0001069157false00010691572024-01-232024-01-23


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)
January 23, 2024

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 January 23, 2024, East West Bancorp, Inc. (the “Company”) announced its financial results for the quarter and full year ended December 31, 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 January 23, 2024, the Company will hold a conference call to discuss its financial results for the quarter and full year ended December 31, 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 January 23, 2024.
Presentation Materials, dated January 23, 2024.
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: January 23, 2024By:/s/ Christopher J. Del Moral-Niles 
Christopher J. Del Moral-Niles
  Executive Vice President and Chief Financial Officer


3




Exhibit 99.1
ewbc_logo-err011624.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 FULL YEAR 2023
OF $1.2 BILLION AND DILUTED EARNINGS PER SHARE OF $8.18; INCREASES DIVIDEND BY 15%

Pasadena, California – January 23, 2024 – 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 2023. Full year 2023 net income was $1.2 billion, or $8.18 per diluted share. Excluding $70 million pre-tax of FDIC Special Assessment-related expense (the “FDIC charge”) and $7 million of net losses on an AFS debt security, adjusted diluted earnings per share1 for the year were $8.56.

Fourth quarter 2023 net income was $239 million, or $1.69 per diluted share. Excluding the FDIC charge and a $3 million gain on the sale of an AFS debt security, adjusted earnings per diluted share were $2.02 for the fourth quarter. Return on average common equity was 18% in 2023, and book value per share grew 17% year-over-year.

“I am pleased to report that 2023 was another year of record revenue and earnings for East West,” stated Dominic Ng, Chairman and Chief Executive Officer of East West. “As I look back I am very proud of our strong performance, marked by an over 20% adjusted return on average tangible common equity and 18% growth in tangible book value per share. East West demonstrated the resilience of our business model and the loyalty of our customers through a tumultuous year.”2

“Thanks to the unwavering dedication of our colleagues to clients and the strength and diversification of our balance sheet, East West has emerged even stronger from the market disruption that characterized 2023. As we start a new year, we are pleased to announce a 15% increase in our common stock dividend. We remain committed to delivering top-tier shareholder returns, supported by prudent balance sheet growth, industry-leading efficiency, and sound risk management.”

FINANCIAL HIGHLIGHTS
Twelve Months Ended December 31,
Year-over-Year Change
($ in millions, except per share data)20232022$%
Revenue$2,608$2,345$26311%
Adjusted Pre-tax, Pre-provision Income3
1,7881,60018712
Net Income1,1611,128333
Diluted Earnings per Share$8.18$7.92$0.263%
Adjusted Diluted Earnings per Share1
$8.56$7.92$0.648%
Book Value per Share
$49.64$42.46$7.1817%
Tangible Book Value2 per Share
$46.27$39.10$7.1718%
Return on Average Common Equity17.91%19.51%-160 bps—
Adjusted Return on Average Tangible Common Equity2
20.25%21.29%-104 bps—
Total Assets
$69,613$64,112$5,5019%
1 Adjusted diluted earnings per share is a non-GAAP financial measure. See reconciliation of GAAP to non-GAAP measures in Table 15.
2 Adjusted return on average tangible common equity and tangible book value are non-GAAP financial measures. See reconciliation of GAAP to non-GAAP measures in Table 14.
3 Adjusted pre-tax, pre-provision income is a non-GAAP financial measure. See reconciliation of GAAP to non-GAAP financial measures in Table 13.
1

BALANCE SHEET

•Total Assets – Total assets were $69.6 billion as of December 31, 2023, an increase of $1.3 billion from $68.3 billion as of September 30, 2023, primarily reflecting loan growth. Year-over-year, total assets grew $5.5 billion or 9% from $64.1 billion as of December 31, 2022.

Fourth quarter 2023 average interest-earning assets of $65.5 billion were up nearly $0.5 billion, or 1%, from $65.1 billion in the third quarter of 2023, primarily due to an increase of $1.4 billion in average loans outstanding, partly offset by a $0.9 billion decrease in interest-bearing cash and deposits with banks.

•Total Loans – Total loans reached a record $52.2 billion as of December 31, 2023, an increase of $1.3 billion, or 3%, from $50.9 billion as of September 30, 2023. Year-over-year, total loans were up $4.0 billion, or 8%, from $48.2 billion as of December 31, 2022.

Fourth quarter 2023 average loans of $51.3 billion grew $1.4 billion, or 3%, from the third quarter of 2023. The increase was driven by growth across all our major loan portfolios.

•Total Deposits – Total deposits were $56.1 billion as of December 31, 2023, an increase of $1.0 billion, or 2%, from $55.1 billion as of September 30, 2023, primarily reflecting an increase in customer deposits. Noninterest-bearing deposits made up 28% of our total deposits as of December 31, 2023, down from 29% as of September 30, 2023. Year-over-year, total deposits increased $125 million from $56.0 billion as of December 31, 2022.

Fourth quarter 2023 average deposits of $55.4 billion increased $208 million from the third quarter of 2023, with growth in average money market and time deposits offset by declines in other deposit categories.

•Strong Capital Levels – As of December 31, 2023, stockholders’ equity was $7.0 billion, up 5% quarter-over-quarter. The stockholders’ equity to asset ratio was 9.98% as of December 31, 2023, an increase of 32 basis points quarter-over-quarter.

As of December 31, 2023, tangible book value2 per share was $46.27, up 7% quarter-over-quarter and 18% year-over-year. The tangible common equity ratio2 was 9.37%, an increase of 34 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 13.31%, and the total risk-based capital ratio increased slightly by three basis points to 14.76%, as of December 31, 2023.

OPERATING RESULTS

Full Year Earnings - Full year 2023 net income was a record $1.2 billion or $8.18 per diluted share, both up 3% year-over-year. Full year revenue was a record $2.6 billion, an increase of $263 million, or 11% year-over-year, and full year adjusted pre-tax, pre-provision income was a record $1.8 billion, an increase of $187 million, or 12% year-over-year.

Fourth Quarter Earnings – Fourth quarter 2023 net income was $239 million, and diluted earnings per share (“EPS”) were $1.69.












2 Tangible book value and the tangible common equity ratio are non-GAAP financial measures. See reconciliation of GAAP to non-GAAP measures in Table 14.
2

Fourth Quarter 2023 Compared to Third Quarter 2023

Net Interest Income and Net Interest Margin

Net interest income totaled $575 million in the fourth quarter, an increase of 1% from $571 million in the third quarter. Net interest margin (“NIM”) was 3.48%, unchanged from the third quarter.
•NIM benefited from higher loan balances and a more favorable asset mix, offset by the higher cost of interest-bearing deposits and changes in the deposit mix in favor of higher-cost customer deposits.
•The average loan yield was 6.61%, up 10 basis points from the third quarter. The average interest-earning asset yield was 6.00%, up 13 basis points from the third quarter.
•The average cost of funds was 2.74%, up 15 basis points from the third quarter. The average cost of deposits was 2.60%, up 17 basis points from the third quarter.

Noninterest Income

Noninterest income totaled $80 million in the fourth quarter, an increase of $3 million, or 4%, from $77 million in the third quarter. Net gains on sales of loans were $4 million in the fourth quarter, primarily reflecting the sale of Small Business Administration loans within the quarter. Net gains on AFS debt securities were $3 million, representing a partial recovery against the $10 million pre-tax impairment loss taken in the first quarter of 2023 on a subordinated AFS debt security of a failed bank.
•Fee income4 of $73 million was up $6 million, or 9%, from $67 million in the third quarter.
•Customer derivative income (loss) was a loss of $1 million in the fourth quarter, compared with income of $11 million in the third quarter. The quarter-over-quarter decrease of close to $12 million was due to an unfavorable change in mark-to-market adjustments. The mark-to-market and credit valuation adjustments on customer and other derivatives was a loss of $7 million in the fourth quarter, compared with a gain of $5 million in the third quarter. Customer-driven derivative revenue of $6 million in the fourth quarter was essentially unchanged from the third quarter.
•Foreign exchange income, wealth management fees, and lending fees each increased by $2 million, reflecting higher customer activity.

Noninterest Expense

Noninterest expense totaled $290 million in the fourth quarter, an increase of $38 million, or 15% from $252 million in the third quarter, including $70 million for the FDIC charge5. Fourth quarter noninterest expense consisted of $215 million of adjusted noninterest expense6, and $5 million in amortization expenses related to tax credit and other investments and core deposit intangibles.
•Adjusted noninterest expense of $215 million increased nearly $14 million, or 7%, from $202 million in the third quarter. This was driven primarily by an $8 million increase in compensation and employee benefits, reflecting higher commissions and incentive accruals, and a $6 million increase in other operating expense, primarily reflecting increases in legal expense, realized credit card fraud losses, and advertising.
•Amortization of tax credit and other investments was $5 million in the fourth quarter, down from $50 million in the third quarter. The decrease was due to the sale of a tax credit investment and timing of certain renewable energy tax credit investments that were not placed into service in the fourth quarter.
•The efficiency ratio was 44.4% in the fourth quarter, compared with 38.9% in the third quarter and the adjusted efficiency ratio6 was 33.1% in the fourth quarter, compared with 31.2% in the third quarter.




