EX-99.1 2 ewbc9918k12312022.htm EX-99.1 Document

Exhibit 99.1
ewbclogoa13a.jpg
East West Bancorp, Inc.
135 N. Los Robles Ave., 7th Fl.
Pasadena, CA 91101
Tel. 626.768.6000
NEWS RELEASE
FOR INVESTOR INQUIRIES, CONTACT:
Irene Oh
Julianna Balicka
Chief Financial Officer
Director of Investor Relations and Corporate Finance
T: (626) 768-6360
T: (626) 768-6985
E: irene.oh@eastwestbank.comE: julianna.balicka@eastwestbank.com


EAST WEST BANCORP REPORTS RECORD NET INCOME FOR FULL YEAR 2022
OF $1.1 BILLION AND RECORD DILUTED EARNINGS PER SHARE OF $7.92;
INCREASES DIVIDEND BY 20%


Pasadena, California – January 26, 2023 – East West Bancorp, Inc. (“East West” or the “Company”) (Nasdaq: EWBC), parent company of East West Bank, reported its financial results for the full year and fourth quarter of 2022. Full year 2022 net income was a record $1.1 billion, or $7.92 per diluted share, which grew 30% year-over-year. Fourth quarter 2022 net income was $336.8 million, or $2.37 per diluted share, which grew 56% year-over-year. Total loans reached a record $48.2 billion as of December 31, 2022, up 16% year-over-year, and total deposits grew to a record $56.0 billion, up 5% from a year ago.

“2023 marks the 50th anniversary of East West. I am very proud of the milestones and growth that East West has achieved throughout its history. We have distinguished ourselves with a long, well-established track record of strong financial performance,” stated Dominic Ng, Chairman and Chief Executive Officer of East West. “For the fourth quarter of 2022, we earned an industry-leading 2.1% return on average assets and 25.0% return on average tangible equity1.”

“East West Federal Savings Bank was founded in 1973 with a mission to serve the financial needs of Asian immigrants in Los Angeles, who were overlooked by mainstream banks. As our customers grew and prospered, achieving their personal and business ambitions, so did East West. With over $60 billion in total assets and annual earnings over $1 billion, East West has grown to be the largest independent bank headquartered in Southern California. Our customer base and geographic footprint expanded, along with the breadth and technological sophistication of our lending, deposit, and fee-based products and services. Today, we provide a seamless banking experience for clients on both sides of the Pacific, executing on our vision to be the bridge between the East and the West,” continued Ng.

“In celebrating our 50th anniversary, we are honored to be the bank of choice for our customers, and thankful and proud of all our associates for their dedication to our clients and East West. We are positive about 2023 and expect to continue our track record of outstanding profitability, achieved through solid revenue growth and disciplined expense management, while maintaining healthy capital levels. As we start the year, we are pleased to announce a 20% increase in our common stock dividend,” concluded Ng.











1 Return on average tangible equity is a non-GAAP financial measure. See reconciliation of GAAP to non-GAAP measures in Table 13.

1

FINANCIAL HIGHLIGHTS

Twelve Months EndedYear-over-Year Change
($ in millions, except per share data)December 31, 2022$%
Total Loans$48,228$6,53416%
Total Deposits55,9682,6175
Total Revenue$2,345$52729%
Adj. Pre-tax, Pre-provision Income2
1,60045440
Net Income1,12825529
Diluted Earnings per Share$7.92$1.8230%


BALANCE SHEET

•Record Assets – Total assets reached $64.1 billion as of December 31, 2022, an increase of $1.5 billion or 2.5% from $62.6 billion as of September 30, 2022. Year-over-year, total assets grew $3.2 billion or 5.3% from $60.9 billion as of December 31, 2021.

Fourth quarter 2022 average interest-earning assets of $60.4 billion were up $897.5 million, or 1.5% (6.0% annualized), from $59.5 billion in the third quarter of 2022. Quarter-over-quarter, average loan growth of $752.6 million and growth in interest-bearing cash and deposits with banks of $696.7 million was partially offset by decreases in debt securities and assets purchased under resale agreements.

•Record Loans – Total loans reached $48.2 billion as of December 31, 2022, an increase of $771.3 million, or 1.6% (6.4% annualized), from $47.5 billion as of September 30, 2022. Year-over-year, total loans grew $6.5 billion, or 15.7%, from $41.7 billion as of December 31, 2021.

Fourth quarter 2022 average loans of $47.6 billion grew $752.6 million, or 1.6% (6.4% annualized), from the third quarter. Average loan growth was well-balanced across all our major loan categories of commercial real estate, commercial & industrial, and residential mortgage.

•Record Deposits – Total deposits were $56.0 billion as of December 31, 2022, an increase of $2.1 billion, or 3.9% (15.5% annualized), from $53.9 billion as of September 30, 2022. Year-over-year, deposits grew $2.6 billion, or 4.9%, from $53.4 billion as of December 31, 2021.

Fourth quarter 2022 average deposits of $55.0 billion increased $932.2 million, or 1.7% (6.8% annualized) from the third quarter, driven by growth in time deposits, partially offset by declines in other deposit categories. Growth in time deposits in the fourth quarter reflected a successful branch-based CD campaign. Average noninterest-bearing deposits made up 39% of average total deposits in the fourth quarter of 2022, compared with 41% in the third quarter of 2022 and 44% in the fourth quarter of 2021.

•Strong Capital Levels – As of December 31, 2022, stockholders’ equity was $6.0 billion, or $42.46 per common share, up 5.7% quarter-over-quarter, and tangible equity3 per common share was $39.10, up 6.2% from September 30, 2022. As of December 31, 2022, the stockholders’ equity to assets ratio was 9.33%, an increase of 28 basis points quarter-over-quarter, and the tangible equity to tangible assets ratio3 was 8.66%, an increase of 31 basis points quarter-over-quarter. The common equity tier 1 (“CET1”) capital ratio was 12.7%, and the total risk-based capital ratio was 14.0% as of December 31, 2022; all regulatory capital ratios expanded quarter-over-quarter.

•Dividend Increase – The first quarter 2023 common stock dividend was increased by 20%, or eight cents per share. The new quarterly dividend is $0.48 per share, up from $0.40 per share. The new annual dividend is $1.92 per share, compared with $1.60 per share previously.





2 Adjusted pre-tax, pre-provision income is a non-GAAP financial measure. See reconciliation of GAAP to non-GAAP measures in Table 12.
3 Tangible equity and the tangible equity to tangible assets ratio are non-GAAP financial measures. See reconciliation of GAAP to non-GAAP measures in Table 13.
2

OPERATING RESULTS

Full Year Earnings – Full year 2022 net income was $1.1 billion, an increase of 29.2% from $873.0 million for the full year 2021. Full year 2022 diluted earnings per share were $7.92, an increase of 29.8% from $6.10 per diluted share for the full year 2021.

Fourth Quarter Earnings – Fourth quarter 2022 net income was $336.8 million, an increase of 14.0% (55.6% annualized) from $295.3 million for the third quarter of 2022, and an increase of 54.6% from $217.8 million for the fourth quarter of 2021. Fourth quarter 2022 diluted earnings per share were $2.37, an increase of 13.9% (55.2% annualized) from $2.08 per diluted share for the third quarter 2022, and an increase of 55.9% from $1.52 per diluted share for the year-ago quarter.

