NOTE 20 — PARENT COMPANY CONDENSED FINANCIAL STATEMENTS

The principal sources of East West’s income (on a parent company-only basis) are dividends from the Bank. In addition to dividend restrictions set forth in statutes and regulations, the banking agencies have the authority to prohibit or to limit the Bank from paying dividends, if, in the banking regulator’s opinion, payment of a dividend would constitute an unsafe or unsound practice in light of the financial condition of the Bank. The Bank declared $100.0 million and $111.6 million of dividends to East West during 2016 and 2014, respectively. The Bank did not declare any dividends to East West during 2015. For information on the statutory and regulatory limitations on the ability of the Company to pay dividends to its stockholders and on the Bank to pay dividends to East West, see Item 1. Business — Supervision and Regulation — Dividends and Other Transfers of Funds. The financial information of East West as of December 31, 2016 and 2015 and for the years ended December 31, 2016, 2015 and 2014 is as follows:

CONDENSED BALANCE SHEETS




($ in thousands)	December 31,
($ in thousands)	2016			2015
ASSETS
Cash and due from banks	$	38,699		$	18,334
Interest-bearing cash with banks	565			564
Cash and cash equivalents	39,264			18,898
Available-for-sale investment securities, at fair value	9,338			8,731
Investment in subsidiaries	3,552,659			3,233,206
Tax credit investments, net	32,245			47,488
Other assets	4,812			46,894
TOTAL	$	3,638,318		$	3,355,217
LIABILITIES
Long-term debt	$	186,327		$	206,084
Other liabilities	24,250			26,183
Total liabilities	210,577			232,267
STOCKHOLDERS’ EQUITY
Common stock, $0.001 par value, 200,000,000 shares authorized; 164,604,072 and 164,246,517 shares issued in 2016 and 2015, respectively.	164			164
Additional paid-in capital	1,727,434			1,701,295
Retained earnings	2,187,676			1,872,594
Treasury stock at cost — 20,436,621 shares in 2016 and 20,337,284 shares in 2015.	(439,387		)	(436,162		)
Accumulated other comprehensive loss, net of tax	(48,146		)	(14,941		)
Total stockholders’ equity	3,427,741			3,122,950
TOTAL	$	3,638,318		$	3,355,217

CONDENSED STATEMENTS OF INCOME




($ in thousands)	Year Ended December 31,
($ in thousands)	2016		2015			2014
Dividends from subsidiaries	$	100,107	$	88		$	111,701
Other income	610		625			7,414
Total income	100,717		713			119,115
Interest expense	5,017		4,636			4,823
Compensation and net occupancy reimbursement to subsidiary	5,001		5,386			4,039
Other expense	15,069		24,829			50,280
Total expense	25,087		34,851			59,142
Income (loss) before income tax benefit and equity in undistributed income of subsidiaries	75,630		(34,138		)	59,973
Income tax benefit	26,041		30,849			80,674
Equity in undistributed income of subsidiaries	330,006		387,966			205,231
Net income	$	431,677	$	384,677		$	345,878

CONDENSED STATEMENTS OF CASH FLOWS




($ in thousands)	Year Ended December 31,
($ in thousands)	2016			2015			2014
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	431,677		$	384,677		$	345,878
Adjustments to reconcile net income to net cash provided by operating activities:
Equity in undistributed income of subsidiaries	(330,006		)	(387,966		)	(317,620		)
Depreciation and amortization	14,094			22,870			46,365
Gains on sales of available-for-sale investment securities and other investments	—			(20		)	(4,357		)
Net change in other assets and other liabilities	47,072			(40,624		)	179,869
Net cash provided (used in) by operating activities	162,837			(21,063		)	250,135
CASH FLOWS FROM INVESTING ACTIVITIES
Net increase in tax credit investments	(6,554		)	(35,633		)	(53,071		)
Purchases of:
Available-for-sale investment securities	—			—			(9,000		)
Proceeds from sale of:
Available-for-sale investment securities	—			20			74,002
Net cash (used in) provided by investing activities	(6,554		)	(35,613		)	11,931
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from:
Issuance of common stock pursuant to various stock plans and agreements	2,081			2,835			6,794
Payments for:
Repayment of long-term debt	(20,000		)	(20,000		)	(30,310		)
Repurchase of vested shares due to employee tax liability	(3,225		)	(5,964		)	(10,326		)
Cash dividends on common stock	(115,828		)	(115,641		)	(103,618		)
Other net financing activities	1,055			3,291			6,513
Net cash used in financing activities	(135,917		)	(135,479		)	(130,947		)
Net increase (decrease) in cash and cash equivalents	20,366			(192,155		)	131,119
Cash and cash equivalents, beginning of year	18,898			211,053			79,934
Cash and cash equivalents, end of year	$	39,264		$	18,898		$	211,053
Supplemental Cash Flow Information:
Cash paid during the year for:
Interest	$	4,691		$	4,254		$	4,462
Noncash financing activities:
Issuance of common stock related to acquisition	$	—		$	—		$	190,830