EX-99.1 3 ex-99_1.htm EXHIBIT TO 8K EXHIBIT TO 8K

FOR FURTHER INFORMATION AT THE COMPANY:

Julia Gouw   
Chief Financial Officer   
(626) 768-6898   
 

EAST WEST BANCORP REPORTS RECORD
EARNINGS OF $36.6 MILLION FOR SECOND QUARTER 2006
 

 
Pasadena, CA - July 19, 2006 - 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 second quarter of 2006. Fully diluted earnings per share for the second quarter increased 26% to a record $0.59 per share from $0.47 in the prior year period.

Highlights for the Second Quarter

·  
Record net income of $36.6 million, up 44% from prior year
·  
Record net interest income of $91.6 million, up 41% from prior year
·  
Net interest margin of 4.08%
·  
Return on equity of 15.98%
·  
Record total assets of $10.0 billion
·  
Record gross loans of $7.9 billion
·  
Record total deposits of $7.1 billion
·  
Total nonperforming assets of 0.11% of total assets
·  
Efficiency ratio improved to 35.31%

Financial Summary

Second quarter net income was a record $36.6 million, up 44% from $25.5 million reported in the prior year period. Diluted earnings per share for the second quarter of 2006 increased to a record $0.59, up 26% from $0.47 in the prior year period. For the quarter, return on average equity totaled 15.98% and return on average assets totaled 1.53%. The effective tax rate for the quarter equaled 38.82%, compared to 36.38% for the prior year period. Pretax income for the second quarter of 2006 climbed to $59.9 million, a 50% or $19.9 million increase over the year ago figure. The growth in the second quarter earnings was driven by the higher balance of interest earning assets resulting in an increase in net interest income.
 
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“East West delivered outstanding results for the second quarter of 2006. We crossed a noteworthy milestone this quarter and reached $10.0 billion in total assets,” stated Dominic Ng, Chairman, President and Chief Executive Officer of East West. “Quarter after quarter, we have been able to both grow our portfolio and realize strong earnings. Our success is the direct result of our focus on fundamentals - strong underwriting criteria, solid customer service and well-aligned product pricing.”

“Despite the changing real estate market and the challenging interest rate environment, our commitment to having strong fundamentals has allowed us to perform well this quarter. Organic loan growth during the quarter was an outstanding 29% annualized, excluding $334.5 million in securitized loans. Additionally, organic core deposits grew at the steady pace of 9% annualized during the quarter. East West will continue to build our balance sheet and drive revenue growth,” continued Ng.

Management Guidance

Based on the results of the first half of the year and management’s expectations for the remainder of 2006, the Company has increased its guidance of earnings per share to $2.28 to $2.30 for the full year of 2006, an increase from the previously estimated amount of $2.25 to $2.29. This is an increase of $0.31 to $0.33 cents per share from 2005.

The EPS guidance is based on the following assumptions for the remainder of 2006:

·  
Annualized loan growth of 15% to 17%
·  
Annualized deposit growth of 10% to 15%
·  
Annual increase in noninterest expense of 25% to 28% from 2005
·  
Efficiency ratio between 36% and 38%
·     Effective tax rate between 39% and 40%
·  
A stable or marginally increasing interest rate environment and a net interest margin between 4.00% and 4.10%
·  
Implementation of expensing stock options in accordance with FASB 123R, a quarterly expense of approximately $300 thousand after tax


Balance Sheet Summary

At June 30, 2006, total assets were $10.02 billion, a $1.74 billion increase above total assets of $8.28 billion at December 31, 2005. Gross loans at June 30, 2006 totaled $7.87 billion, up 32% annualized from $6.79 billion at year-end 2005. Excluding the impact of the Standard Bank acquisition and loan securitizations, organic growth for the first half of the year was a healthy $919.4 million, or 27% annualized. Growth in commercial real estate, single family and construction loans added the largest dollar impact to our organic growth year-to-date.