4 Fee income includes lending, deposit account and wealth management fees, foreign exchange income, and customer derivative revenue. Refer to Table 5 for additional fee and noninterest income information.
5 In November 2023, the Federal Deposit Insurance Corporation (“FDIC”) approved a final rule to implement a special deposit insurance assessment to recover losses to the Deposit Insurance Fund arising from the protection of uninsured depositors following the receiverships of failed institutions in the spring of 2023. Under the final rule, the assessment base for the special assessment is equal to an insured depository institution’s estimated uninsured deposits, reported for the quarter ended December 31, 2022, minus the first $5 billion in estimated uninsured deposits. The FDIC will collect the special assessment over eight quarterly assessment periods starting with the first quarter of 2024, at a quarterly rate of 3.36 bps.
6 Adjusted noninterest expense and adjusted efficiency ratio are non-GAAP financial measures. See reconciliation of GAAP to non-GAAP measures in Table 13.
3

TAX RELATED ITEMS

Full year 2023 income tax expense was $299 million, and the effective tax rate was 20.5%, compared with income tax expense of $284 million and an effective tax rate of 20.1% for the full year 2022. Fourth quarter 2023 income tax expense was $88 million, and the effective tax rate was 27.0%, compared with income tax expense of $66 million and 18.6% for the third quarter of 2023. The higher effective tax rate in the fourth quarter was mainly due to the sale of a tax credit investment and timing of certain renewable energy tax credit investments that were not placed into service in the fourth quarter.

ASSET QUALITY

As of December 31, 2023, the credit quality of our loan portfolio remained solid.
•The criticized loans ratio decreased 14 basis points quarter-over-quarter to 1.87% of loans held-for-investment (“HFI”) as of December 31, 2023, compared with 2.01% as of September 30, 2023. Criticized loans decreased $43 million, or 4%, quarter-over-quarter to $1.0 billion as of December 31, 2023. The special mention loans ratio decreased 18 basis points quarter-over-quarter to 0.77% of loans HFI as of December 31, 2023, compared with 0.95% as of September 30, 2023, and the classified loans ratio increased four basis points to 1.10%.
•The nonperforming assets ratio was 0.16% of total assets as of December 31, 2023, compared with 0.15% of total assets as of September 30, 2023. Nonperforming assets increased $10 million to $114 million as of December 31, 2023, from $104 million as of September 30, 2023.
•Fourth quarter 2023 net charge-offs were $20 million, or annualized 0.15% of average loans HFI, compared with $18 million, or annualized 0.14% of average loans HFI, for the third quarter of 2023.
•The allowance for loan losses increased to $669 million, or 1.28% of loans HFI, as of December 31, 2023, compared with $656 million, or 1.29% of loans HFI, as of September 30, 2023, primarily reflective of net loan growth.
•Fourth quarter 2023 provision for credit losses was $37 million, compared with $42 million in the third quarter of 2023.

CAPITAL STRENGTH

Capital levels for East West remained strong. The following table presents capital metrics as of December 31, 2023, September 30, 2023 and December 31, 2022.

EWBC Capital
($ in millions)
December 31, 2023 (a)
September 30, 2023 (a)
December 31, 2022 (a)
Risk-Weighted Assets (“RWA”) (b)
$53,663$52,951$50,037
Risk-based capital ratios:
CET1 capital ratio13.31%13.30%12.68%
Tier 1 capital ratio13.31%13.30%12.68%
Total capital ratio14.76%14.73%14.00%
Leverage ratio10.21%10.15%9.80%
Tangible common equity ratio (c)
9.37%9.03%8.66%
    
(a)The Company has elected to use the 2020 Current Expected Credit Losses (CECL) transition provision in the calculation of its December 31, 2023, September 30, 2023 and December 31, 2022 regulatory capital ratios. The Company’s December 31, 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 14.

4

DIVIDEND PAYOUT AND CAPITAL ACTIONS

East West’s Board of Directors has declared first quarter 2024 dividends for the Company’s common stock. The common stock cash dividend of $0.55 per share is payable on February 15, 2024, to stockholders of record on February 2, 2024. This represents a 15% increase, or seven cents per share, to the quarterly common stock dividend, up from $0.48 per share previously. The new annual dividend equivalent is $2.20 per share, compared with $1.92 per share previously.

East West repurchased 1.5 million shares of common stock during the fourth quarter of 2023 for approximately $82 million. $172 million of East West’s share repurchase authorization remains available.

Conference Call
East West will host a conference call to discuss fourth quarter 2023 earnings with the public on Tuesday, January 23, 2024, at 2:00 p.m. PT/5:00 p.m. ET. The public and investment community are invited to listen as management discusses fourth 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.
•Information to access a replay of the call will be available one hour after the call on the Investor Relations site at www.eastwestbank.com/investors.

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 $69.6 billion as of December 31, 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. East West Bancorp, Inc. (referred to herein on an unconsolidated basis as “East West” and on a consolidated basis as the “Company,” “we,” “us,” “our” or “EWBC”) may make forward-looking statements in other documents that it files with, or furnishes to, the United States (“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, residential and commercial property 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 political unrest, wars and acts of terrorism; the soundness of other financial institutions and the impacts related to or resulting from 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 us; 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 (“DFPI”) — Division of Financial Institutions, the People’s Bank of China (“PBOC”), China’s National Administration of Financial Regulation (“NAFR”), the Hong Kong Monetary Authority (“HKMA”), the Hong Kong Securities and Futures Commission (“HKSFC”), and the Monetary Authority of Singapore (“MAS”); 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 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 initiatives or 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 proprietary, or personally identifiable 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 and other proceedings; the impact of 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 on the Company and its customers; 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, regulatory agreements, supervisory criticisms, 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 operations of the Company and 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 financial performance of the Company and its customers.

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   
December 31, 2023
% or Basis Point Change
 December 31, 2023September 30, 2023December 31, 2022Qtr-o-QtrYr-o-Yr
Assets   
Cash and cash equivalents$4,614,984$4,561,178$3,481,7841.2 %32.5 %
 Interest-bearing deposits with banks10,49817,213139,021(39.0)(92.4)
 Assets purchased under resale agreements (“resale agreements”)785,000785,000792,192— (0.9)
 
Available-for-sale (“AFS”) debt securities (amortized cost of $6,916,491, $6,976,331 and $6,879,225)
6,188,3376,039,8376,034,9932.5 2.5 
Held-to-maturity (“HTM”) debt securities, at amortized cost (fair value of $2,453,971, $2,308,048 and $2,455,171)
2,956,0402,964,2353,001,868(0.3)(1.5)
 Loans held-for-sale (“HFS”)1164,76225,644(97.6)(99.5)
 
Loans held-for-investment (“HFI”) (net of allowance for loan losses of $668,743, $655,523 and $595,645)
51,542,03950,251,66147,606,7852.6 8.3 
Investments in qualified affordable housing partnerships, tax credit and other investments, net905,036901,559763,2560.4 18.6 
 Goodwill465,697465,697465,697— — 
Operating lease right-of-use assets94,02497,782103,681(3.8)(9.3)
 Other assets 2,051,1132,200,5341,697,229(6.8)20.9 
 Total assets $69,612,884$68,289,458$64,112,1501.9 %8.6 %
Liabilities and Stockholders’ Equity   
 Deposits$56,092,438$55,087,031$55,967,8491.8 %0.2 %
Short-term borrowings4,500,0004,500,000—— 100.0 
 Assets sold under repurchase agreements (“repurchase agreements”)——300,000— (100.0)
 Long-term debt and finance lease liabilities153,011153,087152,400(0.0)0.4 
Operating lease liabilities 102,353107,695111,931(5.0)(8.6)
 Accrued expenses and other liabilities1,814,2481,844,9391,595,358(1.7)13.7 
 Total liabilities62,662,05061,692,75258,127,5381.6 7.8 
 Stockholders’ equity6,950,8346,596,7065,984,6125.4 16.1 
 Total liabilities and stockholders’ equity $69,612,884$68,289,458$64,112,1501.9 %8.6 %
 Book value per share $49.64$46.62$42.466.5 %16.9 %
 
Tangible book value (1) per share
$46.27$43.29$39.106.9 18.3 
 Number of common shares at period-end140,027141,486140,948(1.0)(0.7)
Total stockholders’ equity to assets ratio9.98 %9.66 %9.33 %32 bps65 bps
Tangible common equity (“TCE”) ratio (1)
9.37 %9.03 %8.66 %34 bps71 bps
(1)Tangible book value and the TCE ratio are non-GAAP financial measures. See reconciliation of GAAP to non-GAAP measures in Table 14.
7


EAST WEST BANCORP, INC. AND SUBSIDIARIES
TOTAL LOANS AND DEPOSITS DETAIL
($ in thousands)
(unaudited)
Table 2
December 31, 2023
% Change
  December 31, 2023September 30, 2023December 31, 2022Qtr-o-QtrYr-o-Yr
Loans:   
Commercial:
Commercial and industrial (“C&I”) $16,581,079 $15,864,042 $15,711,095 4.5 %5.5 %
Commercial real estate (“CRE”):
 
CRE
14,777,081 14,667,378 13,857,870 0.7 6.6 
 
Multifamily residential
5,023,163 4,900,097 4,573,068 2.5 9.8 
 
Construction and land
663,868 798,190 638,420 (16.8)4.0 
Total CRE
20,464,112 20,365,665 19,069,358 0.5 7.3 
Consumer:
Residential mortgage:
 
