East West Bancorp, Inc. · NASDAQ:EWBC
East West Bancorp — Q3 2018 Earnings Presentation
18 slides from East West Bancorp's earnings presentation, Oct 18, 2018
Slide 1: EWBC Earnings Results Third Quarter 2018
EWBC Earnings Results Third Quarter 2018 October 18, 2018
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 the Company’s cu
Slide 3: Highlights of Third Quarter 2018 Results
Highlights of Third Quarter 2018 Results $ in millions, except per share data Current Quarter Q-o-Q Change Y-o-Y Change 3Q18 Earnings Net income Net income $ 171.3 (1)% 29% $171 million Adj.1 net income $ 171.3 (1)% 31% EPS $ 1.17 (1)% 29% 3Q18 Adj.1 EPS $ 1.17 (1)% 31% Diluted EPS NII $ 348.7 2% 15
Slide 4: Earnings Growth and Profitability
3Q18 Earnings Growth and Profitability Net Income and Diluted EPS Adjusted* Net Income and Diluted EPS $1.28 $1.18 $1.17 $1.18 $1.17 $1.13 $0.91 $0.89 $0.87 +5% -1% $0.58 -3% +30% $ $ inmillions, except per share data $ inmillions, except per share data Net income Diluted EPS Adj.* net income Adj.*
Slide 5: Record Loans of $31.2 billion
3Q18 Record Loans of $31.2 billion 3Q18 EOP Loan Mix: $31.2 billion . EOP loan growth of 3% Q-o-Q (+13% LQA) . Avg. loan growth of 3% Q-o-Q (+11% LQA). . Largest avg. growth in SFR: $393mm (+31% LQA). 25% . Followed by C&I: $380mm (+14% LQA). 37% . 3Q18 avg. loan yield of 5.02%, up by 7 bps Q-o-Q. .
Slide 6: Record Deposits of $33.6 billion
3Q18 Record Deposits of $33.6 billion 3Q18 EOP Deposit Mix: $33.6 billion . EOP deposit growth of 3% Q-o-Q (+10% LQA). . Avg. deposit growth of 3% Q-o-Q (+11% LQA). . Avg. balance growth in interest-bearing checking (+$128mm) and time deposits (+$1,370mm). 26% 32% . Growth in time deposits reflects
Slide 7: Summary Income Statement
3Q18 Summary Income Statement $ in millions, except per share data 3Q18 2Q18 $ Change % Change Tax Items Adjusted net interest income $ 345.9 $ 335.4 $ 10.5 3 % . 3Q18 effective tax rate was 16%, ASC 310-30 discount an increase from 13% in 2Q18. 2.9 6.3 (3.4) (55) % accretion income . Currently proj
Slide 8: Net Interest Income & Net Interest Margin
3Q18 Net Interest Income & Net Interest Margin Net Interest Income . 3Q18 NII of $348.7mm increased 2% Q-o-Q. . 3Q18 GAAP NIM of 3.76% decreased by 7 bps Q-o-Q. NIM impact from change in asset rates and mix: . +10 bps from change in loan yields. +2% . +5% -3 bps from lower ASC 310-30 discount accret
Slide 9: Fees & Other Operating Income
3Q18 Fees & Other Operating Income Fees and Other Operating Income Q-o-Q Difference . 3Q18 noninterest income totaled $46.5mm, a decrease from $48.3mm in 2Q18. $44.6 . $41.9 Excluding the impact of all gains on sales, 3Q18 fees $40.7 and other operating income of $41.9mm decreased by $38.4 $38.2 6%
Slide 10: Efficiency and PTPP Profitability
3Q18 Efficiency and PTPP Profitability Noninterest Expense & Efficiency Ratio . 3Q18 total noninterest expense: $179.8mm. . 3Q18 adj.* noninterest expense: $157.7mm. . Q-o-Q expense increases: compensation and employee benefits; other operating expenses. . Q-o-Q expense decreases: consulting and leg
Slide 11: Asset Quality Metrics
Asset Quality Metrics Allowance for Loan Losses Provision Expense & Annualized Net Charge-off* Ratio 1.00% $46.3 $46.3 $40 $27.5 0.50% $ $ inbillions $ $ inmillions $14.2 0.15% 0.09% 0.11% 0.01% $0 0.00% 2015 2016 2017 2018 YTD Provision expense NCOs / Avg. loans HFI* Nonperforming Assets* . Allowan
Slide 12: Strong Capital Ratios
Strong Capital Ratios . Regulatory capital ratios increased by 84 bps to 89 bps year-to-date. . Capital ratio increases, common dividend payout, and organic balance sheet growth supported through organic earnings generation. EWBC's Capital Position 0.155 $25.91 13.8% 12.9% 0.135 $25.00 12.3% 12.3% 1
Slide 13: Management Outlook: Full Year 2018 Outlook
Management Outlook: Full Year 2018 Outlook FY 2018 expectations change from 2018 YTD FY 2017 Earnings drivers compared to FY 2017 results prior quarter actual actual End of Period Loans Unchanged. $31.2 billion, $29.1 billion, . Increase at a rate of approximately 10%. +10% YTD annualized +14% Y-o-Y
Slide 14: APPENDIX
APPENDIX My] EAST WEST BANK Your financial bridge
Slide 15: Appendix: GAAP to Non-GAAP Reconciliation
Appendix: GAAP to Non-GAAP Reconciliation EAST WEST BANCORP, INC. AND SUBSIDIARIES GAAP TO NON-GAAP RECONCILIATION ($ in thousands) (unaudited) During the first quarter of 2017, the Company consummated a sale and leaseback transaction on a commercial property and recognized a pre-tax gain on sale of
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) (unaudited) Adjusted efficiency ratio represents adjusted noninterest expense divided by adjusted revenue. Adjusted pre-tax, pre-provision profitability ratio
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) Management believes that presenting the adjusted average loan yield and adjusted net interest margin that exclude the ASC 310-30 discount accretion
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) The Company uses certain non-GAAP financial measures to provide supplemental information regarding the Company’s performance. Tangible equity and t