0001069157false00010691572023-10-192023-10-19


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 8-K
  
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of
The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported)
October 19, 2023

EAST WEST BANCORP, INC.
(Exact name of registrant as specified in its charter)

Delaware
(State or other jurisdiction of incorporation)

000-24939
(Commission File Number)

95-4703316
(IRS Employer Identification No.)

135 North Los Robles Ave., 7th Floor, Pasadena, California 91101
(Address of principal executive offices) (Zip code)

(626) 768-6000
(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
  
☐Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
  
☐Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
  
☐Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act: 
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, par value $0.001 per shareEWBCThe Nasdaq Global Select Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐



Item 2.02. Results of Operations and Financial Condition

On October 19, 2023, East West Bancorp, Inc. (the “Company”) announced its financial results for the quarter ended September 30, 2023. A copy of the Company’s press release (the “Press Release”) is attached as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated by reference in this Item 2.02. The Press Release is “furnished” pursuant to General Instruction B.2 of Form 8-K and the information provided in Item 2.02 of this report, including Exhibit 99.1, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”), or otherwise subject to the liabilities of such Section. The information provided in Item 2.02 of this report, including Exhibit 99.1, shall not be deemed incorporated by reference into any filings the Company has made or may make under the Securities Act of 1933 (the “Securities Act”) or the Exchange Act, except as otherwise expressly stated in such filing.

Item 7.01. Regulation FD Disclosure

On October 19, 2023, the Company will hold a conference call to discuss its financial results for the quarter ended September 30, 2023 and other matters relating to the Company. The Company has also made available on its website, www.eastwestbank.com, presentation materials containing certain historical and forward-looking information relating to the Company (the “Presentation Materials”). The Presentation Materials are furnished as Exhibit 99.2 and are incorporated by reference in this Item 7.01. All information in Exhibit 99.2 is presented as of the particular date or dates referenced therein, and the Company does not undertake any obligation to, and disclaims any duty to, update any of the information provided. The information provided in Item 7.01 of this report, including Exhibit 99.2, shall not be deemed “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities of such Section, nor shall such information be deemed incorporated by reference into any filings the Company has made or may make under the Securities Act or the Exchange Act, except as otherwise expressly stated in such filing.

Item 9.01. Financial Statements and Exhibits

(d) Exhibits
Press Release, dated October 19, 2023.
Presentation Materials, dated October 19, 2023.
104Cover Page Interactive Data (formatted in Inline XBRL).


2




SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


 EAST WEST BANCORP, INC.
  
Date: October 19, 2023By:/s/ Christopher J. Del Moral-Niles 
Christopher J. Del Moral-Niles
  Executive Vice President and Chief Financial Officer


3




Exhibit 99.1
ewbclogoa13.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:
Christopher Del Moral-Niles, CFA
Adrienne Atkinson
Chief Financial Officer
Director of Investor Relations
T: (626) 768-6860
T: (626) 788-7536
E: chris.delmoralniles@eastwestbank.com
E: adrienne.atkinson@eastwestbank.com

EAST WEST BANCORP REPORTS NET INCOME FOR THIRD QUARTER OF 2023
OF $288 MILLION AND DILUTED EARNINGS PER SHARE OF $2.02;
RECORD THIRD QUARTER REVENUE AND NET INTEREST INCOME

Pasadena, California – October 19, 2023 – East West Bancorp, Inc. (“East West” or the “Company”) (Nasdaq: EWBC), parent company of East West Bank, reported its financial results for the third quarter of 2023. Third quarter 2023 net income was $288 million, or $2.02 per diluted share. Total loans reached a record $50.9 billion as of September 30, 2023. Return on average assets was 1.66%, return on average common equity was 17.28%, and return on average tangible common equity1 was 18.65%.

“East West has continued to grow and support its customers. During the third quarter, we drove record quarterly revenue and net interest income, adding to record net income in the first half of this year,” said Dominic Ng, Chairman and Chief Executive Officer of East West. “We took a prudent approach to growth, adding a billion dollars in both loans and customer deposits. This growth and our industry-leading efficiency underscore the durable and diversified nature of our business model,” continued Ng.

“Our balance sheet positions us well to help our customers thrive. East West Bank is on track for another year of record earnings for 2023, and we look forward to entering 2024 with strength. Given our confidence in earnings generation, stable credit quality, and capital strength, East West’s board of directors has approved a restart of our share repurchase program in the fourth quarter,” Ng concluded.

FINANCIAL HIGHLIGHTS

Quarter EndedQuarter EndedYear-over-Year Change
($ in millions, except per share data)September 30, 2023September 30, 2022$%
Revenue$648$627$203%
Pre-tax, Pre-provision Income2
446432143
Net Income288295(8)(3)
Diluted Earnings per Share$2.02$2.08$(0.06)(3%)
Return on Average Assets1.66%1.86%-20 bps
Return on Average Common Equity17.28%20.30%-302 bps
Return on Average Tangible Common Equity1
18.65%22.16%-351 bps
Total Loans$50,912$47,457$3,4557%
Total Deposits55,08753,8571,2302

1 Tangible common equity and return on average tangible common equity are non-GAAP financial measures. See reconciliation of GAAP to non-GAAP measures in Table 13.
2 Pre-tax, pre-provision income is a non-GAAP financial measure. See reconciliation of GAAP to non-GAAP financial measures in Table 12.
1

BALANCE SHEET

•Total Assets – Total assets were $68.3 billion as of September 30, 2023, a decrease of $0.2 billion from $68.5 billion as of June 30, 2023, reflecting increasing balance sheet efficiency.

Third quarter 2023 average interest-earning assets of $65.1 billion were up $1.0 billion, or 2%, from $64.1 billion in the second quarter of 2023, primarily due to an increase of $1.0 billion in average loans outstanding.

•Total Loans – Total loans reached a record $50.9 billion as of September 30, 2023, an increase of $1.1 billion, or 2%, from $49.8 billion as of June 30, 2023. Year-over-year, total loans were up $3.5 billion, or 7%, from $47.5 billion as of September 30, 2022.

Third quarter 2023 average loans of $49.9 billion grew $1.0 billion, or 2%, from the second quarter of 2023. The increase was driven by growth across all our major loan portfolios.

•Total Deposits – Total deposits were $55.1 billion as of September 30, 2023, a decrease of $0.6 billion, or 1%, from $55.7 billion as of June 30, 2023, reflecting a $1.6 billion reduction in wholesale deposits, partially offset by an increase of $1 billion in customer deposits. Noninterest-bearing deposits made up 29% of our total deposits as of September 30, 2023, down from 30% as of June 30, 2023. Year-over-year, total deposits increased $1.2 billion, or 2%, from $53.9 billion as of September 30, 2022.

Third quarter 2023 average deposits of $55.2 billion increased $0.9 billion, or 2%, from the second quarter of 2023. During the third quarter, growth in average money market and time deposits was offset by declines in other deposit categories, which largely reflected our commercial and consumer customers reallocating balances to products with higher yields.

•Strong Capital Levels – As of September 30, 2023, stockholders’ equity was $6.6 billion, or $46.62 per share, both up 2% quarter-over-quarter. The stockholders’ equity to asset ratio was 9.66% as of September 30, 2023, an increase of 23 basis points quarter-over-quarter.

As of September 30, 2023, tangible book value3 per share was $43.29, up 2% quarter-over-quarter and 18% year-over-year. The tangible common equity ratio3 was 9.03%, an increase of 23 basis points quarter-over-quarter.

All of East West’s regulatory capital ratios are well in excess of regulatory requirements for well-capitalized institutions, as well as above regional and national bank averages. The common equity tier 1 (“CET1”) capital ratio increased to 13.30%, and the total risk-based capital ratio increased to 14.74%, as of September 30, 2023.

OPERATING RESULTS

Third Quarter Earnings – Third quarter 2023 net income was $288 million, and diluted earnings per share (“EPS”) were $2.02. While third quarter 2023 net income and EPS both decreased from the second quarter of 2023, revenue and pre-tax pre-provision income both improved.

Net income and diluted EPS for the nine months ended September 30, 2023 were $922 million and $6.49, which both increased 17% from the nine months ended September 30, 2022.











3 Tangible book value and the tangible common equity ratio are non-GAAP financial measures. See reconciliation of GAAP to non-GAAP measures in Table 13.
2

Third Quarter 2023 Compared to Second Quarter 2023

Net Interest Income and Net Interest Margin

Net interest income (“NII”) totaled $571 million in the third quarter, an increase of 1% from $567 million in the second quarter. Net interest margin (“NIM”) of 3.48% declined seven basis points from 3.55% in the second quarter.
•The change in NIM was primarily driven by a higher cost of interest-bearing deposits and changes in the deposit mix in favor of higher-cost customer deposits, partially offset by lower wholesale deposit levels and higher loan volumes and yields.
•The average loan yield was 6.51%, up 18 basis points from the second quarter. The average interest-earning asset yield was 5.87%, up 20 basis points from the second quarter.
•The average cost of funds was 2.59%, up 28 basis points from the second quarter. The average cost of deposits was 2.43%, up 31 basis points from the second quarter.

Noninterest Income

Noninterest income totaled $77 million in the third quarter, a decrease of $2 million, or 2%, from $79 million in the second quarter.
•Fee income4 of $67 million was down $2 million, or 3%, from $69 million in the second quarter.
•Interest rate contracts and other derivative income of $11 million was up from $7 million in the second quarter. The change primarily reflected a favorable change in mark-to-market adjustments.
•Other investment income of $2 million was down $2 million from $4 million in the second quarter, reflecting higher recognition of equity valuation marks for Community Reinvestment Act investments during the second quarter.

Noninterest Expense

Noninterest expense totaled $252 million in the third quarter, a decrease of 4% from $262 million in the second quarter. Third quarter noninterest expense consisted of $202 million of adjusted noninterest expense5, and $50 million in amortization expenses related to tax credit and other investments and core deposit intangibles.
•Adjusted noninterest expense of $202 million decreased over $3 million, or 2%, from $205 million in the second quarter. This was driven by decreases in consulting expense, compensation and employee benefits, loan related expenses, and occupancy expense.
•The efficiency ratio was 38.9% in the third quarter, compared with 40.6% in the second quarter and the adjusted efficiency ratio5 was 31.2% in the third quarter, compared with 31.8% in the second quarter.