Single-family residential
13,383,060 12,836,558 11,223,027 4.3 19.2 
 
Home equity lines of credit (“HELOCs”)1,722,204 1,776,665 2,122,655 (3.1)(18.9)
Total residential mortgage
15,105,264 14,613,223 13,345,682 3.4 13.2 
Other consumer
60,327 64,254 76,295 (6.1)(20.9)
Total loans HFI (1)
52,210,782 

50,907,184 

48,202,430 2.6 8.3 
Loans HFS
116 4,762 25,644 (97.6)(99.5)
 
Total loans (1)
52,210,898 50,911,946 48,228,074 2.6 8.3 
Allowance for loan losses(668,743)(655,523)(595,645)2.0 12.3 
 
Net loans (1)
$51,542,155 $50,256,423 $47,632,429 2.6 %8.2 %
Deposits:
   
 
Noninterest-bearing demand
$15,539,872 $16,169,072 $21,051,090 (3.9)%(26.2)%
 
Interest-bearing checking
7,558,908 7,689,289 6,672,165 (1.7)13.3 
 
Money market
13,108,727 12,613,827 12,265,024 3.9 6.9 
 
Savings
1,841,467 1,963,766 2,649,037 (6.2)(30.5)
 
Time deposits
18,043,464 16,651,077 13,330,533 8.4 35.4 
 
Total deposits
$56,092,438 $55,087,031 $55,967,849 1.8 %0.2 %
(1)Includes $71.2 million, $72.0 million and $70.4 million of net deferred loan fees and net unamortized premiums as of December 31, 2023, September 30, 2023 and December 31, 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
December 31, 2023
% Change
December 31, 2023September 30, 2023December 31, 2022Qtr-o-QtrYr-o-Yr
Interest and dividend income$990,378 $961,787 $761,212 3.0%30.1%
Interest expense
415,544 390,974 155,705 6.3166.9
Net interest income before provision for credit losses574,834 570,813 605,507 0.7(5.1)
Provision for credit losses37,000 42,000 25,000 (11.9)48.0
Net interest income after provision for credit losses537,834 528,813 580,507 1.7(7.4)
Noninterest income79,903 76,752 64,927 

4.123.1
Noninterest expense290,498 252,014 257,110 15.313.0
Income before income taxes
327,239 353,551 388,324 (7.4)(15.7)
Income tax expense
88,286 65,813 51,561 34.171.2
Net income
$238,953 $287,738 $336,763 (17.0)%(29.0)%
Earnings per share (“EPS”)
   
- Basic
$1.70 $2.03 $2.39 (16.4)%(28.9)%
- Diluted
$1.69 $2.02 $2.37 (16.5)(28.7)
Weighted-average number of shares outstanding
- Basic
140,595 141,485 140,947 (0.6)%(0.2)%
- Diluted
141,409 142,122 142,138 (0.5)(0.5)
 
 
Three Months Ended
December 31, 2023
% Change
 
 
December 31, 2023September 30, 2023December 31, 2022Qtr-o-QtrYr-o-Yr
Noninterest income:
   
 
Lending fees
$22,077 $20,312 $19,339 8.7%14.2%
Deposit account fees22,996 22,622 22,112 1.74.0
Customer derivative (loss) income
(945)11,208 (638)NM(48.1)
 
Foreign exchange income
14,236 12,334 14,015 15.41.6
 
Wealth management fees
7,735 5,877 6,071 31.627.4
 
Net gains (losses) on sales of loans3,675 (12)443 NMNM
 
Net gain on AFS debt security
3,138 — — 100.0100.0
Other investment income1,673 1,751 1,127 (4.5)48.4
Other income
5,318 2,660 2,458 99.9116.4
Total noninterest income$79,903 $76,752 $64,927 4.1%23.1%
Noninterest expense:
   
 
Compensation and employee benefits
$130,794 $123,153 $120,422 6.2%8.6%
 
Occupancy and equipment expense
15,735 15,353 15,648 2.50.6
 
Deposit insurance premiums and regulatory assessments
78,553 8,583 4,930 NMNM
Deposit account expense11,390 11,585 8,437 (1.7)35.0
Computer software and data processing expenses
11,315 11,761 11,145 (3.8)1.5
 
Other operating expense38,130 31,885 31,923 19.619.4
Amortization of tax credit and other investments4,581 49,694 64,605 (90.8)(92.9)
Total noninterest expense$290,498 $252,014 $257,110 15.3%13.0%
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
 Year Ended
December 31, 2023
% Change
  December 31, 2023December 31, 2022Yr-o-Yr
Interest and dividend income$3,693,805 $2,321,231 59.1%
Interest expense
1,381,551 275,350 401.7
Net interest income before provision for credit losses2,312,254 2,045,881 13.0
Provision for credit losses125,000 73,500 70.1
Net interest income after provision for credit losses2,187,254 1,972,381 10.9
Noninterest income 295,264 298,666 (1.1)
Noninterest expense1,022,748 859,393 19.0
Income before income taxes
1,459,770 1,411,654 3.4
Income tax expense
298,609 283,571 5.3
Net income
$1,161,161 $1,128,083 2.9%
EPS
  
- Basic
$8.23 $7.98 3.0%
- Diluted
$8.18 $7.92 3.4
Weighted-average number of shares outstanding
- Basic
141,164 141,326 (0.1)%
- Diluted
141,902 142,492 (0.4)
 
 
Year EndedDecember 31, 2023
% Change
 
 
December 31, 2023December 31, 2022Yr-o-Yr
Noninterest income:
  
 
Lending fees
$83,876 $79,208 5.9%
 
Deposit account fees
89,606 88,435 1.3
Customer derivative income
20,200 29,057 (30.5)
 
Foreign exchange income
52,481 48,158 9.0
 
Wealth management fees
26,805 27,565 (2.8)
 
Net gains on sales of loans3,634 6,411 (43.3)
 
Net (losses) gains on AFS debt securities
(6,862)1,306 NM
Other investment income9,348 7,037 32.8
Other income
16,176 11,489 40.8
Total noninterest income$295,264 $298,666 (1.1)%
Noninterest expense:
  
 
Compensation and employee benefits
$508,538 $477,635 6.5%
 
Occupancy and equipment expense
62,763 62,501 0.4
 
Deposit insurance premiums and regulatory assessments
103,308 19,449 431.2
Deposit account expense43,143 25,508 69.1
Computer software and data processing expenses
44,475 42,776 4.0
 
Other operating expense (1)
140,222 118,166 18.7
Amortization of tax credit and other investments120,299 113,358 6.1
Total noninterest expense$1,022,748 $859,393 19.0%
NM - Not meaningful.
(1)Includes $3.9 million of repurchase agreements’ extinguishment cost for the twelve months ended December 31, 2023.
10

EAST WEST BANCORP, INC. AND SUBSIDIARIES
FEE AND OTHER NONINTEREST INCOME
($ in thousands)
(unaudited)
Table 5
 
Three Months Ended
Year Ended
December 31, 2023September 30, 2023December 31, 2022December 31, 2023December 31, 2022
Customer derivative (loss) income:
Customer derivative revenue
$6,297 $5,894 $3,984 $23,216 $14,986 
Mark-to-market and credit valuation adjustments (“CVA”)
(7,242)5,314 (4,622)(3,016)14,071 
Total customer derivative (loss) income
$(945)$11,208 $(638)$20,200 $29,057 
Three Months Ended
Year Ended
December 31, 2023September 30, 2023December 31, 2022December 31, 2023December 31, 2022
Fee income:
Lending fees
$22,077 $20,312 $19,339 $83,876 $79,208 
Deposit account fees
22,996 22,622 22,112 89,606 88,435 
Foreign exchange income
14,236 12,334 14,015 52,481 48,158 
Wealth management fees
7,735 5,877 6,071 26,805 27,565 
Customer derivative revenue
6,297 5,894 3,984 23,216 14,986 
Total fee income
73,341 67,039 65,521 275,984 258,352 
Mark-to-market and CVA
(7,242)5,314 (4,622)(3,016)14,071 
Net gains (losses) on sale of loans
3,675 (12)443 3,634 6,411 
Net gains (losses) on AFS debt securities
3,138 — — (6,862)1,306 
Other investment income
1,673 1,751 1,127 9,348 7,037 
Other income
5,318 2,660 2,458 16,176 11,489 
Total noninterest income
$79,903 $76,752 $64,927 $295,264 $298,666 

11

EAST WEST BANCORP, INC. AND SUBSIDIARIES
SELECTED AVERAGE BALANCES
($ in thousands)
(unaudited)
Table 6
Three Months Ended
December 31, 2023
% Change
Year Ended
December 31, 2023
% Change
  December 31, 2023September 30, 2023December 31, 2022Qtr-o-QtrYr-o-YrDecember 31, 2023December 31, 2022Yr-o-Yr
Loans:
     
Commercial:
 
C&I$15,948,678 $15,400,172 $15,496,386 3.6%2.9%$15,499,899 $15,013,560 3.2%
CRE:
 
CRE14,723,027 14,453,014 13,699,042 1.97.514,312,459 13,145,204 8.9
 
Multifamily residential4,939,119 4,798,360 4,604,628 2.97.34,756,885 4,252,605 11.9
 
