East West Bancorp Reports Net Income for First Quarter of 2023 of $322 Million and Diluted Earnings Per Share of $2.27, Up 37% Year-Over-Year

East West Bancorp, Inc. (“East West” or the “Company”) (Nasdaq: EWBC), parent company of East West Bank, reported its financial results for the first quarter of 2023. First quarter 2023 net income was $322.4 million, or $2.27 per diluted share, up from $237.7 million, or $1.66 per diluted share in the prior year period. Year-over-year, earnings per share increased 37%. Total loans reached a record $48.9 billion as of March 31, 2023.

“East West’s ability to consistently generate industry-leading profitability while maintaining above peer capital ratios are strengths in any business cycle. East West continued to deliver in the first quarter, despite the banking industry and market disruption that occurred in mid-March,” stated Dominic Ng, Chairman and Chief Executive Officer of East West. “For the first quarter of 2023, we earned industry-leading returns of 2.0% on average assets and 22.9% on average tangible common equity1. Net interest margin was a healthy 3.96%, asset quality continued to be excellent with net charge-offs of 0.01% annualized. With our strong earnings, all capital ratios expanded, and our total capital ratio increased to 14.5%.”

“Our balance sheet positions us to excel. Our loan portfolio is granular and well-diversified without significant concentration in any industry or sector. We have a strong, granular deposit franchise with over 550,000 deposit accounts spanning consumer, small business, non-profit and corporate customers. Our capital and liquidity are strong. We are steadfast in our positive outlook for East West’s performance,” concluded Ng.

FINANCIAL HIGHLIGHTS

Quarter Ended

Year-over-Year Change

($ in millions, except per share data)

March 31, 2023

March 31, 2022

Total Loans

48,925

43,491

5,434

12.5

Total Deposits

54,737

54,938

(201

)

(0.4

)

Total Revenue

660

495

164

Adj. Pre-tax, Pre-provision Income2

466

320

145

Net Income

322

238

Adj. Net Income2

330

238

Diluted Earnings per Share

2.27

1.66

0.61

Adj. Diluted Earnings per Share2

2.32

1.66

0.66

Return on Average Assets

2.01

1.56

+45 bps

Return on Average Common Equity

21.15

16.50

+465 bps

Return on Avg. Tang. Common Equity1

22.94

18.00

+494 bps

_________________________

1 Return on average tangible common equity is a non-GAAP financial measure. See reconciliation of GAAP to non-GAAP measures in Table 11.

2 Adjusted pre-tax, pre-provision income, adjusted net income and adjusted diluted earnings per share are non-GAAP financial measures. See reconciliation of GAAP to non-GAAP financial measures in Tables 10 and 12.

BALANCE SHEET

Total Assets – Total assets reached a record $67.2 billion as of March 31, 2023, an increase of $3.1 billion, or 5%, from $64.1 billion as of December 31, 2022. First quarter 2023 average interest-earning assets of $61.5 billion were up $1.1 billion, or 2%, from $60.4 billion in the fourth quarter of 2022. Quarter-over-quarter, average loans grew $542.7 million and average interest-bearing cash and deposits with banks increased $465.9 million.

Strong Capital Levels – As of March 31, 2023, stockholders’ equity was $6.3 billion, or $44.62 per share, up 5% quarter-over-quarter. The stockholders’ equity to assets ratio was 9.38% as of March 31, 2023, an increase of five basis points quarter-over-quarter. As of March 31, 2023, tangible book value3 per share was $41.28, up 6% quarter-over-quarter. The tangible common equity ratio3 was 8.74%, an increase of eight basis points quarter-over-quarter. All of East West’s regulatory capital ratios are well in excess of regulatory requirements for well-capitalized institutions, as well as above regional and national bank averages. The common equity tier 1 (“CET1”) capital ratio increased to 13.06%, and the total risk-based capital ratio increased to 14.50%, as of March 31, 2023.

Total Loans – Total loans reached a record $48.9 billion as of March 31, 2023, an increase of $696.8 million, or 1%, from $48.2 billion as of December 31, 2022. Year-over-year, total loans grew $5.4 billion, or 12%, from $43.5 billion as of March 31, 2022. First quarter 2023 average loans of $48.1 billion grew $542.7 million, or 1%, from the fourth quarter of 2022. Average growth in residential mortgage and commercial real estate loans was partially offset by a modest decrease in average commercial & industrial loans.

Total Deposits – Total deposits were $54.7 billion as of March 31, 2023, a decrease of $1.2 billion, or 2%, from $56.0 billion as of December 31, 2022. Year-over-year, deposits declined $201.0 million, or 0.4%, from $54.9 billion as of March 31, 2022. Noninterest-bearing deposits made up 33% of our total deposits as of March 31, 2023. First quarter 2023 average deposits of $55.0 billion were essentially unchanged from the fourth quarter of 2022. During the first quarter, time deposits grew due to a successful branch-based CD campaign for the Lunar New Year. This was offset by declines in other deposit categories, which reflected customers seeking higher yields in a rising interest rate environment and the banking industry disruption in mid-March. As of March 31, 2023, East West Bank’s domestic deposits were $52.5 billion, of which insured or otherwise collateralized deposits were estimated at $29.6 billion. East West Bank’s domestic uninsured deposit ratio improved to 44% as of March 31, 2023, compared to 50% as of December 31, 2022. Since the industry disruption in mid-March, the Company has worked with customers to expand their FDIC insurance coverage, primarily through the utilization of fully insured sweep programs. East West’s borrowing capacity, cash and cash equivalents well exceed our uninsured deposit balances.

Conservative Liquidity Management – Cash and cash equivalents increased 70% to $5.9 billion as of March 31, 2023, up from $3.5 billion as of December 31, 2022. This increase in on-balance sheet liquidity was in response to the recent volatility in the banking industry and reflects East West’s conservative liquidity management practices. The increase in cash and cash equivalents was primarily funded with borrowings from the Bank Term Funding Program (“BTFP”) totaling $4.5 billion at a rate of 4.37% as of March 31, 2023. As of March 31, 2023, East West Bank’s borrowing capacity, plus cash and cash equivalents was $30.6 billion, equivalent to 134% of total uninsured and uncollateralized deposits of $22.8 billion. As of December 31, 2022, borrowing capacity, plus cash and cash equivalents was $26.4 billion, equivalent to 99% of total uninsured and uncollateralized deposits.

_________________________

3 Tangible book value and the tangible common equity ratio are non-GAAP financial measures. See reconciliation of GAAP to non-GAAP measures in Table 11.

