East West Bancorp, Inc. · NASDAQ:EWBC
East West Bancorp — Q2 2018 Earnings Presentation
18 slides from East West Bancorp's earnings presentation, Jul 19, 2018
Slide 1: EWBC Earnings Results Second Quarter 2018
EWBC Earnings Results Second Quarter 2018 July 19, 2018
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 the Company’s cu
Slide 3: Highlights of Second Quarter 2018 Results
Highlights of Second Quarter 2018 Results $ in millions, except per share data Current Quarter Q-o-Q Change Y-o-Y Change 2Q18 Earnings Net income Net income $ 172.3 (8)% 46% $172 million Adj.1 net income $ 172.3 5% 46% EPS $ 1.18 (8)% 45% 2Q18 Adj.1 EPS $ 1.18 4% 45% Diluted EPS NII $ 341.7 5% 18% $
Slide 4: Earnings Growth and Profitability
2Q18 Earnings Growth and Profitability Net Income and Diluted EPS Adjusted* Net Income and Diluted EPS $200 $187 $200 $172 $165 $172 $1.28 $1.18 $1.18 $133 $130 $127 $1.13 $118 $118 $0.91 $0.89 $0.87 $100 $85 $100 $0.81 $0.81 millions $ in $ in millions $ in $0.58 +10% -3% +30% +5% $ $ inmillions, e
Slide 5: Record Loans of $30.2 billion
2Q18 Record Loans of $30.2 billion 2Q18 EOP Loan Mix: $30.2 billion . EOP loan growth of 2% Q-o-Q (+9% LQA) . Avg. loan growth of 1.5% Q-o-Q (+6% LQA). . Largest avg. growth by category in SFR, $11.1 $7.4 following similar trend from 1Q18. 37% 24% . 2Q18 avg. loan yield of 4.95%, up by 26 bps Q-o-Q.
Slide 6: Record Deposits of $32.8 billion
2Q18 Record Deposits of $32.8 billion 2Q18 EOP Deposit Mix: $32.8 billion . EOP deposit growth of 0.5% Q-o-Q (+ 2% LQA). . Avg. deposit growth of 0.3% Q-o-Q (+1% LQA). . Excluding $498mm of avg. Desert Community $7.9 $10.7 24% 33% Bank (DCB) deposits held-for-sale in 1Q18, 2Q18 avg. deposit growth w
Slide 7: Fees & Other Operating Income
2Q18 Fees & Other Operating Income Fees and Other Operating Income Q-o-Q Difference $50 Total Fees and Other Operating Income . 2Q18 noninterest income totaled $48.3mm, a $44.6 decrease from $74.4mm for 1Q18, which $41.9 1.9 4% $40.7 included a pre-tax gain of $31.5mm from the sale of $40 $38.4 $38.
Slide 8: Summary Income Statement
2Q18 Summary Income Statement $ in millions, except per share data 2Q18 1Q18 $ Change % Change Notable Items Adjusted net interest income $ 335.4 $ 321.5 $ 13.9 4 % Adjusted earnings growth: . ASC 310-30 discount 2Q18 net income of $172.3mm grew 5% 6.3 5.2 1.1 21 % accretion income from 1Q18 adj. ne
Slide 9: Net Interest Income & Net Interest Margin
2Q18 Net Interest Income & Net Interest Margin Net Interest Income . 2Q18 NII of $341.7mm increased 5% Q-o-Q. $360 . $342 2Q18 GAAP NIM of 3.83% expanded by 10 bps Q-o-Q. $340 $320 $327 Rate shift: +23 bps from change in earning asset yields. $320 $303 . +18 bps from loan yields, $300 $290 +5% . +2%
Slide 10: PTPP Profitability and Efficiency
2Q18 PTPP Profitability and Efficiency PTPP Income & PTPP Profitability Ratio . Generating positive operating leverage: revenue growth outpacing expense growth. $234 . $240 $210 $213 $219 5.00% 2Q18 revenue up 5.5% Q-o-Q ex. DCB gain in 1Q. $198 . $180 4.00% 2Q18 adj.* noninterest expense up 3.5% Q-
Slide 11: Asset Quality Metrics
Asset Quality Metrics Allowance for Loan Losses Provision Expense & Annualized Net Charge-off* Ratio $35 $30.2 $29.0 1.00% $28 $25.5 2.50% $23.6 $46.3 $21 $40 $35.8 $27.5 0.50% $14 1.50% $ $ inbillions 1.12% 1.02% 0.99% 1.00% $ inmillions $14.2 0.15% 0.14% $7 0.08% 0.01% $0 0.50% $0 0.00% 12.31.15 1
Slide 12: Strong Capital Ratios
Strong Capital Ratios . Regulatory capital ratios increased by 73 bps to 75 bps year-to-date. . Current earnings levels support organic growth, capital ratio expansion, and an increase to the common dividend. . Common dividend increased by 15%: new quarterly dividend of $0.23/share or annualized run
Slide 13: Management Outlook: Full Year 2018 Outlook
Management Outlook: Full Year 2018 Outlook FY 2018 expectations change from 2018 YTD FY 2017 Earnings drivers compared to FY 2017 results prior quarter actual actual End of Period Loans . Increase at a percentage rate of Unchanged. $30.2 billion, $29.1 billion, approximately 10%. +8% YTD annualized
Slide 14: Appendix
APPENDIX EAST WEST BANK Your financial bridge’
Slide 15: Appendix: GAAP to Non-GAAP Reconciliation
Appendix: GAAP to Non-GAAP Reconciliation EAST WEST BANCORP, INC. AND SUBSIDIARIES GAAP TO NON-GAAP RECONCILIATION ($ in thousands) (unaudited) During the first quarter of 2017, the Company consummated a sale and leaseback transaction on a commercial property and recognized a pre-tax gain on sale of
Slide 16: 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 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) Management believes that presenting the adjusted average loan yield and adjusted net interest margin that exclude the ASC 310-30 discount accretion
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) The Company uses certain non-GAAP financial measures to provide supplemental information regarding the Company’s performance. Tangible equity and t