East West Bancorp, Inc. · NASDAQ:EWBC
East West Bancorp — Q1 2022 Earnings Presentation
23 slides from East West Bancorp's earnings presentation, Apr 21, 2022
Slide 1: EWBC Earnings Results First Quarter 2022
EWBC Earnings Results First Quarter 2022 April 21, 2022
Slide 2: Forward-Looking Statements
Forward-Looking Statements 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 e
Slide 3: Highlights of First Quarter 2022
Highlights of First Quarter 2022 Return on Average Assets Adjusted Pre-Tax, Pre-Provision 1Q22 Net Income Income* & Profitability Ratio* 1.56% $238 million 1.50% $340 $320 1.39% $299 $262 1Q22 Diluted EPS $ in millions $260 $1.66 $180 2.10% 1.91% 1.91% Record Loans $100 $43.5 billion 1Q21 4Q21 1Q22
Slide 4: 03.31.22: Strong, Well-Diversified Balance Sheet
03.31.22: Strong, Well-Diversified Balance Sheet Record Loans as of 03.31.22: $43.5 billion $ in millions, except per share data 03.31.22 12.31.21 Q-o-Q Change ($ in billions) Cash equivalents & ST investments $ 4,665 $ 4,649 $ 16 Repo assets 1,957 2,354 (397) AFS debt securities 6,729 9,965 (3,236)
Slide 5: 03.31.22: Strong Capital Ratios
03.31.22: Strong Capital Ratios ▪ Book value per share of $40.09 as of 03.31.22: -2.5% Q-o-Q and +8% Y-o-Y. Tangible equity* per share of $36.76 as of 03.31.22: -3% Q-o-Q and +8% Y-o-Y. ▪ Q-o-Q decline in equity: negative change in accumulated other comprehensive income (“AOCI”) of $304.5mm and divi
Slide 6: 03.31.22: Diversified Commercial Loan Portfolio
03.31.22: Diversified Commercial Loan Portfolio Total Loans: C&I Loans by Industry as % of Total Loans Outstanding Total Resi. Mortgage & 4% Private Equity Other Consumer 27% 4% General Manufacturing & Wholesale 3% Entertainment 2% Real Estate related $43.5 $14.5bn 2% Technology & Life Science billi
Slide 7: 03.31.22: Diversified Commercial Real Estate Portfolio
03.31.22: Diversified Commercial Real Estate Portfolio Total Loans: Total CRE Loans by Property Type as % of Total CRE: Distribution by Total Loans Outstanding Geography WA Total Resi. Mortgage Other MFR, 9% 3% & Other Consumer 9% 27% PPP $17.0bn Retail, 9% TX 1% 8% $17.0 SoCal $43.5 Total CRE 53% b
Slide 8: 03.31.22: Low LTV Commercial Real Estate Portfolio
03.31.22: Low LTV Commercial Real Estate Portfolio Total CRE: Distribution by LTV CRE Size & LTV by Property Type Total Weighted Average ($ in millions) Portfolio Size Avg. LTV Loan Size >65% to 70% 6% >70% Multifamily $ 3,894 52% $ 1.5 5% Retail $ 3,759 48% $ 2.2 Industrial $ 3,099 49% $ 2.7 <=50%
Slide 9: 03.31.22: Low LTV Residential Mortgage Portfolio
03.31.22: Low LTV Residential Mortgage Portfolio Resi. Mortgage: Distribution by Geography Resi. Mortgage: Distribution by LTV TX 2% Other >60% 7% 8% WA 7% SoCal 41% <=50% $11.6 billion $414,000 39% Resi. Mortgage Avg. loan size* Loans >55% to 60% 51% Outstanding 41% Avg. LTV* NY 27% NorCal >50% to
Slide 10: 03.31.22: Asset Quality Metrics by Portfolio
03.31.22: Asset Quality Metrics by Portfolio Criticized Loans / Total Loans NPAs / Total Assets 2.6% Asset quality of the loan portfolio continues 2.5% to be strong. 0.38% 2.0% 1.9% ▪ Criticized loans ratio improved +8 bps 1.6% 1.4% 0.28% Q-o-Q and balances were flat Q-o-Q: 1.1% 1.0% Criticized loan
Slide 11: 1Q22: Allowance for Loan Losses & Credit Costs
1Q22: Allowance for Loan Losses & Credit Costs Allowance for Loan Losses Coverage Ratio Provision for Credit Losses & Net Charge-offs $700 0.14% 0.13% 0.13% $608 $586 $560 $542 $546 0.10% 0.08% $ in millions $ in millions 1.62% $13 $13 $13.5 1.52% 1.41% $10 $8 $8 1.32% 1.26% 1.53% 1.46% $0 1.38% 1.3
Slide 12: 1Q22: Summary Income Statement