OPERATING RESULTS

First Quarter Earnings – First quarter 2023 net income was $322.4 million, a decrease of 4% from $336.8 million for the fourth quarter of 2022, and an increase of 36% from $237.7 million for the first quarter of 2022. First quarter 2023 diluted earnings per share (“EPS”) were $2.27, a decrease of 4% from $2.37 per diluted share for the fourth quarter of 2022, and an increase of 37% from $1.66 per diluted share for the year-ago quarter.

First quarter 2023 adjusted net income4 was $329.5 million, and adjusted diluted EPS4 was $2.32, a decrease of 2% quarter-over-quarter for both metrics. Noninterest income in the first quarter of 2023 included a $10.0 million (before tax) impairment loss on a subordinated debt security of a failed bank, which was $7.1 million after tax, or $0.05 per share.

First Quarter 2023 Compared to Fourth Quarter 2022

Net Interest Income and Net Interest Margin

Net interest income (“NII”) totaled $599.9 million, a decrease of 1% from $605.5 million. Net interest margin (“NIM”) of 3.96% declined two basis points from 3.98%.

The change in NII reflects day count in the first quarter (90 days) compared with the fourth quarter (92 days). Equalizing for day count, the 2% of quarter-over-quarter average earning asset growth more than offsets the two basis points of NIM contraction.
The change in NIM was primarily driven by a higher cost of interest-bearing deposits and changes in the deposit mix in favor of higher-cost deposits, partially offset by expanding earning asset yields.
The average loan yield was 6.14%, up 55 basis points from the fourth quarter. The average interest-earning asset yield was 5.51%, up 51 basis points from the fourth quarter.
The average cost of funds was 1.69%, up 58 basis points from the fourth quarter. The average cost of deposits was 1.60%, up 54 basis points.
The changes in yields and rates reflected rising benchmark interest rates.

Noninterest Income

Noninterest income totaled $60.0 million in the first quarter, a decrease of $4.9 million, or 8%, from $64.9 million in the fourth quarter.

Fee income and net gains on sales of loans were $66.3 million, up slightly from $66.0 million in the fourth quarter, reflecting higher lending and wealth management fees. The quarterly change in foreign exchange (“FX”) income reflected higher customer-driven FX fee income that was more than offset by an unfavorable change in mark-to-market adjustments on FX positions.
Interest rate contracts and other derivative income was $2.6 million in the first quarter, compared with a loss of $0.6 million in the fourth quarter. The change reflected both growth in customer-driven revenue and a favorable change in mark-to-market adjustments.

_________________________

4 Adjusted net income and adjusted EPS are non-GAAP financial measures. See reconciliation of GAAP to non-GAAP measures in Table 12.

Noninterest Expense

Noninterest expense totaled $218.4 million in the first quarter, compared with $257.1 million in the fourth quarter. First quarter noninterest expense consisted of $204.0 million of adjusted noninterest expense5, $10.1 million in amortization of tax credit and other investments, $0.4 million in amortization of core deposit intangibles, and $3.9 million in repurchase agreements’ extinguishment cost.

Adjusted noninterest expense of $204.0 million increased $11.9 million, or 6%, from $192.1 million in the fourth quarter. The linked quarter change primarily reflected seasonal first quarter increase in compensation and employee benefits expense, and higher deposit insurance premiums and regulatory assessments.
In the first quarter of 2023, the Company prepaid $300 million of repurchase agreement funding, which had carried a rate of 6.74%.
Amortization of tax credit and other investments totaled $10.0 million in the first quarter, compared with $64.6 million in the fourth quarter. Quarter-over-quarter variability in the amortization of tax credits and other investments primarily reflects the impact of investments that close in a given period.
The efficiency ratio was 33.1% in the first quarter, compared with 38.3% in the fourth quarter and the adjusted efficiency ratio4 was 30.5% in the first quarter, compared with 28.7% in the fourth quarter.

TAX RELATED ITEMS

First quarter 2023 income tax expense was $99.0 million, and the effective tax rate was 23.5%. The effective tax rate for the full year 2022 was 20.1%.

ASSET QUALITY

The asset quality of our loan portfolio continues to be excellent. First quarter 2023 provision for credit losses was $20.0 million, compared with $25.0 million in fourth quarter 2022.

The allowance for loan losses increased to $619.9 million, or 1.27% of loans held-for-investment (“HFI”), as of March 31, 2023, compared with $595.6 million, or 1.24% of loans HFI, as of December 31, 2022.
First quarter 2023 net charge-offs were $0.6 million or annualized 0.01% of average loans HFI, down from net charge-offs of $10.1 million, or annualized 0.08% of average loans HFI, for the fourth quarter of 2022.
The nonperforming assets ratio improved to 0.14% of total assets as of March 31, 2023, down from 0.16% as of December 31, 2022. Nonperforming assets decreased $6.4 million, or 6%, quarter-over-quarter to $93.4 million as of March 31, 2023, down from $99.8 million as of December 31, 2022.
The criticized loans ratio increased one basis point quarter-over-quarter to 1.87% of loans HFI as of March 31, 2023, compared with 1.86% as of December 31, 2022. Criticized loans increased $18.1 million, or 2%, quarter-over-quarter to $914.1 million as of March 31, 2023, compared with $896.0 million as of December 31, 2022.

_________________________

5 Adjusted noninterest expense and the adjusted efficiency ratio are non-GAAP financial measures. See reconciliation of GAAP to non-GAAP measures in Table 10.

CAPITAL STRENGTH

Capital levels for East West are strong and all capital ratios expanded quarter-over-quarter and year-over-year. The following table presents the regulatory capital metrics as of March 31, 2023, December 31, 2022 and March 31, 2022.

EWBC Capital

($ in millions)

March 31, 2023 (a)

December 31, 2022 (a)

March 31, 2022 (a)

Risk-Weighted Assets (“RWA”) (b)

50,227

50,037

45,432

Risk-based capital ratios:

CET1 capital ratio

13.06

12.68

12.55

Tier 1 capital ratio

13.06

12.68

12.55

Total capital ratio

14.50

14.00

13.88

Leverage ratio

10.02

9.80

9.26

Tangible common equity ratio (c)

8.74

8.66

8.47

(a)

The Company has elected to use the 2020 Current Expected Credit Losses (CECL) transition provision in the calculation of its March 31, 2023, December 31, 2022, and March 31, 2022 regulatory capital ratios. The Company’s March 31, 2023 regulatory capital ratios and RWA are preliminary.

