Business Wire | Jul 22, 2021 08:00AM EDT

East West Bancorp Reports Net Income for Second Quarter 2021 of $225 Million and Diluted Earnings Per Share Of $1.57

Jul. 22, 2021

PASADENA, Calif.--(BUSINESS WIRE)--Jul. 22, 2021--East West Bancorp, Inc. ("East West" or the "Company") (Nasdaq: EWBC), parent company of East West Bank, today reported its financial results for the second quarter of 2021. Net income for the second quarter of 2021 was $224.7 million, or $1.57 per diluted share. Second quarter 2021 return on average assets was 1.56% and return on average equity was 16.6%.

"East West had a very strong quarter of robust growth, expanding profitability and improving asset quality," stated Dominic Ng, Chairman and Chief Executive Officer of East West. "As of June 30, 2021, our total loans reached a record $40.1 billion and our total deposits reached a record $52.6 billion."

"Excluding the impact of the Paycheck Protection Program, loans grew by 12% annualized in the second quarter, with solid growth across our residential mortgage, commercial, and commercial real estate loan portfolios. Total deposits grew by 25% annualized, and noninterest-bearing demand deposits reached 41% of total deposits as of June 30, 2021. Our diversified growth reflects the strength of our business model, our commercial and consumer customer mix, and our geographic footprint in dynamic metropolitan areas of the United States."

"Quarter-over-quarter, our revenue grew by 17% annualized and operating expenses decreased, driving adjusted pre-tax, pre-provision income growth of 33% annualized and expanding profitability," continued Ng. "Our solid financial performance for the second quarter resulted in adjusted pre-tax, pre-provision profitability1 of 2.0% and a return on average tangible equity2 of 18.3%."

"Asset quality continues to be healthy. Criticized loans fell by 15% quarter-over-quarter; net charge-offs were 0.13% of average loans, annualized, and the nonperforming assets ratio declined by seven basis points to 0.38% of total assets. Accordingly, we recorded a negative $15.0 million provision for credit losses in the second quarter."

"We are pleased with our results this quarter and are positive about our outlook for the rest of the year," concluded Ng. "The hard work and outstanding execution by all our associates builds a strong foundation for East West's continued growth and success in the years to come. We are well poised to help our communities and customers thrive as the economy expands."

BALANCE SHEET

* Record Assets - Total assets reached $59.9 billion as of June 30, 2021, up by $3.0 billion, or 21% annualized, from $56.9 billion as of March 31, 2021. Second quarter 2021 average interest-earning assets of $54.9 billion grew by $2.0 billion, or 16% linked quarter annualized. The growth in average interest-earning assets consisted of a $1.5 billion increase in average available-for-sale ("AFS") debt securities, an $893.0 million increase in average loans, and a $667.7 million increase in average assets purchased under resale agreements ("resale agreements"), partially offset by a $1.0 billion decrease in average interest-bearing cash and deposits with banks. The increase in average AFS debt securities and resale agreements largely reflected activity during the first quarter of 2021; on an end-of-period basis, AFS debt securities increased by $610.2 million and resale agreements increased by $139.1 million between June 30, 2021, and March 31, 2021.

* Record Loans - Total loans reached $40.1 billion as of June 30, 2021, up by $484.6 million, or 5% annualized, from $39.6 billion as of March 31, 2021. Excluding Paycheck Protection Program ("PPP") loans of $1.4 billion as of June 30, 2021, total loans grew by $1.1 billion, or 12% linked quarter annualized. During the second quarter of 2021, $695.5 million of PPP loans outstanding were forgiven by the Small Business Administration. The Company funded 5,523 new PPP loans totaling $896.5 million in the first half of 2021. Second quarter 2021 average loans of $39.6 billion grew by $893.0 million, or 9% linked quarter annualized. Excluding PPP loans, average loans grew by $953.6 million, or 10% annualized, from the first quarter of 2021. The strong loan growth during the quarter was broad-based, with the strongest growth from average residential mortgage loans, which increased by 19% linked quarter annualized. Average total CRE loans grew by 8% linked quarter annualized, and average C&I loans, excluding PPP, grew by 6% linked quarter annualized.

* Record Deposits - Total deposits reached $52.6 billion as of June 30, 2021, up by $3.0 billion, or 25% annualized, from $49.5 billion as of March 31, 2021. Noninterest-bearing demand deposits reached a record $21.8 billion as of June 30, 2021, up by $2.9 billion, or 61% annualized, from $18.9 billion as of March 31, 2021. Noninterest-bearing demand deposits made up 41% of total deposits as of June 30, 2021, up from 38% as of March 31, 2021, or 34% as of June 30, 2020. Second quarter 2021 average deposits of $50.2 billion grew by $2.3 billion, or 20% linked quarter annualized. Growth in the second quarter was led by noninterest-bearing demand deposits, which increased by 36% linked quarter annualized. Time deposits decreased quarter-over-quarter, reflecting run-off of higher rate certificates of deposit.

* Capital Levels - Capital levels for East West are strong. As of June 30, 2021, stockholders' equity was $5.5 billion, or $39.10 per common share, and tangible equity3 per common share was $35.75. As of June 30, 2021, the tangible equity to tangible assets ratio3 was 8.54%, the common equity tier 1 ("CET1") capital ratio was 12.8%, and the total risk-based capital ratio was 14.3%.

OPERATING RESULTS

Second Quarter Earnings - Second quarter 2021 net income was $224.7 million, or $1.57 per diluted share, an increase of 10% from $205.0 million, or $1.44 per diluted share, for the first quarter of 2021.

Second Quarter 2021 Compared to First Quarter 2021

Net Interest Income and Net Interest Margin

Net interest income ("NII") totaled $376.5 million, an increase of 26% annualized from $353.7 million. Net interest margin ("NIM") of 2.75% increased by four basis points from 2.71%.

* Excluding the impact of PPP loans, adjusted NII4 totaled $361.1 million, an increase of 27% annualized from $338.7 million. Adjusted NIM4 of 2.73% expanded by three basis points from 2.70%. PPP loans contributed $15.4 million to NII in the second quarter, compared with $15.0 million in the first quarter. * NII growth reflected higher interest income, due to average loan, AFS debt securities and resale agreement volume growth, and decreased interest expense, due to a lower cost of deposits, a reduction of time deposit balances and pay off of FHLB advances. During the second quarter, $400.0 million of FHLB advances with an average rate of 2.25% matured. * The yield on average earning assets of 2.92% was relatively stable quarter-over-quarter, contracting by one basis point from 2.93%. The average loan yield of 3.57% was likewise relatively stable, contracting by one basis point from 3.58%. Quarter-over-quarter, yields on AFS debt securities and resale agreements were lower, but the overall mix of earning assets was higher yielding due to a reduction of average interest-bearing cash and deposits with banks. * The average cost of deposits of 0.14% decreased by four basis points from 0.18%. The average cost of interest-bearing deposits of 0.24% decreased by six basis points from 0.30%. The decrease in the cost of deposits primarily reflects continued downward repricing of time deposits to market rates, and a reduction in rates paid on money market accounts.

Noninterest Income

Noninterest income totaled $68.4 million in the second quarter, down from $72.9 million in the first quarter. Quarter-over-quarter growth in foreign exchange income, lending fees, deposit account fees, and wealth management fees drove a 15% increase in customer-driven fee income. However, the growth in customer-driven fee income was offset by an unfavorable change in the credit valuation adjustment of interest rate contracts and other derivatives.

* Included in interest rate contracts and other derivative income are fair value changes primarily due to the quarter-over-quarter change in the credit valuation adjustment. These fair value changes amounted to a $5.4 million loss in the second quarter, reflecting a quarter-over-quarter decline in long-term benchmark interest rates. In the first quarter, the comparable amount was a $14.1 million gain, reflecting an increase in long-term benchmark interest rates during the period. * Other investment income totaled $7.6 million in the second quarter, up from $0.9 million in the first quarter, reflecting increased valuations of Community Reinvestment Act-related investments.

Noninterest Expense

Noninterest expense totaled $189.5 million. Second quarter noninterest expense consisted of $161.5 million of adjusted noninterest expense5, $27.3 million in amortization of tax credit and other investments, and $0.7 million in amortization of core deposit intangibles.

* Adjusted noninterest expense of $161.5 million decreased by 2% from $165.0 million in the first quarter. Compensation and employee benefits expense decreased from a seasonally higher first quarter. * Amortization of tax credit and other investments totaled $27.3 million, an increase from $25.4 million in the first quarter. Second quarter amortization of tax credit and other investments included $0.9 million of recoveries related to DC Solar tax credit investments. These recoveries amounted to $0.6 million after tax. * The adjusted efficiency ratio5 was 36.3% in the second quarter, an improvement from 38.7% in the first quarter.

TAX RELATED ITEMS

Second quarter 2021 income tax expense was $45.6 million and the effective tax rate was 17%. Year-to-date for the first six months of 2021, the effective tax rate was 15%. For the full year, the Company expects the effective tax rate to be approximately 15%.

ASSET QUALITY

* Quarter-over-quarter, criticized loans fell by $184.9 million, or 15%, with decreases of 23% in special mention and 9% in classified loans. The allowance for loan losses ("ALLL") totaled $585.7 million, or 1.46% of loans held-for-investment ("HFI"), as of June 30, 2021, compared with $607.5 million, or 1.53% of loans HFI, as of March 31, 2021. * Quarter-over-quarter, the ALLL decreased by $21.8 million, and the ALLL coverage ratio of loans HFI decreased by seven basis points. The change in the ALLL reflects an improved macroeconomic forecast, improved loan risk ratings, and lower expected losses over the expected life of the loans. * As a result of the improvements noted above, during the second quarter of 2021, the Company recorded a negative $15.0 million provision for credit losses. * Second quarter 2021 net charge-offs were $13.3 million, or annualized 0.13% of average loans HFI, down by $131 thousand, or one basis point, from $13.4 million, or annualized 0.14% of average loans HFI, for the first quarter of 2021. * As of June 30, 2021, criticized loans totaled $1,032.0 million, or 2.58% of loans HFI, an improvement of 49 basis points from $1,216.9 million, or 3.07% of loans HFI, as of March 31, 2021. Special mention loans decreased by 23% to $386.8 million as of June 30, 2021, down from $504.2 million as of March 31, 2021. Classified loans decreased by 9% to $645.2 million as of June 30, 2021, down from $712.7 million as of March 31, 2021. * Nonperforming assets were $225.7 million, or 0.38% of total assets, as of June 30, 2021, compared with $258.1 million, or 0.45% of total assets, as of March 31, 2021.

CAPITAL STRENGTH

Capital levels for East West are strong. The following table presents the regulatory capital ratios as of June 30, 2021, March 31, 2021, and June 30, 2020.

EWBCRegulatory Basel IIICapitalMetrics

Minimum Minimum Well June 30, March 31, June 30, Capital($ in Capital Capitalized Ratio +millions) 2021 ^(a) 2021 ^(a) 2020 ^(a) Ratio Ratio Conservation

Buffer ^(b)

Risk-BasedCapital Ratios:

CET1 capital 12.8 % 12.7 % 12.7 % 4.5 % 6.5 % 7.0 %ratio

Tier 1 12.8 % 12.7 % 12.7 % 6.0 % 8.0 % 8.5 %capital ratio

Total capital 14.3 % 14.3 % 14.4 % 8.0 % 10.0 % 10.5 %ratio

Leverage 9.1 % 9.1 % 9.7 % 4.0 % 5.0 % 4.0 %ratio

Risk-WeightedAssets $ 40,609 $ 39,572 $ 36,199 N/A N/A N/A("RWA") ^(c)



N/A Not applicable.

(a)

The Company has elected to use the 2020 CECL transition provision in the calculation of its June 30, 2021, March 31, 2020, and June 30, 2020 regulatory capital ratios. The Company's June 30, 2021 regulatory capital ratios and RWA are preliminary.

(b)

An additional 2.5% capital conservation buffer above the minimum capital ratios are required in order to avoid limitations on distributions, including dividend payments and certain discretionary bonus payments to executive officers.

(c)

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.

DIVIDEND PAYOUT AND CAPITAL ACTIONS

East West's Board of Directors has declared third quarter 2021 dividends for the Company's common stock. The common stock cash dividend of $0.33 per share is payable on August 16, 2021, to stockholders of record on August 2, 2021.

On March 3, 2020, East West's Board of Directors authorized the repurchase of up to $500 million of East West's common stock. East West did not repurchase any shares during the second quarter of 2021, and has not repurchased any shares since the first quarter of 2020, under this authorization.

Conference Call

East West will host a conference call to discuss second quarter 2021 earnings with the public on Thursday, July 22, 2021, at 8:30 a.m. PT/11:30 a.m. ET. The public and investment community are invited to listen as management discusses second quarter 2021 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 July 22, 2021, at 11:30 a.m. PT through August 22, 2021. 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: 10157563.

About East West

East West Bancorp, Inc. is a public company with total assets of $59.9 billion and is traded on the Nasdaq Global Select Market under the symbol "EWBC". The Company's wholly owned subsidiary, East West Bank, is one of the largest independent banks headquartered in California, operating over 120 locations in the United States and in China. The Company's markets in the United States include California, Georgia, Massachusetts, Nevada, New York, Texas and Washington. In China, East West's presence includes full service branches in Hong Kong, Shanghai, Shantou and Shenzhen, and representative offices in Beijing, Chongqing, Guangzhou, and Xiamen. For more information on East West, visit the Company's website at 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 (the "SEC") and management may make forward-looking statements to analysts, investors, media members and others. Forward-looking statements are statements that are not historical facts, and are based on current expectations, estimates and projections about the Company's industry, management's beliefs and certain assumptions made by management, many of which, by their nature, are inherently uncertain and beyond the Company's control, such as the future impacts of the COVID-19 pandemic. These statements relate to the Company's financial condition, results of operations, plans, objectives, future performance and/or business. They usually can be identified by the use of forward-looking language, such as "likely result in," "expects," "anticipates," "estimates," "forecasts," "projects," "intends to," "assumes," "believes," "plans," "trend," "objective," "continues," "remains," "will," "would," "should," "could," "may," "might," "can," or similar expressions, and the negative thereof. You should not place undue reliance on these statements, as they are subject to risks and uncertainties, including, but not limited to, those described in the documents incorporated by reference. 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. Moreover, you should treat these statements as speaking only as of the date they are made and based only on information then actually known to the Company.