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Average earning assets for the second quarter of 2006 totaled $9.01 billion, 44% higher than the second quarter of 2005. The growth in average earning assets was driven by a 39% or $2.16 billion increase in average loans to $7.72 billion. The yield on average earning assets for the quarter was 7.09%, an increase of 109 basis points from the year ago quarter and an increase of 19 basis points from the previous quarter. The yield on average loans receivable for the quarter was 7.45%, an increase of 116 basis points from the year ago quarter and an increase of 24 basis points from the previous quarter. The continued increase in the yield on average earning assets is attributable to increases in market interest rates and the corresponding repricing of our loan portfolio.

Total deposits at June 30, 2006 were $7.13 billion, an $868.4 million increase over total deposits of $6.26 billion at December 31, 2005. Excluding the impact of the Standard Bank acquisition, organic deposit growth for the first half of the year was $139.9 million, or 4% annualized. Core deposits at June 30, 2006 totaled $3.51 billion. Excluding the impact of the Standard Bank acquisition, organic core deposit growth for the quarter was $207.3 million, or 13% annualized.

Average total deposits for the second quarter grew to $7.00 billion, 48% above the figure for the prior year period, while average core deposits totaled $3.37 billion, 44% greater than a year ago. The growth in average deposits is primarily a result of substantial increases in average time deposits of 52% or $1.25 billion, money market deposits of 105% or $628.1 million and noninterest bearing demand deposits of 18% or $191.8 million.

The average cost of deposits for the second quarter of 2006 was 2.86%, a 121 basis point increase from the year ago quarter and a 32 basis point increase from the previous quarter. The average cost of funds for the second quarter equaled 3.17%, a 123 basis point increase from the prior year and a 31 basis point increase from the prior quarter. The increase in the cost of deposits from both the prior year and the prior quarter periods was attributable to continuing market competition for deposits.

Second Quarter Operating Results

Net interest income for the second quarter increased to a record $91.6 million, 41% or $26.7 million greater than the second quarter of 2005 and 10% or $8.6 million greater on a sequential quarter basis. The interest margin for the quarter of 4.08% reflected a decrease of 7 basis points from the year ago margin and a decrease of 10 basis points from the previous quarter margin. We continued to experience strong competition in loan and deposit pricing, resulting in the decrease in margin for both the sequential quarter and the previous year. Additionally, the lower net interest margin on the assets and liabilities acquired from Standard Bank also affected the interest margin for the second quarter. We expect a net interest margin between 4.00% and 4.10% for the remainder of the year as management anticipates that competitor banks will continue to aggressively price both loans and deposits.

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East West provided $1.3 million for loan losses during the second quarter of 2006, compared to $4.5 million during the second quarter of 2005 and $3.3 million during the previous quarter. Based on the credit quality and the projected growth of the loan portfolio during the remainder of the year, management anticipates that the provision for loan losses for the rest of 2006 should be similar to the first six months.

Noninterest income for the second quarter totaled $8.1 million, 2% or $155 thousand higher than the second quarter of 2005 and 9% or $771 thousand lower than the sequential quarter. Core noninterest income, excluding the impact of gain on sales of investment securities, totaled $8.0 million during the quarter, 19% or $1.3 million higher than the prior year figure and 11% or $800 thousand higher than the sequential quarter. The increase in noninterest income compared to prior year was due to the growth of our franchise and the increase in the number of customer accounts. Branch fees increased 71% or $1.2 million and other operating income increased 35% or $708 thousand compared to the prior year. These increases were partially offset by decreases in both net gain on sales of investment securities of 89% or $1.1 million and income from secondary marketing activities of 81% or $803 thousand. Compared to the prior quarter, noninterest income grew in most sectors and the 9% decrease was attributable to a decrease in net gain on sales of investment securities of 92% or $1.6 million.
 
Noninterest expense totaled $38.5 million for the second quarter of 2006, 36% or $10.1 million higher than a year ago and 5% or $1.7 million higher than the previous quarter. This increase from prior year was largely due to increased staffing levels and occupancy costs due to our growth and the recent acquisitions of Standard Bank and United National Bank. Management anticipates that, based on the expected growth of the Bank for the remainder of 2006, noninterest expense should increase by 25% to 28% for the full year 2006.

