Business Wire | Jul 23, 2020 08:00AM EDT

East West Bancorp Reports Net Income for Second Quarter 2020 of $99.4 Million and Diluted Earnings Per Share Of $0.70

Jul. 23, 2020

PASADENA, Calif.--(BUSINESS WIRE)--Jul. 23, 2020--East West Bancorp, Inc. ("East West" or the "Company") (Nasdaq: EWBC), parent company of East West Bank, the financial bridge between the United States and Greater China, today reported its financial results for the second quarter of 2020. For the second quarter of 2020, net income was $99.4 million or $0.70 per diluted share. Second quarter 2020 return on average assets was 0.83% and return on average equity was 8.02%.

"East West is steadfast in its commitment to support our existing and new customers and the communities we operate in. Despite the challenges presented by adapting to the COVID-19 pandemic, total loans grew $1.3 billion, or 15% annualized, to a record $37.2 billion as of June 30, 2020 from $35.9 billion as of March 31, 2020," stated Dominic Ng, Chairman and Chief Executive Officer of East West.

"During the second quarter, East West funded $1.8 billion of Paycheck Protection Program loans for over 7,200 customers. In addition, residential mortgage loans grew by 12% annualized and total commercial real estate loans grew by 9% annualized. This well-balanced loan growth demonstrates the strength of East West's business model and our ability to generate responsible and attractive growth, even under difficult economic conditions."

"Total deposits grew $2.0 billion, or 21% annualized, to a record $40.7 billion as of June 30, 2020 from $38.7 billion as of March 31, 2020," continued Ng. "Second quarter 2020 deposit growth was driven by strong growth in noninterest-bearing demand and in low-cost money market deposits. Further, we proactively reduced higher-cost deposit balances. Overall, the average cost of deposits declined by 35 basis points quarter-over-quarter."

"East West's adjusted1 pre-tax, pre-provision profitability ratio remained strong at over 2% for the second quarter of 2020, despite the very low interest rate environment. During the quarter, we further strengthened our allowance for loan losses coverage to 1.70% of our loan portfolio, to reflect a more adverse macroeconomic outlook," added Ng.

"We added to our already substantial levels of liquidity by participating in the Paycheck Protection Program Liquidity Facility, bolstering our balance sheet capacity to serve our customers. Quarter-over-quarter, our capital increased and our high capital ratios position us in a place of strength," concluded Ng. "I wish to thank all of our associates for all of their hard work, dedication and adaptability in serving our customers in these unprecedented and challenging times."

SUMMARY OF THE QUARTER

* Second Quarter Earnings - Second quarter 2020 net income was $99.4 million and diluted earnings per share ("EPS") were $0.70, compared to first quarter 2020 net income of $144.8 million and diluted EPS of $1.00.

* Record Loans - Total loans of $37.2 billion as of June 30, 2020 increased by $1.3 billion, or 15% annualized, from $35.9 billion as of March 31, 2020. As of June 30, 2020, Paycheck Protection Program ("PPP") loans were $1.7 billion. Second quarter 2020 average loans of $37.1 billion grew $2.0 billion, or 23% linked quarter annualized. Loan growth during the quarter came from each of East West's major loan portfolios, with the strongest growth from commercial and industrial ("C&I"), driven by PPP loan growth. Commercial real estate and residential mortgage loans contributed to the growth during the quarter as well.

* Record Deposits - Total deposits of $40.7 billion as of June 30, 2020 increased by $2.0 billion, or 21% annualized, from $38.7 billion as of March 31, 2020. Second quarter 2020 average deposits of $39.9 billion grew $2.4 billion, or 26% linked quarter annualized, primarily driven by growth in noninterest-bearing demand accounts. Average non-interest bearing deposits increased to 34% of total deposits in the second quarter, up from 30% in the first quarter of 2020. Deposit growth in the second quarter was attributable to strong growth from consumer and small business commercial customers, as well as to PPP funds held in deposit accounts, partially offset by the intentional run-off of higher-cost balances.

* Balance Sheet Management - During the second quarter of 2020, the Company participated in the PPP Liquidity Facility ("PPPLF"), adding $1.4 billion to low-cost funding at a rate of 35 basis points. Also during the second quarter, East West prepaid $150.0 million of repurchase agreements and incurred a debt extinguishment cost of $8.7 million.

* Net Interest Income and Net Interest Margin - Second quarter 2020 net interest income ("NII") was $343.8 million, a decrease of $18.9 million or 5% from first quarter 2020 NII of $362.7 million. Second quarter 2020 net interest margin ("NIM") was 3.04%, a 40 basis point compression from 3.44% in the first quarter of 2020. The changes in the NII and in the NIM reflect the quarter-over-quarter drop in the average Prime and LIBOR interest rates.

* Noninterest Expense and Efficiency Ratio - Second quarter 2020 noninterest expense totaled $187.7 million, including $153.3 million of adjusted2 noninterest expense. Adjusted noninterest expense of $153.3 million decreased by $7.3 million, or 5%, from $160.6 million in the first quarter of 2020. Correspondingly, the adjusted2 efficiency ratio was 38.1% in the second quarter, compared to 38.5% in the first quarter.

* Asset Quality Metrics - The allowance for loan losses ("ALLL") totaled $632.1 million, or 1.70% of loans held-for-investment ("HFI"), as of June 30, 2020, compared to $557.0 million, or 1.55% of loans HFI, as of March 31, 2020. Second quarter 2020 provision for credit losses was $102.4 million, compared to $ 73.9 million for the first quarter of 2020. Second quarter 2020 net charge-offs were $19.2 million, or annualized 0.21% of average loans HFI, compared to annualized 0.01% of average loans HFI in the first quarter of 2020. Nonperforming assets were $202.2 million, or 0.41% of total assets, as of June 30, 2020, compared to 0.33% of total assets as of March 31, 2020.

* Capital Levels - Capital levels for East West are strong. As of June 30, 2020, stockholders' equity was $5.0 billion, or $35.25 per share. Tangible equity3 per common share was $31.86 as of June 30, 2020, an increase of 2% from $31.27 as of March 31, 2020. As of June 30, 2020, the tangible equity to tangible assets ratio3 was 9.2%, the common equity tier 1 ("CET1") capital ratio was 12.7%, and the total risk-based capital ratio was 14.4%.

OPERATING RESULTS

Second Quarter 2020 Compared to First Quarter 2020

Net Interest Income and Net Interest Margin

Net interest income totaled $343.8 million, a decrease of 5% from $362.7 million. Net interest margin of 3.04% decreased by 40 basis points from 3.44%.

* Interest and fees earned on PPP loans contributed $21.3 million to interest income, and interest expense paid on the related PPPLF was $0.5 million. * Average interest-earning assets of $45.4 billion grew $3.1 billion, or 29% linked quarter annualized. Average loan growth of $2.0 billion, or 23% linked quarter annualized, was mainly due to growth from PPP loans. The average balance of PPP loans was $1.5 billion in the second quarter of 2020. * Average interest-bearing deposits were essentially flat at $26.4 billion. Average noninterest-bearing deposits of $13.5 billion grew $2.4 billion, or 87% linked quarter annualized. The average balance of the PPPLF, classified as long-term debt, was $530.3 million. * The average loan yield contracted by 73 basis points to 3.98%, down from 4.71%, reflecting materially lower interest rates during the second quarter. * The yield on average interest-earning assets contracted by 73 basis points to 3.53%, down from 4.26%. * The average cost of interest-bearing deposits decreased by 46 basis points to 0.71%, down from 1.17%. The average cost of deposits decreased by 35 basis points to 0.47%, down from 0.82%.

Noninterest Income

Noninterest income totaled $58.6 million, an 8% increase from $54.0 million.

* Gains on sales of available-for-sale debt securities were $9.6 million, driven by $131.6 million in sales of municipal bonds during the second quarter. * Lending fees of $21.9 million increased by $6.2 million, primarily reflecting an increase in the valuation of warrants received as part of lending relationships. * The largest linked-quarter decreases in noninterest income were a $3.3 million decrease in foreign exchange income and a $2.3 million decrease in wealth management fees, both reflecting a decrease in customer-driven transactions during the second quarter.

Noninterest Expense

Noninterest expense totaled $187.7 million, a 5% increase from $178.9 million.