TAX RELATED ITEMS

Third quarter 2023 income tax expense was $66 million, and the effective tax rate was 18.6%, compared with 12.7% for the second quarter of 2023. The lower effective tax rate in the second quarter was mainly due to a larger amount of tax credits in renewable energy investments that closed during the second quarter. The effective tax rate for the first nine months of 2023 was 18.6% compared with 22.7% for the first nine months of 2022. We currently estimate that the full year tax rate for 2023 will be between 19% - 20%.










4 Fee income includes lending, deposit account and wealth management fees, foreign exchange income, and interest rate contracts and other derivative income.
5 Adjusted noninterest expense and adjusted efficiency ratio are non-GAAP financial measures. See reconciliation of GAAP to non-GAAP measures in Table 12.
3

ASSET QUALITY

As of September 30, 2023, the credit quality of our loan portfolio remained solid.
•The nonperforming assets ratio improved to 0.15% of total assets as of September 30, 2023, down from 0.17% of total assets as of June 30, 2023. Nonperforming assets decreased $12 million, or 10%, quarter-over-quarter to $104 million as of September 30, 2023, from $116 million as of June 30, 2023.
•Third quarter 2023 net charge-offs were $18 million, or annualized 0.14% of average loans held-for-investment (“HFI”), compared with $8 million, or annualized 0.06% of average loans HFI, for the second quarter of 2023.
•The criticized loans ratio increased 38 basis points quarter-over-quarter to 2.01% of loans HFI as of September 30, 2023, compared with 1.63% as of June 30, 2023. Criticized loans increased $210 million, or 26%, quarter-over-quarter to $1.0 billion as of September 30, 2023, compared with $812 million as of June 30, 2023. The special mention loans ratio increased 29 basis points quarter-over quarter to 0.95% of loans HFI as of September 30, 2023, compared with 0.66% as of June 30, 2023, and the classified loans ratio increased nine basis points to 1.06%.
•The allowance for loan losses increased to $656 million, or 1.29% of loans HFI, as of September 30, 2023, compared with $635 million, or 1.28% of loans HFI, as of June 30, 2023.
•Third quarter 2023 provision for credit losses was $42 million, compared with $26 million in the second quarter of 2023.

CAPITAL STRENGTH

Capital levels for East West remained strong as of September 30, 2023. All capital ratios expanded quarter-over-quarter and year-over-year. The following table presents the regulatory capital metrics as of September 30, 2023, June 30, 2023 and September 30, 2022.
EWBC Capital
($ in millions)
September 30, 2023 (a)
June 30, 2023 (a)
September 30, 2022 (a)
Risk-Weighted Assets (“RWA”) (b)
$52,944$51,696$49,266
Risk-based capital ratios:
CET1 capital ratio13.30%13.17%12.27%
Tier 1 capital ratio13.30%13.17%12.27%
Total capital ratio14.74%14.60%13.57%
Leverage ratio10.15%10.03%9.55%
Tangible common equity ratio (c)
9.03%8.80%8.35%
(a)The Company has elected to use the 2020 Current Expected Credit Losses (CECL) transition provision in the calculation of its September 30, 2023, June 30, 2023 and September 30, 2022 regulatory capital ratios. The Company’s September 30, 2023 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.
(c)Tangible common equity ratio is a non-GAAP financial measure. See reconciliation of GAAP to non-GAAP measures in Table 13.

DIVIDEND PAYOUT AND CAPITAL ACTIONS

East West’s Board of Directors has declared fourth quarter 2023 dividends for the Company’s common stock. The common stock cash dividend of $0.48 per share is payable on November 15, 2023, to stockholders of record on November 1, 2023.

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 third quarter of 2023. The Company intends to resume share repurchases in the fourth quarter of 2023.

4

Conference Call
East West will host a conference call to discuss third quarter 2023 earnings with the public on Thursday, October 19, 2023, at 8:30 a.m. PT/11:30 a.m. ET. The public and investment community are invited to listen as management discusses third quarter 2023 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 October 19, 2023, at 11:30 a.m. PT/2:30 p.m. ET through November 19, 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: 8920769.

About East West

East West provides financial services that help customers reach further and connect to new opportunities. East West Bancorp, Inc. is a public company (Nasdaq: “EWBC”) with total assets of $68.3 billion as of September 30, 2023. The Company’s wholly-owned subsidiary, East West Bank, is the largest independent bank headquartered in Southern California, and operates over 120 locations in the United States and Asia. The Bank’s markets in the United States include California, Georgia, Illinois, Massachusetts, Nevada, New York, Texas, and Washington. For more information on East West, visit www.eastwestbank.com.
5

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 provisions 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 assumptions, beliefs, estimates, expectations 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 increased funding costs, declines in asset values and/or recognition of allowance for credit losses; changes in local, regional and global business, economic and political conditions and geopolitical events, such as Russia’s invasion of Ukraine; the soundness of other financial institutions and the impacts related to or resulting from recent bank failures and other economic and industry volatility, including potential increased regulatory requirements, Federal Deposit Insurance Corporation (“FDIC”) insurance premiums and assessments, losses in the value of our investment portfolio, deposit withdrawals, or other adverse consequences of negative market perceptions of the banking industry or the Company; 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 FDIC, the SEC, the Consumer Financial Protection Bureau (“CFPB”), the California Department of Financial Protection and Innovation — Division of Financial Institutions, China’s National Administration of Financial Regulation, the Hong Kong Monetary Authority, the Hong Kong Securities and Futures Commission, and the Monetary Authority of Singapore; 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 U.S. federal government shutdown and uncertainty regarding the U.S. federal government’s debt limit and credit rating; the Company’s ability to compete effectively against financial institutions and other entities, including as a result of emerging technologies; the success and timing of the Company’s business strategies; the Company’s ability to retain key officers and employees; the 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 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 (“FASB”) or other regulatory agencies and their impact on the Company’s 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, hurricanes, flooding and earthquakes 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, 2022 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 based only on information 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   
September 30, 2023
% or Basis Point Change
 September 30, 2023June 30, 2023September 30, 2022Qtr-o-QtrYr-o-Yr
Assets   
 Cash and due from banks$495,976$614,053$554,260(19.2)%(10.5)%
Interest-bearing cash with banks4,065,2025,763,8341,609,093(29.5)152.6 
Cash and cash equivalents4,561,1786,377,8872,163,353(28.5)110.8 
 Interest-bearing deposits with banks17,21317,169630,5430.3 (97.3)
 Assets purchased under resale agreements (“resale agreements”)785,000635,000892,98623.6 (12.1)
 
Available-for-sale (“AFS”) debt securities (amortized cost of $6,976,331, $6,820,569 and $6,771,354)
6,039,8375,987,2585,906,0900.9 2.3 
Held-to-maturity (“HTM”) debt securities, at amortized cost (fair value of $2,308,048, $2,440,484 and $2,459,135)
2,964,2352,975,9333,012,667(0.4)(1.6)
 Loans held-for-sale (“HFS”)4,7622,83014,50068.3 (67.2)
 
Loans held-for-investment (“HFI”) (net of allowance for loan losses of $655,523, $635,400 and $582,517)
50,251,66149,192,96446,859,7382.2 7.2 
Investments in qualified affordable housing partnerships, tax credit and other investments, net901,559815,471725,25410.6 24.3 
 Goodwill465,697465,697465,697— — 
Operating lease right-of-use assets97,782100,500105,411(2.7)(7.2)
 Other assets 2,200,5341,961,9721,799,82212.2 22.3 
 Total assets $68,289,458$68,532,681$62,576,061(0.4)%9.1 %
Liabilities and Stockholders’ Equity   
 Deposits$55,087,031$55,658,786$53,857,362(1.0)%2.3 %
Short-term borrowings4,500,0004,500,000—— 100.0 
Federal funds purchased——200,000— (100.0)
 FHLB advances——324,920— (100.0)
 Assets sold under repurchase agreements (“repurchase agreements”)——611,785— (100.0)
 Long-term debt and finance lease liabilities153,087152,951152,6100.1 0.3 
Operating lease liabilities 107,695110,383113,477(2.4)(5.1)
 Accrued expenses and other liabilities1,844,9391,648,8641,655,23911.9 11.5 
 Total liabilities61,692,75262,070,98456,915,393(0.6)8.4 
 Stockholders’ equity6,596,7066,461,6975,660,6682.1 16.5 
 Total liabilities and stockholders’ equity $68,289,458$68,532,681$62,576,061(0.4)%9.1 %
 Book value per share $46.62$45.67$40.172.1 %16.1 %
 
Tangible book value (1) per share
$43.29$42.33$36.802.3 17.6 
 Number of common shares at period-end141,486141,484140,9180.0 0.4 
Total stockholders’ equity to assets ratio9.66 %9.43 %9.05 %23 bps61 bps
Tangible common equity (“TCE”) ratio (1)
9.03 %8.80 %8.35 %23 bps68 bps
(1)Tangible book value and the TCE 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
September 30, 2023
% Change
  September 30, 2023June 30, 2023September 30, 2022Qtr-o-QtrYr-o-Yr
Loans:   
Commercial:
Commercial and industrial (“C&I”) $15,864,042 $15,670,084 $15,625,072 1.2 %1.5 %
Commercial real estate (“CRE”):
 
CRE
14,667,378 14,373,385 13,573,157 2.0 8.1 
 
Multifamily residential
4,900,097 4,764,180 4,559,302 2.9 7.5 
 
Construction and land
798,190 781,068 556,894 2.2 43.3 
Total CRE
20,365,665 19,918,633 18,689,353 2.2 9.0 
Consumer:
Residential mortgage:
 
Single-family residential
12,836,558 12,308,613 10,855,345 4.3 18.3 
 
Home equity lines of credit (“HELOCs”)1,776,665 1,862,928 2,184,924 (4.6)(18.7)
Total residential mortgage
14,613,223 14,171,541 13,040,269 3.1 12.1 
Other consumer
64,254 68,106 87,561 (5.7)(26.6)
Total loans HFI (1)
50,907,184 

