities sold under repurchase agreements
    
200,000
   
-
   
100
  
Notes payable
    
9,195
   
11,018
   
(17)
 
Accrued expenses and other liabilities
    
84,328
   
62,757
   
34
 
Long-term debt
    
153,095
   
57,476
   
166
 
Total liabilities
    
7,241,503
   
5,514,571
   
31
 
Stockholders' equity
    
696,875
   
514,309
   
35
 
Total liabilities and stockholders' equity
  
$
7,938,378
  
$
6,028,880
    
32
 
Book value per share
  
$
12.43
  
$
9.80
    
27
 
Number of shares at period end
    
56,074
   
52,501
   
7
 
                 
 
  
Ending Balances
    
September 30,
    
December 31,
 
  
% 
  
     
2005
    
2004
    
Change
  
Loans receivable
                    
Real estate - single family
 
$
443,736
  
$
327,554
    
35
 
Real estate - multifamily
    
1,296,344
   
1,121,107
   
16
 
Real estate - commercial
    
3,309,761
   
2,556,827
   
29
 
Real estate - construction
    
570,935
   
348,501
   
64
 
Commercial
    
586,174
   
438,537
   
34
 
Trade finance
    
213,760
   
155,809
   
37
 
Consumer
    
205,398
   
185,159
   
11
 
Total gross loans receivable
  
$
6,626,108
  
$
5,133,494
    
29
 
Unearned fees, premiums and discounts
    
(2,379
)
  
(2,156
)
  
10
 
Allowance for loan losses
    
(67,414
)
  
(50,884
)
  
32
 
Net loans receivable
  
$
6,556,315
  
$
5,080,454
    
29
 
                 
 
  
Deposits
                    
Noninterest-bearing demand
  
$
1,380,330
  
$
1,097,851
    
26
 
Interest-bearing checking
    
360,472
   
334,747
   
8
 
Money market
    
881,074
   
507,949
   
73
 
Savings
    
391,533
   
340,399
   
15
 
Total core deposits
    
3,013,409
   
2,280,946
   
32
 
Time deposits less than $100,000
    
952,943
   
747,858
   
27
 
Time deposits $100,000 or greater
    
2,163,777
   
1,493,713
   
45
 
Total time deposits
    
3,116,720
   
2,241,571
   
39
 
Total deposits
  
$
6,130,129
  
$
4,522,517
    
36
 
 

EAST WEST BANCORP, INC. 
  
 CONDENSED CONSOLIDATED STATEMENTS OF INCOME 
  
 (In thousands, except per share amounts) 
  
 (unaudited) 
  
                   
       
Three Months Ended September 30,
 
% 
  
       
2005
  
2004
  
Change
  
                   
Interest and dividend income
        
$
106,287
  
$
66,815
    
59
 
Interest expense
          
(34,705
)
  
(13,980
)
  
148
 
Net interest income before provision for loan losses
          
71,582
   
52,835
   
35
 
Provision for loan losses
          
(4,500
)
  
(5,000
)
  
(10)
 
Net interest income after provision for loan losses
          
67,082
   
47,835
   
40
 
Noninterest income
          
7,827
   
7,208
   
9
 
Noninterest expense
          
(30,306
)
  
(23,242
)
  
30
 
Income before provision for income taxes
          
44,603
   
31,801
   
40
 
Income taxes
          
(16,020
)
  
(11,402
)
  
41
 
Net income
        
$
28,583
  
$
20,399
    
40
 
Net income per share, basic
        
$
0.54
  
$
0.40
    
35
 
Net income per share, diluted
        
$
0.52
  
$
0.39
    
33
 
Shares used to compute per share net income:
                      
 
  
- Basic
          
53,261
   
51,210
   
4
 
- Diluted
         
54,822
   
52,884
   
4
 
 
                      
 
  
 
                      
 
  
       
Three Months Ended September 30,
  
% 
  
           
2005
    
2004
    
Change
  
Noninterest income:
                          
Letters of credit fees and commissions
        
$
2,029
  
$
1,782
    
14
 
Branch fees
          
1,858
   
1,693
   
10
 
Net gain on investment securities available-for-sale
          
1,786
   
678
   
163
 
Ancillary loan fees
          
816
   
848
   
(4)
 
(Loss) income from secondary market activities
          
(41
)
  
82
   
(150)
 
