East West Bancorp, Inc. · NASDAQ:EWBC
East West Bancorp — Q4 2019 Earnings Presentation
22 slides from East West Bancorp's earnings presentation, Jan 23, 2020
Slide 1: EWBC Earnings Results Fourth Quarter and Full Year 2019
EWBC Earnings Results Fourth Quarter and Full Year 2019 January 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: Highlights of Fourth Quarter and Full Year 2019 Results
Highlights of Fourth Quarter and Full Year 2019 Results $ in millions, except Fourth Quarter Q-o-Q Change Y-o-Y Change Full Year Y-o-Y Change per share data 2019 vs. 3Q19 vs. 4Q18 2019 vs. FY 2018 Earnings Net income $ 188.2 10% 9% $ 674.0 (4)% Adj.* net income $ 187.1 9% 8% $ 707.9 4% EPS $ 1.29 10
Slide 4: 4Q19 Earnings Growth and Profitability
4Q19 Earnings Growth and Profitability Net Income and Diluted EPS Adjusted* Net Income and Diluted EPS $188 $180 $187 $173 $173 $171 $164 $171 $169 $1.28 $150 $1.29 -2% +7% $1.24 -5% +9% $1.18 $1.17 $1.18 $1.16 $1.17 $1.12 $1.03 $ $ inmillions, except per share data $ $ inmillions, except per share
Slide 5: 4Q19 Record Loans of $34.8 billion
4Q19 Record Loans of $34.8 billion 4Q19 EOP Loan Mix: $34.8 billion . EOP loan growth of 7% Y-o-Y and 2% Q-o-Q. ($ in billions) . FY 2019 avg. loan growth of 10% Y-o-Y. . Avg. growth in CRE: $1.1bn (+9% Y-o-Y). $8.8 25% . Avg. growth in residential mortgage: $1.0bn (+15% Y-o-Y). $12.2 . Avg. growth
Slide 6: 4Q19 Record Deposits of $37.3 billion
4Q19 Record Deposits of $37.3 billion 4Q19 EOP Deposit Mix: $37.3 billion . 12.31.19 EOP loan-to-deposit ratio of 93.2%. ($ in billions) . EOP deposit growth of 5% Y-o-Y and 2% Q-o-Q. . FY 2019 avg. deposit growth of 8% Y-o-Y. $7.3 . Avg. growth in time: $2,530mm (+34% Y-o-Y). 20% $11.1 . Avg. growt
Slide 7: 4Q19 Summary Income Statement
4Q19 Summary Income Statement $ in millions, except per share data 4Q19 3Q19 $ Change % Change Notable & Tax-Related Items Adjusted net interest income $ 362.2 $ 367.3 $ (5.1) (1.4) % . Adjusted** 4Q19 EPS: $1.28. ASC 310-30 discount 6.1 2.5 3.5 140 % accretion income . Included in amortization of t
Slide 8: 4Q19 Net Interest Income & Net Interest Margin
4Q19 Net Interest Income & Net Interest Margin . 4Q19 NII: $368.2mm, down by $1.6mm or 0.4% Q-o-Q. Net Interest Income . 4Q19 NIM: 3.47%, down 12 bps Q-o-Q. $369 $362 $367 $370 $368 . Impact to NIM from change in yields & rates (Q-o-Q): +1% +1% -0.4% -2% . -15 bps from lower loan yields, incl. fees
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 December 31, 2019) Breakdown by interest rate indices % of Breakdown by loan type % of $ in mm. total loans $ in mm. total loans Total Fixed rate loans 4,399.0 13% C&I 1,574.5
Slide 10: 4Q19 Noninterest Income Detail
4Q19 Noninterest Income Detail 60.0 Fee Income & Net Gains on Sales of Loans * $60.0 Total noninterest income of $63.0mm in 4Q19 vs. $51.5mm in 3Q19. $52.5 $50.9 $48.9 1.1 2% . Fee income and net gains on sales of loans: 50.0 2.0 $50.0 $52.5mm in 4Q19, up $1.7mm or +3% Q-o-Q. 14.1 27% . IRC and othe
Slide 11: 4Q19 Operating Expense & Efficiency
4Q19 Operating Expense & Efficiency Adjusted* Noninterest Expense Noninterest Expense & Efficiency Ratio $165 70.0% $161 $160 $159 $165.3 $156 $160.8 $170.0 $155.9 $159.8 $158.6 160.0 37.9% 39.8% 38.0% 37.7% 38.3% 26.7 16% $150.0 25.5 24.8 26.9 140.0 27.8 9.2 9.7 11.2 7% $130.0 9.9 9.4 2.1 2.1 3.2 2
Slide 12: Asset Quality Metrics
Asset Quality Metrics Allowance for Loan Losses Provision for Credit Losses & Net Charge-off Ratio $110 $99 $358 0.90% $311 $287 2.40% 0.70% $261 $64 $53 0.50% $46 inmillions 1.02% 1.03% $40 0.99% 0.96% 1.20% $36 $ $ inmillions $ $ 0.30% $27 $23 0.10% 0.15% 0.13% 0.16% $- 0.00% 0.08% $- -0.10% 12.31
Slide 13: Strong Capital Ratios
Strong Capital Ratios . Tangible equity* per common share increased by 15% Y-o-Y. . Tangible equity to tangible assets ratio* increased by 67 bps Y-o-Y. . Regulatory capital ratios increased by 45 bps to 75 bps Y-o-Y. . Quarterly common stock dividend of 27.5 cents per share, or annualized $1.10 per
Slide 14: Management Outlook: Full Year 2020
Management Outlook: Full Year 2020 FY 2020 expectations Earnings drivers compared to FY 2019 results 2019 actual End of Period Loans . Increase at a percentage rate of 7% to 8%. $34.8 billion +7% Y-o-Y Net Interest Margin . 3.40% to 3.45%, 3.64% including the impact of ASC 310-30 discount accretion.
Slide 15: Appendix
APPENDIX ty EAST WEST BANK Your financial bridge
Slide 16: Appendix: GAAP to Non-GAAP Reconciliation
Appendix: GAAP to Non-GAAP Reconciliation EAST WEST BANCORP, INC. AND SUBSIDIARIES GAAP TO NON-GAAP RECONCILIATION ($ 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, second and fourth quarters of 2019, the Company recorded a $7.0 million pre-tax impairment charge, reversed $30.1 m
Slide 18: Appendix: GAAP to Non-GAAP Reconciliation
Appendix: GAAP to Non-GAAP Reconciliation EAST WEST BANCORP, INC. AND SUBSIDIARIES GAAP TO NON-GAAP RECONCILIATION ($ in thousands, except per share data) (unaudited) During the first, second and fourth quarters of 2019, the Company recorded a $7.0 million pre-tax impairment charge, reversed $30.1 m
Slide 19: Appendix: GAAP to Non-GAAP Reconciliation (cont'd)
Appendix: GAAP to Non-GAAP Reconciliation (cont’d) EAST WEST BANCORP, INC. AND SUBSIDIARIES GAAP TO NON-GAAP RECONCILIATION ($ in thousands) (unaudited) Adjusted efficiency ratio represents adjusted noninterest expense divided by adjusted revenue. Adjusted pre-tax, pre-provision profitability ratio
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) Management believes that presenting the adjusted average loan yield and adjusted net interest margin that exclude the ASC 310-30 discount accretion
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) The Company uses certain non-GAAP financial measures to provide supplemental information regarding the Company’s performance. Tangible equity and t
Slide 22: 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