* Second quarter noninterest expense consisted of $153.3 million of adjusted noninterest expense, $24.8 million in amortization of tax credit and other investments, $8.7 million of debt extinguishment cost, and $0.9 million in amortization of core deposit intangibles. * During the second quarter, the Company prepaid $150.0 million of repurchase agreements and incurred a debt extinguishment cost of $8.7 million. * Adjusted noninterest expense of $153.3 million decreased by $7.3 million, or 5%, from $160.6 million. The largest linked-quarter change was a $5.0 million decrease in compensation and employee benefits expense, followed by a $1.9 million decrease in other operating expenses and a $1.7 million decrease in legal expense. * The adjusted efficiency ratio was 38.1% in the second quarter, compared to 38.5% in the first quarter.

TAX RELATED ITEMS

Second quarter 2020 income tax expense was $12.9 million and the effective tax rate was 12%, compared to income tax expense of $19.2 million and an effective tax rate of 12% for the first quarter of 2020.

ASSET QUALITY

The allowance for loan losses totaled $632.1 million, or 1.70% of loans HFI, as of June 30, 2020, compared to $557.0 million, or 1.55% of loans HFI, as of March 31, 2020.

* Second quarter 2020 provision for credit losses was $102.4 million, compared to $73.9 million for the first quarter of 2020, and $19.2 million for the second quarter of 2019. Second quarter 2020 provision for credit losses was primarily driven by a more adverse macroeconomic forecast as of June 30, 2020, relative to March 31, 2020, as well as loan risk rating downgrades. * Second quarter 2020 net charge-offs were $19.2 million, or annualized 0.21% of average loans HFI, compared to first quarter 2020 net charge-offs of $0.9 million, or annualized 0.01% of average loans HFI, and net charge-offs of $7.6 million, or annualized 0.09% of average loans HFI, for the second quarter of 2019. Second quarter 2020 net charge-offs were largely from loans in the oil and gas industry. * Nonperforming assets were $202.2 million, or 0.41% of total assets, as of June 30, 2020, compared to nonperforming assets of $150.9 million, or 0.33% of total assets, as of March 31, 2020, and $119.3 million, or 0.28% of total assets, as of June 30, 2019. The increase in nonperforming assets was largely due to inflows to nonaccrual status of oil and gas and commercial real estate loans, partially offset by pay-offs and charge-offs of C&I loans.

CAPITAL STRENGTH

Capital levels for East West are strong. The following table presents the regulatory capital ratios as of June 30, 2020, March 31, 2020, and June 30, 2019.

EWBCRegulatory Basel III CapitalMetrics

Minimum June 30, March 31, June 30, Minimum Well Capital($ in 2020 ^(a) 2020^(a) 2019 Capital Capitalized Ratio +millions) Ratio Ratio Conservation Buffer ^(b)

Risk-BasedCapital Ratios:

CET1 capital 12.7 % 12.4 % 12.5 % 4.5 % 6.5 % 7.0 %ratio

Tier 1 12.7 % 12.4 % 12.5 % 6.0 % 8.0 % 8.5 %capital ratio

Total capital 14.4 % 13.9 % 13.9 % 8.0 % 10.0 % 10.5 %ratio

Leverage 9.7 % 10.2 % 10.4 % 4.0 % 5.0 % 4.0 %ratio

Risk-WeightedAssets $ 36,199 $ 36,548 $ 34,154 N/A N/A N/A ("RWA") ^(c)



N/A Not applicable.

The Company has elected to use the 2020 CECL transition provision in the(a) calculation of its June 30, 2020 and March 31, 2020 regulatory capital ratios. The Company's June 30, 2020 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 2020 dividends for the Company's common stock. The common stock cash dividend of $0.275 per share is payable on August 17, 2020 to shareholders of record on August 4, 2020.

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 2020 under this authorization.

Conference Call

East West will host a conference call to discuss second quarter 2020 earnings with the public on Thursday, July 23, 2020 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 2020 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 23, 2020 at 11:30 a.m. Pacific Time through August 23, 2020. 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: 10145315.

About East West

East West Bancorp, Inc. is a publicly owned company with total assets of $49.4 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 125 locations in the United States and Greater China. U.S. markets include California, Georgia, Massachusetts, Nevada, New York, Texas and Washington. In Greater 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) constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, including forward-looking statements relating to our current business plans and expectations regarding future operating results. Forward-looking statements may include, but are not limited to, the use of forward-looking language, such as "likely result in," "expects," "anticipates," "estimates," "forecasts," "projects," "intends to," "assumes," or may include other similar words or phrases, such as "believes," "plans," "trend," "objective," "continues," "remains," or similar expressions, or future or conditional verbs, such as "will," "would," "should," "could," "may," "might," "can," or similar verbs, and the negative thereof. These forward-looking statements are subject to risks and uncertainties that could cause actual results, performance or achievements to differ materially from those projected. These risks and uncertainties, some of which are beyond our control, include, but are not limited to,the impact of disease pandemics, such as the worldwide spread of COVID-19, on us, our operations and our customers and employees; and the measures that international, federal, state and local governments, agencies, law enforcement and/or health authorities implement to address it, which may precipitate or exacerbate one or more of the below-mentioned and/or other risks, and significantly disrupt or prevent us from operating its business in the ordinary course for an extended period; changes in governmental policy and regulation, including measures taken in response to economic, business, political and social conditions, such as the Small Business Administration's Payment Protection Program, the Board of Governors of the Federal Reserve Board System's (the "Federal Reserve") efforts to provide liquidity to the U.S. financial system, including changes in government interest rate policies, and to provide credit to private commercial and municipal borrowers, and other program designed to address the effects of the COVID-19 pandemic, as well as the resulting effect of all such items on our operations, liquidity and capital position, and on the financial condition of our borrowers and other customers; changes in the U.S. economy, including an economic slowdowns or recession, inflation, deflation, employment levels, rate of growth and general business conditions; the changes and effects thereof in trade, monetary and fiscal policies and laws, including the ongoing trade dispute between the United States ("U.S.") and the People's Republic of China; fluctuations in our stock price; changes in income tax laws and regulations; our ability to compete effectively against other financial institutions in our banking markets; success and timing of our business strategies; our ability to retain key officers and employees; impact on our funding costs, net interest income and net interest margin from changes in key variable market interest rates, competition, regulatory requirements and our product mix; changes in our costs of operation, compliance and expansion; our ability to adopt and successfully integrate new technologies into our business in a strategic manner; impact of benchmark interest rate reform in the U.S. that resulted in the Secured Overnight Financing Rate selected as the preferred alternative reference rate to the London Interbank Offered Rate; impact of failure in, or breach of, our operational or security systems or infrastructure, or those of third parties with whom we do 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; adequacy of our risk management framework, disclosure controls and procedures and internal control over financial reporting; future credit quality and performance, including our expectations regarding future credit losses and allowance levels; impact of adverse changes to our credit ratings from major credit rating agencies; impact of adverse judgments or settlements in litigation; changes in the commercial and consumer real estate markets; changes in consumer spending and savings habits; impact on our 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; 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 U.S. Securities and Exchange Commission, the Consumer Financial Protection Bureau and the California Department of Business Oversight - Division of Financial Institutions; impact of the Dodd-Frank Wall Street Reform and Consumer Protection Act on our business, business practices, cost of operations and executive compensation; heightened regulatory and governmental oversight and scrutiny of our 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 our 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; our capital requirements and our ability to generate capital internally or raise capital on favorable terms; impact on our liquidity due to changes in our ability to receive dividends from our subsidiaries; any future strategic acquisitions or divestitures; continuing consolidation in the financial services industry; changes in the equity and debt securities markets; fluctuations in foreign currency exchange rates; a recurrence of 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 other-than-temporary impairment on securities held in our available-for-sale debt securities portfolio; impact of natural or man-made disasters or calamities, such as wildfires or conflicts or other events that may directly or indirectly result in a negative impact on our financial performance; and other factors set forth in our public reports including our Annual Report on Form 10-K for the year ended December 31, 2019 and our Quarterly Reports on Form 10-Q, and particularly the discussion of risk factors within those documents. In addition to the risk factors enumerated above, the economic impact of the COVID-19 pandemic could cause actual outcome to differ, possibly materially, from our forward-looking statement due to factors and future developments that are uncertain, unpredictable and in many cases beyond our control. Given the ongoing and dynamic nature of the circumstances, it is difficult to predict the full impact of the COVID-19 pandemic on our business. The extent to which the COVID-19 pandemic impacts us will depend on future developments that are uncertain and unpredictable, including the scope, severity and duration of the pandemic and its impact on our customers, the actions taken by governmental authorities in response to the pandemic as well as its impact on global and regional economies, and the pace of recovery when the COVID-19 pandemic subsides, among others. If any of these risks or uncertainties materializes or if any of the assumptions underlying such forward-looking statements proves to be incorrect, our results could differ materially from those expressed in, implied or projected by such forward-looking statements. We assume no obligation to update or revise such forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by law.