49,828,364 

47,442,255 2.2 7.3 
Loans HFS
4,762 2,830 14,500 68.3 (67.2)
 
Total loans (1)
50,911,946 49,831,194 47,456,755 2.2 7.3 
Allowance for loan losses(655,523)(635,400)(582,517)3.2 12.5 
 
Net loans (1)
$50,256,423 $49,195,794 $46,874,238 2.2 7.2 
Deposits:
   
 
Noninterest-bearing demand
$16,169,072 $16,741,099 $21,645,394 (3.4)%(25.3)%
 
Interest-bearing checking
7,689,289 8,348,587 6,822,343 (7.9)12.7 
 
Money market
12,613,827 11,486,473 12,113,292 9.8 4.1 
 
Savings
1,963,766 2,102,850 2,917,770 (6.6)(32.7)
 
Time deposits
16,651,077 16,979,777 10,358,563 (1.9)60.7 
 
Total deposits
$55,087,031 $55,658,786 $53,857,362 (1.0)%2.3 %
(1)Includes $(72.0) million, $(74.0) million and $(60.3) million of net deferred loan fees and net unamortized premiums as of September 30, 2023, June 30, 2023 and September 30, 2022, 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
September 30, 2023
% Change
September 30, 2023June 30, 2023September 30, 2022Qtr-o-QtrYr-o-Yr
Interest and dividend income$961,787 $906,134 $628,236 6.1%53.1%
Interest expense
390,974 339,388 76,427 15.2411.6
Net interest income before provision for credit losses570,813 566,746 551,809 0.73.4
Provision for credit losses42,000 26,000 27,000 61.555.6
Net interest income after provision for credit losses528,813 540,746 524,809 (2.2)0.8
Noninterest income76,752 78,631 75,552 

(2.4)1.6
Noninterest expense252,014 261,789 215,973 (3.7)16.7
Income before income taxes
353,551 357,588 384,388 (1.1)(8.0)
Income tax expense
65,813 45,557 89,049 44.5(26.1)
Net income
$287,738 $312,031 $295,339 (7.8)%(2.6)%
Earnings per share (“EPS”)
   
- Basic
$2.03 $2.21 $2.10 (7.8)%(3.0)%
- Diluted
$2.02 $2.20 $2.08 (7.9)(2.6)
Weighted-average number of shares outstanding
- Basic
141,485 141,468 140,917 0.0%0.4%
- Diluted
142,122 141,876 142,011 0.20.1
 
 
Three Months Ended
September 30, 2023
% Change
 
 
September 30, 2023June 30, 2023September 30, 2022Qtr-o-QtrYr-o-Yr
Noninterest income:
   
 
Lending fees
$20,312 $20,901 $20,289 (2.8)%0.1%
Deposit account fees22,622 22,285 23,636 1.5(4.3)
Interest rate contracts and other derivative income11,208 7,373 8,761 52.027.9
 
Foreign exchange income
12,334 13,251 10,083 (6.9)22.3
 
Wealth management fees
5,877 6,889 8,903 (14.7)(34.0)
 
Net (losses) gains on sales of loans(12)(7)2,129 71.4NM
Other investment income (losses)1,751 4,003 (580)(56.3)NM
Other income
2,660 3,936 2,331 (32.4)14.1
Total noninterest income$76,752 $78,631 $75,552 (2.4)%1.6%
Noninterest expense:
   
 
Compensation and employee benefits
$123,153 $124,937 $127,580 (1.4)%(3.5)%
 
Occupancy and equipment expense
15,353 16,088 15,920 (4.6)(3.6)
 
Deposit insurance premiums and regulatory assessments
8,583 8,262 4,875 3.976.1
Deposit account expense11,585 10,559 6,707 9.772.7
Data processing3,645 3,213 3,725 13.4(2.1)
Computer software expense8,116 7,479 6,889 8.517.8
 
Other operating expense31,885 35,337 30,403 (9.8)4.9
Amortization of tax credit and other investments49,694 55,914 19,874 (11.1)150.0
Total noninterest expense$252,014 $261,789 $215,973 (3.7)%16.7%
NM - Not meaningful.


9

EAST WEST BANCORP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF INCOME
($ and shares in thousands, except per share data)
(unaudited)
Table 4
 Nine Months Ended
September 30, 2023
% Change
  September 30, 2023September 30, 2022Yr-o-Yr
Interest and dividend income$2,703,427 $1,560,019 73.3%
Interest expense
966,007 119,645 NM
Net interest income before provision for credit losses1,737,420 1,440,374 20.6
Provision for credit losses88,000 48,500 81.4
Net interest income after provision for credit losses1,649,420 1,391,874 18.5
Noninterest income 215,361 233,739 (7.9)
Noninterest expense732,250 602,283 21.6
Income before income taxes
1,132,531 1,023,330 10.7
Income tax expense
210,323 232,010 (9.3)
Net income
$922,208 $791,320 16.5%
EPS
  
- Basic
$6.52 $5.59 16.6%
- Diluted
$6.49 $5.55 17.0
Weighted-average number of shares outstanding
- Basic
141,356 141,453 (0.1)%
- Diluted
142,044 142,601 (0.4)
 
 
Nine Months EndedSeptember 30, 2023
% Change
 
 
September 30, 2023September 30, 2022Yr-o-Yr
Noninterest income:
  
 
Lending fees
$61,799 $59,869 3.2%
 
Deposit account fees
66,610 66,323 0.4
Interest rate contracts and other derivative income21,145 29,695 (28.8)
 
Foreign exchange income
38,245 34,143 12.0
 
Wealth management fees
19,070 21,494 (11.3)
 
Net (losses) gains on sales of loans(41)5,968 NM
 
Net (losses) gains on AFS debt securities
(10,000)1,306 NM
Other investment income7,675 5,910 29.9
Other income
10,858 9,031 20.2
Total noninterest income$215,361 $233,739 (7.9)%
Noninterest expense:
  
 
Compensation and employee benefits
$377,744 $357,213 5.7%
 
Occupancy and equipment expense
47,028 46,853 0.4
 
Deposit insurance premiums and regulatory assessments
24,755 14,519 70.5
Deposit account expense31,753 17,071 86.0
Data processing
10,205 10,876 (6.2)
Computer software expense
22,955 20,755 10.6
 
Other operating expense (1)
102,092 86,243 18.4
Amortization of tax credit and other investments115,718 48,753 137.4
Total noninterest expense$732,250 $602,283 21.6%
NM - Not meaningful.
(1)Includes $3.9 million of repurchase agreements’ extinguishment cost for the nine months ended September 30, 2023.
10

EAST WEST BANCORP, INC. AND SUBSIDIARIES
SELECTED AVERAGE BALANCES
($ in thousands)
(unaudited)
Table 5
Three Months Ended
September 30, 2023
% Change
Nine Months Ended
September 30, 2023
% Change
  September 30, 2023June 30, 2023September 30, 2022Qtr-o-QtrYr-o-YrSeptember 30, 2023September 30, 2022Yr-o-Yr
Loans:
     
Commercial:
 
C&I$15,400,172 $15,244,826 $15,282,661 1.0%0.8%$15,348,662 $14,850,849 3.4%
CRE:
 
CRE14,453,014 14,130,811 13,533,482 2.36.814,174,100 12,958,562 9.4
 
Multifamily residential4,798,360 4,685,786 4,531,351 2.45.94,695,473 4,133,975 13.6
 
Construction and land807,906 782,541 532,800 3.251.6755,651 467,731 61.6
Total CRE
20,059,280 19,599,138 18,597,633 2.37.919,625,224 17,560,268 11.8
Consumer:
Residential mortgage:
 
Single-family residential12,548,593 12,014,513 10,676,022 4.417.511,997,671 9,809,549 22.3
 
HELOCs
1,816,900 1,928,208 2,216,355 (5.8)(18.0)1,931,105 2,230,060 (13.4)
Total residential mortgage14,365,493 13,942,721 12,892,377 3.011.413,928,776 12,039,609 15.7
Other consumer
63,917 65,035 81,870 (1.7)(21.9)67,181 97,794 (31.3)
 
Total loans (1)
$49,888,862 $48,851,720 $46,854,541 2.1%6.5%$48,969,843 $44,548,520 9.9%
Interest-earning assets
$65,051,461 $64,061,569 $59,478,689 1.5%9.4%$63,545,257 $58,949,457 7.8%
Total assets
$68,936,786 $67,497,367 $63,079,444 2.1%9.3%$67,196,590 $62,361,618 7.8%
Deposits:     
Noninterest-bearing demand
$16,302,296 $16,926,937 $22,423,633 (3.7)%(27.3)%$17,633,922 $23,244,247 (24.1)%
Interest-bearing checking
8,080,025 8,434,655 6,879,632 (4.2)17.47,675,325 6,747,711 13.7
Money market
12,180,806 10,433,839 12,351,571 16.7(1.4)11,295,157 12,526,222 (9.8)
Savings
2,013,246 2,200,124 2,961,634 (8.5)(32.0)2,215,102 2,954,098 (25.0)
Time deposits
16,621,683 16,289,320 9,435,063 2.076.215,993,669 8,596,728 86.0
Total deposits
$55,198,056 $54,284,875 $54,051,533 1.7%2.1%$54,813,175 $54,069,006 1.4%
Interest-bearing liabilities$43,563,947 $42,026,844 $32,703,323 3.7%33.2%$40,826,548 $31,631,865 29.1%
Stockholders’ equity
$6,604,798 $6,440,996 $5,772,638 2.5%14.4%$6,411,250 $5,765,637 11.2%
(1)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
 
 
September 30, 2023June 30, 2023
 
 
Average Average Average Average
 
 
BalanceInterest
Yield/Rate (1)
BalanceInterest
Yield/Rate (1)
Assets
      
Interest-earning assets:
      
 
Interest-bearing cash and deposits with banks
$5,392,795 $67,751 4.98 %$5,247,755 $60,995 4.66 %
 
Resale agreements648,587 4,460 2.73 %641,939 3,969 2.48 %
 
AFS debt securities6,074,119 57,177 3.73 %6,257,397 56,292 3.61 %
HTM debt securities2,967,703 12,601 1.68 %2,983,780 12,678 1.70 %
 