(b)

Under regulatory guidelines, on-balance sheet assets and credit equivalent amounts of derivatives and off-balance sheet items are assigned to one of several broad risk categories based on the nature of the obligor, or, if relevant, the guarantor or the nature of any collateral. The aggregate dollar value in each risk category is then multiplied by the risk weight associated with that category. The resulting weighted values from each of the risk categories are aggregated for determining total RWA.

(c)

Tangible common equity ratio is a non-GAAP financial measure. See reconciliation of GAAP to non-GAAP measures in Table 11.

DIVIDEND PAYOUT AND CAPITAL ACTIONS

East West’s Board of Directors has declared second quarter 2023 dividends for the Company’s common stock. The common stock cash dividend of $0.48 per share is payable on May 15, 2023, to stockholders of record on May 1, 2023.

On March 3, 2020, East West’s Board of Directors authorized the repurchase of up to $500 million of East West’s common stock, of which $254 million remains available. East West did not repurchase any shares during the first quarter of 2023.

Conference Call

East West will host a conference call to discuss first quarter 2023 earnings with the public on Thursday, April 20, 2023, at 8:30 a.m. PT/11:30 a.m. ET. The public and investment community are invited to listen as management discusses first quarter 2023 results and operating developments.

The following dial-in information is provided for participation in the conference call: calls within the U.S. – (877) 506-6399; calls within Canada – (855) 669-9657; international calls – (412) 902-6699.
A presentation to accompany the earnings call will be available on the Investor Relations page of the Company’s website at www.eastwestbank.com/investors.
A listen-only live broadcast of the call will also be available on the Investor Relations page of the Company’s website at www.eastwestbank.com/investors.
A replay of the conference call will be available on April 20, 2023, at 11:30 a.m. PT/2:30 p.m. ET through May 20, 2023. The replay numbers are: within the U.S. – (877) 344-7529; within Canada – (855) 669-9658; international calls – (412) 317-0088; and the replay access code is: 6046956.

About East West

East West provides financial services that help customers reach further and connect to new opportunities. East West Bancorp, Inc. is a public company (Nasdaq: “EWBC”) with total assets of $67.2 billion. The Company’s wholly-owned subsidiary, East West Bank, is the largest independent bank headquartered in Southern California, and operates over 120 locations in the United States and Asia. The Bank’s markets in the United States include California, Georgia, Illinois, Massachusetts, Nevada, New York, Texas, and Washington. For more information on East West, visit www.eastwestbank.com.

Forward-Looking Statements

Certain matters set forth herein (including any exhibits hereto) contain forward-looking statements that are intended to be covered by the safe harbor for such statements provided by the Private Securities Litigation Reform Act of 1995. In addition, the Company may make forward-looking statements in other documents that it files with, or furnishes to, the U.S. Securities and Exchange Commission (“SEC”) and management may make forward-looking statements to analysts, investors, media members and others. Forward-looking statements are those that do not relate to historical facts and that are based on current assumptions, beliefs, estimates, expectations and projections, many of which, by their nature, are inherently uncertain and beyond the Company’s control. Forward-looking statements may relate to various matters, including the Company’s financial condition, results of operations, plans, objectives, future performance, business or industry, and usually can be identified by the use of forward-looking words, such as “anticipates,” “assumes,” “believes,” “can,” “continues,” “could,” “estimates,” “expects,” “forecasts,” “goal,” “intends,” “likely,” “may,” “might,” “objective,” “plans,” “potential,” “projects,” “remains,” “should,” “target,” “trend,” “will,” “would,” or similar expressions or variations thereof, and the negative thereof, but these terms are not the exclusive means of identifying such statements. You should not place undue reliance on forward-looking statements, as they are subject to risks and uncertainties, including, but not limited to, those described below. When considering these forward-looking statements, you should keep in mind these risks and uncertainties, as well as any cautionary statements the Company may make.

There are various important factors that could cause future results to differ materially from historical performance and any forward-looking statements. Factors that might cause such differences, include, but are not limited to: changes in the global economy, including an economic slowdown, capital or financial market disruption, supply chain disruption, level of inflation, interest rate environment, housing prices, employment levels, rate of growth and general business conditions, which could result in, among other things, reduced demand for loans, reduced availability of funding or increases in funding costs, declines in asset values and /or recognition of allowance for credit losses; changes in local, regional and global business, economic and political conditions and geopolitical events, such as Russia’s invasion of Ukraine; the impacts related to or resulting from recent bank failures and other economic and industry volatility, including potential increased regulatory requirements and costs and potential impacts to macroeconomic conditions; changes in laws or the regulatory environment, including regulatory reform initiatives and policies of the U.S. Department of the Treasury, the Board of Governors of the Federal Reserve System (“Federal Reserve”), the Federal Deposit Insurance Corporation (“FDIC”), the SEC, the Consumer Financial Protection Bureau, the California Department of Financial Protection and Innovation — Division of Financial Institutions, the China Banking and Insurance Regulatory Commission, the Hong Kong Monetary Authority, the Hong Kong Securities and Futures Commission, and the Monetary Authority of Singapore; changes and effects thereof in trade, monetary and fiscal policies and laws, including the ongoing trade, economic and political disputes between the U.S. and the People’s Republic of China and the monetary policies of the Federal Reserve; changes in the commercial and consumer real estate markets; changes in consumer or commercial spending, savings and borrowing habits, and patterns and behaviors; the impact from potential changes to income tax laws and regulations, federal spending and economic stimulus programs; the impact of any future U.S. federal government shutdown and uncertainty regarding the U.S. federal government’s debt limit and credit rating; the Company’s ability to compete effectively against financial institutions and other entities, including as a result of emerging technologies; the soundness of other financial institutions; the success and timing of the Company’s business strategies; the Company’s ability to retain key officers and employees; the impact on the Company’s funding costs, net interest income and net interest margin from changes in key variable market interest rates, competition, regulatory requirements and the Company’s product mix; changes in the Company’s costs of operation, compliance and expansion; the Company’s ability to adopt and successfully integrate new technologies into its business in a strategic manner; the impact of the benchmark interest rate reform in the U.S. including the transition away from the U.S. dollar (“USD”) London Interbank Offered Rate (“LIBOR”) to alternative reference rates; the impact of communications or technology disruption, failure in, or breach of, the Company’s operational or security systems or infrastructure, or those of third party vendors with which the Company does business, including as a result of cyber-attacks; and other similar matters which could result in, among other things, confidential and/or proprietary information being disclosed or misused, and materially impact the Company’s ability to provide services to its clients; the adequacy of the Company’s risk management framework, disclosure controls and procedures and internal control over financial reporting; future credit quality and performance, including the Company’s expectations regarding future credit losses and allowance levels; the impact of adverse changes to the Company’s credit ratings from major credit rating agencies; the impact of adverse judgments or settlements in litigation; the impact on the Company’s operations due to political developments, pandemics, wars, civil unrest, terrorism or other hostilities that may disrupt or increase volatility in securities or otherwise affect business and economic conditions; heightened regulatory and governmental oversight and scrutiny of the Company’s business practices, including dealings with consumers; the impact of reputational risk from negative publicity, fines, penalties and other negative consequences from regulatory violations, legal actions and the Company’s interactions with business partners, counterparties, service providers and other third parties; the impact of regulatory investigations and enforcement actions; changes in accounting standards as may be required by the Financial Accounting Standards Board or other regulatory agencies and their impact on critical accounting policies and assumptions; the Company’s capital requirements and its ability to generate capital internally or raise capital on favorable terms; the impact on the Company’s liquidity due to changes in the Company’s ability to receive dividends from its subsidiaries; any strategic acquisitions or divestitures; changes in the equity and debt securities markets; fluctuations in the Company’s stock price; fluctuations in foreign currency exchange rates; the impact of increased focus on social, environmental and sustainability matters, which may affect the Company’s operations as well as those of its customers and the economy more broadly; and the impact of climate change, natural or man-made disasters or calamities, such as wildfires, droughts, hurricanes, flooding and earthquakes or other events that may directly or indirectly result in a negative impact on the Company’s financial performance.

