East West Bancorp, Inc. · NASDAQ:EWBC
East West Bancorp — Q4 2018 Earnings Presentation
21 slides from East West Bancorp's earnings presentation, Jan 24, 2019
Slide 1: EWBC Earnings Results Fourth Quarter 2018
EWBC Earnings Results Fourth Quarter 2018 January 24, 2019
Slide 2: Forward-Looking Statements
Forward-Looking Statements Forward-Looking Statements Certain matters set forth herein (including any exhibits hereto) constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, including forward-looking statements relating to our current busi
Slide 3: Highlights of Fourth Quarter 2018 Results
Highlights of Fourth Quarter 2018 Results $ in millions, except per share data Current Quarter Q-o-Q Change Y-o-Y Change 4Q18 2018 Earnings Net income Net income Net income $ 173.0 1% 104% $173 million $704 million Adj.1 net income $ 173.0 1% 37% EPS $ 1.18 1% 104% 4Q18 2018 Adj.1 EPS $ 1.18 1% 37%
Slide 4: 4Q18 Earnings Growth and Profitability
4Q18 Earnings Growth and Profitability Net Income and Diluted EPS Adjusted* Net Income and Diluted EPS $200 $187 $200 $172 $171 $173 $165 $172 $171 $173 $1.28 $1.18 $1.17 $1.18 $1.18 $1.17 $1.18 $127 $1.13 $0.87 $100 $ millionsin $85 $100 -1% +1% $0.58 millions in $ +30% +5% $ $ inmillions, except p
Slide 5: 4Q18 Record Loans of $32.4 billion
4Q18 Record Loans of $32.4 billion 4Q18 EOP Loan Mix: $32.4 billion . ($ in billions) EOP loan growth of 4% Q-o-Q (+15% LQA). . Avg. loan growth of 3% Q-o-Q (+13% LQA). . $8.0 Avg. growth in C&I: $427mm (+15% LQA). 25% $12.1 . Avg. growth in SFR: $359mm (+26% LQA). 37% . Avg. growth in CRE: $295mm (
Slide 6: 4Q18 Record Deposits of $35.4 billion
4Q18 Record Deposits of $35.4 billion 4Q18 EOP Deposit Mix: $35.4 billion . EOP deposit growth of 5% Q-o-Q (+21% LQA). ($ in billions) . Avg. deposit growth of 5% Q-o-Q (+21% LQA). . Avg. balance growth in noninterest-bearing $9.1 26% $11.4 demand (+$808mm), money market (+$567mm) 32% and time depos
Slide 7: 4Q18 Summary Income Statement
4Q18 Summary Income Statement $ in millions, except per share data 4Q18 3Q18 $ Change % Change Tax Items Adjusted net interest income $ 363.6 $ 345.9 $ 17.7 5 % . 4Q18 effective tax rate was 16%, ASC 310-30 discount unchanged from 3Q18. 5.8 2.9 2.9 103 % accretion income . Full year 2018 effective t
Slide 8: 4Q18 Net Interest Income & Net Interest Margin
4Q18 Net Interest Income & Net Interest Margin Net Interest Income . 4Q18 NII of $369.4mm increased 6% Q-o-Q. $380 $369 . 4Q18 GAAP NIM of 3.79% increased by 3 bps Q-o-Q. $360 $342 $349 $340 NIM impact from change in rates: $320 $327 $320 . +6% +15 bps from change in loan yields. $300 . +2% +2 bps f
Slide 9: 4Q18 Fees & Other Operating Income
4Q18 Fees & Other Operating Income $50 Fees and Other Operating Income Q-o-Q Difference $44.6 . 4Q18 noninterest income totaled $41.7mm, a 1.9 $41.9 decrease from $46.5mm in 3Q18. $40 2.6 $38.9 . $38.4 $38.2 6.6 Excluding the impact of all gains on sales, 4Q18 fees 3.3 9% 4.1 2.9 4.6 and other opera
Slide 10: 4Q18 Efficiency and PTPP Profitability
4Q18 Efficiency and PTPP Profitability Noninterest Expense & Efficiency Ratio . 4Q18 total noninterest expense: $188.1mm. . $160 $156 $158 $156 4Q18 adj.* noninterest expense: $155.9mm. $152 $150 . Q-o-Q expense decreases: compensation and employee benefits, deposit insurance premiums and $140 regul
Slide 11: Asset Quality Metrics
