0001069157-11-000013.txt : 20110426 0001069157-11-000013.hdr.sgml : 20110426 20110426172228 ACCESSION NUMBER: 0001069157-11-000013 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20110426 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20110426 DATE AS OF CHANGE: 20110426 FILER: COMPANY DATA: COMPANY CONFORMED NAME: EAST WEST BANCORP INC CENTRAL INDEX KEY: 0001069157 STANDARD INDUSTRIAL CLASSIFICATION: STATE COMMERCIAL BANKS [6022] IRS NUMBER: 954703316 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-24939 FILM NUMBER: 11780981 BUSINESS ADDRESS: STREET 1: 135 N. LOS ROBLES AVE. 7TH FLOOR CITY: PASADENA STATE: CA ZIP: 91101 BUSINESS PHONE: 6267686000 MAIL ADDRESS: STREET 1: EAST WEST BANCORP INC STREET 2: 135 N. LOS ROBLES AVE. 7TH FLOOR CITY: PASADENA STATE: CA ZIP: 91101 8-K 1 form8k.htm EAST WEST BANCORP, INC. FORM 8-K form8k.htm
 
 
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
 
April 26, 2011
Date of Report (date of earliest event reported)
 
 
EAST WEST BANCORP, INC.
 (Exact name of registrant as specified in its charter)
 
  
Commission file number 000-24939
 
    Delaware
  
95-4703316
    (State or Other Jurisdiction of Incorporation or Organization)
  
(IRS Employer Identification Number)
 
135 N Los Robles Ave., 7th Floor, Pasadena, California 91101
(Address of principal executive offices including 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 (See General Instruction A.2.):
     
o
  
Written communications pursuant to Rule 425 under the Securities Act (17 CFR230.425)
     
o
  
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR240.14a-12)

     
o
  
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR240.14d-2(b))
     
o
  
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR240.13e-(c))
 

East West Bancorp, Inc.
Current Report of Form 8-K

Item 2.02. Results of Operations and Financial Condition.
 
On April 26, 2011, East West Bancorp, Inc. announced, via press release, its preliminary results of operations for the quarter and year ended March 31, 2011. A copy of the press release is furnished herewith as Exhibit 99.1 and is incoproarted herein by reference.

Item 9.01. Financial Statements and Exhibits
 
(d) Exhibits
 99.1                          Press Release, dated April 26, 2011, issued by East West Bancorp, Inc.



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.
 
Date:  April 26, 2011
 
 
EAST WEST BANCORP, INC.
   
 
By:
/s/ Irene H. Oh
  
   
Irene H. Oh
Executive Vice President and
Chief Financial Officer
 
 
EXHIBIT INDEX
 
Exhibit Number
  
Description
99.1
  
Press Release, dated April 26, 2011, issued by East West Bancorp, Inc.

 




 EX-99.1 2 ex99_1.htm PRESS RELEASE ex99_1.htm
EXHIBIT 99.1
 
 
East West Bancorp, Inc.
135 N. Los Robles Ave., 7th Fl.
Pasadena, CA 91101
Tel. 626.768.6800
Fax 626.817.8838
    
 
 
 
FOR FURTHER INFORMATION AT THE COMPANY:

Irene Oh
Chief Financial Officer
(626) 768-6360

 
EAST WEST BANCORP REPORTS 185% INCREASE IN EARNINGS PER
SHARE FROM PRIOR YEAR TO $0.37 FOR FIRST QUARTER 2011 AND
INCREASE IN ANNUAL DIVIDEND TO $0.20 PER SHARE

Pasadena, CA – April 26, 2011 – East West Bancorp, Inc. (Nasdaq: EWBC), parent company of East West Bank, the financial bridge between the U.S. and Asia, today reported financial results for the first quarter of 2011. For the first quarter of 2011, net income was $56.1 million or $0.37 per dilutive share. In the first quarter, East West increased profitability $31.2 million or 125% and increased earnings per dilutive share $0.24 or 185% from the prior year period.

“East West’s solid results for the first quarter of 2011 with net income of $56.1 million or $0.37 per share reflect strong performance across the Bank,” stated Dominic Ng, Chairman and Chief Executive Officer of East West. “Throughout the organization we have performed well, increasing loan and deposit market share and increasing profitability. During the first quarter of 2011, non-covered commercial and trade finance loan balances grew 10% to a record $2.2 billion and core deposits grew 3% to a record $9.1 billion.”

“As we look towards the future, there are many opportunities for East West to expand market share and grow our business. We are confident that we can take advantage of these opportunities to increase our earnings power in 2011 and beyond. For the last several quarters, East West has posted strong growth in our non-covered commercial and trade finance loan portfolios, improved credit quality, and increased deposits while maintaining strong discipline on operating expenses.”

Ng concluded, “We are pleased to announce that our strong balance sheet and profitability has allowed us to increase our annual dividend rate from $0.04 to $0.20 per share. East West is focused on active capital management, utilizing our capital to support strong organic growth while also providing a strong return to our shareholders.”
 
 
 
 

2011 Quarterly Results Summary
 
   
For the three months ended,
  
Dollars in millions, except per share
  
March 31, 2011
    
December 31, 2010
    
March 31, 2010
  
Net income
   $ 56.1     $ 56.3     $ 24.9  
Net income available to common shareholders*
     54.4       32.2       18.8  
Earnings per share (diluted)*
     0.37       0.22       0.13  
                         
Return on average assets
     1.07 %     1.10 %     0.49 %
Return on average common equity
     10.50 %     6.28 %     4.71 %
                         
Tier 1 risk-based capital ratio
     15.9 %     15.7 %     18.9 %
Total risk-based capital ratio
     17.7 %     17.5 %     20.9 %
 
*Q4 2010 EPS and net income available to common shareholders included a noncash charge of $18.7 million or $0.13 per dilutive share related to the repurchase of preferred stock issued to the U.S. Treasury.
       