Net gain on sale of fixed assets
          
12
   
911
   
(99)
 
Other operating income
          
1,367
   
1,214
   
13
 
Total noninterest income
        
$
7,827
  
$
7,208
    
9
 
                       
 
  
Noninterest expense:
                      
 
  
Compensation and employee benefits
        
$
12,979
  
$
9,386
    
38
 
Occupancy and equipment expense
          
3,736
   
2,812
   
33
 
Amortization of investments in affordable
                      
 
  
     housing partnerships
          
1,581
   
1,784
   
(11)
 
Amortization of premiums on deposits acquired
          
782
   
575
   
36
 
Data processing
          
717
   
566
   
27
 
Deposit insurance premiums and regulatory
                      
 
  
     assessments
          
258
   
211
   
22
 
Other operating expense
          
10,253
   
7,908
   
30
 
Total noninterest expense
        
$
30,306
  
$
23,242
    
30
 
 
 

EAST WEST BANCORP, INC.
  
 CONDENSED CONSOLIDATED STATEMENTS OF INCOME
  
 (In thousands, except per share amounts)
  
 (unaudited)
  
                   
       
Nine Months Ended September 30,
  
% 
  
       
2005
  
2004
  
Change
  
               
 
  
Interest and dividend income
        
$
284,812
  
$
175,307
    
62
 
Interest expense
          
(86,048
)
  
(35,385
)
  
143
 
Net interest income before provision for loan losses
          
198,764
   
139,922
   
42
 
Provision for loan losses
          
(13,370
)
  
(11,750
)
  
14
 
Net interest income after provision for loan losses
          
185,394
   
128,172
   
45
 
Noninterest income
          
22,291
   
21,499
   
4
 
Noninterest expense
          
(86,425
)
  
(64,110
)
  
35
 
Income before provision for income taxes
          
121,260
   
85,561
   
42
 
Income taxes
          
(43,695
)
  
(30,188
)
  
45
 
Net income
        
$
77,565
  
$
55,373
    
40
 
Net income per share, basic
        $
1.47
  $
1.10
   
34
 
Net income per share, diluted
       
$
1.43
  
$
1.07
    
34
 
Shares used to compute per share net income:
                      
 
  
- Basic
         
52,615
   
50,137
   
5
 
- Diluted
         
54,221
   
51,752
   
5
 
 
                          
                           
       
 Nine Months Ended September 30,  
  
% 
  
           
2005
    
2004
    
Change
  
Noninterest income:
                          
Letters of credit fees and commissions
        
$
6,533
  
$
5,971
    
9
 
Branch fees
          
5,143
   
5,327
   
(3)
 
Net gain on investment securities available-for-sale
          
3,519
   
1,481
   
138
 
Ancillary loan fees
          
1,945
   
2,242
   
(13)
 
Income from secondary market activities
          
1,143
   
1,133
   
1
 
Net gain on sale of fixed assets
          
40
   
931
   
(96)
 
Other operating income
          
3,968
   
4,414
   
(10)
 
Total noninterest income
        
$
22,291
  
$
21,499
    
4
 
                       
 
  
Noninterest expense:
                          
Compensation and employee benefits
        
$
38,318
  
$
27,693
    
38
 
Occupancy and equipment expense
          
10,426
   
7,748
   
35
 
Amortization of investments in affordable
                      
 
  
     housing partnerships
          
4,971
   
5,559
   
(11)
 
Amortization of premiums on deposits acquired
          
1,988
   
1,612
   
23
 
Data processing
          
1,940
   
1,534
   
26
 
Deposit insurance premiums and regulatory
                      
 
  
     assessments
          
709
   
572
   
24
 
Other operating expense
          
28,073
   
19,392
   
45
 
Total noninterest expense
        
$
86,425
  
$
64,110
    
35
 
 
 
EAST WEST BANCORP, INC.
  
