East West Bancorp Reports Record Net Income for Full Year 2022 of $1.1 Billion and Record Diluted Earnings Per Share of $7.92; Increases Dividend By 20%

Rhea-AI Summary

East West Bancorp (Nasdaq: EWBC) reported a record net income of $1.1 billion for the full year 2022, marking a 30% increase year-over-year. The fourth quarter also showed robust growth, with net income rising 56% to $336.8 million. Total loans hit a record $48.2 billion, up 16% year-over-year, while total deposits grew to $56.0 billion, a 5% increase. The company announced a 20% dividend increase, bringing the quarterly dividend to $0.48 per share. Strong financial metrics include a 2.1% return on average assets and a 25.0% return on average tangible equity. The balance sheet remains solid with total assets of $64.1 billion.

Positive

• Record net income of $1.1 billion for 2022, up 30% year-over-year.
• Fourth quarter net income of $336.8 million grew 56% year-over-year.
• Total loans reached $48.2 billion, a 16% year-over-year increase.
• Total deposits increased to $56.0 billion, up 5% year-over-year.
• Announced a 20% increase in quarterly common stock dividend to $0.48.

Negative

• Noninterest income decreased by 14.1% in the fourth quarter.
• Noninterest expense rose to $257.1 million, driven by increased amortization of tax credits.

 

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

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

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

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

FINANCIAL HIGHLIGHTS
		Twelve Months Ended			Year-over-Year Change
($ in millions, except per share data)		December 31, 2022			$		%
Total Loans		$	48,228		$	6,534	16	%
Total Deposits			55,968			2,617	5
Total Revenue		$	2,345		$	527	29	%
Adj. Pre-tax, Pre-provision Income2			1,600			454	40
Net Income			1,128			255	29
Diluted Earnings Per Share		$	7.92		$	1.82	30	%

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¹ Return on average tangible equity is a non-GAAP financial measure. See reconciliation of GAAP to non-GAAP measures in Table 13.
² Adjusted pre-tax, pre-provision income is a non-GAAP financial measure. See reconciliation of GAAP to non-GAAP measures in Table 12.

BALANCE SHEET

• Record Assets – Total assets reached $64.1 billion as of December 31, 2022, an increase of $1.5 billion or 2.5% from $62.6 billion as of September 30, 2022. Year-over-year, total assets grew $3.2 billion or 5.3% from $60.9 billion as of December 31, 2021.
  
  Fourth quarter 2022 average interest-earning assets of $60.4 billion were up $897.5 million, or 1.5% (6.0% annualized), from $59.5 billion in the third quarter of 2022. Quarter-over-quarter, average loan growth of $752.6 million and growth in interest-bearing cash and deposits with banks of $696.7 million was partially offset by decreases in debt securities and assets purchased under resale agreements.
  

• Record Loans – Total loans reached $48.2 billion as of December 31, 2022, an increase of $771.3 million, or 1.6% (6.4% annualized), from $47.5 billion as of September 30, 2022. Year-over-year, total loans grew $6.5 billion, or 15.7%, from $41.7 billion as of December 31, 2021.
  
  Fourth quarter 2022 average loans of $47.6 billion grew $752.6 million, or 1.6% (6.4% annualized), from the third quarter. Average loan growth was well-balanced across all our major loan categories of commercial real estate, commercial & industrial, and residential mortgage.
  

• Record Deposits – Total deposits were $56.0 billion as of December 31, 2022, an increase of $2.1 billion, or 3.9% (15.5% annualized), from $53.9 billion as of September 30, 2022. Year-over-year, deposits grew $2.6 billion, or 4.9%, from $53.4 billion as of December 31, 2021.
  
  Fourth quarter 2022 average deposits of $55.0 billion increased $932.2 million, or 1.7% (6.8% annualized) from the third quarter, driven by growth in time deposits, partially offset by declines in other deposit categories. Growth in time deposits in the fourth quarter reflected a successful branch-based CD campaign. Average noninterest-bearing deposits made up 39% of average total deposits in the fourth quarter of 2022, compared with 41% in the third quarter of 2022 and 44% in the fourth quarter of 2021.

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

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

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

OPERATING RESULTS

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

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

Fourth Quarter 2022 Compared to Third Quarter 2022

Net Interest Income and Net Interest Margin

Record net interest income (“NII”) totaled $605.5 million, an increase of 9.7% (38.6% annualized) from $551.8 million. Net interest margin (“NIM”) of 3.98% expanded 30 basis points from 3.68%.

• NII growth and NIM expansion were driven by higher earning asset yields, partially offset by a higher cost of funds.
• The average loan yield was 5.59%, up 84 basis points from the third quarter. The average interest-earning asset yield was 5.00%, up 81 basis points from the third quarter. Average loans made up 79% of average interest-earning assets in the fourth quarter of 2022, essentially unchanged from the third quarter of 2022.
• The average cost of funds was 1.11%, up 56 basis points from the third quarter. The average cost of deposits was 1.06%, up 55 basis points, and the average cost of interest-bearing deposits was 1.74%, up 88 basis points from the third quarter.
• The changes in yields and rates reflected rising benchmark interest rates.

Noninterest Income

Noninterest income totaled $64.9 million in the fourth quarter, a decrease of $10.6 million, or 14.1%, from $75.6 million in the third quarter.

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

Noninterest Expense

Noninterest expense totaled $257.1 million in the fourth quarter, compared with $216.0 million in the third quarter. Fourth quarter noninterest expense consisted of $192.1 million of adjusted noninterest expense⁴, $64.6 million in amortization of tax credit and other investments, and $0.4 million in amortization of core deposit intangibles.

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

TAX RELATED ITEMS

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

ASSET QUALITY

The asset quality of our loan portfolio continued to be solid and stable, with decreases in both classified and special mention loans, as well as very low nonperforming asset and net charge-off ratios. Provision for credit losses was $25.0 million for the fourth quarter of 2022, compared with $27.0 million for the third quarter of 2022.