^1 See reconciliation of GAAP to non-GAAP financial measures in Table 14.

^2 See reconciliation of GAAP to non-GAAP financial measures in Table 14.

^3 See reconciliation of GAAP to non-GAAP financial measures in Table 15.

EAST WEST BANCORP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEET

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

(unaudited)

Table 1



June 30, 2020 % or Basis Point Change

June 30, 2020 March 31, 2020 June 30, 2019 Qtr-o-Qtr Yr-o-Yr

Assets

Cash and due from $ 602,974 $ 427,415 $ 425,949 41.1 % 41.6 % banks

Interest-bearing 3,930,528 2,652,627 3,195,665 48.2 23.0 cash with banks

Cash and cash 4,533,502 3,080,042 3,621,614 47.2 25.2 equivalents

Interest-bearing 531,591 293,509 150,273 81.1 253.8 deposits with banks

Securitiespurchased underresale agreements 1,260,000 860,000 1,010,000 46.5 24.8 ("resaleagreements") ^(1)

Available-for-sale("AFS") debtsecurities(amortized cost of$3,823,714 and 3,884,574 3,695,943 2,592,913 5.1 49.8 $3,660,413 as ofJune 30, 2020 andMarch 31, 2020,respectively)

Federal Home LoanBank ("FHLB") and 78,963 78,745 78,093 0.3 1.1 Federal ReserveBank ("FRB") stock

Loans held-for-sale 3,875 1,594 3,879 143.1 (0.1) ("HFS")

Loansheld-for-investment(''HFI'') (net ofallowance for loan 36,597,341 35,336,390 33,399,752 3.6 9.6 losses of $632,071,$557,003 ^(2) and$330,625)

Investments inqualified 201,888 198,653 198,466 1.6 1.7 affordable housingpartnerships, net

Investments in taxcredit and other 251,318 268,330 210,387 (6.3) 19.5 investments, net

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

Operating lease 94,898 101,381 109,032 (6.4) (13.0) right-of-use assets

Other assets 1,503,946 1,568,261 1,052,252 (4.1) 42.9

Total assets $ 49,407,593 $ 45,948,545 $ 42,892,358 7.5 % 15.2 %



Liabilities andStockholders' Equity

Deposits $ 40,672,678 $ 38,686,958 $ 36,477,542 5.1 % 11.5 %

Short-term 52,851 66,924 19,972 (21.0) 164.6 borrowings

Federal funds 200,000 - - 100.0 100.0 purchased

FHLB advances 656,759 646,336 745,074 1.6 (11.9)

Securities soldunder repurchaseagreements 300,000 450,000 50,000 (33.3) 500.0 ("repurchaseagreements") ^(1)

Long-term debt andfinance lease 1,580,442 152,162 152,506 938.7 936.3 liabilities ^(3)

Operating lease 102,708 109,356 117,448 (6.1) (12.6) liabilities

Accrued expensesand other 854,912 933,824 595,223 (8.5) 43.6 liabilities

Total liabilities 44,420,350 41,045,560 38,157,765 8.2 16.4

Stockholders' 4,987,243 4,902,985 4,734,593 1.7 5.3 equity ^(2)

Total liabilitiesand stockholders' $ 49,407,593 $ 45,948,545 $ 42,892,358 7.5 % 15.2 % equity



Book value per $ 35.25 $ 34.67 $ 32.53 1.7 % 8.4 % common share

Tangible equity ^(4) per common $ 31.86 $ 31.27 $ 29.20 1.9 9.1 share

Number of commonshares at 141,486 141,435 145,547 0.0 (2.8) period-end

Tangible equity totangible assets 9.21 % 9.73 % 10.02 % (52) bps (81) bpsratio ^(4)



Resale and repurchase agreements are reported net when the transactions are eligible for netting under Accounting Standards Codification ("ASC") 210-20-45-11, Balance Sheet Offsetting: Repurchase and Reverse Repurchase(1) Agreements. There was no netting of repurchase agreements against resale agreements as of June 30, 2020 and March 31, 2020. $400 million of gross repurchase agreements were eligible for netting against gross resale agreements as of June 30, 2019.

On January 1, 2020, the Company adopted Accounting Standards Update ("ASU") 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments using the modified retrospective(2) approach. The March 31, 2020 Allowance for loan loss reflects an increase of $125.2 million as a result of adopting ASU 2016-13. We recorded an after-tax decrease to opening retained earnings of $98.0 million as of January 1, 2020.

(3) Includes $1.43 billion of advances from the Paycheck Protection Program Liquidity Facility ("PPPLF").

(4) See reconciliation of GAAP to non-GAAP financial measures in Table 15.

EAST WEST BANCORP, INC. AND SUBSIDIARIES

TOTAL LOANS AND DEPOSITS DETAIL

($ in thousands)

(unaudited)

Table 2



June 30, 2020 % Change

June 30, 2020 March 31, 2020 June 30, 2019 Qtr-o-Qtr Yr-o-Yr

Loans:

Commercial:

Commercial andindustrial ("C&I") $ 13,422,691 $ 12,590,764 $ 12,402,967 6.6 % 8.2 %^(1)

Commercial real estate ("CRE"):

CRE 10,902,114 10,682,242 9,663,624 2.1 12.8

Multifamily 3,032,385 2,902,601 2,577,154 4.5 17.7 residential

Construction and 567,716 606,209 674,798 (6.3) (15.9) land

Total CRE 14,502,215 14,191,052 12,915,576 2.2 12.3

Consumer:

Residential mortgage:

Single-family 7,660,094 7,403,723 6,494,882 3.5 17.9 residential

Home equity linesof credit 1,461,951 1,452,862 1,575,150 0.6 (7.2) ("HELOCs")

Total residential 9,122,045 8,856,585 8,070,032 3.0 13.0 mortgage

Other consumer 182,461 254,992 341,802 (28.4) (46.6)

Total loans HFI ^ 37,229,412 35,893,393 33,730,377 3.7 10.4 (2)

Loans HFS 3,875 1,594 3,879 143.1 (0.1)

Total loans ^(2) 37,233,287 35,894,987 33,734,256 3.7 10.4

Allowance for loan (632,071) (557,003) (330,625) 13.5 91.2 losses

Net loans ^(2) $ 36,601,216 $ 35,337,984 $ 33,403,631 3.6 % 9.6 %



Deposits:

Noninterest-bearing $ 13,940,420 $ 11,833,397 $ 10,599,088 17.8 % 31.5 %demand

Interest-bearing 5,280,887 5,467,508 5,083,675 (3.4) 3.9 checking

Money market 10,002,624 9,302,246 8,009,325 7.5 24.9

Savings 2,186,199 2,117,274 2,188,738 3.3 (0.1)

Time deposits 9,262,548 9,966,533 10,596,716 (7.1) (12.6)

Total deposits $ 40,672,678 $ 38,686,958 $ 36,477,542 5.1 % 11.5 %



(1) Includes $1.75 billion of Paycheck Protection Program ("PPP") loans as of June 30, 2020.

Includes net deferred loan fees, unearned fees, unamortized premiums and unaccreted discounts of $(72.1) million, $(50.3) million, and $(43.8)(2) million as of June 30, 2020, March 31, 2020 and June 30, 2019, respectively. Net origination fees related to PPP loans were $(25.4) million as of June 30, 2020.