Loans (2)
49,888,862 818,719 6.51 %48,851,720 771,264 6.33 %
 
FHLB and FRB stock
79,395 1,079 5.39 %78,978 936 4.75 %
 
Total interest-earning assets
$65,051,461 $961,787 5.87 %$64,061,569 $906,134 5.67 %
Noninterest-earning assets:
      
 
Cash and due from banks
544,939 569,227   
 
Allowance for loan losses(629,229)(619,868)  
 
Other assets
3,969,615 3,486,439   
 
Total assets
$68,936,786   $67,497,367   
Liabilities and Stockholders’ Equity     
Interest-bearing liabilities:
      
 
Checking deposits
$8,080,025 $54,285 2.67 %$8,434,655 $49,571 2.36 %
 
Money market deposits
12,180,806 113,217 3.69 %10,433,839 86,419 3.32 %
 
Savings deposits
2,013,246 4,047 0.80 %2,200,124 3,963 0.72 %
 
Time deposits
16,621,683 166,747 3.98 %16,289,320 147,524 3.63 %
 
Federal funds purchased and other short-term borrowings
4,501,327 49,575 4.37 %4,500,566 49,032 4.37 %
 
FHLB advances
1 — — %1 — — %
 
Repurchase agreements13,897 193 5.51 %15,579 211 5.43 %
 
Long-term debt and finance lease liabilities
152,962 2,910 7.55 %152,760 2,668 7.01 %
 
Total interest-bearing liabilities
$43,563,947 $390,974 3.56 %$42,026,844 $339,388 3.24 %
Noninterest-bearing liabilities and stockholders’ equity:
     
 
Demand deposits
16,302,296 16,926,937 
 
Accrued expenses and other liabilities
2,465,745 2,102,590 
 
Stockholders’ equity
6,604,798 6,440,996 
 
Total liabilities and stockholders’ equity
$68,936,786 $67,497,367 
Interest rate spread
 2.31 %2.43 %
Net interest income and net interest margin $570,813 3.48 %$566,746 3.55 %
(1)Annualized.
(2)Includes loans HFS.
12

EAST WEST BANCORP, INC. AND SUBSIDIARIES
QUARTER-TO-DATE AVERAGE BALANCES, YIELDS AND RATES
($ in thousands)
(unaudited)
Table 7
 Three Months Ended
September 30, 2023September 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
$5,392,795 $67,751 4.98 %$2,287,010 $9,080 1.58 %
 
Resale agreements648,587 4,460 2.73 %1,037,292 6,769 2.59 %
 
AFS debt securities6,074,119 57,177 3.73 %6,204,729 38,383 2.45 %
HTM debt securities2,967,703 12,601 1.68 %3,017,063 12,709 1.67 %
 
Loans (2)
49,888,862 818,719 6.51 %46,854,541 560,452 4.75 %
 
FHLB and FRB stock
79,395 1,079 5.39 %78,054 843 4.28 %
 
Total interest-earning assets
$65,051,461 $961,787 5.87 %$59,478,689 $628,236 4.19 %
Noninterest-earning assets:
      
 
Cash and due from banks
544,939 615,836   
 
Allowance for loan losses(629,229)(566,369)  
 
Other assets
3,969,615 3,551,288   
 
Total assets
$68,936,786   $63,079,444   
Liabilities and Stockholders’ Equity
     
Interest-bearing liabilities:
      
 
Checking deposits
$8,080,025 $54,285 2.67 %$6,879,632 $8,493 0.49 %
 
Money market deposits
12,180,806 113,217 3.69 %12,351,571 33,101 1.06 %
 
Savings deposits
2,013,246 4,047 0.80 %2,961,634 2,268 0.30 %
 
Time deposits
16,621,683 166,747 3.98 %9,435,063 25,032 1.05 %
 
Federal funds purchased and other short-term borrowings
4,501,327 49,575 4.37 %211,794 1,177 2.20 %
 
FHLB advances
1 — — %86,243 392 1.80 %
 
Repurchase agreements13,897 193 5.51 %624,821 4,421 2.81 %
 
Long-term debt and finance lease liabilities
152,962 2,910 7.55 %152,565 1,543 4.01 %
 
Total interest-bearing liabilities
$43,563,947 $390,974 3.56 %$32,703,323 $76,427 0.93 %
Noninterest-bearing liabilities and stockholders’ equity:
      
 
Demand deposits
16,302,296 22,423,633 
 
Accrued expenses and other liabilities
2,465,745 2,179,850 
 
Stockholders’ equity
6,604,798 5,772,638 
 
Total liabilities and stockholders’ equity
$68,936,786 $63,079,444 
Interest rate spread
 2.31 %3.26 %
Net interest income and net interest margin
 $570,813 3.48 %$551,809 3.68 %
(1)Annualized.
(2)Includes loans HFS.

13

EAST WEST BANCORP, INC. AND SUBSIDIARIES
YEAR-TO-DATE AVERAGE BALANCES, YIELDS AND RATES
($ in thousands)
(unaudited)
Table 8
 Nine Months Ended
September 30, 2023September 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
$4,703,843 $164,393 4.67 %$3,175,596 $17,127 0.72 %
 
Resale agreements659,621 12,932 2.62 %1,588,452 23,705 2.00 %
 
AFS debt securities6,146,653 166,666 3.63 %6,886,268 106,290 2.06 %
HTM debt securities2,982,284 38,013 1.70 %2,672,797 33,645 1.68 %
 
Loans (2)
48,969,843 2,318,369 6.33 %44,548,520 1,376,978 4.13 %
 
FHLB and FRB stock
83,013 3,054 4.92 %77,824 2,274 3.91 %
 
Total interest-earning assets
$63,545,257 $2,703,427 5.69 %$58,949,457 $1,560,019 3.54 %
Noninterest-earning assets:
      
 
Cash and due from banks
578,144 656,772   
 
Allowance for loan losses
(617,381)(551,818)  
 
Other assets
3,690,570 3,307,207   
 
Total assets
$67,196,590 $62,361,618   
Liabilities and Stockholders’ Equity
     
Interest-bearing liabilities:
      
 
Checking deposits
$7,675,325 $127,030 2.21 %$6,747,711 $13,073 0.26 %
 
Money market deposits
11,295,157 275,738 3.26 %12,526,222 45,196 0.48 %
 
Savings deposits
2,215,102 11,679 0.70 %2,954,098 5,836 0.26 %
 
Time deposits
15,993,669 428,120 3.58 %8,596,728 40,266 0.63 %
 
Federal funds purchased and other short-term borrowings
3,284,663 107,432 4.37 %93,370 1,427 2.04 %
 
FHLB advances
164,836 6,430 5.22 %128,137 1,529 1.60 %
 
Repurchase agreements45,080 1,456 4.32 %433,340 8,855 2.73 %
 
Long-term debt and finance lease liabilities
152,716 8,122 7.11 %152,259 

3,463 3.04 %
 
Total interest-bearing liabilities
$40,826,548 $966,007 3.16 %$31,631,865 $119,645 0.51 %
Noninterest-bearing liabilities and stockholders’ equity:
 
Demand deposits
17,633,922 23,244,247 
 
Accrued expenses and other liabilities
2,324,870 1,719,869 
 
Stockholders’ equity
6,411,250 5,765,637 
 
Total liabilities and stockholders’ equity
$67,196,590 $62,361,618 
Interest rate spread
 2.53 %3.03 %
Net interest income and net interest margin
 $1,737,420 3.66 %$1,440,374 3.27 %
(1)Annualized.
(2)Includes loans HFS.


14

EAST WEST BANCORP, INC. AND SUBSIDIARIES
SELECTED RATIOS
(unaudited)
Table 9
Three Months Ended (1)
September 30, 2023
Basis Point Change
 
 
September 30,
2023		June 30,
2023		September 30,
2022		Qtr-o-QtrYr-o-Yr
 
Return on average assets
1.66 %1.85 %1.86 %(19)bps(20)bps
Adjusted return on average assets (2)
1.66 %1.85 %1.86 %(19)(20)
 
Return on average common equity 17.28 %19.43 %20.30 %(215)(302)
Adjusted return on average common equity (2)
17.28 %19.43 %20.30 %(215)(302)
Return on average TCE (3)
18.65 %21.01 %22.16 %(236)(351)
Adjusted return on average TCE (3)
18.65 %21.01 %22.16 %(236)(351)
 
Interest rate spread
2.31 %2.43 %3.26 %(12)(95)
 
Net interest margin
3.48 %3.55 %3.68 %(7)(20)
Average loan yield
6.51 %6.33 %4.75 %18 176 
 
Yield on average interest-earning assets
5.87 %5.67 %4.19 %20 168 
Average cost of interest-bearing deposits
3.45 %3.09 %0.86 %36 259 
 
Average cost of deposits
2.43 %2.12 %0.51 %31 192 
 
Average cost of funds
2.59 %2.31 %0.55 %28 204 
Pre-tax, pre-provision profitability ratio (4)
2.56 %2.61 %2.72 %(5)(16)
 
Adjusted noninterest expense/average assets (4)
1.16 %1.22 %1.23 %(6)(7)
Efficiency ratio
38.92 %40.56 %34.43 %(164)449 
 