East West generated a 35.31% efficiency ratio for the second quarter of 2006, compared to 35.78% a year ago. Management believes that an efficiency ratio between 36% and 38% remains achievable for the full year 2006.

Asset Quality

Strong credit quality continued for the second quarter of 2006. Total nonperforming assets were reduced to $10.5 million or 0.11% of total assets at June 30, 2006, compared to $30.1 million, or 0.36% of total assets at December 31, 2005. The decrease in nonperforming assets resulted from loans either that paid off or were brought current. Nonaccrual loans as of June 30, 2006 were $7.7 million or 0.10% of total loans, compared to $24.1 million or 0.36% of total loans, at December 31, 2005.

Net chargeoffs for the quarter totaled $305 thousand or an annualized 0.02% of average loans. This compares to net chargeoffs of $2.4 million, or an annualized 0.17% of average loans for the second quarter of 2005 and net loan recoveries of $46 thousand or an annualized 0.00% of average loans for the previous quarter.

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The allowance for loan losses at June 30, 2006 was $75.8 million or 0.96% of total loans and 986% of nonaccrual loans, compared to $68.6 million or 1.01% of total loans and 284% of nonaccrual loans at December 31, 2005. At June 30, 2006, the allowance for unfunded loan commitments and off-balance sheet credit exposures amounted to $12.3 million compared to $11.1 million at December 31, 2005. The allowance for loan losses and unfunded loan commitments to total loans was 1.12% at June 30, 2006, compared to 1.17% of total loans at December 31, 2005.

Capitalization

East West continues to remain well capitalized under all regulatory guidelines. At June 30, 2006, our Tier I risk-based capital ratio was 9.41%, total risk-based capital ratio was 11.34% and Tier I leverage ratio was 8.43%. Total stockholders’ equity as of June 30, 2006 was $937.7 million, representing a book value of $15.41 per share.

About East West

East West Bancorp is a publicly owned company, with $10.0 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 62 branch locations. East West Bank serves the community with 61 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.

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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, 2005 (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.

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EAST WEST BANCORP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except per share amounts)
(unaudited)
 
June 30, 2006
  
December 31, 2005
  
% Change
  
Assets
            
Cash and cash equivalents
$
137,309
  
$
151,192
    
(9
)
Interest bearing deposits in other banks
  
663
   
-
   
100
 
Securities purchased under resale agreements
  
100,000
   
50,000
   
100
 
Investment securities available-for-sale
  
1,353,386
   
869,837
   
56
 
Loans receivable (net of allowance for loan losses
                  
of $75,847 and $68,635)
  