Construction and land752,783 807,906 591,962 (6.8)27.2754,928 499,044 51.3
Total CRE
20,414,929 20,059,280 18,895,632 1.88.019,824,272 17,896,853 10.8
Consumer:
Residential mortgage:
 
Single-family residential13,097,056 12,548,593 10,988,102 4.419.212,274,776 10,106,609 21.5
 
HELOCs
1,732,348 1,816,900 2,145,416 (4.7)(19.3)1,881,008 2,208,725 (14.8)
Total residential mortgage14,829,404 14,365,493 13,133,518 3.212.914,155,784 12,315,334 14.9
Other consumer
59,245 63,917 81,596 (7.3)(27.4)65,181 93,711 (30.4)
 
Total loans (1)
$51,252,256 $49,888,862 $47,607,132 2.7%7.7%$49,545,136 $45,319,458 9.3%
Interest-earning assets
$65,505,724 $65,051,461 $60,376,151 0.7%8.5%$64,039,402 $59,309,062 8.0%
Total assets
$69,421,959 $68,936,786 $64,252,730 0.7%8.0%$67,757,505 $62,838,282 7.8%
Deposits:     
Noninterest-bearing demand
$15,884,525 $16,302,296 $21,419,290 (2.6)%(25.8)%$17,192,978 $22,784,258 (24.5)%
Interest-bearing checking
7,608,234 8,080,025 6,543,349 (5.8)16.37,658,414 6,696,200 14.4
Money market
12,824,121 12,180,806 12,197,782 5.35.111,680,540 12,443,437 (6.1)
Savings
1,873,276 2,013,246 2,747,166 (7.0)(31.8)2,128,943 2,901,940 (26.6)
Time deposits
17,216,367 16,621,683 12,076,193 3.642.616,301,856 9,473,744 72.1
Total deposits
$55,406,523 $55,198,056 $54,983,780 0.4%0.8%$54,962,731 $54,299,579 1.2%
Interest-bearing liabilities$44,178,360 $43,563,947 $34,372,853 1.4%28.5%$41,671,388 $32,322,744 28.9%
Stockholders’ equity
$6,695,852 $6,604,798 $5,834,623 1.4%14.8%$6,482,985 $5,783,025 12.1%
(1)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
 
 
December 31, 2023September 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
$4,445,115 $56,250 5.02 %$5,392,795 $67,751 4.98 %
 
Resale agreements785,000 7,232 3.66 %648,587 4,460 2.73 %
 
AFS debt securities5,985,361 58,926 3.91 %6,074,119 57,177 3.73 %
HTM debt securities2,958,294 12,585 1.69 %2,967,703 12,601 1.68 %
Loans:
C&I
15,948,678 321,026 7.99 %15,400,172 306,542 7.90 %
CRE
20,414,929 327,194 6.36 %20,059,280 317,416 6.28 %
Residential mortgage
14,829,404 205,371 5.49 %14,365,493 193,913 5.36 %
Other consumer
59,245 786 5.26 %63,917 848 5.26 %
 
Total loans (2)
51,252,256 854,377 6.61 %49,888,862 818,719 6.51 %
 
FHLB and FRB stock
79,698 1,008 5.02 %79,395 1,079 5.39 %
 
Total interest-earning assets
$65,505,724 $990,378 6.00 %$65,051,461 $961,787 5.87 %
Noninterest-earning assets:
      
 
Cash and due from banks
489,055 544,939   
 
Allowance for loan losses(650,724)(629,229)  
 
Other assets
4,077,904 3,969,615   
 
Total assets
$69,421,959   $68,936,786   
Liabilities and Stockholders’ Equity     
Interest-bearing liabilities:
      
 
Checking deposits
$7,608,234 $52,170 2.72 %$8,080,025 $54,285 2.67 %
 
Money market deposits
12,824,121 123,744 3.83 %12,180,806 113,217 3.69 %
 
Savings deposits
1,873,276 3,894 0.82 %2,013,246 4,047 0.80 %
 
Time deposits
17,216,367 183,175 4.22 %16,621,683 166,747 3.98 %
 
Federal funds purchased and other short-term borrowings
4,500,475 49,570 4.37 %4,501,327 49,575 4.37 %
 
FHLB advances
1 — — %1 — — %
 
Repurchase agreements2,876 41 5.66 %13,897 193 5.51 %
 
Long-term debt and finance lease liabilities
153,010 2,950 7.65 %152,962 2,910 7.55 %
 
Total interest-bearing liabilities
$44,178,360 $415,544 3.73 %$43,563,947 $390,974 3.56 %
Noninterest-bearing liabilities and stockholders’ equity:
     
 
Demand deposits
15,884,525 16,302,296 
 
Accrued expenses and other liabilities
2,663,222 2,465,745 
 
Stockholders’ equity
6,695,852 6,604,798 
 
Total liabilities and stockholders’ equity
$69,421,959 $68,936,786 
Interest rate spread
 2.27 %2.31 %
Net interest income and net interest margin $574,834 3.48 %$570,813 3.48 %
(1)Annualized.
(2)Includes loans HFS.
13

EAST WEST BANCORP, INC. AND SUBSIDIARIES
QUARTER-TO-DATE AVERAGE BALANCES, YIELDS AND RATES
($ in thousands)
(unaudited)
Table 8
 Three Months Ended
December 31, 2023December 31, 2022
Average Average Average Average
BalanceInterest
Yield/Rate (1)
BalanceInterest
Yield/Rate (1)
Assets
      
Interest-earning assets:
      
 
Interest-bearing cash and deposits with banks
$4,445,115 $56,250 5.02 %$2,983,726 $23,986 3.19 %
 
Resale agreements785,000 7,232 3.66 %833,170 6,062 2.89 %
 
AFS debt securities5,985,361 58,926 3.91 %5,869,336 46,224 3.12 %
HTM debt securities2,958,294 12,585 1.69 %3,004,412 12,747 1.68 %
Loans:
C&I
15,948,678 321,026 7.99 %15,496,386 250,451 6.41 %
CRE
20,414,929 327,194 6.36 %18,895,632 262,327 5.51 %
Residential mortgage
14,829,404 205,371 5.49 %13,133,518 157,696 4.76 %
Other consumer
59,245 786 5.26 %81,596 849 4.13 %
 
Total loans (2)
51,252,256 854,377 6.61 %47,607,132 671,323 5.59 %
 
FHLB and FRB stock
79,698 1,008 5.02 %78,375 870 4.40 %
 
Total interest-earning assets
$65,505,724 $990,378 6.00 %$60,376,151 $761,212 5.00 %
Noninterest-earning assets:
      
 
Cash and due from banks
489,055 640,509   
 
Allowance for loan losses(650,724)(583,271)  
 
Other assets
4,077,904 3,819,341   
 
Total assets
$69,421,959   $64,252,730   
Liabilities and Stockholders’ Equity
     
Interest-bearing liabilities:
      
 
Checking deposits
$7,608,234 $52,170 2.72 %$6,543,349 $16,735 1.01 %
 
Money market deposits
12,824,121 123,744 3.83 %12,197,782 62,246 2.02 %
 
Savings deposits
1,873,276 3,894 0.82 %2,747,166 2,714 0.39 %
 
Time deposits
17,216,367 183,175 4.22 %12,076,193 65,772 2.16 %
 
Federal funds purchased and other short-term borrowings
4,500,475 49,570 4.37 %47,142 374 3.15 %
 
FHLB advances
1 — — %40,178 225 2.22 %
 
Repurchase agreements2,876 41 5.66 %568,520 5,507 3.84 %
 
Long-term debt and finance lease liabilities
153,010 2,950 7.65 %152,523 2,132 5.55 %
 
Total interest-bearing liabilities
$44,178,360 $415,544 3.73 %$34,372,853 $155,705 1.80 %
Noninterest-bearing liabilities and stockholders’ equity:
      
 
Demand deposits
15,884,525 21,419,290 
 
Accrued expenses and other liabilities
2,663,222 2,625,964 
 
Stockholders’ equity
6,695,852 5,834,623 
 
Total liabilities and stockholders’ equity
$69,421,959 $64,252,730 
Interest rate spread
 2.27 %3.20 %
Net interest income and net interest margin
 $574,834 3.48 %$605,507 3.98 %
(1)Annualized.
(2)Includes loans HFS.