There are a number of important factors that could cause future results to differ materially from historical performance and these forward-looking statements. Factors that might cause such differences, some of which are beyond the Company's control, include, but are not limited to: changes in the U.S. economy, including an economic slowdown, inflation, deflation, housing prices, employment levels, rate of growth and general business conditions; changes in local, regional and global business, economic and political conditions and geopolitical events; the impacts of the ongoing COVID-19 pandemic and any other pandemic, epidemic or health-related crisis; changes in laws or the regulatory environment including regulatory reform initiatives and policies of the U.S. Department of Treasury, the Federal Reserve, the Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency, the SEC, the Consumer Financial Protection Bureau and the California Department of Financial Protection and Innovation - Division of Financial Institutions, and the SBA; the changes and effects thereof in trade, monetary and fiscal policies and laws, including the ongoing trade dispute between the U.S. and the People's Republic of China; changes in the commercial and consumer real estate markets; changes in consumer spending and savings habits; fluctuations in the Company's stock price; changes in income tax laws and regulations; the Company's ability to compete effectively against financial institutions in its banking markets and other entities, including as a result of emerging technologies; the soundness of other financial institutions; success and timing of the Company's business strategies; the Company's ability to retain key officers and employees; 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; impact of the benchmark interest rate reform in the U.S. including the transition away from USD LIBOR to alternative reference rates; impact of a communications or technology disruption, failure in, or breach of, the Company's operational or security systems or infrastructure, or those of third parties with whom 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; 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; impact of adverse changes to the Company's credit ratings from major credit rating agencies; impact of adverse judgments or settlements in litigation; impact on the Company's international operations due to political developments, disease pandemics, wars or other hostilities that may disrupt or increase volatility in securities or otherwise affect economic conditions; heightened regulatory and governmental oversight and scrutiny of the Company's business practices, including dealings with consumers; impact of reputational risk from negative publicity, fines and penalties and other negative consequences from regulatory violations and legal actions and from the Company's interactions with business partners, counterparties, service providers and other third parties; impact of regulatory 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; impact of other potential federal tax changes and spending cuts; the Company's capital requirements and its ability to generate capital internally or raise capital on favorable terms; impact on the Company's liquidity due to changes in the Company's ability to pay dividends and repurchase common stock and to receive dividends from its subsidiaries; any future strategic acquisitions or divestitures; changes in the equity and debt securities markets; fluctuations in foreign currency exchange rates; impact of climate change, social and sustainability concerns; significant turbulence or disruption in the capital or financial markets, which could result in, among other things, a reduction in the availability of funding or increases in funding costs, a reduction in investor demand for mortgage loans and declines in asset values and/or recognition of allowance for credit losses on securities held in the Company's AFS debt securities portfolio; and impact of natural or man-made disasters or calamities, such as wildfires and earthquakes, which are particular to California, or conflicts, terrorism 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 2020 Form 10-K 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. 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.

__________________________________________________________

1 See reconciliation of GAAP to non-GAAP financial measures in Table 12. 2 See reconciliation of GAAP to non-GAAP financial measures in Table 13. 3 See reconciliation of GAAP to non-GAAP financial measures in Table 13. 4 See reconciliation of GAAP to non-GAAP financial measures in Table 14. 5 See reconciliation of GAAP to non-GAAP financial measures in Table 12.

N/A Not applicable.

The Company has elected to use the 2020 CECL transition provision in the(a) calculation of its June 30, 2021, March 31, 2020, and June 30, 2020 regulatory capital ratios. The Company's June 30, 2021 regulatory capital ratios and RWA are preliminary.

An additional 2.5% capital conservation buffer above the minimum capital(b) ratios are required in order to avoid limitations on distributions, including dividend payments and certain discretionary bonus payments to executive officers.

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(c) 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.

DIVIDEND PAYOUT AND CAPITAL ACTIONS

East West's Board of Directors has declared third quarter 2021 dividends for the Company's common stock. The common stock cash dividend of $0.33 per share is payable on August 16, 2021, to stockholders of record on August 2, 2021.

On March 3, 2020, East West's Board of Directors authorized the repurchase of up to $500 million of East West's common stock. East West did not repurchase any shares during the second quarter of 2021, and has not repurchased any shares since the first quarter of 2020, under this authorization.

Conference Call

East West will host a conference call to discuss second quarter 2021 earnings with the public on Thursday, July 22, 2021, at 8:30 a.m. PT/11:30 a.m. ET. The public and investment community are invited to listen as management discusses second quarter 2021 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 July 22, 2021, at 11:30 a.m. PT through August 22, 2021. 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: 10157563.

About East West

East West Bancorp, Inc. is a public company with total assets of $59.9 billion and is traded on the Nasdaq Global Select Market under the symbol "EWBC". The Company's wholly owned subsidiary, East West Bank, is one of the largest independent banks headquartered in California, operating over 120 locations in the United States and in China. The Company's markets in the United States include California, Georgia, Massachusetts, Nevada, New York, Texas and Washington. In China, East West's presence includes full service branches in Hong Kong, Shanghai, Shantou and Shenzhen, and representative offices in Beijing, Chongqing, Guangzhou, and Xiamen. For more information on East West, visit the Company's website at 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 (the "SEC") and management may make forward-looking statements to analysts, investors, media members and others. Forward-looking statements are statements that are not historical facts, and are based on current expectations, estimates and projections about the Company's industry, management's beliefs and certain assumptions made by management, many of which, by their nature, are inherently uncertain and beyond the Company's control, such as the future impacts of the COVID-19 pandemic. These statements relate to the Company's financial condition, results of operations, plans, objectives, future performance and/or business. They usually can be identified by the use of forward-looking language, such as "likely result in," "expects," "anticipates," "estimates," "forecasts," "projects," "intends to," "assumes," "believes," "plans," "trend," "objective," "continues," "remains," "will," "would," "should," "could," "may," "might," "can," or similar expressions, and the negative thereof. You should not place undue reliance on these statements, as they are subject to risks and uncertainties, including, but not limited to, those described in the documents incorporated by reference. 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. Moreover, you should treat these statements as speaking only as of the date they are made and based only on information then actually known to the Company.

There are a number of important factors that could cause future results to differ materially from historical performance and these forward-looking statements. Factors that might cause such differences, some of which are beyond the Company's control, include, but are not limited to: changes in the U.S. economy, including an economic slowdown, inflation, deflation, housing prices, employment levels, rate of growth and general business conditions; changes in local, regional and global business, economic and political conditions and geopolitical events; the impacts of the ongoing COVID-19 pandemic and any other pandemic, epidemic or health-related crisis; changes in laws or the regulatory environment including regulatory reform initiatives and policies of the U.S. Department of Treasury, the Federal Reserve, the Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency, the SEC, the Consumer Financial Protection Bureau and the California Department of Financial Protection and Innovation - Division of Financial Institutions, and the SBA; the changes and effects thereof in trade, monetary and fiscal policies and laws, including the ongoing trade dispute between the U.S. and the People's Republic of China; changes in the commercial and consumer real estate markets; changes in consumer spending and savings habits; fluctuations in the Company's stock price; changes in income tax laws and regulations; the Company's ability to compete effectively against financial institutions in its banking markets and other entities, including as a result of emerging technologies; the soundness of other financial institutions; success and timing of the Company's business strategies; the Company's ability to retain key officers and employees; 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; impact of the benchmark interest rate reform in the U.S. including the transition away from USD LIBOR to alternative reference rates; impact of a communications or technology disruption, failure in, or breach of, the Company's operational or security systems or infrastructure, or those of third parties with whom 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; 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; impact of adverse changes to the Company's credit ratings from major credit rating agencies; impact of adverse judgments or settlements in litigation; impact on the Company's international operations due to political developments, disease pandemics, wars or other hostilities that may disrupt or increase volatility in securities or otherwise affect economic conditions; heightened regulatory and governmental oversight and scrutiny of the Company's business practices, including dealings with consumers; impact of reputational risk from negative publicity, fines and penalties and other negative consequences from regulatory violations and legal actions and from the Company's interactions with business partners, counterparties, service providers and other third parties; impact of regulatory 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; impact of other potential federal tax changes and spending cuts; the Company's capital requirements and its ability to generate capital internally or raise capital on favorable terms; impact on the Company's liquidity due to changes in the Company's ability to pay dividends and repurchase common stock and to receive dividends from its subsidiaries; any future strategic acquisitions or divestitures; changes in the equity and debt securities markets; fluctuations in foreign currency exchange rates; impact of climate change, social and sustainability concerns; significant turbulence or disruption in the capital or financial markets, which could result in, among other things, a reduction in the availability of funding or increases in funding costs, a reduction in investor demand for mortgage loans and declines in asset values and/or recognition of allowance for credit losses on securities held in the Company's AFS debt securities portfolio; and impact of natural or man-made disasters or calamities, such as wildfires and earthquakes, which are particular to California, or conflicts, terrorism 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 2020 Form 10-K 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. 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.

__________________________________________________________

1 See reconciliation of GAAP to non-GAAP financial measures in Table 12. 2 See reconciliation of GAAP to non-GAAP financial measures in Table 13. 3 See reconciliation of GAAP to non-GAAP financial measures in Table 13. 4 See reconciliation of GAAP to non-GAAP financial measures in Table 14. 5 See reconciliation of GAAP to non-GAAP financial measures in Table 12.

EAST WEST BANCORP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEET

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

(unaudited)

Table 1



June 30, 2021 % or Basis Point Change

June 30, 2021 March 31, 2021 June 30, 2020 Qtr-o-Qtr Yr-o-Yr

Assets

Cash and due from $ 626,716 $ 582,270 $ 602,974 7.6 % 3.9 % banks

Interest-bearing 5,371,089 4,036,863 3,930,528 33.1 36.7 cash with banks

Cash and cash 5,997,805 4,619,133 4,533,502 29.8 32.3 equivalents

Interest-bearing 830,279 741,923 531,591 11.9 56.2 deposits with banks

Assets purchased under resale 2,299,184 2,160,038 1,260,000 6.4 82.5 agreements ("resale agreements")

Available-for-sale ("AFS") debt securities (amortized cost of 8,399,460 7,789,213 3,884,574 7.8 116.2 $8,411,142, $7,904,546 and $3,823,714)

Federal Home Loan Bank ("FHLB") and 76,931 83,250 78,963 (7.6 ) (2.6 ) Federal Reserve Bank ("FRB") stock

Loans held-for-sale 1,819 - 3,875 100.0 (53.1 ) ("HFS")

Loans held-for-investment (''HFI'') (net of allowance for loan 39,485,775 38,981,242 36,597,341 1.3 7.9 losses of $585,724, $607,506 and $632,071)

Investments in qualified 287,432 284,862 201,888 0.9 42.4 affordable housing partnerships, net

Investments in tax credit and other 364,187 361,438 251,318 0.8 44.9 investments, net

Goodwill 465,697 465,697 465,697 - -

Operating lease 102,609 94,483 94,898 8.6 8.1 right-of-use assets

Other assets 1,543,698 1,292,867 1,503,946 19.4 2.6

Total assets $ 59,854,876 $ 56,874,146 $ 49,407,593 5.2 % 21.1 %



Liabilities and Stockholders' Equity

Deposits $ 52,582,575 $ 49,547,136 $ 40,672,678 6.1 % 29.3 %

Short-term - - 252,851 - (100.0 ) borrowings

FHLB advances 248,464 653,035 656,759 (62.0 ) (62.2 )

Assets sold under repurchase agreements 300,000 300,000 300,000 - - ("repurchase agreements")

Long-term debt and ^ finance lease 151,997 152,195 1,580,442 (1) (0.1 ) (90.4 ) liabilities

Operating lease 110,105 101,828 102,708 8.1 7.2 liabilities

Accrued expenses and other 914,187 834,925 854,912 9.5 6.9 liabilities

Total liabilities 54,307,328 51,589,119 44,420,350 5.3 22.3

Stockholders' 5,547,548 5,285,027 4,987,243 5.0 11.2 equity

Total liabilities and stockholders' $ 59,854,876 $ 56,874,146 $ 49,407,593 5.2 % 21.1 % equity



Book value per $ 39.10 $ 37.26 $ 35.25 4.9 % 10.9 % common share

Tangible equity ^ (2) per common $ 35.75 $ 33.90 $ 31.86 5.5 12.2 share

Number of common shares at 141,878 141,843 141,486 0.0 0.3 period-end

Tangible equity to tangible assets 8.54 % 8.53 % 9.21 % 1 bp (67 ) bps ratio ^(2)



(1)

Includes $1.43 billion of advances from the Federal Reserve Paycheck Protection Program Liquidity Facility ("PPPLF") as of June 30, 2020.

(2)

See reconciliation of GAAP to non-GAAP financial measures in Table 13.

(1) Includes $1.43 billion of advances from the Federal Reserve Paycheck Protection Program Liquidity Facility ("PPPLF") as of June 30, 2020.

(2) See reconciliation of GAAP to non-GAAP financial measures in Table 13.