 
First Quarter 2011 Highlights

·  
Strong First Quarter Earnings – For the first quarter 2011, net income was $56.1 million or $0.37 per share. Earnings per share grew $0.02 or 6% from the fourth quarter of 2010, excluding the noncash charge of $18.7 million or $0.13 per dilutive share in the fourth quarter of 2010 resulting from accelerated discount accretion on the repurchase of the preferred stock issued to the U.S. Treasury. 1

·  
C&I Loan Growth of 10% Quarter to Date – Quarter to date, non-covered commercial and trade finance loans grew $200.5 million or 10% to $2.2 billion.

·  
Record Deposit Growth – Total deposits grew to a record $16.4 billion, a $795.3 million or 5% increase from December 31, 2010. Core deposits grew to a record $9.1 billion as of March 31, 2011, an increase of $231.1 million or 3% from December 31, 2010.

·  
Provision for Loan Losses Down 11% from Q4 2010, Down 65% from Q1 2010 – Provision for loan losses declined to $26.5 million, a decrease of $3.3 million or 11% from the prior quarter and a decrease of $49.9 million or 65% from the first quarter of 2010.

·  
Net Charge-offs Down 11% from Q4 2010, Down 46% from Q1 2010 – Net charge-offs declined to $34.2 million, a decrease of $4.1 million or 11% from the prior quarter and a decrease of $29.7 million or 46% from the first quarter of 2010.

·  
Nonperforming Assets Down 3% to 0.89% of Total Assets – Nonperforming assets decreased to $188.3 million, or 0.89% of total assets. This is the sixth consecutive quarter East West has reported a nonperforming assets to total assets ratio under 1.00%, and represents a decrease in nonperforming assets of 3% from the fourth quarter of 2010.
 
 
2
 
 
·  
Return on Common Equity Improves to 10.5% – We have improved our return to common shareholders by 67% to 10.50% from 6.28% in the fourth quarter.

·  
Efficiency Ratio Improves 4% to 43.14% – Noninterest expenses, excluding prepayment penalties on FHLB advances and net of amounts to be reimbursed by the FDIC, declined $7.5 million or 7% from the fourth quarter of 2010 to $93.3 million for the first quarter of 2011, resulting in an efficiency ratio of 43.14% for the quarter.1

Management Guidance

The Company is providing guidance for the second quarter of 2011 and the full year of 2011. Management currently estimates that fully diluted earnings per share for the full year of 2011 will range from $1.47 to $1.50 per dilutive share or an increase of approximately 77% to 81% from 2010. Additionally, management has increased the 2011 full year guidance from our previously released guidance by approximately $0.02 per dilutive share. Management currently estimates that fully diluted earnings per share for the second quarter of 2011 will range from $0.35 to $0.37 per dilutive share. This EPS guidance for the second quarter is based on the following assumptions:

·  
Stable balance sheet
·  
A stable interest rate environment and an adjusted net interest margin between 4.00% and 4.10%
·  
Provision for loan losses of approximately $24 million to $28 million
·  
Total noninterest expense of approximately $95 million to $100 million, net of amounts to be reimbursed by the FDIC
·  
Effective tax rate of approximately 35%

Balance Sheet Summary

At March 31, 2011, total assets increased 2% to $21.1 billion compared to $20.7 billion at December 31, 2010. Average earning assets increased 3% to $18.7 billion for the quarter ended March 31, 2011, compared to $18.1 billion for the quarter ended December 31, 2010. The increase in total assets and average earning assets was fueled by our strong deposit growth during the quarter of 5% or $795.3 million.

Loans receivable at March 31, 2011 totaled $13.7 billion, reflecting no change from December 31, 2010.  During the first quarter, non-covered loan balances increased 2% or $185.3 million to $9.1 billion at March 31, 2011. The increase in non-covered loans was primarily driven by increases in commercial and trade finance loans of 10% or $200.5 million and single family loans of 7% or $82.3 million, partially offset by decreases in commercial real estate, multifamily, land and construction loans. Additionally, as of March 31, 2011, we classified $303.7 million of loans as held for sale, primarily comprised of government guaranteed student loans.
 
 
3
 
 
Covered Loans
Covered loans totaled $4.6 billion as of March 31, 2011, a decrease of $201.1 million during the first quarter. The decrease in the covered loan portfolio was mainly due to paydowns, payoffs and charge-off activity.

The covered loan portfolio is primarily comprised of loans acquired from the FDIC-assisted acquisition of United Commercial Bank (UCB) which are covered under loss share agreements with the FDIC. After active management of the portfolio for over a year, we resolved many problem loans and during the fourth quarter of 2010 we concluded that the credit quality is better than originally estimated. As such, we lowered the credit discount on the UCB covered loan portfolio resulting in an increase in interest income over the life of the loans. Correspondingly, with the lowered credit discount, the expected reimbursement from the FDIC under the loss sharing agreement also decreased, resulting in amortization on the FDIC indemnification asset over the life of the indemnification asset, which is recorded as a charge to noninterest income. The net decrease in the FDIC indemnification asset resulting from loan disposition activity, recoveries and amortization of the indemnification asset was $26.9 million in the first quarter of 2011.

In total, the net decrease in the FDIC indemnification asset and receivable recorded in noninterest income (loss) was $(17.4) million for the first quarter of 2011. The net decrease of $26.9 million discussed above was partially offset by an increase in the FDIC receivable of $9.5 million due to reimbursable expense claims. During the first quarter we incurred $11.9 million in expenses on covered loans and other real estate owned, 80% or $9.5 million of which is reimbursable from the FDIC.

Deposits and Borrowings
Deposit balances increased to a record $16.4 billion at March 31, 2011, a 5% or $795.3 million increase from $15.6 billion at December 31, 2010. During the quarter, total core deposits increased to a record $9.1 billion, or an increase of 3% or $231.1 million and time deposits increased to $7.3 billion, or an increase of 8% or $564.2 million. The strong increase in core deposits during the first quarter was primarily driven by a significant increase in noninterest-bearing demand deposits. Noninterest-bearing demand deposits increased by 10% or $275.3 million for the first quarter of 2011.  The strong increase in time deposits in the first quarter of 2011 was primarily due to the success of our Chinese New Year retail deposit campaign.