14

EAST WEST BANCORP, INC. AND SUBSIDIARIES
YEAR-TO-DATE AVERAGE BALANCES, YIELDS AND RATES
($ in thousands)
(unaudited)
Table 9
 Year Ended
December 31, 2023December 31, 2022
Average Average Average Average
BalanceInterestYield/RateBalanceInterestYield/Rate
Assets
      
Interest-earning assets:
      
 
Interest-bearing cash and deposits with banks
$4,638,630 $220,643 4.76 %$3,127,234 $41,113 1.31 %
 
Resale agreements691,223 20,164 2.92 %1,398,080 29,767 2.13 %
 
AFS debt securities6,105,999 225,592 3.69 %6,629,945 152,514 2.30 %
HTM debt securities2,976,237 50,598 1.70 %2,756,382 46,392 1.68 %
Loans:
C&I
15,499,899 1,190,940 7.68 %15,013,560 715,778 4.77 %
CRE
19,824,272 1,227,795 6.19 %17,896,853 791,839 4.42 %
Residential mortgage
14,155,784 750,813 5.30 %12,315,334 538,255 4.37 %
Other consumer
65,181 3,198 4.91 %93,711 2,429 2.59 %
 
Total loans (1)
49,545,136 3,172,746 6.40 %45,319,458 2,048,301 4.52 %
 
FHLB and FRB stock
82,177 4,062 4.94 %77,963 3,144 4.03 %
 
Total interest-earning assets
$64,039,402 $3,693,805 5.77 %$59,309,062 $2,321,231 3.91 %
Noninterest-earning assets:
      
 
Cash and due from banks
555,689 652,673   
 
Allowance for loan losses
(625,785)(559,746)  
 
Other assets
3,788,199 3,436,293   
 
Total assets
$67,757,505 $62,838,282   
Liabilities and Stockholders’ Equity
     
Interest-bearing liabilities:
      
 
Checking deposits
$7,658,414 $179,200 2.34 %$6,696,200 $29,808 0.45 %
 
Money market deposits
11,680,540 399,482 3.42 %12,443,437 107,442 0.86 %
 
Savings deposits
2,128,943 15,573 0.73 %2,901,940 8,550 0.29 %
 
Time deposits
16,301,856 611,295 3.75 %9,473,744 106,038 1.12 %
 
Federal funds purchased and other short-term borrowings
3,591,114 157,002 4.37 %81,719 1,801 2.20 %
 
FHLB advances
123,288 6,430 5.22 %105,966 1,754 1.66 %
 
Repurchase agreements34,443 1,497 4.35 %467,413 14,362 3.07 %
 
Long-term debt and finance lease liabilities
152,790 11,072 7.25 %152,325 

5,595 3.67 %
 
Total interest-bearing liabilities
$41,671,388 $1,381,551 3.32 %$32,322,744 $275,350 0.85 %
Noninterest-bearing liabilities and stockholders’ equity:
 
Demand deposits
17,192,978 22,784,258 
 
Accrued expenses and other liabilities
2,410,154 1,948,255 
 
Stockholders’ equity
6,482,985 5,783,025 
 
Total liabilities and stockholders’ equity
$67,757,505 $62,838,282 
Interest rate spread
 2.45 %3.06 %
Net interest income and net interest margin
 $2,312,254 3.61 %$2,045,881 3.45 %
(1)Includes loans HFS.


15

EAST WEST BANCORP, INC. AND SUBSIDIARIES
SELECTED RATIOS
(unaudited)
Table 10
Three Months Ended (1)
December 31, 2023
Basis Point Change
 
 
December 31,
2023		September 30,
2023		December 31,
2022		Qtr-o-QtrYr-o-Yr
 
Return on average assets
1.37 %1.66 %2.08 %(29)bps(71)bps
Adjusted return on average assets (2)
1.63 %1.66 %2.08 %(3)(45)
 
Return on average common equity 14.16 %17.28 %22.90 %(312)(874)
Adjusted return on average common equity (2)
16.95 %17.28 %22.90 %(33)(595)
Return on average TCE (3)
15.26 %18.65 %24.96 %(339)(970)
Adjusted return on average TCE (3)
18.26 %18.65 %24.96 %(39)(670)
 
Interest rate spread
2.27 %2.31 %3.20 %(4)(93)
 
Net interest margin
3.48 %3.48 %3.98 %— (50)
Average loan yield
6.61 %6.51 %5.59 %10 102 
 
Yield on average interest-earning assets
6.00 %5.87 %5.00 %13 100 
Average cost of interest-bearing deposits
3.64 %3.45 %1.74 %19 190 
 
Average cost of deposits
2.60 %2.43 %1.06 %17 154 
 
Average cost of funds
2.74 %2.59 %1.11 %15 163 
Adjusted pre-tax, pre-provision profitability ratio (4)
2.49 %2.56 %2.95 %(7)(46)
 
Adjusted noninterest expense/average assets (4)
1.23 %1.16 %1.19 %7 4 
Efficiency ratio
44.37 %38.92 %38.35 %545 602 
 
Adjusted efficiency ratio (4)
33.07 %31.18 %28.66 %189 bps441 bps
Year EndedDecember 31, 2023
Basis Point Change
December 31,
2023		December 31,
2022		Yr-o-Yr
Return on average assets
1.71 %1.80 %(9)bps
Adjusted return on average assets (2)
1.79 %1.80 %(1)
Return on average common equity 17.91 %19.51 %(160)
Adjusted return on average common equity (2)
18.75 %19.51 %(76)
Return on average TCE (3)
19.35 %21.29 %(194)
Adjusted return on average TCE (3)
20.25 %21.29 %(104)
Interest rate spread
2.45 %3.06 %(61)
Net interest margin
3.61 %3.45 %16 
Average loan yield
6.40 %4.52 %188 
Yield on average interest-earning assets
5.77 %3.91 %186 
Average cost of interest-bearing deposits
3.19 %0.80 %239 
Average cost of deposits
2.19 %0.46 %173 
Average cost of funds
2.35 %0.50 %185 
Adjusted pre-tax, pre-provision profitability ratio (4)
2.64 %2.55 %9 
Adjusted noninterest expense/average assets (4)
1.22 %1.18 %4 
Efficiency ratio
39.22 %36.65 %257 
Adjusted efficiency ratio (4)
31.63 %31.74 %(11)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 15.
(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 14.
(4)Adjusted 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 13.

16

EAST WEST BANCORP, INC. AND SUBSIDIARIES
ALLOWANCE FOR LOAN LOSSES & OFF-BALANCE SHEET CREDIT EXPOSURES
($ in thousands)
(unaudited)
Table 11
Three Months Ended December 31, 2023
CommercialConsumer
C&ITotal CRETotal Residential MortgageOther ConsumerTotal
Allowance for loan losses, September 30, 2023
$383,677 $211,418 $58,725 $1,703 $655,523 
Provision for credit losses on loans
(a)27,732 4,875 233 50 32,890 
Gross charge-offs(20,264)(1,213)— (96)(21,573)
Gross recoveries1,248 356 7 — 1,611 
Total net (charge-offs) recoveries (19,016)(857)7 (96)(19,962)
Foreign currency translation adjustment292 — — — 292 
Allowance for loan losses, December 31, 2023
$392,685 $215,436 $58,965 $1,657 $668,743 


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 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 


17

EAST WEST BANCORP, INC. AND SUBSIDIARIES
ALLOWANCE FOR LOAN LOSSES & OFF-BALANCE-SHEET CREDIT EXPOSURES
($ in thousands)
(unaudited)
Table 11 (continued)
Year Ended December 31, 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)45,319 48,998 18,960 294 113,571 
Gross charge-offs(36,573)(17,464)(138)(197)(54,372)
Gross recoveries6,803 1,213 102 — 8,118 
Total net charge-offs(29,770)(16,251)(36)(197)(46,254)
Foreign currency translation adjustment(247)— — — (247)
Allowance for loan losses, December 31, 2023
$392,685 $215,436 $58,965 $1,657 $668,743 

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 

Three Months EndedYear Ended
December 31,
2023		September 30,
2023		December 31,
2022		December 31,
2023		December 31,
2022
Unfunded Credit Facilities
Allowance for unfunded credit commitments, beginning of period (1)
$33,589 $29,728 $24,041 $26,264 $27,514 
Provision for (reversal of) credit losses on unfunded credit commitments(b)4,110 3,864 2,228 11,429 (1,267)
Foreign currency translation adjustment— (3)(5)6 17 
Allowance for unfunded credit commitments, end of period (1)
$37,699 $33,589 $26,264 $37,699 $26,264 
Provision for credit losses(a)+(b)$37,000 $42,000 $25,000 $125,000 $73,500 
(1)Included in Accrued expenses and other liabilities on the Condensed Consolidated Balance Sheet.
18

EAST WEST BANCORP, INC. AND SUBSIDIARIES
CRITICIZED LOANS, NONPERFORMING ASSETS AND CREDIT QUALITY RATIOS
($ in thousands)
(unaudited)
Table 12
Criticized LoansDecember 31, 2023September 30, 2023December 31, 2022
Special mention loans$404,241 $483,428 $468,471 
Classified loans573,969 538,258 427,509 
Total criticized loans (1)
$978,210 $1,021,686 $895,980 
Nonperforming Assets
December 31, 2023September 30, 2023December 31, 2022
Nonaccrual loans:
Commercial:
C&I$37,036 $49,147 $50,428 
Total CRE27,918 16,431 23,413 
Consumer:
Total residential mortgage37,788 37,986 25,586 
Other consumer132 136 99 
Total nonaccrual loans102,874 103,700 99,526 
Other real estate owned, net11,141 — 270 
Total nonperforming assets$114,015 $103,700 $99,796 
Credit Quality RatiosDecember 31, 2023September 30, 2023December 31, 2022
Annualized quarterly net charge-offs to average loans HFI
0.15 %0.14 %0.08 %
Annual net charge-offs to average loans HFI0.09 %N/A0.04 %
Special mention loans to loans HFI0.77 %0.95 %0.97 %
Classified loans to loans HFI1.10 %1.06 %0.89 %
Criticized loans to loans HFI1.87 %2.01 %1.86 %
Nonperforming assets to total assets0.16 %0.15 %0.16 %
Nonaccrual loans to loans HFI0.20 %0.20 %0.21 %
Allowance for loan losses to loans HFI1.28 %1.29 %1.24 %
(1)Excludes loans HFS.