EAST WEST BANCORP, INC. AND SUBSIDIARIES

TOTAL LOANS AND DEPOSITS DETAIL

($ in thousands)

(unaudited)

Table 2

June 30, 2021% Change

June 30, 2021

March 31, 2021

June 30, 2020

Qtr-o-Qtr

Yr-o-Yr

Loans:

Commercial:

Commercial and industrial ("C&I") (1)

$

13,790,461

$

14,081,110

$

13,422,691

(2.1

)%

2.7

%

Commercial real estate ("CRE"):

CRE

11,711,369

11,563,034

10,902,114

1.3

7.4

Multifamily residential

3,219,796

3,066,515

3,032,385

5.0

6.2

Construction and land

460,678

459,254

567,716

0.3

(18.9

)

Total CRE

15,391,843

15,088,803

14,502,215

2.0

6.1

Consumer:

Residential mortgage:

Single-family residential

8,869,370

8,524,287

7,660,094

4.0

15.8

Home equity lines of credit ("HELOCs")

1,872,166

1,749,172

1,461,951

7.0

28.1

Total residential mortgage

10,741,536

10,273,459

9,122,045

4.6

17.8

Other consumer

147,659

145,376

182,461

1.6

(19.1

)

Total loans HFI (2)

40,071,499

39,588,748

37,229,412

1.2

7.6

Loans HFS

1,819

-

3,875

100.0

(53.1

)

Total loans (2)

40,073,318

39,588,748

37,233,287

1.2

7.6

Allowance for loan losses

(585,724

)

(607,506

)

(632,071

)

(3.6

)

(7.3

)

Net loans (2)

$

39,487,594

$

38,981,242

$

36,601,216

1.3

7.9

Deposits:

Noninterest-bearing demand

$

21,816,721

$

18,919,298

$

13,940,420

15.3

%

56.5

%

Interest-bearing checking

6,762,178

7,005,693

5,280,887

(3.5

)

28.1

Money market

12,853,812

12,218,957

10,002,624

5.2

28.5

Savings

2,719,106

2,604,355

2,186,199

4.4

24.4

Time deposits

8,430,758

8,798,833

9,262,548

(4.2

)

(9.0

)

Total deposits

$

52,582,575

$

49,547,136

$

40,672,678

6.1

%

29.3

%

EAST WEST BANCORP, INC. AND SUBSIDIARIES

TOTAL LOANS AND DEPOSITS DETAIL

($ in thousands)

(unaudited)

Table 2



June 30, 2021 % Change

June 30, 2021 March 31, 2021 June 30, 2020 Qtr-o-Qtr Yr-o-Yr

Loans:

Commercial:

Commercial and industrial ("C&I") $ 13,790,461 $ 14,081,110 $ 13,422,691 (2.1 )% 2.7 % ^(1)

Commercial real estate ("CRE"):

CRE 11,711,369 11,563,034 10,902,114 1.3 7.4

Multifamily 3,219,796 3,066,515 3,032,385 5.0 6.2 residential

Construction and 460,678 459,254 567,716 0.3 (18.9 ) land

Total CRE 15,391,843 15,088,803 14,502,215 2.0 6.1

Consumer:

Residential mortgage:

Single-family 8,869,370 8,524,287 7,660,094 4.0 15.8 residential

Home equity lines of credit 1,872,166 1,749,172 1,461,951 7.0 28.1 ("HELOCs")

Total residential 10,741,536 10,273,459 9,122,045 4.6 17.8 mortgage

Other consumer 147,659 145,376 182,461 1.6 (19.1 )

Total loans HFI ^(2) 40,071,499 39,588,748 37,229,412 1.2 7.6

Loans HFS 1,819 - 3,875 100.0 (53.1 )

Total loans ^(2) 40,073,318 39,588,748 37,233,287 1.2 7.6

Allowance for loan (585,724 ) (607,506 ) (632,071 ) (3.6 ) (7.3 )losses

Net loans ^(2) $ 39,487,594 $ 38,981,242 $ 36,601,216 1.3 7.9



Deposits:

Noninterest-bearing $ 21,816,721 $ 18,919,298 $ 13,940,420 15.3 % 56.5 % demand

Interest-bearing 6,762,178 7,005,693 5,280,887 (3.5 ) 28.1 checking

Money market 12,853,812 12,218,957 10,002,624 5.2 28.5

Savings 2,719,106 2,604,355 2,186,199 4.4 24.4

Time deposits 8,430,758 8,798,833 9,262,548 (4.2 ) (9.0 )

Total deposits $ 52,582,575 $ 49,547,136 $ 40,672,678 6.1 % 29.3 %



(1)

Includes $1.43 billion, $2.07 billion and $1.75 billion of Paycheck Protection Program ("PPP") loans as of June 30, 2021, March 31, 2021 and June 30, 2020, respectively.

(2)

Includes net deferred loan fees, unearned fees, unamortized premiums and unaccreted discounts of $(67.0) million, $(76.9) million and $(72.1) million as of June 30, 2021, March 31, 2021 and June 30, 2020, respectively. Net origination fees related to PPP loans were $(25.9) million, $(34.3) million and $(25.4) million as of June 30, 2021, March 31, 2021 and June 30, 2020, respectively.

Includes $1.43 billion, $2.07 billion and $1.75 billion of Paycheck(1) Protection Program ("PPP") loans as of June 30, 2021, March 31, 2021 and June 30, 2020, respectively.

Includes net deferred loan fees, unearned fees, unamortized premiums and unaccreted discounts of $(67.0) million, $(76.9) million and $(72.1)(2) million as of June 30, 2021, March 31, 2021 and June 30, 2020, respectively. Net origination fees related to PPP loans were $(25.9) million, $(34.3) million and $(25.4) million as of June 30, 2021, March 31, 2021 and June 30, 2020, respectively.

EAST WEST BANCORP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF INCOME

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

(unaudited)

Table 3

Three Months Ended

June 30, 2021% Change

June 30, 2021

March 31, 2021

June 30, 2020

Qtr-o-Qtr

Yr-o-Yr

Interest and dividend income (1)

$

399,333

$

381,386

$

398,776

4.7

%

0.1

%

Interest expense

22,860

27,691

55,001

(17.4

)

(58.4

)

Net interest income before provision for credit losses

376,473

353,695

343,775

6.4

9.5

(Reversal of) provision for credit losses

(15,000

)

-

102,443

(100.0

)

NM

Net interest income after provision for credit losses

391,473

353,695

241,332

10.7

62.2

Noninterest income

68,431

72,866

55,707

(2)

(6.1

)

22.8

Noninterest expense

189,523

191,077

184,766

(2)

(0.8

)

2.6

Income before income taxes

270,381

235,484

112,273

14.8

140.8

Income tax expense

45,639

30,490

12,921

49.7

253.2

Net income

$

224,742

$

204,994

$

99,352

9.6

%

126.2

%

Earnings per share ("EPS")

- Basic

$

1.58

$

1.45

$

0.70

9.5

%

125.6

%

- Diluted

$

1.57

$

1.44

$

0.70

9.5

124.3

Weighted-average number of shares outstanding

- Basic

141,868

141,646

141,486

0.2

%

0.3

%

- Diluted

143,040

142,844

141,827

0.1

0.9

Three Months Ended

June 30, 2021% Change

June 30, 2021

March 31, 2021

June 30, 2020

Qtr-o-Qtr

Yr-o-Yr

Noninterest income:

Lending fees

$

21,092

$

18,357

$

21,946

14.9

%

(3.9

)%

Deposit account fees

17,342

15,383

10,872

12.7

59.5

Interest rate contracts and other derivative (loss) income

(3,172

)

16,997

6,107

NM

NM

Foreign exchange income

13,007

9,526

4,562

36.5

185.1

Wealth management fees

7,951

6,911

3,091

15.0

157.2

Net gains on sales of loans

1,491

1,781

132

(16.3

)

NM

Gains on sales of AFS debt securities

632

192

9,640

229.2

(93.4

)

Other investment income (expense)

7,596

925

(1,964

)

(2)

721.2

NM

Other income

2,492

2,794

1,321

(10.8

)

88.6

Total noninterest income

$

68,431

$

72,866

$

55,707

(2)

(6.1

)%

22.8

%

Noninterest expense:

Compensation and employee benefits

$

105,426

$

107,808

$

96,955

(2.2

)%

8.7

%

Occupancy and equipment expense

15,377

15,922

16,217

(3.4

)

(5.2

)

Deposit insurance premiums and regulatory assessments

4,274

3,876

3,700

10.3

15.5

Deposit account expense

3,817

3,892

3,353

(1.9

)

13.8

Data processing

4,035

4,478

4,480

(9.9

)

(9.9

)

Computer software expense

7,521

7,159

7,301

5.1

3.0

Consulting expense

1,868

1,475

1,413

26.6

32.2

Legal expense

1,975

1,502

1,530

31.5

29.1

Other operating expense

17,939

19,607

19,248

(8.5

)

(6.8

)

Amortization of tax credit and other investments

27,291

25,358

21,829

(2)

7.6

25.0

Repurchase agreements' extinguishment cost

-

-

8,740

-

(100.0

)

Total noninterest expense

$

189,523

$

191,077

$

184,766

(2)

(0.8

)%

2.6

%

EAST WEST BANCORP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF INCOME

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

(unaudited)

Table 3



Three Months Ended June 30, 2021 % Change

June 30, 2021 March 31, June 30, 2020 Qtr-o-Qtr Yr-o-Yr 2021

Interest anddividend income $ 399,333 $ 381,386 $ 398,776 4.7 % 0.1 %^(1)

Interest expense 22,860 27,691 55,001 (17.4 ) (58.4 )

Net interestincome before 376,473 353,695 343,775 6.4 9.5 provision forcredit losses

(Reversal of)provision for (15,000 ) - 102,443 (100.0 ) NMcredit losses

Net interestincome after 391,473 353,695 241,332 10.7 62.2 provision forcredit losses

Noninterest 68,431 72,866 55,707 ^ (6.1 ) 22.8 income (2)

Noninterest 189,523 191,077 184,766 ^ (0.8 ) 2.6 expense (2)

Income before 270,381 235,484 112,273 14.8 140.8 income taxes

Income tax 45,639 30,490 12,921 49.7 253.2 expense

Net income $ 224,742 $ 204,994 $ 99,352 9.6 % 126.2 %

Earnings per share ("EPS")

- Basic $ 1.58 $ 1.45 $ 0.70 9.5 % 125.6 %

- Diluted $ 1.57 $ 1.44 $ 0.70 9.5 124.3

Weighted-averagenumber of shares outstanding

- Basic 141,868 141,646 141,486 0.2 % 0.3 %

- Diluted 143,040 142,844 141,827 0.1 0.9



Three Months Ended June 30, 2021 % Change

June 30, 2021 March 31, June 30, 2020 Qtr-o-Qtr Yr-o-Yr 2021

Noninterest income:

Lending fees $ 21,092 $ 18,357 $ 21,946 14.9 % (3.9 ) %

Deposit 17,342 15,383 10,872 12.7 59.5 account fees

Interest rate contracts and other (3,172 ) 16,997 6,107 NM NM derivative (loss) income

Foreign exchange 13,007 9,526 4,562 36.5 185.1 income

Wealth management 7,951 6,911 3,091 15.0 157.2 fees

Net gains on 1,491 1,781 132 (16.3 ) NM sales of loans

Gains on sales of AFS debt 632 192 9,640 229.2 (93.4 ) securities

Other investment 7,596 925 (1,964 ) ^ 721.2 NM income (2) (expense)

Other income 2,492 2,794 1,321 (10.8 ) 88.6

Total ^noninterest $ 68,431 $ 72,866 $ 55,707 (2) (6.1 )% 22.8 %income

Noninterest expense:

Compensation and employee $ 105,426 $ 107,808 $ 96,955 (2.2 )% 8.7 % benefits

Occupancy and equipment 15,377 15,922 16,217 (3.4 ) (5.2 ) expense

Deposit insurance premiums and 4,274 3,876 3,700 10.3 15.5 regulatory assessments

Deposit account 3,817 3,892 3,353 (1.9 ) 13.8 expense

Data 4,035 4,478 4,480 (9.9 ) (9.9 ) processing

Computer software 7,521 7,159 7,301 5.1 3.0 expense

Consulting 1,868 1,475 1,413 26.6 32.2 expense

Legal expense 1,975 1,502 1,530 31.5 29.1

Other operating 17,939 19,607 19,248 (8.5 ) (6.8 ) expense

Amortization of tax credit 27,291 25,358 21,829 ^ 7.6 25.0 and other (2) investments

Repurchase agreements' - - 8,740 - (100.0 ) extinguishment cost

Total ^noninterest $ 189,523 $ 191,077 $ 184,766 (2) (0.8 )% 2.6 %expense



NM - Not meaningful.

(1)

Includes $15.4 million, $15.0 million and $21.3 million of interest income related to PPP loans for the three months ended June 30, 2021, March 31, 2021 and June 30, 2020, respectively.

(2)

Starting fourth quarter of 2020, the Company has reclassified certain income/losses from equity method investments from Amortization of tax credit and other investments to Other investment income, with no effect on net income. June 30, 2020 comparative amounts have been revised to conform with the current presentation.

NM - Not meaningful.

Includes $15.4 million, $15.0 million and $21.3 million of interest income(1) related to PPP loans for the three months ended June 30, 2021, March 31, 2021 and June 30, 2020, respectively.

Starting fourth quarter of 2020, the Company has reclassified certain income/losses from equity method investments from Amortization of tax(2) credit and other investments to Other investment income, with no effect on net income. June 30, 2020 comparative amounts have been revised to conform with the current presentation.

