Delaware | 000-24939 | 95-4703316 | ||
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
EAST WEST BANCORP, INC. | |||
By: | /s/ Irene H. Oh | ||
Irene H. Oh | |||
Executive Vice President and Chief Financial Officer |
Exhibit Number | Description | |
99.1 | Press Release, dated January 27, 2016, issued by East West Bancorp, Inc. |
Exhibit 99.1 | |
East West Bancorp, Inc. | |
135 N. Los Robles Ave., 7th Fl. | |
Pasadena, CA 91101 | |
Tel. 626.768.6000 | |
Fax 626.817.8838 |
NEWS RELEASE | |||
• | Sixth Consecutive Year of Record Earnings - For the full year 2015, net income climbed to $384.7 million or $2.66 per diluted share, an increase of $38.8 million or 11% from $345.9 million(1) in 2014. Net income per diluted share for the full year of 2015 totaled $2.66, an increase of $0.25 or 10% from $2.41(1) in 2014. |
• | Record Loans - Total loans receivable increased to a record $23.7 billion as of December 31, 2015 from $21.8 billion as of December 31, 2014. The year-over-year loan growth of $1.9 billion or 9% was primarily driven by increases of $1.2 billion or 20% in commercial real estate loans, $925.8 million or 11% in commercial loans and $442.3 million or 29% in consumer loans. These increases were partially offset by a $799.9 million or 21% decrease in single-family real estate loans, primarily due to secondary market loan sales during 2015. |
• | Record Deposits - Total deposits grew to a record $27.5 billion as of December 31, 2015 from $24.0 billion as of December 31, 2014. The year-over-year deposit growth of $3.5 billion or 14% was primarily driven by a $1.3 billion or 17% increase in noninterest-bearing demand deposits, a $790.7 million or 31% increase in interest-bearing checking deposits and a $614.8 million or 10% increase in money market deposits. |
• | Improvement in Credit Quality - Nonperforming assets as of December 31, 2015 totaled $128.4 million, an improvement of $4.0 million or 3%, compared to $132.4 million as of December 31, 2014. Nonperforming assets to total assets improved six basis points to 0.40% as of December 31, 2015, compared to 0.46% as of December 31, 2014. |
Quarter Ended | ||||||||||||
($ in millions, except per share data) | December 31, 2015 | September 30, 2015 | December 31, 2014 | |||||||||
Net income (1) | $ | 91.81 | $ | 94.10 | $ | 95.50 | ||||||
Earnings per share (diluted) (1) | $ | 0.63 | $ | 0.65 | $ | 0.66 | ||||||
Tangible equity (1)(2) per common share | $ | 18.15 | $ | 17.79 | $ | 16.30 | ||||||
Return on average assets (1) | 1.14 | % | 1.22 | % | 1.31 | % | ||||||
Return on average equity (1) | 11.67 | % | 12.23 | % | 13.28 | % | ||||||
Net interest income | $ | 246.94 | $ | 240.29 | $ | 259.49 | ||||||
Net interest margin | 3.26 | % | 3.32 | % | 3.80 | % | ||||||
Cost of deposits | 0.29 | % | 0.28 | % | 0.28 | % | ||||||
Adjusted efficiency ratio (2) | 43.99 | % | 40.06 | % | 42.13 | % | ||||||
(1) | Prior year period was restated to reflect the retrospective application of adopting the new accounting guidance related to the Company’s investments in qualified affordable housing projects Accounting Standards Update (“ASU”) 2014-01. See Table 11 for additional information. |
(2) | See reconciliation of the GAAP to non-GAAP financial measure in Table 12. |
• | Strong Fourth Quarter Earnings - Net income totaled $91.8 million for the fourth quarter of 2015, compared to $94.1 million for the third quarter of 2015 and $95.5 million(1) for the fourth quarter of 2014. The 2015 fourth quarter results included a $19.0 million pretax impact from the early termination of the United Commercial Bank (“UCB”) shared-loss agreements, as discussed further below. Net income per diluted share for the fourth quarter of 2015 was $0.63, a decrease of $0.02 from the third quarter of 2015 and a decrease of $0.03 from the fourth quarter of 2014. |
• | Record Loans - Total loans receivable of $23.7 billion as of December 31, 2015 were up $683.4 million or 3% from $23.0 billion as of September 30, 2015. The sequential quarter increase in loans receivable was primarily driven by increases of $390.1 million or 6% in commercial real estate loans and $383.9 million or 4% in commercial loans. |
• | Record Deposits - Total deposits of $27.5 billion as of December 31, 2015 were up $716.9 million or 3% from $26.8 billion as of September 30, 2015. All core deposit categories grew during the quarter, with growth primarily experienced in interest-bearing checking deposits of $295.2 million or 10%, noninterest-bearing demand deposits of $282.6 million or 3% and money market deposits of $127.5 million or 2%. |
• | Improvement in Credit Quality - Nonperforming assets as of December 31, 2015 totaled $128.4 million, an improvement of $1.4 million or 1%, compared to $129.8 million as of September 30, 2015. Nonperforming assets to total assets improved two basis points to 0.40% as of December 31, 2015, compared to 0.42% as of September 30, 2015. |
• | Early Termination of the UCB Shared-Loss Agreements - During the fourth quarter of 2015, the Company reached an agreement with the Federal Deposit Insurance Corporation (“FDIC”) to early terminate the UCB shared-loss agreements and paid $118.4 million as consideration for the early termination. As a result, the income statement impact was a net expense of $19.0 million during the fourth quarter of 2015. As of December 31, 2015, the Company did not have any shared-loss agreements in place. |
• | Federal funds target rate increases 25 basis points in the third quarter of 2016 and 25 basis points in the fourth quarter of 2016 |
• | A net interest margin ranging from 3.29 % to 3.33% for the full year 2016 |
• | Loan growth of approximately 8.00% for the full year 2016 |
• | Deposit growth of approximately 6.00% for the full year 2016 |