As of March 31, 2011, FHLB advances totaled $793.6 million, a decrease of 35% or $420.5 million from December 31, 2010. During the first quarter of 2011, East West paid off maturing FHLB borrowings and also prepaid $216.9 million of FHLB advances at an average cost of 2.80%, incurring a prepayment penalty of $4.0 million, which is included in noninterest expense. These actions were taken to better position the balance sheet, reducing borrowing costs and improving net interest margin in the coming quarters.
 
 
4
 

First Quarter 2011 Operating Results

Net Interest Income
The core net interest margin, excluding the net impact to interest income of $26.9 million resulting from the loan disposition activity and amortization of the indemnification asset, totaled 3.94% for the quarter, compared to 4.43% in the fourth quarter of 2010. 1 The decline in our net interest margin from the previous quarter is primarily related to a decrease in cashflow on covered loans resulting from a decrease in disposition and prepayment activity. Additionally, due to the strong deposit growth during the quarter, excess liquidity was deployed into lower yielding short-term investments. Although our net interest margin remains strong, similar to many banks, we are experiencing some net interest margin compression from the extended low interest rate environment.  As such, the Company took actions in the first quarter and will take additional steps in future quarters to minimize this impact. In the first quarter of 2011, East West prepaid $216.9 million of FHLB advances at an average cost of 2.80%. The prepayment of these FHLB advances will result in an improvement to our net interest margin of approximately 3 basis points in future quarters.  In addition, as discussed above, low-cost core deposit growth remains strong. Our average cost of deposits remains low at 0.66% for the first quarter of 2011 a decrease from 0.67% for the fourth quarter of 2010 and 0.93% for the first quarter of 2010.  East West will continue to look for opportunities to minimize our cost of funds and maximize our yield through redeployment of excess liquidity into higher interest-earning assets.

Noninterest Income
The Company reported total noninterest income for the first quarter of 2011 of $11.0 million, compared to a noninterest loss of $17.3 million in the fourth quarter of 2010 and a noninterest loss of $8.5 million in the first quarter of 2010. The noninterest losses in the prior quarter and the prior year period were due to a net decrease in the FDIC indemnification asset and receivable of $36.0 million for the fourth quarter of 2010 and $43.6 million in the first quarter of 2010.

Total fees and other operating income increased to $19.0 million for the first quarter of 2011, an increase from both the fourth quarter of 2010 and first quarter of 2010 as detailed below:
 
   
Quarter Ended
    
Quarter Ended
    
Quarter Ended
    
% Change
  
($ in thousands)
  
March 31, 2011
    
December 31, 2010
    
March 31, 2010
    
(Yr/Yr)
  
                         
Branch fees
   $ 7,754     $ 7,681     $ 8,758       -11 %
Letters of credit fees and commissions
     3,044       3,323       2,740       11 %
Ancillary loan fees
     1,991       2,101       1,689       18 %
Other operating income
     6,234       5,187       2,527       147 %
Total fees & other operating income
   $ 19,023     $ 18,292     $ 15,714       21 %
 
Other operating income increased 20% or $1.0 million during the first quarter due to increases in foreign exchange income and other fee income.  Also included in noninterest income for the first quarter of 2011 were gains on sales of loans of $7.4 million, from the sale of student loans and SBA loans and a net gain on sales of investment securities of $2.5 million.
 
 
5
 
 
Noninterest Expense
Noninterest expense totaled $106.8 million for the first quarter of 2011, a decrease of 6% or $7.0 million from the fourth quarter of 2010, and a decrease of 23% or $32.1 million from the first quarter of 2010. The decrease in noninterest expense was primarily due to declines in credit cycle costs and integration related expenses. Compared to the prior quarter, other real estate owned expense decreased $6.2 million, loan related expenses decreased $3.4 million, legal expenses decreased by $1.1 million, consulting expenses decreased $686 thousand, and other operating expenses decreased by $3.9 million. These improvements were offset by an increase in deposit insurance premiums of $3.8 million and prepayment penalties on FHLB advances of $4.0 million during the first quarter of 2011.

In the first quarter, we incurred $11.9 million in expenses on covered loans and other real estate owned for which we expect that 80% or $9.5 million will be reimbursed by the FDIC. Of the $9.5 million of expenses reimbursable by the FDIC, $6.5 million is related to net writedowns and expenses on other real estate owned, and $3.0 million is related to legal and other loan related expenses. Noninterest expense excluding amounts to be reimbursed by the FDIC and the prepayment penalty on FHLB advances totaled $93.3 million for the first quarter of 2011. 1

A summary of the noninterest expenses for the first quarter 2011, compared to the fourth quarter 2010, is detailed below:

   
Quarter Ended
    
Quarter Ended
  
($ in thousands)
  
March 31, 2011
    
December 31, 2010
  
Total noninterest expense:
   $ 106,789     $ 113,743  
Amounts to be reimbursed on covered assets (80% of actual expense amount)
     9,483       12,958  
Prepayment penalties for FHLB Advances
     4,022       -  
Noninterest expense excluding reimbursement amounts and prepayment penalty on FHLB Advances
   $ 93,284     $ 100,785  

Management anticipates that in the second quarter of 2011, noninterest expense will be approximately $95 million to $100 million, net of amounts reimbursable from the FDIC.

The effective tax rate for the first quarter was 35.2% compared to 34.3% in the prior quarter. The effective tax rate is reduced from the statutory tax rate primarily due to the utilization of tax credits related to affordable housing investments.
 
Credit Quality
 
East West continues to proactively manage credit, resulting in further improvements in all key asset quality metrics. Nonperforming assets, excluding covered assets, decreased by $6.5 million or 3% to $188.3 million or 0.89% of total assets. In addition, for the sixth consecutive quarter, both net charge-offs and the provision for loan losses have declined. The provision for loan losses was $26.5 million for the first quarter of 2011, a decrease of 11% compared to the previous quarter and a decrease of 65% compared to the first quarter of 2010. Total net charge-offs decreased to $34.2 million for the first quarter of 2011, a decrease of 11% from the previous quarter and a decrease of 46% compared to the previous year as detailed below:
 
   
For the three months ended,
      % Change  
         
 
    
 
  
($ in thousands)
  
March 31, 2011
    
December 31, 2010
    
March 31, 2010
    
Yr/Yr
  
Net charge-offs
   $ 34,219     $ 38,344     $ 63,929       -46 %
Provision for loan losses
   $ 26,506     $ 29,834     $ 76,421       -65 %
 
 
6
 
 
Management expects that the provision for loan losses will continue to decrease and range from $24 million to $28 million for the second quarter of 2011 and $95 million to $100 million for the full year 2011.