Fourth Quarter 2022 Compared to Third Quarter 2022

Net Interest Income and Net Interest Margin
Record net interest income (“NII”) totaled $605.5 million, an increase of 9.7% (38.6% annualized) from $551.8 million. Net interest margin (“NIM”) of 3.98% expanded 30 basis points from 3.68%.
•NII growth and NIM expansion were driven by higher earning asset yields, partially offset by higher cost of funds.
•The average loan yield was 5.59%, up 84 basis points from the third quarter. The average interest-earning asset yield was 5.00%, up 81 basis points from the third quarter. Average loans made up 79% of average interest-earning assets in the fourth quarter of 2022, essentially unchanged from the third quarter of 2022.
•The average cost of funds was 1.11%, up 56 basis points from the third quarter. The average cost of deposits was 1.06%, up 55 basis points, and the average cost of interest-bearing deposits was 1.74%, up 88 basis points from the third quarter.
•The changes in yields and rates reflected rising benchmark interest rates.

Noninterest Income
Noninterest income totaled $64.9 million in the fourth quarter, a decrease of $10.6 million, or 14.1%, from $75.6 million in the third quarter.
•Fee income and net gains on sales of loans were $66.0 million, a decrease of $3.1 million, or 4.5% (17.7% annualized), from $69.0 million in the third quarter.
•Interest rate contracts (“IRC”) and other derivative income was a loss of $0.6 million in the fourth quarter, compared with income of $8.8 million in the third quarter. The quarter-over-quarter decrease of $9.4 million was due to an unfavorable change in the credit valuation adjustment. The mark-to-market on IRC and other derivatives was $(4.6) million in the fourth quarter, compared with $4.8 million in the third quarter. Customer-driven IRC revenue of $4.0 million in the fourth quarter was essentially unchanged from the third quarter.

Noninterest Expense
Noninterest expense totaled $257.1 million in the fourth quarter, compared with $216.0 million in the third quarter. Fourth quarter noninterest expense consisted of $192.1 million of adjusted noninterest expense4, $64.6 million in amortization of tax credit and other investments, and $0.4 million in amortization of core deposit intangibles.
•Adjusted noninterest expense of $192.1 million decreased $3.5 million, or 1.8% (7.1% annualized), from $195.6 million in the third quarter, largely driven by lower compensation and employee benefits expense.
•Amortization of tax credit and other investments totaled $64.6 million in the fourth quarter, compared with $19.9 million in the third quarter. Quarter-over-quarter variability in the amortization of tax credits and other investments partially reflects the impact of investments that close in a given period.
•The adjusted efficiency ratio4 was 28.7% in the fourth quarter, compared with 31.2% in the third quarter.

TAX RELATED ITEMS

Full year 2022 income tax expense was $283.6 million, and the effective tax rate was 20.1%, compared with income tax expense of $183.4 million and an effective tax rate of 17.4% for the full year 2021. Fourth quarter 2022 income tax expense was $51.6 million, and the effective tax rate was 13.3%, compared with income tax expense of $89.0 million and an effective tax rate of 23.2% for the third quarter of 2022.





4 Adjusted noninterest expense and the adjusted efficiency ratio are non-GAAP financial measures. See reconciliation of GAAP to non-GAAP measures in Table 12.
3

ASSET QUALITY

The asset quality of our loan portfolio continued to be solid and stable, with decreases in both classified and special mention loans, as well as very low nonperforming asset and net charge-off ratios. Provision for credit losses was $25.0 million for the fourth quarter of 2022, compared with $27.0 million for the third quarter of 2022.
•Criticized loans decreased $9.2 million, or 1.0%, quarter-over-quarter to $896.0 million as of December 31, 2022, down from $905.2 million as of September 30, 2022. Classified loans decreased 1.6% quarter-over-quarter to $427.5 million, and special mention loans decreased 0.5% to $468.5 million.
•The criticized loans ratio decreased five basis points quarter-over-quarter to 1.86% of loans held-for-investment (“HFI”) as of December 31, 2022, down from 1.91% as of September 30, 2022. The classified loans ratio decreased three basis points quarter-over-quarter to 0.89%, and the special mention loans ratio decreased two basis points to 0.97%.
•As of December 31, 2022, nonperforming assets were $99.8 million, or 0.16% of total assets, compared with $97.0 million, or 0.16% of total assets, as of September 30, 2022.
•Fourth quarter 2022 net charge-offs were $10.1 million, or annualized 0.08% of average loans HFI, compared with net charge-offs of $6.6 million, or annualized 0.06% of average loans HFI, for the third quarter of 2022.
•The allowance for loan losses totaled $595.6 million, or 1.24% of loans HFI, as of December 31, 2022, compared with $582.5 million, or 1.23% of loans HFI, as of September 30, 2022.

CAPITAL STRENGTH

Capital levels for East West are strong. The following table presents the regulatory capital metrics as of December 31, 2022, September 30, 2022 and December 31, 2021.
EWBC Risk-Based Capital Ratios
($ in millions)December 31, 2022 (a)September 30, 2022 (a)December 31, 2021 (a)
CET1 capital ratio12.7%12.3%12.8%
Tier 1 capital ratio12.7%12.3%12.8%
Total capital ratio14.0%13.6%14.1%
Leverage ratio9.8%9.6%9.0%
Risk-Weighted Assets (“RWA”) (b)
$50,087$49,266$43,585
(a)The Company has elected to use the 2020 CECL transition provision in the calculation of its December 31, 2022, September 30, 2022 and December 31, 2021 regulatory capital ratios. The Company’s December 31, 2022 regulatory capital ratios and RWA are preliminary.
(b)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 based on the nature 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.

DIVIDEND PAYOUT AND CAPITAL ACTIONS

East West’s Board of Directors has declared first quarter 2023 dividends for the Company’s common stock. The common stock cash dividend of $0.48 per share is payable on February 21, 2023, to stockholders of record on February 6, 2023. This represents a 20% increase, or eight cents per share, to the quarterly common stock dividend, up from $0.40 per share previously. The new annual dividend is $1.92 per share, compared with $1.60 per share previously.

On March 3, 2020, East West’s Board of Directors authorized the repurchase of up to $500 million of East West’s common stock, of which $254 million remains available. East West did not repurchase any shares during the fourth quarter of 2022.










4

Conference Call
East West will host a conference call to discuss fourth quarter and full year 2022 earnings with the public on Thursday, January 26, 2023, at 8:30 a.m. PT/11:30 a.m. ET. The public and investment community are invited to listen as management discusses fourth quarter and full year 2022 results and operating developments.
•The following dial-in information is provided for participation in the conference call: calls within the U.S. – (877) 506-6399; calls within Canada – (855) 669-9657; international calls – (412) 902-6699.
•A presentation to accompany the earnings call will be available on the Investor Relations page of the Company’s website at www.eastwestbank.com/investors.
•A listen-only live broadcast of the call will also be available on the Investor Relations page of the Company’s website at www.eastwestbank.com/investors.
•A replay of the conference call will be available on January 26, 2023, at 11:30 a.m. PT/2:30 p.m. ET through February 26, 2023. The replay numbers are: within the U.S. – (877) 344-7529; within Canada – (855) 669-9658; international calls – (412) 317-0088; and the replay access code is: 4372128.












































5

About East West

East West Bancorp, Inc. is a public company with total assets of $64.1 billion and is traded on the Nasdaq Global Select Market under the symbol “EWBC”. The Company’s wholly-owned subsidiary, East West Bank, is the largest independent bank headquartered in Southern California, operating over 120 locations in the United States and in Asia. The Company’s markets in the United States include California, Georgia, Illinois, Massachusetts, Nevada, New York, Texas and Washington. In China, East West’s presence includes full-service branches in Hong Kong, Shanghai, Shantou and Shenzhen, and representative offices in Beijing, Chongqing, Guangzhou, and Xiamen. East West also has a representative office in Singapore. For more information on East West, visit the Company’s website at www.eastwestbank.com.