• | Provision for loan losses of approximately $30 million to $35 million for the full year 2016 |
• | Noninterest expense excluding amortization of tax credit and other investments of approximately $560 million to $570 million for the full year 2016 |
• | Amortization of tax credit and other investments of approximately $70 million for the full year 2016 |
• | An effective tax rate of 25% for the full year 2016 |
Quarter Ended | ||||||||||||
($ in thousands) | December 31, 2015 | September 30, 2015 | December 31, 2014 | |||||||||
Branch fees | $ | 10,338 | $ | 9,982 | $ | 9,386 | ||||||
Letters of credit fees and foreign exchange income | 13,986 | 7,468 | 11,229 | |||||||||
Ancillary loan fees | 4,722 | 4,839 | 2,749 | |||||||||
Wealth management fees | 3,958 | 4,374 | 4,057 | |||||||||
Other fees and other operating income | 11,958 | 9,477 | 8,297 | |||||||||
Total fees and other operating income | $ | 44,962 | $ | 36,140 | $ | 35,718 | ||||||
Regulatory Capital Metrics | Basel III (a) | Basel I | ||||||||||||||||||
($ in thousands) | December 31, 2015 (b) | September 30, 2015 | Well Capitalized Regulatory Requirement | December 31, 2014 | Well Capitalized Regulatory Requirement | |||||||||||||||
CET1 capital ratio | 10.5 | % | 10.8 | % | 6.5 | % | N/A | N/A | ||||||||||||
Tier 1 risk-based capital ratio | 10.6 | % | 10.9 | % | 8.0 | % | 11.0 | % | 6.0 | % | ||||||||||
Total risk-based capital ratio | 12.2 | % | 12.6 | % | 10.0 | % | 12.6 | % | 10.0 | % | ||||||||||
Tier 1 leverage capital ratio | 8.5 | % | 8.7 | % | 5.0 | % | 8.4 | % | 5.0 | % | ||||||||||
RWA (c) | $ | 25,231,370 | $ | 23,983,349 | N/A | $ | 21,931,486 | N/A | ||||||||||||
(a) | On January 1, 2015, the Basel III capital rules became effective for the Company. Basel III revises the definition of capital and introduces a minimum CET1 ratio. The Basel III rules are subject to transition provisions primarily related to regulatory capital adjustments and deductions impacting CET1 capital and Tier 1 capital. |
(b) | The Company’s December 31, 2015 regulatory capital ratios, capital and RWA are preliminary. |
(c) | Under regulatory guidelines, on-balance sheet assets and credit equivalent amounts of derivatives and off-balance sheet items are assigned to one of several broad risk categories of the obligor, or, if relevant, the guarantor or the nature of any collateral. The aggregate dollar value in each risk category is then multiplied by the risk weight associated with that category. The resulting weighted values from each of the risk categories are aggregated for determining total RWA. |
(1) | Prior periods were restated to reflect the retrospective application of adopting the new accounting guidance related to the Company's investments in qualified affordable housing projects ASU2014-01. See Table 11 for additional information. |
EAST WEST BANCORP, INC. | |||||||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||||||||
($ in thousands, except per share data) | |||||||||||||
(unaudited) | |||||||||||||
Table 1 | |||||||||||||
December 31, 2015 | September 30, 2015 | December 31, 2014 | |||||||||||
Assets | |||||||||||||
Cash and cash equivalents | $ | 1,360,887 | $ | 1,875,703 | $ | 1,039,885 | |||||||
Short-term investments | 299,916 | 258,028 | 338,714 | ||||||||||
Resale agreements (1) | 1,600,000 | 1,400,000 | 1,225,000 | ||||||||||
Available-for-sale investment securities | 3,773,226 | 2,952,277 | 2,626,617 | ||||||||||
Loans held for sale | 31,958 | 349,375 | 45,950 | ||||||||||
Loans held-for-investment (net of allowance for loan losses of $264,959, $264,430 and $261,679) | 23,378,789 | 22,381,302 | 21,468,270 | ||||||||||
Investment in qualified affordable housing partnerships, net (2) | 193,978 | 170,213 | 178,962 | ||||||||||
Goodwill | 469,433 | 469,433 | 469,433 | ||||||||||
Other assets (2) | 1,242,735 | 1,263,345 | 1,350,761 | ||||||||||
Total assets (2) | $ | 32,350,922 | $ | 31,119,676 | $ | 28,743,592 | |||||||
Liabilities and Stockholders’ Equity | |||||||||||||
Customer deposits | $ | 27,475,981 | $ | 26,759,050 | $ | 24,008,774 | |||||||
Short-term borrowings | — | 3,146 | — | ||||||||||
FHLB advances | 1,019,424 | 318,872 | 317,241 | ||||||||||
Repurchase agreements (1) | — | 150,000 | 795,000 | ||||||||||
Long-term debt | 206,084 | 211,024 | 225,848 | ||||||||||
Accrued expenses and other liabilities | 526,483 | 606,469 | 540,618 | ||||||||||
Total liabilities | 29,227,972 | 28,048,561 | 25,887,481 | ||||||||||
Stockholders’ equity (2) | 3,122,950 | 3,071,115 | 2,856,111 | ||||||||||
Total liabilities and stockholders’ equity (2) | $ | 32,350,922 | $ | 31,119,676 | $ | 28,743,592 | |||||||
Book value per common share (2) | $ | 21.70 | $ | 21.35 | $ | 19.89 | |||||||
Tangible equity (2)(3) per common share | $ | 18.15 | $ | 17.79 | $ | 16.30 | |||||||
Tangible equity to tangible assets ratio (2)(3) | 8.20 | % | 8.36 | % | 8.29 | % | |||||||
Number of common shares at period-end (in thousands) | 143,909 | 143,870 | 143,582 | ||||||||||
(1) | Resale and repurchase agreements are reported net pursuant to Accounting Standards Codification (“ASC”) 210-20-45, Balance Sheet Offsetting. As of December 31, 2015, all $450.0 million of repurchase agreements were eligible for netting against resale agreements, resulting in no repurchase agreements’ balances reported. As of September 30, 2015 and December 31, 2014, $300.0 million out of $450.0 million, and $200.0 million out of $995.0 million of repurchase agreements were eligible for netting against resale agreements, respectively. |
(2) | Prior year period was restated to reflect the retrospective application of adopting the new accounting guidance related to the Company’s investments in qualified affordable housing projects ASU 2014-01. See Table 11 for additional information. |