• Criticized loans decreased $9.2 million, or 1.0%, quarter-over-quarter to $896.0 million as of December 31, 2022, down from $905.2 million as of September 30, 2022. Classified loans decreased 1.6% quarter-over-quarter to $427.5 million, and special mention loans decreased 0.5% to $468.5 million.
• The criticized loans ratio decreased five basis points quarter-over-quarter to 1.86% of loans held-for-investment (“HFI”) as of December 31, 2022, down from 1.91% as of September 30, 2022. The classified loans ratio decreased three basis points quarter-over-quarter to 0.89%, and the special mention loans ratio decreased two basis points to 0.97%.
• As of December 31, 2022, nonperforming assets were $99.8 million, or 0.16% of total assets, compared with $97.0 million, or 0.16% of total assets, as of September 30, 2022.
• Fourth quarter 2022 net charge-offs were $10.1 million, or annualized 0.08% of average loans HFI, compared with net charge-offs of $6.6 million, or annualized 0.06% of average loans HFI, for the third quarter of 2022.
• The allowance for loan losses totaled $595.6 million, or 1.24% of loans HFI, as of December 31, 2022, compared with $582.5 million, or 1.23% of loans HFI, as of September 30, 2022.

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

CAPITAL STRENGTH

Capital levels for East West are strong. The following table presents the regulatory capital metrics as of December 31, 2022, September 30, 2022 and December 31, 2021.

EWBC Risk-Based Capital Ratios
($ in millions)		December 31, 2022 (a)				September 30, 2022 (a)				December 31, 2021 (a)
CET1 capital ratio			12.7	%			12.3	%			12.8	%
Tier 1 capital ratio			12.7	%			12.3	%			12.8	%
Total capital ratio			14.0	%			13.6	%			14.1	%
Leverage ratio			9.8	%			9.6	%			9.0	%
Risk-Weighted Assets (“RWA”) (b)		$	50,087			$	49,266			$	43,585

(a)

The Company has elected to use the 2020 CECL transition provision in the calculation of its December 31, 2022, September 30, 2022, and December 31, 2021 regulatory capital ratios. The Company’s December 31, 2022 regulatory capital ratios and RWA are preliminary.

(b)

Under regulatory guidelines, on-balance sheet assets and credit equivalent amounts of derivatives and off-balance sheet items are assigned to one of several broad risk categories based on the nature of the obligor, or, if relevant, the guarantor or the nature of any collateral. The aggregate dollar value in each risk category is then multiplied by the risk weight associated with that category. The resulting weighted values from each of the risk categories are aggregated for determining total RWA.

DIVIDEND PAYOUT AND CAPITAL ACTIONS

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

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

Conference Call

East West will host a conference call to discuss fourth quarter and full year 2022 earnings with the public on Thursday, January 26, 2023, at 8:30 a.m. PT/11:30 a.m. ET. The public and investment community are invited to listen as management discusses fourth quarter and full year 2022 results and operating developments.

• The following dial-in information is provided for participation in the conference call: calls within the U.S. – (877) 506-6399; calls within Canada – (855) 669-9657; international calls – (412) 902-6699.
• A presentation to accompany the earnings call will be available on the Investor Relations page of the Company’s website at www.eastwestbank.com/investors.
• A listen-only live broadcast of the call will also be available on the Investor Relations page of the Company’s website at www.eastwestbank.com/investors.
• A replay of the conference call will be available on January 26, 2023, at 11:30 a.m. PT/2:30 p.m. ET through February 26, 2023. The replay numbers are: within the U.S. – (877) 344-7529; within Canada – (855) 669-9658; international calls – (412) 317-0088; and the replay access code is: 4372128.

About East West

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

Forward-Looking Statements

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

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

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

EAST WEST BANCORP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
($ and shares in thousands, except per share data)
(unaudited)
Table 1
														December 31, 2022 % or Basis Point Change
		December 31, 2022				September 30, 2022				December 31, 2021				Qtr-o-Qtr			Yr-o-Yr
Assets
Cash and due from banks		$	534,980			$	554,260			$	527,317			(3.5	)%		1.5	%
Interest-bearing cash with banks			2,946,804				1,609,093				3,385,618			83.1			(13.0	)
Cash and cash equivalents			3,481,784				2,163,353				3,912,935			60.9			(11.0	)
Interest-bearing deposits with banks			139,021				630,543				736,492			(78.0	)		(81.1	)
Assets purchased under resale agreements (“resale agreements”)			792,192				892,986				2,353,503			(11.3	)		(66.3	)
Available-for-sale (“AFS”) debt securities (amortized cost of $6,879,225, $6,771,354 and $10,087,179)			6,034,993				5,906,090				9,965,353			2.2			(39.4	)
Held-to-maturity (“HTM”) debt securities, at amortized cost (fair value of $2,455,171 and $2,459,135 in 2022)			3,001,868				3,012,667				—			(0.4	)		100.0
Loans held-for-sale (“HFS”)			25,644				14,500				635			76.9			NM
Loans held-for-investment (''HFI'') (net of allowance for loan losses of $595,645, $582,517 and $541,579)			47,606,785				46,859,738				41,152,202			1.6			15.7
Investments in qualified affordable housing partnerships, tax credit and other investments, net			763,256				725,254				628,263			5.2			21.5
Goodwill			465,697				465,697				465,697			—			—
Operating lease right-of-use assets			103,681				105,411				98,632			(1.6	)		5.1
Other assets			1,697,229				1,799,822				1,556,989			(5.7	)		9.0
Total assets		$	64,112,150			$	62,576,061			$	60,870,701			2.5	%		5.3	%
Liabilities and Stockholders’ Equity
Deposits		$	55,967,849			$	53,857,362			$	53,350,532			3.9	%		4.9	%
Federal funds purchased			—				200,000				—			(100.0	)		—
FHLB advances			—				324,920				249,331			(100.0	)		(100.0	)
Assets sold under repurchase agreements (“repurchase agreements”)			300,000				611,785				300,000			(51.0	)		—
Long-term debt and finance lease liabilities			152,400				152,610				151,997			(0.1	)		0.3
Operating lease liabilities			111,931				113,477				105,534			(1.4	)		6.1
Accrued expenses and other liabilities			1,595,358				1,655,239				876,089			(3.6	)		82.1
Total liabilities			58,127,538				56,915,393				55,033,483			2.1			5.6
Stockholders’ equity			5,984,612				5,660,668				5,837,218			5.7			2.5
Total liabilities and stockholders’ equity		$	64,112,150			$	62,576,061			$	60,870,701			2.5	%		5.3	%
Book value per common share		$	42.46			$	40.17			$	41.13			5.7	%		3.2	%
Tangible equity (1) per common share		$	39.10			$	36.80			$	37.79			6.2			3.5
Number of common shares at period-end			140,948				140,918				141,908			0.0			(0.7	)
Total stockholders’ equity to total assets ratio			9.33	%			9.05	%			9.59	%		28		bps	(26	)	bps
Tangible equity to tangible assets ratio (1)			8.66	%			8.35	%			8.88	%		31		bps	(22	)	bps

NM - Not meaningful.
(1)		Tangible equity and the tangible equity to tangible assets ratio are non-GAAP financial measures. See reconciliation of GAAP to non-GAAP measures in Table 13.

