REGULATORY REQUIREMENTS

12 Months Ended

Dec. 31, 2012

REGULATORY REQUIREMENTS

REGULATORY REQUIREMENTS

23. REGULATORY REQUIREMENTS

Risk-Based Capital—The Bank is a member bank of the Federal Reserve System and the FRB is the Bank’s primary regulator. The Company and the Bank are subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory actions by regulators that, if undertaken, could have a direct material effect on the Company’s financial statements. Under capital adequacy guidelines, the Company and the Bank must meet specific capital guidelines that involve quantitative measures of the assets, liabilities and certain off-balance sheet items as calculated under regulatory accounting practices. The capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings and other factors.

As of December 31, 2012 and 2011, the Bank is categorized as well capitalized under the regulatory framework for prompt corrective action. To be categorized as well capitalized, the Bank must maintain specific total risk-based, Tier I risk-based, and Tier I leverage ratios as set forth in the table below. There are no conditions or events since December 31, 2012 which management believes have changed the category of the Bank.

The actual and required capital amounts and ratios at December 31, 2012 and 2011 are presented as follows: 

									To Be Well Capitalized
					For Capital				Under Prompt Corrective
	Actual				Adequacy Purposes				Action Provisions
	Amount		Ratio		Amount		Ratio		Amount		Ratio
	(Dollars in thousands)
As of December 31, 2012:
Total Capital (to Risk-Weighted Assets)
Consolidated Company	$	2,296,253	16.1	%	$	1,142,743	8.0	%	N/A		N/A
East West Bank	$	2,225,888	15.6	%	$	1,142,215	8.0	%	$	1,427,769	10.0%
Tier I Capital (to Risk-Weighted Assets)
Consolidated Company	$	2,116,757	14.8	%	$	571,371	4.0	%	N/A		N/A
East West Bank	$	2,046,477	14.3	%	$	571,107	4.0	%	$	856,661	6.0%
Tier I Capital (to Average Assets)
Consolidated Company	$	2,116,757	9.6	%	$	880,526	4.0	%	N/A		N/A
East West Bank	$	2,046,477	9.3	%	$	880,162	4.0	%	$	1,100,202	5.0%
As of December 31, 2011:
Total Capital (to Risk-Weighted Assets)
Consolidated Company	$	2,296,274	16.4	%	$	1,123,413	8.0	%	N/A		N/A
East West Bank	$	2,283,178	16.3	%	$	1,123,228	8.0	%	$	1,404,035	10.0%
Tier I Capital (to Risk-Weighted Assets)
Consolidated Company	$	2,074,963	14.8	%	$	561,706	4.0	%	N/A		N/A
East West Bank	$	2,061,896	14.7	%	$	561,614	4.0	%	$	842,421	6.0%
Tier I Capital (to Average Assets)
Consolidated Company	$	2,074,963	9.7	%	$	859,098	4.0	%	N/A		N/A
East West Bank	$	2,061,896	9.6	%	$	858,765	4.0	%	$	1,073,457	5.0%

Under the Dodd-Frank Act, bank holding companies with more than $15 billion in total consolidated assets will no longer be able to include trust preferred securities as Tier I regulatory capital beginning in 2013 with complete phase-out in 2016. As of December 31, 2012 and 2011, trust preferred securities comprised 6.3% and 6.4%, respectively, of the Company’s Tier I capital.

Reserve Requirement—The Bank is required to maintain a percentage of its deposits as reserves at the Federal Reserve Bank. The daily average reserve requirement was approximately $228.7 million and $186.5 million for December 31, 2012 and 2011, respectively.