Notwithstanding the improvements in credit noted above, we have maintained a strong allowance for non-covered loan losses at $220.4 million or 2.50% of non-covered loans receivable at March 31, 2011. This compares to an allowance for non-covered loan losses of $230.4 million or 2.64% of non-covered loans at December 31, 2010 and $250.5 million or 2.93% of outstanding loans at March 31, 2010.

Capital Strength
 
Capital Strength
                  
(Dollars in millions)
                  
     
March 31, 2011
    
Well Capitalized
Regulatory
Requirement
  
Total Excess Above
Well Capitalized
Requirement
Tier 1 leverage capital ratio
     9.3 %     5.00 %   $ 871  
Tier 1 risk-based capital ratio
     15.9 %     6.00 %     1,180  
Total risk-based capital ratio
     17.7 %     10.00 %     913  
Tangible common equity to tangible asset
     8.0 %     N/A       N/A  
Tangible common equity to risk weighted assets ratio
     13.9 %     4.00 % *     1,175  
 
*As there is no stated regulatory guideline for this ratio, the SCAP (Supervisory Capital Assessment Program) guideline of 4.00% tangible common equity has been used.
 
During the fourth quarter of 2010, East West repurchased $306.5 million of preferred stock issued under the U.S. Treasury Capital Purchase Program and in the first quarter of 2011, East West repurchased all outstanding warrants issued to the U.S. Treasury in connection with this program for $14.5 million. Even after the repayment of TARP, our capital ratios remain very strong. As of the end of the first quarter of 2011, our Tier 1 leverage capital ratio totaled 9.3%, our Tier 1 risk-based capital ratio totaled 15.9% and our total risk-based capital ratio totaled 17.7%. East West exceeds well capitalized requirements for all regulatory guidelines by over $800 million.
 
The Company is focused on active capital management and remains committed to maintaining strong capital levels that exceed regulatory requirements, while also supporting balance sheet growth, and providing a strong return to our shareholders. In line with these priorities, the Board of Directors has approved an increase in our annual common stock dividend rate from $0.04 per share to $0.20 per share. The increase in the dividend rate will be effective for the second quarter of 2011.
 
 
7
 
 
Dividend Payout

East West’s Board of Directors has declared second quarter dividends on the common stock and Series A Preferred Stock. The common stock cash dividend of $0.05 is payable on or about May 24, 2011 to shareholders of record on May 10, 2011. The dividend on the Series A Preferred Stock of $20.00 per share is payable on May 1, 2011 to shareholders of record on April 15, 2011.

Conference Call

East West will host a conference call to discuss first quarter of 2011 earnings with the public on Wednesday, April 27, 2011 at 8:30 a.m. PDT/ 11:30 a.m. EDT. The public and investment community are invited to listen as management discusses first quarter results and operating developments. The following dial-in information is provided for participation in the conference call: Local call within the US – (877) 317-6789; Call within Canada – (866) 605-3852; International call – (412) 317-6789.  A listen-only live broadcast of the call also will be available on the investor relations page of the company's website at www.eastwestbank.com. 
 
About East West

East West Bancorp is a publicly owned company with $21.1 billion in assets 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 commercial banks headquartered in California with over 130 locations worldwide, including the U.S. markets of California, New York, Georgia, Massachusetts, Texas and Washington. In Greater China, East West’s presence includes a full service branch in Hong Kong and representative offices in Beijing, Shanghai, Shenzhen and Taipei.  Through a wholly-owned subsidiary bank, East West’s presence in Greater China also includes full service branches in Shanghai and Shantou and a representative office in Guangzhou. For more information on East West Bancorp, visit the Company's website at www.eastwestbank.com.
 
 
8
 
 
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, 2010 (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 borrowers to perform as required under the terms of their loans; effect of additional provisions for loan losses; effect of any goodwill impairment, 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.

1 See reconciliation of the GAAP financial measure to this non-GAAP financial measure in the tables below.
 
 
9
 
 
EAST WEST BANCORP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except per share amounts)
(unaudited)
 
   
March 31, 2011
    
December 31, 2010
    
March 31, 2010
  
Assets
                  
Cash and cash equivalents
   $ 1,492,922     $ 1,333,949     $ 1,380,263  
Short-term investments
     140,585       143,560       257,656  
Securities purchased under resale agreements
     768,369       500,000       380,000  
Investment securities
     2,930,976       2,875,941       2,191,527  
Loans receivable, excluding covered loans (net of allowance for loan losses of $220,402, $230,408 and $250,517)
     8,870,177       8,650,254       8,250,808  
Covered loans, net
     4,599,757       4,800,876       5,220,721  
Total loans receivable, net
     13,469,934       13,451,130       13,471,529  
Federal Home Loan Bank and Federal Reserve stock
     203,760       210,090       227,409  
FDIC indemnification asset
     717,260       792,133       980,950  
Other real estate owned, net
     15,580       21,865       6,907  
Other real estate owned covered, net
     142,416       123,902       78,354  
Premiums on deposits acquired, net
     76,332       79,518       86,351  
Goodwill
     337,438       337,438       337,438  
Other assets
     851,454       831,011       900,792  
Total assets
   $ 21,147,026     $ 20,700,537     $ 20,299,176  
                         
Liabilities and Stockholders' Equity
                        
Deposits
     16,436,598     $ 15,641,259     $ 14,606,702  
Federal Home Loan Bank advances
     793,643       1,214,148       1,769,452  
Securities sold under repurchase agreements
     1,081,019       1,083,545       1,032,511  
Subordinated debt and trust preferred securities
     235,570       235,570       235,570  
Other borrowings
     11,090       10,996       52,752  
Accrued expenses and other liabilities
     431,189       401,088       296,400  
Total liabilities
     18,989,109       18,586,606       17,993,387  
Stockholders' equity
     2,157,917       2,113,931       2,305,789  
Total liabilities and stockholders' equity
   $ 21,147,026     $ 20,700,537     $ 20,299,176  
Book value per common share
   $ 13.96     $ 13.67     $ 13.09  
Number of common shares at period end
     148,638       148,543       147,908  
                         