EAST WEST BANCORP, INC. AND SUBSIDIARIES
TOTAL LOANS AND DEPOSITS DETAIL
($ in thousands)
(unaudited)
Table 2
														December 31, 2022 % Change
		December 31, 2022				September 30, 2022				December 31, 2021				Qtr-o-Qtr			Yr-o-Yr
Loans:
Commercial:
Commercial and industrial (“C&I”) (1)		$	15,711,095			$	15,625,072			$	14,150,608			0.6	%		11.0	%
Commercial real estate (“CRE”):
CRE			13,857,870				13,573,157				12,155,047			2.1			14.0
Multifamily residential			4,573,068				4,559,302				3,675,605			0.3			24.4
Construction and land			638,420				556,894				346,486			14.6			84.3
Total CRE			19,069,358				18,689,353				16,177,138			2.0			17.9
Consumer:
Residential mortgage:
Single-family residential			11,223,027				10,855,345				9,093,702			3.4			23.4
Home equity lines of credit (“HELOCs”)			2,122,655				2,184,924				2,144,821			(2.8	)		(1.0	)
Total residential mortgage			13,345,682				13,040,269				11,238,523			2.3			18.7
Other consumer			76,295				87,561				127,512			(12.9	)		(40.2	)
Total loans HFI (2)			48,202,430				47,442,255				41,693,781			1.6			15.6
Loans HFS			25,644				14,500				635			76.9			NM
Total loans (2)			48,228,074				47,456,755				41,694,416			1.6			15.7
Allowance for loan losses			(595,645	)			(582,517	)			(541,579	)		2.3			10.0
Net loans (2)		$	47,632,429			$	46,874,238			$	41,152,837			1.6			15.7
Deposits:
Noninterest-bearing demand		$	21,051,090			$	21,645,394			$	22,845,464			(2.7	)%		(7.9	)%
Interest-bearing checking			6,672,165				6,822,343				6,524,721			(2.2	)		2.3
Money market			12,265,024				12,113,292				13,130,300			1.3			(6.6	)
Savings			2,649,037				2,917,770				2,888,065			(9.2	)		(8.3	)
Time deposits			13,330,533				10,358,563				7,961,982			28.7			67.4
Total deposits		$	55,967,849			$	53,857,362			$	53,350,532			3.9	%		4.9	%

NM - Not meaningful.
(1)		Includes $99.0 million, $110.9 million and $534.2 million of Paycheck Protection Program (“PPP”) loans as of December 31, 2022, September 30, 2022 and December 31, 2021, respectively. Excluding PPP loans, total loans were $48.13 billion, $47.35 billion and $41.16 billion as of December 31, 2022, September 30, 2022 and December 31, 2021, respectively.
(2)		Includes $(70.4) million, $(60.3) million and $(50.7) million of net deferred loan fees and net unamortized premiums as of December 31, 2022, September 30, 2022 and December 31, 2021, respectively.

EAST WEST BANCORP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF INCOME
($ and shares in thousands, except per share data)
(unaudited)
Table 3
		Three Months Ended												December 31, 2022 % Change
		December 31, 2022				September 30, 2022				December 31, 2021				Qtr-o-Qtr			Yr-o-Yr
Interest and dividend income (1)		$	761,212			$	628,236			$	422,708			21.2	%		80.1	%
Interest expense			155,705				76,427				17,011			103.7			815.3
Net interest income before provision for (reversal of) credit losses			605,507				551,809				405,697			9.7			49.3
Provision for (reversal of) credit losses			25,000				27,000				(10,000	)		(7.4	)		NM
Net interest income after provision for (reversal of) credit losses			580,507				524,809				415,697			10.6			39.6
Noninterest income			64,927				75,552				71,489			(14.1	)		(9.2	)
Noninterest expense			257,110				215,973				210,105			19.0			22.4
Income before income taxes			388,324				384,388				277,081			1.0			40.1
Income tax expense			51,561				89,049				59,285			(42.1	)		(13.0	)
Net income		$	336,763			$	295,339			$	217,796			14.0	%		54.6	%
Earnings per share (“EPS”)
- Basic		$	2.39			$	2.10			$	1.53			14.0	%		55.7	%
- Diluted		$	2.37			$	2.08			$	1.52			13.9			55.9
Weighted-average number of shares outstanding
- Basic			140,947				140,917				141,907			0.0	%		(0.7	)%
- Diluted			142,138				142,011				143,323			0.1			(0.8	)
		Three Months Ended												December 31, 2022 % Change
		December 31, 2022				September 30, 2022				December 31, 2021				Qtr-o-Qtr			Yr-o-Yr
Noninterest income:
Lending fees		$	19,339			$	20,289			$	20,739			(4.7	)%		(6.8	)%
Deposit account fees			22,112				23,636				20,028			(6.4	)		10.4
Interest rate contracts and other derivative (loss) income			(638	)			8,761				1,932			NM			NM
Foreign exchange income			14,015				10,083				13,343			39.0			5.0
Wealth management fees			6,071				8,903				5,291			(31.8	)		14.7
Net gains on sales of loans			443				2,129				2,308			(79.2	)		(80.8	)
Gains on sales of AFS debt securities			—				—				390			—			(100.0	)
Other investment income (loss)			1,127				(580	)			2,982			NM			(62.2	)
Other income			2,458				2,331				4,476			5.4			(45.1	)
Total noninterest income		$	64,927			$	75,552			$	71,489			(14.1	)%		(9.2	)%
Noninterest expense:
Compensation and employee benefits		$	120,422			$	127,580			$	114,743			(5.6	)%		4.9	%
Occupancy and equipment expense			15,648				15,920				15,846			(1.7	)		(1.2	)
Deposit insurance premiums and regulatory assessments			4,930				4,875				4,772			1.1			3.3
Deposit account expense			8,437				6,707				4,307			25.8			95.9
Data processing			3,641				3,725				4,175			(2.3	)		(12.8	)
Computer software expense			7,504				6,889				7,494			8.9			0.1
Other operating expense			31,923				30,403				26,968			5.0			18.4
Amortization of tax credit and other investments			64,605				19,874				31,800			225.1			103.2
Total noninterest expense		$	257,110			$	215,973			$	210,105			19.0	%		22.4	%

NM - Not meaningful.
(1)		Includes $293 thousand, $524 thousand and $9.6 million of interest income related to PPP loans for the three months ended December 31, 2022, September 30, 2022 and December 31, 2021, respectively.