For a more detailed discussion of some of the factors that might cause such differences, see the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 under the heading Item 1A. Risk Factors and the information set forth under Item 1A. Risk Factors in the Company’s Quarterly Reports on Form 10-Q. You should treat forward-looking statements as speaking only as of the date they are made and based only on information then actually known to the Company. The Company does not undertake, and specifically disclaims any obligation to update or revise any forward-looking statements to reflect the occurrence of events or circumstances after the date of such statements except as required by law.

EAST WEST BANCORP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEET

($ and shares in thousands, except per share data)

(unaudited)

Table 1

March 31, 2023

% or Basis Point Change

March 31, 2023

December 31, 2022

March 31, 2022

Qtr-o-Qtr

Yr-o-Yr

Assets

Cash and due from banks

760,317

534,980

571,571

42.1

33.0

Interest-bearing cash with banks

5,173,877

2,946,804

3,277,129

75.6

57.9

Cash and cash equivalents

5,934,194

3,481,784

3,848,700

70.4

54.2

Interest-bearing deposits with banks

10,249

139,021

816,125

(92.6

)

(98.7

)

Assets purchased under resale agreements ("resale agreements")

654,288

792,192

1,956,822

(17.4

)

(66.6

)

Available-for-sale ("AFS") debt securities (amortized cost of $7,072,240, $6,879,225 and $7,091,581)

6,300,868

6,034,993

6,729,431

4.4

(6.4

)

Held-to-maturity ("HTM") debt securities, at amortized cost (fair value of 2,502,674, $2,455,171 and $2,815,968)

2,993,421

3,001,868

2,997,702

(0.3

)

(0.1

)

Loans held-for-sale ("HFS")

6,861

25,644

631

(73.2

)

Loans held-for-investment ("HFI") (net of allowance for loan losses of $619,893,

$595,645 and $545,685)

48,298,155

47,606,785

42,944,997

1.5

12.5

Investments in qualified affordable housing partnerships, tax credit and other investments, net

741,354

763,256

607,985

(2.9

)

21.9

Goodwill

465,697

—

Operating lease right-of-use assets

103,114

103,681

102,491

(0.5

)

0.6

Other assets

1,736,697

1,697,229

1,770,875

2.3

(1.9

)

Total assets

67,244,898

64,112,150

62,241,456

4.9

8.0

Liabilities and Stockholders' Equity

Deposits

54,737,402

55,967,849

54,938,361

(2.2

(0.4

Short-term borrowings

4,500,000

—

100.0

FHLB advances

—

74,619

—

(100.0

)

Assets sold under repurchase agreements ("repurchase agreements")

—

300,000

(100.0

)

(100.0

)

Long-term debt and finance lease liabilities

152,467

152,400

152,227

0.0

0.2

Operating lease liabilities

112,676

111,931

109,656

0.7

2.8

Accrued expenses and other liabilities

1,433,022

1,595,358

963,137

(10.2

)

48.8

Total liabilities

60,935,567

58,127,538

56,538,000

4.8

7.8

Stockholders' equity

6,309,331

5,984,612

5,703,456

5.4

10.6

Total liabilities and stockholders' equity

67,244,898

64,112,150

62,241,456

4.9

8.0

Book value per share

44.62

42.46

40.09

5.1

11.3

Tangible book value (1) per share

41.28

39.10

36.76

5.6

12.3

Number of common shares at period-end

141,396

140,948

142,257

0.3

(0.6

)

Total stockholders' equity to assets ratio

9.38

9.33

9.16

bps

Tangible common equity ("TCE") ratio (1)

8.74

8.66

8.47

bps

NM - Not meaningful.

(1) Tangible book value and the TCE ratio are non-GAAP financial measures. See reconciliation of GAAP to non-GAAP measures in Table 11.

EAST WEST BANCORP, INC. AND SUBSIDIARIES

TOTAL LOANS AND DEPOSITS DETAIL

($ in thousands)

(unaudited)

Table 2

March 31, 2023

% Change

Loans:

March 31, 2023

December 31, 2022

March 31, 2022

Qtr-o-Qtr

Yr-o-Yr

Commercial:

Commercial and industrial ("C&I")

15,641,840

15,711,095

14,838,134

(0.4

5.4

Commercial real estate ("CRE"):

CRE

14,019,136

13,857,870

12,636,787

1.2

10.9

Multifamily residential

4,682,280

4,573,068

3,894,463

2.4

20.2

Construction and land

731,394

638,420

443,836

14.6

64.8

Total CRE

19,432,810

19,069,358

16,975,086

1.9

14.5

Consumer:

Residential mortgage:

Single-family residential

11,786,998

11,223,027

9,283,429

5.0

27.0

Home equity lines of credit ("HELOCs")

1,988,881

2,122,655

2,266,634

(6.3

)

(12.3

)

Total residential mortgage

13,775,879

13,345,682

11,550,063

3.2

19.3

Other consumer

67,519

76,295

127,399

(11.5

)

(47.0

)

Total loans HFI (1)

48,918,048

48,202,430

43,490,682

1.5

12.5

Loans HFS

6,861

25,644

631

(73.2

)

Total loans (1)

48,924,909

48,228,074

43,491,313

1.4

12.5

Allowance for loan losses

(619,893

)

(595,645

)

(545,685

)

4.1

13.6

Net loans (1)

48,305,016

47,632,429

42,945,628

1.4

12.5

Deposits:

Noninterest-bearing demand

18,327,320

21,051,090

24,927,768

(12.9

(26.5

Interest-bearing checking

8,742,580

6,672,165

6,774,826

31.0

29.0

Money market

9,293,114

12,265,024

12,108,432

(24.2

)

(23.3

)

Savings

2,280,562

2,649,037

2,897,248

(13.9

)

(21.3

)

Time deposits

16,093,826

13,330,533

8,230,087

20.7

95.5

Total deposits

54,737,402

55,967,849

54,938,361

(2.2

(0.4

NM - Not meaningful.

