East West Bancorp, Inc. · NASDAQ:EWBC
East West Bancorp — Q1 2017 Earnings Presentation
17 slides from East West Bancorp's earnings presentation, Apr 20, 2017
Slide 1: EWBC Earnings Results First Quarter 2017
EWBC Earnings Results First Quarter 2017 April 20, 2017
Slide 2: Forward-Looking Statements
Forward-Looking Statements 2 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 current business plans and
Slide 3: Highlights of First Quarter 2017 Results
Highlights of First Quarter 2017 Results Solid operating results Net income of $170mm and diluted EPS of $1.16 up by 53% Q-o-Q. Adjusted net income1,2 and adj. diluted EPS1,2 grew 16% Q-o-Q. NII growth driven by strong loan growth and impact of recent interest rate increases, offset by decreas
Slide 4: 1Q17 Earnings Growth and Profitability
$0.74 $0.71 $0.76 $0.76 $0.88 0% 5% 10% 15% 20% 25% $0.45 $0.55 $0.65 $0.75 $0.85 $0.95 1Q16 2Q16 3Q16 4Q16 1Q17 * Diluted EPS (LH axis) Diluted EPS growth (RH axis) $107.5 $103.3 $110.1 $110.7 $128.2 1.33% 1.27% 1.33% 1.27% 1.49% 0.50% 1.00% 1.50% 2.00 $0 $50 $100 $150 1Q16 2Q16 3Q16 4Q16 1Q17 * Ne
Slide 5: 1Q17 Record Loans of $26.5 billion
8.8 9.1 9.3 9.6 9.9 8.4 8.5 8.5 8.7 9.0 1.3 1.3 1.4 1.6 1.7 3.1 3.2 3.4 3.5 3.7 2.1 2.1 2.1 2.1 2.1 0% 20% 40% 60% $0 $10 $20 $30 1Q16 2Q16 3Q16 4Q16 1Q17 C&I CRE MFR SFR Consumer LQA growth rate 1Q17 Record Loans of $26.5 billion 5 $ in b ill io n s EOP Total Loans Q-o-Q Difference Total loans in
Slide 6: 1Q17 Record Deposits of $30.5 billion
9.5 9.5 9.5 10.2 10.7 7.6 7.4 7.7 8.2 8.0 5.4 5.6 5.8 5.9 6.1 6.1 5.7 5.6 5.6 5.8 0.0% 20.0% 40.0% 60.0% $0 $10 $20 $30 $40 1Q16 2Q16 3Q16 4Q16 1Q17 DDA MMDA IB checking & Savings Time LQA growth rate 1Q17 Record Deposits of $30.5 billion 6 Q-o-Q Difference Total deposits increased $652mm or 2% (+
Slide 7: 1Q17 Summary Income Statement
1Q17 Summary Income Statement 7 % Change vs. ($ in millions, except per share data) 1Q17 4Q16 1Q16 1Q17 Comments Adjusted net interest income (excl. accretion) $ 268.9 3.0% 12.6% Loan growth & higher interest rates. ASC 310-30 discount accretion income $ 3.2 (72.1) (75.8) Declined, as anticipate
Slide 8: 1Q17 Net Interest Income & Net Interest Margin
1Q17 NIM of 3.33% expanded by 2 bps Q-o-Q. 1Q17 loans yield of 4.23% declined by 10 bps Q-o-Q because of decreased accretion income. Excluding the impact of accretion income, adjusted NIM of 3.29% expanded by 12 bps Q-o-Q. Benefitted from a rising interest rate environment. Impact from chang
Slide 9: 1Q17 Fees & Other Operating Income
10.2 10.4 10.4 10.2 10.3 3.1 2.8 4.0 3.4 4.5 3.6 4.3 6.1 5.4 5.0 9.6 10.9 10.9 14.4 11.1 2.5 1.4 5.8 7.0 2.55.6 6.5 7.6 7.2 5.4 $0 $10 $20 $30 $40 $50 1Q16 2Q16 3Q16 4Q16 1Q17 Branch fees Wealth management fees Ancillary loan fees LC fees & FX income Derivative fees & other income Other fees & opera
Slide 10: 1Q17 Efficiency and PTPP Profitability
1Q17 Efficiency and PTPP Profitability 10 Adj.* Operating Expense & Efficiency Ratio $ in m ill io n s 1 Adj.* PTPP Income & PTPP Profitability Ratio $ in m ill io n s * See reconciliation of GAAP to non-GAAP financial measures on slides 14-17 and in the Company’s 1Q17 Earnings Release. 1Q17 total
Slide 11: 1Q17 Asset Quality Metrics
Allowance coverage of loans HFI ticked down to 0.99% as of 03.31.17, reflecting limited downward migration of loans into substandard risk categories. Annualized NCO ratio of 8 bps in 1Q17 near historically low levels, down by 5 bps Q-o-Q and down 1 bp Y-o-Y. NPAs increased by $15mm linked quar
Slide 12: 1Q17 Capital Ratios
12 1Q17 Capital Ratios EWBC’s Solid Capital Position Capital ratios increased by 20 to 30 bps in 1Q17. Our core earnings and the sale of the commercial property during the quarter strengthened capital ratios across the board. Current capital levels are solid, and sufficient to support continue
Slide 13: Updated Management Outlook: Full Year 2017 Earnings Drivers
Updated Management Outlook: Full Year 2017 13 Earnings Drivers Full year 2017 expectations compared to 2016 FY results Outlook change from prior quarter 2016 FY actual 1Q17 actual End of Period Loans Increase at a percentage rate in the low double digits. Loan growth supported by deposit growth.
Slide 14: Appendix: GAAP to Non-GAAP Reconciliation
Appendix: GAAP to Non-GAAP Reconciliation 14 Quarter Ended March 31, 2017 December 31, 2016 March 31, 2016 Net income (a) $ 169,736 $ 110,734 $ 107,516 Less: Gain on sale of the commercial property, net of tax (1) (b) (41,526 ) — — Adjusted net income (c) $ 128,210 $ 110,734 $ 107,516 Diluted weight
Slide 15: Adjusted pre-tax, pre-provision profitability ratio reconciliation
15 Adjusted pre-tax, pre-provision profitability ratio represents the aggregate of net interest income and adjusted noninterest income less adjusted noninterest expense, divided by average total assets. Adjusted noninterest income excludes the gain on sale of the commercial property (where applicabl
Slide 16: Appendix: GAAP to Non-GAAP Reconciliation (cont'd)
16 The Company believes that presenting the adjusted average loan yields and adjusted net interest margin that exclude the ASC 310-30 impacts provides clarity to financial statement users regarding the ongoing performance of the Company and allows comparability to prior periods. Appendix: GAAP to No
Slide 17: Appendix: GAAP to Non-GAAP Reconciliation (cont'd)
17 The Company uses certain non-GAAP financial measures to provide supplemental information regarding the Company’s performance. Tangible equity and tangible equity to tangible assets ratios are non- GAAP disclosures. Tangible equity represents stockholders’ equity which has been reduced by goodwill