Forward-Looking Statements

Certain matters set forth herein (including any exhibits hereto) contain forward-looking statements that are intended to be covered by the safe harbor for such statements provided by the Private Securities Litigation Reform Act of 1995. In addition, the Company may make forward-looking statements in other documents that it files with, or furnishes to, the U.S. Securities and Exchange Commission (“SEC”) and management may make forward-looking statements to analysts, investors, media members and others. Forward-looking statements are those that do not relate to historical facts and that are based on current expectations, beliefs, estimates, assumptions and projections, many of which, by their nature, are inherently uncertain and beyond the Company’s control. Forward-looking statements may relate to various matters, including the Company’s financial condition, results of operations, plans, objectives, future performance, business or industry, and usually can be identified by the use of forward-looking words, such as “anticipates,” “assumes,” “believes,” “can,” “continues,” “could,” “estimates,” “expects,” “forecasts,” “goal,” “intends,” “likely,” “may,” “might,” “objective,” “plans,” “potential,” “projects,” “remains,” “should,” “target,” “trend,” “will,” “would,” or similar expressions or variations thereof, and the negative thereof, but these terms are not the exclusive means of identifying such statements. You should not place undue reliance on forward-looking statements, as they are subject to risks and uncertainties, including, but not limited to, those described below. When considering these forward-looking statements, you should keep in mind these risks and uncertainties, as well as any cautionary statements the Company may make.

There are various important factors that could cause future results to differ materially from historical performance and any forward-looking statements. Factors that might cause such differences, include, but are not limited to: changes in the global economy, including an economic slowdown, capital or financial market disruption, supply chain disruption, level of inflation, interest rate environment, housing prices, employment levels, rate of growth and general business conditions, which could result in, among other things, reduced demand for loans, reduced availability of funding or increases in funding costs, declines in asset values and /or recognition of allowance for credit losses on securities held in the Company’s portfolio; changes in local, regional and global business, economic and political conditions and geopolitical events, such as the military conflict between Russia and Ukraine; the economic, financial, reputational and other impacts of the ongoing Coronavirus Disease 2019 (“COVID-19”) pandemic, including variants thereof, and any other pandemic, epidemic or health-related crisis; changes in laws or the regulatory environment, including regulatory reform initiatives and policies of the U.S. Department of the Treasury, the Board of Governors of the Federal Reserve System (“Federal Reserve”), the Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency, the SEC, the Consumer Financial Protection Bureau and the California Department of Financial Protection and Innovation - Division of Financial Institutions; changes and effects thereof in trade, monetary and fiscal policies and laws, including the ongoing trade, economic and political disputes between the U.S. and the People’s Republic of China and the monetary policies of the Federal Reserve; changes in the commercial and consumer real estate markets; changes in consumer or commercial spending, savings and borrowing habits, and patterns and behaviors; the impact from potential changes to income tax laws and regulations, federal spending and economic stimulus programs; the impact of any future federal government shutdown and uncertainty regarding the federal government’s debt limit; the Company’s ability to compete effectively against financial institutions and other entities, including as a result of emerging technologies; the soundness of other financial institutions; the success and timing of the Company’s business strategies; the Company’s ability to retain key officers and employees; impact on the Company’s funding costs, net interest income and net interest margin from changes in key variable market interest rates, competition, regulatory requirements and the Company’s product mix; changes in the Company’s costs of operation, compliance and expansion; the Company’s ability to adopt and successfully integrate new technologies into its business in a strategic manner; the impact of the benchmark interest rate reform in the U.S. including the transition away from the U.S. dollar (“USD”) London Interbank Offered Rate (“LIBOR”) to alternative reference rates; the impact of communications or technology disruption, failure in, or breach of, the Company’s operational or security systems or infrastructure, or those of third party vendors with which the Company does business, including as a result of cyber-attacks; and other similar matters which could result in, among other things, confidential and/or proprietary information being disclosed or misused, and materially impact the Company’s ability to provide services to its clients; the adequacy of the Company’s risk management framework, disclosure controls and procedures and internal control over financial reporting; future credit quality and performance, including the Company’s expectations regarding future credit losses and allowance levels; the impact of adverse changes to the Company’s credit ratings from major credit rating agencies; the impact of adverse judgments or settlements in litigation; the impact on the Company’s operations due to political developments, pandemics, wars, civil unrest, terrorism or other hostilities that may disrupt or increase volatility in securities or otherwise affect business and economic conditions; heightened regulatory and governmental oversight and scrutiny of the Company’s business practices, including dealings with consumers; the impact of reputational risk from negative publicity, fines, penalties and other negative consequences from regulatory violations, legal actions and the Company’s interactions with business partners, counterparties, service providers and other third parties; the impact of regulatory investigations and enforcement actions; changes in accounting standards as may be required by the Financial Accounting Standards Board or other regulatory agencies and their impact on critical accounting policies and assumptions; the Company’s capital requirements and its ability to generate capital internally or raise capital on favorable terms; the impact on the Company’s liquidity due to changes in the Company’s ability to receive dividends from its subsidiaries; any strategic acquisitions or divestitures; changes in the equity and debt securities markets; fluctuations in the Company’s stock price; fluctuations in foreign currency exchange rates; the impact of increased focus on social, environmental and sustainability matters, which may affect the Company’s operations as well as those of its customers and the economy more broadly; and the impact of climate change, natural or man-made disasters or calamities, such as wildfires, droughts and earthquakes, all of which are particularly common in California, or other events that may directly or indirectly result in a negative impact on the Company’s financial performance.

For a more detailed discussion of some of the factors that might cause such differences, see the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 under the heading Item 1A. Risk Factors and the information set forth under Item 1A. Risk Factors in the Company’s Quarterly Reports on Form 10-Q. You should treat forward-looking statements as speaking only as of the date they are made and then actually known to the Company. The Company does not undertake, and specifically disclaims any obligation to update or revise any forward-looking statements to reflect the occurrence of events or circumstances after the date of such statements except as required by law.
6

EAST WEST BANCORP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
($ and shares in thousands, except per share data)
(unaudited)
Table 1   
December 31, 2022
% or Basis Point Change
 December 31, 2022September 30, 2022December 31, 2021Qtr-o-QtrYr-o-Yr
Assets   
 Cash and due from banks$534,980$554,260$527,317(3.5)%1.5 %
Interest-bearing cash with banks2,946,8041,609,0933,385,61883.1 (13.0)
Cash and cash equivalents3,481,7842,163,3533,912,93560.9 (11.0)
 Interest-bearing deposits with banks139,021630,543736,492(78.0)(81.1)
 Assets purchased under resale agreements (“resale agreements”)792,192892,9862,353,503(11.3)(66.3)
 
Available-for-sale (“AFS”) debt securities (amortized cost of $6,879,225, $6,771,354 and $10,087,179)
6,034,9935,906,0909,965,3532.2 (39.4)
Held-to-maturity (“HTM”) debt securities, at amortized cost (fair value of $2,455,171 and $2,459,135 in 2022)
3,001,8683,012,667—(0.4)100.0 
 Loans held-for-sale (“HFS”)25,64414,50063576.9 
NM
 