(1) Includes $(75.4) million, $(70.4) million and $(42.7) million of net deferred loan fees and net unamortized premiums as of March 31, 2023, December 31, 2022 and March 31, 2022, respectively.

EAST WEST BANCORP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF INCOME

($ and shares in thousands, except per share data)

(unaudited)

Table 3

March 31, 2023

Three Months Ended

% Change

March 31, 2023

December 31, 2022

March 31, 2022

Qtr-o-Qtr

Yr-o-Yr

Interest and dividend income

835,506

761,212

432,029

9.8

93.4

Interest expense

235,645

155,705

16,416

51.3

Net interest income before provision for credit losses

599,861

605,507

415,613

(0.9

)

44.3

Provision for credit losses

20,000

25,000

8,000

(20.0

)

150.0

Net interest income after provision for credit losses

579,861

580,507

407,613

(0.1

)

42.3

Noninterest income

59,978

64,927

79,743

(7.6

)

(24.8

)

Noninterest expense

218,447

257,110

189,450

(15.0

)

15.3

Income before income taxes

421,392

388,324

297,906

8.5

41.5

Income tax expense

98,953

51,561

60,254

91.9

64.2

Net income

322,439

336,763

237,652

(4.3

35.7

Earnings per share ("EPS")

- Basic

2.28

2.39

1.67

(4.4

36.6

- Diluted

2.27

2.37

1.66

(4.1

)

36.9

Weighted-average number of shares outstanding

- Basic

141,112

140,947

142,025

0.1

(0.6

- Diluted

141,913

142,138

143,223

(0.2

)

(0.9

)

March 31, 2023

Three Months Ended

% Change

March 31, 2023

December 31, 2022

March 31, 2022

Qtr-o-Qtr

Yr-o-Yr

Noninterest income:

Lending fees

20,586

19,339

19,438

6.4

5.9

Deposit account fees

21,703

22,112

20,315

(1.8

)

6.8

Interest rate contracts and other derivative income (loss)

2,564

(638

)

11,133

(77.0

)

Foreign exchange income

12,660

14,015

12,699

(9.7

)

(0.3

)

Wealth management fees

6,304

6,071

6,052

3.8

4.2

Net (losses) gains on sales of loans

(22

)

443

2,922

Net realized (losses) gains on AFS debt securities

(10,000

)

1,278

Other investment income

1,921

1,127

1,627

70.5

18.1

Other income

4,262

2,458

4,279

73.4

(0.4

)

Total noninterest income

59,978

64,927

79,743

(7.6

(24.8

Noninterest expense:

Compensation and employee benefits

129,654

120,422

116,269

7.7

11.5

Occupancy and equipment expense

15,587

15,648

15,464

(0.4

)

0.8

Deposit insurance premiums and regulatory assessments

7,910

4,930

4,717

60.4

67.7

Deposit account expense

9,609

8,437

4,693

13.9

104.8

Data processing

3,347

3,641

3,665

(8.1

)

(8.7

)

Computer software expense

7,360

7,504

7,294

(1.9

)

0.9

Other operating expense

30,998

31,923

23,448

(2.9

)

32.2

Amortization of tax credit and other investments

10,110

64,605

13,900

(84.4

)

(27.3

)

Repurchase agreements' extinguishment cost

3,872

—

100.0

Total noninterest expense

218,447

257,110

189,450

(15.0

15.3

NM - Not meaningful.

EAST WEST BANCORP, INC. AND SUBSIDIARIES

SELECTED AVERAGE BALANCES

($ in thousands)

(unaudited)

Table 4

March 31, 2023

Three Months Ended

% Change

March 31, 2023

December 31, 2022

March 31, 2022

Qtr-o-Qtr

Yr-o-Yr

Loans:

Commercial:

C&I

15,400,996

15,496,386

14,271,902

(0.6

7.9

CRE:

CRE

13,932,758

13,699,042

12,279,365

1.7

13.5

Multifamily residential

4,600,094

4,604,628

3,749,571

(0.1

)

22.7

Construction and land

675,047

591,962

392,923

14.0

71.8

Total CRE

19,207,899

18,895,632

16,421,859

1.7

17.0

Consumer:

Residential mortgage:

Single-family residential

11,417,477

10,988,102

9,111,188

3.9

25.3

HELOCs

2,050,778

2,145,416

2,183,080

(4.4

)

(6.1

)

Total residential mortgage

13,468,255

13,133,518

11,294,268

2.5

19.2

Other consumer

72,687

81,596

124,389

(10.9

)

(41.6

)

Total loans (1)

48,149,837

47,607,132

42,112,418

1.1

14.3

Interest-earning assets

61,483,533

60,376,151

58,692,366

1.8

4.8

Total assets

65,113,604

64,252,730

61,758,048

1.3

5.4

Deposits:

Noninterest-bearing demand

19,709,980

21,419,290

23,432,746

(8.0

(15.9

Interest-bearing checking

6,493,865

6,543,349

6,648,065

(0.8

)

(2.3

)

Money market

11,260,715

12,197,782

12,913,336

(7.7

)

(12.8

)

Savings

2,436,587

2,747,166

2,930,309

(11.3

)

(16.8

)

Time deposits

15,052,762

12,076,193

8,100,890

24.6

85.8

Total deposits

54,953,909

54,983,780

54,025,346

(0.1

1.7

Interest-bearing liabilities

36,814,685

34,372,853

31,218,479

7.1

17.9

Stockholders' equity

6,183,324

5,834,623

5,842,615

6.0

5.8

(1) Includes loans HFS.

