East West Bancorp, Inc. · NASDAQ:EWBC
East West Bancorp — Q2 2019 Earnings Presentation
21 slides from East West Bancorp's earnings presentation, Jul 18, 2019
Slide 1: EWBC Earnings Results Second Quarter 2019
EWBC Earnings Results Second Quarter 2019 July 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 Second Quarter 2019 Results
Highlights of Second Quarter 2019 Results $ in millions, except per share data Current Quarter Q-o-Q Change Y-o-Y Change 2Q19 2Q19 1 Earnings Net Adj. Net income income Net income $ 150.4 (8)% (13)% $150 million $180 million Adj.1 net income $ 180.5 7% 5% EPS $ 1.03 (8)% (13)% 2Q19 2Q19 1 Adj.1 EPS
Slide 4: 2Q19 Record Loans of $33.7 billion
2Q19 Record Loans of $33.7 billion 2Q19 EOP Loan Mix: $33.7 billion . EOP loan growth of 3% Q-o-Q (+11% LQA). ($ in billions) . Avg. loan growth of 2% Q-o-Q (+7% LQA). . Avg. growth in CRE: $227mm (+7% LQA). . Avg. growth in Consumer: $182mm (+9% LQA). $8.4 $12.4 25% 37% . Avg. growth in C&I: $157mm
Slide 5: 2Q19 Record Deposits of $36.5 billion
2Q19 Record Deposits of $36.5 billion 2Q19 EOP Deposit Mix: $36.5 billion . EOP deposit growth of 2% LQA. ($ in billions) . Loan to deposit ratio: 92.5%, vs. 90.6% as of 03.31.19. . Avg. deposits growth of 5% LQA. . Growth primarily in time and noninterest-bearing $10.6 $10.6 29% 29% demand deposits
Slide 6: 2Q19 Earnings Growth and Profitability
2Q19 Earnings Growth and Profitability Net Income and Diluted EPS Adjusted* Net Income and Diluted EPS $200 $200 $180 $172 $171 $173 $164 $172 $171 $173 $169 $150 $1.18 $1.24 $1.17 $1.18 $1.18 $1.17 $1.18 $1.16 $1.12 +7% $1.03 -1% +1% -2% $ $ millions in $100 $100 $ $ millions in $ in millions,excep
Slide 7: 2Q19 Summary Income Statement
2Q19 Summary Income Statement Notable & Tax-Related Items $ in millions, except per share data 2Q19 1Q19 $ Change % Change Adjusted net interest income $ 365.6 $ 360.3 $ 5.3 1 % . 2Q19 adj.** net income of $180.5mm and adj.** EPS of $1.24. ASC 310-30 discount 1.7 2.2 (0.5) (21) % accretion income 2Q
Slide 8: 2Q19 Net Interest Income & Net Interest Margin
2Q19 Net Interest Income & Net Interest Margin 2Q19 NII of $367.3mm increased 1% Q-o-Q. Net Interest Income . 2Q19 ASC 310-30 discount accretion income of $380 $369 $362 $367 $1.7mm vs. $2.2mm in 1Q19; 2 bps of impact to NIM*. $360 $342 $349 . -2% +1% 2Q19 NII growth reflects loan growth, partially
Slide 9: Loan Portfolio: Underlying Interest Rate Detail
Loan Portfolio: Underlying Interest Rate Detail EWBC’s Loan Portfolio Breakdown: Fixed, Hybrid, & Variable Rate Loans (as of June 30, 2019) % of % of $ in mm. total loans $ in mm. total loans . Prime: $10.5bn or 31% of EWBC’s total Fixed rate loans 3,655.1 10.8% Hybrid: no floors 285.8 0.8% loan por
Slide 10: 2Q19 Noninterest Income Detail
2Q19 Noninterest Income Detail Fee Income & Net Gains on Sales of Loans * Total noninterest income of $52.8mm in 2Q19 vs. $42.1mm in 1Q19. $50 $48.9 . Fee income and net gains on sales of loans totaled $45.0 $48.9mm in 2Q19, a 25% increase from $39.1mm in 2.4 1Q19, primarily due to strong growth in
Slide 11: 2Q19 Efficiency and PTPP Profitability
2Q19 Efficiency and PTPP Profitability Noninterest Expense & Efficiency Ratio . 2Q19 total noninterest expense: $177.7mm, down 5% $161 $160 Q-o-Q from $186.9mm, due to decrease in $158 $160 $156 $156 amortization of tax credits and other investments. . 2Q19 adj.* noninterest expense: $159.8mm, down
Slide 12: Asset Quality Metrics
Asset Quality Metrics Allowance for Loan Losses Provision Expense & Net Charge-off Ratio $33.7 $35 $32.4 $64.3 $29.0 1.00% $28 $25.5 2.50% $46.3 $41.8 $21 $40 $27.5 $14$ in billions 1.50% 0.50% 1.02% 0.99% 0.96% 0.98% millions in $ 0.15% 0.13% 0.14% $7 0.08% $0 0.50% $0 0.00% 12.31.16 12.31.17 12.31
Slide 13: Strong Capital Ratios
Strong Capital Ratios . Regulatory capital ratios increased by 23 bps to 47 bps year-to-date. . Quarterly common stock dividend of 27.5 cents/share, or annualized $1.10/share. Most recently increased in May 2019. EWBC’s Capital Position EWBC's Capital Position $29.20 0.155 13.7% 13.9% $27.15 0.135 1
Slide 14: 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. $33.7 billion $32.4 billion +8% YTD annualized +11% Y-o-Y & +12% Y-o-Y
Slide 15: Appendix
APPENDIX EAST WEST BANK Your financial bridge®
Slide 16: Appendix: GAAP to Non-GAAP Reconciliation
Appendix: GAAP to Non-GAAP Reconciliation EAST WEST BANCORP, INC. AND SUBSIDIARIES GAAP TO NON-GAAP RECONCILIATION ($ in thousands, except per share data) (unaudited) During the second quarter of 2019, the Company reversed $30.1 million of certain previously claimed tax credits related to the DC Sol
Slide 17: Appendix: GAAP to Non-GAAP Reconciliation
Appendix: GAAP to Non-GAAP Reconciliation EAST WEST BANCORP, INC. AND SUBSIDIARIES GAAP TO NON-GAAP RECONCILIATION ($ in thousands, except per share data) (unaudited) During the first quarter of 2019, the Company recorded a $7.0 million pre-tax impairment charge related to DC Solar. During the secon
Slide 18: Appendix: GAAP to Non-GAAP Reconciliation (cont'd)
Appendix: GAAP to Non-GAAP Reconciliation (cont’d) EAST WEST BANCORP, INC. AND SUBSIDIARIES GAAP TO NON-GAAP RECONCILIATION ($ 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