EAST WEST BANCORP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF INCOME

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

(unaudited)

Table 4

Six Months Ended

June 30, 2021 % Change

June 30, 2021

June 30, 2020

Yr-o-Yr

Interest and dividend income (1)

$

780,719

$

847,966

(7.9)%

Interest expense

50,551

141,484

(64.3)

Net interest income before provision for credit losses

730,168

706,482

3.4

(Reversal of ) provision for credit losses

(15,000)

176,313

NM

Net interest income after provision for credit losses

745,168

530,169

40.6

Noninterest income

141,297

111,213

(2)

27.1

Noninterest expense

380,600

365,099

(2)

4.2

Income before income taxes

505,865

276,283

83.1

Income tax expense

76,129

32,107

137.1

Net income

$

429,736

$

244,176

76.0%

EPS

- Basic

$

3.03

$

1.71

77.7%

- Diluted

$

3.01

$

1.70

76.7

Weighted-average number of shares outstanding

- Basic

141,758

143,150

(1.0)%

- Diluted

142,963

143,560

(0.4)

Six Months Ended

June 30, 2021 % Change

June 30, 2021

June 30, 2020

Yr-o-Yr

Noninterest income:

Lending fees

$

39,449

$

37,719

4.6%

Deposit account fees

32,725

21,319

53.5

Interest rate contracts and other derivative income

13,825

13,180

4.9

Foreign exchange income

22,533

12,381

82.0

Wealth management fees

14,862

8,444

76.0

Net gains on sales of loans

3,272

1,082

202.4

Gains on sales of AFS debt securities

824

11,169

(92.6)

Other investment income

8,521

1,414

(2)

502.6

Other income

5,286

4,505

17.3

Total noninterest income

$

141,297

$

111,213

(2)

27.1%

Noninterest expense:

Compensation and employee benefits

$

213,234

$

198,915

7.2%

Occupancy and equipment expense

31,299

33,293

(6.0)

Deposit insurance premiums and regulatory assessments

8,150

7,127

14.4

Deposit account expense

7,709

6,916

11.5

Data processing

8,513

8,306

2.5

Computer software expense

14,680

13,467

9.0

Consulting expense

3,343

2,630

27.1

Legal expense

3,477

4,727

(26.4)

Other operating expense

37,546

40,367

(7.0)

Amortization of tax credit and other investments

52,649

40,611

(2)

29.6

Repurchase agreements' extinguishment cost

-

8,740

(100.0)

Total noninterest expense

$

380,600

$

365,099

(2)

4.2%

EAST WEST BANCORP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF INCOME

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

(unaudited)

Table 4



June 30, Six Months Ended 2021 % Change

June 30, June 30, 2020 Yr-o-Yr 2021

Interest and dividend income ^(1) $ 780,719 $ 847,966 (7.9)%

Interest expense 50,551 141,484 (64.3)

Net interest income before provision for 730,168 706,482 3.4credit losses

(Reversal of ) provision for credit (15,000) 176,313 NMlosses

Net interest income after provision for 745,168 530,169 40.6credit losses

Noninterest income 141,297 111,213 ^ 27.1 (2)

Noninterest expense 380,600 365,099 ^ 4.2 (2)

Income before income taxes 505,865 276,283 83.1

Income tax expense 76,129 32,107 137.1

Net income $ 429,736 $ 244,176 76.0%

EPS

- Basic $ 3.03 $ 1.71 77.7%

- Diluted $ 3.01 $ 1.70 76.7

Weighted-average number of shares outstanding

- Basic 141,758 143,150 (1.0)%

- Diluted 142,963 143,560 (0.4)



June 30, Six Months Ended 2021 % Change

June 30, June 30, 2020 Yr-o-Yr 2021

Noninterest income:

Lending fees $ 39,449 $ 37,719 4.6%

Deposit account fees 32,725 21,319 53.5

Interest rate contracts and other 13,825 13,180 4.9 derivative income

Foreign exchange income 22,533 12,381 82.0

Wealth management fees 14,862 8,444 76.0

Net gains on sales of loans 3,272 1,082 202.4

Gains on sales of AFS debt securities 824 11,169 (92.6)

Other investment income 8,521 1,414 ^ 502.6 (2)

Other income 5,286 4,505 17.3

Total noninterest income $ 141,297 $ 111,213 ^ 27.1% (2)

Noninterest expense:

Compensation and employee benefits $ 213,234 $ 198,915 7.2%

Occupancy and equipment expense 31,299 33,293 (6.0)

Deposit insurance premiums and 8,150 7,127 14.4 regulatory assessments

Deposit account expense 7,709 6,916 11.5

Data processing 8,513 8,306 2.5

Computer software expense 14,680 13,467 9.0

Consulting expense 3,343 2,630 27.1

Legal expense 3,477 4,727 (26.4)

Other operating expense 37,546 40,367 (7.0)

Amortization of tax credit and other 52,649 40,611 ^ 29.6 investments (2)

Repurchase agreements' extinguishment - 8,740 (100.0) cost

Total noninterest expense $ 380,600 $ 365,099 ^ 4.2% (2)



NM - Not meaningful.

(1)

Includes $30.4 million and $21.3 million of interest income related to PPP loans for the six months ended June 30, 2021 and 2020, respectively.

(2)

Starting fourth quarter of 2020, the Company has reclassified certain income/losses from equity method investments from Amortization of tax credit and other investments to Other investment income, with no effect on net income. June 30, 2020 comparative amounts have been revised to conform with the current presentation.

NM - Not meaningful.

(1) Includes $30.4 million and $21.3 million of interest income related to PPP loans for the six months ended June 30, 2021 and 2020, respectively.

Starting fourth quarter of 2020, the Company has reclassified certain income/losses from equity method investments from Amortization of tax(2) credit and other investments to Other investment income, with no effect on net income. June 30, 2020 comparative amounts have been revised to conform with the current presentation.

EAST WEST BANCORP, INC. AND SUBSIDIARIES

SELECTED AVERAGE BALANCES

($ in thousands)

(unaudited)

Table 5

Three Months Ended

June 30, 2021 % Change

Six Months Ended

June 30, 2021 % Change

June 30, 2021

March 31, 2021

June 30, 2020

Qtr-o-Qtr

Yr-o-Yr

June 30, 2021

June 30, 2020

Yr-o-Yr

Loans:

Commercial:

C&I (1)

$

13,811,966

$

13,693,869

$

13,560,719

0.9

%

1.9

%

$

13,753,244

$

12,863,449

6.9

%

CRE:

CRE

11,616,916

11,325,679

10,812,399

2.6

7.4

11,472,102

10,649,041

7.7

Multifamily residential

3,125,001

3,042,079

2,987,311

2.7

4.6

3,083,769

2,938,577

4.9

Construction and land

477,860

549,337

594,965

(13.0

)

(19.7

)

513,401

618,022

(16.9

)

Total CRE

15,219,777

14,917,095

14,394,675

2.0

5.7

15,069,272

14,205,640

6.1

Consumer:

Residential mortgage:

Single-family residential

8,650,706

8,315,052

7,506,546

4.0

15.2

8,483,806

7,381,956

14.9

HELOCs

1,800,213

1,666,233

1,444,933

8.0

24.6

1,733,593

1,443,692

20.1

Total residential mortgage

10,450,919

9,981,285

8,951,479

4.7

16.8

10,217,399

8,825,648

15.8

Other consumer

139,608

137,058

234,900

1.9

(40.6

)

138,340

253,134

(45.3

)

Total loans (2)

$

39,622,270

$

38,729,307

$

37,141,773

2.3

%

6.7

%

$

39,178,255

$

36,147,871

8.4

%

Interest-earning assets

$

54,901,209

$

52,852,045

$

45,413,242

3.9

%

20.9

%

$

53,882,288

$

43,887,886

22.8

%

Total assets

$

57,771,837

$

55,594,283

$

48,228,914

3.9

%

19.8

%

$

56,689,075

$

46,492,211

21.9

%

Deposits:

Noninterest-bearing demand

$

19,717,315

$

18,093,696

$

13,534,873

9.0

%

45.7

%

$

18,909,991

$

12,326,291

53.4

%

Interest-bearing checking

6,671,358

6,393,034

4,687,178

4.4

42.3

6,532,965

4,844,425

34.9

Money market

12,596,515

11,573,847

9,893,816

8.8

27.3

12,088,006

9,453,599

27.9

Savings

2,676,865

2,674,476

2,149,965

0.1

24.5

2,675,677

2,113,118

26.6

Time deposits

8,518,936

9,112,662

9,634,696

(6.5

)

(11.6

)

8,814,159

9,949,351

(11.4

)

Total deposits

$

50,180,989

$

47,847,715

$

39,900,528

4.9

%

25.8

%

$

49,020,798

$

38,686,784

26.7

%

Interest-bearing liabilities

$

31,394,114

$

30,863,568

$

28,362,618

1.7

%

10.7

%

$

31,130,307

$

27,977,979

11.3

%

Stockholders' equity

$

5,425,952

$

5,338,098

$

4,982,446

1.6

%

8.9

%

$

5,382,267

$

5,002,226

7.6

%

EAST WEST BANCORP, INC. AND SUBSIDIARIES

SELECTED AVERAGE BALANCES

($ in thousands)

(unaudited)

Table 5



June 30, 2021 June 30, Three Months Ended % Change Six Months Ended 2021 % Change

June 30, 2021 March 31, 2021 June 30, 2020 Qtr-o-Qtr Yr-o-Yr June 30, 2021 June 30, 2020 Yr-o-Yr

Loans:

Commercial:

C&I ^(1) $ 13,811,966 $ 13,693,869 $ 13,560,719 0.9 % 1.9 % $ 13,753,244 $ 12,863,449 6.9 %

CRE:

CRE 11,616,916 11,325,679 10,812,399 2.6 7.4 11,472,102 10,649,041 7.7

Multifamily 3,125,001 3,042,079 2,987,311 2.7 4.6 3,083,769 2,938,577 4.9 residential

Construction and land 477,860 549,337 594,965 (13.0 ) (19.7 ) 513,401 618,022 (16.9 )

Total CRE 15,219,777 14,917,095 14,394,675 2.0 5.7 15,069,272 14,205,640 6.1

Consumer:

Residential mortgage:

Single-family 8,650,706 8,315,052 7,506,546 4.0 15.2 8,483,806 7,381,956 14.9 residential

HELOCs 1,800,213 1,666,233 1,444,933 8.0 24.6 1,733,593 1,443,692 20.1

Total residential 10,450,919 9,981,285 8,951,479 4.7 16.8 10,217,399 8,825,648 15.8 mortgage

Other consumer 139,608 137,058 234,900 1.9 (40.6 ) 138,340 253,134 (45.3 )

Total loans ^(2) $ 39,622,270 $ 38,729,307 $ 37,141,773 2.3 % 6.7 % $ 39,178,255 $ 36,147,871 8.4 %



Interest-earning assets $ 54,901,209 $ 52,852,045 $ 45,413,242 3.9 % 20.9 % $ 53,882,288 $ 43,887,886 22.8 %

Total assets $ 57,771,837 $ 55,594,283 $ 48,228,914 3.9 % 19.8 % $ 56,689,075 $ 46,492,211 21.9 %



Deposits:

Noninterest-bearing $ 19,717,315 $ 18,093,696 $ 13,534,873 9.0 % 45.7 % $ 18,909,991 $ 12,326,291 53.4 % demand

Interest-bearing 6,671,358 6,393,034 4,687,178 4.4 42.3 6,532,965 4,844,425 34.9 checking

Money market 12,596,515 11,573,847 9,893,816 8.8 27.3 12,088,006 9,453,599 27.9

Savings 2,676,865 2,674,476 2,149,965 0.1 24.5 2,675,677 2,113,118 26.6

Time deposits 8,518,936 9,112,662 9,634,696 (6.5 ) (11.6 ) 8,814,159 9,949,351 (11.4 )

Total deposits $ 50,180,989 $ 47,847,715 $ 39,900,528 4.9 % 25.8 % $ 49,020,798 $ 38,686,784 26.7 %



Interest-bearing $ 31,394,114 $ 30,863,568 $ 28,362,618 1.7 % 10.7 % $ 31,130,307 $ 27,977,979 11.3 %liabilities

Stockholders' equity $ 5,425,952 $ 5,338,098 $ 4,982,446 1.6 % 8.9 % $ 5,382,267 $ 5,002,226 7.6 %



(1)

Includes average balances of PPP loans of $1.87 billion, $1.93 billion and $1.47 billion for the three months ended June 30, 2021, March 31, 2021 and June 30, 2020, respectively, and $1.90 billion and $732.5 million for the six months ended June 30, 2021 and 2020, respectively.

(2)

Includes loans HFS.

Includes average balances of PPP loans of $1.87 billion, $1.93 billion and(1) $1.47 billion for the three months ended June 30, 2021, March 31, 2021 and June 30, 2020, respectively, and $1.90 billion and $732.5 million for the six months ended June 30, 2021 and 2020, respectively.

(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

June 30, 2021

March 31, 2021

Average

Average

Average

Average

Balance

Interest

Yield/Rate (1)

Balance

Interest

Yield/Rate (1)

Assets

Interest-earning assets:

Interest-bearing cash and deposits with banks

$

5,072,225

$

3,628

0.29

%

$

6,117,799

$

3,632

0.24

%

Resale agreements

2,129,567

8,021

1.51

%

1,461,900

6,099

1.69

%

AFS debt securities

7,997,005

34,690

1.74

%

6,459,875

29,100

1.83

%

Loans (2)

39,622,270

352,453

3.57

%

38,729,307

342,008

3.58

%

FHLB and FRB stock

80,142

541

2.71

%

83,164

547

2.67

%

Total interest-earning assets

54,901,209

399,333

2.92

%

52,852,045

381,386

2.93

%

Noninterest-earning assets:

Cash and due from banks

600,053

580,277

Allowance for loan losses

(607,523)

(618,589)

Other assets

2,878,098

2,780,550

Total assets

$

57,771,837

$

55,594,283

Liabilities and Stockholders' Equity

Interest-bearing liabilities:

Checking deposits

$

6,671,358

$

3,777

0.23

%

$

6,393,034

$

4,214

0.27

%

Money market deposits

12,596,515

3,712

0.12

%

11,573,847

4,711

0.17

%

Savings deposits

2,676,865

2,078

0.31

%

2,674,476

1,741

0.26

%

Time deposits

8,518,936

8,431

0.40

%

9,112,662

11,156

0.50

%

Federal funds purchased and other short-term borrowings

336

-

-

%

4,703

42

3.62

%

FHLB advances

474,887

2,099

1.77

%

652,758

3,069

1.91

%

Repurchase agreements

303,118

1,991

2.63

%

300,000

1,978

2.67

%

Long-term debt and finance lease liabilities

152,099

772

2.04

%

152,088

780

2.08

%

Total interest-bearing liabilities

31,394,114

22,860

0.29

%

30,863,568

27,691

0.36

%

Noninterest-bearing liabilities and stockholders' equity:

Demand deposits

19,717,315

18,093,696

Accrued expenses and other liabilities

1,234,456

1,298,921

Stockholders' equity

5,425,952

5,338,098

Total liabilities and stockholders' equity

$

57,771,837

$

55,594,283

Interest rate spread

2.63

%

2.57

%

Net interest income and net interest margin

$

376,473

2.75

%

$

353,695

2.71

%

Adjusted net interest income and adjusted net interest margin (3)

$

361,096

2.73

%

$

338,678

2.70

%

EAST WEST BANCORP, INC. AND SUBSIDIARIES

QUARTER-TO-DATE AVERAGE BALANCES, YIELDS AND RATES

($ in thousands)

(unaudited)

Table 6



Three Months Ended

June 30, 2021 March 31, 2021

Average Average Average Average

Yield/ Yield/ Balance Interest Rate ^ Balance Interest Rate ^ (1) (1)

Assets

Interest-earning assets:

Interest-bearing cash and deposits $ 5,072,225 $ 3,628 0.29 % $ 6,117,799 $ 3,632 0.24 % with banks

Resale agreements 2,129,567 8,021 1.51 % 1,461,900 6,099 1.69 %

AFS debt 7,997,005 34,690 1.74 % 6,459,875 29,100 1.83 % securities

Loans ^(2) 39,622,270 352,453 3.57 % 38,729,307 342,008 3.58 %

FHLB and FRB 80,142 541 2.71 % 83,164 547 2.67 % stock

Total interest-earning 54,901,209 399,333 2.92 % 52,852,045 381,386 2.93 % assets



Noninterest-earning assets:

Cash and due from 600,053 580,277 banks

Allowance for (607,523) (618,589) loan losses

Other assets 2,878,098 2,780,550

Total assets $ 57,771,837 $ 55,594,283



Liabilities andStockholders' Equity

Interest-bearing liabilities:

Checking deposits $ 6,671,358 $ 3,777 0.23 % $ 6,393,034 $ 4,214 0.27 %

Money market 12,596,515 3,712 0.12 % 11,573,847 4,711 0.17 % deposits

Savings deposits 2,676,865 2,078 0.31 % 2,674,476 1,741 0.26 %

Time deposits 8,518,936 8,431 0.40 % 9,112,662 11,156 0.50 %

Federal funds purchased and 336 - - % 4,703 42 3.62 % other short-term borrowings

FHLB advances 474,887 2,099 1.77 % 652,758 3,069 1.91 %

Repurchase 303,118 1,991 2.63 % 300,000 1,978 2.67 % agreements

Long-term debt and finance lease 152,099 772 2.04 % 152,088 780 2.08 % liabilities

Total interest-bearing 31,394,114 22,860 0.29 % 30,863,568 27,691 0.36 % liabilities



Noninterest-bearingliabilities and stockholders'equity:

Demand deposits 19,717,315 18,093,696

Accrued expenses and other 1,234,456 1,298,921 liabilities

Stockholders' 5,425,952 5,338,098 equity

Total liabilities and stockholders' $ 57,771,837 $ 55,594,283 equity



Interest rate 2.63 % 2.57 %spread

Net interest incomeand net interest $ 376,473 2.75 % $ 353,695 2.71 %margin

Adjusted netinterest income andadjusted net $ 361,096 2.73 % $ 338,678 2.70 %interest margin ^(3)



(1)

Annualized.