EAST WEST BANCORP, INC. AND SUBSIDIARIES

QUARTER-TO-DATE AVERAGE BALANCES, YIELDS AND RATES

($ in thousands)

(unaudited)

Table 5

Three Months Ended

March 31, 2023

December 31, 2022

Average

Balance

Interest

Average

Yield/Rate (1)

Average

Balance

Interest

Average

Yield/Rate (1)

Assets

Interest-earning assets:

Interest-bearing cash and deposits with banks

3,449,626

35,647

4.19

2,983,726

23,986

3.19

Resale agreements

688,778

4,503

2.65

833,170

6,062

2.89

AFS debt securities

6,108,825

53,197

3.53

5,869,336

46,224

3.12

HTM debt securities

2,995,677

12,734

1.72

3,004,412

12,747

1.68

Loans (2)

48,149,837

728,386

6.14

47,607,132

671,323

5.59

FHLB and FRB stock

90,790

1,039

4.64

78,375

870

4.40

Total interest-earning assets

61,483,533

835,506

5.51

60,376,151

761,212

5.00

Noninterest-earning assets:

Cash and due from banks

621,104

640,509

Allowance for loan losses

(602,754

)

(583,271

)

Other assets

3,611,721

3,819,341

Total assets

65,113,604

64,252,730

Liabilities and Stockholders' Equity

Interest-bearing liabilities:

Checking deposits

6,493,865

23,174

1.45

6,543,349

16,735

1.01

Money market deposits

11,260,715

76,102

2.74

12,197,782

62,246

2.02

Savings deposits

2,436,587

3,669

0.61

2,747,166

2,714

0.39

Time deposits

15,052,762

113,849

3.07

12,076,193

65,772

2.16

Federal funds purchased and other short-term borrowings

811,551

8,825

4.41

47,142

374

3.15

FHLB advances

500,000

6,430

5.22

40,178

225

2.22

Repurchase agreements

106,785

1,052

4.00

568,520

5,507

3.84

Long-term debt and finance lease liabilities

152,420

2,544

6.77

152,523

2,132

5.55

Total interest-bearing liabilities

36,814,685

235,645

2.60

34,372,853

155,705

1.80

Noninterest-bearing liabilities and stockholders' equity:

Demand deposits

19,709,980

21,419,290

Accrued expenses and other liabilities

2,405,615

2,625,964

Stockholders' equity

6,183,324

5,834,623

Total liabilities and stockholders' equity

65,113,604

64,252,730

Interest rate spread

2.91

3.20

Net interest income and net interest margin

599,861

3.96

605,507

3.98

(1) Annualized.

(2) Includes loans HFS.

EAST WEST BANCORP, INC. AND SUBSIDIARIES

QUARTER-TO-DATE AVERAGE BALANCES, YIELDS AND RATES

($ in thousands)

(unaudited)

Table 6

Three Months Ended

March 31, 2023

March 31, 2022

Average

Balance

Interest

Average

Yield/Rate (1)

Average

Balance

Interest

Average

Yield/Rate (1)

Assets

Interest-earning assets:

Interest-bearing cash and deposits with banks

3,449,626

35,647

4.19

4,466,012

3,260

0.30

Resale agreements

688,778

4,503

2.65

2,097,998

8,383

1.62

AFS debt securities

6,108,825

53,197

3.53

7,969,795

34,469

1.75

HTM debt securities

2,995,677

12,734

1.72

1,968,568

8,198

1.69

Loans (2)

48,149,837

728,386

6.14

42,112,418

377,110

3.63

FHLB and FRB stock

90,790

1,039

4.64

77,575

609

3.18

Total interest-earning assets

61,483,533

835,506

5.51

58,692,366

432,029

2.99

Noninterest-earning assets:

Cash and due from banks

621,104

641,882

Allowance for loan losses

(602,754

)

(543,345

)

Other assets

3,611,721

2,967,145

Total assets

65,113,604

61,758,048

Liabilities and Stockholders' Equity

Interest-bearing liabilities:

Checking deposits

6,493,865

23,174

1.45

6,648,065

1,402

0.09

Money market deposits

11,260,715

76,102

2.74

12,913,336

3,203

0.10

Savings deposits

2,436,587

3,669

0.61

2,930,309

1,704

0.24

Time deposits

15,052,762

113,849

3.07

8,100,890

6,680

0.33

Federal funds purchased and other short-term borrowings

811,551

8,825

4.41

1,866

1.96

FHLB advances

500,000

6,430

5.22

160,018

578

1.46

Repurchase agreements

106,785

1,052

4.00

311,984

2,016

2.62

Long-term debt and finance lease liabilities

152,420

2,544

6.77

152,011

824

2.20

Total interest-bearing liabilities

36,814,685

235,645

2.60

31,218,479

16,416

0.21

Noninterest-bearing liabilities and stockholders' equity:

Demand deposits

19,709,980

23,432,746

Accrued expenses and other liabilities

2,405,615

1,264,208

Stockholders' equity

6,183,324

5,842,615

Total liabilities and stockholders' equity

65,113,604

61,758,048

Interest rate spread

2.91

2.78

Net interest income and net interest margin

599,861

3.96

415,613

2.87

(1) Annualized.

(2) Includes loans HFS.

EAST WEST BANCORP, INC. AND SUBSIDIARIES

SELECTED RATIOS

(unaudited)

Table 7

March 31, 2023

Three Months Ended (1)

Basis Point Change

March 31, 2023

December 31, 2022

March 31, 2022

Qtr-o-Qtr

Yr-o-Yr

Return on average assets

2.01

2.08

1.56

)

bps

Adjusted return on average assets (2)

2.05

2.08

1.56

)

Return on average common equity

21.15

22.90

16.50

(175

)

465

Adjusted return on average common equity (2)

21.61

22.90

16.50

(129

)

511

Return on average TCE (3)

22.94

24.96

18.00

(202

)

494

Adjusted return on average TCE (3)

23.44

24.96

18.00

(152

)

544

Interest rate spread

2.91

3.20

2.78

(29

)

Net interest margin

3.96

3.98

2.87

)

109

Average loan yield

6.14

5.59

3.63

251

Yield on average interest-earning assets

5.51

5.00

2.99

252

Average cost of interest-bearing deposits

2.49

1.74

0.17

232

Average cost of deposits

1.60

1.06

0.10

150

Average cost of funds

1.69

1.11

0.12

157

Adjusted pre-tax, pre-provision profitability ratio (4)

2.90

2.95

2.10

)

Adjusted noninterest expense/average assets (4)

1.27

1.19

1.15

Efficiency ratio

33.11

38.35

38.25

(524

)

(514

)

Adjusted efficiency ratio (4)

30.46

28.66

35.34

180

bps

(488

)

bps

(1)

Annualized except for efficiency ratio.

