Slide 1: EWBC Earnings Results Second Quarter 2020
EWBC Earnings Results Second Quarter 2020 July 23, 2020
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: East West Response to COVID-19
East West Response to COVID-19 Employees SBA Paycheck Protection Program Developed detailed return to office plan with Processed and funded $1.8 billion for over phased return for associates. 7,200 small to medium-sized businesses and Continue work-from-home plans for nonprofit organizations d
Slide 4: Summary of Second Quarter 2020 Results
Summary of Second Quarter 2020 Results Profitability: Returns on Assets & Equity 2.00% 1.74% 40.0% 2Q20 1.67% 1.58% Net Income 30.0% 1.30% $99 million 17.4% 15.7% 16.6% 0.83% 20.0% 12.9% 15.5% 9.0% 2Q20 14.1% 14.9% 10.0% 11.6% Diluted EPS 8.0% 0.00% 0.0% $0.70 2Q19* 3Q19 4Q19* 1Q20 2Q20 ROAA ROAE RO
Slide 5: Summary Balance Sheet
2Q20: Summary Balance Sheet $ in millions, except per share data 06.30.20 03.31.20 % Change Notable Items Cash equivalents & ST investments $ 5,065 $ 3,374 50% AFS debt securities & repo assets 5,145 4,556 13% Strong, well-diversified balance sheet. Gross loans (ex. PPP) $ 35,487 $ 35,895 -1% Tota
Slide 6: Strong Capital Ratios
2Q20: Strong Capital Ratios Growing Equity: Book value per share of $35.25 as of 06.30.20: +2% Q-o-Q and +8% Y-o-Y. Tangible equity* per share of $31.86 as of 06.30.20: +2% Q-o-Q and +9% Y-o-Y. Tangible equity* to tangible assets ratio of 9.2% as of 06.30.20. Increasing risk-based capital ra
Slide 7: Record Loans of $37.2 billion
2Q20: Record Loans of $37.2 billion Loan Mix as of 06.30.20: $37.2 billion* EOP loan growth: 4% Q-o-Q (+15% LQA). ($ in billions) Avg. loan growth: 6% Q-o-Q (+23% LQA). $1.7 $9.3 5% C&I: 2Q growth from PPP. 25% PPP: average balance of $1.5bn in 2Q20. Real estate portfolio growth: total CRE
Slide 8: Diversified Commercial Loan Portfolio
06.30.20: Diversified Commercial Loan Portfolio Total Loans: C&I Loans by Industry as % of Total Loans Outstanding Total Residential Total Residential Mortgage Mortgage && 3% General Manufacturing & Wholesale Other Consumer Other Consumer 25% 3% Oil & Gas 25% 3% Private Equity $11.7 billion 2% Enter
Slide 9: Diversified Commercial Real Estate Portfolio
06.30.20: Diversified Commercial Real Estate Portfolio Total Loans: Total CRE Loans by Property Type as % of Total CRE Geographic Distribution Total Loans Outstanding Total Residential Other WA 8% Mortgage & 3% Other Consumer Retail, 9% TX 25% 6% NY PPP $14.5 billion MFR, 8% 6% $14.5 5% $37.2 Total
Slide 10: Low LTV Commercial Real Estate Portfolio
06.30.20: Low LTV Commercial Real Estate Portfolio LTV Distribution of Total CRE LTV & Size by Property Type >65% to 70% > 70% Average Weight. Avg. 7% 4% Loan Size LTV ($ in mm) Retail $ 2.2 mm 50% Multifamily 1.2 mm 52% >60% to 65% Office 3.8 mm 54% 16% $2.3 million Industrial 2.3 mm 51% Avg. size
Slide 11: Low LTV Single Family Mortgage Portfolio
06.30.20: Low LTV Single Family Mortgage Portfolio Geographic Distribution of SFR LTV Distribution SFR >60% 7% <=50% 32% $385,000 $7.7 billion Avg. outstanding Single-family SFR size mortgage >55% to 60% 53% 47% Avg. LTV >50% to 55% 14% Single-family residential (SFR): $7.7bn as of 06.30.20, prima
Slide 12: Low LTV HELOC Portfolio
06.30.20: Low LTV HELOC Portfolio Geographic Distribution of HELOC LTV* Distribution HELOC >60%:: 3% Other WA 5% 10% >55% to 60% NY 33% $362,000 13% $1.5 billion SoCal Avg. HELOC 48% commitment HELOC <=50% Loan balance 49% 57% Avg. LTV* NorCal 24% * Combined LTV for 1st and 2nd >50% to 55% liens. Ba