(3) | See reconciliation of the GAAP to non-GAAP financial measure in Table 12. |
EAST WEST BANCORP, INC. | |||||||||||||
TOTAL LOANS AND DEPOSITS DETAIL | |||||||||||||
($ in thousands) | |||||||||||||
(unaudited) | |||||||||||||
Table 2 | |||||||||||||
December 31, 2015 | September 30, 2015 | December 31, 2014 | |||||||||||
Loans: | |||||||||||||
Real estate - commercial | $ | 7,478,474 | $ | 7,088,408 | $ | 6,256,059 | |||||||
Real estate - land and construction | 632,275 | 621,596 | 563,454 | ||||||||||
Commercial | 9,003,007 | 8,619,156 | 8,077,201 | ||||||||||
Real estate - single-family | 3,066,919 | 3,002,808 | 3,866,781 | ||||||||||
Real estate - multifamily | 1,522,995 | 1,492,361 | 1,449,908 | ||||||||||
Consumer | 1,956,091 | 1,834,579 | 1,513,742 | ||||||||||
Total loans held-for-investment (1) | 23,659,761 | 22,658,908 | 21,727,145 | ||||||||||
Loans held for sale | 31,958 | 349,375 | 45,950 | ||||||||||
Total loans (1), including loans held for sale | 23,691,719 | 23,008,283 | 21,773,095 | ||||||||||
Unearned fees, premiums and discounts | (16,013 | ) | (13,176 | ) | 2,804 | ||||||||
Allowance for loan losses | (264,959 | ) | (264,430 | ) | (261,679 | ) | |||||||
Net loans (1) | $ | 23,410,747 | $ | 22,730,677 | $ | 21,514,220 | |||||||
Customer deposits: | |||||||||||||
Noninterest-bearing demand | $ | 8,656,805 | $ | 8,374,192 | $ | 7,381,030 | |||||||
Interest-bearing checking | 3,336,293 | 3,041,085 | 2,545,618 | ||||||||||
Money market | 6,932,962 | 6,805,460 | 6,318,120 | ||||||||||
Savings | 1,933,026 | 1,884,535 | 1,651,267 | ||||||||||
Total core deposits | 20,859,086 | 20,105,272 | 17,896,035 | ||||||||||
Time deposits | 6,616,895 | 6,653,778 | 6,112,739 | ||||||||||
Total deposits | $ | 27,475,981 | $ | 26,759,050 | $ | 24,008,774 | |||||||
(1) | Includes ASC 310-30 discount of $80.1 million, $90.8 million and $133.6 million as of December 31, 2015, September 30, 2015 and December 31, 2014, respectively. |
EAST WEST BANCORP, INC. | |||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF INCOME | |||||||||||||
($ in thousands, except per share data) | |||||||||||||
(unaudited) | |||||||||||||
Table 3 | |||||||||||||
Quarter Ended | |||||||||||||
December 31, 2015 | September 30, 2015 | December 31, 2014 | |||||||||||
Interest and dividend income | $ | 270,477 | $ | 264,632 | $ | 287,135 | |||||||
Interest expense | (23,536 | ) | (24,343 | ) | (27,647 | ) | |||||||
Net interest income before reversal of (provision for) credit losses | 246,941 | 240,289 | 259,488 | ||||||||||
Reversal of (provision for) credit losses | 2,000 | (7,736 | ) | (19,000 | ) | ||||||||
Net interest income after reversal of (provision for) credit losses | 248,941 | 232,553 | 240,488 | ||||||||||
Noninterest income | 44,483 | 54,181 | 7,805 | ||||||||||
Noninterest expense (1) | (144,939 | ) | (147,745 | ) | (125,698 | ) | |||||||
Income before income taxes (1) | 148,485 | 138,989 | 122,595 | ||||||||||
Income tax expense (1) | (56,680 | ) | (44,892 | ) | (27,093 | ) | |||||||
Net income (1) | $ | 91,805 | $ | 94,097 | $ | 95,502 | |||||||
Earnings per share (1) | |||||||||||||
- Basic | $ | 0.64 | $ | 0.65 | $ | 0.67 | |||||||
- Diluted | $ | 0.63 | $ | 0.65 | $ | 0.66 | |||||||
Weighted average number of shares outstanding (in thousands) | |||||||||||||
- Basic | 143,900 | 143,861 | 143,432 | ||||||||||
- Diluted | 144,686 | 144,590 | 144,116 | ||||||||||
Quarter Ended | |||||||||||||
December 31, 2015 | September 30, 2015 | December 31, 2014 | |||||||||||
Noninterest income: | |||||||||||||
Branch fees | $ | 10,338 | $ | 9,982 | $ | 9,386 | |||||||
Letters of credit fees and foreign exchange income | 13,986 | 7,468 | 11,229 | ||||||||||
Ancillary loan fees | 4,722 | 4,839 | 2,749 | ||||||||||
Wealth management fees | 3,958 | 4,374 | 4,057 | ||||||||||
Changes in FDIC indemnification asset and receivable/payable | (19,007 | ) | (3,883 | ) | (50,578 | ) | |||||||
Net gains on sales of loans | 5,155 | 4,888 | 18,417 | ||||||||||
Net gains on sales of available-for-sale investment securities | 13,373 | 17,036 | 4,248 | ||||||||||
Other fees and other operating income | 11,958 | 9,477 | 8,297 | ||||||||||
Total noninterest income | $ | 44,483 | $ | 54,181 | $ | 7,805 | |||||||
Noninterest expense: | |||||||||||||
Compensation and employee benefits | $ | 68,895 | $ | 66,185 | $ | 59,369 | |||||||
Occupancy and equipment expense | 15,302 | 15,362 | 15,588 | ||||||||||
Amortization of tax credit and other investments (1) | 14,555 | 12,269 | 10,361 | ||||||||||
Amortization of premiums on deposits acquired | 2,196 | 2,310 | 2,483 | ||||||||||
Deposit insurance premiums and regulatory assessments | 5,049 | 4,726 | 5,161 | ||||||||||
Other real estate owned income | (1,433 | ) | (1,374 | ) | (4,286 | ) | |||||||
Legal expense | 3,270 | 2,099 | 7,615 | ||||||||||
Data processing | 2,589 | 2,602 | 2,537 | ||||||||||
Consulting expense | 7,638 | 4,983 | 2,152 | ||||||||||
Repurchase agreements’ extinguishment costs | — | 15,193 | — | ||||||||||
Deposit related expenses | 2,800 | 2,362 | 2,103 | ||||||||||
Other operating expense | 24,078 | 21,028 | 22,615 | ||||||||||
Total noninterest expense (1) | $ | 144,939 | $ | 147,745 | $ | 125,698 | |||||||
(1) | Prior year period was restated to reflect the retrospective application of adopting the new accounting guidance related to the Company’s investments in qualified affordable housing projects ASU 2014-01. See Table 11 for additional information. |
EAST WEST BANCORP, INC. | |||||||||
CONDENSED CONSOLIDATED STATEMENTS OF INCOME | |||||||||
($ in thousands, except per share data) | |||||||||
(unaudited) | |||||||||
Table 4 | |||||||||
Year Ended | |||||||||
