East West Bancorp, Inc. · NASDAQ:EWBC
East West Bancorp — Q1 2019 Earnings Presentation
19 slides from East West Bancorp's earnings presentation, Apr 18, 2019
Slide 1: EWBC Earnings Results First Quarter 2019
EWBC Earnings Results First Quarter 2019 April 18, 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 First Quarter 2019 Results
Highlights of First Quarter 2019 Results $ in millions, except 1Q19 1Q19 per share data Current Quarter Q-o-Q Change Y-o-Y Change Net Adj.1 Net Earnings income income Net income $ 164.0 (5)% (12)% $164 million $169 million 1 Adj. net income $ 168.9 (2)% 2% 1Q19 1Q19 EPS $ 1.12 (5)% (12)% Diluted Adj
Slide 4: Record Loans of $32.9 billion
1Q19 Record Loans of $32.9 billion 1Q19 EOP Loan Mix: $32.9 billion . ($ in billions) EOP loan growth of 1% Q-o-Q (+6% LQA). . Avg. loan growth of 3% Q-o-Q (+11% LQA). . Avg. growth in CRE: $352mm (+12% LQA). $8.3 25% $12.0 . Avg. growth in C&I: $291mm (+10% LQA). 37% . Avg. growth in Consumer: $237
Slide 5: Record Deposits of $36.3 billion
1Q19 Record Deposits of $36.3 billion 1Q19 EOP Deposit Mix: $36.3 billion . ($ in billions) EOP deposit growth of 2% Q-o-Q (+10% LQA). . Loan to deposit ratio: 90.6%, vs. 91.4% as of 12.31.18. $9.9 $10.0 . Avg. deposit declined slightly: (0.2)% Q-o-Q (-1% LQA). 27% 28% . Seasonally high DDAs in 4Q18
Slide 6: Earnings Growth and Profitability
1Q19 Earnings Growth and Profitability Net Income and Diluted EPS Adjusted* Net Income and Diluted EPS $200 $187 $200 $172 $171 $173 $164 $172 $171 $173 $169 $1.28 $165 $1.18 $1.17 $1.18 $1.18 $1.18 $1.12 $1.13 $1.17 $1.16 -2% $ in millions $ in $100 $100 +5% -1% +1% $ in millions $ in $ $ inmillion
Slide 7: Summary Income Statement
1Q19 Summary Income Statement Notable & Tax-Related Items $ in millions, except per share data 1Q19 4Q18 $ Change % Change . Adjusted net interest income $ 360.3 $ 363.6 $ (3.3) (1) % 1Q19 adj.** net income of $168.9mm and adj.** EPS of $1.16. ASC 310-30 discount 2.2 5.8 (3.6) (63) % accretion incom
Slide 8: Net Interest Income & Net Interest Margin
1Q19 Net Interest Income & Net Interest Margin 1Q19 NII of $362.5mm decreased 2% Q-o-Q. Excluding Net Interest Income accretion, adj.* NII of $360.3mm decreased 1% Q-o-Q. $369 $380 $362 . 1Q19 ASC 310-30 discount accretion income of $2.2mm vs. $360 $342 $349 $5.8mm in 4Q18. $340 $327 -2% . Q-o-Q dec
Slide 9: Noninterest Income Detail
1Q19 Noninterest Income Detail Fee Income & Net Gains on Sales of Loans * Total noninterest income of $42.1mm in 1Q19 vs. $45.0 $41.7mm in 4Q18. . 2.4 Lending fees consist of: loan, credit enhancement, and $39.9 trade finance fees. $40 $38.8 $39.1 6.5 1.1 0.9 2% . $35.8 1.5 Deposit account fees: for
Slide 10: Efficiency and PTPP Profitability
1Q19 Efficiency and PTPP Profitability Noninterest Expense & Efficiency Ratio . 1Q19 total noninterest expense: $186.9mm. $161 . 1Q19 adj.* noninterest expense: $160.8mm. $160 $156 $158 $156 $150 . Main Q-o-Q increases: compensation and employee $140 benefits, including seasonally higher payroll tax
Slide 11: Asset Quality Metrics
Asset Quality Metrics Allowance for Loan Losses Provision Expense & Net Charge-off Ratio $35 $32.4 $32.9 $64.3 $29.0 1.00% $28 $25.5 2.50% $46.3 $21 $40 $27.5 $ $ inbillions $14 1.50% $22.6 0.50% 1.02% 0.99% 0.96% 0.97% $ inmillions 0.15% 0.13% 0.18% $7 0.08% $0 0.50% $0 0.00% 12.31.16 12.31.17 12.3
Slide 12: Strong Capital Ratios
Strong Capital Ratios . Regulatory capital ratios increased by 18 bps to 33 bps year-to-date. . Common dividend increased by 20%, or 4.5 cents per share, in 2Q19. New quarterly common stock dividend of 27.5 cents per share or annualized $1.10/share, up from $0.23/share and $0.92/share, respectively.
Slide 13: Management Outlook: Full Year 2019 Outlook
Management Outlook: Full Year 2019 Outlook FY 2019 expectations change from 2019 YTD FY 2018 Earnings drivers compared to FY 2018 results prior quarter actual actual End of Period Loans . Increase by approximately 10%. Unchanged. $32.9 billion $32.4 billion +6% YTD annualized +11% Y-o-Y & +11% Y-o-Y
Slide 14: APPENDIX
APPENDIX ty EAST WEST BANK Your financial bridge
Slide 15: Appendix: GAAP to Non-GAAP Reconciliation
Appendix: GAAP to Non-GAAP Reconciliation EAST WEST BANCORP, INC. AND SUBSIDIARIES GAAP TO NON-GAAP RECONCILIATION ($ in thousands, except per share data) (unaudited) During the first quarter of 2019, the Company recorded a pre-tax impairment charge related to certain tax credit investments of $7.0
Slide 16: Appendix: GAAP to Non-GAAP Reconciliation (cont’d)
Appendix: GAAP to Non-GAAP Reconciliation (cont’d) EAST WEST BANCORP, INC. AND SUBSIDIARIES GAAP TO NON-GAAP RECONCILIATION ($ 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 uses certain non-GAAP financial measures to provide supplemental information regarding the Company’s performance. Tangible equity
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) Adjusted return on average tangible equity represents adjusted tangible net income divided by average tangible equity. Adjusted tangible net income