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, 2020 % Change

June 30, March 31, June 30, Qtr-o-Qtr Yr-o-Yr 2020 2020 2019

Interest anddividend income $ 398,776 $ 449,190 $ 474,844 (11.2) % (16.0) %^(1)

Interest expense 55,001 86,483 107,518 (36.4) (48.8)

Net interestincome before 343,775 362,707 367,326 (5.2) (6.4) provision forcredit losses

Provision for 102,443 73,870 19,245 38.7 432.3 credit losses

Net interestincome after 241,332 288,837 348,081 (16.4) (30.7) provision forcredit losses

Noninterest 58,637 54,049 52,759 8.5 11.1 income

Noninterest 187,696 178,876 177,663 4.9 5.6 expense

Income before 112,273 164,010 223,177 (31.5) (49.7) income taxes

Income tax 12,921 19,186 72,797 (32.7) (82.3) expense

Net income $ 99,352 $ 144,824 $ 150,380 (31.4) % (33.9) %

Earnings per share ("EPS")

- Basic $ 0.70 $ 1.00 $ 1.03 (29.8) % (32.0) %

- Diluted $ 0.70 $ 1.00 $ 1.03 (29.7) (32.0)

Weighted-averagenumber of shares outstanding

- Basic 141,486 144,814 145,546 (2.3) % (2.8) %

- Diluted 141,827 145,285 146,052 (2.4) (2.9)



Three Months Ended June 30, 2020 % Change

June 30, March 31, June 30, Qtr-o-Qtr Yr-o-Yr 2020 2020 2019

Noninterest income:

Lending fees $ 21,946 $ 15,773 $ 16,423 39.1 % 33.6 %

Deposit account 10,872 10,447 9,607 4.1 13.2 fees

Foreign exchange 4,562 7,819 7,286 (41.7) (37.4) income

Wealth 3,091 5,353 3,800 (42.3) (18.7) management fees

Interest ratecontracts and 6,107 7,073 10,398 (13.7) (41.3) other derivativeincome

Net gains on 132 950 15 (86.1) 780.0 sales of loans

Gains on salesof AFS debt 9,640 1,529 1,447 530.5 566.2 securities

Other investment 966 1,921 706 (49.7) 36.8 income

Other income 1,321 3,184 3,077 (58.5) (57.1)

Totalnoninterest $ 58,637 $ 54,049 $ 52,759 8.5 % 11.1 %income

Noninterest expense:

Compensation andemployee $ 96,955 $ 101,960 $ 100,531 (4.9) % (3.6 %)benefits

Occupancy andequipment 16,217 17,076 17,362 (5.0) (6.6) expense

Depositinsurancepremiums and 3,700 3,427 2,919 8.0 26.8 regulatoryassessments

Legal expense 1,530 3,197 2,355 (52.1) (35.0)

Data processing 4,480 3,826 3,460 17.1 29.5

Consulting 1,413 1,217 2,069 16.1 (31.7) expense

Deposit related 3,353 3,563 3,338 (5.9) 0.4 expense

Computer 7,301 6,166 6,211 18.4 17.5 software expense

Other operating 19,248 21,119 22,679 (8.9) (15.1) expense

Amortization oftax credit and 24,759 17,325 16,739 42.9 47.9 otherinvestments

Repurchaseagreements' 8,740 - - 100.0 100.0 extinguishmentcost

Totalnoninterest $ 187,696 $ 178,876 $ 177,663 4.9 % 5.6 %expense



(1) Includes $21.3 million of interest income related to PPP loans for the three months ended June 30, 2020.

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 2020 % Change

June 30, June 30, Yr-o-Yr 2020 2019

Interest and dividend income ^(1) $ 847,966 $ 938,155 (9.6) %

Interest expense 141,484 208,368 (32.1)

Net interest income before provision for 706,482 729,787 (3.2) credit losses

Provision for credit losses 176,313 41,824 321.6

Net interest income after provision for 530,169 687,963 (22.9) credit losses

Noninterest income 112,686 94,890 18.8

Noninterest expense 366,572 364,585 0.5

Income before income taxes 276,283 418,268 (33.9)

Income tax expense 32,107 103,864 (69.1)

Net income $ 244,176 $ 314,404 (22.3) %

EPS

- Basic $ 1.71 $ 2.16 (21.1) %

- Diluted $ 1.70 $ 2.15 (21.0)

Weighted-average number of shares outstanding

- Basic 143,150 145,402 (1.5) %

- Diluted 143,560 146,016 (1.7)



June 30, Six Months Ended 2020 % Change

June 30, June 30, Yr-o-Yr 2020 2019

Noninterest income:

Lending fees $ 37,719 $ 31,392 20.2 %

Deposit account fees 21,319 19,075 11.8

Foreign exchange income 12,381 12,301 0.7

Wealth management fees 8,444 7,574 11.5

Interest rate contracts and other 13,180 13,614 (3.2) derivative income

Net gains on sales of loans 1,082 930 16.3

Gains on sales of AFS debt securities 11,169 3,008 271.3

Other investment income 2,887 1,908 51.3

Other income 4,505 5,088 (11.5)

Total noninterest income $ 112,686 $ 94,890 18.8 %

Noninterest expense:

Compensation and employee benefits $ 198,915 $ 202,830 (1.9) %

Occupancy and equipment expense 33,293 34,680 (4.0)

Deposit insurance premiums and 7,127 6,007 18.6 regulatory assessments

Legal expense 4,727 4,580 3.2

Data processing 8,306 6,617 25.5

Consulting expense 2,630 4,128 (36.3)

Deposit related expense 6,916 6,842 1.1

Computer software expense 13,467 12,289 9.6

Other operating expense 40,367 44,968 (10.2)

Amortization of tax credit and other 42,084 41,644 1.1 investments

Repurchase agreements' extinguishment 8,740 - 100.0 cost

Total noninterest expense $ 366,572 $ 364,585 0.5 %



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

EAST WEST BANCORP, INC. AND SUBSIDIARIES

SELECTED AVERAGE BALANCES

($ in thousands)

(unaudited)

Table 5



June 30, 2020 June 30, Three Months Ended % Change Six Months Ended 2020 % Change

June 30, 2020 March 31, 2020 June 30, 2019 Qtr-o-Qtr Yr-o-Yr June 30, 2020 June 30, 2019 Yr-o-Yr

Loans:

Commercial:

C&I ^(1) $ 13,560,719 $ 12,166,178 $ 12,003,277 11.5 % 13.0 % $ 12,863,449 $ 11,925,003 7.9 %

CRE:

CRE 10,812,399 10,485,683 9,501,566 3.1 13.8 10,649,041 9,439,946 12.8

Multifamily residential 2,987,311 2,889,844 2,510,271 3.4 19.0 2,938,577 2,504,320 17.3

Construction and land 594,965 641,079 675,967 (7.2) (12.0) 618,022 630,459 (2.0)

Total CRE 14,394,675 14,016,606 12,687,804 2.7 13.5 14,205,640 12,574,725 13.0

Consumer:

Residential mortgage:

Single-family 7,506,546 7,257,367 6,373,715 3.4 17.8 7,381,956 6,263,246 17.9 residential

HELOCs 1,444,933 1,442,450 1,607,311 0.2 (10.1) 1,443,692 1,629,637 (11.4)

Total residential 8,951,479 8,699,817 7,981,026 2.9 12.2 8,825,648 7,892,883 11.8 mortgage

Other consumer 234,900 271,367 309,267 (13.4) (24.0) 253,134 307,033 (17.6)

Total loans ^(2) $ 37,141,773 $ 35,153,968 $ 32,981,374 5.7 % 12.6 % $ 36,147,871 $ 32,699,644 10.5 %



Interest-earning assets $ 45,413,242 $ 42,362,531 $ 39,461,101 7.2 % 15.1 % $ 43,887,886 $ 39,105,030 12.2 %

Total assets $ 48,228,914 $ 44,755,509 $ 41,545,441 7.8 % 16.1 % $ 46,492,211 $ 41,144,152 13.0 %



Deposits:

Noninterest-bearing $ 13,534,873 $ 11,117,710 $ 10,237,868 21.7 % 32.2 % $ 12,326,291 $ 10,155,079 21.4 %demand

Interest-bearing 4,687,178 5,001,672 5,221,110 (6.3) (10.2) 4,844,425 5,245,845 (7.7) checking

Money market 9,893,816 9,013,381 7,856,055 9.8 25.9 9,453,599 7,967,831 18.6

Savings 2,149,965 2,076,270 2,106,626 3.5 2.1 2,113,118 2,099,058 0.7

Time deposits 9,634,696 10,264,007 9,904,726 (6.1) (2.7) 9,949,351 9,658,181 3.0

Total deposits $ 39,900,528 $ 37,473,040 $ 35,326,385 6.5 % 12.9 % $ 38,686,784 $ 35,125,994 10.1 %



