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8-K

East West Bancorp Inc (EWBC)

8-K 2020-07-23 For: 2020-07-23
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of

The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported)

July 23, 2020

EAST WEST BANCORP, INC.

(Exact name of registrant as specified in its charter)

Delaware

(State or other jurisdiction of incorporation)

000-24939

(Commission File Number)

95-4703316

(IRS Employer Identification No.)

135 N Los Robles Ave., 7th Floor, Pasadena, California 91101

(Address of principal executive offices) (Zip code)

(626) 768-6000

(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class Trading Symbol(s) Name of each exchange on which registered
Common Stock, $0.001 Par Value EWBC The Nasdaq Global Select Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02. Results of Operations and Financial Condition

On July 23, 2020, East West Bancorp, Inc. (the “Company”) announced, via press release, its financial results for the quarter ended June 30, 2020 (the “Press Release”). The Press Release is available on the Company’s website. The Press Release is “furnished” as Exhibit 99.1 to this Current Report on Form 8-K pursuant to General Instruction B.2 of Form 8-K and the information provided in Item 2.02 of this report, including Exhibit 99.1, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”), or otherwise subject to the liabilities under that Section. The information provided in Item 2.02 of this report, including Exhibit 99.1, shall not be deemed incorporated by reference into any filings the Company has made or may make under the Securities Act of 1933 (the “Securities Act”) or the Exchange Act, except as otherwise expressly stated in such filing.

Item 7.01. Regulation FD Disclosure

On July 23, 2020, the Company will hold a conference call to discuss its financial results for the quarter ended June 30, 2020, including the Press Release and other matters relating to the Company. The Company has also made available on its website presentation materials containing certain historical and forward-looking information relating to the Company (the “Presentation Materials”). The Presentation Materials are furnished as Exhibit 99.2 and are incorporated by reference in this Item 7.01. All information in Exhibit 99.2 is presented as of the particular date or dates referenced therein, and the Company does not undertake any obligation to, and disclaims any duty to, update any of the information provided. The information provided in Item 7.01 of this report, including Exhibit 99.2, shall not be deemed “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities under that Section, nor shall the information or Exhibit 99.2 be deemed incorporated by reference in any filings the Company has made or may make under the Exchange Act or the Securities Act, except as otherwise expressly stated in such filing.

Item 9.01. Financial Statements and Exhibits

(d) Exhibits

99.1 Press Release, dated July 23, 2020.
99.2 Presentation Presentation Materials, dated July 23, 2020.
104 Cover Page Interactive Data (formatted as Inline XBRL). Filed herewith.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

EAST WEST BANCORP, INC.
Date: July 23, 2020 By: /s/ Irene H. Oh
Irene H. Oh
Executive Vice President and Chief Financial Officer

3

Document

Exhibit 99.1
East West Bancorp, Inc.
135 N. Los Robles Ave., 7th Fl.
Pasadena, CA 91101
Tel. 626.768.6000 NEWS RELEASE
--- FOR INVESTOR INQUIRIES, CONTACT:
--- ---
Irene Oh Julianna Balicka
Chief Financial Officer Director of Strategy and Corporate Development
T: (626) 768-6360 T: (626) 768-6985
E: irene.oh@eastwestbank.com E: julianna.balicka@eastwestbank.com

EAST WEST BANCORP REPORTS NET INCOME FOR SECOND QUARTER 2020

OF $99.4 MILLION AND DILUTED EARNINGS PER SHARE OF $0.70

Pasadena, California — July 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 adjusted^1^ 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.”

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

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 adjusted^2^ 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 adjusted^2^ 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 equity^3^ 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 ratio^3^ was 9.2%, the common equity tier 1 (“CET1”) capital ratio was 12.7%, and the total risk-based capital ratio was 14.4%.

^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.

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.

1

•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.

EWBC Regulatory Capital Metrics Basel III
($ in millions) June 30,<br><br>2020 ^(a)^ March 30,<br><br>2020 ^(a)^ June 30,<br>2019 Minimum<br>Capital<br>Ratio Well<br>Capitalized<br>Ratio Minimum<br><br>Capital Ratio +<br><br>Conservation Buffer ^(b)^
Risk-Based Capital Ratios:
CET 1 capital ratio 12.7 % 12.4 % 12.5 % 4.5 % 6.5 % 7.0 %
Tier 1 capital ratio 12.7 % 12.4 % 12.5 % 6.0 % 8.0 % 8.5 %
Total capital ratio 14.4 % 13.9 % 13.9 % 8.0 % 10.0 % 10.5 %
Leverage ratio 9.7 % 10.2 % 10.4 % 4.0 % 5.0 % 4.0 %
Risk-Weighted Assets (“RWA”) ^(c)^ $ 36,199 $ 36,548 $ 34,154 N/A N/A N/A

N/A Not applicable.