SELECTED FINANCIAL INFORMATION
  
(Dollars in thousands)
  
(unaudited)
  
 
Average Balances
  
 
  
Three Months Ended September 30,
 
% 
  
       
2005
  
2004
  
Change
  
Loans receivable
                          
Real estate - single family
       
$
414,732
  
$
246,482
    
68
 
Real estate - multifamily
          
1,243,585
   
1,006,020
   
24
 
Real estate - commercial
          
2,906,445
   
2,223,589
   
31
 
Real estate - construction
          
470,967
   
292,499
   
61
 
Commercial
          
517,591
   
375,378
   
38
 
Trade finance
          
188,975
   
134,231
   
41
 
Consumer
          
193,527
   
169,900
   
14
 
Total loans receivable
          
5,935,822
   
4,448,099
   
33
 
Investment securities available-for-sale
          
711,660
   
469,550
   
52
 
Earning assets
          
6,730,519
   
4,980,691
   
35
 
Total assets
          
7,077,746
   
5,272,107
   
34
 
                           
Deposits
                          
Noninterest-bearing demand
        
$
1,208,118
  
$
964,794
    
25
 
Interest-bearing checking
          
338,523
   
287,506
   
18
 
Money market
          
733,825
   
460,529
   
59
 
Savings
          
337,370
   
329,466
   
2
 
Total core deposits
          
2,617,836
   
2,042,295
   
28
 
Time deposits less than $100,000
          
853,497
   
715,932
   
19
 
Time deposits $100,000 or greater
          
1,842,909
   
1,136,633
   
62
 
Total time deposits
          
2,696,406
   
1,852,565
   
46
 
Total deposits
          
5,314,242
   
3,894,860
   
36
 
Interest-bearing liabilities
          
5,185,614
   
3,747,094
   
38
 
Stockholders' equity
          
597,112
   
457,446
   
31
 
 
                      
 
  
       
 Nine Months Ended September 30,  
  
% 
  
           
2005
    
2004
    
Change
  
Loans receivable
                          
Real estate - single family
       
$
393,667
  
$
190,982
    
106
 
Real estate - multifamily
          
1,190,840
   
906,945
   
31
 
Real estate - commercial
          
2,749,805
   
1,939,907
   
42
 
Real estate - construction
          
422,910
   
244,497
   
73
 
Commercial
          
461,306
   
345,609
   
33
 
Trade finance
          
177,022
   
125,912
   
41
 
Consumer
          
186,887
   
160,203
   
17
 
Total loans receivable
          
5,582,437
   
3,914,055
   
43
 
Investment securities available-for-sale
          
639,791
   
431,451
   
48
 
Earning assets
          
6,295,001
   
4,447,684
   
42
 
Total assets
          
6,613,071
   
4,718,172
   
40
 
                       
 
  
Deposits
                          
Noninterest-bearing demand
        
$
1,115,316
  
$
926,339
    
20
 
Interest-bearing checking
          
334,127
   
283,054
   
18
 
Money market
          
651,005
   
381,914
   
70
 
Savings
          
327,775
   
316,116
   
4
 
Total core deposits
          
2,428,223
   
1,907,423
   
27
 
Time deposits less than $100,000
          
809,061
   
694,952
   
16
 
Time deposits $100,000 or greater
          
1,647,462
   
1,009,866
   
63
 
Total time deposits
          
2,456,523
   
1,704,818
   
44
 
Total deposits
          
4,884,746
   
3,612,241
   
35
 
Interest-bearing liabilities
          
4,863,928
   
3,304,249
   
47
 
Stockholders' equity
          
553,794
   
415,588
   
33
 
 

EAST WEST BANCORP, INC.
SELECTED FINANCIAL INFORMATION
(unaudited)
                   
 
Selected Ratios
    
Three Months Ended September 30,
 
%
  
       
2005
  
2004
  
Change
  
For The Period
                          
Return on average assets
          
1.62
%
  
1.55
%
  
4
 
Return on average equity
          
19.15
%
  
17.84
%
  
7
 
Interest rate spread
          
3.61
%
  
3.85
%
  
(6)
 
Net interest margin
          
4.22
%
  
4.22
%
  
- 
  
Yield on earning assets
          
6.27
%
  
5.34
%
  
17
 
Cost of deposits
          
1.89
%
  
1.00
%
  
89
 
Cost of funds
          
2.15
%
  
1.18
%
  
82
 
Noninterest expense/average assets (1)
          
1.58
%
  
1.58
%
  
-
 
Efficiency ratio (1)
          
35.19
%
  
34.78
%
  
1
 
Net chargeoffs to average loans (2)
          
0.08
%
  
0.30
%
  
(73)
 
                           
                           
 
      