Interest-bearing $ 28,362,618 $ 27,593,341 $ 25,860,541 2.8 % 9.7 % $ 27,977,979 $ 25,657,814 9.0 %liabilities

Stockholders' equity $ 4,982,446 $ 5,022,005 $ 4,684,348 (0.8) % 6.4 % $ 5,002,226 $ 4,611,231 8.5 %



(1) Includes average balance of PPP loans of $1.47 billion and $732.5 million for the three and six months ended June 30, 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, 2020 March 31, 2020

Average Average Average Average

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

Assets

Interest-earning assets:

Interest-bearingcash and deposits $ 3,435,920 $ 4,564 0.53 % $ 2,973,006 $ 11,108 1.50 %with banks

Resale agreements ^ 1,037,473 5,514 2.14 % 882,142 5,625 2.56 %(2)

AFS debt securities 3,719,209 21,004 2.27 % 3,274,740 20,142 2.47 %

Loans ^(3) 37,141,773 367,393 3.98 % 35,153,968 411,869 4.71 %

FHLB and FRB stock 78,867 301 1.54 % 78,675 446 2.28 %

Totalinterest-earning 45,413,242 398,776 3.53 % 42,362,531 449,190 4.26 %assets



Noninterest-earning assets:

Cash and due from 498,908 510,512 banks

Allowance for loan (566,473) (492,297) losses

Other assets 2,883,237 2,374,763

Total assets $ 48,228,914 $ 44,755,509



Liabilities andStockholders' Equity

Interest-bearing liabilities:

Checking deposits $ 4,687,178 $ 5,404 0.46 % $ 5,001,672 $ 10,246 0.82 %

Money market 9,893,816 8,093 0.33 % 9,013,381 22,248 0.99 %deposits

Savings deposits 2,149,965 1,445 0.27 % 2,076,270 1,817 0.35 %

Time deposits 9,634,696 31,457 1.31 % 10,264,007 42,092 1.65 %

Federal fundspurchased and other 242,185 265 0.44 % 59,978 556 3.73 %short-termborrowings

FHLB advances 653,665 3,343 2.06 % 693,357 4,166 2.42 %

Repurchase 418,681 3,540 3.40 % 332,417 3,991 4.83 %agreements ^(2)

Long-term debt andfinance lease 682,432 1,454 0.86 % 152,259 1,367 3.61 %liabilities

Totalinterest-bearing 28,362,618 55,001 0.78 % 27,593,341 86,483 1.26 %liabilities



Noninterest-bearingliabilities and stockholders'equity:

Demand deposits 13,534,873 11,117,710

Accrued expensesand other 1,348,977 1,022,453 liabilities

Stockholders' 4,982,446 5,022,005 equity

Total liabilitiesand stockholders' $ 48,228,914 $ 44,755,509 equity



Interest rate 2.75 % 3.00 %spread

Net interest incomeand net interest $ 343,775 3.04 % $ 362,707 3.44 %margin



(1) Annualized.

There was no netting of repurchase agreements against resale agreements for the three months ended June 30, 2020. Average balances of resale and repurchase agreements for the three months ended March 31, 2020 have been reported net, pursuant to ASC 210-20-45-11, Balance Sheet Offsetting:(2) Repurchase and Reverse Repurchase Agreements. The weighted-average yields of gross resale agreements were 2.14% and 2.50% for the three months ended June 30, 2020 and March 31, 2020, respectively. The weighted-average interest rates of gross repurchase agreements were 3.40% and 4.10% for the three months ended June 30, 2020 and March 31, 2020, respectively.

(3) Includes loans HFS.

EAST WEST BANCORP, INC. AND SUBSIDIARIES

QUARTER-TO-DATE AVERAGE BALANCES, YIELDS AND RATES

($ in thousands)

(unaudited)

Table 7



Three Months Ended

June 30, 2020 June 30, 2019

Average Average Average Average

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

Assets

Interest-earning assets:

Interest-bearingcash and deposits $ 3,435,920 $ 4,564 0.53 % $ 2,852,060 $ 16,800 2.37 %with banks

Resale agreements ^ 1,037,473 5,514 2.14 % 999,835 7,404 2.98 %(2)

AFS debt securities 3,719,209 21,004 2.27 % 2,551,383 15,685 2.47 %

Loans ^(3) 37,141,773 367,393 3.98 % 32,981,374 434,450 5.28 %

FHLB and FRB stock 78,867 301 1.54 % 76,449 505 2.65 %

Totalinterest-earning 45,413,242 398,776 3.53 % 39,461,101 474,844 4.83 %assets



Noninterest-earning assets:

Cash and due from 498,908 439,449 banks

Allowance for loan (566,473) (321,335) losses

Other assets 2,883,237 1,966,226

Total assets $ 48,228,914 $ 41,545,441



Liabilities andStockholders' Equity

Interest-bearing liabilities:

Checking deposits $ 4,687,178 $ 5,404 0.46 % $ 5,221,110 $ 15,836 1.22 %

Money market 9,893,816 8,093 0.33 % 7,856,055 28,681 1.46 %deposits

Savings deposits 2,149,965 1,445 0.27 % 2,106,626 2,477 0.47 %

Time deposits 9,634,696 31,457 1.31 % 9,904,726 50,970 2.06 %

Federal fundspurchased and other 242,185 265 0.44 % 35,575 361 4.07 %short-termborrowings

FHLB advances 653,665 3,343 2.06 % 533,841 4,011 3.01 %

Repurchase 418,681 3,540 3.40 % 50,000 3,469 27.83 %agreements ^(2)

Long-term debt andfinance lease 682,432 1,454 0.86 % 152,608 1,713 4.50 %liabilities

Totalinterest-bearing 28,362,618 55,001 0.78 % 25,860,541 107,518 1.67 %liabilities



Noninterest-bearingliabilities and stockholders'equity:

Demand deposits 13,534,873 10,237,868

Accrued expensesand other 1,348,977 762,684 liabilities

Stockholders' 4,982,446 4,684,348 equity

Total liabilitiesand stockholders' $ 48,228,914 $ 41,545,441 equity



Interest rate 2.75 % 3.16 %spread

Net interest incomeand net interest $ 343,775 3.04 % $ 367,326 3.73 %margin



(1) Annualized.

There was no netting of repurchase agreements against resale agreements for the three months ended June 30, 2020. Average balances of resale and repurchase agreements for the three months ended June 30, 2019 have been reported net, pursuant to ASC 210-20-45-11, Balance Sheet Offsetting:(2) Repurchase and Reverse Repurchase Agreements. The weighted-average yields of gross resale agreements were 2.14% and 2.71% for the three months ended June 30, 2020 and 2019, respectively. The weighted-average interest rates of gross repurchase agreements were 3.40% and 4.93% for the three months ended June 30, 2020 and 2019, respectively.

(3) Includes loans HFS.

EAST WEST BANCORP, INC. AND SUBSIDIARIES

YEAR-TO-DATE AVERAGE BALANCES, YIELDS AND RATES

($ in thousands)

(unaudited)

Table 8



Six Months Ended

June 30, 2020 June 30, 2019

Average Average Average Average

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

Assets

Interest-earning assets:

Interest-bearingcash and deposits $ 3,204,463 $ 15,672 0.98 % $ 2,716,128 $ 32,210 2.38 %with banks

Resale agreements ^ 959,807 11,139 2.33 % 1,017,320 15,310 3.03 %(2)

AFS investment 3,496,974 41,146 2.37 % 2,596,590 31,433 2.44 %securities

Loans^ (3) 36,147,871 779,262 4.34 % 32,699,644 857,984 5.29 %

FHLB and FRB stock 78,771 747 1.91 % 75,348 1,218 3.26 %

Totalinterest-earning 43,887,886 847,966 3.89 % 39,105,030 938,155 4.84 %assets



Noninterest-earning assets:

Cash and due from 504,710 453,725 banks

Allowance for loan (529,385) (317,909) losses

Other assets 2,629,000 1,903,306

Total assets $ 46,492,211 $ 41,144,152



Liabilities andStockholders' Equity

Interest-bearing liabilities:

Checking deposits $ 4,844,425 $ 15,650 0.65 % $ 5,245,845 $ 30,091 1.16 %

Money market 9,453,599 30,341 0.65 % 7,967,831 58,915 1.49 %deposits

Savings deposits 2,113,118 3,262 0.31 % 2,099,058 4,704 0.45 %

Time deposits 9,949,351 73,549 1.49 % 9,658,181 96,259 2.01 %

Federal fundspurchased and other 151,081 821 1.09 % 47,939 977 4.11 %short-termborrowings

FHLB advances 673,511 7,509 2.24 % 436,475 6,990 3.23 %

Repurchase 375,549 7,531 4.03 % 50,000 6,961 28.07 %agreements ^(2)

Long-term debt andfinance lease 417,345 2,821 1.36 % 152,485 3,471 4.59 %liabilities

Totalinterest-bearing 27,977,979 141,484 1.02 % 25,657,814 208,368 1.64 %liabilities



Noninterest-bearingliabilities and stockholders'equity:

Demand deposits 12,326,291 10,155,079

Accrued expensesand other 1,185,715 720,028 liabilities

Stockholders' 5,002,226 4,611,231 equity

Total liabilitiesand stockholders' $ 46,492,211 $ 41,144,152 equity



Interest rate 2.87 % 3.20 %spread

Net interest incomeand net interest $ 706,482 3.24 % $ 729,787 3.76 %margin



(1) Annualized

Average balances of resale and repurchase agreements 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(2) agreements were 2.32% and 2.77% for the six months ended June 30, 2020 and 2019, respectively. The weighted-average interest rates of gross repurchase agreements were 3.76% and 4.97% for the six months ended June 30, 2020 and 2019, respectively.

(3) Includes loans HFS.

EAST WEST BANCORP, INC. AND SUBSIDIARIES

SELECTED RATIOS

(unaudited)

Table 9



Three Months Ended ^(1) June 30, 2020 Basis Point Change

June March June 30, 31, 30, Qtr-o-Qtr Yr-o-Yr 2020 2020 2019

Return on average 0.83 % 1.30 % 1.45 % (47) bps (62) bpsassets

Adjusted return on 0.83 % 1.30 % 1.74 % (47) (91) average assets ^(2)

Return on average 8.02 % 11.60 % 12.88 % (358) (486) equity

Adjusted return on 8.02 % 11.60 % 15.45 % (358) (743) average equity ^(2)

Return on average 8.96 % 12.93 % 14.51 % (397) (555) tangible equity ^(2)

Adjusted return onaverage tangible 8.96 % 12.93 % 17.39 % (397) (843) equity ^(2)

Interest rate spread 2.75 % 3.00 % 3.16 % (25) (41)

Net interest margin 3.04 % 3.44 % 3.73 % (40) (69)

Average loan yield 3.98 % 4.71 % 5.28 % (73) (130)

Yield on averageinterest-earning 3.53 % 4.26 % 4.83 % (73) (130) assets

Average cost ofinterest-bearing 0.71 % 1.17 % 1.57 % (46) (86) deposits

Average cost of 0.47 % 0.82 % 1.11 % (35) (64) deposits

Average cost of funds 0.53 % 0.90 % 1.19 % (37) (66)

Adjusted pre-tax,pre-provision 2.08 % 2.30 % 2.51 % (22) (43) profitability ratio ^(2)

Adjusted noninterestexpense/average 1.28 % 1.44 % 1.54 % (16) (26) assets ^(2)

Efficiency ratio 46.64 % 42.92 % 42.29 % 372 435

Adjusted efficiency 38.09 % 38.54 % 38.03 % (45) bps 6 bpsratio ^(2)







June 30, Six Months Ended 2020 ^(1) Basis Point Change

June June 30, 30, Yr-o-Yr 2020 2019

Return on average 1.06 % 1.54 % (48) bps assets

Adjusted return on 1.06 % 1.71 % (65) average assets ^(2)

Return on average 9.82 % 13.75 % (393) equity

Adjusted return on 9.82 % 15.28 % (546) average equity ^(2)

Return on average 10.95 % 15.50 % (455) tangible equity ^(2)

Adjusted return onaverage tangible 10.95 % 17.21 % (626) equity ^(2)

Interest rate spread 2.87 % 3.20 % (33)

Net interest margin 3.24 % 3.76 % (52)

Average loan yield 4.34 % 5.29 % (95)

Yield on averageinterest-earning 3.89 % 4.84 % (95) assets

Average cost ofinterest-bearing 0.94 % 1.53 % (59) deposits

Average cost of 0.64 % 1.09 % (45) deposits

Average cost of funds 0.71 % 1.17 % (46)

Adjusted pre-tax,pre-provision 2.19 % 2.47 % (28) profitability ratio ^(2)

Adjusted noninterestexpense/average 1.36 % 1.57 % (21) assets ^(2)

Efficiency ratio 44.75 % 44.21 % 54

Adjusted efficiency 38.31 % 38.88 % (57) bps ratio ^(2)



(1) Annualized except for efficiency ratio.

(2) See reconciliation of GAAP to non-GAAP financial measures in Tables 13, 14 and 15.

EAST WEST BANCORP, INC. AND SUBSIDIARIES

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

($ in thousands)

(unaudited)

Table 10

ASU 2016-13 replaced the incurred loss methodology used in calculating theallowance for loan losses with a current expected credit loss model ("CECL").The Company adopted ASU 2016-13 using the modified retrospective approach onJanuary 1, 2020. As a result, prior comparative periods have not been adjustedfor the CECL model. In addition, ASU 2016-13 introduces the concept ofPurchased Credit Deteriorated ("PCD") financial assets, which replacespurchased credit-impaired ("PCI") assets. For PCD assets, the initial allowancefor loan losses is added to the purchase price and is considered to be part ofthe PCD loan amortized cost basis, hence, there is no income statement impacton acquisition. This contrasts with PCI loans where allowance for loan lossesonly reflects losses that are incurred by the Company after the acquisition.The allowance for loan losses is evaluated each quarter and adjusted asnecessary by recognizing a loan loss expense or a reversal of loan lossexpense. There were no PCD loans during the three and six months ended June 30,2020.

Three Months Ended June 30, 2020

Commercial Consumer

CRE Residential Mortgage Total Multi-Family Construction Single- Other C&I CRE Residential and Land Family HELOCs Consumer Residential

Allowance forloan losses, $ 362,629 $ 132,819 $ 16,530 $ 11,018 $ 26,822 $ 3,881 $ 3,304 $ 557,003 March 31,2020

Provision for(reversal of) (a) 37,862 43,315 7,908 7,526 (1,667) 205 (849) 94,300 credit losseson loans

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

Gross 602 226 620 7 159 2 93 1,709 recoveries

Total net(charge-offs) (19,776) (94) 620 7 159 (219) 63 (19,240) recoveries

Foreigncurrency 8 - - - - - - 8 translationadjustment

Allowance forloan losses, $ 380,723 $ 176,040 $ 25,058 $ 18,551 $ 25,314 $ 3,867 $ 2,518 $ 632,071 June 30, 2020



Three Months Ended March 31, 2020

Commercial Consumer

CRE Residential Mortgage Total Multi-Family Construction Single- Other C&I CRE Residential and Land Family HELOCs Consumer Residential

Allowance forloan losses, $ 238,376 $ 40,509 $ 22,826 $ 19,404 $ 28,527 $ 5,265 $ 3,380 $ 358,287 December 31,2019

Impact of ASU2016-13 74,237 72,169 (8,112) (9,889) (3,670) (1,798) 2,221 125,158 adoption

Allowance forloan losses, $ 312,613 $ 112,678 $ 14,714 $ 9,515 $ 24,857 $ 3,467 $ 5,601 $ 483,445 January 1,2020

Provision for(reversal of) (a) 60,618 11,435 1,281 1,482 1,700 412 (2,272) 74,656 credit losseson loans

Gross (11,977) (954) - - - - (26) (12,957) charge-offs

Gross 1,575 9,660 535 21 265 2 1 12,059 recoveries

Total net(charge-offs) (10,402) 8,706 535 21 265 2 (25) (898) recoveries

Foreigncurrency (200) - - - - - - (200) translationadjustment

Allowance forloan losses, $ 362,629 $ 132,819 $ 16,530 $ 11,018 $ 26,822 $ 3,881 $ 3,304 $ 557,003 March 31,2020