7,793,273
   
6,724,320
   
16
 
Premiums on deposits acquired, net
  
23,884
   
18,853
   
27
 
Goodwill
  
244,351
   
143,254
   
71
 
Other assets
  
365,425
   
320,800
   
14
 
Total assets
$
10,018,291
  
$
8,278,256
    
21
 
                   
Liabilities and Stockholders' Equity
                  
Deposits
$
7,126,994
  
$
6,258,587
    
14
 
Fed funds purchased
  
104,000
   
91,500
   
14
 
Federal Home Loan Bank advances
  
841,918
   
617,682
   
36
 
Securities sold under repurchase agreements
  
725,000
   
325,000
   
123
 
Notes payable
  
4,646
   
8,833
   
(47
)
Accrued expenses and other liabilities
  
93,968
   
89,421
   
5
 
Long-term debt
  
184,023
   
153,095
   
20
 
Total liabilities
  
9,080,549
   
7,544,118
   
20
 
Stockholders' equity
  
937,742
   
734,138
   
28
 
Total liabilities and stockholders' equity
$
10,018,291
  
$
8,278,256
    
21
 
Book value per share
$
15.41
  
$
12.99
    
19
 
Number of shares at period end
  
60,858
   
56,519
   
8
 
                   
Ending Balances  
June 30, 2006
    
December 31, 2005
    
% Change
  
Loans receivable
                  
Real estate - single family
$
532,095
  
$
509,151
    
5
 
Real estate - multifamily
  
1,600,288
   
1,239,836
   
29
 
Real estate - commercial
  
3,689,227
   
3,321,520
   
11
 
Real estate - construction
  
846,294
   
640,654
   
32
 
Commercial
  
773,235
   
643,296
   
20
 
Trade finance
  
237,387
   
230,771
   
3
 
Consumer
  
195,505
   
208,797
   
(6
)
Total gross loans receivable
  
7,874,031
   
6,794,025
   
16
 
Unearned fees, premiums and discounts
  
(4,911
)
  
(1,070
)
  
359
 
Allowance for loan losses
  
(75,847
)
  
(68,635
)
  
11
 
Net loans receivable
$
7,793,273
  
$
6,724,320
    
16
 
                   
Deposits
                  
Noninterest-bearing demand
$
1,400,048
  
$
1,331,992
    
5
 
Interest-bearing checking
  
396,842
   
472,611
   
(16
)
Money market
  
1,293,271
   
978,678
   
32
 
Savings
  
419,267
   
326,806
   
28
 
Total core deposits
  
3,509,428
   
3,110,087
   
13
 
Time deposits less than $100,000
  
1,141,592
   
927,793
   
23
 
Time deposits $100,000 or greater
  
2,475,974
   
2,220,707
   
11
 
Total time deposits
  
3,617,566
   
3,148,500
   
15
 
Total deposits
$
7,126,994
  
$
6,258,587
    
14
 
 
 
EAST WEST BANCORP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
(unaudited)
               
 
 
Three Months Ended June 30,
 
 %
  
   
2006
  
2005
  
Change
  
               
Interest and dividend income
  
$
159,248
  
$
93,769
    
70
 
Interest expense
    
(67,604
)
  
(28,809
)
  
135
 
Net interest income before provision for loan losses
    
91,644
   
64,960
   
41
 
Provision for loan losses
    
(1,333
)
  
(4,500
)
  
(70
)
Net interest income after provision for loan losses
    
90,311
   
60,460
   
49
 
Noninterest income
    
8,119
   
7,964
   
2
 
Noninterest expense
    
(38,536
)
  
(28,401
)
  
36
 
Income before provision for income taxes
    
59,894
   
40,023
   
50
 
Income taxes
    
(23,249
)
  
(14,560
)
  
60
 
Net income
  
$
36,645
  
$
25,463
    
44
 
Net income per share, basic
  
$
0.61
  
$
0.49
    
24
 
Net income per share, diluted
  
$
0.59
  
$
0.47
    
26
 
Shares used to compute per share net income:
                    
- Basic
    
60,270
   
52,338
   
15
 
- Diluted
   
61,619
   
53,878
   
14
 
                     
                     
   
Three Months Ended June 30,  
    
% 
  
     
2006
    
2005
    
Change
  
Noninterest income:
                    
Branch fees
  
$
2,890
  
$
1,692
    
71
 
Letters of credit fees and commissions
    
2,159
   
1,967
   
10
 
Net gain on sales of investment securities available-for-sale
    
145
   
1,285
   
(89
)
Income from secondary market activities
    
189
   
992
   
(81
)
Other operating income
    
2,736
   
2,028
   
35
 
Total noninterest income
  
$
8,119
  
$
7,964
    
2
 
 
                    
Noninterest expense:
                    
Compensation and employee benefits
  
$
15,831
  
$
12,485
    
27
 
Occupancy and equipment expense
    
5,339
   
3,432
   
56
 
Amortization of premiums on deposits acquired
    
1,852
   
603
   
207
 
Amortization of investments in affordable
                    
housing partnerships
    
1,461
   
1,709
   
(15
)
Data processing
    
1,028
   
654
   
57
 
Deposit insurance premiums and regulatory assessments
    
366
   
228
   
61
 
Other operating expense
    
12,659
   
9,290
   
36
 
Total noninterest expense
  
$
38,536
  
$
28,401
    
36
 
 
 