Asset Quality Metrics Allowance for Loan Losses Provision Expense & Net Charge-off Ratio $35 $32.4 $64.3 1.00% $29.0 2.50% $28 $25.5 $23.6 $46.3 $21 $40 0.50% 1.50% $27.5 $ $ inbillions $14 1.12% 1.02% 0.99% 0.96% $ inmillions $14.2 0.15% 0.13% $7 0.08% 0.01% $0 0.50% $0 0.00% 12.31.15 12.31.16 12.3
Slide 12: Strong Capital Ratios
Strong Capital Ratios . Regulatory capital ratios increased by 67 bps to 77 bps year over year. . Capital ratio increases, common dividend payout, and organic balance sheet growth supported through organic earnings generation. EWBC's Capital Position 0.155 13.7% $27.15 12.9% 0.135 12.2% 12.2% 11.4%
Slide 13: Management Outlook: Full Year 2019
Management Outlook: Full Year 2019 FY 2019 expectations FY 2018 Earnings drivers compared to FY 2018 results actual End of Period Loans . Increase by approximately 10%. $32.4 billion, +11% Y-o-Y Net Interest Income . Increase at a percentage rate in the low double-digits $1.4 billion (excl. the impa
Slide 14: Appendix
APPENDIX My] EAST WEST BANK Your financial bridge
Slide 15: Appendix: GAAP to Non-GAAP Reconciliation
Appendix: GAAP to Non-GAAP Reconciliation EAST WEST BANCORP, INC. AND SUBSIDIARIES GAAP TO NON-GAAP RECONCILIATION ($ in thousands, except per share data) (unaudited) During the first quarter of 2017, the Company consummated a sale and leaseback transaction on a commercial property and recognized a
Slide 16: Appendix: GAAP to Non-GAAP Reconciliation (cont'd)
Appendix: GAAP to Non-GAAP Reconciliation (cont’d) EAST WEST BANCORP, INC. AND SUBSIDIARIES GAAP TO NON-GAAP RECONCILIATION ($ in thousands, except per share data) (unaudited) During the first quarter of 2017, the Company consummated a sale and leaseback transaction on a commercial property and reco
Slide 17: Appendix: GAAP to Non-GAAP Reconciliation (cont'd)
Appendix: GAAP to Non-GAAP Reconciliation (cont’d) EAST WEST BANCORP, INC. AND SUBSIDIARIES GAAP TO NON-GAAP RECONCILIATION ($ in thousands) (unaudited) Adjusted efficiency ratio represents adjusted noninterest expense divided by adjusted revenue. Adjusted pre-tax, pre-provision profitability ratio
Slide 18: Appendix: GAAP to Non-GAAP Reconciliation (cont'd)
Appendix: GAAP to Non-GAAP Reconciliation (cont’d) EAST WEST BANCORP, INC. AND SUBSIDIARIES GAAP TO NON-GAAP RECONCILIATION ($ in thousands) (unaudited) Adjusted efficiency ratio represents adjusted noninterest expense divided by adjusted revenue. Adjusted pre-tax, pre-provision profitability ratio
Slide 19: Appendix: GAAP to Non-GAAP Reconciliation (cont'd)
Appendix: GAAP to Non-GAAP Reconciliation (cont’d) EAST WEST BANCORP, INC. AND SUBSIDIARIES GAAP TO NON-GAAP RECONCILIATION ($ in thousands) (unaudited) Management believes that presenting the adjusted average loan yield and adjusted net interest margin that exclude the ASC 310-30 discount accretion
Slide 20: Appendix: GAAP to Non-GAAP Reconciliation (cont'd)
Appendix: GAAP to Non-GAAP Reconciliation (cont’d) 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 equity and t
Slide 21: Appendix: GAAP to Non-GAAP Reconciliation (cont'd)
Appendix: GAAP to Non-GAAP Reconciliation (cont’d) EAST WEST BANCORP, INC. AND SUBSIDIARIES GAAP TO NON-GAAP RECONCILIATION ($ in thousands) (unaudited) Adjusted return on average tangible equity represents adjusted tangible net income divided by average tangible equity. Adjusted tangible net income