EAST WEST BANCORP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF INCOME
($ and shares in thousands, except per share data)
(unaudited)
Table 4
		Year Ended							December 31, 2022 % Change
		December 31, 2022			December 31, 2021				Yr-o-Yr
Interest and dividend income (1)		$	2,321,231		$	1,618,734			43.4%
Interest expense			275,350			87,163			215.9
Net interest income before provision for (reversal of) credit losses			2,045,881			1,531,571			33.6
Provision for (reversal of) credit losses			73,500			(35,000	)		NM
Net interest income after provision for (reversal of) credit losses			1,972,381			1,566,571			25.9
Noninterest income			298,666			285,895			4.5
Noninterest expense			859,393			796,089			8.0
Income before income taxes			1,411,654			1,056,377			33.6
Income tax expense			283,571			183,396			54.6
Net income		$	1,128,083		$	872,981			29.2%
EPS
- Basic		$	7.98		$	6.16			29.7%
- Diluted		$	7.92		$	6.10			29.8
Weighted-average number of shares outstanding
- Basic			141,326			141,826			(0.4)%
- Diluted			142,492			143,140			(0.5)
		Year Ended							December 31, 2022 % Change
		December 31, 2022			December 31, 2021				Yr-o-Yr
Noninterest income:
Lending fees		$	79,208		$	77,704			1.9%
Deposit account fees			88,435			71,261			24.1
Interest rate contracts and other derivative income			29,057			22,913			26.8
Foreign exchange income			48,158			48,977			(1.7)
Wealth management fees			27,565			25,751			7.0
Net gains on sales of loans			6,411			8,909			(28.0)
Gains on sales of AFS debt securities			1,306			1,568			(16.7)
Other investment income			7,037			16,852			(58.2)
Other income			11,489			11,960			(3.9)
Total noninterest income		$	298,666		$	285,895			4.5%
Noninterest expense:
Compensation and employee benefits		$	477,635		$	433,728			10.1%
Occupancy and equipment expense			62,501			62,996			(0.8)
Deposit insurance premiums and regulatory assessments			19,449			17,563			10.7
Deposit account expense			25,508			16,152			57.9
Data processing			14,517			16,263			(10.7)
Computer software expense			28,259			30,600			(7.7)
Other operating expense			118,166			96,330			22.7
Amortization of tax credit and other investments			113,358			122,457			(7.4)
Total noninterest expense		$	859,393		$	796,089			8.0%

NM - Not meaningful.
(1)		Includes $7.3 million and $55.2 million of interest income related to PPP loans for the years ended December 31, 2022 and 2021, respectively.

EAST WEST BANCORP, INC. AND SUBSIDIARIES
SELECTED AVERAGE BALANCES
($ in thousands)
(unaudited)
Table 5
		Three Months Ended									December 31, 2022 % Change						Year Ended						December 31, 2022 % Change
		December 31, 2022			September 30, 2022			December 31, 2021			Qtr-o-Qtr			Yr-o-Yr			December 31, 2022			December 31, 2021			Yr-o-Yr
Loans:
Commercial:
C&I (1)		$	15,496,386		$	15,282,661		$	13,592,203		1.4	%		14.0	%		$	15,013,560		$	13,656,720		9.9%
CRE:
CRE			13,699,042			13,533,482			11,954,535		1.2			14.6				13,145,204			11,663,144		12.7
Multifamily residential			4,604,628			4,531,351			3,434,274		1.6			34.1				4,252,605			3,213,582		32.3
Construction and land			591,962			532,800			340,940		11.1			73.6				499,044			445,333		12.1
Total CRE			18,895,632			18,597,633			15,729,749		1.6			20.1				17,896,853			15,322,059		16.8
Consumer:
Residential mortgage:
Single-family residential			10,988,102			10,676,022			9,031,677		2.9			21.7				10,106,609			8,742,565		15.6
HELOCs			2,145,416			2,216,355			2,052,383		(3.2	)		4.5				2,208,725			1,859,073		18.8
Total residential mortgage			13,133,518			12,892,377			11,084,060		1.9			18.5				12,315,334			10,601,638		16.2
Other consumer			81,596			81,870			126,557		(0.3	)		(35.5	)			93,711			136,280		(31.2)
Total loans (2)		$	47,607,132		$	46,854,541		$	40,532,569		1.6	%		17.5	%		$	45,319,458		$	39,716,697		14.1%
Interest-earning assets		$	60,376,151		$	59,478,689		$	58,944,082		1.5	%		2.4	%		$	59,309,062		$	56,256,388		5.4%
Total assets		$	64,252,730		$	63,079,444		$	62,183,137		1.9	%		3.3	%		$	62,838,282		$	59,251,091		6.1%
Deposits:
Noninterest-bearing demand		$	21,419,290		$	22,423,633		$	24,019,333		(4.5	)%		(10.8	)%		$	22,784,258		$	21,271,410		7.1%
Interest-bearing checking			6,543,349			6,879,632			6,462,471		(4.9	)		1.3				6,696,200			6,543,817		2.3
Money market			12,197,782			12,351,571			12,920,174		(1.2	)		(5.6	)			12,443,437			12,428,025		0.1
Savings			2,747,166			2,961,634			2,841,352		(7.2	)		(3.3	)			2,901,940			2,746,933		5.6
Time deposits			12,076,193			9,435,063			8,072,917		28.0			49.6				9,473,744			8,493,511		11.5
Total deposits		$	54,983,780		$	54,051,533		$	54,316,247		1.7	%		1.2	%		$	54,299,579		$	51,483,696		5.5%
Interest-bearing liabilities		$	34,372,853		$	32,703,323		$	31,011,536		5.1	%		10.8	%		$	32,322,744		$	31,077,459		4.0%
Stockholders’ equity		$	5,834,623		$	5,772,638		$	5,786,237		1.1	%		0.8	%		$	5,783,025		$	5,559,212		4.0%

(1)		Average balances of PPP loans were $104.6 million, $127.6 million and $677.2 million for the three months ended December 31, 2022, September 30, 2022 and December 31, 2021, respectively, and $215.4 million and $1.39 billion for the years ended December 31, 2022 and 2021, respectively.
(2)		Includes loans HFS.