 
EAST WEST BANCORP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
(unaudited)
               
   
Six Months Ended June 30,
 
 %
  
   
2006
  
2005
  
Change
  
               
Interest and dividend income
  
$
296,550
  
$
178,525
    
66
 
Interest expense
    
(121,858
)
  
(51,343
)
  
137
 
Net interest income before provision for loan losses
    
174,692
   
127,182
   
37
 
Provision for loan losses
    
(4,666
)
  
(8,870
)
  
(47
)
Net interest income after provision for loan losses
    
170,026
   
118,312
   
44
 
Noninterest income
    
17,009
   
14,464
   
18
 
Noninterest expense
    
(75,359
)
  
(56,119
)
  
34
 
Income before provision for income taxes
    
111,676
   
76,657
   
46
 
Income taxes
    
(42,980
)
  
(27,675
)
  
55
 
Net income
  
$
68,696
  
$
48,982
    
40
 
Net income per share, basic
  
$
1.17
  
$
0.94
    
24
 
Net income per share, diluted
  
$
1.15
  
$
0.91
    
26
 
Shares used to compute per share net income:
                    
- Basic
    
58,538
   
52,291
   
12
 
- Diluted
   
59,956
   
53,921
   
11
 
                     
                     
 
 
Six Months Ended June 30,  
 
 
% 
  
     
2006
    
2005
    
Change
  
Noninterest income:
                    
Branch fees
  
$
5,429
  
$
3,285
    
65
 
Letters of credit fees and commissions
    
4,331
   
4,504
   
(4
)
Net gain on sales of investment securities available-for-sale
    
1,861
   
1,733
   
7
 
Income from secondary market activities
    
373
   
1,184
   
(68
)
Other operating income
    
5,015
   
3,758
   
33
 
Total noninterest income
  
$
17,009
  
$
14,464
    
18
 
 
                    
Noninterest expense:
                    
Compensation and employee benefits
  
$
32,000
  
$
25,339
    
26
 
Occupancy and equipment expense
    
10,116
   
6,690
   
51
 
Amortization of premiums on deposits acquired
    
3,617
   
1,206
   
200
 
Amortization of investments in affordable
                    
housing partnerships
    
2,726
   
3,390
   
(20
)
Data processing
    
1,788
   
1,223
   
46
 
Deposit insurance premiums and regulatory assessments
    
682
   
451
   
51
 
Other operating expense
    
24,430
   
17,820
   
37
 
Total noninterest expense
  
$
75,359
  
$
56,119
    
34
 
 
 
  EAST WEST BANCORP, INC.
  SELECTED FINANCIAL INFORMATION
  (Dollars in thousands)
  (unaudited)
 