Three Months Ended June 30, 2019

Commercial Consumer

CRE Residential Mortgage Total Multi-Family Construction Single- Other C&I CRE Residential and Land Family HELOCs Consumer Residential

Allowance forloan losses, $ 189,757 $ 39,224 $ 19,169 $ 22,349 $ 35,759 $ 7,401 $ 4,235 $ 317,894 March 31,2019

Provision for(reversal of) (a) 26,140 (1,250) 58 173 (3,068) (1,224) (98) 20,731 credit losseson loans

Gross (11,745) - - - - - (14) (11,759) charge-offs

Gross 1,713 1,837 53 439 72 - 7 4,121 recoveries

Total net(charge-offs) (10,032) 1,837 53 439 72 - (7) (7,638) recoveries

Foreigncurrency (362) - - - - - - (362) translationadjustment

Allowance forloan losses, $ 205,503 $ 39,811 $ 19,280 $ 22,961 $ 32,763 $ 6,177 $ 4,130 $ 330,625 June 30, 2019



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, 2020

Commercial Consumer

CRE Residential Mortgage Total Multi-Family Construction Single- Other C&I CRE Residential and Land Family HELOCs Consumer Residential

Allowance forloan losses, $ 238,376 $ 40,509 $ 22,826 $ 19,404 $ 28,527 $ 5,265 $ 3,380 $ 358,287 December 31,2019

Impact of ASU2016-13 74,237 72,169 (8,112) (9,889) (3,670) (1,798) 2,221 125,158 adoption

Allowance forloan losses, $ 312,613 $ 112,678 $ 14,714 $ 9,515 $ 24,857 $ 3,467 $ 5,601 $ 483,445 January 1,2020

Provision for(reversal of) (a) 98,480 54,750 9,189 9,008 33 617 (3,121) 168,956 credit losseson loans

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

Gross 2,177 9,886 1,155 28 424 4 94 13,768 recoveries

Total net(charge-offs) (30,178) 8,612 1,155 28 424 (217) 38 (20,138) recoveries

Foreigncurrency (192) - - - - - - (192) translationadjustment

Allowance forloan losses, $ 380,723 $ 176,040 $ 25,058 $ 18,551 $ 25,314 $ 3,867 $ 2,518 $ 632,071 June 30, 2020



Six Months Ended June 30, 2019

Commercial Consumer

CRE Residential Mortgage Total Multi-Family Construction Single- Other C&I CRE Residential and Land Family HELOCs Consumer Residential

Allowance forloan losses, $ 189,117 $ 40,666 $ 19,885 $ 20,290 $ 31,340 $ 5,774 $ 4,250 $ 311,322 December 31.2018

Provision for(reversal of) (a) 41,404 (2,914) (939) 2,169 1,349 401 (99) 41,371 credit losseson loans

Gross (28,989) - - - - - (28) (29,017) charge-offs

Gross 3,964 2,059 334 502 74 2 7 6,942 recoveries

Total net(charge-offs) (25,025) 2,059 334 502 74 2 (21) (22,075) recoveries

Foreigncurrency 7 - - - - - - 7 translationadjustment

Allowance forloan losses, $ 205,503 $ 39,811 $ 19,280 $ 22,961 $ 32,763 $ 6,177 $ 4,130 $ 330,625 June 30, 2019



Three Months Ended Six Months Ended

June 30, March 31, June 30, June 30, June 30, 2020 2020 2019 2020 2019

UnfundedCredit Facilities

Allowancefor unfundedcredit $ 20,829 $ 11,158 $ 14,505 $ 11,158 $ 12,566 commitments,beginning ofperiod ^(1)

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

Provisionfor(reversalof) credit (b) 8,143 (786) (1,486) 7,357 453 losses onunfundedcreditcommitments

Allowancefor unfundedcredit $ 28,972 $ 20,829 $ 13,019 $ 28,972 $ 13,019 commitments,end ofperiod ^(1)



Provision (a)for credit + $ 102,443 $ 73,870 $ 19,245 $ 176,313 $ 41,824 losses (b)



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

EAST WEST BANCORP, INC. AND SUBSIDIARIES

CREDIT QUALITY

($ in thousands)

(unaudited)

Table 11

The Company adopted ASU 2016-13 using the modified retrospective approach onJanuary 1, 2020. As a result, prior comparative periods have not been adjusted.PCI loans prior to the adoption of ASU 2016-13 were classified as PCD loans asof January 1, 2020. Nonaccrual loans as of June 30, 2020 and March 31, 2020include all loans that are 90 or more days past due, unless the loan iswell-collateralized or guaranteed by government agencies, and in the process ofcollection. Nonaccrual loans presented as of June 30, 2019 included onlyNon-PCI nonaccrual loans.



Nonperforming Assets^ June 30, March 31, June 30, 2020 2020 2019

Total Total Non-PCI Nonaccrual Nonaccrual Nonaccrual loans loans Loans

Commercial:

C&I $ 84,823 $ 89,079 $ 73,150

CRE:

CRE 56,577 6,298 20,914

Multifamily residential 774 803 1,027

Total CRE 57,351 7,101 21,941

Consumer:

Residential mortgage:

Single-family residential 20,070 17,536 13,075

HELOCs 14,068 10,446 7,344

Total residential mortgage 34,138 27,982 20,419

Other consumer 2,508 2,506 2,504

Total nonaccrual loans 178,820 126,668 118,014

Other real estate owned, net 19,504 19,504 130

Other nonperforming assets 3,890 4,758 1,167

Total nonperforming assets $ 202,214 $ 150,930 $ 119,311







Credit Quality Ratios June 30, March 31, June 30, 2020 2020 2019

Nonperforming assets to total 0.41 % 0.33 % 0.28 %assets

Nonaccrual loans to loans HFI 0.48 % 0.35 % 0.35 %

Allowance for loan losses to loans 1.70 % 1.55 % 0.98 %HFI

Allowance for loan losses to 353.47 % 439.73 % 280.16 %nonaccrual loans

Annualized quarterly net 0.21 % 0.01 % 0.09 %charge-offs to average loans HFI



EAST WEST BANCORP, INC. AND SUBSIDIARIES

GAAP TO NON-GAAP RECONCILIATION

($ in thousands)

(unaudited)

Table 12

During the second quarter of 2019, the Company reversed $30.1 million ofcertain previously claimed tax credits related to the DC Solar tax creditinvestments ("DC Solar"). The table below shows the computation of theCompany's effective tax rate excluding the impact of the DC Solar tax creditsreversal. Management believes that excluding the impact of the DC Solar taxcredits reversal from the effective tax rate computation allows comparabilityto prior periods.



Three Months Ended Six Months Ended

June 30, March 31, June 30, June 30, June 30, 2020 2020 2019 2020 2019

Income tax (a) $ 12,921 $ 19,186 $ 72,797 $ 32,107 $ 103,864 expense

Less:Reversalof certainpreviouslyclaimed (b) - - (30,104) - (30,104) taxcreditsrelated toDC Solar

Adjustedincome tax (c) $ 12,921 $ 19,186 $ 42,693 $ 32,107 $ 73,760 expense



Incomebefore (d) 112,273 164,010 223,177 276,283 418,268 incometaxes



Effective (a)tax rate / 11.5 % 11.7 % 32.6 % 11.6 % 24.8 % (d)

Less:Reversalof certainpreviously (b)claimed / - % - % (13.5) % - % (7.2) %tax (d)creditsrelated toDC Solar

Adjusted (c)effective / 11.5 % 11.7 % 19.1 % 11.6 % 17.6 %tax rate (d)



EAST WEST BANCORP, INC. AND SUBSIDIARIES

GAAP TO NON-GAAP RECONCILIATION

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

(unaudited)

Table 13

During the first and second quarters of 2019, the Company recorded a $7.0million pre-tax impairment charge and reversed $30.1 million of certainpreviously claimed tax credits related to the DC Solar tax credit investments("DC Solar"), respectively. Management believes that presenting thecomputations of the adjusted net income, adjusted diluted earnings per commonshare, adjusted return on average assets and adjusted return on average equitythat adjust for the above discussed non-recurring items provides clarity tofinancial statement users regarding the ongoing performance of the Company andallows comparability to prior periods.