EAST WEST BANCORP, INC. AND SUBSIDIARIES
QUARTER-TO-DATE AVERAGE BALANCES, YIELDS AND RATES
($ in thousands)
(unaudited)
Table 6
		Three Months Ended
		December 31, 2022										September 30, 2022
		Average Balance				Interest			Average Yield/Rate(1)			Average Balance				Interest			Average Yield/Rate(1)
Assets
Interest-earning assets:
Interest-bearing cash and deposits with banks		$	2,983,726			$	23,986		3.19	%		$	2,287,010			$	9,080		1.58	%
Resale agreements			833,170				6,062		2.89	%			1,037,292				6,769		2.59	%
AFS debt securities			5,869,336				46,224		3.12	%			6,204,729				38,383		2.45	%
HTM debt securities			3,004,412				12,747		1.68	%			3,017,063				12,709		1.67	%
Loans (2)			47,607,132				671,323		5.59	%			46,854,541				560,452		4.75	%
FHLB and FRB stock			78,375				870		4.40	%			78,054				843		4.28	%
Total interest-earning assets			60,376,151				761,212		5.00	%			59,478,689				628,236		4.19	%
Noninterest-earning assets:
Cash and due from banks			640,509										615,836
Allowance for loan losses			(583,271	)									(566,369	)
Other assets			3,819,341										3,551,288
Total assets		$	64,252,730									$	63,079,444
Liabilities and Stockholders’ Equity
Interest-bearing liabilities:
Checking deposits		$	6,543,349			$	16,735		1.01	%		$	6,879,632			$	8,493		0.49	%
Money market deposits			12,197,782				62,246		2.02	%			12,351,571				33,101		1.06	%
Savings deposits			2,747,166				2,714		0.39	%			2,961,634				2,268		0.30	%
Time deposits			12,076,193				65,772		2.16	%			9,435,063				25,032		1.05	%
Federal funds purchased and other short-term borrowings			47,142				374		3.15	%			211,794				1,177		2.20	%
FHLB advances			40,178				225		2.22	%			86,243				392		1.80	%
Repurchase agreements			568,520				5,507		3.84	%			624,821				4,421		2.81	%
Long-term debt and finance lease liabilities			152,523				2,132		5.55	%			152,565				1,543		4.01	%
Total interest-bearing liabilities			34,372,853				155,705		1.80	%			32,703,323				76,427		0.93	%
Noninterest-bearing liabilities and stockholders’ equity:
Demand deposits			21,419,290										22,423,633
Accrued expenses and other liabilities			2,625,964										2,179,850
Stockholders’ equity			5,834,623										5,772,638
Total liabilities and stockholders’ equity		$	64,252,730									$	63,079,444
Interest rate spread									3.20	%									3.26	%
Net interest income and net interest margin						$	605,507		3.98	%						$	551,809		3.68	%

(1)		Annualized.
(2)		Includes loans HFS. Average balances of PPP loans were $104.6 million and $127.6 million for the three months ended December 31, 2022 and September 30, 2022, respectively.

EAST WEST BANCORP, INC. AND SUBSIDIARIES
QUARTER-TO-DATE AVERAGE BALANCES, YIELDS AND RATES
($ in thousands)
(unaudited)
Table 7
		Three Months Ended
		December 31, 2022										December 31, 2021
		Average Balance				Interest			Average Yield/Rate(1)			Average Balance				Interest			Average Yield/Rate(1)
Assets
Interest-earning assets:
Interest-bearing cash and deposits with banks		$	2,983,726			$	23,986		3.19	%		$	6,050,870			$	3,750		0.25	%
Resale agreements			833,170				6,062		2.89	%			2,440,636				9,162		1.49	%
AFS debt securities			5,869,336				46,224		3.12	%			9,842,691				42,367		1.71	%
HTM debt securities			3,004,412				12,747		1.68	%			—				—		—	%
Loans (2)			47,607,132				671,323		5.59	%			40,532,569				366,936		3.59	%
FHLB and FRB stock			78,375				870		4.40	%			77,316				493		2.53	%
Total interest-earning assets			60,376,151				761,212		5.00	%			58,944,082				422,708		2.85	%
Noninterest-earning assets:
Cash and due from banks			640,509										652,126
Allowance for loan losses			(583,271	)									(558,645	)
Other assets			3,819,341										3,145,574
Total assets		$	64,252,730									$	62,183,137
Liabilities and Stockholders’ Equity
Interest-bearing liabilities:
Checking deposits		$	6,543,349			$	16,735		1.01	%		$	6,462,471			$	1,846		0.11	%
Money market deposits			12,197,782				62,246		2.02	%			12,920,174				3,172		0.10	%
Savings deposits			2,747,166				2,714		0.39	%			2,841,352				1,734		0.24	%
Time deposits			12,076,193				65,772		2.16	%			8,072,917				6,617		0.33	%
Federal funds purchased and other short-term borrowings			47,142				374		3.15	%			730				—		—	%
FHLB advances			40,178				225		2.22	%			249,048				856		1.36	%
Repurchase agreements			568,520				5,507		3.84	%			313,075				2,018		2.56	%
Long-term debt and finance lease liabilities			152,523				2,132		5.55	%			151,769				768		2.01	%
Total interest-bearing liabilities			34,372,853				155,705		1.80	%			31,011,536				17,011		0.22	%
Noninterest-bearing liabilities and stockholders’ equity:
Demand deposits			21,419,290										24,019,333
Accrued expenses and other liabilities			2,625,964										1,366,031
Stockholders’ equity			5,834,623										5,786,237
Total liabilities and stockholders’ equity		$	64,252,730									$	62,183,137
Interest rate spread									3.20	%									2.63	%
Net interest income and net interest margin						$	605,507		3.98	%						$	405,697		2.73	%

(1)		Annualized.
(2)		Includes loans HFS. Average balances of PPP loans were $104.6 million and $677.2 million for the three months ended December 31, 2022 and December 31, 2021, respectively.