                         
Ending Balances
                        
   
March 31, 2011
    
December 31, 2010
    
March 31, 2010
  
Loans receivable
                        
Real estate - single family
   $ 1,201,311     $ 1,119,024     $ 961,397  
Real estate - multifamily
     949,034       974,745       997,325  
Real estate - commercial
     3,339,592       3,392,984       3,572,003  
Real estate - land
     220,135       235,707       317,880  
Real estate - construction
     254,614       278,047       415,247  
Commercial
     2,183,819       1,983,355       1,444,717  
Consumer
     670,529       733,526       830,717  
Total loans receivable held for investment, excluding covered loans
     8,819,034       8,717,388       8,539,286  
Loans held for sale
     303,673       220,055       17,540  
Covered loans, net
     4,599,757       4,800,876       5,220,721  
Total loans receivable
     13,722,464       13,738,319       13,777,547  
Unearned fees, premiums and discounts
     (32,128 )     (56,781 )     (55,501 )
Allowance for loan losses on non-covered loans
     (220,402 )     (230,408 )     (250,517 )
Net loans receivable
   $ 13,469,934     $ 13,451,130     $ 13,471,529  
                         
Deposits
                        
Noninterest-bearing demand
   $ 2,951,793     $ 2,676,466     $ 2,289,933  
Interest-bearing checking
     808,070       757,446       628,759  
Money market
     4,362,483       4,457,376       3,844,378  
Savings
     984,552       984,518       982,616  
Total core deposits
     9,106,898       8,875,806       7,745,686  
Time deposits
     7,329,700       6,765,453       6,861,016  
Total deposits
   $ 16,436,598     $ 15,641,259     $ 14,606,702  
 
 
10
 
 
EAST WEST BANCORP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
(unaudited)
 
   
Quarter Ended
   
March 31, 2011
    
December 31, 2010
    
March 31, 2010
  
                   
Interest and dividend income
   $ 254,335     $ 292,195     $ 318,703  
Interest expense
     (45,501 )     (45,633 )     (56,979 )
Net interest income before provision for loan losses
     208,834       246,562       261,724  
Provision for loan losses
     (26,506 )     (29,834 )     (76,421 )
Net interest income after provision for loan losses
     182,328       216,728       185,303  
Noninterest income (loss)
     11,041       (17,279 )     (8,451 )
Noninterest expense
     (106,789 )     (113,743 )     (138,910 )
Income before benefit for income taxes
     86,580       85,706       37,942  
Provision for income taxes
     30,509       29,357       13,026  
Net income
     56,071       56,349       24,916  
Preferred stock dividend and amortization of preferred stock discount
     (1,715 )     (24,109 )     (6,138 )
Net income available to common stockholders
   $ 54,356     $ 32,240     $ 18,778  
Net income per share, basic
   $ 0.37     $ 0.22     $ 0.17  
Net income per share, diluted
   $ 0.37     $ 0.22     $ 0.13  
Shares used to compute per share net income:
                        
- Basic
     146,837       146,625       109,961  
- Diluted
     153,334       147,524       146,865  
                         
                         
   
Quarter Ended
     
   
March 31, 2011
    
December 31, 2010
    
March 31, 2010
  
Noninterest income (loss):
                        
Branch fees
   $ 7,754     $ 7,681     $ 8,758  
Decrease in FDIC indemnification asset and FDIC receivable
     (17,443 )     (36,043 )     (43,572 )
Net gain on sales of loans
     7,410       6,265       -  
Letters of credit fees and commissions
     3,044       3,323       2,740  
Net gain on sales of investments
     2,515       5,244       16,111  
Impairment loss on investment securities
     (464 )     (6,340 )     (4,799 )
Ancillary loan fees
     1,991       2,101       1,689  
(Loss) gain on acquisition
     -       (4,697 )     8,095  
Other operating income
     6,234       5,187       2,527  
Total noninterest income (loss)
   $ 11,041     $ (17,279 )   $ (8,451 )
                         
Noninterest expense:
                        
Compensation and employee benefits
   $ 38,270     $ 39,001     $ 50,779  
Occupancy and equipment expense
     12,598       13,051       11,944  
Loan related expenses
     3,099       6,503       2,997  
Other real estate owned expense
     10,664       16,879       18,012  
Deposit insurance premiums and regulatory assessments
     7,191       3,416       11,581  
Prepayment penalties for FHLB advances
     4,022       -       9,932  
Legal expense
     4,101       5,186       2,907  
Amortization of premiums on deposits acquired
     3,185       3,237       3,384  
Data processing
     2,603       2,441       2,482  
Consulting expense
     1,626       2,312       2,141  
Amortization of investments in affordable housing partnerships
     4,525       2,915       3,037  
Other operating expense
     14,905       18,802       19,714  
Total noninterest expense
   $ 106,789     $ 113,743     $ 138,910  
 
 
11
 
 
EAST WEST BANCORP, INC.
SELECTED FINANCIAL INFORMATION
(In thousands)
(unaudited)
 
       Average Balances         Quarter Ended        
                   
   
March 31, 2011
    
December 31, 2010
    
March 31, 2010
  
Loans receivable
                  
Real estate - single family
   $ 1,161,336     $ 1,091,042     $ 931,318  
Real estate - multifamily
     961,770       969,801       1,071,910  
Real estate - commercial
     3,379,191       3,430,009       3,601,112  
Real estate - land
     229,901       250,530       356,908  
Real estate - construction
     278,668       297,558       449,272  
Commercial
     2,056,781       1,834,920       1,472,451  
Consumer
     1,055,534       992,408       731,771  
Total loans receivable, excluding covered loans
     9,123,181       8,866,268       8,614,742  
Covered loans
     4,695,964       4,866,915       5,369,328  
Total loans receivable
     13,819,145       13,733,183       13,984,070  
Investment securities
     2,818,703       2,876,561       2,185,875  
Earning assets
     18,741,052       18,144,027       17,940,933  
Total assets
     20,894,782       20,467,482       20,398,717  
                         