Loans held-for-investment (''HFI'') (net of allowance for loan losses of $595,645, $582,517 and $541,579)
47,606,78546,859,73841,152,2021.6 15.7 
Investments in qualified affordable housing partnerships, tax credit and other investments, net763,256725,254628,2635.2 21.5 
 Goodwill465,697465,697465,697— — 
Operating lease right-of-use assets103,681105,41198,632(1.6)5.1 
 Other assets 1,697,2291,799,8221,556,989(5.7)9.0 
 Total assets $64,112,150$62,576,061$60,870,7012.5 %5.3 %
Liabilities and Stockholders’ Equity   
 Deposits$55,967,849$53,857,362$53,350,5323.9 %4.9 %
Federal funds purchased—200,000—(100.0)— 
 FHLB advances—324,920249,331(100.0)(100.0)
 Assets sold under repurchase agreements (“repurchase agreements”)300,000611,785300,000(51.0)— 
 Long-term debt and finance lease liabilities152,400152,610151,997(0.1)0.3 
Operating lease liabilities 111,931113,477105,534(1.4)6.1 
 Accrued expenses and other liabilities1,595,3581,655,239876,089(3.6)82.1 
 Total liabilities58,127,53856,915,39355,033,4832.1 5.6 
 Stockholders’ equity5,984,6125,660,6685,837,2185.7 2.5 
 Total liabilities and stockholders’ equity $64,112,150$62,576,061$60,870,7012.5 %5.3 %
 Book value per common share $42.46$40.17$41.135.7 %3.2 %
 
Tangible equity (1) per common share
$39.10$36.80$37.796.2 3.5 
 Number of common shares at period-end140,948140,918141,9080.0 (0.7)
Total stockholders’ equity to total assets ratio9.33 %9.05 %9.59 %28 bps(26)bps
Tangible equity to tangible assets ratio (1)
8.66 %8.35 %8.88 %31 bps(22)bps
NM - Not meaningful.
(1)Tangible equity and the tangible equity to tangible assets ratio are non-GAAP financial measures. See reconciliation of GAAP to non-GAAP measures in Table 13.
7

EAST WEST BANCORP, INC. AND SUBSIDIARIES
TOTAL LOANS AND DEPOSITS DETAIL
($ in thousands)
(unaudited)
Table 2
December 31, 2022
% Change
  December 31, 2022September 30, 2022December 31, 2021Qtr-o-QtrYr-o-Yr
Loans:   
Commercial:
Commercial and industrial (“C&I”) (1)
$15,711,095 $15,625,072 $14,150,608 0.6 %11.0 %
Commercial real estate (“CRE”):
 
CRE
13,857,870 13,573,157 12,155,047 2.1 14.0 
 
Multifamily residential
4,573,068 4,559,302 3,675,605 0.3 24.4 
 
Construction and land
638,420 556,894 346,486 14.6 84.3 
Total CRE
19,069,358 18,689,353 16,177,138 2.0 17.9 
Consumer:
Residential mortgage:
 
Single-family residential
11,223,027 10,855,345 9,093,702 3.4 23.4 
 
Home equity lines of credit (“HELOCs”)2,122,655 2,184,924 2,144,821 (2.8)(1.0)
Total residential mortgage
13,345,682 13,040,269 11,238,523 2.3 18.7 
Other consumer
76,295 87,561 127,512 (12.9)(40.2)
Total loans HFI (2)
48,202,430 

47,442,255 

41,693,781 1.6 15.6 
Loans HFS
25,644 14,500 635 76.9 
NM
 
Total loans (2)
48,228,074 47,456,755 41,694,416 1.6 15.7 
Allowance for loan losses(595,645)(582,517)(541,579)2.3 10.0 
 
Net loans (2)
$47,632,429 $46,874,238 $41,152,837 1.6 15.7 
Deposits:
   
 
Noninterest-bearing demand
$21,051,090 $21,645,394 $22,845,464 (2.7)%(7.9)%
 
Interest-bearing checking
6,672,165 6,822,343 6,524,721 (2.2)2.3 
 
Money market
12,265,024 12,113,292 13,130,300 1.3 (6.6)
 
Savings
2,649,037 2,917,770 2,888,065 (9.2)(8.3)
 
Time deposits
13,330,533 10,358,563 7,961,982 28.7 67.4 
 
Total deposits
$55,967,849 $53,857,362 $53,350,532 3.9 %4.9 %
NM - Not meaningful.
(1)Includes $99.0 million, $110.9 million and $534.2 million of Paycheck Protection Program (“PPP”) loans as of December 31, 2022, September 30, 2022 and December 31, 2021, respectively. Excluding PPP loans, total loans were $48.13 billion, $47.35 billion and $41.16 billion as of December 31, 2022, September 30, 2022 and December 31, 2021, respectively.
(2)Includes $(70.4) million, $(60.3) million and $(50.7) million of net deferred loan fees and net unamortized premiums as of December 31, 2022, September 30, 2022 and December 31, 2021, respectively.

8

EAST WEST BANCORP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF INCOME
($ and shares in thousands, except per share data)
(unaudited)
Table 3
Three Months Ended
December 31, 2022
% Change
December 31, 2022September 30, 2022December 31, 2021Qtr-o-QtrYr-o-Yr
Interest and dividend income (1)
$761,212 $628,236 $422,708 21.2 %80.1 %
Interest expense
155,705 76,427 17,011 103.7 815.3 
Net interest income before provision for (reversal of) credit losses605,507 551,809 405,697 9.7 49.3 
Provision for (reversal of) credit losses25,000 27,000 (10,000)(7.4)
NM
Net interest income after provision for (reversal of) credit losses580,507 524,809 415,697 10.6 39.6 
Noninterest income64,927 75,552 71,489 

(14.1)(9.2)
Noninterest expense257,110 215,973 210,105 19.0 22.4 
Income before income taxes
388,324 384,388 277,081 1.0 40.1 
Income tax expense
51,561 89,049 59,285 (42.1)(13.0)
Net income
$336,763 $295,339 $217,796 14.0 %54.6 %
Earnings per share (“EPS”)
   
- Basic
$2.39 $2.10 $1.53 14.0 %55.7 %
- Diluted
$2.37 $2.08 $1.52 13.9 55.9 
Weighted-average number of shares outstanding
- Basic
140,947 140,917 141,907 0.0 %(0.7)%
- Diluted
142,138 142,011 143,323 0.1 (0.8)
 
 
Three Months Ended
December 31, 2022
% Change
 
 
December 31, 2022September 30, 2022December 31, 2021Qtr-o-QtrYr-o-Yr
Noninterest income:
   
 
Lending fees
$19,339 $20,289 $20,739 (4.7)%(6.8)%
Deposit account fees22,112 23,636 20,028 (6.4)10.4 
Interest rate contracts and other derivative (loss) income(638)8,761 1,932 
NM
NM
 
Foreign exchange income
14,015 10,083 13,343 39.0 5.0 
 
Wealth management fees
6,071 8,903 5,291 (31.8)14.7 
 
Net gains on sales of loans
443 2,129 2,308 (79.2)(80.8)
 
Gains on sales of AFS debt securities
— — 390 — (100.0)
Other investment income (loss) 1,127 (580)2,982 
NM
(62.2)
Other income
2,458 2,331 4,476 5.4 (45.1)
Total noninterest income$64,927 $75,552 $71,489 (14.1)%(9.2)%
Noninterest expense:
   
 
Compensation and employee benefits
$120,422 $127,580 $114,743 (5.6)%4.9 %
 
Occupancy and equipment expense
15,648 15,920 15,846 (1.7)(1.2)
 
Deposit insurance premiums and regulatory assessments
4,930 4,875 4,772 1.1 3.3 
Deposit account expense8,437 6,707 4,307 25.8 95.9 
Data processing3,641 3,725 4,175 (2.3)(12.8)
Computer software expense7,504 6,889 7,494 8.9 0.1 
 
Other operating expense
31,923 30,403 26,968 5.0 18.4 
Amortization of tax credit and other investments64,605 19,874 31,800 225.1 103.2 
Total noninterest expense$257,110 $215,973 $210,105 19.0 %22.4 %
NM - Not meaningful.
(1)Includes $293 thousand, $524 thousand and $9.6 million of interest income related to PPP loans for the three months ended December 31, 2022, September 30, 2022 and December 31, 2021, respectively.