(2)

Includes loans HFS.

(3)

Net interest income and net interest margin for the three months ended June 30, 2021 and March 31, 2021 have been adjusted for the impact of PPP loans. See reconciliation of GAAP to non-GAAP financial measures in Table 14.

(1) Annualized.

(2) Includes loans HFS.

Net interest income and net interest margin for the three months ended(3) June 30, 2021 and March 31, 2021 have been adjusted for the impact of PPP loans. See reconciliation of GAAP to non-GAAP financial measures in Table 14.

EAST WEST BANCORP, INC. AND SUBSIDIARIES

QUARTER-TO-DATE AVERAGE BALANCES, YIELDS AND RATES

($ in thousands)

(unaudited)

Table 7

Three Months Ended

June 30, 2021

June 30, 2020

Average

Average

Average

Average

Balance

Interest

Yield/Rate (1)

Balance

Interest

Yield/Rate (1)

Assets

Interest-earning assets:

Interest-bearing cash and deposits with banks

$

5,072,225

$

3,628

0.29%

$

3,435,920

$

4,564

0.53%

Resale agreements

2,129,567

8,021

1.51%

1,037,473

5,514

2.14%

AFS debt securities

7,997,005

34,690

1.74%

3,719,209

21,004

2.27%

Loans (2)

39,622,270

352,453

3.57%

37,141,773

367,393

3.98%

FHLB and FRB stock

80,142

541

2.71%

78,867

301

1.54%

Total interest-earning assets

54,901,209

399,333

2.92 %

45,413,242

398,776

3.53 %

Noninterest-earning assets:

Cash and due from banks

600,053

498,908

Allowance for loan losses

(607,523)

(566,473)

Other assets

2,878,098

2,883,237

Total assets

$

57,771,837

$

48,228,914

Liabilities and Stockholders' Equity

Interest-bearing liabilities:

Checking deposits

$

6,671,358

$

3,777

0.23%

$

4,687,178

$

5,404

0.46%

Money market deposits

12,596,515

3,712

0.12%

9,893,816

8,093

0.33%

Savings deposits

2,676,865

2,078

0.31%

2,149,965

1,445

0.27%

Time deposits

8,518,936

8,431

0.40%

9,634,696

31,457

1.31%

Federal funds purchased and other short-term borrowings

336

-

-%

242,185

265

0.44%

FHLB advances

474,887

2,099

1.77%

653,665

3,343

2.06%

Repurchase agreements

303,118

1,991

2.63%

418,681

3,540

3.40%

Long-term debt and finance lease liabilities

152,099

772

2.04%

682,432

(3)

1,454

0.86%

Total interest-bearing liabilities

31,394,114

22,860

0.29%

28,362,618

55,001

0.78%

Noninterest-bearing liabilities and stockholders' equity:

Demand deposits

19,717,315

13,534,873

Accrued expenses and other liabilities

1,234,456

1,348,977

Stockholders' equity

5,425,952

4,982,446

Total liabilities and stockholders' equity

$

57,771,837

$

48,228,914

Interest rate spread

2.63%

2.75%

Net interest income and net interest margin

$

376,473

2.75%

$

343,775

3.04%

Adjusted net interest income and adjusted net interest margin (4)

$

361,096

2.73%

$

322,949

2.96%

EAST WEST BANCORP, INC. AND SUBSIDIARIES

QUARTER-TO-DATE AVERAGE BALANCES, YIELDS AND RATES

($ in thousands)

(unaudited)

Table 7



Three Months Ended

June 30, 2021 June 30, 2020

Average Average Average Average

Yield/ Yield/ Balance Interest Rate ^ Balance Interest Rate ^ (1) (1)

Assets

Interest-earning assets:

Interest-bearing cash and deposits $ 5,072,225 $ 3,628 0.29% $ 3,435,920 $ 4,564 0.53% with banks

Resale agreements 2,129,567 8,021 1.51% 1,037,473 5,514 2.14%

AFS debt 7,997,005 34,690 1.74% 3,719,209 21,004 2.27% securities

Loans ^(2) 39,622,270 352,453 3.57% 37,141,773 367,393 3.98%

FHLB and FRB 80,142 541 2.71% 78,867 301 1.54% stock

Total interest-earning 54,901,209 399,333 2.92 % 45,413,242 398,776 3.53 % assets



Noninterest-earning assets:

Cash and due from 600,053 498,908 banks

Allowance for (607,523) (566,473) loan losses

Other assets 2,878,098 2,883,237

Total assets $ 57,771,837 $ 48,228,914



Liabilities andStockholders' Equity

Interest-bearing liabilities:

Checking deposits $ 6,671,358 $ 3,777 0.23% $ 4,687,178 $ 5,404 0.46%

Money market 12,596,515 3,712 0.12% 9,893,816 8,093 0.33% deposits

Savings deposits 2,676,865 2,078 0.31% 2,149,965 1,445 0.27%

Time deposits 8,518,936 8,431 0.40% 9,634,696 31,457 1.31%

Federal funds purchased and 336 - -% 242,185 265 0.44% other short-term borrowings

FHLB advances 474,887 2,099 1.77% 653,665 3,343 2.06%

Repurchase 303,118 1,991 2.63% 418,681 3,540 3.40% agreements

Long-term debt ^ and finance lease 152,099 772 2.04% 682,432 (3) 1,454 0.86% liabilities

Total interest-bearing 31,394,114 22,860 0.29% 28,362,618 55,001 0.78% liabilities



Noninterest-bearingliabilities and stockholders'equity:

Demand deposits 19,717,315 13,534,873

Accrued expenses and other 1,234,456 1,348,977 liabilities

Stockholders' 5,425,952 4,982,446 equity

Total liabilities and stockholders' $ 57,771,837 $ 48,228,914 equity



Interest rate 2.63% 2.75%spread

Net interest incomeand net interest $ 376,473 2.75% $ 343,775 3.04%margin

Adjusted netinterest income andadjusted net $ 361,096 2.73% $ 322,949 2.96%interest margin ^(4)



(1)

Annualized.

(2)

Includes loans HFS.

(3)

Primarily includes average balances of PPPLF, which was repaid in full during the fourth quarter of 2020.

(4)

Net interest income and net interest margin for the three months ended June 30, 2021 and June 30, 2020 have been adjusted for the impact of PPP loans. Net interest margin for the three months ended June 30, 2020 has been adjusted for advances from the PPPLF. See reconciliation of GAAP to non-GAAP financial measures in Table 14.

(1) Annualized.

(2) Includes loans HFS.

(3) Primarily includes average balances of PPPLF, which was repaid in full during the fourth quarter of 2020.

Net interest income and net interest margin for the three months ended June 30, 2021 and June 30, 2020 have been adjusted for the impact of PPP(4) loans. Net interest margin for the three months ended June 30, 2020 has been adjusted for advances from the PPPLF. See reconciliation of GAAP to non-GAAP financial measures in Table 14.

EAST WEST BANCORP, INC. AND SUBSIDIARIES

YEAR-TO-DATE AVERAGE BALANCES, YIELDS AND RATES

($ in thousands)

(unaudited)

Table 8

Six Months Ended

June 30, 2021

June 30, 2020

Average

Average

Average

Average

Balance

Interest

Yield/Rate (1)

Balance

Interest

Yield/Rate (1)

Assets

Interest-earning assets:

Interest-bearing cash and deposits with banks

$

5,592,124

$

7,260

0.26%

$

3,204,463

$

15,672

0.98%

Resale agreements (2)

1,797,578

14,120

1.58%

959,807

11,139

2.33%

AFS debt securities

7,232,686

63,790

1.78%

3,496,974

41,146

2.37%

Loans (3)

39,178,255

694,461

3.57%

36,147,871

779,262

4.34%

FHLB and FRB stock

81,645

1,088

2.69%

78,771

747

1.91%

Total interest-earning assets

53,882,288

780,719

2.92%

43,887,886

847,966

3.89%

Noninterest-earning assets:

Cash and due from banks

590,219

504,710

Allowance for loan losses

(613,026

)

(529,385

)

Other assets

2,829,594

2,629,000

Total assets

$

56,689,075

$

46,492,211

Liabilities and Stockholders' Equity

Interest-bearing liabilities:

Checking deposits

$

6,532,965

$

7,991

0.25%

$

4,844,425

$

15,650

0.65%

Money market deposits

12,088,006

8,423

0.14%

9,453,599

30,341

0.65%

Savings deposits

2,675,677

3,819

0.29%

2,113,118

3,262

0.31%

Time deposits

8,814,159

19,587

0.45%

9,949,351

73,549

1.49%

Federal funds purchased and other short-term borrowings

2,508

42

3.38%

151,081

821

1.09%

FHLB advances

563,331

5,168

1.85%

673,511

7,509

2.24%

Repurchase agreements (2)

301,567

3,969

2.65%

375,549

7,531

4.03%

Long-term debt and finance lease liabilities

152,094

1,552

2.06%

417,345

(4)

2,821

1.36%

Total interest-bearing liabilities

31,130,307

50,551

0.33%

27,977,979

141,484

1.02%

Noninterest-bearing liabilities and stockholders' equity:

Demand deposits

18,909,991

12,326,291

Accrued expenses and other liabilities

1,266,510

1,185,715

Stockholders' equity

5,382,267

5,002,226

Total liabilities and stockholders' equity

$

56,689,075

$

46,492,211

Interest rate spread

2.59%

2.87%

Net interest income and net interest margin

$

730,168

2.73%

$

706,482

3.24%

Adjusted net interest income and adjusted net interest margin (5)

$

699,774

2.71%

$

685,656

3.20%

EAST WEST BANCORP, INC. AND SUBSIDIARIES

YEAR-TO-DATE AVERAGE BALANCES, YIELDS AND RATES

($ in thousands)

(unaudited)

Table 8



Six Months Ended

June 30, 2021 June 30, 2020

Average Average Average Average

Yield/ Yield/ Balance Interest Rate ^ Balance Interest Rate ^ (1) (1)

Assets

Interest-earning assets:

Interest-bearing cash and deposits $ 5,592,124 $ 7,260 0.26% $ 3,204,463 $ 15,672 0.98% with banks

Resale agreements 1,797,578 14,120 1.58% 959,807 11,139 2.33% ^(2)

AFS debt 7,232,686 63,790 1.78% 3,496,974 41,146 2.37% securities

Loans^ (3) 39,178,255 694,461 3.57% 36,147,871 779,262 4.34%

FHLB and FRB 81,645 1,088 2.69% 78,771 747 1.91% stock

Total interest-earning 53,882,288 780,719 2.92% 43,887,886 847,966 3.89% assets



Noninterest-earning assets:

Cash and due from 590,219 504,710 banks

Allowance for (613,026 ) (529,385 ) loan losses

Other assets 2,829,594 2,629,000

Total assets $ 56,689,075 $ 46,492,211



Liabilities andStockholders' Equity

Interest-bearing liabilities:

Checking deposits $ 6,532,965 $ 7,991 0.25% $ 4,844,425 $ 15,650 0.65%

Money market 12,088,006 8,423 0.14% 9,453,599 30,341 0.65% deposits

Savings deposits 2,675,677 3,819 0.29% 2,113,118 3,262 0.31%

Time deposits 8,814,159 19,587 0.45% 9,949,351 73,549 1.49%

Federal funds purchased and 2,508 42 3.38% 151,081 821 1.09% other short-term borrowings

FHLB advances 563,331 5,168 1.85% 673,511 7,509 2.24%

Repurchase 301,567 3,969 2.65% 375,549 7,531 4.03% agreements ^(2)

Long-term debt ^ and finance lease 152,094 1,552 2.06% 417,345 (4) 2,821 1.36% liabilities

Total interest-bearing 31,130,307 50,551 0.33% 27,977,979 141,484 1.02% liabilities



Noninterest-bearingliabilities and stockholders'equity:

Demand deposits 18,909,991 12,326,291

Accrued expenses and other 1,266,510 1,185,715 liabilities

Stockholders' 5,382,267 5,002,226 equity

Total liabilities and stockholders' $ 56,689,075 $ 46,492,211 equity



Interest rate 2.59% 2.87%spread

Net interest incomeand net interest $ 730,168 2.73% $ 706,482 3.24%margin

Adjusted netinterest income andadjusted net $ 699,774 2.71% $ 685,656 3.20%interest margin ^(5)



(1)

Annualized.