EAST WEST BANCORP, INC. AND SUBSIDIARIES
YEAR-TO-DATE AVERAGE BALANCES, YIELDS AND RATES
($ in thousands)
(unaudited)
Table 8
		Year Ended
		December 31, 2022										December 31, 2021
		Average							Average			Average							Average
		Balance				Interest			Yield/Rate			Balance				Interest			Yield/Rate
Assets
Interest-earning assets:
Interest-bearing cash and deposits with banks		$	3,127,234			$	41,113		1.31	%		$	6,071,896			$	15,531		0.26	%
Resale agreements			1,398,080				29,767		2.13	%			2,107,157				32,239		1.53	%
AFS debt securities			6,629,945				152,514		2.30	%			8,281,234				143,983		1.74	%
HTM debt securities			2,756,382				46,392		1.68	%			—				—		—	%
Loans (1)			45,319,458				2,048,301		4.52	%			39,716,697				1,424,900		3.59	%
FHLB and FRB stock			77,963				3,144		4.03	%			79,404				2,081		2.62	%
Total interest-earning assets			59,309,062				2,321,231		3.91	%			56,256,388				1,618,734		2.88	%
Noninterest-earning assets:
Cash and due from banks			652,673										615,255
Allowance for loan losses			(559,746	)									(592,211	)
Other assets			3,436,293										2,971,659
Total assets		$	62,838,282									$	59,251,091
Liabilities and Stockholders’ Equity
Interest-bearing liabilities:
Checking deposits		$	6,696,200			$	29,808		0.45	%		$	6,543,817			$	13,023		0.20	%
Money market deposits			12,443,437				107,442		0.86	%			12,428,025				15,041		0.12	%
Savings deposits			2,901,940				8,550		0.29	%			2,746,933				7,496		0.27	%
Time deposits			9,473,744				106,038		1.12	%			8,493,511				33,599		0.40	%
Federal funds purchased and other short-term borrowings			81,719				1,801		2.20	%			1,584				42		2.65	%
FHLB advances			105,966				1,754		1.66	%			404,789				6,881		1.70	%
Repurchase agreements			467,413				14,362		3.07	%			306,845				7,999		2.61	%
Long-term debt and finance lease liabilities			152,325				5,595		3.67	%			151,955				3,082		2.03	%
Total interest-bearing liabilities			32,322,744				275,350		0.85	%			31,077,459				87,163		0.28	%
Noninterest-bearing liabilities and stockholders’ equity:
Demand deposits			22,784,258										21,271,410
Accrued expenses and other liabilities			1,948,255										1,343,010
Stockholders’ equity			5,783,025										5,559,212
Total liabilities and stockholders’ equity		$	62,838,282									$	59,251,091
Interest rate spread									3.06	%									2.60	%
Net interest income and net interest margin						$	2,045,881		3.45	%						$	1,531,571		2.72	%

(1)

Includes loans HFS. Average balances of PPP loans were $215.4 million and $1.39 billion for the years ended December 31, 2022 and 2021, respectively.

EAST WEST BANCORP, INC. AND SUBSIDIARIES
SELECTED RATIOS
(unaudited)
Table 9
		Three Months Ended (1)									December 31, 2022 Basis Point Change
		December 31, 2022			September 30, 2022			December 31, 2021			Qtr-o-Qtr				Yr-o-Yr
Return on average assets		2.08	%		1.86	%		1.39	%		22		bps		69		bps
Return on average equity		22.90	%		20.30	%		14.93	%		260				797
Tangible return on average tangible equity (2)		24.96	%		22.16	%		16.32	%		280				864
Interest rate spread		3.20	%		3.26	%		2.63	%		(6	)			57
Net interest margin		3.98	%		3.68	%		2.73	%		30				125
Average loan yield		5.59	%		4.75	%		3.59	%		84				200
Yield on average interest-earning assets		5.00	%		4.19	%		2.85	%		81				215
Average cost of interest-bearing deposits		1.74	%		0.86	%		0.18	%		88				156
Average cost of deposits		1.06	%		0.51	%		0.10	%		55				96
Average cost of funds		1.11	%		0.55	%		0.12	%		56				99
Adjusted pre-tax, pre-provision profitability ratio (3)		2.95	%		2.72	%		1.91	%		23				104
Adjusted noninterest expense/average assets (3)		1.19	%		1.23	%		1.13	%		(4	)			6
Efficiency ratio		38.35	%		34.43	%		44.03	%		392				(568	)
Adjusted efficiency ratio (3)		28.66	%		31.18	%		37.24	%		(252	)	bps		(858	)	bps
		Year Ended						December 31, 2022 Basis Point Change
		December 31, 2022			December 31, 2021			Yr-o-Yr
Return on average assets		1.80	%		1.47	%		33			bps
Return on average equity		19.51	%		15.70	%		381
Tangible return on average tangible equity (2)		21.29	%		17.24	%		405
Interest rate spread		3.06	%		2.60	%		46
Net interest margin		3.45	%		2.72	%		73
Average loan yield		4.52	%		3.59	%		93
Yield on average interest-earning assets		3.91	%		2.88	%		103
Average cost of interest-bearing deposits		0.80	%		0.23	%		57
Average cost of deposits		0.46	%		0.13	%		33
Average cost of funds		0.50	%		0.17	%		33
Adjusted pre-tax, pre-provision profitability ratio (3)		2.55	%		1.94	%		61
Adjusted noninterest expense/average assets (3)		1.18	%		1.13	%		5
Efficiency ratio		36.65	%		43.80	%		(715	)
Adjusted efficiency ratio (3)		31.74	%		36.91	%		(517	)		bps

(1)		Annualized except for efficiency ratio.
(2)		Tangible return on average tangible equity is a non-GAAP financial measure. See reconciliation of GAAP to non-GAAP measures in Table 13.
(3)		Adjusted pre-tax, pre-provision profitability ratio, adjusted noninterest expense/average assets and the adjusted efficiency ratio are non-GAAP financial measures. See reconciliation of GAAP to non-GAAP measures in Table 12.