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. Adjusted efficiency ratio represents adjusted noninterest expense divided by adjusted revenue. Adjusted pre-tax, pre-provision profitability ratio represents total adjusted revenue less adjusted noninterest expense, divided by average total assets. Adjusted revenue excludes the net gain/loss related to an AFS debt security that was written-off in the first quarter of 2023 and subsequently sold during the fourth quarter of 2023. Adjusted noninterest expense excludes the amortization of tax credit and other investments, the amortization of core deposit intangibles, the FDIC special assessment charge (included in deposit insurance premiums and regulatory assessments) 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 EndedYear Ended
December 31, 2023September 30, 2023December 31, 2022December 31, 2023December 31, 2022
Net interest income before provision for credit losses(a)$574,834 $570,813 $605,507 $2,312,254 $2,045,881 
Total noninterest income79,903 76,752 64,927 295,264 298,666 
Total revenue(b)$654,737 $647,565 $670,434 $2,607,518 $2,344,547 
Noninterest income79,903 76,752 64,927 295,264 298,666 
Less/add: Net gain/loss on AFS debt security
(3,138)— — 6,862 — 
Adjusted noninterest income(c)76,765 76,752 64,927 302,126 298,666 
Adjusted revenue(a)+(c) = (d)$651,599 $647,565 $670,434 $2,614,380 $2,344,547 
Total noninterest expense(e)$290,498 $252,014 $257,110 $1,022,748 $859,393 
Less: Amortization of tax credit and other investments(4,581)(49,694)(64,605)(120,299)(113,358)
Amortization of core deposit intangibles(441)(441)(381)(1,763)(1,865)
FDIC special assessment charge
(69,986)— — (69,986)— 
Repurchase agreements’ extinguishment cost— — — (3,872)— 
Adjusted noninterest expense(f)$215,490 $201,879 $192,124 $826,828 $744,170 
Efficiency ratio(e)/(b)44.37 %38.92 %38.35 %39.22 %36.65 %
Adjusted efficiency ratio(f)/(d)33.07 %31.18 %28.66 %31.63 %31.74 %
Adjusted pre-tax, pre-provision income
(d)-(f) = (g)$436,109 $445,686 $478,310 $1,787,552 $1,600,377 
Average total assets(h)$69,421,959 $68,936,786 $64,252,730 $67,757,505 $62,838,282 
Adjusted pre-tax, pre-provision profitability ratio
(g)/(h)2.49 %(1)2.56 %(1)2.95 %(1)2.64 %2.55 %
Adjusted noninterest expense/average assets (f)/(h)1.23 %(1)1.16 %(1)1.19 %(1)1.22 %1.18 %
(1)Annualized.


20

EAST WEST BANCORP, INC. AND SUBSIDIARIES
GAAP TO NON-GAAP RECONCILIATION
($ in thousands)
(unaudited)
Table 14
   
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.
 December 31, 2023September 30, 2023December 31, 2022
Stockholders’ equity (a)$6,950,834 $6,596,706 $5,984,612 
Less: Goodwill(465,697)(465,697)(465,697)
Other intangible assets (1)
(6,602)(5,649)(7,998)
Tangible book value(b)$6,478,535 $6,125,360 $5,510,917 
Number of common shares at period-end(c)140,027 141,486 140,948 
Book value per share(a)/(c)$49.64 $46.62 $42.46 
Tangible book value per share (b)/(c)$46.27 $43.29 $39.10 
Total assets(d)$69,612,884 $68,289,458 $64,112,150 
Less: Goodwill(465,697)(465,697)(465,697)
Other intangible assets (1)
(6,602)(5,649)(7,998)
Tangible assets (e)$69,140,585 $67,818,112 $63,638,455 
Total stockholders’ equity to assets ratio(a)/(d)9.98 %9.66 %9.33 %
TCE ratio (b)/(e)9.37 %9.03 %8.66 %
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, the FDIC special assessment charge (included in Deposit insurance premiums and regulatory assessments on the Consolidated Statement of Income), and the net gain/loss related to an AFS debt security that was written-off in the first quarter of 2023 and subsequently sold during the fourth quarter of 2023. 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, 2023September 30, 2023December 31, 2022December 31, 2023December 31, 2022
Net income(e)$238,953 $287,738 $336,763 $1,161,161 $1,128,083 
Add: Amortization of core deposit intangibles
441 441 381 1,763 1,865 
          Amortization of mortgage servicing assets
302 328 329 1,328 1,425 
Tax effect of amortization adjustments (2)
(220)(225)(209)(914)(966)
Tangible net income(f)$239,476 $288,282 $337,264 $1,163,338 $1,130,407 
Add: FDIC special assessment charge
69,986 — — 69,986 — 
Less/add: Net gain/loss on AFS debt security
(3,138)— — 6,862 — 
Tax effect of adjustments (2)
(19,760)— — (22,716)— 
Adjusted tangible net income(g)$286,564 $288,282 $337,264 $1,217,470 $1,130,407 
Average stockholders’ equity (h)$6,695,852 $6,604,798 $5,834,623 $6,482,985 $5,783,025 
Less: Average goodwill(465,697)(465,697)(465,697)(465,697)(465,697)
          Average other intangible assets (1)
(5,434)(6,148)(8,378)(6,542)(8,695)
Average tangible book value(i)$6,224,721 $6,132,953 $5,360,548 $6,010,746 $5,308,633 
Return on average common equity(e)/(h)14.16 %(3)17.28 %(3)22.90 %(3)17.91 %19.51 %
Return on average TCE(f)/(i)15.26 %(3)18.65 %(3)24.96 %(3)19.35 %21.29 %
Adjusted return on average TCE(g)/(i)18.26 %(3)18.65 %(3)24.96 %(3)20.25 %21.29 %
(1)Includes core deposit intangibles and mortgage servicing assets.
(2)Applied statutory tax rate of 29.56% for the three and twelve months ended December 31, 2023, and 29.29% for the three months ended September 30, 2023. Applied statutory tax rate of 29.37% for the three and twelve months ended December 31, 2022.
(3)Annualized.
21

EAST WEST BANCORP, INC. AND SUBSIDIARIES
GAAP TO NON-GAAP RECONCILIATION
($ and shares in thousands, except for per share data)
(unaudited)
Table 15
During the fourth quarter of 2023, the Company recorded a $70.0 million pre-tax FDIC special assessment charge (included in Deposit insurance premiums and regulatory assessments on the Consolidated Statement of Income) and recognized a $3.1 million pre-tax gain on sale for an AFS debt security that was previously written-off. 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 items provide clarity to financial statement users regarding the ongoing performance of the Company and allows comparability to prior periods.
 Three Months EndedYear Ended
December 31, 2023September 30, 2023December 31, 2022December 31, 2023December 31, 2022
Net income
(a)$238,953 $287,738 $336,763 $1,161,161 $1,128,083 
Add: FDIC special assessment charge
69,986 — — 69,986 — 
Less/add: Net gain/loss on AFS debt security
(3,138)— — 6,862 — 
Tax effect of adjustments (1)
(19,760)— — (22,716)— 
Adjusted net income
(b)$286,041 $287,738 $336,763 $1,215,293 $1,128,083 
Diluted weighted-average number of shares outstanding141,409 142,122 142,138 141,902 142,492 
Diluted EPS
$1.69 $2.02 $2.37 $8.18 $7.92 
Add: FDIC special assessment charge
0.35 — — 0.35 — 
Less/add: Net gain/loss on AFS debt security
(0.02)— — 0.03 — 
Adjusted diluted EPS
$2.02 $2.02 $2.37 $8.56 $7.92 
Average total assets
(c)$69,421,959 $68,936,786 $64,252,730 $67,757,505 $62,838,282 
Average stockholders’ equity
(d)$6,695,852 $6,604,798 $5,834,623 $6,482,985 $5,783,025 
Return on average assets(a)/(c)1.37 %(2)1.66 %(2)2.08 %(2)1.71 %1.80 %
Adjusted return on average assets (b)/(c)1.63 %(2)1.66 %(2)2.08 %(2)1.79 %1.80 %
Return on average common equity(a)/(d)14.16 %(2)17.28 %(2)22.90 %(2)17.91 %19.51 %
Adjusted return on average common equity(b)/(d)16.95 %(2)17.28 %(2)22.90 %(2)18.75 %19.51 %
Return on average TCE (3)
15.26 %18.65 %24.96 %19.35 %21.29 %
Adjusted return on average TCE (3)
18.26 %18.65 %24.96 %20.25 %21.29 %
(1)Applied statutory tax rate of 29.56% for the three and the twelve months ended December 31, 2023.
(2)Annualized.
(3)Refer to Table 14 for the calculation of the return on average TCE and adjusted return on average TCE ratios.

22
East West Bancorp, Inc. Fourth Quarter and Full Year 2023 Earnings Presentation January 23, 2024

 
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 fourth-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.