Three Months Ended June 30,
     
Average Balances  
2006
  
2005
  
% Change
  
Loans receivable              
Residential first mortgage
  
$
518,088
  
$
415,587
    
25
 
Real estate - multifamily
    
1,642,472
   
1,195,736
   
37
 
Real estate - commercial
    
3,569,198
   
2,731,457
   
31
 
Real estate - construction
    
817,983
   
418,732
   
95
 
Commercial
    
760,970
   
435,910
   
75
 
Trade finance
    
221,756
   
183,788
   
21
 
Consumer
    
193,148
   
186,062
   
4
 
Total loans receivable
    
7,723,615
   
5,567,272
   
39
 
Investment securities available-for-sale
    
1,112,309
   
632,105
   
76
 
Earning assets
    
9,005,891
   
6,272,968
   
44
 
Total assets
    
9,583,728
   
6,577,451
   
46
 
Deposits
                    
Noninterest-bearing demand
  
$
1,282,553
  
$
1,090,716
    
18
 
Interest-bearing checking
    
425,440
   
327,977
   
30
 
Money market
    
1,228,093
   
599,968
   
105
 
Savings
    
429,311
   
315,704
   
36
 
Total core deposits
    
3,365,397
   
2,334,365
   
44
 
Time deposits less than $100,000
    
1,155,660
   
803,033
   
44
 
Time deposits $100,000 or greater
    
2,474,445
   
1,579,695
   
57
 
Total time deposits
    
3,630,105
   
2,382,728
   
52
 
Total deposits
    
6,995,502
   
4,717,093
   
48
 
Interest-bearing liabilities
    
7,277,690
   
4,864,126
   
50
 
Stockholders' equity
    
917,143
   
543,376
   
69
 
   
Six Months Ended June 30,
       
 Average Balances    
2006
    
2005
    
% Change
  
Loans receivable
                    
Residential first mortgage
  
$
541,449
  
$
383,432
    
41
 
Real estate - multifamily
    
1,479,441
   
1,163,559
   
27
 
Real estate - commercial
    
3,469,696
   
2,670,187
   
30
 
Real estate - construction
    
755,605
   
398,483
   
90
 
Commercial
    
742,297
   
432,697
   
72
 
Trade finance
    
217,976
   
170,947
   
28
 
Consumer
    
196,527
   
183,513
   
7
 
Total loans receivable
    
7,402,991
   
5,402,818
   
37
 
Investment securities available-for-sale
    
975,973
   
606,182
   
61
 
Earning assets
    
8,538,937
   
6,076,555
   
41
 
Total assets
    
9,078,505
   
6,377,461
   
42
 
Deposits
                    
Noninterest-bearing demand
  
$
1,230,939
  
$
1,068,146
    
15
 
Interest-bearing checking
    
431,926
   
331,892
   
30
 
Money market
    
1,128,207
   
608,908
   
85
 
Savings
    
383,574
   
322,899
   
19
 
Total core deposits
    
3,174,646
   
2,331,845
   
36
 
Time deposits less than $100,000
    
1,075,175
   
786,474
   
37
 
Time deposits $100,000 or greater
    
2,354,358
   
1,548,120
   
52
 
Total time deposits
    
3,429,533
   
2,334,594
   
47
 
Total deposits
    
6,604,179
   
4,666,439
   
42
 
Interest-bearing liabilities
    
6,896,886
   
4,700,420
   
47
 
Stockholders' equity
    
842,414
   
531,770
   
58
 
 
EAST WEST BANCORP, INC.
SELECTED FINANCIAL INFORMATION
(Dollars in thousands)
(unaudited)
Selected Ratios
Three Months Ended June 30,
 
 
 
2006
  
2005
    
% Change
  
For The Period
              
Return on average assets
  
1.53
%
  
1.55
%
    
(1
)
Return on average equity
  
15.98
%
  
18.74
%
    
(15
)
Interest rate spread
  
3.36
%
  
3.62
%
    
(7
)
Net interest margin
  
4.08
%
  
4.15
%
    
(2
)
Yield on earning assets
  
7.09
%
  
6.00
%
    
18
 
Cost of deposits
  
2.86
%
  
1.65
%
    
73
  
Cost of funds
  
3.17
%
  
1.94
%
    
63
 
Noninterest expense/average assets (1)
  
1.47
%
  
1.59
%
    
(8
)
Efficiency ratio (1)
  
35.31
%
  
35.78
%
    
(1
)
Net chargeoffs to average loans (2)
  
0.02
%
  
0.17
%
    
(88
)
                     
 
Six Months Ended June 30,  
    
 
  
   
2006
    
2005
      
% Change
  
For The Period
                    
Return on average assets
  
1.51
%
  
1.54
%
    
(2
)
Return on average equity
  
16.31
%
  
18.42
%
    
(11
)
Interest rate spread
  
3.44
%
  
3.72
%
    
(8
)
Net interest margin
  
4.13
%
  
4.22
%
    
(2
)
Yield on earning assets
  
7.00
%
  
5.92
%
    
18
 
Cost of deposits
  
2.71
%
  
1.54
%
    
76
 
Cost of funds
  
3.02
%
  
1.79
%
    
69
  
Noninterest expense/average assets (1)
  
1.52
%
  
1.62
%
    
(6
)
Efficiency ratio (1)
  