9

EAST WEST BANCORP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF INCOME
($ and shares in thousands, except per share data)
(unaudited)
Table 4
 Year Ended
December 31, 2022
% Change
  December 31, 2022December 31, 2021Yr-o-Yr
Interest and dividend income (1)
$2,321,231 $1,618,734 43.4%
Interest expense
275,350 87,163 215.9
Net interest income before provision for (reversal of) credit losses2,045,881 1,531,571 33.6
Provision for (reversal of) credit losses73,500 (35,000)NM
Net interest income after provision for (reversal of) credit losses1,972,381 1,566,571 25.9
Noninterest income 298,666 285,895 4.5
Noninterest expense859,393 796,089 8.0
Income before income taxes
1,411,654 1,056,377 33.6
Income tax expense
283,571 183,396 54.6
Net income
$1,128,083 $872,981 29.2%
EPS
  
- Basic
$7.98 $6.16 29.7%
- Diluted
$7.92 $6.10 29.8
Weighted-average number of shares outstanding
- Basic
141,326 141,826 (0.4)%
- Diluted
142,492 143,140 (0.5)
 
 
Year EndedDecember 31, 2022
% Change
 
 
December 31, 2022December 31, 2021Yr-o-Yr
Noninterest income:
  
 
Lending fees
$79,208 $77,704 1.9%
 
Deposit account fees
88,435 71,261 24.1
Interest rate contracts and other derivative income29,057 22,913 26.8
 
Foreign exchange income
48,158 48,977 (1.7)
 
Wealth management fees
27,565 25,751 7.0
 
Net gains on sales of loans
6,411 8,909 (28.0)
 
Gains on sales of AFS debt securities1,306 1,568 (16.7)
Other investment income7,037 16,852 (58.2)
Other income
11,489 11,960 (3.9)
Total noninterest income$298,666 $285,895 4.5%
Noninterest expense:
  
 
Compensation and employee benefits
$477,635 $433,728 10.1%
 
Occupancy and equipment expense
62,501 62,996 (0.8)
 
Deposit insurance premiums and regulatory assessments
19,449 17,563 10.7
Deposit account expense25,508 16,152 57.9
Data processing
14,517 16,263 (10.7)
Computer software expense
28,259 30,600 (7.7)
 
Other operating expense
118,166 96,330 22.7
Amortization of tax credit and other investments113,358 122,457 (7.4)
Total noninterest expense$859,393 $796,089 8.0%
NM - Not meaningful.
(1)Includes $7.3 million and $55.2 million of interest income related to PPP loans for the years ended December 31, 2022 and 2021, respectively.
10

EAST WEST BANCORP, INC. AND SUBSIDIARIES
SELECTED AVERAGE BALANCES
($ in thousands)
(unaudited)
Table 5
Three Months Ended
December 31, 2022
% Change
Year Ended
December 31, 2022
% Change
  December 31,
2022		September 30,
2022		December 31,
2021		Qtr-o-QtrYr-o-YrDecember 31,
2022		December 31,
2021		Yr-o-Yr
Loans:
     
Commercial:
 
C&I (1)
$15,496,386 $15,282,661 $13,592,203 1.4%14.0%$15,013,560 $13,656,720 9.9%
CRE:
 
CRE
13,699,042 13,533,482 11,954,535 1.214.613,145,204 11,663,144 12.7
 
Multifamily residential4,604,628 4,531,351 3,434,274 1.634.14,252,605 3,213,582 32.3
 
Construction and land591,962 532,800 340,940 11.173.6499,044 445,333 12.1
Total CRE
18,895,632 18,597,633 15,729,749 1.620.117,896,853 15,322,059 16.8
Consumer:
Residential mortgage:
 
Single-family residential10,988,102 10,676,022 9,031,677 2.921.710,106,609 8,742,565 15.6
 
HELOCs
2,145,416 2,216,355 2,052,383 (3.2)4.52,208,725 1,859,073 18.8
Total residential mortgage13,133,518 12,892,377 11,084,060 1.918.512,315,334 10,601,638 16.2
Other consumer
81,596 81,870 126,557 (0.3)(35.5)93,711 136,280 (31.2)
 
Total loans (2)
$47,607,132 $46,854,541 $40,532,569 1.6%17.5%$45,319,458 $39,716,697 14.1%
Interest-earning assets
$60,376,151 $59,478,689 $58,944,082 1.5%2.4%$59,309,062 $56,256,388 5.4%
Total assets
$64,252,730 $63,079,444 $62,183,137 1.9%3.3%$62,838,282 $59,251,091 6.1%
Deposits:     
Noninterest-bearing demand
$21,419,290 $22,423,633 $24,019,333 (4.5)%(10.8)%$22,784,258 $21,271,410 7.1%
Interest-bearing checking
6,543,349 6,879,632 6,462,471 (4.9)1.36,696,200 6,543,817 2.3
Money market
12,197,782 12,351,571 12,920,174 (1.2)(5.6)12,443,437 12,428,025 0.1
Savings
2,747,166 2,961,634 2,841,352 (7.2)(3.3)2,901,940 2,746,933 5.6
Time deposits
12,076,193 9,435,063 8,072,917 28.049.69,473,744 8,493,511 11.5
Total deposits
$54,983,780 $54,051,533 $54,316,247 1.7%1.2%$54,299,579 $51,483,696 5.5%
Interest-bearing liabilities$34,372,853 $32,703,323 $31,011,536 5.1%10.8%$32,322,744 $31,077,459 4.0%
Stockholders’ equity
$5,834,623 $5,772,638 $5,786,237 1.1%0.8%$5,783,025 $5,559,212 4.0%
(1)Average balances of PPP loans were $104.6 million, $127.6 million and $677.2 million for the three months ended December 31, 2022, September 30, 2022 and December 31, 2021, respectively, and $215.4 million and $1.39 billion for the years ended December 31, 2022 and 2021, respectively.
(2)Includes loans HFS.

11

EAST WEST BANCORP, INC. AND SUBSIDIARIES
QUARTER-TO-DATE AVERAGE BALANCES, YIELDS AND RATES
($ in thousands)
(unaudited)
Table 6
 
 
Three Months Ended
 
 
December 31, 2022September 30, 2022
 
 
Average Average Average Average
 
 
BalanceInterest
Yield/Rate (1)
BalanceInterest
Yield/Rate (1)
Assets
      
Interest-earning assets:
      
 
Interest-bearing cash and deposits with banks
$2,983,726 $23,986 3.19 %$2,287,010 $9,080 1.58 %
 
Resale agreements833,170 6,062 2.89 %1,037,292 6,769 2.59 %
 
AFS debt securities5,869,336 46,224 3.12 %6,204,729 38,383 2.45 %
HTM debt securities3,004,412 12,747 1.68 %3,017,063 12,709 1.67 %
 
Loans (2)
47,607,132 671,323 5.59 %46,854,541 560,452 4.75 %
 
FHLB and FRB stock
78,375 870 4.40 %78,054 843 4.28 %
 
Total interest-earning assets
60,376,151 761,212 5.00 %59,478,689 628,236 4.19 %
Noninterest-earning assets:
      
 
Cash and due from banks
640,509 615,836   
 
Allowance for loan losses(583,271)(566,369)  
 
Other assets
3,819,341 3,551,288   
 
Total assets
$64,252,730   $63,079,444   
Liabilities and Stockholders’ Equity     
Interest-bearing liabilities:
      
