East West Bancorp, Inc. · NASDAQ:EWBC
East West Bancorp — Q3 2017 Earnings Presentation
18 slides from East West Bancorp's earnings presentation, Oct 19, 2017
Slide 1: EWBC Earnings Results Third Quarter 2017
EWBC Earnings Results Third Quarter 2017 October 19, 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 Third Quarter 2017 Results
Net income $132.7 million Adj. net income1,2 $130.4 million Diluted EPS $0.91 Adj. diluted EPS1,2 $0.89 Tangible equity2/share $22.71 Record loans $28.5 billion Record deposits $31.3 billion Highlights of Third Quarter 2017 Results Strong earnings results. Net income increased 12% Q-o-Q and dilute
Slide 4: 3Q17 Earnings Growth and Profitability
$110.1 $110.7 $128.2 $118.3 $130.5 $41.5 $2.2 13.1% 12.9% 14.9% 13.0% 13.8% 15.5% 15.3% 17.6% 15.3% 16.1% 10% 13% 16% 19% 22% 25% $0 $40 $80 $120 $160 $200 3Q16 4Q16 1Q17* 2Q17 3Q17* $ in m illi on s Net Income & ROE and Tangible ROE* Net income (LH axis) Gain on sale of assets (LH axis) Return on a
Slide 5: 3Q17 Record Loans of $28.5 billion
9.3 9.6 10.0 10.2 10.6 8.5 8.7 9.0 9.1 9.5 1.5 1.6 1.7 1.8 1.93.4 3.5 3.7 4.0 4.4 2.1 2.1 2.1 2.1 2.1 0% 20% 40% 60% 80% $0 $10 $20 $30 3Q16 4Q16 1Q17 2Q17 3Q17 $ in b il li o n s Total Loans* C&I CRE MFR SFR Consumer LQA growth rate 3Q17 Record Loans of $28.5 billion 5 * Total loans held for invest
Slide 6: 3Q17 Record Deposits of $31.3 billion
9.5 10.2 10.7 10.5 11.0 7.7 8.2 8.0 8.2 7.9 5.8 5.9 6.1 6.4 6.6 5.6 5.6 5.8 6.1 5.8 0% 20% 40% 60% 80% $0 $7 $14 $21 $28 $35 3Q16 4Q16 1Q17 2Q17 3Q17 $ in b il li o n s Total Deposits DDA MMDA IB checking & Savings Time LQA growth rate 3Q17 Record Deposits of $31.3 billion 6 DDA = Noninterest-bearin
Slide 7: Total Fees and Other Operating Income
10.4 10.2 10.3 10.7 10.8 4.0 3.4 4.5 3.5 3.6 6.1 5.4 5.0 5.9 6.0 10.9 14.4 11.1 12.0 10.2 5.8 7.0 2.5 3.8 6.7 7.7 7.1 5.4 6.2 3.6 $0 $10 $20 $30 $40 $50 3Q16 4Q16 1Q17 2Q17 3Q17 $ in m il li o n s Total Fees and Other Operating Income Branch fees Wealth management fees Ancillary loan fees & other in
Slide 8: 3Q17 Summary Income Statement
3Q17 Summary Income Statement 8 % Change vs. ($ in millions, except per share data) 3Q17 2Q17 3Q16 3Q17 Comments Adjusted net interest income (excl. accretion) $ 298.6 5% 21% Reflects strong loan growth and NIM expansion. ASC 310-30 discount accretion income $ 4.5 (28)% (37)% . Net interest income
Slide 9: Net Interest Income and Net Interest Margin
247.0 261.1 268.9 283.8 298.6 7.1 11.6 3.2 6.3 4.6 $220 $240 $260 $280 $300 $320 3Q16 4Q16 1Q17 2Q17 3Q17 $ in mi llio ns Net Interest Income Adj. net interest income* Accretion income 3.16% 3.17% 3.29% 3.41% 3.46% 4.05% 4.13% 4.17% 4.30% 4.35% 0.30% 0.31% 0.32% 0.36% 0.40% 3.00% 3.20% 3.40% 3.60% 0
Slide 10: 3Q17 Efficiency and PTPP Profitability
3Q17 total noninterest expense: $165mm. Excluding tax credit amortization and core deposit intangible amortization, 3Q17 adjusted* noninterest expense of $139mm decreased slightly by $0.6mm Q-o-Q. 3Q17 adj.* efficiency ratio of 39.8%. Trailing twelve month adj.* efficiency ratio of 41.8%.
Slide 11: 3Q17 Asset Quality Metrics
$130.8 $129.6 $144.8 $133.0 $117.0 0.39% 0.37% 0.41% 0.37% 0.32% 0.00% 0.20% 0.40% 0.60% $100 $120 $140 $160 $180 $200 3Q16 4Q16 1Q17 2Q17 3Q17 $ i n m illi on s Nonperforming Assets* Nonperforming assets (LH axis) NPAs / Total assets (RH axis) $24,732 $25,503 $26,461 $27,211 $28,525 1.03% 1.02% 0.9
Slide 12: 3Q17 Capital Ratios
$20.27 $22.71 7.0% 8.5% 10.5% 4.0% 8.52% 10.9% 10.9% 12.4% 8.7% 9.17% 11.2% 11.2% 12.8% 9.4% 0 0.02 0.04 0.06 0.08 0.1 0.12 0.14 $5.00 $10.00 $15.00 $20.00 $25.00 Tangible equity per share Tangible equity to tangible assets ratio CET1 risk-based capital ratio Tier 1 risk-based capital ratio Total ri
Slide 13: Updated Management Outlook: Full Year 2017
Updated Management Outlook: Full Year 2017 13 Earnings drivers Revised full year 2017 outlook (after 3Q17) Change from prior outlook (after 2Q17) 2016 FY actual 2017 YTD actual End of Period Loans Increase at a percentage rate in low double digits. Unchanged $25.5 billion, +8% Y-o-Y $28.5 billion,
Slide 14: Appendix
APPENDIX Wy EAST WEST BANK Your financial bridge”
Slide 15: Appendix: GAAP to Non-GAAP Reconciliation
Appendix: GAAP to Non-GAAP Reconciliation 15 As previously disclosed on the March 30, 2017 Form 8-K, the Company consummated a sale and leaseback transaction on a commercial property and recognized a pre-tax gain on sale of $71.7 million during the first quarter of 2017. In the third quarter of 2017
Slide 16: Appendix: GAAP to Non-GAAP Reconciliation (cont'd)
16 Adjusted pre-tax, pre-provision profitability ratio represents the aggregate of adjusted revenue less adjusted noninterest expense, divided by average total assets. Adjusted revenue represents the aggregate of net interest income and adjusted noninterest income, where adjusted noninterest income
Slide 17: Appendix: GAAP to Non-GAAP Reconciliation (cont'd)
17 The Company believes that presenting the adjusted average loan yield and adjusted net interest margin that exclude the ASC 310-30 discount accretion impact provides clarity to financial statement users regarding the change in loan contractual yields and allows comparability to prior periods. Appe
Slide 18: Appendix: GAAP to Non-GAAP Reconciliation (cont'd)
18 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 ratio are non-GAAP measures. Tangible equity and tangible assets represent stockholders’ equity and total assets, re