36.00
%
  
36.37
%
    
(1
)
Net chargeoffs to average loans (2)
  
0.01
%
  
0.12
%
    
(92
)
                     
Period End
                    
Tier 1 risk-based capital ratio
  
9.41
%
  
9.61
%
    
(2
)
Total risk-based capital ratio
  
11.34
%
  
11.54
%
    
(2
)
Tier 1 leverage capital ratio
  
8.43
%
  
8.70
%
    
(3
)
Nonperforming assets to total assets
  
0.11
%
  
0.04
%
    
175
  
Nonaccrual loans to total loans
  
0.10
%
  
0.03
%
    
233
  
Allowance for loan losses to total loans
  
0.96
%
  
0.99
%
    
(3
)
Allowance for loan losses and unfunded loan
                    
commitments to total loans
  
1.12
%
  
1.15
%
    
(3
)
Allowance for loan losses to nonaccrual loans
  
986.31
%
  
3571.99
%
    
(72
)
                     
                     
(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
(Dollar in thousands)
(unaudited)
                           
   
Three Months Ended June 30,
  
   
2006
  
2005
  
   
Average
          
Average
          
   
Volume
  
Interest
  
Yield (1)
  
Volume
  
Interest
  
Yield (1)
  
ASSETS
                          
Interest-earning assets:
                          
Short-term investments
  
$
7,678
  
$
107
    
5.59
%
$
7,708
  
$
57
    
2.97
%
Interest bearing deposit in other banks
    
779
   
6
   
3.09
%
  
-
   
-
   
-
 
Securities purchased under resale agreements
    
100,000
   
1,896
   
7.60
%
  
-
   
-
   
-
 
Investment securities available-for-sale
    
1,112,309
   
12,949
   
4.67
%
  
632,105
   
5,582
   
3.54
%
Loans receivable
    
7,723,615
   
143,426
   
7.45
%
  
5,567,272
   
87,334
   
6.29
%
FHLB/FRB stock
    
61,510
   
864
   
5.63
%
  
65,883
   
796
   
4.85
%
Total interest-earning assets
    
9,005,891
   
159,248
   
7.09
%
  
6,272,968
   
93,769
   
6.00
%
                                       
Noninterest-earning assets:
                                      
Cash and due from banks
    
129,338
               
99,873
             
Allowance for loan losses
    
(75,980
)
              
(55,608
)
            
Other assets
    
524,479
               
260,218
             
Total assets
  
$
9,583,728
              
$
6,577,451
              
                                       
LIABILITIES AND STOCKHOLDERS' EQUITY
                                      
Interest-bearing liabilities:
                                      
Checking accounts
    
425,440
   
1,376
   
1.30
%
  
327,977
   
615
   
0.75
%
Money market accounts
    
1,228,093
   
11,085
   
3.62
%
  
599,968
   
3,053
   
2.04
%
Savings deposits
    
429,311
   
865
   
0.81
%
  
315,704
   
199
   
0.25
%
Time deposits less than $100,000
    
1,155,660
   
10,523
   
3.65
%
  
803,033
   
4,649
   
2.32
%
Time deposits $100,000 or greater
    
2,474,445
   
26,090
   
4.23
%
  
1,579,695
   
10,878
   
2.76
%
Fed funds purchased
    
97,314
   
1,208
   
4.98
%
  
6,875
   
60
   
3.50
%
Federal Home Loan Bank advances
    
756,206
   
8,199
   
4.35
%
  
1,138,783
   
7,890
   
2.78
%
Securities sold under repurchase agreement
    
527,198
   
5,005
   
3.81
%
  
-
   
-
   
-
 
Long-term debt
    
184,023
   
3,253
   
7.09
%
  
92,091
   
1,465
   
6.38
%
Total interest-bearing liabilities
    
7,277,690
   
67,604
   
3.73
%
  
4,864,126
   
28,809
   
2.38
%
                                       
Noninterest-bearing liabilities:
                                      