December 31, 2015 | December 31, 2014 | ||||||||
Interest and dividend income | $ | 1,053,815 | $ | 1,153,698 | |||||
Interest expense | (103,376 | ) | (112,820 | ) | |||||
Net interest income before provision for credit losses | 950,439 | 1,040,878 | |||||||
Provision for credit losses | (14,217 | ) | (49,158 | ) | |||||
Net interest income after provision for credit losses | 936,222 | 991,720 | |||||||
Noninterest income (loss) | 183,383 | (11,714 | ) | ||||||
Noninterest expense (1) | (540,884 | ) | (532,983 | ) | |||||
Income before income taxes (1) | 578,721 | 447,023 | |||||||
Income tax expense (1) | (194,044 | ) | (101,145 | ) | |||||
Net income (1) | $ | 384,677 | $ | 345,878 | |||||
Earnings per share (1) | |||||||||
- Basic | $ | 2.67 | $ | 2.42 | |||||
- Diluted | $ | 2.66 | $ | 2.41 | |||||
Weighted average number of shares outstanding (in thousands) | |||||||||
- Basic | 143,818 | 142,952 | |||||||
- Diluted | 144,512 | 143,563 | |||||||
Year Ended | |||||||||
December 31, 2015 | December 31, 2014 | ||||||||
Noninterest income (loss): | |||||||||
Branch fees | $ | 39,495 | $ | 37,866 | |||||
Letters of credit fees and foreign exchange income | 38,985 | 37,323 | |||||||
Ancillary loan fees | 15,029 | 10,616 | |||||||
Wealth management fees | 18,268 | 16,162 | |||||||
Changes in FDIC indemnification asset and receivable/payable | (37,980 | ) | (201,417 | ) | |||||
Net gains on sales of loans | 24,874 | 39,132 | |||||||
Net gains on sales of available-for-sale investment securities | 40,367 | 10,851 | |||||||
Other fees and other operating income | 44,345 | 37,753 | |||||||
Total noninterest income (loss) | $ | 183,383 | $ | (11,714 | ) | ||||
Noninterest expense: | |||||||||
Compensation and employee benefits | $ | 262,193 | $ | 231,838 | |||||
Occupancy and equipment expense | 61,292 | 63,815 | |||||||
Amortization of tax credit and other investments (1) | 36,120 | 44,092 | |||||||
Amortization of premiums on deposits acquired | 9,234 | 10,204 | |||||||
Deposit insurance premiums and regulatory assessments | 18,772 | 21,922 | |||||||
Other real estate owned income | (8,914 | ) | (3,591 | ) | |||||
Legal expense | 16,373 | 53,018 | |||||||
Data processing | 10,185 | 15,888 | |||||||
Consulting expense | 17,234 | 8,511 | |||||||
Repurchase agreements’ extinguishment costs | 21,818 | — | |||||||
Deposit related expenses | 9,582 | 7,536 | |||||||
Other operating expense | 86,995 | 79,750 | |||||||
Total noninterest expense (1) | $ | 540,884 | $ | 532,983 | |||||
(1) | Prior year period was restated to reflect the retrospective application of adopting the new accounting guidance related to the Company’s investments in qualified affordable housing projects ASU 2014-01. See Table 11 for additional information. |
EAST WEST BANCORP, INC. | |||||||||||||
SELECTED FINANCIAL INFORMATION | |||||||||||||
($ in thousands) | |||||||||||||
(unaudited) | |||||||||||||
Table 5 | |||||||||||||
Average Balances | Quarter Ended | ||||||||||||
December 31, 2015 | September 30, 2015 | December 31, 2014 | |||||||||||
Loans: | |||||||||||||
Real estate - commercial | $ | 7,282,106 | $ | 6,906,581 | $ | 6,190,071 | |||||||
Real estate - land and construction | 634,601 | 591,266 | 527,732 | ||||||||||
Commercial | 8,590,810 | 8,222,777 | 7,772,264 | ||||||||||
Real estate - single-family | 3,183,770 | 3,364,514 | 3,777,006 | ||||||||||
Real estate - multifamily | 1,502,009 | 1,454,773 | 1,473,282 | ||||||||||
Consumer | 1,932,481 | 1,825,065 | 1,562,578 | ||||||||||
Total loans | $ | 23,125,777 | $ | 22,364,976 | $ | 21,302,933 | |||||||
Available-for-sale investment securities | $ | 3,255,976 | $ | 2,830,941 | $ | 2,592,325 | |||||||
Interest-earning assets | $ | 30,020,404 | $ | 28,727,735 | $ | 27,057,843 | |||||||
Total assets (1) | $ | 31,944,102 | $ | 30,662,930 | $ | 29,022,768 | |||||||
Customer deposits: | |||||||||||||
Noninterest-bearing demand | $ | 8,809,031 | $ | 7,970,181 | $ | 7,636,630 | |||||||
Interest-bearing checking | 3,178,877 | 2,838,728 | 2,446,895 | ||||||||||
Money market | 7,079,586 | 6,938,009 | 6,395,838 | ||||||||||
Savings | 1,909,838 | 1,823,036 | 1,668,101 | ||||||||||
Total core deposits | $ | 20,977,332 | $ | 19,569,954 | $ | 18,147,464 | |||||||
Time deposits | 6,582,823 | 6,659,322 | 6,151,558 | ||||||||||
Total deposits | $ | 27,560,155 | $ | 26,229,276 | $ | 24,299,022 | |||||||
Interest-bearing liabilities | $ | 19,349,119 | $ | 19,041,840 | $ | 18,015,306 | |||||||
Stockholders’ equity (1) | $ | 3,121,332 | $ | 3,051,276 | $ | 2,853,244 | |||||||
Selected Ratios | Quarter Ended | ||||||||||||
December 31, 2015 | September 30, 2015 | December 31, 2014 | |||||||||||
Return on average assets (1) | 1.14 | % | 1.22 | % | 1.31 | % | |||||||
Return on average equity (1) | 11.67 | % | 12.23 | % | 13.28 | % | |||||||
Interest rate spread | 3.09 | % | 3.14 | % | 3.60 | % | |||||||
Net interest margin | 3.26 | % | 3.32 | % | 3.80 | % | |||||||
Yield on interest-earning assets | 3.57 | % | 3.65 | % | 4.21 | % | |||||||
Cost of deposits | 0.29 | % | 0.28 | % | 0.28 | % | |||||||
Cost of funds | 0.33 | % | 0.36 | % | 0.43 | % | |||||||
Adjusted noninterest expense (2)(4)/average assets (1) | 1.59 | % | 1.53 | % | 1.54 | % | |||||||
Adjusted efficiency ratio (3)(4) | 43.99 | % | 40.06 | % | 42.13 | % | |||||||
(1) | Prior year period was restated to reflect the retrospective application of adopting the new accounting guidance related to the Company’s investments in qualified affordable housing projects ASU 2014-01. See Table 11 for additional information. |
(2) | Adjusted noninterest expense represents noninterest expense, excluding repurchase agreements’ extinguishment costs, amortization of tax credit and other investments, amortization of premiums on deposits acquired and integration and merger related expenses (where applicable). |