Deposits
                        
Noninterest-bearing demand
   $ 2,708,842     $ 2,649,912     $ 2,222,104  
Interest-bearing checking
     771,626       756,741       636,039  
Money market
     4,386,100       4,275,692       3,464,234  
Savings
     971,313       957,781       992,186  
Total core deposits
     8,837,881       8,640,126       7,314,563  
Time deposits
     7,139,530       6,664,058       7,315,789  
Total deposits
     15,977,411       15,304,184       14,630,352  
Interest-bearing liabilities
     15,609,601       15,004,890       15,763,168  
Stockholders' equity
     2,153,460       2,416,463       2,293,712  
   
                         
       
Selected Ratios
  
Quarter Ended
  
       
   
March 31, 2011
    
December 31, 2010
    
March 31, 2010
  
For The Period
                        
Return on average assets
     1.07 %     1.10 %     0.49 %
Return on average common equity
     10.50 %     6.28 %     4.71 %
Interest rate spread (2)
     4.32 %     5.18 %     5.73 %
Net interest margin (2)
     4.52 %     5.39 %     5.92 %
Yield on earning assets (2)
     5.50 %     6.39 %     7.20 %
Cost of deposits
     0.66 %     0.67 %     0.93 %
Cost of funds
     1.01 %     1.03 %     1.28 %
Noninterest expense/average assets (1)
     1.82 %     2.10 %     2.40 %
Efficiency ratio (3)
     43.14 %     44.77 %     49.03 %
 
(1) Excludes the amortization of intangibles, amortization and impairment loss of premiums on deposits acquired, amortization of investments in affordable housing partnerships and prepayment penalties for FHLB advances.
 
(2) Yields on certain securities have been adjusted upward to a "fully taxable equivalent" basis in order to reflect the effect of income which is exempt from federal income taxation at the current statutory tax rate.
 
(3) Represents noninterest expense, excluding the amortization of intangibles, amortization and impairment loss of premiums on deposits acquired, amortization of investments in affordable housing partnerships and prepayment penalties for FHLB advances, divided by the aggregate of net interest income before provision for loan losses and noninterest income, excluding items that are non-recurring in nature.
 
 
12
 
 
EAST WEST BANCORP, INC.
QUARTER TO DATE AVERAGE BALANCES, YIELDS AND RATES PAID
(In thousands)
(unaudited)
 
   
Quarter Ended
  
   
March 31, 2011
    
March 31, 2010
  
   
Average
                
Average
              
   
Volume
    
Interest
    
Yield (1)
    
Volume
    
Interest
    
Yield (1)
  
                                     
ASSETS
                                    
Interest-earning assets:
                                    
Short-term investments and interest bearing deposits in other banks
   $ 995,484     $ 2,740       1.12 %   $ 1,289,964     $ 3,541       1.11 %
Securities purchased under resale agreements
     898,122       4,270       1.90 %     259,319       6,263       9.66 %
Investment securities (2)
     2,818,703       18,857       2.68 %     2,185,875       20,190       3.75 %
Loans receivable
     9,123,181       114,911       5.11 %     8,614,742       122,028       5.74 %
Loans receivable - covered
     4,695,964       112,615       9.73 %     5,369,328       165,916       12.53 %
Federal Home Loan Bank and Federal Reserve Bank stocks
     209,598       942       1.80 %     221,705       779       1.41 %
Total interest-earning assets
     18,741,052       254,335       5.50 %     17,940,933       318,717       7.20 %
                                                 
Noninterest-earning assets:
                                                
Cash and due from banks
     272,112                       324,655                  
Allowance for loan losses
     (236,196 )                     (253,482 )                
Other assets
     2,117,814                       2,386,611                  
Total assets
   $ 20,894,782                     $ 20,398,717                  
                                                 
                                                 
LIABILITIES AND STOCKHOLDERS' EQUITY
                                                
Interest-bearing liabilities:
                                                
Checking accounts
     771,626       648       0.34 %     636,039       614       0.39 %
Money market accounts
     4,386,100       5,975       0.55 %     3,464,234       7,966       0.93 %
Savings deposits
     971,313       732       0.31 %     992,186       1,142       0.47 %
Time deposits
     7,139,530       18,627       1.06 %     7,315,789       23,726       1.32 %
Federal Home Loan Bank advances
     1,014,009       5,778       2.31 %     2,035,825       9,005       1.79 %
Securities sold under repurchase agreements
     1,080,240       12,017       4.45 %     1,028,698       12,541       4.88 %
Subordinated debt and trust preferred securities
     235,570       1,571       2.67 %     235,570       1,547       2.63 %
Other borrowings
     11,212       153       5.46 %     54,827       438       3.20 %
Total interest-bearing liabilities
     15,609,600       45,501       1.18 %     15,763,168       56,979       1.47 %
                                                 
Noninterest-bearing liabilities:
                                                
Demand deposits
     2,708,842                       2,222,104                  
Other liabilities
     422,880                       119,733                  
Stockholders' equity
     2,153,460                       2,293,712                  
Total liabilities and stockholders' equity
   $ 20,894,782                     $ 20,398,717                  
                                                 
Interest rate spread
                     4.32 %                     5.73 %
                                                 
Net interest income and net interest margin
           $ 208,834       4.52 %           $ 261,738       5.92 %
                                                 
Net interest income and net interest margin, adjusted (3)
           $ 181,908       3.94 %           $ 198,790       4.49 %
 
(1) Annualized.
(2) Amounts calculated on a fully taxable equivalent basis using the current statutory federal tax rate.
(3) Amounts exclude the net impact of covered loan dispositions of $26.9 million and $60.4 million for the three months ended March 31, 2011 and 2010, respectively, and repurchase agreement termination gain of $2.5 million for March 31, 2010.
 