Demand deposits
    
1,282,553
               
1,090,716
             
Other liabilities
    
106,342
               
79,233
             
Stockholders' equity
    
917,143
               
543,376
             
Total liabilities and stockholders' equity
  
$
9,583,728
              
$
6,577,451
              
Interest rate spread
                
3.36
%
              
3.62
%
Net interest income and net margin
        
$
91,644
    
4.08
%
      
$
64,960
    
4.15
%
                                       
                                       
                                       
(1) Annualized.
                                      
 
 
 
EAST WEST BANCORP, INC.
YEAR TO DATE AVERAGE BALANCES, YIELDS AND RATES PAID
(Dollar in thousands)
(unaudited)
                           
                           
   
Six Months Ended June 30,
  
   
2006
  
2005
  
   
Average
          
Average
          
   
Volume
  
Interest
  
Yield (1)
  
Volume
  
Interest
  
Yield (1)
  
ASSETS
                          
Interest-earning assets:
                          
Short-term investments
  
$
9,238
  
$
228
    
4.98
%
$
7,377
  
$
99
    
2.71
%
Interest bearing deposit in other banks
    
421
   
8
   
3.83
%
  
-
   
-
   
-
  
Securities purchased under resale agreements
    
89,503
   
3,243
   
7.31
%
  
-
   
-
   
-
  
Investment securities available-for-sale
    
975,973
   
22,164
   
4.58
%
  
606,182
   
10,839
   
3.61
%
Loans receivable
    
7,402,991
   
269,297
   
7.34
%
  
5,402,818
   
166,230
   
6.20
%
FHLB/FRB stock
    
60,811
   
1,610
   
5.34
%
  
60,178
   
1,357
   
4.55
%
Total interest-earning assets
    
8,538,937
   
296,550
   
7.00
%
  
6,076,555
   
178,525
   
5.92
%
                                       
Noninterest-earning assets:
                                      
Cash and due from banks
    
135,859
               
100,940
             
Allowance for loan losses
    
(73,220
)
              
(54,011
)
            
Other assets
    
476,929
               
253,977
             
Total assets
  
$
9,078,505
              
$
6,377,461
              
                                       
LIABILITIES AND STOCKHOLDERS' EQUITY
                                      
Interest-bearing liabilities:
                                      
Checking accounts
    
431,926
   
2,702
   
1.26
%
  
331,892
   
1,248
   
0.76
%
Money market accounts
    
1,128,207
   
18,919
   
3.38
%
  
608,908
   
6,013
   
1.99
%
Savings deposits
    
383,574
   
1,202
   
0.63
%
  
322,899
   
389
   
0.24
%
Time deposits less than $100,000
    
1,075,175
   
18,507
   
3.47
%
  
786,474
   
8,515
   
2.18
%
Time deposits $100,000 or greater
    
2,354,358
   
47,498
   
4.07
%
  
1,548,120
   
19,520
   
2.54
%
Fed funds purchased
    
99,651
   
2,327
   
4.71
%
  
6,169
   
102
   
3.33
%
Federal Home Loan Bank advances
    
826,130
   
16,907
   
4.13
%
  
1,021,079
   
13,071
   
2.58
%
Securities sold under repurchase agreement
    
426,657
   
7,882
   
3.73
%
  
-
   
-
   
-
  
Long-term debt
    
171,208
   
5,914
   
6.97
%
  
74,879
   
2,485
   
6.69
%
Total interest-bearing liabilities
    
6,896,886
   
121,858
   
3.56
%
  
4,700,420
   
51,343
   
2.20
%
                                       
Noninterest-bearing liabilities:
                                      
Demand deposits
    
1,230,939
               
1,068,146
             
Other liabilities
    
108,266
               
77,125
             
Stockholders' equity
    
842,414
               
531,770
             
Total liabilities and stockholders' equity
  
$
9,078,505
              
$
6,377,461
              
Interest rate spread
                
3.44
%
              
3.72
%
Net interest income and net margin
        
$
174,692
    
4.13
%
      
$
127,182
    
4.22
%
                                       
                                       
                                       
(1) Annualized.