(3) | Represents noninterest expense, excluding repurchase agreements’ extinguishment costs, amortization of tax credit and other investments, amortization of premiums on deposits acquired and integration and merger related expenses (where applicable), divided by the aggregate of net interest income before reversal of (provision for) credit losses, and noninterest income. |
(4) | See reconciliation of the GAAP to non-GAAP financial measure in Table 12. |
EAST WEST BANCORP, INC. | |||||||||
SELECTED FINANCIAL INFORMATION | |||||||||
($ in thousands) | |||||||||
(unaudited) | |||||||||
Table 6 | |||||||||
Average Balances | Year Ended | ||||||||
December 31, 2015 | December 31, 2014 | ||||||||
Loans: | |||||||||
Real estate - commercial | $ | 6,781,671 | $ | 6,064,250 | |||||
Real estate - land and construction | 597,171 | 495,503 | |||||||
Commercial | 8,140,624 | 6,960,925 | |||||||
Real estate - single-family | 3,510,864 | 3,607,175 | |||||||
Real estate - multifamily | 1,476,747 | 1,458,673 | |||||||
Consumer | 1,769,512 | 1,765,292 | |||||||
Total loans | $ | 22,276,589 | $ | 20,351,818 | |||||
Available-for-sale investment securities | $ | 2,847,655 | $ | 2,540,228 | |||||
Interest-earning assets | $ | 28,390,582 | $ | 25,798,578 | |||||
Total assets (1) | $ | 30,328,457 | $ | 27,652,970 | |||||
Customer deposits: | |||||||||
Noninterest-bearing demand | $ | 7,928,460 | $ | 6,834,871 | |||||
Interest-bearing checking | 2,795,379 | 2,179,428 | |||||||
Money market | 6,763,979 | 5,958,461 | |||||||
Savings | 1,785,085 | 1,748,465 | |||||||
Total core deposits | $ | 19,272,903 | $ | 16,721,225 | |||||
Time deposits | 6,482,697 | 6,218,745 | |||||||
Total deposits | $ | 25,755,600 | $ | 22,939,970 | |||||
Interest-bearing liabilities | $ | 18,781,466 | $ | 17,648,639 | |||||
Stockholders’ equity (1) | $ | 3,019,095 | $ | 2,718,173 | |||||
Selected Ratios | Year Ended | ||||||||
December 31, 2015 | December 31, 2014 | ||||||||
Return on average assets (1) | 1.27 | % | 1.25 | % | |||||
Return on average equity (1) | 12.74 | % | 12.72 | % | |||||
Interest rate spread | 3.16 | % | 3.83 | % | |||||
Net interest margin | 3.35 | % | 4.03 | % | |||||
Yield on interest-earning assets | 3.71 | % | 4.47 | % | |||||
Cost of deposits | 0.29 | % | 0.29 | % | |||||
Cost of funds | 0.39 | % | 0.46 | % | |||||
Adjusted noninterest expense (2)(4)/average assets (1) | 1.56 | % | 1.69 | % | |||||
Adjusted efficiency ratio (3)(4) | 41.78 | % | 45.28 | % | |||||
(1) | Prior year period was restated to reflect the retrospective application of adopting the new accounting guidance related to the Company’s investments in qualified affordable housing projects ASU 2014-01. See Table 11 for additional information. |
(2) | Adjusted noninterest expense represents noninterest expense, excluding repurchase agreements’ extinguishment costs, amortization of tax credit and other investments, amortization of premiums on deposits acquired and integration and merger related expenses (where applicable). |
(3) | Represents noninterest expense, excluding repurchase agreements’ extinguishment costs, amortization of tax credit and other investments, amortization of premiums on deposits acquired and integration and merger related expenses (where applicable), divided by the aggregate of net interest income before provision for credit losses, and noninterest income. |
(4) | See reconciliation of the GAAP to non-GAAP financial measure in Table 12. |
EAST WEST BANCORP, INC. | |||||||||||||||||||||||
QUARTER-TO-DATE AVERAGE BALANCES, YIELDS AND RATES | |||||||||||||||||||||||
($ in thousands) | |||||||||||||||||||||||
(unaudited) | |||||||||||||||||||||||
Table 7 | |||||||||||||||||||||||
Quarter Ended | |||||||||||||||||||||||
December 31, 2015 | December 31, 2014 | ||||||||||||||||||||||
Average | Average | Average | Average | ||||||||||||||||||||
Balance | Interest | Yield/Rate(1) | Balance | Interest | Yield/Rate(1) | ||||||||||||||||||
Assets | |||||||||||||||||||||||
Interest-earning assets: | |||||||||||||||||||||||
Due from banks and short-term investments | $ | 2,085,641 | $ | 3,397 | 0.65 | % | $ | 1,678,398 | $ | 5,753 | 1.36 | % | |||||||||||
Resale agreements (2) | 1,479,891 | 5,859 | 1.57 | % | 1,396,739 | 5,567 | 1.58 | % | |||||||||||||||
Available-for-sale investment securities | 3,255,976 | 11,428 | 1.39 | % | 2,592,325 | 8,554 | 1.31 | % | |||||||||||||||
Loans | 23,125,777 | 248,638 | 4.27 | % | 21,302,933 | 265,892 | 4.95 | % | |||||||||||||||
FHLB and Federal Reserve Bank stock | 73,119 | 1,155 | 6.27 | % | 87,448 | 1,369 | 6.21 | % | |||||||||||||||
Total interest-earning assets | $ | 30,020,404 | $ | 270,477 | 3.57 | % | $ | 27,057,843 | $ | 287,135 | 4.21 | % | |||||||||||
Noninterest-earning assets: | |||||||||||||||||||||||
Cash and cash equivalents | 376,538 | 358,982 | |||||||||||||||||||||
Allowance for loan losses | (268,870 | ) | (256,928 | ) | |||||||||||||||||||
Other assets (3) | 1,816,030 | 1,862,871 | |||||||||||||||||||||
Total assets (3) | $ | 31,944,102 | $ | 29,022,768 | |||||||||||||||||||
Liabilities and Stockholders’ Equity | |||||||||||||||||||||||
Interest-bearing liabilities: | |||||||||||||||||||||||
Checking deposits | $ | 3,178,877 | $ | 2,604 | 0.32 | % | $ | 2,446,895 | $ | 1,734 | 0.28 | % | |||||||||||
Money market deposits | 7,079,586 | 5,155 | 0.29 | % | 6,395,838 | 4,267 | 0.26 | % | |||||||||||||||
Savings deposits | 1,909,838 | 952 | 0.20 | % | 1,668,101 | 796 | 0.19 | % | |||||||||||||||
Time deposits | 6,582,823 | 11,117 | 0.67 | % | 6,151,558 | 10,080 | 0.65 | % | |||||||||||||||
Federal funds purchased and other short-term borrowings | 1,624 | 5 | 1.22 | % | 310 | — | — | ||||||||||||||||