Three Months Ended June 30, 2020 March 31, 2020 June 30, 2019

Net income (a) $ 99,352 $ 144,824 $ 150,380

Add: Reversal ofcertain previously - - 30,104 claimed tax creditsrelated to DC Solar

Adjusted net income (b) $ 99,352 $ 144,824 $ 180,484



Dilutedweighted-average 141,827 145,285 146,052 number of sharesoutstanding

Diluted EPS $ 0.70 $ 1.00 $ 1.03

Diluted EPS impact ofreversal of certainpreviously claimed tax - - 0.21 credits related to DCSolar

Adjusted diluted EPS $ 0.70 $ 1.00 $ 1.24



Average total assets (c) $ 48,228,914 $ 44,755,509 $ 41,545,441

Average stockholders' (d) $ 4,982,446 $ 5,022,005 $ 4,684,348 equity

Return on average (a)assets ^(1) / 0.83 % 1.30 % 1.45 % (c)

Adjusted return on (b)average assets ^(1) / 0.83 % 1.30 % 1.74 % (c)

Return on average (a)equity ^(1) / 8.02 % 11.60 % 12.88 % (d)

Adjusted return on (b)average equity ^(1) / 8.02 % 11.60 % 15.45 % (d)





Six Months Ended

June 30, 2020 June 30, 2019

Net income (e) $ 244,176 $ 314,404

Add: Impairment chargerelated to DC Solar ^ - 6,978 (2)

Tax effect of - (2,063) adjustments ^(3)

Add: Reversal ofcertain previously - 30,104 claimed tax creditsrelated to DC Solar

Adjusted net income (f) $ 244,176 $ 349,423



Diluted weightedaverage number of 143,560 146,016 shares outstanding

Diluted EPS $ 1.70 $ 2.15

Diluted EPS impact ofimpairment charge - 0.03 related to DC Solar,net of tax

Diluted EPS impact ofreversal of certainpreviously claimed tax - 0.21 credits related to DCSolar

Adjusted diluted EPS $ 1.70 $ 2.39



Average total assets (g) $ 46,492,211 $ 41,144,152

Average stockholders' (h) $ 5,002,226 $ 4,611,231 equity

Return on average (e)assets ^(1) / 1.06 % 1.54 % (g)

Adjusted return on (f)average assets ^(1) / 1.06 % 1.71 % (g)

Return on average (e)equity ^(1) / 9.82 % 13.75 % (h)

Adjusted return on (f)average equity ^(1) / 9.82 % 15.28 % (h)



(1) Annualized.

(2) Included in Amortization of tax credit and other investments on the Consolidated Statement of Income.

(3) Applied statutory rate of 29.56% for the three and six months ended June 30, 2019.

EAST WEST BANCORP, INC. AND SUBSIDIARIES

GAAP TO NON-GAAP RECONCILIATION

($ in thousands)

(unaudited)

Table 14

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 agreements. 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, 2020 March 31, 2020 June 30, 2019

Net interest incomebefore provision for (a) $ 343,775 $ 362,707 $ 367,326 credit losses

Total noninterest 58,637 54,049 52,759 income

Total revenue (b) $ 402,412 $ 416,756 $ 420,085



Total noninterest (c) $ 187,696 $ 178,876 $ 177,663 expense

Less: Amortizationof tax credit and (24,759) (17,325) (16,739) other investments

Amortization of core (931) (953) (1,152) deposit intangibles

Repurchaseagreements' (8,740) - - extinguishment cost

Adjusted noninterest (d) $ 153,266 $ 160,598 $ 159,772 expense

Efficiency ratio (c)/ 46.64 % 42.92 % 42.29 % (b)

Adjusted efficiency (d)/ 38.09 % 38.54 % 38.03 %ratio (b)

Adjusted pre-tax, (b)-pre-provision income (d) = $ 249,146 $ 256,158 $ 260,313 (e)

Average total assets (f) $ 48,228,914 $ 44,755,509 $ 41,545,441

Adjusted pre-tax,pre-provision (e)/ 2.08 % 2.30 % 2.51 %profitability ratio (f)^(1)

Adjusted noninterest (d)/expense/average (f) 1.28 % 1.44 % 1.54 %assets ^(1)





Six Months Ended

June 30, 2020 June 30, 2019

Net interest incomebefore provision for (g) $ 706,482 $ 729,787 credit losses

Total noninterest 112,686 94,890 income

Total revenue (h) 819,168 824,677



Total noninterest (i) $ 366,572 $ 364,585 expense

Less: Amortizationof tax credit and (42,084) (41,644) other investments

Amortization of core (1,884) (2,326) deposit intangibles

Repurchaseagreements' (8,740) - extinguishment cost

Adjusted noninterest (j) $ 313,864 $ 320,615 expense

Efficiency ratio (i)/ 44.75 % 44.21 % (h)

Adjusted efficiency (j)/ 38.31 % 38.88 % ratio (h)

Adjusted pre-tax, (h)-pre-provision income (j) = $ 505,304 $ 504,062 (k)

Average total assets (l) $ 46,492,211 $ 41,144,152

Adjusted pre-tax,pre-provision (k)/ 2.19 % 2.47 % profitability ratio^ (l)(1)

Adjusted noninterest (j)/expense /average (l) 1.36 % 1.57 % assets ^(1)



(1) Annualized.

EAST WEST BANCORP, INC. AND SUBSIDIARIES

GAAP TO NON-GAAP RECONCILIATION

($ in thousands)

(unaudited)

Table 15

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, 2020 March 31, 2020 June 30, 2019

Stockholders' equity (a) $ 4,987,243 $ 4,902,985 $ 4,734,593

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

Other intangible assets ^(1) (13,490) (14,769) (18,952)

Tangible equity (b) $ 4,508,056 $ 4,422,519 $ 4,249,944



Total assets (c) $ 49,407,593 $ 45,948,545 $ 42,892,358

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

Other intangible assets ^(1) (13,490) (14,769) (18,952)

Tangible assets (d) $ 48,928,406 $ 45,468,079 $ 42,407,709

Total stockholders' equity to (a)total assets ratio / 10.09 % 10.67 % 11.04 % (c)

Tangible equity to tangible assets (b)ratio / 9.21 % 9.73 % 10.02 % (d)



Adjusted return on average tangible equity represents adjusted tangible netincome divided by average tangible equity. Adjusted tangible net incomeexcludes the after-tax impacts of the amortization of core deposit intangiblesand mortgage servicing assets, impairment charge and the reversal of certain previously claimed tax credits related to DC Solar (where applicable). Giventhat 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, 2020 March 31, June 30, 2019 June 30, June 30, 2019 2020 2020

Net Income $ 99,352 $ 144,824 $ 150,380 $ 244,176 $ 314,404

Add:Amortizationof core 931 953 1,152 1,884 2,326 depositintangibles

Amortizationof mortgage 458 584 1,013 1,042 1,337 servicingassets

Tax effect ofadjustments ^ (394) (436) (640) (830) (1,083) (2)

Tangible net (e) $ 100,347 $ 145,925 $ 151,905 $ 246,272 $ 316,984 income

Add:Impairmentcharge - - - - 6,978 related to DCSolar ^(3)

Tax effect ofadjustment ^ - - - - (2,063) (2)

Add: Reversalof certainpreviouslyclaimed tax - - 30,104 - 30,104 creditsrelated to DCSolar

Adjustedtangible net (f) $ 100,347 $ 145,925 $ 151,905 $ 246,272 $ 352,003 income



Averagestockholders' $ 4,982,446 $ 5,022,005 $ 4,684,348 $ 5,002,226 $ 4,611,231 equity

Less: Average (465,697) (465,697) (465,697) (465,697) (465,629) goodwill

Average otherintangible (14,247) (15,588) (20,380) (14,918) (21,116) assets ^(1)

Averagetangible (g) $ 4,502,502 $ 4,540,720 $ 4,198,271 $ 4,521,611 $ 4,124,486 equity

Return on (e)average / 8.96 % 12.93 % 14.51 % 10.95 % 15.50 % tangible (g)equity ^(4)

Adjustedreturn on (f)average / 8.96 % 12.93 % 17.39 % 10.95 % 17.21 % tangible (g)equity ^(4)



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

Applied statutory rate of 28.35% for the three and six months ended June(2) 30, 2020, and the three months ended March 31, 2020. Applied statutory rate of 29.56% for the three and six months ended June 30, 2019.

(3) Included in Amortization of tax credit and other investments on the Consolidated Statement of Income.

(4) Annualized.

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

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