Adjusted efficiency ratio (4)
31.18 %31.83 %31.18 %(65)bps— bps
Nine Months Ended (1)
September 30, 2023
Basis Point Change
September 30,
2023		September 30,
2022		Yr-o-Yr
Return on average assets
1.83 %1.70 %13 bps
Adjusted return on average assets (2)
1.85 %1.70 %15 
Return on average common equity 19.23 %18.35 %88 
Adjusted return on average common equity (2)
19.38 %18.35 %103 
Return on average TCE (3)
20.80 %20.04 %76 
Adjusted return on average TCE (3)
20.96 %20.04 %92 
Interest rate spread
2.53 %3.03 %(50)
Net interest margin
3.66 %3.27 %39 
Average loan yield
6.33 %4.13 %220 
Yield on average interest-earning assets
5.69 %3.54 %215 
Average cost of interest-bearing deposits
3.03 %0.45 %258 
Average cost of deposits
2.06 %0.26 %180 
Average cost of funds
2.21 %0.29 %192 
Pre-tax, pre-provision profitability ratio (4)
2.69 %2.41 %28 
Adjusted noninterest expense/average assets (4)
1.22 %1.18 %4 
Efficiency ratio
37.50 %35.98 %152 
Adjusted efficiency ratio (4)
31.15 %32.98 %(183)bps
(1)Annualized except for efficiency ratio and adjusted efficiency ratio.
(2)Adjusted return on average assets and adjusted return on average common equity are non-GAAP financial measures. See reconciliation of GAAP to non-GAAP measures in Table 14.
(3)Return on average TCE and adjusted return on average TCE are non-GAAP financial measures. See reconciliation of GAAP to non-GAAP measures in Table 13.
(4)Pre-tax, pre-provision profitability ratio, adjusted noninterest expense/average assets and 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 September 30, 2023
CommercialConsumer
C&ITotal CRETotal Residential MortgageOther ConsumerTotal
Allowance for loan losses, June 30, 2023
$375,333 $202,768 $56,039 $1,260 $635,400 
Provision for credit losses on loans
(a)13,006 22,026 2,648 456 38,136 
Gross charge-offs(7,074)(13,879)(41)(13)(21,007)
Gross recoveries2,279 503 79 — 2,861 
Total net (charge-offs) recoveries (4,795)(13,376)38 (13)(18,146)
Foreign currency translation adjustment133 — — — 133 
Allowance for loan losses, September 30, 2023
$383,677 $211,418 $58,725 $1,703 $655,523 


Three Months Ended June 30, 2023
CommercialConsumer
C&ITotal CRETotal Residential MortgageOther ConsumerTotal
Allowance for loan losses, March 31, 2023
$376,325 $188,915 $52,978 $1,675 $619,893 
Provision for (reversal of) credit losses on loans(a)5,259 16,076 3,057 (367)24,025 
Gross charge-offs(7,335)(2,366)(6)(48)(9,755)
Gross recoveries2,065 143 10 — 2,218 
Total net (charge-offs) recoveries (5,270)(2,223)4 (48)(7,537)
Foreign currency translation adjustment(981)— — — (981)
Allowance for loan losses, June 30, 2023
$375,333 $202,768 $56,039 $1,260 $635,400 


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 


16

EAST WEST BANCORP, INC. AND SUBSIDIARIES
ALLOWANCE FOR LOAN LOSSES & OFF-BALANCE-SHEET CREDIT EXPOSURES
($ in thousands)
(unaudited)
Table 10 (continued)
Nine Months Ended September 30, 2023
CommercialConsumer
C&ITotal CRETotal Residential MortgageOther ConsumerTotal
Allowance for loan losses, December 31, 2022
$371,700 $182,346 $40,039 $1,560 $595,645 
Impact of ASU 2022-02 adoption5,683 343 2 — 6,028 
Allowance for loan losses, January 1, 2023$377,383 $182,689 $40,041 $1,560 $601,673 
Provision for credit losses on loans
(a)17,587 44,123 18,727 244 80,681 
Gross charge-offs(16,309)(16,251)(138)(101)(32,799)
Gross recoveries5,555 857 95 — 6,507 
Total net charge-offs(10,754)(15,394)(43)(101)(26,292)
Foreign currency translation adjustment(539)— — — (539)
Allowance for loan losses, September 30, 2023
$383,677 $211,418 $58,725 $1,703 $655,523 

Nine Months Ended September 30, 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)37,867 3,640 10,628 (140)51,995 
Gross charge-offs(18,322)(7,304)(968)(90)(26,684)
Gross recoveries16,688 1,343 332 — 18,363 
Total net charge-offs
(1,634)(5,961)(636)(90)(8,321)
Foreign currency translation adjustment(2,736)— — — (2,736)
Allowance for loan losses, September 30, 2022
$371,749 $178,487 $30,587 $1,694 $582,517 

Three Months EndedNine Months Ended
September 30,
2023		June 30,
2023		September 30,
2022		September 30,
2023		September 30,
2022
Unfunded Credit Facilities
Allowance for unfunded credit commitments, beginning of period (1)
$29,728 $27,741 $24,304 $26,264 $27,514 
Provision for (reversal of) credit losses on unfunded credit commitments(b)3,864 1,975 (274)7,319 (3,495)
Foreign currency translation adjustment(3)12 11 6 22 
Allowance for unfunded credit commitments, end of period (1)
$33,589 $29,728 $24,041 $33,589 $24,041 
Provision for credit losses(a)+(b)$42,000 $26,000 $27,000 $88,000 $48,500 
(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 LoansSeptember 30, 2023June 30, 2023September 30, 2022
Special mention loans$483,428 $330,741 $470,964 
Classified loans538,258 481,051 434,242 
Total criticized loans (1)
$1,021,686 $811,792 $905,206 
Nonperforming Assets
September 30, 2023June 30, 2023September 30, 2022
Nonaccrual loans:
Commercial:
C&I$49,147 $61,879 $47,988 
Total CRE16,431 20,598 11,209 
Consumer:
Total residential mortgage37,986 33,032 23,309 
Other consumer136 24 37 
Total nonaccrual loans103,700 115,533 82,543 
Nonperforming loans HFS— — 14,500 
Total nonperforming assets$103,700 $115,533 $97,043 
Credit Quality RatiosSeptember 30, 2023June 30, 2023September 30, 2022
Annualized quarterly net charge-offs to average loans HFI
0.14 %0.06 %0.06 %
Special mention loans to loans HFI0.95 %0.66 %0.99 %
Classified loans to loans HFI1.06 %0.97 %0.92 %
Criticized loans to loans HFI2.01 %1.63 %1.91 %
Nonperforming assets to total assets0.15 %0.17 %0.16 %
Nonaccrual loans to loans HFI0.20 %0.23 %0.17 %
Allowance for loan losses to loans HFI1.29 %1.28 %1.23 %
(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 adjusted revenue. Pre-tax, pre-provision profitability ratio represents total adjusted revenue less adjusted noninterest expense, divided by average total assets. Adjusted revenue excludes the write-off of an AFS debt security (where applicable). Adjusted noninterest expense excludes the amortization of tax credit and other investments, the amortization of core deposit intangibles and the repurchase agreements’ extinguishment cost (where applicable). 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 EndedNine Months Ended
 September 30, 2023June 30, 2023September 30, 2022September 30, 2023September 30, 2022
Net interest income before provision for credit losses(a)$570,813 $566,746 $551,809 $1,737,420 $1,440,374 
Total noninterest income76,752 78,631 75,552 215,361 233,739 
Total revenue(b)$647,565 $645,377 $627,361 $1,952,781 $1,674,113 
Noninterest income76,752 78,631 75,552 215,361 233,739 
Add: Write-off of AFS debt security
— — — 10,000 — 
Adjusted noninterest income(c)76,752 78,631 75,552 225,361 233,739 
Adjusted revenue(a)+(c) = (d)$647,565 $645,377 $627,361 $1,962,781 $1,674,113 
Total noninterest expense(e)$252,014 $261,789 $215,973 $732,250 $602,283 
Less: Amortization of tax credit and other investments(49,694)(55,914)(19,874)(115,718)(48,753)
Amortization of core deposit intangibles(441)(440)(485)(1,322)(1,484)
Repurchase agreements’ extinguishment cost— — — (3,872)— 
Adjusted noninterest expense(f)$201,879 $205,435 $195,614 $611,338 $552,046 
Efficiency ratio(e)/(b)38.92 %40.56 %34.43 %37.50 %35.98 %
Adjusted efficiency ratio(f)/(d)31.18 %31.83 %31.18 %31.15 %32.98 %
Pre-tax, pre-provision income (d)-(f) = (g)$445,686 $439,942 $431,747 $1,351,443 $1,122,067 
Average total assets(h)$68,936,786 $67,497,367 $63,079,444 $67,196,590 $62,361,618 
Pre-tax, pre-provision profitability ratio (1)
(g)/(h)2.56 %2.61 %2.72 %2.69 %2.41 %
Adjusted noninterest expense/average assets (1)
(f)/(h)1.16 %1.22 %1.23 %1.22 %1.18 %
(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 book value, tangible book value per share and TCE ratio are non-GAAP financial measures. Tangible book value 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.
 September 30, 2023June 30, 2023September 30, 2022
Stockholders’ equity (a)$6,596,706 $6,461,697 $5,660,668 
Less: Goodwill(465,697)(465,697)(465,697)
Other intangible assets (1)
(5,649)(6,418)(8,667)
Tangible book value(b)$6,125,360 $5,989,582 $5,186,304 
Number of common shares at period-end(c)141,486 141,484 140,918 
Book value per share(a)/(c)$46.62 $45.67 $40.17 
Tangible book value per share (b)/(c)$43.29 $42.33 $36.80 
Total assets(d)$68,289,458 $68,532,681 $62,576,061 
Less: Goodwill(465,697)(465,697)(465,697)
Other intangible assets (1)
(5,649)(6,418)(8,667)
Tangible assets (e)$67,818,112 $68,060,566 $62,101,697 
Total stockholders’ equity to assets ratio(a)/(d)9.66 %9.43 %9.05 %
TCE ratio (b)/(e)9.03 %8.80 %8.35 %
Return on average TCE represents tangible net income divided by average tangible book value. Adjusted return on average TCE represents adjusted tangible net income divided by average tangible book value. Tangible net income excludes the after-tax impacts of the amortization of core deposit intangibles and mortgage servicing assets. Adjusted tangible net income excludes the after-tax impacts of the tangible net income adjustments and the write-off of an AFS debt security. 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 EndedNine Months Ended
September 30, 2023June 30, 2023September 30, 2022September 30, 2023September 30, 2022
Net income(e)$287,738 $312,031 $295,339 $922,208 $791,320 
Add: Amortization of core deposit intangibles
441 440 485 1,322 1,484 
          Amortization of mortgage servicing assets
328 342 340 1,026 1,096 
Tax effect of amortization adjustments (2)
(225)(230)(237)(688)(742)
Tangible net income(f)$288,282 $312,583 $295,927 $923,868 $793,158 
Add: Write-off of AFS debt security— — — 10,000 — 
Tax effect of write-off (2)
— — — (2,929)— 
Adjusted tangible net income(g)$288,282 $312,583 $295,927 $930,939 $793,158 
Average stockholders’ equity (h)$6,604,798 $6,440,996 $5,772,638 $6,411,250 $5,765,637 
Less: Average goodwill(465,697)(465,697)(465,697)(465,697)(465,697)
          Average other intangible assets (1)
(6,148)(6,921)(8,379)(6,916)(8,801)
Average tangible book value(i)$6,132,953 $5,968,378 $5,298,562 $5,938,637 $5,291,139 
Return on average common equity (3)
(e)/(h)17.28 %19.43 %20.30 %19.23 %18.35 %
Return on average TCE (3)
(f)/(i)18.65 %21.01 %22.16 %20.80 %20.04 %
Adjusted return on average TCE (3)
(g)/(i)18.65 %21.01 %22.16 %20.96 %20.04 %
(1)Includes core deposit intangibles and mortgage servicing assets.
(2)Applied statutory tax rate of 29.29% for the three and nine months ended September 30, 2023, and the three months ended June 30, 2023. Applied statutory tax rate of 28.77% for the three and nine months ended September 30, 2022.
(3)Annualized.
20