FHLB advances | 333,207 | 1,114 | 1.33 | % | 316,886 | 1,029 | 1.29 | % | |||||||||||||||
Repurchase agreements (2)(4) | 52,174 | 1,413 | 10.74 | % | 804,961 | 8,550 | 4.21 | % | |||||||||||||||
Long-term debt | 210,990 | 1,176 | 2.21 | % | 230,757 | 1,191 | 2.05 | % | |||||||||||||||
Total interest-bearing liabilities | $ | 19,349,119 | $ | 23,536 | 0.48 | % | $ | 18,015,306 | $ | 27,647 | 0.61 | % | |||||||||||
Noninterest-bearing liabilities: | |||||||||||||||||||||||
Demand deposits | 8,809,031 | 7,636,630 | |||||||||||||||||||||
Other liabilities | 664,620 | 517,588 | |||||||||||||||||||||
Stockholders’ equity (3) | 3,121,332 | 2,853,244 | |||||||||||||||||||||
Total liabilities and stockholders’ equity (3) | $ | 31,944,102 | $ | 29,022,768 | |||||||||||||||||||
Interest rate spread | 3.09 | % | 3.60 | % | |||||||||||||||||||
Net interest income and net interest margin | $ | 246,941 | 3.26 | % | $ | 259,488 | 3.80 | % | |||||||||||||||
(1) | Annualized. |
(2) | Average volumes of resale and repurchase agreements are reported net pursuant to ASC 210-20-45, Balance Sheet Offsetting. |
(3) | Prior year period was restated to reflect the retrospective application of adopting the new accounting guidance related to the Company’s investments in qualified affordable housing projects ASU 2014-01. See Table 11 for additional information. |
(4) | The higher cost of funds noted on the repurchase agreements in the fourth quarter of 2015 is mainly due to lower balances of repurchase agreements reported as a result of the netting impacts pursuant to ASC 210-20-45, Balance Sheet Offsetting. |
EAST WEST BANCORP, INC. | |||||||||||||||||||||||
YEAR-TO-DATE AVERAGE BALANCES, YIELDS AND RATES | |||||||||||||||||||||||
($ in thousands) | |||||||||||||||||||||||
(unaudited) | |||||||||||||||||||||||
Table 8 | |||||||||||||||||||||||
Year Ended | |||||||||||||||||||||||
December 31, 2015 | December 31, 2014 | ||||||||||||||||||||||
Average | Average | Average | Average | ||||||||||||||||||||
Volume | Interest | Yield/Rate | Volume | Interest | Yield/Rate | ||||||||||||||||||
Assets | |||||||||||||||||||||||
Interest-earning assets: | |||||||||||||||||||||||
Due from banks and short-term investments | $ | 1,851,604 | $ | 17,939 | 0.97 | % | $ | 1,469,200 | $ | 23,214 | 1.58 | % | |||||||||||
Resale agreements (1) | 1,337,274 | 19,799 | 1.48 | % | 1,340,411 | 20,323 | 1.52 | % | |||||||||||||||
Available-for-sale investment securities | 2,847,655 | 41,375 | 1.45 | % | 2,540,228 | 44,684 | 1.76 | % | |||||||||||||||
Loans | 22,276,589 | 968,625 | 4.35 | % | 20,351,818 | 1,059,205 | 5.20 | % | |||||||||||||||
FHLB and Federal Reserve Bank stock | 77,460 | 6,077 | 7.85 | % | 96,921 | 6,272 | 6.47 | % | |||||||||||||||
Total interest-earning assets | $ | 28,390,582 | $ | 1,053,815 | 3.71 | % | $ | 25,798,578 | $ | 1,153,698 | 4.47 | % | |||||||||||
Noninterest-earning assets: | |||||||||||||||||||||||
Cash and cash equivalents | 342,606 | 322,581 | |||||||||||||||||||||
Allowance for loan losses | (263,143 | ) | (254,616 | ) | |||||||||||||||||||
Other assets (2) | 1,858,412 | 1,786,427 | |||||||||||||||||||||
Total assets (2) | $ | 30,328,457 | $ | 27,652,970 | |||||||||||||||||||
Liabilities and Stockholders’ Equity | |||||||||||||||||||||||
Interest-bearing liabilities: | |||||||||||||||||||||||
Checking deposits | $ | 2,795,379 | $ | 8,453 | 0.30 | % | $ | 2,179,428 | $ | 5,431 | 0.25 | % | |||||||||||
Money market deposits | 6,763,979 | 18,988 | 0.28 | % | 5,958,461 | 16,001 | 0.27 | % | |||||||||||||||
Savings deposits | 1,785,085 | 3,468 | 0.19 | % | 1,748,465 | 2,971 | 0.17 | % | |||||||||||||||
Time deposits | 6,482,697 | 42,596 | 0.66 | % | 6,218,745 | 41,083 | 0.66 | % | |||||||||||||||
Federal funds purchased and other short-term borrowings | 4,797 | 58 | 1.21 | % | 888 | — | — | ||||||||||||||||
FHLB advances | 327,080 | 4,270 | 1.31 | % | 349,767 | 4,116 | 1.18 | % | |||||||||||||||
Repurchase agreements (1)(3) | 404,096 | 20,907 | 5.17 | % | 955,147 | 38,395 | 4.02 | % | |||||||||||||||
Long-term debt | 218,353 | 4,636 | 2.12 | % | 237,738 | 4,823 | 2.03 | % | |||||||||||||||
Total interest-bearing liabilities | $ | 18,781,466 | $ | 103,376 | 0.55 | % | $ | 17,648,639 | $ | 112,820 | 0.64 | % | |||||||||||
Noninterest-bearing liabilities: | |||||||||||||||||||||||
Demand deposits | 7,928,460 | 6,834,871 | |||||||||||||||||||||
Other liabilities | 599,436 | 451,287 | |||||||||||||||||||||
Stockholders’ equity (2) | 3,019,095 | 2,718,173 | |||||||||||||||||||||
Total liabilities and stockholders’ equity (2) | $ | 30,328,457 | $ | 27,652,970 | |||||||||||||||||||
Interest rate spread | 3.16 | % | 3.83 | % | |||||||||||||||||||
Net interest income and net interest margin | $ | 950,439 | 3.35 | % | $ | 1,040,878 | 4.03 | % | |||||||||||||||
(1) | Average volumes of resale and repurchase agreements are reported net pursuant to ASC 210-20-45, Balance Sheet Offsetting. |
(2) | Prior year period was restated to reflect the retrospective application of adopting the new accounting guidance related to the Company’s investments in qualified affordable housing projects ASU 2014-01. See Table 11 for additional information. |
(3) | The higher cost of funds noted on the repurchase agreements in 2015 is mainly due to lower balances of repurchase agreements reported as a result of the netting impacts pursuant to ASC 210-20-45, Balance Sheet Offsetting. |
EAST WEST BANCORP, INC. | |||||||||||||||||||||
ALLOWANCE FOR CREDIT LOSSES | |||||||||||||||||||||
($ in thousands) | |||||||||||||||||||||
(unaudited) | |||||||||||||||||||||
Table 9 | |||||||||||||||||||||
Quarter Ended | Year Ended | ||||||||||||||||||||
December 31, 2015 | September 30, 2015 | December 31, 2014 | December 31, 2015 | December 31, 2014 | |||||||||||||||||