Slide 13: Allowance for Loan Losses & Credit Costs
2Q20: Allowance for Loan Losses & Credit Costs Allowance for Loan Losses Coverage Ratio Provision for Credit Losses & Net Charge-offs 0.70% $632 4.80% 220 0.50% $557 0.26% $483 0.21% $ in millions 0.30% $500 3.60% 0.09% 0.10% 0.01% $ in millions 0.10% $358 $311 102 2.40% 110 -0 .10% 1.55% 1.70% 1.39
Slide 14: Asset Quality Metrics
2Q20: Asset Quality Metrics Special Mention Loans Total: $576mm Classified Loans 21.6% Total: $674mm Special mention loan ratio by portfolio $6 $36 1% 5% 0.4% 0.4% Classified loan ratio by portfolio 11.0% 36 36 $140 $164 198 24% 1.4% 24% 198 1.4% $276 Classified: 41% SM: 1.8% of 30 0.3% $276 30 0.3%
Slide 15: Record Deposits of $40.7 billion
2Q20: Record Deposits of $40.7 billion Deposit Mix as of 06.30.20: $40.7 billion EOP loan-to-deposit ratio of 91.5% as of 06.30.20. ($ in billions) EOP deposit growth of 5% Q-o-Q (+21% LQA). Avg. deposit growth of 6% Q-o-Q (+26% LQA). $9.3 Growth in avg. DDA: $2.4bn (+87% LQA). Avg. DDA 23%
Slide 16: Summary Income Statement
2Q20: Summary Income Statement 2Q20 vs. 1Q20 $ in millions, except per share data 2Q20 1Q20 $ Change % Change Notable Items Net Interest Income $ 343.8 $ 362.7 $ (18.9) -5% Fee income & net gains on sales of Gains on sales of AFS debt securities of 52.2 54.4 (2.2) -4% loans* $10mm, driven by $132m
Slide 17: Net Interest Income & Net Interest Margin
2Q20: Net Interest Income & Net Interest Margin Net Interest Income & Net Interest Margin 2Q20 NII: $344mm, down by $19mm or -5% Q-o-Q. 2Q included $21mm of PPP loan income, net of interest expense on PPPLF. 400 $367 $370 $368 $363 2Q20 NIM: 3.04%, down 40 bps Q-o-Q. 350 $344 300 Impact to NIM
Slide 18: Noninterest Income Detail
2Q20: Noninterest Income Detail Fee Income & Net Gains on Sales of Loans * Total noninterest income: $59mm in 2Q20 vs. $54mm in 1Q20. 60.0 $54.4 $52.5 $52.2 Fee income and net gains on sales of loans: $50.9 50.0 $48.9 $52mm in 2Q20, down $2mm or -4% Q-o-Q. 14.1 11.6 22% 11.8 11.1 14.1 Decrease r
Slide 19: Operating Expense & Efficiency
2Q20: Operating Expense & Efficiency Adjusted* Noninterest Expense Noninterest Expense & Efficiency Ratio 180.0 $165.3 $160 $159 $165 $161 70.0% $159.8 $158.6 $160.6 $170 $153 160.0 $153.3 26.7 24.2 38.0% 37.7% 38.3% 38.5% 38.1% 24.8 26.8 140.0 21.5 13% 3.2 1.2 2.1 6.0 6.1 1% 5.4 2.6 1.4 3.6 5.4 4%
Slide 20: Appendix
APPENDIX ty] EAST WEST BANK Your financial bridge”
Slide 21: Appendix: GAAP to Non-GAAP Reconciliation
Appendix: GAAP to Non-GAAP Reconciliation EAST WEST BANCORP, INC. AND SUBSIDIARIES GAAP TO NON-GAAP RECONCILIATION ($ in thousands, except per share data) (unaudited) During the first and second quarters of 2019, the Company recorded a $7.0 million pre-tax impairment charge and reversed $30.1 millio
Slide 22: Appendix: GAAP to Non-GAAP Reconciliation
Appendix: GAAP to Non-GAAP Reconciliation EAST WEST BANCORP, INC. AND SUBSIDIARIES GAAP TO NON-GAAP RECONCILIATION ($ in thousands) (unaudited) Adjusted efficiency ratio represents adjusted noninterest expense divided by revenue. Adjusted pre-tax, pre-provision profitability ratio represents revenue
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) The Company uses certain non-GAAP financial measures to provide supplemental information regarding the Company’s performance. Tangible equity and tangible e
Slide 24: 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