 Nine Months Ended September 30,  
    
%
  
           
2005
    
2004
    
Change
  
For The Period
                          
Return on average assets
          
1.56
%
  
1.56
%
  
-
 
Return on average equity
          
18.67
%
  
17.77
%
  
5
 
Interest rate spread
          
3.68
%
  
3.83
%
  
(4)
 
Net interest margin
          
4.22
%
  
4.20
%
  
- 
  
Yield on earning assets
          
6.05
%
  
5.26
%
  
15
 
Cost of deposits
          
1.67
%
  
0.94
%
  
78
 
Cost of funds
          
1.92
%
  
1.12
%
  
71
Noninterest expense/average assets (1)
          
1.60
%
  
1.61
%
  
-
 
Efficiency ratio (1)
          
35.95
%
  
35.27
%
  
2
 
Net chargeoffs to average loans (2)
          
0.10
%
  
0.15
%
  
(33)
 
                       
 
  
Period End
                          
Tier 1 risk-based capital ratio
          
8.74
%
  
9.63
%
  
(9)
 
Total risk-based capital ratio
          
10.93
%
  
10.70
%
  
2
 
Tier 1 leverage capital ratio
          
8.83
%
  
9.18
%
  
(4)
 
Nonperforming assets to total assets
          
0.22
%
  
0.05
%
  
340
 
Nonaccrual loans to total loans
          
0.19
%
  
0.06
%
  
217
 
Allowance for loan losses to total loans
          
1.02
%
  
0.99
%
  
2
 
Allowance for loan losses and unfunded loan
                      
 
  
     commitments to total loans
          
1.17
%
  
1.15
%
  
2
 
Allowance for loan losses to nonaccrual loans
          
525
%
  
1804
%
  
(71)
 
                           
                           
(1) Excludes the amortization of intangibles and investments in affordable housing partnerships.      
              
(2) Annualized.
                          
 
 

EAST WEST BANCORP, INC.
  
QUARTER TO DATE AVERAGE BALANCES, YIELDS AND RATES PAID
  
(Dollars in thousands)
  
(unaudited)
  
                           
   
Quarter Ended September 30,
  
   
2005
  
2004
  
   
Average
      
Yield
  
Average
      
Yield
  
   
Volume
  
Interest
  
(1)
  
Volume
  
Interest
  
(1)
  
Assets
                                      
Interest-earning assets:
                                      
Short-term investments
  
$
9,655
    $
78
   
3.21
%
$
22,712
    $
85
   
1.49
%
Securities purchased under resale agreements
    
12,500
   
224
   
7.11
%
  
-
   
-
   
-
 
Investment securities available-for-sale
    
711,660
   
7,181
   
4.00
%
  
469,550
   
3,563
   
3.02
%
Loans receivable
    
5,935,822
   
98,110
   
6.56
%
  
4,448,099
   
62,655
   
5.60
%
FHLB and FRB stock
    
60,882
   
694
   
4.52
%
  
40,330
   
512
   
5.05
%
Total interest-earning assets
    
6,730,519
   
106,287
   
6.27
%
  
4,980,691
   
66,815
   
5.34
%
                                       
Noninterest-earning assets:
                                      
Cash and due from banks
    
110,124
               
92,808
             
Allowance for loan losses
    
(59,976
)
              
(44,806
)
            
Other assets
    
297,079
               
243,414
             
Total assets
  
$
7,077,746
              
$
5,272,107
              
                                       
Liabilities and stockholders' equity
                                      
Interest-bearing liabilities:
                                      
Checking accounts
    $
338,523
   $
662
   
0.78
%
  $
287,506
   $
275
   
0.38
%
Money market accounts
    
733,825
   
4,162
   
2.25
%
  
460,529
   
1,285
   
1.11
%
Savings deposits
    
337,370
   
267
   
0.31
%
  
329,466
   
123
   
0.15
%
Time deposits less than $100,000
    
853,497
   
4,915
   
2.28
%
  
715,932
   
3,014
   
1.67
%
Time deposits $100,000 or greater
    
1,842,909
   
15,269
   
3.29
%
  
1,136,633
   
5,088
   
1.78
%
Short-term borrowings
    
68,701
   
637
   
3.68
%
  
4,014
   
18
   
1.78
%
Federal Home Loan Bank advances
    
803,688
   
6,290
   
3.11
%
  
771,002
   
3,367
   
1.74
%
Securities sold under repurchase agreements
    
91,848
   
693
   
2.99
%
  
-
   
-
   
-
 
Long-term debt
    
115,253
   
1,810
   
6.23
%
  
42,012
   
810
   
7.67
%
Total interest-bearing liabilities
    
5,185,614
   
34,705
   
2.66
%
  
3,747,094
   
13,980
   
1.49
%
                                       
Noninterest-bearing liabilities:
                                      