 
$1.1 $1.2 $1.6 $1.8 FY 2022 FY 2023 Full Year 2023 Highlights 3 Key Metrics (1) See reconciliation of GAAP to non-GAAP financial measures in the appendix and in the Company’s earnings press releases Net Income & Adjusted Pre-tax Pre-Provision Income (PTPP)1 $ i n b ill io n s ▪ Record full year revenue and earnings − Revenue of $2.6 billion, up $263 million, 11% Y-o-Y − Net income of $1.2 billion, or $8.18 per diluted share ($8.56 adjusted earnings per share)1 ▪ Prudent balance sheet growth − Increased deposit granularity − Diversified loan growth ▪ Strong credit risk management − 9bps annual NCOs to average loans − 16bps of NPAs to total assets ▪ Continued industry-leading efficiency ▪ Increasing 1Q24 dividend by 15% to $0.55/share Adjusted PTPP1Net Income Highlights 1.7% Return on Average Assets 20.3% Adjusted Return on Average Tangible Common Equity1 17.9% Return on Average Common Equity +12% Y-o-Y

 
Loans 4 Prudent growth that bolsters diversification ($ in billions) Average Loans End of Period Loan Growth (3Q23 to 4Q23) ($ in millions) +5% - +3% Q-o-Q +3% $98 $488 $717 Total CRE Residential mortgage & other consumer C&I 12.1 13.1 13.7 15.0 15.5 12.9 14.4 15.3 17.9 19.8 8.4 9.3 10.7 12.4 14.2 $33.4 $36.8 $39.7 $45.3 $49.5 2019 2020 2021 2022 2023 C&I CRE Residential mortgage & other consumer +6% +11% +14% 4 Year CAGR +10%

 
($95) $274 $355 $471 Wholesale Greater China Commercial Consumer Deposits 5 Over $1 billion in customer deposit growth within the quarter ($ in billions) Average Deposits End of Period Deposit Growth (3Q23 to 4Q23) ($ in millions) ▪ Portfolio Detail (as of 12.31.23) − Over 590,000 accounts − Average commercial deposit account size: ~$310,000 − Average consumer deposit account size: ~$40,000 10.5 13.8 21.3 22.8 17.2 7.3 7.6 9.3 9.6 9.88.2 9.9 12.4 12.4 11.7 10.0 9.5 8.5 9.5 16.3 $36.0 $40.8 $51.5 $54.3 $55.0 2019 2020 2021 2022 2023 DDA IB Checking & Savings MMDA Time Total +13% +7% +13% +9% 4 Year CAGR +11% +3% +9% +1% Q-o-Q +2% -5%

 
Net Interest Income & Net Interest Margin 6 Grew NII as higher loan balances and yields offset rate pressure, driving stable NIM ▪ NII up 1% Q-o-Q ▪ NIM stable Q-o-Q ▪ $4.25 billion of active cash flow hedges cost ~$25mm in 4Q23, or 15 bps to NIM, but provide incremental protection as SOFR falls ▪ NIM trough likely in 2H24, assuming the consensus economic outlook 4Q23 HighlightsNet Interest Income (NII) & Net Interest Margin (NIM) Impact to NIM from Q-o-Q Change in Yields, Rates & Mix $606 $600 $567 $571 $575 3.98% 3.96% 3.55% 3.48% 3.48% 4Q22 1Q23 2Q23 3Q23 4Q23 NII NIM ($ in millions)

 
22% 20% 27% 25% 6% Fixed rate Hybrid in fixed rate period Variable - LIBOR + SOFR rates Variable - Prime rate Variable - all other rates 5.51% 5.96% 6.15% 6.28% 6.36% CRE 6.41% 7.26% 7.57% 7.90% 7.99% C&I 4.76% 5.10% 5.24% 5.36% 5.49% Residential Mortgage Loan Yields 7 Fixed Rate and Hybrid in Fixed Period Loans (% of Total) Loan Portfolio by Index Rate Average Loan Rate by Portfolio (as of 12.31.23) Total fixed rate and hybrid in fixed period: 42% 57%* variable rate 44% hybrid in fixed-rate period & 41% fixed rate 4Q22 1Q23 2Q23 3Q23 4Q23 12.31.23 rate sheet price for 30-year fixed: 7.88%*46% had customer-level interest rate derivative contracts 89% variable rate 35% 37% 38% 39% 39% 39% 41% 42% 03.31.22 06.30.22 09.30.22 12.31.22 03.31.23 06.30.23 09.30.23 12.31.23

 
Deposit and Funding Cost 8 Average Deposit and Liability Cost 1.06% 1.60% 2.12% 2.43% 2.60% 1.74% 2.49% 3.09% 3.45% 3.64% 1.80% 2.60% 3.24% 3.56% 3.73% 4Q22 1Q23 2Q23 3Q23 4Q23 Average cost of deposits Average cost of interest-bearing deposits Average cost of interest-bearing liabilities Average Deposit Rate by Portfolio 1.01% 1.45% 2.36% 2.67% 2.72% Checking Deposits 2.02% 2.74% 3.32% 3.69% 3.83% Money Market Deposits 2.16% 3.07% 3.63% 3.98% 4.22% Time Deposits 4Q22 1Q23 2Q23 3Q23 4Q23

 
38 48 71 88 90 64 75 78 79 84 26 22 49 48 52 17 18 26 28 27 42 40 11 15 23 $187 $203 $235 $258 $276 2019 2020 2021 2022 2023 Fees and Noninterest Income 9 Customer and Other Derivative Income Detail ($mm) 4Q22 3Q23 4Q23 Revenue $ 4.0 $ 5.9 $ 6.3 MTM (4.6) 5.3 (7.2) Total $ (0.6) $ 11.2 $ (1.0) Greater customer activity drove an increase in fee income within the quarter ▪ Fee income1 of $73mm in 4Q23, up $6mm, or 9% from $67mm in 3Q23 ▪ Foreign exchange income, wealth management fees, and lending fees each increased $2mm, reflecting higher customer activity ▪ Total noninterest income of $80mm in 4Q23 also included a net gain on sale of loans of $4mm; net gain on AFS debt security of $3mm 4Q23 Highlights (1) Fee income excludes mark-to-market adjustments related to customer and other derivatives; net gains on sales of loans; net gains on sales of securities; other investment income and other income Fee Income1 ($ in millions) +23% +7% -14% +13% 4-Year CAGR +10% +19% Customer Derivative Income Wealth Management Fees Foreign Exchange Income Lending Fees Deposit Account Fees

 
402 404 434 478 509 106 89 94 116 135 27 29 34 45 76 70 66 63 63 63 40 46 47 43 44 $645 $634 $671 $744 $827 2019 2020 2021 2022 2023 Computer Software & Data Processing Occupancy & Equipment Deposit-related Expenses All Other Compensation & Employee Benefits 28.7% 31.2% 33.1% 4Q22 3Q23 4Q23 Operating Expense & Efficiency 10 Best-in-class efficiency Adjusted Noninterest Expense1 ($ in millions) ▪ Total noninterest expense of $290mm ‒ Impacted by $70mm of FDIC Special Assessment-related expense ▪ Adjusted noninterest expense1 up Q-o-Q − Compensation and employee benefits rose $8mm, reflecting higher commissions and incentive accruals − Other operating expenses were up $6mm, reflecting increases in legal expense, realized credit card fraud losses, and advertising (1) See reconciliation of GAAP to non-GAAP financial measures in the appendix and in the Company’s earnings press releases 4Q23 Highlights 4-Year CAGR +6% +6% +3% -3% Adjusted Efficiency Ratio and Noninterest Expense/Average Assets Ratio1 Adj. Efficiency Noninterest Expense / Avg. Assets 6% +30% 1.19% 1.16% 1.23%

 
0.89% 0.93% 0.97% 1.06% 1.10% 0.97% 0.94% 0.66% 0.95% 0.77% 1.86% 1.87% 1.63% 2.01% 1.87% 12.31.22 03.31.23 06.30.23 09.30.23 12.31.23 Classified loans / Loans HFI Special Mention loans / Loans HFI Asset Quality Metrics 11 A solid foundation, with 2023 annual net charge-offs of 9bps Provision for Credit Losses & Net Charge-offs ($ in millions) Non-Performing Assets Criticized Loans / Loans HFI Criticized Ratio by Loans HFI Portfolio ($ in millions) $25 $20 $26 $42 $37 $10 $1 $8 $18 $20 0.08% 0.01% 0.06% 0.14% 0.15% 4Q22 1Q23 2Q23 3Q23 4Q23 Provision for credit losses Net charge-offs NCO ratio (ann.) $100 $93 $116 $104 $114 0.16% 0.14% 0.17% 0.15% 0.16% 12.31.22 03.31.23 06.30.23 09.30.23 12.31.23 Non-performing assets NPAs/ Total assets 3.40% 2.08% 0.40% 3.17% 1.91% 0.40% C&I CRE Resi. mortgage & consumer 09.30.23 12.31.23

 
Allowance for Loan Losses Adequate reserves across portfolios Allowance for Loan Losses (ALLL) ($ in millions) $596 $620 $635 $656 $669 1.24% 1.27% 1.28% 1.29% 1.28% $400 12.31.22 03.31.23 06.30.23 09.30.23 12.31.23 ALLL ALLL/Loans HFI 12.31.22 09.30.23 12.31.23 Loan Category ALLL ALLL/Loans HFI ALLL ALLL/Loans HFI ALLL ALLL/Loans HFI C&I $ 372 2.37% $ 384 2.42% $ 393 2.37% Total CRE 182 0.96 211 1.04 215 1.05 Office 36 1.42 53 2.30 55 2.43 Resi. mortgage & consumer 42 0.31 61 0.41 61 0.40 Total Loans $ 596 1.24% $ 656 1.29% $ 669 1.28% Composition of ALLL by Portfolio ($ in millions) 12