(2)

Adjusted return on average assets and adjusted return on average equity are non-GAAP financial measures. See reconciliation of GAAP to non-GAAP measures in Table 12.

(3)

Return on average TCE and adjusted return on average TCE are non-GAAP financial measure. See reconciliation of GAAP to non-GAAP measures in Table 11.

(4)

Adjusted pre-tax, pre-provision profitability ratio, adjusted noninterest expense/average assets and the adjusted efficiency ratio are non-GAAP financial measures. See reconciliation of GAAP to non-GAAP measures in Table 10.

EAST WEST BANCORP, INC. AND SUBSIDIARIES

ALLOWANCE FOR LOAN LOSSES & OFF-BALANCE SHEET CREDIT EXPOSURES

($ in thousands)

(unaudited)

Table 8

Three Months Ended March 31, 2023

Commercial

Consumer

C&I

Total CRE

Total Residential

Mortgage

Other Consumer

Total

Allowance for loan losses, December 31, 2022

371,700

182,346

40,039

1,560

595,645

Impact of ASU 2022-02 adoption

5,683

343

—

6,028

Allowance for loan losses, January 1, 2023

377,383

182,689

40,041

1,560

601,673

(Reversal of) provision for credit losses on loans

(a)

(678

)

6,021

13,022

155

18,520

Gross charge-offs

(1,900

)

(91

)

(40

)

(2,037

)

Gross recoveries

1,211

211

—

1,428

Total net (charge-offs) recoveries

(689

)

205

(85

)

(40

)

(609

)

Foreign currency translation adjustment

309

—

309

Allowance for loan losses, March 31, 2023

376,325

188,915

52,978

1,675

619,893

Three Months Ended December 31, 2022

Commercial

Consumer

C&I

Total CRE

Total Residential

Mortgage

Other Consumer

Total

Allowance for loan losses, September 30, 2022

371,749

178,487

30,587

1,694

582,517

(Reversal of) provision for credit losses on loans

(a)

(263

)

13,790

9,363

(118

)

22,772

Gross charge-offs

(416

)

(10,804

)

—

(16

)

(11,236

)

Gross recoveries

136

873

—

1,098

Total (charge-offs) net recoveries

(280

)

(9,931

)

(16

)

(10,138

)

Foreign currency translation adjustment

494

—

494

Allowance for loan losses, December 31, 2022

371,700

182,346

40,039

1,560

595,645

Three Months Ended March 31, 2022

Commercial

Consumer

C&I

Total CRE

Total Residential

Mortgage

Other Consumer

Total

Allowance for loan losses, December 31, 2021

338,252

180,808

20,595

1,924

541,579

Provision for credit losses on loans

(a)

9,262

1,658

1,225

107

12,252

Gross charge-offs

(11,188

)

(399

)

—

(46

)

(11,633

)

Gross recoveries

3,002

229

138

—

3,369

Total net (charge-offs) recoveries

(8,186

)

(170

)

138

(46

)

(8,264

)

Foreign currency translation adjustment

118

—

118

Allowance for loan losses, March 31, 2022

339,446

182,296

21,958

1,985

545,685

EAST WEST BANCORP, INC. AND SUBSIDIARIES

ALLOWANCE FOR LOAN LOSSES & OFF-BALANCE SHEET CREDIT EXPOSURES

($ in thousands)

(unaudited)

Table 8 (continued)

Three Months Ended

March 31, 2023

December 31, 2022

March 31, 2022

Unfunded Credit Facilities

Allowance for unfunded credit commitments, beginning of period (1)

26,264

24,041

27,514

Provision for (reversal of) credit losses on unfunded credit commitments

(b)

1,480

2,228

(4,252

)

Foreign currency translation adjustment

)

—

Allowance for unfunded credit commitments, end of period (1)

27,741

26,264

23,262

Provision for credit losses

(a)+(b)

20,000

25,000

8,000

(1) Included in Accrued expenses and other liabilities on the Condensed Consolidated Balance Sheet.

EAST WEST BANCORP, INC. AND SUBSIDIARIES

CRITICIZED LOANS, NONPERFORMING ASSETS AND CREDIT QUALITY RATIOS

($ in thousands)

(unaudited)

Table 9

Criticized Loans

March 31, 2023

December 31, 2022

March 31, 2022

Special mention loans

461,356

468,471

402,704

Classified loans

452,715

427,509

430,633

Total criticized loans (1)

914,071

895,980

833,337

Nonperforming Assets

March 31, 2023

December 31, 2022

March 31, 2022

Nonaccrual loans:

Commercial:

C&I

43,747

50,428

51,773

Total CRE

19,427

23,413

9,827

Consumer:

Total residential mortgage

29,585

25,586

23,197

Other consumer

366

Total nonaccrual loans

93,125

99,526

84,834

Other real estate owned, net

270

—

Other nonperforming assets

—

9,548

Total nonperforming assets

93,395

99,796

94,382

Credit Quality Ratios

March 31, 2023

December 31, 2022

March 31, 2022

Annualized quarterly net charge-offs to average loans HFI

0.01

0.08

Special mention loans to loans HFI

0.94

0.97

0.93

Classified loans to loans HFI

0.93

0.89

0.99

Criticized loans to loans HFI

1.87

1.86

1.92

Nonperforming assets to total assets

0.14

0.16

0.15

Nonaccrual loans to loans HFI

0.19

0.21

0.20

Allowance for loan losses to loans HFI

1.27

1.24

1.25

(1) Excludes loans HFS.

EAST WEST BANCORP, INC. AND SUBSIDIARIES

GAAP TO NON-GAAP RECONCILIATION

($ in thousands)

(unaudited)

Table 10

The Company uses certain non-GAAP financial measures to provide supplemental information regarding the Company's performance. Adjusted efficiency ratio represents adjusted noninterest expense divided by adjusted revenue. Adjusted pre-tax, pre-provision profitability ratio represents total adjusted revenue less adjusted noninterest expense, divided by average total assets. Adjusted revenue excludes the write-off of an AFS debt security. Adjusted noninterest expense excludes the amortization of tax credit and other investments, the amortization of core deposit intangibles and the repurchase agreements' extinguishment cost. Management believes that the measures and ratios presented below provide clarity to financial statement users regarding the ongoing performance of the Company and allow comparability to prior periods.