Non-Purchased Credit Impaired (“Non-PCI”) Loans | |||||||||||||||||||||
Allowance for non-PCI loans, beginning of period | $ | 263,889 | $ | 260,617 | $ | 252,464 | $ | 260,965 | $ | 247,406 | |||||||||||
(Reversal of) provision for loan losses on non-PCI loans | (3,135 | ) | 8,505 | 17,846 | 6,924 | 48,615 | |||||||||||||||
Net (recoveries) charge-offs: | |||||||||||||||||||||
Commercial real estate | (5,815 | ) | 52 | 30 | (5,590 | ) | 1,155 | ||||||||||||||
Commercial | 2,089 | 6,254 | 5,464 | 11,641 | 29,786 | ||||||||||||||||
Residential | (111 | ) | (1,123 | ) | (1,364 | ) | (2,935 | ) | (1,307 | ) | |||||||||||
Consumer | (9 | ) | 50 | 5,215 | 173 | 5,422 | |||||||||||||||
Total net (recoveries) charge-offs | (3,846 | ) | 5,233 | 9,345 | 3,289 | 35,056 | |||||||||||||||
Allowance for non-PCI loans, end of period | $ | 264,600 | $ | 263,889 | $ | 260,965 | $ | 264,600 | $ | 260,965 | |||||||||||
Purchased Credit Impaired (“PCI”) Loans | |||||||||||||||||||||
Allowance for PCI loans, beginning of period | $ | 541 | $ | 612 | $ | 714 | $ | 714 | $ | 2,269 | |||||||||||
Reversal of provision for loan losses on PCI loans | (182 | ) | (71 | ) | — | (355 | ) | (1,032 | ) | ||||||||||||
Total charge-offs | — | — | — | — | 523 | ||||||||||||||||
Allowance for PCI loans, end of period | $ | 359 | $ | 541 | $ | 714 | $ | 359 | $ | 714 | |||||||||||
Allowance for loan losses | $ | 264,959 | $ | 264,430 | $ | 261,679 | $ | 264,959 | $ | 261,679 | |||||||||||
Unfunded Lending Commitments | |||||||||||||||||||||
Allowance for unfunded lending commitments, beginning of period | $ | 19,043 | $ | 19,741 | $ | 11,558 | $ | 12,712 | $ | 11,282 | |||||||||||
Provision for (reversal of) unfunded lending commitments | 1,317 | (698 | ) | 1,154 | 7,648 | 1,575 | |||||||||||||||
Total charge-offs | — | — | — | — | 145 | ||||||||||||||||
Allowance for unfunded lending commitments, end of period | $ | 20,360 | $ | 19,043 | $ | 12,712 | $ | 20,360 | $ | 12,712 | |||||||||||
Allowance for credit losses | $ | 285,319 | $ | 283,473 | $ | 274,391 | $ | 285,319 | $ | 274,391 | |||||||||||
EAST WEST BANCORP, INC. | ||||||||||||||||
CREDIT QUALITY | ||||||||||||||||
($ in thousands) | ||||||||||||||||
(unaudited) | ||||||||||||||||
Table 10 | ||||||||||||||||
Non-PCI Nonperforming Assets | December 31, 2015 | September 30, 2015 | December 31, 2014 | |||||||||||||
Nonaccrual loans: | ||||||||||||||||
Real estate - commercial | $ | 29,229 | $ | 29,639 | $ | 28,513 | ||||||||||
Real estate - land and construction | 697 | 2,455 | 9,636 | |||||||||||||
Commercial | 64,735 | 60,703 | 28,801 | |||||||||||||
Real estate - single-family | 8,726 | 11,067 | 8,625 | |||||||||||||
Real estate - multifamily | 16,244 | 13,127 | 20,819 | |||||||||||||
Consumer | 1,738 | 528 | 3,868 | |||||||||||||
Total nonaccrual loans | 121,369 | 117,519 | 100,262 | |||||||||||||
Other real estate owned, net | 7,034 | 12,251 | 32,111 | |||||||||||||
Total nonperforming assets | $ | 128,403 | $ | 129,770 | $ | 132,373 | ||||||||||
Credit Quality Ratios: | December 31, 2015 | September 30, 2015 | December 31, 2014 | |||||||||||||
Non-PCI nonperforming assets to total assets (1) | 0.40 | % | 0.42 | % | 0.46 | % | ||||||||||
Non-PCI nonaccrual loans to loans held-for-investment (1) | 0.51 | % | 0.52 | % | 0.46 | % | ||||||||||
Allowance for loan losses to loans held-for-investment (1) | 1.12 | % | 1.17 | % | 1.20 | % | ||||||||||
Allowance for credit losses to loans held-for-investment (1) | 1.21 | % | 1.25 | % | 1.26 | % | ||||||||||
Allowance for loan losses to non-PCI nonaccrual loans | 218.31 | % | 225.01 | % | 261.00 | % | ||||||||||
Quarter-to-date net (recoveries) charge-offs to average loans held-for-investment | (0.07 | )% | (2) | 0.09 | % | (2) | 0.17 | % | (2) | |||||||
Year-to-date net charge-offs to average loans held-for-investment | 0.01 | % | 0.04 | % | (2) | 0.18 | % | |||||||||
(1) | Total assets and loans held-for-investment include PCI loans of $970.4 million, $1.1 billion and $1.3 billion as of December 31, 2015, September 30, 2015, and December 31, 2014, respectively. |
(2) | Annualized. |
EAST WEST BANCORP, INC. | ||||||||||||||||
IMPACT OF ADOPTING NEW ACCOUNTING GUIDANCE | ||||||||||||||||
($ in thousands, except per share data) | ||||||||||||||||
(unaudited) | ||||||||||||||||
Table 11 | ||||||||||||||||
In the first quarter of 2015, East West adopted ASU 2014-01, Accounting for Investments in Qualified Affordable Housing Projects. This ASU allows companies that invest in qualified affordable housing projects to elect the proportional amortization method of accounting for these investments, if certain conditions are met. The Company restated the prior period condensed consolidated financial statements to reflect the impact of the retrospective application of the new accounting guidance. | ||||||||||||||||
The following tables present the impact of the new accounting guidance on the condensed consolidated balance sheet and statements of income and the consolidated ratios at the periods indicated: | ||||||||||||||||
December 31, 2014 | ||||||||||||||||
Condensed Consolidated Balance Sheets | As Previously Reported | As Revised | ||||||||||||||
Investment in qualified affordable housing partnerships, net | $ | 178,652 | $ | 178,962 | ||||||||||||
Other assets - deferred tax assets | $ | 384,367 | $ | 389,601 | ||||||||||||
Stockholders’ equity | $ | 2,850,568 | $ | 2,856,111 | ||||||||||||
December 31, 2014 | ||||||||||||||||
Consolidated Ratios and Other Measures | As Previously Reported | As Revised | ||||||||||||||
Book value per common share | $ | 19.85 | $ | 19.89 | ||||||||||||
Tangible equity (1) per common share | $ | 16.26 | $ | 16.30 | ||||||||||||