EAST WEST BANCORP, INC. AND SUBSIDIARIES
GAAP TO NON-GAAP RECONCILIATION
($ and shares in thousands, except for per share data)
(unaudited)
Table 14
During the first quarter of 2023, the Company recorded a $10.0 million pre-tax impairment write-off of an AFS debt security. Management believes that presenting the computations of the adjusted net income, adjusted diluted earnings per common share, adjusted return on average assets and adjusted return on average common equity that adjust for the above discussed non-recurring item provide clarity to financial statement users regarding the ongoing performance of the Company and allows comparability to prior periods.
 Three Months EndedNine Months Ended
September 30, 2023June 30, 2023September 30, 2022September 30, 2023September 30, 2022
Net income
(a)$287,738 $312,031 $295,339 $922,208 $791,320 
Add: Write-off of AFS debt security— — — 10,000 — 
Tax effect of write-off (1)
— — — (2,929)— 
Adjusted net income
(b)$287,738 $312,031 $295,339 $929,279 $791,320 
Diluted weighted-average number of shares outstanding142,122 141,876 142,011 142,044 142,601 
Diluted EPS
$2.02 $2.20 $2.08 $6.49 $5.55 
Add: Write-off of AFS debt security— — — 0.05 — 
Adjusted diluted EPS
$2.02 $2.20 $2.08 $6.54 $5.55 
Average total assets
(c)$68,936,786 $67,497,367 $63,079,444 $67,196,590 $62,361,618 
Average stockholders’ equity
(d)$6,604,798 $6,440,996 $5,772,638 $6,411,250 $5,765,637 
Return on average assets (2)
(a)/(c)1.66 %1.85 %1.86 %1.83 %1.70 %
Adjusted return on average assets (2)
(b)/(c)1.66 %1.85 %1.86 %1.85 %1.70 %
Return on average common equity (2)
(a)/(d)17.28 %19.43 %20.30 %19.23 %18.35 %
Adjusted return on average common equity (2)
(b)/(d)17.28 %19.43 %20.30 %19.38 %18.35 %
(1)Applied statutory tax rate of 29.29% for the three and the nine months ended September 30, 2023, and the three months ended June 30, 2023. Applied statutory tax rate of 28.77% for the three and nine months ended September 30, 2022.
(2)Annualized.
21
East West Bancorp, Inc. Third Quarter 2023 Earnings Presentation October 19, 2023

 
Forward-Looking Statements 2 Forward-Looking Statements This presentation contains 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. These statements are based on the current beliefs and expectations of the management of East West Bancorp, Inc. (the “Company”) and are subject to significant risks and uncertainties. You should not place undue reliance on these statements. There are various important factors that could cause the Company’s future results to differ materially from historical performance and any forward-looking statements, including the factors described in the Company’s third-quarter 2023 earnings release, as well as those factors contained in the Company’s filings with the Securities and Exchange Commission, including the “Risk Factors” section of the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 and in its subsequent Quarterly Reports on Form 10-Q. 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. These statements speak only as of the date they are made and are based only on information then actually known to the Company. The Company does not undertake to update any forward-looking statements except as required by law. Non-GAAP Financial Measures Certain financial information in this presentation has not been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and is presented on a non-GAAP basis. Investors should refer to the reconciliations included in this presentation and should consider the Company’s non-GAAP measures in addition to, not as a substitute for or superior to, measures prepared in accordance with GAAP. These measures may not be comparable to similarly titled measures used by other companies.

 
50.0 52.1 53.1 $53.9 $55.7 $55.1 09.30.22 06.30.23 09.30.23 $36.80 $42.33 $43.29 09.30.22 06.30.23 09.30.23 $47.5 $49.8 $50.9 09.30.22 06.30.23 09.30.23 Third Quarter 2023 Performance 3 Key Metrics Highlights Loans – Period End Deposits – Period End Tangible Book Value2/Share (1) Y-o-Y growth rate for customer deposits (total deposits, excluding wholesale) (2) See reconciliation of GAAP to non-GAAP financial measures in the appendix and in the Company’s Earnings Press Releases $ i n b ill io n s $ i n b ill io n s +7% Y-o-Y +6% Y-o-Y1 +18% Y-o-Y Wholesale Customer ▪ Net income of $288 million, diluted EPS of $2.02 − Record 3Q revenue and net interest income ▪ Diversified loan growth across all categories − +2% Q-o-Q, +7% Y-o-Y ▪ Grew consumer and commercial deposits; reduced wholesale deposits ▪ Controlled expenses, continued industry- leading efficiency; positive operating leverage Q-o-Q ▪ TBV2 & ROTCE2 − TBV2/share: +2% Q-o-Q, +18% Y-o-Y − ROTCE2: 19%

 
$ Change % Change $ in millions, except per share data 09.30.23 06.30.23 Q-o-Q 09.30.22 Q-o-Q Y-o-Y Cash and equivalents, ST investments & resale agreements $ 5,363 $ 7,030 $ (1,667) $ 3,687 -24% 45% AFS debt securities 6,040 5,987 53 5,906 1% 2% HTM debt securities 2,964 2,976 (12) 3,013 0% -2% Total Loans $ 50,912 $ 49,831 $ 1,081 $ 47,457 2% 7% Allowance for loan losses (ALLL) (656) (635) (21) (583) 3% 13% Net Loans $ 50,256 $ 49,196 $ 1,060 $ 46,874 2% 7% Other assets 3,666 3,344 322 3,096 10% 18% Total Assets $ 68,289 $ 68,533 $ (244) $ 62,576 0% 9% Customer deposits1 $ 53,043 $ 52,034 $ 1,009 $ 49,981 2% 6% Wholesale deposits 2,044 3,625 (1,581) 3,876 -44% -47% Borrowings & repurchase agreements 4,500 4,500 - 1,137 NM 296% Long-term debt & finance lease liab. 153 153 - 153 NM NM Other liabilities 1,953 1,759 194 1,768 11% 10% Total Liabilities $ 61,693 $ 62,071 $ (378) $ 56,915 -1% 8% Total Stockholders' Equity $ 6,597 $ 6,462 $ 135 $ 5,661 2% 17% Change 09.30.23 06.30.23 09.30.22 Q-o-Q Y-o-Y Tangible book value2 per share $ 43.29 $ 42.33 $ 0.96 $ 36.80 2% 18% Tangible common equity ratio2 9.03% 8.80% - 8.35% 23 bps 68 bps 4 Summary Balance Sheet (1) Total deposits excluding wholesale deposits (2) See reconciliation of GAAP to non-GAAP financial measures in the appendix and in the Company’s Earnings Press Releases EWBC’s balance sheet position is strong, well-diversified and efficient Highlights ▪ Grew customer deposits and loan balances ▪ Used excess cash to pay down wholesale deposits ▪ Added to reserves ▪ Further enhanced our strong capital levels ▪ Intend to resume share repurchases in the fourth quarter B A A B A B

 
$15.9bn 31% $20.4bn 40% $14.6bn 29% 10% 2% 2% 3% 4% 5% 5 Commercial Loan Portfolio Outstandings ▪ $15.9bn ▪ +1% Q-o-Q & +2% Y-o-Y (1) Industries with 1% of total loans outstanding: Tech & Telecom; Food Production & Distribution; Hospitality & Leisure; Oil & Gas; Healthcare Services Well diversified by loan type, C&I diversified by industry and sector Total Loans C&I Loans by Industry (as % of Total Portfolio Loans) C&I Portfolio Highlights as of 09.30.23 Private Equity Media & Entertainment Real Estate Investment & Mgmt. Manufacturing & Wholesale Infrastructure & Clean Energy Other Industries with 1% of total loans outstanding1 Commitments ▪ $8.4bn undisbursed; $24.3bn total ▪ +2% Q-o-Q & +9% Y-o-Y growth (total) Utilization ▪ 65.3%, vs. 65.5% as of 06.30.23 Greater China ▪ $2.2bn outstanding ▪ +3% Q-o-Q from $2.1bn as of 06.30.23 ▪ Nearly all C&I, well- diversified by industry (as of 09.30.23) C&I Resi. Mortgage & Other Consumer CRE $50.9bn Total Loans

 
Multifamily 24% Retail 21% Industrial 19% Hotel 11% Office 11% Healthcare, 4% All other CRE, 6% Const. & Land, 4% Commercial Real Estate Portfolio 6 SoCal 50% NorCal 19% TX 8% NY 5% WA 3% Other 15% (as % of Total CRE, 09.30.23) $20.4 billion Loans Outstanding Our CRE portfolio is well diversified and has been below FFIEC guidelines since 2009 CRE Loans by Type Total CRE Distribution by Geography (as of 09.30.23)