Demand deposits
    
1,208,118
               
964,794
             
Other liabilities
    
86,902
               
102,773
             
Stockholders' equity
    
597,112
               
457,446
             
Total liabilities and stockholders' equity
  
$
7,077,746
              
$
5,272,107
              
Interest rate spread
                
3.61
%
              
3.85
%
Net interest income and net margin
        
$
71,582
    
4.22
%
      
$
52,835
    
4.22
%
                                       
(1) Annualized.
                                      
 

EAST WEST BANCORP, INC.
  
YEAR TO DATE AVERAGE BALANCES, YIELDS AND RATES PAID
  
(Dollars in thousands)
  
(unaudited)
  
                           
   
Nine Months Ended September 30,
  
   
2005
  
2004
  
   
Average
      
Yield
  
Average
      
Yield
  
   
Volume
  
Interest
 
(1)
  
Volume
  
Interest
  
(1)
  
Assets
                                      
Interest-earning assets:
                                      
Short-term investments
  
$
8,173
    $
177
   
2.90
%
$
70,890
    $
607
   
1.14
%
Securities purchased under resale agreements
    
4,213
   
224
   
7.11
%
  
-
   
-
   
-
 
Investment securities available-for-sale
    
639,763
   
18,020
   
3.77
%
  
431,451
   
10,791
   
3.34
%
Loans receivable
    
5,582,437
   
264,340
   
6.33
%
  
3,914,055
   
162,895
   
5.56
%
FHLB and FRB stock
    
60,415
   
2,051
   
4.54
%
  
31,288
   
1,014
   
4.33
%
Total interest-earning assets
    
6,295,001
   
284,812
   
6.05
%
  
4,447,684
   
175,307
   
5.26
%
                                       
Noninterest-earning assets:
                                      
Cash and due from banks
    
104,035
               
87,556
             
Allowance for loan losses
    
(56,021
)
              
(42,807
)
            
Other assets
    
270,056
               
225,739
             
Total assets
  
$
6,613,071
              
$
4,718,172
              
                                       
Liabilities and stockholders' equity
                                      
Interest-bearing liabilities:
                                      
Checking accounts
    $
334,127
   $
1,909
   
0.76
%
  $
283,054
   $
743
   
0.35
%
Money market accounts
    
651,005
   
10,175
   
2.09
%
  
381,914
   
2,836
   
0.99
%
Savings deposits
    
327,775
   
657
   
0.27
%
  
316,116
   
338
   
0.14
%
Time deposits less than $100,000
    
809,061
   
13,430
   
2.22
%
  
694,952
   
8,310
   
1.60
%
Time deposits $100,000 or greater
    
1,647,462
   
34,789
   
2.82
%
  
1,009,866
   
13,323
   
1.76
%
Short-term borrowings
    
27,242
   
739
   
3.63
%
  
2,545
   
31
   
1.63
%
Federal Home Loan Bank advances
    
947,819
   
19,361
   
2.73
%
  
579,886
   
7,594
   
1.75
%
Securities sold under repurchase agreements
    
30,952
   
693
   
2.99
%
  
-
   
-
   
-
 
Long-term debt
    
88,485
   
4,295
   
6.49
%
  
35,916
   
2,210
   
8.22
%
Total interest-bearing liabilities
    
4,863,928
   
86,048
   
2.37
%
  
3,304,249
   
35,385
   
1.43
%
                                       
Noninterest-bearing liabilities:
                                      
Demand deposits
    
1,115,316
               
926,339
             
Other liabilities
    
80,033
               
71,996
             
Stockholders' equity
    
553,794
               
415,588
             
Total liabilities and stockholders' equity
  
$
6,613,071
              
$
4,718,172
              
Interest rate spread
                
3.68
%
              
3.83
%
Net interest income and net margin
        
$
198,764
    
4.22
%
      
$
139,922
    
4.20
%
                                       
(1) Annualized.