Three Months Ended

March 31, 2023

December 31, 2022

March 31, 2022

Net interest income before provision for credit losses

(a)

599,861

605,507

415,613

Total noninterest income

59,978

64,927

79,743

Total revenue

(b)

659,839

670,434

495,356

Noninterest income

59,978

64,927

79,743

Add: Write-off of AFS debt security

10,000

Adjusted noninterest income

(c)

69,978

64,927

79,743

Adjusted revenue

(a)+(c) = (d)

669,839

670,434

495,356

Total noninterest expense

(e)

218,447

257,110

189,450

Less: Amortization of tax credit and other investments

(10,110

)

(64,605

)

(13,900

)

Amortization of core deposit intangibles

(441

)

(381

)

(511

)

Repurchase agreements' extinguishment cost

(3,872

)

Adjusted noninterest expense

(f)

204,024

192,124

175,039

Efficiency ratio

(e)/(b)

33.11

38.35

38.25

Adjusted efficiency ratio

(f)/(d)

30.46

28.66

35.34

Adjusted pre-tax, pre-provision income

(d)-(f) = (g)

465,815

478,310

320,317

Average total assets

(h)

65,113,604

64,252,730

61,758,048

Adjusted pre-tax, pre-provision profitability ratio (1)

(g)/(h)

2.90

2.95

2.10

Adjusted noninterest expense/average assets (1)

(f)/(h)

1.27

1.19

1.15

(1) Annualized.

EAST WEST BANCORP, INC. AND SUBSIDIARIES

GAAP TO NON-GAAP RECONCILIATION

($ in thousands)

(unaudited)

Table 11

The Company uses certain non-GAAP financial measures to provide supplemental information regarding the Company's performance. TCE and TCE ratio are non-GAAP financial measures. TCE and tangible assets represent stockholders' equity and total assets, respectively, which have been reduced by goodwill and other intangible assets. Given that the use of such measures and ratios is more prevalent in the banking industry, and such measures and ratios are used by banking regulators and analysts, the Company has included them below for discussion.

March 31, 2023

December 31, 2022

March 31, 2022

Stockholders' equity

(a)

6,309,331

5,984,612

5,703,456

Less: Goodwill

(465,697

)

(465,697

)

(465,697

)

Other intangible assets (1)

(7,201

)

(7,998

)

(9,044

)

TCE

(b)

5,836,433

5,510,917

5,228,715

Total assets

(c)

67,244,898

64,112,150

62,241,456

Less: Goodwill

(465,697

)

(465,697

)

(465,697

)

Other intangible assets (1)

(7,201

)

(7,998

)

(9,044

)

Tangible assets

(d)

66,772,000

63,638,455

61,766,715

Total stockholders' equity to assets ratio

(a)/(c)

9.38

9.33

9.16

TCE ratio

(b)/(d)

8.74

8.66

8.47

Return on average TCE represents tangible net income divided by average TCE. Adjusted return on average TCE represents adjusted tangible net income divided by average TCE. Tangible net income excludes the after-tax impacts of the amortization of core deposit intangibles and mortgage servicing assets. Adjusted tangible net income excludes the after-tax impacts of the tangible net income adjustments and the write-off of an AFS debt security. Given that the use of such measures and ratios is more prevalent in the banking industry, and such measures and ratios are used by banking regulators and analysts, the Company has included them below for discussion.

Three Months Ended

March 31, 2023

December 31, 2022

March 31, 2022

Net income

(e)

322,439

336,763

237,652

Add: Amortization of core deposit intangibles

441

381

511

Amortization of mortgage servicing assets

356

329

392

Tax effect of amortization adjustments (2)

(233

)

(209

)

(260

)

Tangible net income

(f)

323,003

337,264

238,295

Add: Write-off of AFS debt security

10,000

Tax effect of write-off (2)

(2,929

)

Adjusted tangible net income

(g)

330,074

337,264

238,295

Average stockholders' equity

(h)

6,183,324

5,834,623

5,842,615

Less: Average goodwill

(465,697

)

(465,697

)

(465,697

)

Average other intangible assets (1)

(7,696

)

(8,378

)

(9,207

)

Average TCE

(i)

5,709,931

5,360,548

5,367,711

Return on average common equity (3)

(e)/(h)

21.15

22.90

16.50

Return on average TCE (3)

(f)/(i)

22.94

24.96

18.00

Adjusted return on average TCE (3)

(g)/(i)

23.44

24.96

18.00

(1)

Includes core deposit intangibles and mortgage servicing assets.

(2)

Applied statutory tax rate of 29.29%, 29.37% and 28.77% for the three months ended March 31, 2023, December 31, 2022 and March 31, 2022, respectively.

(3)

Annualized.

EAST WEST BANCORP, INC. AND SUBSIDIARIES

GAAP TO NON-GAAP RECONCILIATION

($ and shares in thousands, except for per share data)

(unaudited)

Table 12

During the first quarter of 2023, the Company recorded a $10.0 million pre-tax impairment write-off of an AFS debt security. Management believes that presenting the computations of the adjusted net income, adjusted diluted earnings per common share, adjusted return on average assets and adjusted return on average common equity that adjust for the above discussed non-recurring items provide clarity to financial statement users regarding the ongoing performance of the Company and allows comparability to prior periods.

Three Months Ended

March 31, 2023

December 31, 2022

March 31, 2022

Net income

(a)

322,439

336,763

237,652

Add: Write-off of AFS debt security

10,000

—

Tax effect of write-off (1)

(2,929

)

—

Adjusted net income

(b)

329,510

336,763

237,652

Diluted weighted-average number of shares outstanding

141,913

142,138

143,223

Diluted EPS

2.27

2.37

1.66

Add: Write-off of AFS debt security

0.05

—

Adjusted diluted EPS

2.32

2.37

1.66

Average total assets

(c)

65,113,604

64,252,730

61,758,048

Average stockholders' equity

(d)

6,183,324

5,834,623

5,842,615

Return on average assets (2)

(a)/(c)

2.01

2.08

1.56

Adjusted return on average assets (2)

(b)/(c)

2.05

2.08

1.56

Return on average common equity (2)

(a)/(d)

21.15

22.90

16.50

Adjusted return on average common equity (2)

(b)/(d)

21.61

22.90

16.50

(1)

Applied statutory tax rate of 29.29% for the three months ended March 31, 2023.

(2)

Annualized.

View source version on businesswire.com: https://www.businesswire.com/news/home/20230420005006/en/

FOR INVESTOR INQUIRIES, CONTACT: Irene Oh Chief Financial Officer T: (626) 768-6360 E: irene.oh@eastwestbank.com

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