(2)

Average balances of resale and repurchase agreements for the six months ended June 30, 2020 have been reported net, pursuant to ASC 210-20-45-11, Balance Sheet Offsetting: Repurchase and Reverse Repurchase Agreements. The weighted-average yields of gross resale and gross repurchase agreements for the six months ended June 30, 2020 were 2.32% and 3.76%, respectively.

(3)

Includes loans HFS.

(4)

Primarily includes average balances of PPPLF, which was repaid in full during the fourth quarter of 2020.

(5)

Net interest income and net interest margin for the six months ended June 30, 2021 and June 30, 2020 have been adjusted for the impact of PPP loans. Net interest margin for the six months ended June 30, 2020 has been adjusted for advances from the PPPLF. See reconciliation of GAAP to non-GAAP financial measures in Table 14.

(1) Annualized.

Average balances of resale and repurchase agreements for the six months ended June 30, 2020 have been reported net, pursuant to ASC 210-20-45-11,(2) Balance Sheet Offsetting: Repurchase and Reverse Repurchase Agreements. The weighted-average yields of gross resale and gross repurchase agreements for the six months ended June 30, 2020 were 2.32% and 3.76%, respectively.

(3) Includes loans HFS.

(4) Primarily includes average balances of PPPLF, which was repaid in full during the fourth quarter of 2020.

Net interest income and net interest margin for the six months ended June 30, 2021 and June 30, 2020 have been adjusted for the impact of PPP loans.(5) Net interest margin for the six months ended June 30, 2020 has been adjusted for advances from the PPPLF. See reconciliation of GAAP to non-GAAP financial measures in Table 14.

EAST WEST BANCORP, INC. AND SUBSIDIARIES

SELECTED RATIOS

(unaudited)

Table 9

Three Months Ended (1)

June 30, 2021 Basis Point Change

June 30, 2021

March 31, 2021

June 30, 2020

Qtr-o-Qtr

Yr-o-Yr

Return on average assets

1.56

%

1.50

%

0.83

%

6

bps

73

bps

Return on average equity

16.61

%

15.57

%

8.02

%

104

859

Return on average tangible equity (2)

18.28

%

17.17

%

8.96

%

111

932

Interest rate spread

2.63

%

2.57

%

2.75

%

6

(12)

Net interest margin

2.75

%

2.71

%

3.04

%

4

(29)

Adjusted net interest margin (2)

2.73

%

2.70

%

2.96

%

3

(23)

Average loan yield

3.57

%

3.58

%

3.98

%

(1)

(41)

Adjusted average loan yield (2)

3.58

%

3.60

%

3.90

%

(2)

(32)

Yield on average interest-earning assets

2.92

%

2.93

%

3.53

%

(1)

(61)

Average cost of interest-bearing deposits

0.24

%

0.30

%

0.71

%

(6)

(47)

Average cost of deposits

0.14

%

0.18

%

0.47

%

(4)

(33)

Average cost of funds

0.18

%

0.23

%

0.53

%

(5)

(35)

Adjusted pre-tax, pre-provision profitability ratio (2)

1.97

%

1.91

%

2.05

%

6

(8)

Adjusted noninterest expense/average assets (2)

1.12

%

1.20

%

1.28

%

(8)

(16)

Efficiency ratio

42.60

%

44.79

%

46.25

%

(219)

(365)

Adjusted efficiency ratio (2)

36.30

%

38.68

%

38.37

%

(238)

bps

(207)

bps

Six Months Ended (1)

June 30, 2021 Basis Point Change

June 30, 2021

June 30, 2020

Yr-o-Yr

Return on average assets

1.53

%

1.06

%

47

bps

Return on average equity

16.10

%

9.82

%

628

Return on average tangible equity (2)

17.73

%

10.95

%

678

Interest rate spread

2.59

%

2.87

%

(28)

Net interest margin

2.73

%

3.24

%

(51)

Adjusted net interest margin (2)

2.71

%

3.20

%

(49)

Average loan yield

3.57

%

4.34

%

(77)

Adjusted average loan yield (2)

3.59

%

4.30

%

(71)

Yield on average interest-earning assets

2.92

%

3.89

%

(97)

Average cost of interest-bearing deposits

0.27

%

0.94

%

(67)

Average cost of deposits

0.16

%

0.64

%

(48)

Average cost of funds

0.20

%

0.71

%

(51)

Adjusted pre-tax, pre-provision profitability ratio (2)

1.94

%

2.18

%

(24)

Adjusted noninterest expense/average assets (2)

1.16

%

1.36

%

(20)

Efficiency ratio

43.67

%

44.65

%

(98)

Adjusted efficiency ratio (2)

37.47

%

38.38

%

(91)

bps

EAST WEST BANCORP, INC. AND SUBSIDIARIES

SELECTED RATIOS

(unaudited)

Table 9



Three Months Ended ^(1) June 30, 2021 Basis Point Change

June March June 30, 31, 30, Qtr-o-Qtr Yr-o-Yr 2021 2021 2020

Return on average 1.56 % 1.50 % 0.83 % 6 bps 73 bps assets

Return on average 16.61 % 15.57 % 8.02 % 104 859 equity

Return on average tangible equity ^ 18.28 % 17.17 % 8.96 % 111 932 (2)

Interest rate 2.63 % 2.57 % 2.75 % 6 (12) spread

Net interest 2.75 % 2.71 % 3.04 % 4 (29) margin

Adjusted net interest margin ^ 2.73 % 2.70 % 2.96 % 3 (23) (2)

Average loan 3.57 % 3.58 % 3.98 % (1) (41) yield

Adjusted average 3.58 % 3.60 % 3.90 % (2) (32) loan yield ^(2)

Yield on average interest-earning 2.92 % 2.93 % 3.53 % (1) (61) assets

Average cost of interest-bearing 0.24 % 0.30 % 0.71 % (6) (47) deposits

Average cost of 0.14 % 0.18 % 0.47 % (4) (33) deposits

Average cost of 0.18 % 0.23 % 0.53 % (5) (35) funds

Adjusted pre-tax, pre-provision 1.97 % 1.91 % 2.05 % 6 (8) profitability ratio ^(2)

Adjusted noninterest 1.12 % 1.20 % 1.28 % (8) (16) expense/average assets ^(2)

Efficiency ratio 42.60 % 44.79 % 46.25 % (219) (365)

Adjusted efficiency ratio 36.30 % 38.68 % 38.37 % (238) bps (207) bps ^(2)





June 30, Six Months Ended 2021 ^(1) Basis Point Change

June June 30, 30, Yr-o-Yr 2021 2020

Return on average 1.53 % 1.06 % 47 bps assets

Return on average 16.10 % 9.82 % 628 equity

Return on average tangible equity ^ 17.73 % 10.95 % 678 (2)

Interest rate 2.59 % 2.87 % (28) spread

Net interest 2.73 % 3.24 % (51) margin

Adjusted net interest margin ^ 2.71 % 3.20 % (49) (2)

Average loan 3.57 % 4.34 % (77) yield

Adjusted average 3.59 % 4.30 % (71) loan yield ^(2)

Yield on average interest-earning 2.92 % 3.89 % (97) assets

Average cost of interest-bearing 0.27 % 0.94 % (67) deposits

Average cost of 0.16 % 0.64 % (48) deposits

Average cost of 0.20 % 0.71 % (51) funds

Adjusted pre-tax, pre-provision 1.94 % 2.18 % (24) profitability ratio ^(2)

Adjusted noninterest 1.16 % 1.36 % (20) expense/average assets ^(2)

Efficiency ratio 43.67 % 44.65 % (98)

Adjusted efficiency ratio 37.47 % 38.38 % (91) bps ^(2)



(1)

Annualized except for efficiency ratio.

(2)

See reconciliation of GAAP to non-GAAP financial measures in Tables 12, 13 and 14.

(1) Annualized except for efficiency ratio.

(2) See reconciliation of GAAP to non-GAAP financial measures in Tables 12, 13 and 14.

EAST WEST BANCORP, INC. AND SUBSIDIARIES

ALLOWANCE FOR LOAN LOSSES & OFF-BALANCE-SHEET CREDIT EXPOSURES

($ in thousands)

(unaudited)

Table 10

Three Months Ended June 30, 2021

Commercial

Consumer

Total

C&I

Total CRE

Total Residential Mortgage

Other Consumer

Total

Allowance for loan losses, March 31, 2021

$

394,084

$

192,895

$

18,509

$

2,018

$

607,506

(Reversal of) provision for credit losses on loans

(a)

(22,586

)

10,747

859

2,209

(8,771

)

Gross charge-offs

(10,572

)

(4,456

)

-

(32

)

(15,060

)

Gross recoveries

1,338

344

100

3

1,785

Total net (charge-offs) recoveries

(9,234

)

(4,112

)

100

(29

)

(13,275

)

Foreign currency translation adjustment

264

-

-

-

264

Allowance for loan losses, June 30, 2021

$

362,528

$

199,530

$

19,468

$

4,198

$

585,724

EAST WEST BANCORP, INC. AND SUBSIDIARIES

ALLOWANCE FOR LOAN LOSSES & OFF-BALANCE-SHEET CREDIT EXPOSURES

($ in thousands)

(unaudited)

Table 10



Three Months Ended June 30, 2021

Commercial Consumer Total

Total Other C&I Total CRE Residential Consumer Total Mortgage

Allowance forloan losses, $ 394,084 $ 192,895 $ 18,509 $ 2,018 $ 607,506 March 31,2021

(Reversal of)provision for (a) (22,586 ) 10,747 859 2,209 (8,771 ) credit losseson loans

Gross (10,572 ) (4,456 ) - (32 ) (15,060 ) charge-offs

Gross 1,338 344 100 3 1,785 recoveries

Total net(charge-offs) (9,234 ) (4,112 ) 100 (29 ) (13,275 ) recoveries

Foreigncurrency 264 - - - 264 translationadjustment

Allowance forloan losses, $ 362,528 $ 199,530 $ 19,468 $ 4,198 $ 585,724 June 30, 2021



Three Months Ended March 31, 2021

Commercial

Consumer

Total

C&I

Total CRE

Total Residential Mortgage

Other Consumer

Total

Allowance for loan losses, December 31, 2020

$

398,040

$

201,603

$

18,210

$

2,130

$

619,983

Provision for (reversal of) credit losses on loans

(a)

3,839

(3,076

)

398

(113

)

1,048

Gross charge-offs

(8,436

)

(7,283

)

(179

)

(1

)

(15,899

)

Gross recoveries

760

1,651

80

2

2,493

Total net (charge-offs) recoveries

(7,676

)

(5,632

)

(99

)

1

(13,406

)

Foreign currency translation adjustment

(119

)

-

-

-

(119

)

Allowance for loan losses, March 31, 2021

$

394,084

$

192,895

$

18,509

$

2,018

$

607,506



Three Months Ended March 31, 2021

Commercial Consumer Total

Total Other C&I Total CRE Residential Consumer Total Mortgage

Allowance forloan losses, $ 398,040 $ 201,603 $ 18,210 $ 2,130 $ 619,983 December 31,2020

Provision for(reversal of) (a) 3,839 (3,076 ) 398 (113 ) 1,048 credit losseson loans

Gross (8,436 ) (7,283 ) (179 ) (1 ) (15,899 ) charge-offs

Gross 760 1,651 80 2 2,493 recoveries

Total net(charge-offs) (7,676 ) (5,632 ) (99 ) 1 (13,406 )recoveries

Foreigncurrency (119 ) - - - (119 )translationadjustment

Allowance forloan losses, $ 394,084 $ 192,895 $ 18,509 $ 2,018 $ 607,506 March 31,2021

Three Months Ended June 30, 2020

Commercial

Consumer

Total

C&I

Total CRE

Total Residential Mortgage

Other Consumer

Total

Allowance for loan losses, March 31, 2020

$

362,629

$

160,367

$

30,703

$

3,304

$

557,003

Provision for (reversal of) credit losses on loans

(a)

37,862

58,749

(1,462

)

(849

)

94,300

Gross charge-offs

(20,378

)

(320

)

(221

)

(30

)

(20,949

)

Gross recoveries

602

853

161

93

1,709

Total net (charge-offs) recoveries

(19,776

)

533

(60

)

63

(19,240

)

Foreign currency translation adjustment

8

-

-

-

8

Allowance for loan losses, June 30, 2020

$

380,723

$

219,649

$

-

$

29,181

$

2,518

$

632,071



Three Months Ended June 30, 2020

Commercial Consumer Total

Total Other C&I Total CRE Residential Consumer Total Mortgage

Allowance forloan losses, $ 362,629 $ 160,367 $ 30,703 $ 3,304 $ 557,003 March 31,2020

Provision for(reversal of) (a) 37,862 58,749 (1,462 ) (849 ) 94,300 credit losseson loans

Gross (20,378 ) (320 ) (221 ) (30 ) (20,949 ) charge-offs

Gross 602 853 161 93 1,709 recoveries

Total net(charge-offs) (19,776 ) 533 (60 ) 63 (19,240 ) recoveries

Foreigncurrency 8 - - - 8 translationadjustment

Allowance forloan losses, $ 380,723 $ 219,649 $ - $ 29,181 $ 2,518 $ 632,071 June 30, 2020



EAST WEST BANCORP, INC. AND SUBSIDIARIES

ALLOWANCE FOR LOAN LOSSES & OFF-BALANCE-SHEET CREDIT EXPOSURES

($ in thousands)

(unaudited)

Table 10 (continued)

Six Months Ended June 30, 2021

Commercial

Consumer

Total

C&I

Total CRE

Total Residential Mortgage

Other Consumer

Total

Allowance for loan losses, December 31, 2020

$

398,040

$

201,603

$

18,210

$

2,130

$

619,983

(Reversal of) provision for credit losses on loans

(a)

(18,747

)

7,671

1,257

2,096

(7,723

)

Gross charge-offs

(19,008

)

(11,739

)

(179

)

(33

)

(30,959

)

Gross recoveries

2,098

1,995

180

5

4,278

Total net (charge-offs) recoveries

(16,910

)

(9,744

)

1

(28

)

(26,681

)

Foreign currency translation adjustment

145

-

-

-

145

Allowance for loan losses, June 30, 2021

$

362,528

$

199,530

$

19,468

$

4,198

$

585,724

EAST WEST BANCORP, INC. AND SUBSIDIARIES

ALLOWANCE FOR LOAN LOSSES & OFF-BALANCE-SHEET CREDIT EXPOSURES

($ in thousands)