 
Checking deposits
$6,543,349 $16,735 1.01 %$6,879,632 $8,493 0.49 %
 
Money market deposits
12,197,782 62,246 2.02 %12,351,571 33,101 1.06 %
 
Savings deposits
2,747,166 2,714 0.39 %2,961,634 2,268 0.30 %
 
Time deposits
12,076,193 65,772 2.16 %9,435,063 25,032 1.05 %
 
Federal funds purchased and other short-term borrowings
47,142 374 3.15 %211,794 1,177 2.20 %
 
FHLB advances
40,178 225 2.22 %86,243 392 1.80 %
 
Repurchase agreements568,520 5,507 3.84 %624,821 4,421 2.81 %
 
Long-term debt and finance lease liabilities
152,523 2,132 5.55 %152,565 1,543 4.01 %
 
Total interest-bearing liabilities
34,372,853 155,705 1.80 %32,703,323 76,427 0.93 %
Noninterest-bearing liabilities and stockholders’ equity:
     
 
Demand deposits
21,419,290 22,423,633 
 
Accrued expenses and other liabilities
2,625,964 2,179,850 
 
Stockholders’ equity
5,834,623 5,772,638 
 
Total liabilities and stockholders’ equity
$64,252,730 $63,079,444 
Interest rate spread
 3.20 %3.26 %
Net interest income and net interest margin $605,507 3.98 %$551,809 3.68 %
(1)Annualized.
(2)Includes loans HFS. Average balances of PPP loans were $104.6 million and $127.6 million for the three months ended December 31, 2022 and September 30, 2022, respectively.

12

EAST WEST BANCORP, INC. AND SUBSIDIARIES
QUARTER-TO-DATE AVERAGE BALANCES, YIELDS AND RATES
($ in thousands)
(unaudited)
Table 7
 Three Months Ended
December 31, 2022December 31, 2021
Average Average Average Average
BalanceInterest
Yield/Rate (1)
BalanceInterest
Yield/Rate (1)
Assets
      
Interest-earning assets:
      
 
Interest-bearing cash and deposits with banks
$2,983,726 $23,986 3.19 %$6,050,870 $3,750 0.25 %
 
Resale agreements833,170 6,062 2.89 %2,440,636 9,162 1.49 %
 
AFS debt securities5,869,336 46,224 3.12 %9,842,691 42,367 1.71 %
HTM debt securities3,004,412 12,747 1.68 %— — — %
 
Loans (2)
47,607,132 671,323 5.59 %40,532,569 366,936 3.59 %
 
FHLB and FRB stock
78,375 870 4.40 %77,316 493 2.53 %
 
Total interest-earning assets
60,376,151 761,212 5.00 %58,944,082 422,708 2.85 %
Noninterest-earning assets:
      
 
Cash and due from banks
640,509 652,126   
 
Allowance for loan losses(583,271)(558,645)  
 
Other assets
3,819,341 3,145,574   
 
Total assets
$64,252,730   $62,183,137   
Liabilities and Stockholders’ Equity
     
Interest-bearing liabilities:
      
 
Checking deposits
$6,543,349 $16,735 1.01 %$6,462,471 $1,846 0.11 %
 
Money market deposits
12,197,782 62,246 2.02 %12,920,174 3,172 0.10 %
 
Savings deposits
2,747,166 2,714 0.39 %2,841,352 1,734 0.24 %
 
Time deposits
12,076,193 65,772 2.16 %8,072,917 6,617 0.33 %
 
Federal funds purchased and other short-term borrowings
47,142 374 3.15 %730 — — %
 
FHLB advances
40,178 225 2.22 %249,048 856 1.36 %
 
Repurchase agreements568,520 5,507 3.84 %313,075 2,018 2.56 %
 
Long-term debt and finance lease liabilities
152,523 2,132 5.55 %151,769 768 2.01 %
 
Total interest-bearing liabilities
34,372,853 155,705 1.80 %31,011,536 17,011 0.22 %
Noninterest-bearing liabilities and stockholders’ equity:
      
 
Demand deposits
21,419,290 24,019,333 
 
Accrued expenses and other liabilities
2,625,964 1,366,031 
 
Stockholders’ equity
5,834,623 5,786,237 
 
Total liabilities and stockholders’ equity
$64,252,730 $62,183,137 
Interest rate spread
 3.20 %2.63 %
Net interest income and net interest margin
 $605,507 3.98 %$405,697 2.73 %
(1)Annualized.
(2)Includes loans HFS. Average balances of PPP loans were $104.6 million and $677.2 million for the three months ended December 31, 2022 and December 31, 2021, respectively.

13

EAST WEST BANCORP, INC. AND SUBSIDIARIES
YEAR-TO-DATE AVERAGE BALANCES, YIELDS AND RATES
($ in thousands)
(unaudited)
Table 8
 Year Ended
December 31, 2022December 31, 2021
Average Average Average Average
BalanceInterestYield/RateBalanceInterestYield/Rate
Assets
      
Interest-earning assets:
      
 
Interest-bearing cash and deposits with banks
$3,127,234 $41,113 1.31 %$6,071,896 $15,531 0.26 %
 
Resale agreements1,398,080 29,767 2.13 %2,107,157 32,239 1.53 %
 
AFS debt securities6,629,945 152,514 2.30 %8,281,234 143,983 1.74 %
HTM debt securities2,756,382 46,392 1.68 %— — — %
 
Loans (1)
45,319,458 2,048,301 4.52 %39,716,697 1,424,900 3.59 %
 
FHLB and FRB stock
77,963 3,144 4.03 %79,404 2,081 2.62 %
 
Total interest-earning assets
59,309,062 2,321,231 3.91 %56,256,388 1,618,734 2.88 %
Noninterest-earning assets:
      
 
Cash and due from banks
652,673 615,255   
 
Allowance for loan losses
(559,746)(592,211)  
 
Other assets
3,436,293 2,971,659   
 
Total assets
$62,838,282 $59,251,091   
Liabilities and Stockholders’ Equity
     
Interest-bearing liabilities:
      
 
Checking deposits
$6,696,200 $29,808 0.45 %$6,543,817 $13,023 0.20 %
 
Money market deposits
12,443,437 107,442 0.86 %12,428,025 15,041 0.12 %
 
Savings deposits
2,901,940 8,550 0.29 %2,746,933 7,496 0.27 %
 
Time deposits
9,473,744 106,038 1.12 %8,493,511 33,599 0.40 %
 
Federal funds purchased and other short-term borrowings
81,719 1,801 2.20 %1,584 42 2.65 %
 
FHLB advances
105,966 1,754 1.66 %404,789 6,881 1.70 %
 
Repurchase agreements467,413 14,362 3.07 %306,845 7,999 2.61 %
 
Long-term debt and finance lease liabilities
152,325 5,595 3.67 %151,955 

3,082 2.03 %
 
Total interest-bearing liabilities
32,322,744 275,350 0.85 %31,077,459 87,163 0.28 %
Noninterest-bearing liabilities and stockholders’ equity:
 
Demand deposits
22,784,258 21,271,410 
 
Accrued expenses and other liabilities
1,948,255 1,343,010 
 
Stockholders’ equity
5,783,025 5,559,212 
 
Total liabilities and stockholders’ equity
$62,838,282 $59,251,091 
Interest rate spread
 3.06 %2.60 %
Net interest income and net interest margin
 $2,045,881 3.45 %$1,531,571 2.72 %
(1)Includes loans HFS. Average balances of PPP loans were $215.4 million and $1.39 billion for the years ended December 31, 2022 and 2021, respectively.