Tangible equity to tangible assets (1) | 8.27 | % | 8.29 | % | ||||||||||||
Quarter Ended | Year Ended | |||||||||||||||
December 31, 2014 | December 31, 2014 | |||||||||||||||
Condensed Consolidated Statements of Income | As Previously Reported | As Revised | As Previously Reported | As Revised | ||||||||||||
Noninterest expense (2) | $ | 135,246 | $ | 125,698 | $ | 564,551 | $ | 532,983 | ||||||||
Income before taxes | $ | 113,047 | $ | 122,595 | $ | 415,455 | $ | 447,023 | ||||||||
Income tax expense | $ | 20,049 | $ | 27,093 | $ | 72,972 | $ | 101,145 | ||||||||
Net income | $ | 92,998 | $ | 95,502 | $ | 342,483 | $ | 345,878 | ||||||||
Earnings per share | ||||||||||||||||
- Basic | $ | 0.65 | $ | 0.67 | $ | 2.39 | $ | 2.42 | ||||||||
- Diluted | $ | 0.65 | $ | 0.66 | $ | 2.38 | $ | 2.41 | ||||||||
Quarter Ended | Year Ended | |||||||||||||||
December 31, 2014 | December 31, 2014 | |||||||||||||||
Consolidated Ratios and Other Measures | As Previously Reported | As Revised | As Previously Reported | As Revised | ||||||||||||
Return on average assets | 1.27 | % | 1.31 | % | 1.24 | % | 1.25 | % | ||||||||
Return on average equity | 12.95 | % | 13.28 | % | 12.61 | % | 12.72 | % | ||||||||
(1) | See reconciliation of the GAAP to non-GAAP financial measure in Table 12. |
(2) | Included in noninterest expense was the line item amortization of tax credit and other investments of $19.9 million (previously reported) and $10.4 million (as revised) for the quarter ended December 31, 2014 and $75.7 million (previously reported) and $44.1 million (as revised) for the year ended December 31, 2014. |
EAST WEST BANCORP, INC. | ||||||||||||
GAAP TO NON-GAAP RECONCILIATION | ||||||||||||
($ in thousands) | ||||||||||||
(unaudited) | ||||||||||||
Table 12 | ||||||||||||
The Company uses certain non-GAAP financial measures to provide supplemental information regarding the Company’s performance. Tangible equity and tangible equity to tangible assets ratios are non-GAAP disclosures. Tangible equity represents common shareholders’ equity which has been reduced by goodwill and intangible assets. Given that the use of such measures and ratios are more prevalent in the banking industry and with banking regulators and analysts, the Company has included them for discussion. | ||||||||||||
December 31, 2015 | September 30, 2015 | December 31, 2014 | ||||||||||
Stockholders’ equity (1) | $ | 3,122,950 | $ | 3,071,115 | $ | 2,856,111 | ||||||
Less: | ||||||||||||
Goodwill and other intangible assets | (511,031 | ) | (511,584 | ) | (515,478 | ) | ||||||
Tangible equity (1) | $ | 2,611,919 | $ | 2,559,531 | $ | 2,340,633 | ||||||
Total assets (1) | $ | 32,350,922 | $ | 31,119,676 | $ | 28,743,592 | ||||||
Less: | ||||||||||||
Goodwill and other intangible assets | (511,031 | ) | (511,584 | ) | (515,478 | ) | ||||||
Tangible assets (1) | $ | 31,839,891 | $ | 30,608,092 | $ | 28,228,114 | ||||||
Tangible equity to tangible assets ratio (1) | 8.20 | % | 8.36 | % | 8.29 | % | ||||||
Adjusted efficiency ratio represents noninterest expense, excluding repurchase agreements’ extinguishment costs, amortization of tax credit and other investments, amortization of premiums on deposits acquired, and integration and merger related expenses, divided by the aggregate of net interest income before provision for credit losses, and noninterest income. The Company believes that presenting the adjusted efficiency ratio shows the trend in recurring overhead-related noninterest expense relative to recurring net revenues. This provides clarity to financial statement users regarding the ongoing performance of the Company and allows comparability to prior periods. | ||||||||||||
Quarter Ended | ||||||||||||
December 31, 2015 | September 30, 2015 | December 31, 2014 | ||||||||||
Total noninterest expense (1) | $ | 144,939 | $ | 147,745 | $ | 125,698 | ||||||
Less: | ||||||||||||
Repurchase agreements’ extinguishment costs | — | (15,193 | ) | — | ||||||||
Amortization of tax credit and other investments (1) | (14,555 | ) | (12,269 | ) | (10,361 | ) | ||||||
Amortization of premiums on deposits acquired | (2,196 | ) | (2,310 | ) | (2,483 | ) | ||||||
Integration and merger related expenses | — | — | (253 | ) | ||||||||
Adjusted noninterest expense | $ | 128,188 | $ | 117,973 | $ | 112,601 | ||||||
Net interest income before reversal of (provision for) credit losses | $ | 246,941 | $ | 240,289 | $ | 259,488 | ||||||
Noninterest income | 44,483 | 54,181 | 7,805 | |||||||||
Net interest income and noninterest income | $ | 291,424 | $ | 294,470 | $ | 267,293 | ||||||
Adjusted efficiency ratio | 43.99 | % | 40.06 | % | 42.13 | % | ||||||
Year Ended | ||||||||||||
December 31, 2015 | December 31, 2014 | |||||||||||
Total noninterest expense (1) | $ | 540,884 | $ | 532,983 | ||||||||
Less: | ||||||||||||
Repurchase agreements’ extinguishment costs | (21,818 | ) | — | |||||||||
Amortization of tax credit and other investments (1) | (36,120 | ) | (44,092 | ) | ||||||||
Amortization of premiums on deposits acquired | (9,234 | ) | (10,204 | ) | ||||||||
Integration and merger related expenses | — | (12,640 | ) | |||||||||
Adjusted noninterest expense | $ | 473,712 | $ | 466,047 | ||||||||
Net interest income before provision for credit losses | $ | 950,439 | $ | 1,040,878 | ||||||||
Noninterest income (loss) | 183,383 | (11,714 | ) | |||||||||
Net interest income and noninterest income (loss) | $ | 1,133,822 | $ | 1,029,164 | ||||||||
Adjusted efficiency ratio | 41.78 | % | 45.28 | % | ||||||||
(1) | Prior year period was restated to reflect the retrospective application of adopting the new accounting guidance related to the Company’s investments in qualified affordable housing projects ASU 2014-01. See Table 11 for additional information. |