1Q22: Summary Income Statement 1Q22 vs. 4Q21 $ in millions, except per share data & ratios 1Q22 4Q21 $ Change % Change Comments Net interest income (ex. PPP) $ 410.4 $ 396.1 14.3 4% ▪ Noninterest income: Mark-to- PPP income 5.2 9.6 (4.4) -46% market (“MTM”) adjustments in interest rate contracts (“I
Slide 13: 1Q22: Average Balance Sheet: Growth & Mix
1Q22: Average Balance Sheet: Growth & Mix Average Loans & Growth ▪ 1Q22 avg. loan growth: +16% LQA (+$1.6bn Q-o-Q) or +19% LQA ex. PPP (+$1.8bn). Growth in all major loan $42.1 portfolios, with strongest growth from C&I ex. PPP (+30% $39.6 $40.0 $40.5 $38.7 0.4 1.9 +3% 1.1 +6% 0.7 +16% LQA), followe
Slide 14: 1Q22: Net Interest Income & Net Interest Margin
1Q22: Net Interest Income & Net Interest Margin Net Interest Income & Net Interest Margin ▪ 1Q22 NII: $416mm, +2% Q-o-Q (+10% ann.) from $406mm in 4Q21. $406 $416 $396 $376 ▪ 1Q22 NII (ex. PPP): $410mm, +4% Q-o-Q (+15% $ in millions $354 ann.) from $396mm in 4Q21. PPP income: $5mm in 2.87% 1Q22 vs.
Slide 15: 1Q22: Loan Yields: Average & Spot
1Q22: Loan Yields: Average & Spot Loan Portfolio by Index Rate (03.31.22) Avg. Loan Yield (in bps) Relative to Prime Rate & LIBOR 1% 5% Avg. Loan 19% 358 357 361 359 363 400 Yield: Total fixed Avg. yield in and hybrid 1Q22: 3.63%, in fixed 3.25% 3.25% 3.25% 3.25% 3.29% 33% comprising period 3.48% in
Slide 16: 1Q22: Cost of Deposits: Average & Spot
1Q22: Cost of Deposits: Average & Spot Average Cost of Deposits (in bps) Relative to Avg. Fed Funds Rate 30 0.29% ▪ Spot rate of total deposits: 0.25% 21 0.11% as of 03.31.22 (vs. 24 18 18 17 0.09% as of 12.31.21). 14 12 10 10 ▪ Spot rate of IB deposits: 0.20% as of 03.31.22 (vs. 0.16% as of 12.31.2
Slide 17: 1Q22: Noninterest Income Detail
1Q22: Noninterest Income Detail Fee Income* & Net Gains on Sales of Loans Total noninterest income: $80mm in 1Q22, compared with $71.5mm in 4Q21. $65 $63 ▪ Fee income and net gains on sales of loans: 3 2 $65mm in 1Q22, up 3% Q-o-Q (+11% ann.), and 2 4 $55 5 up 18% Y-o-Y. 6 2 3 ▪ Interest rate contra
Slide 18: 1Q22: Operating Expense & Efficiency
1Q22: Operating Expense & Efficiency Adjusted Noninterest Expense* Adjusted Efficiency Ratio* 38.7% 37.2% 35.3% $178 $175 $165 26 24 21 9 9 8 All other 12 11 12 16 15 Deposit related $ in millions 16 expenses 1Q21 4Q21 1Q22 Computer software & Data processing ▪ 1Q22 noninterest expense: $189mm. Occu
Slide 19: Management Outlook: Full Year 2022
Management Outlook: Full Year 2022 FY 2022 expectations Earnings drivers compared with FY 2021 results Prior outlook 2021 actual End of Period Loans ▪ Increase at a percentage rate of ▪ Increase at a percentage rate $41.2 billion (ex. PPP) (ex. PPP) approximately 13% to 15% Y-o-Y. of approx. 12% Y-o
Slide 20: Appendix
APPENDIX ty] EAST WEST BANK Your financial bridge”
Slide 21: Appendix: GAAP to Non-GAAP Reconciliation
Appendix: GAAP to Non-GAAP Reconciliation EAST WEST BANCORP, INC. AND SUBSIDIARIES GAAP TO NON-GAAP RECONCILIATION ($ in thousands) (unaudited) The Company uses certain non-GAAP financial measures to provide supplemental information regarding the Company’s performance. Adjusted efficiency ratio repr
Slide 22: 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) (unaudited) The Company uses certain non-GAAP financial measures to provide supplemental information regarding the Company’s performance. Tangible equity and tangible e
Slide 23: 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) (unaudited) Adjusted return on average tangible equity represents tangible net income divided by average tangible equity. Tangible net income excludes the after-tax imp