(unaudited)

Table 10 (continued)



Six Months Ended June 30, 2021

Commercial Consumer Total

Total Other C&I Total CRE Residential Consumer Total Mortgage

Allowance forloan losses, $ 398,040 $ 201,603 $ 18,210 $ 2,130 $ 619,983 December 31,2020

(Reversal of)provision for (a) (18,747 ) 7,671 1,257 2,096 (7,723 ) credit losseson loans

Gross (19,008 ) (11,739 ) (179 ) (33 ) (30,959 ) charge-offs

Gross 2,098 1,995 180 5 4,278 recoveries

Total net(charge-offs) (16,910 ) (9,744 ) 1 (28 ) (26,681 ) recoveries

Foreigncurrency 145 - - - 145 translationadjustment

Allowance forloan losses, $ 362,528 $ 199,530 $ 19,468 $ 4,198 $ 585,724 June 30, 2021



Six Months Ended June 30, 2020

Commercial

Consumer

Total

C&I

Total CRE

Total Residential Mortgage

Other Consumer

Total

Allowance for loan losses, December 31, 2019

$

238,376

$

82,739

$

33,792

$

3,380

$

358,287

Impact of ASU 2016-13 adoption

74,237

54,168

(5,468

)

2,221

125,158

Allowance for loan losses, January 1, 2020

$

312,613

$

136,907

$

28,324

$

5,601

$

483,445

Provision for (reversal of) credit losses on loans

(a)

98,480

72,947

650

(3,121

)

168,956

Gross charge-offs

(32,355

)

(1,274

)

(221

)

(56

)

(33,906

)

Gross recoveries

2,177

11,069

428

94

13,768

Total net (charge-offs) recoveries

(30,178

)

9,795

207

38

(20,138

)

Foreign currency translation adjustment

(192

)

-

-

-

(192

)

Allowance for loan losses, June 30, 2020

$

380,723

$

219,649

$

29,181

$

2,518

$

632,071



Six Months Ended June 30, 2020

Commercial Consumer Total

Total Other C&I Total CRE Residential Consumer Total Mortgage

Allowance forloan losses, $ 238,376 $ 82,739 $ 33,792 $ 3,380 $ 358,287 December 31,2019

Impact of ASU2016-13 74,237 54,168 (5,468 ) 2,221 125,158 adoption

Allowance forloan losses, $ 312,613 $ 136,907 $ 28,324 $ 5,601 $ 483,445 January 1,2020

Provision for(reversal of) (a) 98,480 72,947 650 (3,121 ) 168,956 credit losseson loans

Gross (32,355 ) (1,274 ) (221 ) (56 ) (33,906 ) charge-offs

Gross 2,177 11,069 428 94 13,768 recoveries

Total net(charge-offs) (30,178 ) 9,795 207 38 (20,138 )recoveries

Foreigncurrency (192 ) - - - (192 )translationadjustment

Allowance forloan losses, $ 380,723 $ 219,649 $ 29,181 $ 2,518 $ 632,071 June 30, 2020

Three Months Ended

Six Months Ended

June 30, 2021

March 31, 2021

June 30, 2020

June 30, 2021

June 30, 2020

Unfunded Credit Facilities

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

$

32,529

$

33,577

$

20,829

$

33,577

$

11,158

Impact of ASU 2016-13 adoption

-

-

-

-

10,457

(Reversal of) provision for credit losses on unfunded credit commitments

(b)

(6,229

)

(1,048

)

8,143

(7,277

)

7,357

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

$

26,300

$

32,529

$

28,972

$

26,300

$

28,972

Provision for credit losses

(a)+(b)

$

(15,000

)

$

-

$

102,443

$

(15,000

)

$

176,313



Three Months Ended Six Months Ended

June 30, 2021 March 31, June 30, June 30, 2021 June 30, 2021 2020 2020

UnfundedCredit Facilities

Allowancefor unfundedcredit $ 32,529 $ 33,577 $ 20,829 $ 33,577 $ 11,158 commitments,beginning ofperiod ^(1)

Impact ofASU 2016-13 - - - - 10,457 adoption

(Reversalof)provisionfor credit (b) (6,229 ) (1,048 ) 8,143 (7,277 ) 7,357 losses onunfundedcreditcommitments

Allowancefor unfundedcredit $ 26,300 $ 32,529 $ 28,972 $ 26,300 $ 28,972 commitments,end ofperiod ^(1)



Provision (a)for credit + $ (15,000 ) $ - $ 102,443 $ (15,000 ) $ 176,313 losses (b)



(1)

Included in Accrued expense and other liabilities on the Consolidated Balance Sheet.

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

EAST WEST BANCORP, INC. AND SUBSIDIARIES

CRITICIZED LOANS, NONPERFORMING ASSETS AND CREDIT QUALITY RATIOS

($ in thousands)

(unaudited)

Table 11

Criticized Loans

June 30, 2021

March 31, 2021

June 30, 2020

Special mention loans

386,807

504,226

575,870

Classified loans

645,180

712,693

683,744

Total criticized loans

$

1,031,987

$

1,216,919

$

1,259,614

Nonperforming Assets

June 30, 2021

March 31, 2021

June 30, 2020

Nonaccrual loans:

Commercial:

C&I

$

83,225

$

125,536

$

84,823

Total CRE

81,573

74,727

57,351

Consumer:

Total residential mortgage

30,489

29,173

34,138

Other consumer

2,503

2,526

2,508

Total nonaccrual loans

197,790

231,962

178,820

Other real estate owned, net

14,914

15,824

19,504

Other nonperforming assets

13,025

10,360

3,890

Total nonperforming assets

$

225,729

$

258,146

$

202,214

Credit Quality Ratios

June 30, 2021

March 31, 2021

June 30, 2020

Annualized quarterly net charge-offs to average loans HFI

0.13

%

0.14

%

0.21

%

Special mention loans to loans HFI

0.97

%

1.27

%

1.55

%

Classified loans to loans HFI

1.61

%

1.80

%

1.84

%

Criticized loans to loans HFI

2.58

%

3.07

%

3.38

%

Nonperforming assets to total assets

0.38

%

0.45

%

0.41

%

Nonaccrual loans to loans HFI

0.49

%

0.59

%

0.48

%

Allowance for loan losses to loans HFI

1.46

%

1.53

%

1.70

%

EAST WEST BANCORP, INC. AND SUBSIDIARIES

CRITICIZED LOANS, NONPERFORMING ASSETS AND CREDIT QUALITY RATIOS

($ in thousands)

(unaudited)

Table 11



Criticized Loans June 30, 2021 March 31, June 30, 2020 2021

Special mention loans 386,807 504,226 575,870

Classified loans 645,180 712,693 683,744

Total criticized loans $ 1,031,987 $ 1,216,919 $ 1,259,614







Nonperforming Assets^ June 30, 2021 March 31, June 30, 2020 2021

Nonaccrual loans:

Commercial:

C&I $ 83,225 $ 125,536 $ 84,823

Total CRE 81,573 74,727 57,351

Consumer:

Total residential mortgage 30,489 29,173 34,138

Other consumer 2,503 2,526 2,508

Total nonaccrual loans 197,790 231,962 178,820

Other real estate owned, net 14,914 15,824 19,504

Other nonperforming assets 13,025 10,360 3,890

Total nonperforming assets $ 225,729 $ 258,146 $ 202,214







Credit Quality Ratios June 30, 2021 March 31, June 30, 2020 2021

Annualized quarterly netcharge-offs to average loans 0.13 % 0.14 % 0.21 %HFI

Special mention loans to loans 0.97 % 1.27 % 1.55 %HFI

Classified loans to loans HFI 1.61 % 1.80 % 1.84 %

Criticized loans to loans HFI 2.58 % 3.07 % 3.38 %

Nonperforming assets to total 0.38 % 0.45 % 0.41 %assets

Nonaccrual loans to loans HFI 0.49 % 0.59 % 0.48 %

Allowance for loan losses to 1.46 % 1.53 % 1.70 %loans HFI



EAST WEST BANCORP, INC. AND SUBSIDIARIES

GAAP TO NON-GAAP RECONCILIATION

($ in thousands)

(unaudited)

Table 12

Adjusted efficiency ratio represents adjusted noninterest expense divided by revenue. Adjusted pre-tax, pre-provision profitability ratio represents revenue less adjusted noninterest expense, divided by average total assets. Adjusted noninterest expense excludes the amortization of tax credit and other investments, the amortization of core deposit intangibles and the extinguishment cost on repurchase agreement. 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

June 30, 2021

March 31, 2021

June 30, 2020

Net interest income before provision for credit losses

(a)

$

376,473

$

353,695

$

343,775

Total noninterest income (1)

68,431

72,866

55,707

Total revenue

(b)

$

444,904

$

426,561

$

399,482

Total noninterest expense (1)

(c)

$

189,523

$

191,077

$

184,766

Less: Amortization of tax credit and other investments (1)

(27,291

)

(25,358

)

(21,829

)

Amortization of core deposit intangibles

(710

)

(732

)

(931

)

Repurchase agreements' extinguishment cost

-

-

(8,740

)

Adjusted noninterest expense

(d)

$

161,522

$

164,987

$

153,266

Efficiency ratio

(c)/(b)

42.60

%

44.79

%

46.25

%

Adjusted efficiency ratio

(d)/(b)

36.30

%

38.68

%

38.37

%

Adjusted pre-tax, pre-provision income

(b)-(d) = (e)

$

283,382

$

261,574

$

246,216

Average total assets

(f)

$

57,771,837

$

55,594,283

$

48,228,914

Adjusted pre-tax, pre-provision profitability ratio (2)

(e)/(f)

1.97

%

1.91

%

2.05

%

Adjusted noninterest expense/average assets (2)

(d)/(f)

1.12

%

1.20

%

1.28

%

Six Months Ended

June 30, 2021

June 30, 2020

Net interest income before provision for credit losses

(g)

$

730,168

$

706,482

Total noninterest income (1)

141,297

111,213

Total revenue

(h)

871,465

817,695

Total noninterest expense (1)

(i)

$

380,600

$

365,099

Less: Amortization of tax credit and other investments (1)

(52,649

)

(40,611

)

Amortization of core deposit intangibles

(1,442

)

(1,884

)

Repurchase agreements' extinguishment cost

-

(8,740

)

Adjusted noninterest expense

(j)

$

326,509

$

313,864

Efficiency ratio

(i)/(h)

43.67

%

44.65

%

Adjusted efficiency ratio

(j)/(h)

37.47

%

38.38

%

Adjusted pre-tax, pre-provision income

(h)-(j) = (k)

$

544,956

$

503,831

Average total assets

(l)

$

56,689,075

$

46,492,211

Adjusted pre-tax, pre-provision profitability ratio (2)

(k)/(l)

1.94

%

2.18

%

Adjusted noninterest expense/average assets (2)

(j)/(l)

1.16

%

1.36

%

EAST WEST BANCORP, INC. AND SUBSIDIARIES

GAAP TO NON-GAAP RECONCILIATION

($ in thousands)

(unaudited)

Table 12

Adjusted efficiency ratio represents adjusted noninterest expense divided byrevenue. Adjusted pre-tax, pre-provision profitability ratio represents revenueless adjusted noninterest expense, divided by average total assets. Adjustednoninterest expense excludes the amortization of tax credit and otherinvestments, the amortization of core deposit intangibles and theextinguishment cost on repurchase agreement. Management believes that themeasures and ratios presented below provide clarity to financial statementusers regarding the ongoing performance of the Company and allow comparabilityto prior periods.



Three Months Ended

June 30, 2021 March 31, 2021 June 30, 2020

Net interest incomebefore provision for (a) $ 376,473 $ 353,695 $ 343,775 credit losses

Total noninterest 68,431 72,866 55,707 income ^(1)

Total revenue (b) $ 444,904 $ 426,561 $ 399,482



Total noninterest (c) $ 189,523 $ 191,077 $ 184,766 expense ^(1)

Less: Amortization oftax credit and other (27,291 ) (25,358 ) (21,829 )investments ^(1)

Amortization of core (710 ) (732 ) (931 )deposit intangibles

Repurchaseagreements' - - (8,740 )extinguishment cost

Adjusted noninterest (d) $ 161,522 $ 164,987 $ 153,266 expense

Efficiency ratio (c)/ 42.60 % 44.79 % 46.25 % (b)

Adjusted efficiency (d)/ 36.30 % 38.68 % 38.37 %ratio (b)

(b)-Adjusted pre-tax, (d) $ 283,382 $ 261,574 $ 246,216 pre-provision income = (e)

Average total assets (f) $ 57,771,837 $ 55,594,283 $ 48,228,914

Adjusted pre-tax,pre-provision (e)/ 1.97 % 1.91 % 2.05 %profitability ratio ^ (f)(2)

Adjusted noninterest (d)/expense/average (f) 1.12 % 1.20 % 1.28 %assets ^(2)





Six Months Ended

June 30, 2021 June 30, 2020

Net interest incomebefore provision for (g) $ 730,168 $ 706,482 credit losses

Total noninterest 141,297 111,213 income ^(1)

Total revenue (h) 871,465 817,695



Total noninterest (i) $ 380,600 $ 365,099 expense^ (1)

Less: Amortization oftax credit and other (52,649 ) (40,611 ) investments^ (1)

Amortization of core (1,442 ) (1,884 ) deposit intangibles

Repurchaseagreements' - (8,740 ) extinguishment cost

Adjusted noninterest (j) $ 326,509 $ 313,864 expense

Efficiency ratio (i)/ 43.67 % 44.65 % (h)

Adjusted efficiency (j)/ 37.47 % 38.38 % ratio (h)

(h)-Adjusted pre-tax, (j) $ 544,956 $ 503,831 pre-provision income = (k)

Average total assets (l) $ 56,689,075 $ 46,492,211

Adjusted pre-tax,pre-provision (k)/ 1.94 % 2.18 % profitability ratio ^ (l)(2)

Adjusted noninterest (j)/expense/average (l) 1.16 % 1.36 % assets ^(2)



(1)

In the fourth quarter of 2020, the Company reclassified certain income/losses from equity-method investments from Amortization of tax credit and other investments to Other investment income, with no effect on net income. Prior-period amounts have been revised to conform with the current presentation.

(2)

Annualized.