EAST WEST BANCORP, INC. AND SUBSIDIARIES
ALLOWANCE FOR LOAN LOSSES & OFF-BALANCE SHEET CREDIT EXPOSURES
($ in thousands)
(unaudited)
Table 10
			Three Months Ended December 31, 2022
			Commercial								Consumer
			C&I				Total CRE				Total Residential Mortgage			Other Consumer				Total
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 recoveries				136				873				89			—				1,098
Total net (charge-offs) recoveries				(280	)			(9,931	)			89			(16	)			(10,138	)
Foreign currency translation adjustment				494				—				—			—				494
Allowance for loan losses, December 31, 2022			$	371,700			$	182,346			$	40,039		$	1,560			$	595,645

			Three Months Ended September 30, 2022
			Commercial								Consumer
			C&I				Total CRE				Total Residential Mortgage				Other Consumer				Total
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 recoveries				7,172				71				21				—				7,264
Total net recoveries (charge-offs)				278				(6,155	)			(754	)			(10	)			(6,641	)
Foreign currency translation adjustment				(1,386	)			—				—				—				(1,386	)
Allowance for loan losses, September 30, 2022			$	371,749			$	178,487			$	30,587			$	1,694			$	582,517

			Three Months Ended December 31, 2021
			Commercial								Consumer
			C&I				Total CRE				Total Residential Mortgage				Other Consumer				Total
Allowance for loan losses, September 30, 2021			$	342,142			$	192,260			$	21,684			$	4,318			$	560,404
Provision for (reversal of) credit losses on loans	(a)			2,395				(9,416	)			(1,519	)			(940	)			(9,480	)
Gross charge-offs				(12,328	)			(2,872	)			—				(1,454	)			(16,654	)
Gross recoveries				5,605				836				430				—				6,871
Total net (charge-offs) recoveries				(6,723	)			(2,036	)			430				(1,454	)			(9,783	)
Foreign currency translation adjustment				438				—				—				—				438
Allowance for loan losses, December 31, 2021			$	338,252			$	180,808			$	20,595			$	1,924			$	541,579

EAST WEST BANCORP, INC. AND SUBSIDIARIES
ALLOWANCE FOR LOAN LOSSES & OFF-BALANCE-SHEET CREDIT EXPOSURES
($ in thousands)
(unaudited)
Table 10 (continued)
			Year Ended December 31, 2022
			Commercial								Consumer
			C&I				Total CRE				Total Residential Mortgage				Other Consumer				Total
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 recoveries				16,824				2,216				421				—				19,461
Total net charge-offs				(1,914	)			(15,892	)			(547	)			(106	)			(18,459	)
Foreign currency translation adjustment				(2,242	)			—				—				—				(2,242	)
Allowance for loan losses, December 31, 2022			$	371,700			$	182,346			$	40,039			$	1,560			$	595,645

			Year Ended December 31, 2021
			Commercial								Consumer
			C&I				Total CRE				Total Residential Mortgage				Other Consumer				Total
Allowance for loan losses, December 31, 2020			$	398,040			$	201,603			$	18,210			$	2,130			$	619,983
(Reversal of) provision for credit losses on loans	(a)			(39,732	)			6,782				2,710				1,286				(28,954	)
Gross charge-offs				(32,490	)			(31,514	)			(1,091	)			(1,497	)			(66,592	)
Gross recoveries				11,906				3,937				766				5				16,614
Total net charge-offs				(20,584	)			(27,577	)			(325	)			(1,492	)			(49,978	)
Foreign currency translation adjustment				528				—				—				—				528
Allowance for loan losses, December 31, 2021			$	338,252			$	180,808			$	20,595			$	1,924			$	541,579

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

(1)

Included in Accrued expenses and other liabilities on the Condensed Consolidated Balance Sheet.

	EAST WEST BANCORP, INC. AND SUBSIDIARIES
	CRITICIZED LOANS, NONPERFORMING ASSETS AND CREDIT QUALITY RATIOS
	($ in thousands)
	(unaudited)
Table 11
Criticized Loans			December 31, 2022				September 30, 2022				December 31, 2021
Special mention loans			$	468,471			$	470,964			$	384,694
Classified loans				427,509				434,242				448,362
Total criticized loans (1)			$	895,980			$	905,206			$	833,056
Nonperforming Assets			December 31, 2022				September 30, 2022				December 31, 2021
Nonaccrual loans:
Commercial:
C&I			$	50,428			$	47,988			$	59,023
Total CRE				23,413				11,209				9,942
Consumer:
Total residential mortgage				25,586				23,309				24,164
Other consumer				99				37				52
Total nonaccrual loans				99,526				82,543				93,181
Other real estate owned, net				270				—				363
Other nonperforming assets				—				—				9,938
Nonperforming loans HFS				—				14,500				—
Total nonperforming assets			$	99,796			$	97,043			$	103,482
Credit Quality Ratios			December 31, 2022				September 30, 2022				December 31, 2021
Annualized quarterly net charge-offs to average loans HFI				0.08	%			0.06	%			0.10	%
Annual net charge-offs to average loans HFI				0.04	%			N/A				0.13	%
Special mention loans to loans HFI				0.97	%			0.99	%			0.92	%
Classified loans to loans HFI				0.89	%			0.92	%			1.08	%
Criticized loans to loans HFI				1.86	%			1.91	%			2.00	%
Nonperforming assets to total assets				0.16	%			0.16	%			0.17	%
Nonaccrual loans to loans HFI				0.21	%			0.17	%			0.22	%
Allowance for loan losses to loans HFI				1.24	%			1.23	%			1.30	%

(1)

Excludes loans HFS.