 
13
 
 
EAST WEST BANCORP, INC.
QUARTERLY ALLOWANCE FOR LOAN LOSSES RECAP
(In thousands)
(unaudited)
 
   
Quarter Ended
  
   
3/31/2011
    
12/31/2010
    
3/31/2010
  
LOANS
                  
Allowance balance, beginning of period
   $ 234,633     $ 244,186     $ 238,833  
Allowance for unfunded loan commitments and letters of credit
     (758 )     (1,043 )     (808 )
Provision for loan losses
     26,506       29,834       76,421  
                         
Net Charge-offs:
                        
Real estate - single family
     928       1,770       3,426  
Real estate - multifamily
     2,178       5,048       4,860  
Real estate - commercial
     4,603       13,557       8,201  
Real estate - land
     8,931       8,942       26,828  
Real estate - residential construction
     7,273       (212 )     11,642  
Real estate - commercial construction
     620       3,086       2,029  
Commercial
     8,660       5,981       6,368  
Consumer
     1,027       172       575  
Total net charge-offs (recovery)
     34,220       38,344       63,929  
Allowance balance, end of period (3)
   $ 226,161     $ 234,633     $ 250,517  
                         
UNFUNDED LOAN COMMITMENTS AND LETTERS OF CREDIT:
                  
Allowance balance, beginning of period
   $ 9,952     $ 8,909     $ 8,119  
Provision for unfunded loan commitments and letters of credit
     758       1,043       808  
Allowance balance, end of period
   $ 10,710     $ 9,952     $ 8,927  
GRAND TOTAL, END OF PERIOD
   $ 236,871     $ 244,585     $ 259,444  
                         
Nonperforming assets to total assets (1)
     0.89 %     0.94 %     0.89 %
Allowance for loan losses on non-covered loans to total gross non-covered loans held for investment at end of period
     2.50 %     2.64 %     2.93 %
Allowance for loan losses on non-covered loans and unfunded loan commitments to total gross non-covered loans held for investment at end of period
     2.62 %     2.76 %     3.04 %
Allowance on non-covered loans to non-covered nonaccrual loans at end of period
     127.59 %     133.24 %     143.62 %
Nonaccrual loans to total loans (2)
     1.26 %     1.26 %     1.27 %
 
(1) Nonperforming assets excludes covered loans and covered REOs. Total assets includes covered assets.
(2) Nonaccrual loans excludes covered loans.  Total loans includes covered loans.
(3) Included in the allowance is $5.8 million and $4.2 million related to covered loans as of March 31, 2011 and December 31, 2010, respectively. This allowance is related to drawdowns on commitments that were in existence as of the acquisition dates and therefore, are covered under the loss share agreements with the FDIC. Allowance on these subsequent drawdowns is accounted for as part of our general allowance.
 
14
 
 
EAST WEST BANCORP, INC
TOTAL NON-PERFORMING ASSETS, EXCLUDING COVERED ASSETS
(in thousands)
(unaudited)
 
AS OF MARCH 31, 2011
                              
   
Total Nonaccrual Loans
                    
   
90+ Days
Delinquent
    
Under 90+ Days
Delinquent
    
Total
Nonaccrual
Loans
    
REO Assets
    
Total
Non-Performing
Assets
  
Loan Type
                              
Real estate - single family
   $ 10,585     $ -     $ 10,585     $ 441     $ 11,026  
Real estate - multifamily
     9,101       4,320       13,421       184       13,605  
Real estate - commercial
     41,494       5,027       46,521       3,966       50,487  
Real estate - land
     11,053       10,064       21,117       9,856       30,973  
Real estate - residential construction
     15,664       1,000       16,664       92       16,756  
Real estate - commercial construction
     9,329       20,390       29,719       775       30,494  
Commercial
     18,003       14,954       32,957       180       33,137  
Consumer
     1,755       -       1,755       86       1,841  
Total
   $ 116,984     $ 55,755     $ 172,739     $ 15,580     $ 188,319  
                                         
AS OF DECEMBER 31, 2010
                                        
   
Total Nonaccrual Loans
                          
   
90+ Days
Delinquent
    
Under 90+ Days
Delinquent
    
Total
Nonaccrual
Loans
    
REO Assets
    
Total
Non-Performing
Assets
  
Loan Type
                                        
Real estate - single family
   $ 7,059     $ 355     $ 7,414     $ 556     $ 7,970  
Real estate - multifamily
     9,687       7,695       17,382       468       17,850  
Real estate - commercial
     48,096       7,962       56,058       3,566       59,624  
Real estate - land
     8,138       20,761       28,899       16,180       45,079  
Real estate - residential construction
     -       22,341       22,341       92       22,433  
Real estate - commercial construction
     14,198       3,347       17,545       780       18,325  
Commercial
     8,235       14,436       22,671       223       22,894  
Consumer
     620       -       620       -       620  
Total
   $ 96,033     $ 76,897     $ 172,930     $ 21,865     $ 194,795  
                                         
AS OF MARCH 31, 2010
                                        
   
Total Nonaccrual Loans
                          
   
90+ Days
Delinquent
    
Under 90+ Days
Delinquent
    
Total
Nonaccrual
Loans
    
REO Assets
    
Total
Non-Performing
Assets
  
Loan Type
                                        
Real estate - single family
   $ 13,673     $ -     $ 13,673     $ -     $ 13,673  
Real estate - multifamily
     12,444       4,780       17,224       712       17,936  
Real estate - commercial
     28,484       4,127       32,611       2,979       35,590  
Real estate - land
     27,077       32,266       59,343       2,007       61,350  
Real estate - residential construction
     3,188       782       3,970       379       4,349  
Real estate - commercial construction
     15,066       9,652       24,718       830       25,548  
Commercial
     7,209       14,227       21,436       -       21,436  
Consumer
     1,218       234       1,452       -       1,452  
Total
   $ 108,359     $ 66,068     $ 174,427     $ 6,907     $ 181,334  
 
 
15
 
 
EAST WEST BANCORP, INC.
GAAP TO NON-GAAP RECONCILIATION
(In thousands)
(Unaudited)
 
The tangible common equity to risk weighted asset and tangible common equity to tangible asset ratios is a non-GAAP disclosure. The Company uses certain non-GAAP financial measures to provide supplemental information regarding the Company's performance to provide additional disclosure. As the use of tangible common equity to tangible asset is more prevalent in the banking industry and with banking regulators and analysts, we have included the tangible common equity to risk-weighted assets and tangible common equity to tangible asset ratios.
 