 
Capital Healthy capital position: 1.5 million shares repurchased in 4Q23, 15% increase to 1Q24 dividend Highlights ▪ Very strong capital − We operate from a position of capital strength ▪ 15% dividend increase ‒ Declared 1Q24 dividend of $0.55/share, up $0.07/share from $0.48/share in 4Q23 ‒ Increased 2024 annual dividend equivalent to $2.20/share ▪ Opportunistic stock repurchase activity − Repurchased 1.5mm shares in 4Q23 − Remaining share authorization of $172mm available for future repurchases ▪ Retiring $117 million of Trust Preferred Securities in 1Q24 8.7% 9.8% 12.7% 14.0% 9.0% 10.2% 13.3% 14.7% 9.4% 10.2% 13.3% 14.8% Tangible common equity Leverage CET1 Total capital 12.31.22 09.30.23 12.31.23 Regulatory well capitalized requirement (1) See reconciliation of GAAP to non-GAAP financial measures in the appendix and in the Company’s earnings press releases (2) The Company has elected to use the 2020 CECL transition provision in the calculation of its December 31, 2022, September 30, 2023 and December 31, 2023 regulatory capital ratios. The Company’s December 31, 2023 regulatory capital ratios are preliminary. 2 5.0% 6.5% 10.0% 13 1 Key Ratios

 
Management Outlook: Full Year 2024 14 Earnings Drivers FY 2024 Expectations vs. FY 2023 Results Economic and Interest Rate Outlook ▪ Softening economy with modest growth ▪ Assuming a year-end forward curve with cuts beginning in Q2 End of Period Loans ▪ Growing in the range of 3% to 5% Y-o-Y Net Interest Income ▪ Declining in the range of 4% to 6% Y-o-Y, driven by rate cuts Adjusted Noninterest Expense1 ▪ Increasing in the range of 6% to 8% Y-o-Y, driven primarily by compensation and benefits expense, offset partly by lower deposit- account expense Net Charge-offs ▪ 1Q24 in line with 4Q23, with subsequent quarters increasing modestly ▪ Subsequent quarters in the range of 15 to 25 bps Effective Tax Rate ▪ To increase modestly Best-in-Class Efficiency Top Quartile Returns FY 2024 Expectation (1) See reconciliation of GAAP to non-GAAP financial measures in the appendix and in the Company’s earnings press releases

 
$39.10 $41.28 $42.33 $43.29 $46.27 12.31.22 03.31.23 06.30.23 09.30.23 12.31.23 Full Year 2023 Highlights (Continued) 15 Tangible Book Value/Share(1) +18% Y-o-Y Designations and AwardsKey Metrics (1) See reconciliation of GAAP to non-GAAP financial measures in the appendix and in the Company’s earnings press releases

 
Appendix

 
11% 1% 1% 1% 1% 1% 2% 2% 3% 4% 5% Industries with 1% of total loans outstanding1 Commercial Loan Portfolio 17 Over 70% of EWBC’s loans support commercial customers and are well-diversified CRE $20.5bn C&I $16.6bn (as % of Total Portfolio Loans, 12.31.23) Commercial Loans by Type Total Loan Portfolio $52.2bn Resi. Mortgage & Other Consumer $15.1 29% CRE $20.5 39% C&I $16.6 32% (1) Industries with 1% of total loans outstanding: Tech & Telecom; Food Production & Distribution; Hospitality & Leisure; Oil & Gas; Healthcare Services Private Equity Media & Entertainment Real Estate Investment & Mgmt. Manufacturing & Wholesale Infrastructure & Clean Energy Other 1% 2% 2% 4% 5% 8% 8% 9% Industrial Multifamily Retail Hotel Office Healthcare All other CRE Construction and Land

 
<=50% 44% >50% to 55% 16% >55% to 60% 17% >60% to 65% 14% >65% to 70% 6% >70% 3% Commercial Real Estate Portfolio Detail 18(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% 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 12.31.23) (as of 12.31.23) ▪ Fewer than 25% of CRE loans have an LTV over 60% Total Portfolio Size ($bn) Weighted Avg. LTV1 (%) Average Loan Size ($mm) Multifamily $5.0 52% $2 Retail 4.3 48 3 Industrial 4.0 47 3 Hotel 2.4 53 9 Office 2.3 52 4 Healthcare 0.9 55 4 Other 0.9 49 3 Construction & Land2 0.7 52 13 Total CRE $20.5 50% $3

 
Residential Mortgage Portfolio 19 SoCal 40% NorCal 16% NY 27% WA 7% TX 2% Other 8% <=50% 46% >50% to 55% 12% >55% to 60% 32% >60% 10% 51% Average LTV1 Well-diversified by geography, with low LTVs and average loan size (as of 12.31.23) Resi. Mortgage Distribution by LTV1 (as of 12.31.23) $436,000 Average loan size2 (1) Combined LTV for 1st and 2nd liens; based on commitment (2) Average loan 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 12.31.23 Outstandings ▪ $15.1bn loans outstanding ▪ +3% Q-o-Q and +13% Y-o-Y Originations ▪ $0.9bn in 4Q23 ▪ Primarily originated through East West Bank branches Single-family Residential ▪ $13.4bn loans outstanding ▪ +4% Q-o-Q and +19% Y-o-Y HELOC ▪ $1.7bn loans outstanding ▪ $3.5bn in undisbursed commitments ▪ 33% utilization, unchanged from 09.30.23 ▪ 80% of commitments in first lien position Resi. Mortgage Distribution by Geography3

 
CRE Office – Additional Information 20 Loan Size Balance ($ in mm) No. of Loans Avg. Loan Size ($ in mm) LTV >$30mm $258 6 $43 56% $20mm - $30mm 452 18 25 56 $10mm - $20mm 562 39 14 55 $5mm - $10mm 447 60 7 51 <$5mm 553 421 1 46 Total $2,272 544 $4 52% 36% 5% 14% 8% 7% 4% 6% 3% 5% 7% Other Los Angeles County Other SoCal Other Bay Area San Francisco Other CA 1% Houston Dallas Manhattan, 1% Other TX Washington Other Regions New Jersey, 2% Other NY, 1% Downtown Los Angeles and Adjacent Neighborhoods CRE Office: Geographic Mix by Metro Area CRE Office by Size Segment (as of 12.31.23) (as of 12.31.23) Low LTVs across different size segments, low average loan size

 
CRE Retail – Additional Information 21 30% 4% 18%9% 3% 4% 5% 5% 3% 3% 11% Other Los Angeles County Downtown Los Angeles and Adjacent Neighborhoods 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 $337 9 $37 46% $20mm - $30mm 428 17 25 56 $10mm - $20mm 736 54 14 51 $5mm - $10mm 758 110 7 49 <$5mm 2,039 1,546 1 45 Total $4,298 1,736 $2 48% Low LTVs across different size segments, low average loan size CRE Retail: Geographic Mix by Metro Area CRE Retail by Size Segment (as of 12.31.23) (as of 12.31.23)

 
Appendix: GAAP to Non-GAAP Reconciliation 22 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. Pre-tax, pre-provision profitability ratio represents total adjusted revenue less adjusted noninterest expense, divided by average total assets. Adjusted revenue excludes the net gain/loss related to an AFS debt security that was written-off in the first quarter of 2023 and subsequently sold during the fourth quarter of 2023. Adjusted noninterest expense excludes the amortization of tax credit and other investments, the amortization of core deposit intangibles, the FDIC special assessment charge (included in deposit insurance premiums and regulatory assessments) 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. (1) Annualized.

 
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.

 
(1) Includes core deposit intangibles and mortgage servicing assets. (2) Applied statutory tax rate of 29.56% for the three and twelve months ended December 31, 2023, and 29.29% for the three months ended September 30, 2023. Applied statutory tax rate of 29.37% for the three and twelve months ended December 31, 2022. (3) Annualized. Appendix: GAAP to Non-GAAP Reconciliation 24 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, the FDIC special assessment charge (included in Deposit insurance premiums and regulatory assessments on the Consolidated Statement of Income), and the net gain/loss related to an AFS debt security that was written-off in the first quarter of 2023 and subsequently sold during the fourth quarter of 2023. 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.

 
Appendix: GAAP to Non-GAAP Reconciliation 25 (1) Applied statutory tax rate of 29.56% for the three and twelve months ended December 31, 2023. (2) Annualized. (3) Refer to Slide 24 for the calculation of the return on average TCE and adjusted return on average TCE ratios. EAST WEST BANCORP, INC. AND SUBSIDIARIES GAAP TO NON-GAAP RECONCILIATION ($ in thousands) (unaudited) During the fourth quarter of 2023, the Company recorded a $70.0 million pre-tax FDIC special assessment charge (included in Deposit insurance premiums and regulatory assessments on the Consolidated Statement of Income) and recognized a $3.1 million pre-tax gain on sale for an AFS debt security that was previously written-off. 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 items provide clarity to financial statement users regarding the ongoing performance of the Company and allows comparability to prior periods.

 
v3.23.4
Cover Page
Jan. 23, 2024
Cover [Abstract]  
Document Type 8-K
Document Period End Date Jan. 23, 2024
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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