East West Bancorp, Inc. · NASDAQ:EWBC
East West Bancorp — Q1 2021 Earnings Presentation
26 slides from East West Bancorp's earnings presentation, Apr 22, 2021
Slide 1: EWBC Earnings Results First Quarter 2021
EWBC Earnings Results First Quarter 2021 April 22, 2021
Slide 2: Forward-Looking Statements
Forward-Looking Statements Forward-Looking Statements Certain matters set forth herein (including any exhibits hereto) contains certain forward-looking information about us that is intended to be covered by the safe harbor for “forward-looking statements” provided by the Private Securities Litigatio
Slide 3: Highlights of First Quarter 2021
Highlights of First Quarter 2021 Return on Average Assets Adjusted Pre-Tax, Pre-Provision 1Q21 Net Income Income* & Profitability Ratio* 1.50% $280 $205 million 4.50% $262 $258 $251 1.30% 1Q21 Diluted EPS $ in millions 1.24% 2.32% 1.90% 1.91% $1.44 1.42% Record Loans $200 0.25% 0.25% $39.6 billion 1
Slide 4: 03.31.21: Strong, Well-Diversified Balance Sheet
03.31.21: Strong, Well-Diversified Balance Sheet Record Loans as of 03.31.21: $39.6 billion $ in millions, except per share data 03.31.21 12.31.20 $ Change ($ in billions) Cash equivalents & ST investments $ 5,361 $ 4,828 $ 533 AFS debt securities & repo assets 9,949 7,005 2,944 Gross loans (ex. PPP
Slide 5: 03.31.21: Strong Capital Ratios
03.31.21: Strong Capital Ratios ▪ Book value per share of $37.26 as of 03.31.21: essentially unchanged Q-o-Q and +7% Y-o-Y. ▪ Tangible equity per share* of $33.90 as of 03.31.21: essentially unchanged Q-o-Q and +8% Y-o-Y. ▪ Tangible equity to tangible assets ratio* of 8.5% as of 03.31.21, compared w
Slide 6: 03.31.21: Diversified Commercial Loan Portfolio
03.31.21: Diversified Commercial Loan Portfolio Total Loans: C&I Loans by Industry as % of Total Loans Outstanding Total Resi. Mortgage & 3% General Manufacturing & Wholesale Other Consumer 27% 3% Private Equity 3% Entertainment $12.0bn 2% Oil & Gas $39.6 C&I 2% 2% Real Estate Related Technology & L
Slide 7: 03.31.21: Diversified Commercial Real Estate Portfolio
03.31.21: Diversified Commercial Real Estate Portfolio Total Loans: Total CRE Loans by Property Type as % of Total CRE: Distribution by Total Loans Outstanding Geography WA 3% Total Resi. Mortgage Other & Other Consumer Retail, 9% 7% 27% TX $15.1bn MFR, 8% 7% PPP $39.6 $15.1 SoCal 5% Total CRE NY bi
Slide 8: 03.31.21: Low LTV Commercial Real Estate Portfolio
03.31.21: Low LTV Commercial Real Estate Portfolio Total CRE: Distribution by LTV CRE LTV & Size by Property Type >70% Average Weight. Avg. 4% Loan Size LTV >65% to 70% ($ in mm) 6% Retail $ 2.2 mm 49% Multifamily 1.2 mm 51% >60% to 65% 15% <=50% Office 4.1 mm 53% $2.4 million 42% Avg. size of loan
Slide 9: 03.31.21: Low LTV Single Family Residential Mortgages
03.31.21: Low LTV Single Family Residential Mortgages SFR: Distribution by Geography SFR: Distribution by LTV TX 2% Other >60% 8% 11% WA <=50% 7% 33% SoCal 41% $389,000 $8.5 billion Avg. size of loan SFR Loans outstanding Outstanding 53% Avg. LTV NY >55% to 60% 30% 42% >50% to 55% 14% NorCal 12% ▪ S
Slide 10: 03.31.21: Low LTV Home Equity Lines of Credit
03.31.21: Low LTV Home Equity Lines of Credit HELOC: Distribution by Geography HELOC: Distribution by LTV* >60%: 2% Other 6% WA 11% >55% to 60% 40% SoCal $395,000 $1.7 billion 46% Avg. size of <=50% NY commitment 51% HELOC Loans 12% Outstanding 49% Avg. LTV* NorCal 25% * Combined LTV for 1st and 2nd
Slide 11: 03.31.21: Asset Quality Metrics by Portfolio
03.31.21: Asset Quality Metrics by Portfolio Criticized Loans / Total Loans NPAs / Total Assets ▪ Criticized loans: $1,217mm, or 3.1% of loans HFI, as of 3.9% 03.31.21, vs. $1,217mm, or 3.2% as of 12.31.20. 0.52% ▪ Special mention: $504mm as of 03.31.21, -11% Q-o-Q. 3.2% 0.45% 0.45% 3.1% ▪ Classifie
Slide 12: 1Q21: Allowance for Loan Losses & Credit Costs
1Q21: Allowance for Loan Losses & Credit Costs Allowance for Loan Losses Coverage Ratio Provision for Credit Losses & Net Charge-offs $700 $632 $618 $620 $102 $608 $557 $74 $ in millions $ in millions 0.35% $483 1.78% 0.26% 1.73% 1.68% 1.55% 1.62% 0.21% 0.20% 1.39% 0.14% 1.70% 1.65% 1.61% 1.53% $24
Slide 13: 1Q21: Summary Income Statement
1Q21: Summary Income Statement 1Q21 vs. 4Q20 $ in millions, except per share data & ratios 1Q21 4Q20 $ Change % Change Comments $ 338.7 $ 332.7 6.0 2% Net interest income (ex. PPP) ▪ Noninterest income: 4Q20 included PPP income 15.0 13.9 1.1 8% gains on sales of bank premises and Total net interest
Slide 14: 1Q21: Average Balance Sheet: Growth & Mix
1Q21: Average Balance Sheet: Growth & Mix Average Loans & Growth ▪ 1Q21 avg. loan growth: +11% LQA (+$1.0bn Q-o-Q) or +9% LQA ex. PPP (+$777mm). Rate of growth accelerated from $37.1 $37.2 $37.7 $38.7 4Q20. Growth in all major loan portfolios. $35.2 +0.2% +6% +11% 1.9 +23% 1.5 1.8 1.7 9.0 9.1 9.3 9.