In the fourth quarter of 2020, the Company reclassified certain income/ losses from equity-method investments from Amortization of tax credit and(1) other investments to Other investment income, with no effect on net income. Prior-period amounts have been revised to conform with the current presentation.

(2) Annualized.

EAST WEST BANCORP, INC. AND SUBSIDIARIES

GAAP TO NON-GAAP RECONCILIATION

($ in thousands)

(unaudited)

Table 13

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 financial measures. Tangible equity 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.

June 30, 2021

March 31, 2021

June 30, 2020

Stockholders' equity

(a)

$

5,547,548

$

5,285,027

$

4,987,243

Less: Goodwill

(465,697

)

(465,697

)

(465,697

)

Other intangible assets (1)

(10,309

)

(11,151

)

(13,490

)

Tangible equity

(b)

$

5,071,542

$

4,808,179

$

4,508,056

Total assets

(c)

$

59,854,876

$

56,874,146

$

49,407,593

Less: Goodwill

(465,697

)

(465,697

)

(465,697

)

Other intangible assets (1)

(10,309

)

(11,151

)

(13,490

)

Tangible assets

(d)

$

59,378,870

$

56,397,298

$

48,928,406

Total stockholders' equity to total assets ratio

(a)/(c)

9.27

%

9.29

%

10.09

%

Tangible equity to tangible assets ratio

(b)/(d)

8.54

%

8.53

%

9.21

%

EAST WEST BANCORP, INC. AND SUBSIDIARIES

GAAP TO NON-GAAP RECONCILIATION

($ in thousands)

(unaudited)

Table 13

The Company uses certain non-GAAP financial measures to provide supplementalinformation regarding the Company's performance. Tangible equity and tangibleequity to tangible assets ratio are non-GAAP financial measures. Tangibleequity 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 bankingindustry, and such measures and ratios are used by banking regulators andanalysts, the Company has included them below for discussion.



June 30, 2021 March 31, 2021 June 30, 2020

Stockholders' equity (a) $ 5,547,548 $ 5,285,027 $ 4,987,243

Less: Goodwill (465,697 ) (465,697 ) (465,697 )

Other intangible (10,309 ) (11,151 ) (13,490 )assets ^(1)

Tangible equity (b) $ 5,071,542 $ 4,808,179 $ 4,508,056



Total assets (c) $ 59,854,876 $ 56,874,146 $ 49,407,593

Less: Goodwill (465,697 ) (465,697 ) (465,697 )

Other intangible (10,309 ) (11,151 ) (13,490 )assets ^(1)

Tangible assets (d) $ 59,378,870 $ 56,397,298 $ 48,928,406

Total stockholders' (a)equity to total assets / 9.27 % 9.29 % 10.09 %ratio (c)

Tangible equity to (b)tangible assets ratio / 8.54 % 8.53 % 9.21 % (d)



Return on average tangible equity represents tangible net income divided by average tangible equity. Tangible net income excludes the after-tax impacts of the amortization of core deposit intangibles and mortgage servicing 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.

Three Months Ended

Six Months Ended

June 30, 2021

March 31, 2021

June 30, 2020

June 30, 2021

June 30, 2020

Net Income

$

224,742

$

204,994

$

99,352

$

429,736

$

244,176

Add: Amortization of core deposit intangibles

710

732

931

1,442

1,884

Amortization of mortgage servicing assets

420

414

458

834

1,042

Tax effect of amortization adjustments (2)

(321

)

(325

)

(394

)

(646

)

(830

)

Tangible net income

(e)

$

225,551

$

205,815

$

100,347

$

431,366

$

246,272

Average stockholders' equity

$

5,425,952

$

5,338,098

$

4,982,446

$

5,382,267

$

5,002,226

Less: Average goodwill

(465,697

)

(465,697

)

(465,697

)

(465,697

)

(465,697

)

Average other intangible assets (1)

(10,827

)

(11,594

)

(14,247

)

(11,209

)

(14,918

)

Average tangible equity

(f)

$

4,949,428

$

4,860,807

$

4,502,502

$

4,905,361

$

4,521,611

Return on average tangible equity (3)

(e)/(f)

18.28

%

17.17

%

8.96

%

17.73

%

10.95

%

Return on average tangible equity represents tangible net income divided byaverage tangible equity. Tangible net income excludes the after-tax impacts ofthe amortization of core deposit intangibles and mortgage servicing assets.Given that the use of such measures and ratios is more prevalent in the bankingindustry, and such measures and ratios are used by banking regulators andanalysts, the Company has included them below for discussion.



Three Months Ended Six Months Ended

June 30, 2021 March 31, June 30, 2020 June 30, 2021 June 30, 2020 2021

Net Income $ 224,742 $ 204,994 $ 99,352 $ 429,736 $ 244,176

Add:Amortizationof core 710 732 931 1,442 1,884 depositintangibles

Amortizationof mortgage 420 414 458 834 1,042 servicingassets

Tax effect ofamortization (321 ) (325 ) (394 ) (646 ) (830 )adjustments ^(2)

Tangible net (e) $ 225,551 $ 205,815 $ 100,347 $ 431,366 $ 246,272 income



Averagestockholders' $ 5,425,952 $ 5,338,098 $ 4,982,446 $ 5,382,267 $ 5,002,226 equity

Less: Average (465,697 ) (465,697 ) (465,697 ) (465,697 ) (465,697 )goodwill

Average otherintangible (10,827 ) (11,594 ) (14,247 ) (11,209 ) (14,918 )assets ^(1)

Averagetangible (f) $ 4,949,428 $ 4,860,807 $ 4,502,502 $ 4,905,361 $ 4,521,611 equity

Return on (e)average / 18.28 % 17.17 % 8.96 % 17.73 % 10.95 %tangible (f)equity ^(3)



(1)

Includes core deposit intangibles and mortgage servicing assets.

(2)

Applied statutory tax rate of 28.37% for the three and six months ended June 30, 2021, and the three months ended March 31, 2021. Applied statutory tax rate of 28.35% for the three and six months ended June 30, 2020.

(3)

Annualized.

(1) Includes core deposit intangibles and mortgage servicing assets.

Applied statutory tax rate of 28.37% for the three and six months ended(2) June 30, 2021, and the three months ended March 31, 2021. Applied statutory tax rate of 28.35% for the three and six months ended June 30, 2020.

(3) Annualized.

EAST WEST BANCORP, INC. AND SUBSIDIARIES

GAAP TO NON-GAAP RECONCILIATION

($ in thousands)

(unaudited)

Table 14

In April 2020, the Company started accepting applications under the PPP administered by the Small Business Administration ("SBA") under the Coronavirus Aid, Relief, and Economic Security Act and began to originate loans to qualified small businesses. In January 2021, the Company began processing applications under the second round of the SBA's PPP in response to the Consolidated Appropriations Act, 2021 signed by the President on December 27, 2020. The PPP ended on May 31, 2021.

These loans are included in the Company's C&I portfolio, have an interest rate of one percent and are 100% guaranteed by the SBA. Loan processing fees paid to the Company from the SBA are accounted for as loan origination fees, where net deferred fees are recognized on a straight line basis over the estimated life of the loan as a yield adjustment on the loans. If a loan is paid off or forgiven by the SBA prior to its projected estimated life, the remaining unamortized deferred fees will be recognized as interest income in that period. The Company drew down $1.44 billion from the PPPLF during the second quarter of 2020. The remaining balance of $1.43 billion as of September 2020 was repaid in full during the fourth quarter of 2020.

Adjusted loan yield and adjusted net interest margin for the three months ended June 30, 2021, March 31, 2021 and June 30, 2020, and six months ended June 30, 2021 and 2020 exclude the impact of PPP loans. Net interest margin for the three and six months ended June 30, 2020 has also been adjusted for advances from the PPPLF. Management believes that presenting the adjusted average loan yield and adjusted net interest margin provide comparability to prior periods and these non-GAAP financial measures provide supplemental information regarding the Company's performance.

Three Months Ended

Six Months Ended

Yield on Average Loans

June 30, 2021

March 31, 2021

June 30, 2020

June 30, 2021

June 30, 2020

Interest income on loans

(a)

$

352,453

$

342,008

$

367,393

$

694,461

$

779,262

Less: Interest income on PPP loans

(15,377

)

(15,017

)

(21,289

)

(30,394

)

(21,289

)

Adjusted interest income on loans

(b)

$

337,076

$

326,991

$

346,104

$

664,067

$

757,973

Average loans

(c)

$

39,622,270

$

38,729,307

$

37,141,773

$

39,178,255

$

36,147,871

Less: Average PPP loans

(1,870,385

)

(1,931,071

)

(1,465,013

)

(1,900,560

)

(732,506

)

Adjusted average loans

(d)

$

37,751,885

$

36,798,236

$

35,676,760

$

37,277,695

$

35,415,365

Average loan yield (1)

(a)/(c)

3.57

%

3.58

%

3.98

%

(1

)

3.57

%

4.34

%

Adjusted average loan yield (1)

(b)/(d)

3.58

%

3.60

%

3.90

%

(1

)

3.59

%

4.30

%

Net Interest Margin

Net interest income

(e)

$

376,473

$

353,695

$

343,775

$

730,168

$

706,482

Less: Interest income on PPP loans

(15,377

)

(15,017

)

(21,289

)

(30,394

)

(21,289

)

Add: Interest expense on advances from the PPPLF

-

-

463

-

463

Adjusted net interest income

(f)

$

361,096

$

338,678

$

322,949

$

699,774

$

685,656

Average interest-earning assets

(g)

$

54,901,209

$

52,852,045

$

45,413,242

$

53,882,288

$

43,887,886

Less: Average PPP loans

(1,870,385

)

(1,931,071

)

(1,465,013

)

(1,900,560

)

(732,506

)

Adjusted average interest-earning assets

(h)

$

53,030,824

$

50,920,974

$

43,948,229

$

51,981,728

$

43,155,380

Net interest margin (1)

(e)/(g)

2.75

%

2.71

%

3.04

%

(1

)

2.73

%

3.24

%

Adjusted net interest margin (1)

(f)/(h)

2.73

%

2.70

%

2.96

%

(1

)

2.71

%

3.20

%

EAST WEST BANCORP, INC. AND SUBSIDIARIES

GAAP TO NON-GAAP RECONCILIATION

($ in thousands)

(unaudited)

Table 14

In April 2020, the Company started accepting applications under the PPPadministered by the Small Business Administration ("SBA") under the CoronavirusAid, Relief, and Economic Security Act and began to originate loans toqualified small businesses. In January 2021, the Company began processingapplications under the second round of the SBA's PPP in response to theConsolidated Appropriations Act, 2021 signed by the President on December 27,2020. The PPP ended on May 31, 2021.



These loans are included in the Company's C&I portfolio, have an interest rateof one percent and are 100% guaranteed by the SBA. Loan processing fees paid tothe Company from the SBA are accounted for as loan origination fees, where netdeferred fees are recognized on a straight line basis over the estimated lifeof the loan as a yield adjustment on the loans. If a loan is paid off orforgiven by the SBA prior to its projected estimated life, the remainingunamortized deferred fees will be recognized as interest income in that period.The Company drew down $1.44 billion from the PPPLF during the second quarter of2020. The remaining balance of $1.43 billion as of September 2020 was repaid infull during the fourth quarter of 2020.



Adjusted loan yield and adjusted net interest margin for the three months endedJune 30, 2021, March 31, 2021 and June 30, 2020, and six months ended June 30,2021 and 2020 exclude the impact of PPP loans. Net interest margin for thethree and six months ended June 30, 2020 has also been adjusted for advancesfrom the PPPLF. Management believes that presenting the adjusted average loanyield and adjusted net interest margin provide comparability to prior periodsand these non-GAAP financial measures provide supplemental informationregarding the Company's performance.



Three Months Ended Six Months Ended Yield on Average June 30, 2021 March 31, 2021 June 30, 2020 June 30, 2021 June 30, 2020Loans

Interest income (a) $ 352,453 $ 342,008 $ 367,393 $ 694,461 $ 779,262 on loans

Less: Interestincome on PPP (15,377 ) (15,017 ) (21,289 ) (30,394 ) (21,289 )loans

Adjustedinterest income (b) $ 337,076 $ 326,991 $ 346,104 $ 664,067 $ 757,973 on loans



Average loans (c) $ 39,622,270 $ 38,729,307 $ 37,141,773 $ 39,178,255 $ 36,147,871

Less: Average (1,870,385 ) (1,931,071 ) (1,465,013 ) (1,900,560 ) (732,506 )PPP loans

Adjusted average (d) $ 37,751,885 $ 36,798,236 $ 35,676,760 $ 37,277,695 $ 35,415,365 loans



Average loan (a) ^yield ^(1) / 3.57 % 3.58 % 3.98 % (1 ^) 3.57 % 4.34 % (c)

Adjusted average (b) ^loan yield ^(1) / 3.58 % 3.60 % 3.90 % (1 ^) 3.59 % 4.30 % (d)



Net Interest Margin

Net interest (e) $ 376,473 $ 353,695 $ 343,775 $ 730,168 $ 706,482 income

Less: Interestincome on PPP (15,377 ) (15,017 ) (21,289 ) (30,394 ) (21,289 )loans

Add: Interestexpense on - - 463 - 463 advances fromthe PPPLF

Adjusted net (f) $ 361,096 $ 338,678 $ 322,949 $ 699,774 $ 685,656 interest income



Averageinterest-earning (g) $ 54,901,209 $ 52,852,045 $ 45,413,242 $ 53,882,288 $ 43,887,886 assets

Less: Average (1,870,385 ) (1,931,071 ) (1,465,013 ) (1,900,560 ) (732,506 )PPP loans

Adjusted averageinterest-earning (h) $ 53,030,824 $ 50,920,974 $ 43,948,229 $ 51,981,728 $ 43,155,380 assets



Net interest (e) ^margin ^(1) / 2.75 % 2.71 % 3.04 % (1 ^) 2.73 % 3.24 % (g)

Adjusted net (f) ^interest margin / 2.73 % 2.70 % 2.96 % (1 ^) 2.71 % 3.20 %^(1) (h)



(1)

Annualized.

View source version on businesswire.com: https://www.businesswire.com/news/home/20210722005257/en/

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

CONTACT: Julianna Balicka Director of Investor Relations and Corporate Finance T: (626) 768-6985 E: julianna.balicka@eastwestbank.com