   
As of
  
   
March 31, 2011
  
Stockholders' Equity
   $ 2,157,917  
Less:
        
Preferred Equity
     (83,027 )
Goodwill and other intangible assets
     (423,138 )
Tangible common equity
   $ 1,651,752  
         
Risk-weighted assets
     11,921,804  
         
Tangible Common Equity to risk-weighted assets
     13.9 %
         
   
As of
  
   
March 31, 2011
  
Total assets
   $ 21,147,026  
Less:
        
Goodwill and other intangible assets
     (423,138 )
Tangible assets
   $ 20,723,888  
         
Tangible common equity to tangible asset ratio
     8.0 %
 
Operating noninterest income is a non-GAAP disclosure. The Company uses certain non-GAAP financial measures to provide supplemental information regarding the Company's performance to provide additional disclosure. There are noninterest income line items that are non-core in nature. Operating noninterest income excludes such non-core noninterest income line items. The Company believes that presenting the operating noninterest income provides more clarity to the users of financial statements regarding the core noninterest income amounts.
 
   
Quarter Ended
  
   
March 31, 2011
  
Noninterest income (loss)
   $ 11,041  
Add:
        
Impairment loss on investment securities
     464  
Less:
        
Net gain on sales of investments
     (2,515 )
Net gain on sales of loans
     (7,410 )
Decrease in FDIC indemnification asset and FDIC receivable
     17,443  
Operating noninterest income (non-GAAP)
   $ 19,023  
         
         
   
Quarter Ended
  
   
March 31, 2010
  
Noninterest income (loss)
   $ (8,451 )
Add:
        
Impairment loss on investment securities
     4,799  
Less:
        
Net gain on sales of investments
     (16,111 )
Gain on acquisition
     (8,095 )
Decrease in FDIC indemnification asset and FDIC receivable
     43,572  
Operating noninterest income (non-GAAP)
   $ 15,714  
 
 
16
 
 
EAST WEST BANCORP, INC.
GAAP TO NON-GAAP RECONCILIATION
(In thousands)
(Unaudited)
 
Operating noninterest expense is a non-GAAP disclosure. The Company uses certain non-GAAP financial measures to provide supplemental information regarding the Company's performance to provide additional disclosure. These are noninterest expense line items that are non-core in nature. Operating noninterest expense excludes such non-core noninterest expense line items. The Company believes that presenting the operating noninterest expense provides more clarity to the users of financial statements regarding the core noninterest expense amounts.
 
   
Quarter Ended
  
   
March 31, 2011
  
Total noninterest expense:
   $ 106,789  
Amounts to be reimbursed on covered assets (80% of actual expense amount)
     9,483  
Prepayment penalties for FHLB advances
     4,022  
Noninterest expense excluding reimbursement amounts and prepayment penalties for FHLB advances
   $ 93,284  
         
   
Quarter Ended
  
   
December 31, 2010
  
Total noninterest expense:
   $ 113,743  
Amounts to be reimbursed on covered assets (80% of actual expense amount)
     12,958  
Noninterest expense excluding reimbursement amounts
   $ 100,785  
 
 
17
 
 
EAST WEST BANCORP, INC.
GAAP TO NON-GAAP RECONCILIATION
(In thousands)
(Unaudited)
 
The Company uses certain non-GAAP financial measures to provide supplemental information regarding the Company's performance to provide additional disclosure. The net interest margin includes amounts that are non-core in nature. As such, the Company believes that presenting the net interest income and net interest margin excluding such non-core items provides additional clarity to the users of financial statements regarding the core net interest income and net interest margin, comparability to prior periods and the ongoing performance of the Company.
 
   
Quarter Ended March 31, 2011
  
   
Average Volume
    
Interest
    
Yield (1)
  
Total interest-earning assets
   $ 18,741,052     $ 254,335       5.50 %
Net interest income and net interest margin
           $ 208,834       4.52 %
Less net impact of covered loan dispositions and amortization of the FDIC indemnification asset
             (26,926 )        
Net interest income and net interest margin, excluding net impact of covered loan dispositions and amortization of the FDIC indemnification asset
           $ 181,908       3.94 %
                         
                         
   
Quarter Ended December 31, 2010
  
   
Average Volume
    
Interest
    
Yield (1)
  
Total interest-earning assets
   $ 18,144,027     $ 292,195       6.39 %
Net interest income and net interest margin
           $ 246,562       5.39 %
Less net impact of covered loan dispositions and amortization of the FDIC indemnification asset
             (43,783 )        
Net interest income and net interest margin, excluding net impact of covered loan dispositions and amortization of the FDIC indemnification asset
           $ 202,779       4.43 %
                         
                         
   
Quarter Ended March 31, 2010
  
   
Average Volume
    
Interest
    
Yield (1)
  
Total interest-earning assets
   $ 17,940,933     $ 318,717       7.20 %
Net interest income and net interest margin
           $ 261,738       5.92 %
Less yield adjustment related to:
                        
Net impact of covered loan dispositions
             (60,412 )        
Reverse repurchase agreement termination gain
             (2,536 )        
Total yield adjustment
             (62,948 )        
Net interest income and net interest margin, excluding net impact of covered loan dispositions
           $ 198,790       4.49 %
                         
 (1) Annualized.                        
 
 
 
18
 
 
EAST WEST BANCORP, INC.
GAAP TO NON-GAAP RECONCILIATION
(In thousands)
(Unaudited)
 
Dilutive EPS excluding the noncash impact resulting from the repurchase of preferred stock issued to the U.S. Treasury is a non-GAAP disclosure. The Company uses certain non-GAAP financial measures to provide supplemental information regarding the Company's performance to provide additional disclosure. The Company believes that presenting the Non-GAAP dilutive EPS provides more clarity to the users of financial statements.
 
   
Quarter Ended
  
   
December 31, 2010
  
GAAP Diluted EPS
   $ 0.22  
Impact of noncash charge resulting from the repurchase of preferred stock issued to the U.S. Treasury
     0.13  
Non-GAAP Diluted EPS
   $ 0.35  
  
  
19

















 

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