East West Bancorp, Inc. · NASDAQ:EWBC
East West Bancorp — Q3 2019 Earnings Presentation
20 slides from East West Bancorp's earnings presentation, Oct 17, 2019
Slide 1: EWBC Earnings Results Third Quarter 2019
EWBC Earnings Results Third Quarter 2019 October 17, 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 Third Quarter 2019 Results
Highlights of Third Quarter 2019 Results $ in millions, except per share data Current Quarter Q-o-Q Change Y-o-Y Change 3Q19 Earnings Net income $171 million Net income $ 171.4 14% 0.1% Adj.1 net income $ 171.4 (5)% 0.1% 3Q19 EPS $ 1.17 14% 0.1% Diluted EPS $1.17 Adj.1 EPS $ 1.17 (5)% (0.2)% 2 NII $
Slide 4: Earnings Growth and Profitability
3Q19 Earnings Growth and Profitability Net Income and Diluted EPS Adjusted* Net Income and Diluted EPS $200 $200 $180 $171 $173 $164 $171 $171 $173 $169 $171 $150 $1.24 $1.17 $1.18 $1.17 $1.17 $1.18 $1.16 $1.17 $1.12 +1% +7% -5% $1.03 -2% $ in millions $ in $100 $100 $ in millions $ in $ $ inmillion
Slide 5: Record Loans of $34.0 billion
3Q19 Record Loans of $34.0 billion 3Q19 EOP Loan Mix: $34.0 billion . EOP loan growth of 1% Q-o-Q (+3% LQA). ($ in billions) $0.3 . Avg. loan growth of 2% Q-o-Q (+8% LQA). 1% . Avg. growth in CRE: $254mm (+8% LQA). $8.4 25% . Avg. growth in SFR & HELOC: $213mm (+11% LQA). $12.3 . Avg. growth in C&I:
Slide 6: Record Deposits of $36.7 billion
3Q19 Record Deposits of $36.7 billion 3Q19 EOP Deposit Mix: $36.7 billion . EOP deposit growth of 2% LQA. ($ in billions) . Avg. deposit growth of 13% LQA. . Avg. growth in MMDA: $489mm (+25% LQA). . Avg. growth in DDA: $475mm (+18% LQA). $10.5 $10.8 . Avg. growth in time: $433mm (+17% LQA). 29% 29%
Slide 7: Summary Income Statement
3Q19 Summary Income Statement $ in millions, except per share data 3Q19 2Q19 $ Change % Change Notable & Tax-Related Items Adjusted net interest income $ 367.3 $ 365.6 $ 1.7 0.5 % . Record operating revenue of ASC 310-30 discount 2.5 1.7 0.8 47 % $421mm. accretion income Net interest income 369.8 36
Slide 8: Net Interest Income & Net Interest Margin
3Q19 Net Interest Income & Net Interest Margin Net Interest Income . 3Q19 NII of $369.8mm increased 1% Q-o-Q. . 3Q19 ASC 310-30 discount accretion income of $2.5mm $369 $370 $362 $367 vs. $1.7mm in 2Q19; 3 bps of impact to NIM*. $349 +1% -2% +1% . 3Q19 NIM of 3.59%, decrease of 14 bps Q-o-Q. +6% . I
Slide 9: Noninterest Income Detail
3Q19 Noninterest Income Detail Fee Income & Net Gains on Sales of Loans * Total noninterest income of $51.5mm in 3Q19 vs. $52.8mm in 2Q19. $50.9 . Fee income and net gains on sales of loans: $50.9mm, $48.9 2.0 4% +4% Q-o-Q. . Gains on loan sales: Q-o-Q increase primarily due to 11.8 11.1 22% $39.9 $
Slide 10: Efficiency and PTPP Profitability
3Q19 Efficiency and PTPP Profitability Noninterest Expense & Efficiency Ratio . 3Q19 total noninterest expense: $176.6mm, decrease of 1% Q-o-Q from $177.7mm. $161 $160 $159 $158 $156 $160 . 3Q19 adj.* noninterest expense: $158.6mm, decrease of 1% Q-o-Q from $159.8mm. Largest decline in $140 compensa
Slide 11: Asset Quality Metrics
Asset Quality Metrics Allowance for Loan Losses Provision Expense & Net Charge-off Ratio $346 $80.1 $350 $311 $82 $287 2.50% $64.3 $261 1.00% $46.3 inmillions 1.50% $ $ inmillions $ $ $27.5 0.50% 1.02% 0.99% 0.96% 1.02% 0.18% 0.15% 0.08% 0.13% $0 0.50% $0 0.00% 12.31.16 12.31.17 12.31.18 09.30.19 20
Slide 12: Strong Capital Ratios
Strong Capital Ratios . Year-to-date capital increase: tangible equity per common share increased by 11%; the tangible equity to tangible assets ratio increased by 57 bps; regulatory capital ratios increased by 41 bps to 56 bps. . Quarterly common stock dividend of 27.5 cents/share, or annualized $1
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 7%. Previously: Increase $34.0 billion $32.4 billion by approximately +7% YTD annualiz
Slide 14: APPENDIX
APPENDIX ty EAST WEST BANK Your financial bridge
Slide 15: Appendix: GAAP to Non-GAAP Reconciliation
Appendix: GAAP to Non-GAAP Reconciliation EAST WEST BANCORP, INC. AND SUBSIDIARIES GAAP TO NON-GAAP RECONCILIATION ($ in thousands, except per share data) (unaudited) During the second quarter of 2019, the Company reversed $30.1 million of certain previously claimed tax credits related to the DC Sol
Slide 16: Appendix: GAAP to Non-GAAP Reconciliation
Appendix: GAAP to Non-GAAP Reconciliation EAST WEST BANCORP, INC. AND SUBSIDIARIES GAAP TO NON-GAAP RECONCILIATION ($ in thousands, except per share data) (unaudited) During the first quarter of 2019, the Company recorded a $7.0 million pre-tax impairment charge related to DC Solar. During the secon
Slide 17: Appendix: GAAP to Non-GAAP Reconciliation (cont'd)
Appendix: GAAP to Non-GAAP Reconciliation (cont’d) EAST WEST BANCORP, INC. AND SUBSIDIARIES GAAP TO NON-GAAP RECONCILIATION ($ in thousands) (unaudited) Adjusted efficiency ratio represents adjusted noninterest expense divided by adjusted revenue. Adjusted pre-tax, pre-provision profitability ratio
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) Management believes that presenting the adjusted average loan yield and adjusted net interest margin that exclude the ASC 310-30 discount accretion
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) The Company uses certain non-GAAP financial measures to provide supplemental information regarding the Company’s performance. Tangible equity and t
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) Adjusted return on average tangible equity represents adjusted tangible net income divided by average tangible equity. Adjusted tangible net income