14

EAST WEST BANCORP, INC. AND SUBSIDIARIES
SELECTED RATIOS
(unaudited)
Table 9
Three Months Ended (1)
December 31, 2022
Basis Point Change
 
 
December 31,
2022		September 30,
2022		December 31,
2021		Qtr-o-QtrYr-o-Yr
 
Return on average assets
2.08 %1.86 %1.39 %22 bps69 bps
 
Return on average equity
22.90 %20.30 %14.93 %260 797 
Tangible return on average tangible equity (2)
24.96 %22.16 %16.32 %280 864 
 
Interest rate spread
3.20 %3.26 %2.63 %(6)57 
 
Net interest margin
3.98 %3.68 %2.73 %30 125 
Average loan yield
5.59 %4.75 %3.59 %84 200 
 
Yield on average interest-earning assets
5.00 %4.19 %2.85 %81 215 
Average cost of interest-bearing deposits
1.74 %0.86 %0.18 %88 156 
 
Average cost of deposits
1.06 %0.51 %0.10 %55 96 
 
Average cost of funds
1.11 %0.55 %0.12 %56 99 
Adjusted pre-tax, pre-provision profitability ratio (3)
2.95 %2.72 %1.91 %23 104 
 
Adjusted noninterest expense/average assets (3)
1.19 %1.23 %1.13 %(4)6 
Efficiency ratio
38.35 %34.43 %44.03 %392 (568)
 
Adjusted efficiency ratio (3)
28.66 %31.18 %37.24 %(252)bps(858)bps
Year EndedDecember 31, 2022
Basis Point Change
December 31, 2022December 31, 2021Yr-o-Yr
Return on average assets
1.80 %1.47 %33 bps
Return on average equity
19.51 %15.70 %381 
Tangible return on average tangible equity (2)
21.29 %17.24 %405 
Interest rate spread
3.06 %2.60 %46 
Net interest margin
3.45 %2.72 %73 
Average loan yield
4.52 %3.59 %93 
Yield on average interest-earning assets
3.91 %2.88 %103 
Average cost of interest-bearing deposits
0.80 %0.23 %57 
Average cost of deposits
0.46 %0.13 %33 
Average cost of funds
0.50 %0.17 %33 
Adjusted pre-tax, pre-provision profitability ratio (3)
2.55 %1.94 %61 
Adjusted noninterest expense/average assets (3)
1.18 %1.13 %5 
Efficiency ratio
36.65 %43.80 %(715)
Adjusted efficiency ratio (3)
31.74 %36.91 %(517)bps
(1)Annualized except for efficiency ratio.
(2)Tangible return on average tangible equity is a non-GAAP financial measure. See reconciliation of GAAP to non-GAAP measures in Table 13.
(3)Adjusted pre-tax, pre-provision profitability ratio, adjusted noninterest expense/average assets and the adjusted efficiency ratio are non-GAAP financial measures. See reconciliation of GAAP to non-GAAP measures in Table 12.

15

EAST WEST BANCORP, INC. AND SUBSIDIARIES
ALLOWANCE FOR LOAN LOSSES & OFF-BALANCE SHEET CREDIT EXPOSURES
($ in thousands)
(unaudited)
Table 10
Three Months Ended December 31, 2022
CommercialConsumer
C&ITotal CRETotal Residential MortgageOther ConsumerTotal
Allowance for loan losses, September 30, 2022
$371,749 $178,487 $30,587 $1,694 $582,517 
(Reversal of) provision for credit losses on loans(a)(263)13,790 9,363 (118)22,772 
Gross charge-offs(416)(10,804)— (16)(11,236)
Gross recoveries136 873 89 — 1,098 
Total net (charge-offs) recoveries (280)(9,931)89 (16)(10,138)
Foreign currency translation adjustment494 — — — 494 
Allowance for loan losses, December 31, 2022
$371,700 $182,346 $40,039 $1,560 $595,645 


Three Months Ended September 30, 2022
CommercialConsumer
C&ITotal CRETotal Residential MortgageOther ConsumerTotal
Allowance for loan losses, June 30, 2022$363,282 $173,479 $25,060 $1,449 $563,270 
Provision for credit losses on loans(a)9,575 11,163 6,281 255 27,274 
Gross charge-offs(6,894)(6,226)(775)(10)(13,905)
Gross recoveries7,172 71 21 — 7,264 
Total net recoveries (charge-offs) 278 (6,155)(754)(10)(6,641)
Foreign currency translation adjustment(1,386)— — — (1,386)
Allowance for loan losses, September 30, 2022
$371,749 $178,487 $30,587 $1,694 $582,517 


Three Months Ended December 31, 2021
CommercialConsumer
C&ITotal CRETotal Residential MortgageOther ConsumerTotal
Allowance for loan losses, September 30, 2021
$342,142 $192,260 $21,684 $4,318 $560,404 
Provision for (reversal of) credit losses on loans(a)2,395 (9,416)(1,519)(940)(9,480)
Gross charge-offs(12,328)(2,872)— (1,454)(16,654)
Gross recoveries5,605 836 430 — 6,871 
Total net (charge-offs) recoveries (6,723)(2,036)430 (1,454)(9,783)
Foreign currency translation adjustment438 — — — 438 
Allowance for loan losses, December 31, 2021
$338,252 $180,808 $20,595 $1,924 $541,579 

















16

EAST WEST BANCORP, INC. AND SUBSIDIARIES
ALLOWANCE FOR LOAN LOSSES & OFF-BALANCE-SHEET CREDIT EXPOSURES
($ in thousands)
(unaudited)
Table 10 (continued)
Year Ended December 31, 2022
CommercialConsumer
C&ITotal CRETotal Residential MortgageOther ConsumerTotal
Allowance for loan losses, December 31, 2021
$338,252 $180,808 $20,595 $1,924 $541,579 
Provision for (reversal of) credit losses on loans(a)37,604 17,430 19,991 (258)74,767 
Gross charge-offs(18,738)(18,108)(968)(106)(37,920)
Gross recoveries16,824 2,216 421 — 19,461 
Total net charge-offs(1,914)(15,892)(547)(106)(18,459)
Foreign currency translation adjustment(2,242)— — — (2,242)
Allowance for loan losses, December 31, 2022
$371,700 $182,346 $40,039 $1,560 $595,645 

Year Ended December 31, 2021
CommercialConsumer
C&ITotal CRETotal Residential MortgageOther ConsumerTotal
Allowance for loan losses, December 31, 2020
$398,040 $201,603 $18,210 $2,130 $619,983 
(Reversal of) provision for credit losses on loans(a)(39,732)6,782 2,710 1,286 (28,954)
Gross charge-offs(32,490)(31,514)(1,091)(1,497)(66,592)
Gross recoveries11,906 3,937 766 5 16,614 
Total net charge-offs(20,584)(27,577)(325)(1,492)(49,978)
Foreign currency translation adjustment528 — — — 528
Allowance for loan losses, December 31, 2021
$338,252 $180,808 $20,595 $1,924 $541,579 

Three Months EndedYear Ended
December 31,
2022		September 30,
2022		December 31,
2021		December 31,
2022		December 31,
2021
Unfunded Credit Facilities
Allowance for unfunded credit commitments, beginning of period (1)
$24,041 $24,304 $28,036 $27,514 $33,577 
Provision for (reversal of) credit losses on unfunded credit commitments(b)2,228 (274)(520)(1,267)(6,046)
Foreign currency translation adjustment(5)11 (2)17 (17)
Allowance for unfunded credit commitments, end of period (1)
$26,264 $24,041 $27,514 $26,264 $27,514 
Provision for (reversal of) credit losses(a)+(b)$25,000 $27,000 $(10,000)$73,500 $(35,000)
(1)Included in Accrued expenses and other liabilities on the Condensed Consolidated Balance Sheet.
17