EAST WEST BANCORP, INC. AND SUBSIDIARIES
GAAP TO NON-GAAP RECONCILIATION
($ in thousands)
(unaudited)
Table 12
The Company uses certain non-GAAP financial measures to provide supplemental information regarding the Company’s performance. Adjusted efficiency ratio represents adjusted noninterest expense divided by revenue. Adjusted pre-tax, pre-provision profitability ratio represents total revenue less adjusted noninterest expense, divided by average total assets. Adjusted noninterest expense excludes the amortization of tax credit and other investments and the amortization of core deposit intangibles. Management believes that the measures and ratios presented below provide clarity to financial statement users regarding the ongoing performance of the Company and allow comparability to prior periods.
				Three Months Ended
				December 31, 2022				September 30, 2022				December 31, 2021
Net interest income before provision for (reversal of) credit losses				$	605,507			$	551,809			$	405,697
Total noninterest income					64,927				75,552				71,489
Total revenue		(a)		$	670,434			$	627,361			$	477,186
Total noninterest expense		(b)		$	257,110			$	215,973			$	210,105
Less: Amortization of tax credit and other investments					(64,605	)			(19,874	)			(31,800	)
Amortization of core deposit intangibles					(381	)			(485	)			(602	)
Adjusted noninterest expense		(c)		$	192,124			$	195,614			$	177,703
Efficiency ratio		(b)/(a)			38.35	%			34.43	%			44.03	%
Adjusted efficiency ratio		(c)/(a)			28.66	%			31.18	%			37.24	%
Adjusted pre-tax, pre-provision income		(a)-(c) = (d)		$	478,310			$	431,747			$	299,483
Average total assets		(e)		$	64,252,730			$	63,079,444			$	62,183,137
Adjusted pre-tax, pre-provision profitability ratio (1)		(d)/(e)			2.95	%			2.72	%			1.91	%
Adjusted noninterest expense/average assets (1)		(c)/(e)			1.19	%			1.23	%			1.13	%
				Year Ended
				December 31, 2022				December 31, 2021
Net interest income before provision for (reversal of) credit losses				$	2,045,881			$	1,531,571
Total noninterest income					298,666				285,895
Total revenue		(f)		$	2,344,547			$	1,817,466
Total noninterest expense		(g)		$	859,393			$	796,089
Less: Amortization of tax credit and other investments					(113,358	)			(122,457	)
Amortization of core deposit intangibles					(1,865	)			(2,749	)
Adjusted noninterest expense		(h)		$	744,170			$	670,883
Efficiency ratio		(g)/(f)			36.65	%			43.80	%
Adjusted efficiency ratio		(h)/(f)			31.74	%			36.91	%
Adjusted pre-tax, pre-provision income		(f)-(h) = (i)		$	1,600,377			$	1,146,583
Average total assets		(j)		$	62,838,282			$	59,251,091
Adjusted pre-tax, pre-provision profitability ratio		(i)/(j)			2.55	%			1.94	%
Adjusted noninterest expense/average assets		(h)/(j)			1.18	%			1.13	%

(1)

Annualized.

EAST WEST BANCORP, INC. AND SUBSIDIARIES
GAAP TO NON-GAAP RECONCILIATION
($ in thousands)
(unaudited)
Table 13
The Company uses certain non-GAAP financial measures to provide supplemental information regarding the Company’s performance. Tangible equity and tangible equity to tangible assets ratio are non-GAAP financial measures. Tangible equity and tangible assets represent stockholders’ equity and total assets, respectively, which have been reduced by goodwill and other intangible assets. Given that the use of such measures and ratios is more prevalent in the banking industry, and such measures and ratios are used by banking regulators and analysts, the Company has included them below for discussion.
				December 31, 2022				September 30, 2022				December 31, 2021
Stockholders’ equity		(a)		$	5,984,612			$	5,660,668			$	5,837,218
Less: Goodwill					(465,697	)			(465,697	)			(465,697	)
Other intangible assets (1)					(7,998	)			(8,667	)			(9,334	)
Tangible equity		(b)		$	5,510,917			$	5,186,304			$	5,362,187
Total assets		(c)		$	64,112,150			$	62,576,061			$	60,870,701
Less: Goodwill					(465,697	)			(465,697	)			(465,697	)
Other intangible assets (1)					(7,998	)			(8,667	)			(9,334	)
Tangible assets		(d)		$	63,638,455			$	62,101,697			$	60,395,670
Total stockholders’ equity to total assets ratio		(a)/(c)			9.33	%			9.05	%			9.59	%
Tangible equity to tangible assets ratio		(b)/(d)			8.66	%			8.35	%			8.88	%

Tangible return on average tangible equity represents tangible net income divided by average tangible equity. Tangible net income excludes the after-tax impacts of the amortization of core deposit intangibles and mortgage servicing assets. Given that the use of such measures and ratios is more prevalent in the banking industry, and such measures and ratios are used by banking regulators and analysts, the Company has included them below for discussion.
				Three Months Ended															Year Ended
				December 31, 2022					September 30, 2022					December 31, 2021					December 31, 2022				December 31, 2021
Net income		(e)		$	336,763				$	295,339				$	217,796				$	1,128,083			$	872,981
Add: Amortization of core deposit intangibles					381					485					602					1,865				2,749
Amortization of mortgage servicing assets					329					340					415					1,425				1,679
Tax effect of amortization adjustments (2)					(209	)				(237	)				(293	)				(966	)			(1,274	)
Tangible net income		(f)		$	337,264				$	295,927				$	218,520				$	1,130,407			$	876,135
Average stockholders’ equity		(g)		$	5,834,623				$	5,772,638				$	5,786,237				$	5,783,025			$	5,559,212
Less: Average goodwill					(465,697	)				(465,697	)				(465,697	)				(465,697	)			(465,697	)
Average other intangible assets (1)					(8,378	)				(8,379	)				(9,611	)				(8,695	)			(10,535	)
Average tangible equity		(h)		$	5,360,548				$	5,298,562				$	5,310,929				$	5,308,633			$	5,082,980
Return on average equity		(e)/(g)			22.90	%	(3	)		20.30	%	(3	)		14.93	%	(3	)		19.51	%			15.70	%
Tangible return on average tangible equity		(f)/(h)			24.96	%	(3	)		22.16	%	(3	)		16.32	%	(3	)		21.29	%			17.24	%

(1)		Includes core deposit intangibles and mortgage servicing assets.
(2)		Applied statutory tax rate of 29.37% for the three and twelve months ended December 31, 2022. Applied statutory tax rate of 28.77% for the three months ended September 30, 2022, and for the three and twelve months ended December 31, 2021.
(3)		Annualized.

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20230126005011/en/

FOR INVESTOR INQUIRIES, CONTACT:

Irene Oh

Chief Financial Officer

T: (626) 768-6360

E: irene.oh@eastwestbank.com

Julianna Balicka

Director of Investor Relations and Corporate Finance

T: (626) 768-6985

E: julianna.balicka@eastwestbank.com

Source: East West Bancorp, Inc.

FAQ

What were East West Bancorp's fourth quarter earnings for 2022?

East West Bancorp reported fourth quarter earnings of $336.8 million, an increase of 56% year-over-year.

How much did East West Bancorp's total loans increase in 2022?

Total loans increased by 16% year-over-year, reaching $48.2 billion by December 31, 2022.

What is the common stock dividend for East West Bancorp in 2023?

The common stock dividend was increased by 20% to $0.48 per share.

What was East West Bancorp's total net income for 2022?

The total net income for East West Bancorp in 2022 was a record $1.1 billion.

What are East West Bancorp's financial highlights for 2022?

Financial highlights include a 2.1% return on average assets and a 25.0% return on average tangible equity.