 
Commercial Real Estate Portfolio Detail 7 (1) Weighted average LTV is based on most recent LTV, using most recent available appraisal and current loan commitment (2) Construction & Land average size based on total commitment <=50% 44% >50% to 55% 16% >55% to 60% 16% >60% to 65% 15% >65% to 70% 6% >70% 3% 51% Average LTV1 Low LTVs and granular, many loans have full recourse and personal guarantees Distribution by LTV1 Size and LTV by Property Type (as of 09/30.23) (as of 09.30.23) ▪ Fewer than 25% of CRE loans have an LTV over 60% Total Portfolio Size ($bn) Weighted Avg. LTV1 (%) Average Loan Size ($mm) Multifamily $4.9 52% $2 Retail 4.3 48 2 Industrial 3.9 47 3 Hotel 2.3 53 9 Office 2.3 52 4 Healthcare 0.8 56 4 Other 1.1 49 3 Construction & Land2 0.8 54 14 Total CRE $20.4 51% $3

 
Residential Mortgage Portfolio 8 SoCal 40% NorCal 16% NY 27% WA 7% TX 2% Other 8% <=50% 44% >50% to 55% 12% >55% to 60% 33% >60% 11% 51% Average LTV1 Well-diversified by geography, with low LTVs and average loan size Resi. Mortgage Distribution by Geography3 (as of 09.30.23) Resi. Mortgage Distribution by LTV1 (as of 09.30.23) $436,000 Average loan size2 (1) Combined LTV for 1st and 2nd liens; based on commitment (2) Avg. size based on loan outstanding for single-family residential and commitment for HELOC (3) Geographic distribution based on commitment size of residential mortgage Portfolio Highlights as of 09.30.23 Outstandings ▪ $14.6bn loans outstanding ▪ +3% Q-o-Q and +12% Y-o-Y Originations ▪ $0.9bn in 3Q23 ▪ -1% Q-o-Q and -38% Y-o-Y ▪ Primarily originated through East West Bank branches Single-family Residential ▪ $12.8bn loans outstanding ▪ +4% Q-o-Q and +18% Y-o-Y HELOC ▪ $1.8bn loans outstanding ▪ $3.5bn in undisbursed commitments ▪ 33% utilization, vs. 35% as of 06.30.23 ▪ 81% of commitments in first lien position

 
$7 $10 $1 $8 $18 3Q22 4Q22 1Q23 2Q23 3Q23 0.06% 0.08% 0.01% 0.06% 0.14% 372 372 376 375 384 178 182 189 203 211 33 42 55 57 61$583 $596 $620 $635 $656 1.23% 1.24% 1.27% 1.28% 1.29% 09.30.22 12.31.22 03.31.23 06.30.23 09.30.23 Solid & Stable Asset Quality Metrics 9 Nonaccrual loans OREO & other NPAs NPAs / Total Assets Criticized Loans / Loans HFI Classified loans HFI Special Mention loans HFI HFI represents Held-for-Investment Classified loans HFI Special Mention loans HFI Criticized Ratio by Loans HFI Portfolio (as of 09.30.23) ▪ Net charge-offs of $18mm, or annualized 0.14% of avg. loans, vs. 0.06% in 2Q23 ▪ Provision for credit losses: $42mm for 3Q23 compared with $26mm for 2Q23 ▪ ALLL coverage of loans: 1.29% as of 09.30.23, vs. 1.28% as of 06.30.23 ▪ Nonperforming assets: decreased to $104mm (0.15% of assets) as of 09.30.23, compared with $116mm (0.17% of assets) as of 06.30.23 ▪ Criticized loans: $1.0bn (2.01% of loans HFI) as of 09.30.23, up from $812mm (1.63% of loans HFI) as of 06.30.23 Net Charge-offs Net charge-offsNCO ratio (ann.) Allowance for Loan Losses Coverage Ratio C&I Total CRE Resi. mort. & consumer ALLL/Loans HFI 0.16% 0.16% 0.14% 0.17% 0.15% 09.30.22 12.31.22 03.31.23 06.30.23 09.30.23 0.92% 0.89% 0.93% 0.97% 1.06% 0.99% 0.97% 0.94% 0.66% 0.95% 1.91% 1.86% 1.87% 1.63% 2.01% 09.30.22 12.31.22 03.31.23 06.30.23 09.30.23 $ i n m ill io n s $ i n m ill io n s 3.40% 2.08% 0.40% C&I CRE Resi. mortgage & consumer

 
8.4% 9.6% 12.3% 13.6% 8.8% 10.0% 13.2% 14.6% 9.0% 10.2% 13.3% 14.7% Tangible common equity Leverage CET1 Total capital 09.30.22 06.30.23 09.30.23 ▪ Very strong capital − We operate from a position of capital strength − Hypothetical adjustments for AFS + HTM security marks and on- and off- balance sheet allowance (not already reflected in equity) would still result in very strong capital ratios ▪ 4Q23 Dividend of $0.48/share − 2023 total dividends of $1.92 ▪ Stock repurchase activity − None during 3Q23 − Intend to resume share repurchases in 4Q23 − Remaining share authorization of $254mm Capital Ratios 10 (1) The Company has elected to use the 2020 CECL transition provision in the calculation of its September 30, 2022, June 30, 2023, and September 30, 2023 regulatory capital ratios. The Company’s September 30, 2023 regulatory capital ratios are preliminary. Highlights Strong capital levels – all ratios increased Q-o-Q 1 (2) See reconciliation of GAAP to non-GAAP financial measures in the appendix and in the Company’s Earnings Press Releases Regulatory well capitalized ratio 6.5% 10.0% 5.0% 2

 
$26.3 $26.7 $27.3 $16.7 $18.0 $18.4 $4.0 $4.5 $4.4 $3.0 $2.9 $3.0 $3.9 $3.6 $2.0 $53.9 $55.7 $55.1 09.30.22 06.30.23 09.30.23 Wholesale Greater China State & Public Agency Consumer Commercial $50.0bn Customer Deposits1 $16.2 29% $12.6 23% $9.6 18% $16.7 30% Demand Deposit Accounts (DDA) Money Market (MMDA) Int. Bearing Checking & Savings Time Total Deposit Portfolio 11 (1) Total deposits excluding wholesale deposits Granular and diversified by segment, customer type ▪ Grew customer deposits by $1bn Q-o-Q − Commercial up $600mm − Consumer up $400mm ▪ Reduced wholesale deposits by $1.6bn Q-o-Q ▪ Portfolio Detail (as of 09.30.23) − Over 580,000 accounts − Average commercial deposit account size: ~$332,000 − Average consumer deposit account size: ~$39,000 HighlightsDeposits by Segment as % of Total Deposits (as of 09.30.23, $ in billions) Total Deposits by Account Type $55.1 billion Total Deposits $52.1bn1 $53.1bn1 (as of 09.30.23, $ in billions)

 
17% 16% 15% 4% 8% 8% 87% 90% 90% 3Q22 2Q23 3Q23 Avg. Earning Asset (“AEA”) Mix & Avg. Loan-to-Deposit (“LTD”) Ratio 15.3 15.2 15.4 18.6 19.6 20.1 13.0 14.1 14.4 $46.9 $48.9 $49.9 3Q22 2Q23 3Q23 22.4 16.9 16.3 12.4 10.4 12.2 9.9 10.7 10.1 9.4 16.3 16.6 $54.1 $54.3 $55.2 3Q22 2Q23 3Q23 Average Balance Sheet: Growth & Mix 12 DDA MMDA IB Checking & Savings Time ▪ 3Q23 avg. deposits: +2% Q-o-Q; +$913mm − MMDA: +$1.7bn − CDs: +$332mm − Declines in other deposit categories reflected customers reallocating balances to products with higher yields $ i n b ill io n s Loans/AEA Secur. & other /AEA IB Cash & equiv./AEA Avg. LTD ratio ▪ 3Q23 AEA growth: +2% Q-o-Q, reflecting loan growth. − Loans made up 77% of AEA in 3Q23, vs. 76% in 2Q23 ▪ 3Q23 avg. loan growth: +2% Q-o-Q; +$1.0bn. − CRE: +$460mm − Resi & other: +$423mm − C&I: +$155mm $ i n b ill io n s C&I Total CRE Residential mortgage & other consumer Average Loans Average Deposits

 
Net Interest Income & Net Interest Margin 13 $ i n m ill io n s +0.01% +0.14% 3.55% Higher loan yields, balances 3.48% Higher other AEA yields -0.04% Higher cost of IB deposits, balances -0.22% Favorable earning asset mix shift +0.04% Deposit mix shift Record third quarter NII, growth Q-o-Q ▪ 3Q23 NII up 1% Q-o-Q ▪ 3Q23 NIM down 7bp Q-o-Q ▪ NIM Drivers − Higher cost of interest-bearing deposits and deposit mix shift − Higher loan balances and interest-earning asset yields provided a partial offset − Changes in yields and rates reflected an increase in benchmark interest rates in the quarter amid customer preferences for deposit products with higher yields HighlightsNet Interest Income (NII) & Net Interest Margin (NIM) Impact to NIM from Q-o-Q Change in Yields, Rates & Mix 2Q23 3Q23 $552 $606 $600 $567 $571 3.68% 3.98% 3.96% 3.55% 3.48% 2.35% 3.82% 4.68% 5.16% 5.43% 3Q22 4Q22 1Q23 2Q23 3Q23 NII NIM Avg. Fed Funds Rate

 
4.16% 4.31% 4.49% 4.69% 4.90% Single-family Resi. 5.07% 5.93% 6.27% 6.47% 6.63% CRE 5.59% 6.76% 7.15% 7.48% 7.69% C&I Loan Yields 14 C&I spot rate excludes PPP, credit cards, deposit overdraft & micro- finance 60%* variable rate 43% hybrid in fixed-rate period & 41% fixed rate 100% Prime-based, variable rate 09.30.22 12.31.22 03.31.23 06.30.23 09.30.23 Rate sheet pricing for 30-year fixed mortgage is 7.5%, 0 points as of 10.05.23 *45% had customer-level interest rate derivative contracts in place HELOC utilization rate 33% as of 09.30.23 Loan Coupon Spot Rate by Portfolio Average Loan Yield vs. 1M SOFR Loan Portfolio by Index Rate (as of 09.30.2023) Total fixed rate and hybrid in fixed period: 41% 88% variable rate 4.75% 5.59% 6.14% 6.33% 6.51% 2.42% 3.87% 4.61% 5.03% 5.29% 3Q22 4Q22 1Q23 2Q23 3Q23 Avg. loan yield Avg. 1M SOFR Coupon Spot Rate as of 09.30.23: 6.62% 6.68% 8.18% 8.72% 9.11% 9.34% HELOC 22% 19% 28% 25% 6% Fixed rate Hybrid in fixed rate period Variable - LIBOR + SOFR rates Variable - Prime rate Variable - all other rates