EAST WEST BANCORP, INC. AND SUBSIDIARIES
CRITICIZED LOANS, NONPERFORMING ASSETS AND CREDIT QUALITY RATIOS
($ in thousands)
(unaudited)
Table 11
Criticized LoansDecember 31, 2022September 30, 2022December 31, 2021
Special mention loans$468,471 $470,964 $384,694 
Classified loans427,509 434,242 448,362 
Total criticized loans (1)
$895,980 $905,206 $833,056 
Nonperforming Assets
December 31, 2022September 30, 2022December 31, 2021
Nonaccrual loans:
Commercial:
C&I$50,428 $47,988 $59,023 
Total CRE23,413 11,209 9,942 
Consumer:
Total residential mortgage25,586 23,309 24,164 
Other consumer99 37 52 
Total nonaccrual loans99,526 82,543 93,181 
Other real estate owned, net270 — 363 
Other nonperforming assets— — 9,938 
Nonperforming loans HFS— 14,500 — 
Total nonperforming assets$99,796 $97,043 $103,482 
Credit Quality RatiosDecember 31, 2022September 30, 2022December 31, 2021
Annualized quarterly net charge-offs to average loans HFI 0.08 %0.06 %0.10 %
Annual net charge-offs to average loans HFI0.04 %N/A0.13 %
Special mention loans to loans HFI0.97 %0.99 %0.92 %
Classified loans to loans HFI0.89 %0.92 %1.08 %
Criticized loans to loans HFI1.86 %1.91 %2.00 %
Nonperforming assets to total assets0.16 %0.16 %0.17 %
Nonaccrual loans to loans HFI0.21 %0.17 %0.22 %
Allowance for loan losses to loans HFI1.24 %1.23 %1.30 %
(1)Excludes loans HFS.

18

EAST WEST BANCORP, INC. AND SUBSIDIARIES
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. Adjusted efficiency ratio represents adjusted noninterest expense divided by revenue. Adjusted pre-tax, pre-provision profitability ratio represents total revenue less adjusted noninterest expense, divided by average total assets. Adjusted noninterest expense excludes the amortization of tax credit and other investments and the amortization of core deposit intangibles. Management believes that the measures and ratios presented below provide clarity to financial statement users regarding the ongoing performance of the Company and allow comparability to prior periods.
Three Months Ended
 December 31, 2022September 30, 2022December 31, 2021
Net interest income before provision for (reversal of) credit losses$605,507 $551,809 $405,697 
Total noninterest income64,927 75,552 71,489 
Total revenue(a)$670,434 $627,361 $477,186 
Total noninterest expense(b)$257,110 $215,973 $210,105 
Less: Amortization of tax credit and other investments(64,605)(19,874)(31,800)
Amortization of core deposit intangibles(381)(485)(602)
Adjusted noninterest expense(c)$192,124 $195,614 $177,703 
Efficiency ratio(b)/(a)38.35 %34.43 %44.03 %
Adjusted efficiency ratio(c)/(a)28.66 %31.18 %37.24 %
Adjusted pre-tax, pre-provision income (a)-(c) = (d)$478,310 $431,747 $299,483 
Average total assets(e)$64,252,730 $63,079,444 $62,183,137 
Adjusted pre-tax, pre-provision profitability ratio (1)
(d)/(e)2.95 %2.72 %1.91 %
Adjusted noninterest expense/average assets (1)
(c)/(e)1.19 %1.23 %1.13 %
 Year Ended
 December 31, 2022December 31, 2021
Net interest income before provision for (reversal of) credit losses$2,045,881 $1,531,571 
Total noninterest income298,666 285,895 
Total revenue(f)$2,344,547 $1,817,466 
Total noninterest expense(g)$859,393 $796,089 
Less: Amortization of tax credit and other investments(113,358)(122,457)
Amortization of core deposit intangibles(1,865)(2,749)
Adjusted noninterest expense(h)$744,170 $670,883 
Efficiency ratio(g)/(f)36.65 %43.80 %
Adjusted efficiency ratio(h)/(f)31.74 %36.91 %
Adjusted pre-tax, pre-provision income (f)-(h) = (i)$1,600,377 $1,146,583 
Average total assets (j)$62,838,282 $59,251,091 
Adjusted pre-tax, pre-provision profitability ratio(i)/(j)2.55 %1.94 %
Adjusted noninterest expense/average assets(h)/(j)1.18 %1.13 %
(1)Annualized.

19

EAST WEST BANCORP, INC. AND SUBSIDIARIES
GAAP TO NON-GAAP RECONCILIATION
($ in thousands)
(unaudited)
Table 13   
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 ratio are non-GAAP financial measures. Tangible equity and tangible assets represent stockholders’ equity and total assets, respectively, which have been reduced by goodwill and other intangible assets. Given that the use of such measures and ratios is more prevalent in the banking industry, and such measures and ratios are used by banking regulators and analysts, the Company has included them below for discussion.
 December 31, 2022September 30, 2022December 31, 2021
Stockholders’ equity (a)$5,984,612 $5,660,668 $5,837,218 
Less: Goodwill(465,697)(465,697)(465,697)
Other intangible assets (1)
(7,998)(8,667)(9,334)
Tangible equity (b)$5,510,917 $5,186,304 $5,362,187 
Total assets(c)$64,112,150 $62,576,061 $60,870,701 
Less: Goodwill(465,697)(465,697)(465,697)
Other intangible assets (1)
(7,998)(8,667)(9,334)
Tangible assets (d)$63,638,455 $62,101,697 $60,395,670 
Total stockholders’ equity to total assets ratio(a)/(c)9.33 %9.05 %9.59 %
Tangible equity to tangible assets ratio (b)/(d)8.66 %8.35 %8.88 %
Tangible return on average tangible equity represents tangible net income divided by average tangible equity. Tangible net income excludes the after-tax impacts of the amortization of core deposit intangibles and mortgage servicing assets. Given that the use of such measures and ratios is more prevalent in the banking industry, and such measures and ratios are used by banking regulators and analysts, the Company has included them below for discussion.
Three Months EndedYear Ended
December 31,
2022		September 30,
2022		December 31,
2021		December 31,
2022		December 31,
2021
Net income(e)$336,763 $295,339 $217,796 $1,128,083 $872,981 
Add: Amortization of core deposit intangibles
381 485 602 1,865 2,749 
          Amortization of mortgage servicing assets
329 340 415 1,425 1,679 
Tax effect of amortization adjustments (2)
(209)(237)(293)(966)(1,274)
Tangible net income(f)$337,264 $295,927 $218,520 $1,130,407 $876,135 
Average stockholders’ equity (g)$5,834,623 $5,772,638 $5,786,237 $5,783,025 $5,559,212 
Less: Average goodwill(465,697)(465,697)(465,697)(465,697)(465,697)
          Average other intangible assets (1)
(8,378)(8,379)(9,611)(8,695)(10,535)
Average tangible equity (h)$5,360,548 $5,298,562 $5,310,929 $5,308,633 $5,082,980 
Return on average equity(e)/(g)22.90 %(3)20.30 %(3)14.93 %(3)19.51 %15.70 %
Tangible return on average tangible equity(f)/(h)24.96 %(3)22.16 %(3)16.32 %(3)21.29 %17.24 %
(1)Includes core deposit intangibles and mortgage servicing assets.
(2)Applied statutory tax rate of 29.37% for the three and twelve months ended December 31, 2022. Applied statutory tax rate of 28.77% for the three months ended September 30, 2022, and for the three and twelve months ended December 31, 2021.
(3)Annualized.

20