Slide 15: 1Q21: Net Interest Income & Net Interest Margin
1Q21: Net Interest Income & Net Interest Margin Adj.* Net Interest Income & Adj.* Net Interest Margin ▪ 1Q21 NII: $354mm, +2% Q-o-Q (+8% annualized) from $347mm in 4Q20. 1Q21 NIM: 2.71%, -6 bps Q-o-Q. $363 5.50% $350 $323 $333 $339 ▪ 1Q21 adj.* NII (ex. PPP): $339mm, +2% Q-o-Q (+7% ann.) $318 4.50%
Slide 16: 1Q21: Average Loan Yields
1Q21: Average Loan Yields Adj.* Avg. Loan Yield (in bps) vs. Prime & LIBOR ▪ 1Q21 avg. loan yield: 3.58%, -10 bps $0 GAAP Yield: GAAP Yield: GAAP Yield: GAAP Yield: Q-o-Q. 471 398 bps 360 bps 368 bps 358 bps 495 $0 ▪ Ex. PPP, 1Q21 adj.* avg. loan yield: 390 4.42% 370 369 360 395 3.60%, -9 bps Q-o-Q.
Slide 17: 1Q21: Average Cost of Deposits
1Q21: Average Cost of Deposits Avg. Cost of Deposits (in bps) Relative to Fed Funds Rate ▪ Spot rate of total deposits: 0.16% as of 160 0.0 03.31.21 (vs. 0.22% as of 12.31.20). 1.42% ▪ Spot rate of IB deposits: 0.26% as of 03.31.21 (vs. 0.35% as of 12.31.20). ▪ Repricing of maturing CDs to lower rat
Slide 18: 1Q21: Noninterest Income Detail
1Q21: Noninterest Income Detail Total noninterest income: $73mm in 1Q21, up $3mm from Fee Income* & Net Gains on Sales of Loans $70mm in 4Q20 (+4% Q-o-Q or +18% annualized). ▪ Fee income and net gains on sales of loans: $54.4 $54.8 0.9 $52.2 $53.1 $55mm in 1Q21, up $2mm from $53mm in 4Q20 1.7 4% 0.1
Slide 19: 1Q21: Operating Expense & Efficiency
1Q21: Operating Expense & Efficiency Adjusted* Noninterest Expense Adj. Noninterest Expense* & Adj.* Efficiency Ratio* 60.0% $166 $165 $165.6 $165.0 $160.6 $161 $153.3 $154.4 23.5 20.7 13% $153 $154 $ in millions 22.0 19.2 17.5 8.5 9.0 5% 40.8% 39.8% 9.5 8.4 38.4% 38.4% 38.7% 9.1 11.7 11.6 7% 10.0 1
Slide 20: Management Outlook: Full Year 2021
Management Outlook: Full Year 2021 FY 2021 expectations Earnings drivers compared with FY 2020 results Prior Outlook 2020 actual End of Period Loans ▪ Increase at a percentage rate of ▪ Increase at a percentage $36.8 billion (ex. PPP) (ex. PPP) approximately 8% Y-o-Y. rate of 6% to 8% Y-o-Y. +6% Y-o
Slide 21: Appendix
APPENDIX ty] EAST WEST BANK Your financial bridge”
Slide 22: Appendix: GAAP to Non-GAAP Reconciliation
Appendix: GAAP to Non-GAAP Reconciliation EAST WEST BANCORP, INC. AND SUBSIDIARIES GAAP TO NON-GAAP RECONCILIATION ($ in thousands) (unaudited) During the fourth quarter of 2020, the Company recorded $10.7 million in pre-tax recovery and $5.1 million in uncertain tax position related to the Company’
Slide 23: Appendix: GAAP to Non-GAAP Reconciliation
Appendix: GAAP to Non-GAAP Reconciliation EAST WEST BANCORP, INC. AND SUBSIDIARIES GAAP TO NON-GAAP RECONCILIATION ($ in thousands) (unaudited) Adjusted efficiency ratio represents adjusted noninterest expense divided by revenue. Adjusted pre-tax, pre-provision profitability ratio represents revenue
Slide 24: 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 25: 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 adjusted tangible net income divided by average tangible equity. Adjusted tangible net income excludes
Slide 26: 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) In April 2020, the Company started accepting applications under the PPP administered by the Small Business Administration (“SBA”) under the Coronavirus Aid,