 
0.51% 1.06% 1.60% 2.12% 2.43% 0.86% 1.74% 2.49% 3.09% 3.45% 0% 1% 2% 3% 4% 5% 6% 3Q22 4Q22 1Q23 2Q23 3Q23 Deposit Cost 15 0.74% 1.35% 1.93% 2.28% 2.48% Total Deposits Spot Rate Cumulative beta1: 46% 1.24% 2.16% 2.85% 3.25% 3.51% IB Deposits Spot Rate Cumulative beta1: 64% 5.10% 5.92% 6.21% 6.45% 6.62% Total Loan Coupon Spot Rate Cumulative beta1: 61% Target Fed Funds rate Average Deposit Cost Relative to Target Fed Funds Rate (1) Beta represents change in metric between 09.30.23 and 12.31.21, divided by change in target Fed Funds rate between 09.30.23 and 12.31.21 Average cost of deposits Average cost of interest-bearing deposits Deposit Spot Rate vs. Loan Coupon Spot Rate and Cumulative Beta1 09.30.22 12.31.22 03.31.23 06.30.23 09.30.23

 
24 22 23 20 21 20 10 13 12 9 7 6 4 6 6 $67 $69 $67 3Q22 2Q23 3Q23 IRC Revenue Wealth Mgmt. Fees FX Income Lending Fees Deposit Acct. Fees Noninterest Income 16 Interest Rate Contracts (IRC) and Other Derivative Income Detail ($mm) 3Q22 2Q23 3Q23 Revenue $ 4.0 $ 6.0 $ 5.9 MTM 4.8 1.4 5.3 Total $ 8.8 $ 7.4 $ 11.2 Consistent relationship-based fee base ▪ Total noninterest income − $77mm in 3Q23, down $2mm, or 2% from $79mm in 2Q23 − Other investment income of $2mm down from $4mm Q-o- Q, reflecting higher equity recognition of Community Reinvestment Act investments during 2Q23 ▪ Interest rate contracts & other − Up $4mm Q-o-Q, driven primarily by a favorable mark-to-market adjustment HighlightsFee Income1 (1) Fee income excludes MTM adjustments related to IRC and other derivatives; net gains on sales of loans; net gains on sales of securities; other investment income and other income $ i n m ill io n s

 
128 125 123 16 16 15 11 11 12 12 19 20 29 34 32 $196 $205 $202 3Q22 2Q23 3Q23 All other Deposit related expenses Computer software & Data processing Occupancy & Equipment Comp and employee benefits Operating Expense & Efficiency 17 $ i n m ill io n s Industry-leading efficiency supporting profitability ▪ Total noninterest expense of $252mm ▪ Adjusted noninterest expense1 down $3mm Q-o-Q − Reflects decreases in consulting expense, compensation and employee benefits, loan related expenses, and occupancy expense HighlightsAdjusted Noninterest Expense1 (1) See reconciliation of GAAP to non-GAAP financial measures in the appendix and in the Company’s Earnings Press Releases Adjusted Efficiency Ratio1 31.2% 31.8% 31.2% 3Q22 2Q23 3Q23

 
Management Outlook: Full Year 2023 18 (1) PPP loans were $99.0 million as of 12.31.22. Income related to PPP loans was $7.3 million in FY 2022 (2) See reconciliation of GAAP to non-GAAP financial measures in the appendix and in the Company’s Earnings Press Releases Earnings Drivers FY 2023 Expectations vs. FY 2022 Results 2022 Actual End of Period Loans ▪ Increase in the range of 5% to 7% Y-o-Y. PPP impact immaterial $48.1 billion (ex. PPP1) +17% Y-o-Y (ex. PPP1) Net Interest Income ▪ Increase in the range of 12% to 15% Y-o-Y. PPP impact immaterial $2.0 billion (ex. PPP1) +38% Y-o-Y (ex. PPP1) Adj. Noninterest Expense2 (ex. tax credit investment & core deposit intangible amortization; ex. debt extinguishment cost) ▪ Increase in the range of 9% to 11% Y-o-Y ▪ Expecting to deliver positive operating leverage on a full-year basis $744 million +11% Y-o-Y Credit Items ▪ Provision for credit losses in the range of $110 million to $130 million Gross charge-off ratio of 0.08% for FY 2022. Net charge-off ratio of 0.04% for FY 2022. Tax Items (Tax credit investments and amortization referenced in this outlook exclude low- income housing tax credits) ▪ FY effective tax rate: 19% to 20% ▪ Tax credit investments: ~$185mm ▪ 4Q tax credit amortization: ~$45mm FY effective tax rate: 20% Tax credit investments: $129mm Tax credit amortization: $113mm Interest Rates ▪ Forward interest rate curve as of 09.30.23 ▪ To end 2023 with a Fed Funds target rate of 5.5% Fed Funds target rate increased to 4.50% as of 12.31.22, up from 0.25% as of 12.31.21. Largely reaffirming prior guidance, updating outlook for tax items

 
APPENDIX

 
CRE Office – Additional Information 20 CRE Office: Geographic Mix by Metro Area CRE Office by Size Segment (as of 09.30.23) (as of 09.30.23) 6% 33% 8% 14% 8% 8% Low LTVs across different size segments, low average loan size Loan Size Balance ($ in mm) No. of Loans Avg. Loan Size ($ in mm) LTV >$30mm $258 6 $43 56% $20mm - $30mm 497 20 25 53 $10mm - $20mm 548 38 14 55 $5mm - $10mm 442 59 7 51 <$5mm 541 421 1 46 Total $2,286 544 $4 52% 35% 6% 14% 8% 8% 5% 4% 3% 5% 6% Other Los Angeles County Other SoCal Other Bay Area San Francisco Other CA 2% Houston Dallas Manhattan, 1% Other TX Washington Other Regions New Jersey, 2% Other NY, 1% Downtown Los Angeles

 
CRE Retail – Additional Information 21 CRE Retail: Geographic Mix by Metro Area CRE Retail by Size Segment (as of 09.30.23) (as of 09.30.23) 30% 4% 18%10% 3% 4% 5% 5% 3% 3% 11% Other Los Angeles County Downtown Los Angeles Other SoCalOther Bay Area San Francisco Other CA Houston Dallas, 1% Manhattan Other TX, 2% Washington Other Regions New Jersey, 1% Other NY Loan Size Balance ($ in mm) No. of Loans Avg. Loan Size ($ in mm) LTV >$30mm $301 8 $38 43% $20mm - $30mm 429 17 25 58 $10mm - $20mm 740 54 14 52 $5mm - $10mm 751 109 7 49 <$5mm 2,029 1,521 1 45 Total $4,251 1,709 $2 48% Low LTVs across different size segments, low average loan size

 
Appendix: GAAP to Non-GAAP Reconciliation 22 (1) Annualized EAST WEST BANCORP, INC. AND SUBSIDIARIES GAAP TO NON-GAAP RECONCILIATION ($ in thousands) (unaudited) The Company uses certain non-GAAP financial measures to provide supplemental information regarding the Company’s performance. Adjusted efficiency ratio represents adjusted noninterest expense divided by adjusted revenue. Adjusted revenue excludes the write-off of an AFS debt security (where applicable). Adjusted noninterest expense excludes the amortization of tax credit and other investments, the amortization of core deposit intangibles and the repurchase agreements’ extinguishment cost (where applicable). 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.

 
Appendix: GAAP to Non-GAAP Reconciliation 23 EAST WEST BANCORP, INC. AND SUBSIDIARIES GAAP TO NON-GAAP RECONCILIATION ($ in thousands) (unaudited) The Company uses certain non-GAAP financial measures to provide supplemental information regarding the Company’s performance. Tangible book value, tangible book value per share and TCE ratio are non-GAAP financial measures. Tangible book value 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. (1) Includes core deposit intangibles and mortgage servicing assets.

 
Appendix: GAAP to Non-GAAP Reconciliation 24 (1) Includes core deposit intangibles and mortgage servicing assets. (2) Applied statutory tax rate of 29.29% for the three and nine months ended September 30, 2023, and the three months ended June 30, 2023. Applied statutory tax rate of 28.77% for the three and nine months ended September 30, 2022. (3) Annualized. EAST WEST BANCORP, INC. AND SUBSIDIARIES GAAP TO NON-GAAP RECONCILIATION ($ in thousands) (unaudited) Return on average TCE represents tangible net income divided by average tangible book value. Adjusted return on average TCE represents adjusted tangible net income divided by average tangible book value. Tangible net income excludes the after-tax impacts of the amortization of core deposit intangibles and mortgage servicing assets. Adjusted tangible net income excludes the after-tax impacts of the tangible net income adjustments and the write-off of an AFS debt security. 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.

 
v3.23.3
Cover Page
Oct. 19, 2023
Cover [Abstract]  
Document Type 8-K
Document Period End Date Oct. 19, 2023
Entity Registrant Name EAST WEST BANCORP, INC.
Entity Central Index Key 0001069157
Amendment Flag false
Entity Incorporation, State or Country Code DE
Entity File Number 000-24939
Entity Tax Identification Number 95-4703316
Entity Address, Address Line One 135 North Los Robles Ave.
Entity Address, Address Line Two 7th Floor
Entity Address, City or Town Pasadena
Entity Address, State or Province CA
Entity Address, Postal Zip Code 91101
City Area Code 626
Local Phone Number 768-6000
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Title of 12(b) Security Common Stock, par value $0.001 per share
Trading Symbol EWBC
Security Exchange Name NASDAQ
Entity Emerging Growth Company false
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