(a)The Company has elected to use the 2020 CECL transition provision in the 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.

(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 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.

EAST WEST BANCORP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
( and shares in thousands, except per share data)
(unaudited)
Table 1
June 30, 2020<br>% or Basis Point Change
June 30, 2020 March 31, 2020 June 30, 2019 Qtr-o-Qtr Yr-o-Yr
Assets
$ 602,974 $ 427,415 $ 425,949 41.1 % 41.6 %
3,930,528 2,652,627 3,195,665 48.2 23.0
4,533,502 3,080,042 3,621,614 47.2 25.2
531,591 293,509 150,273 81.1 253.8
1,260,000 860,000 1,010,000 46.5 24.8
3,884,574 3,695,943 2,592,913 5.1 49.8
78,963 78,745 78,093 0.3 1.1
3,875 1,594 3,879 143.1 (0.1)
36,597,341 35,336,390 33,399,752 3.6 9.6
201,888 198,653 198,466 1.6 1.7
251,318 268,330 210,387 (6.3) 19.5
465,697 465,697 465,697 — —
94,898 101,381 109,032 (6.4) (13.0)
1,503,946 1,568,261 1,052,252 (4.1) 42.9
$ 49,407,593 $ 45,948,545 $ 42,892,358 7.5 % 15.2 %
Liabilities and Stockholders’ Equity
$ 40,672,678 $ 38,686,958 $ 36,477,542 5.1 % 11.5 %
52,851 66,924 19,972 (21.0) 164.6
200,000 — — 100.0 100.0
656,759 646,336 745,074 1.6 (11.9)
300,000 450,000 50,000 (33.3) 500.0
1,580,442 152,162 152,506 938.7 936.3
102,708 109,356 117,448 (6.1) (12.6)
854,912 933,824 595,223 (8.5) 43.6
44,420,350 41,045,560 38,157,765 8.2 16.4
4,987,243 4,902,985 4,734,593 1.7 5.3
$ 49,407,593 $ 45,948,545 $ 42,892,358 7.5 % 15.2 %
$ 35.25 $ 34.67 $ 32.53 1.7 % 8.4 %
$ 31.86 $ 31.27 $ 29.20 1.9 9.1
141,486 141,435 145,547 0.0 (2.8)
9.21 % 9.73 % 10.02 % (52) bps (81) bps

All values are in US Dollars.

(1)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 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.

(2)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 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<br>% Change
June 30, 2020 March 31, 2020 June 30, 2019 Qtr-o-Qtr Yr-o-Yr
Loans:
Commercial:
$ 13,422,691 $ 12,590,764 $ 12,402,967 6.6 % 8.2 %
10,902,114 10,682,242 9,663,624 2.1 12.8
3,032,385 2,902,601 2,577,154 4.5 17.7
567,716 606,209 674,798 (6.3) (15.9)
14,502,215 14,191,052 12,915,576 2.2 12.3
Consumer:
7,660,094 7,403,723 6,494,882 3.5 17.9
1,461,951 1,452,862 1,575,150 0.6 (7.2)
9,122,045 8,856,585 8,070,032 3.0 13.0
182,461 254,992 341,802 (28.4) (46.6)
Total loans HFI (2) 37,229,412 35,893,393 33,730,377 3.7 10.4
Loans HFS 3,875 1,594 3,879 143.1 (0.1)
37,233,287 35,894,987 33,734,256 3.7 10.4
Allowance for loan losses (632,071) (557,003) (330,625) 13.5 91.2
$ 36,601,216 $ 35,337,984 $ 33,403,631 3.6 9.6
Deposits:
$ 13,940,420 $ 11,833,397 $ 10,599,088 17.8 % 31.5 %
5,280,887 5,467,508 5,083,675 (3.4) 3.9
10,002,624 9,302,246 8,009,325 7.5 24.9
2,186,199 2,117,274 2,188,738 3.3 (0.1)
9,262,548 9,966,533 10,596,716 (7.1) (12.6)
$ 40,672,678 $ 38,686,958 $ 36,477,542 5.1 % 11.5 %

All values are in US Dollars.

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

(2)Includes net deferred loan fees, unearned fees, unamortized premiums and unaccreted discounts of $(72.1) million, $(50.3) million, and $(43.8) 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<br>% Change
June 30, 2020 March 31, 2020 June 30, 2019 Qtr-o-Qtr Yr-o-Yr
Interest and dividend income (1) $ 398,776 $ 449,190 $ 474,844 (11.2) % (16.0) %
Interest expense 55,001 86,483 107,518 (36.4) (48.8)
Net interest income before provision for credit losses 343,775 362,707 367,326 (5.2) (6.4)
Provision for credit losses 102,443 73,870 19,245 38.7 432.3
Net interest income after provision for credit losses 241,332 288,837 348,081 (16.4) (30.7)
Noninterest income 58,637 54,049 52,759 8.5 11.1
Noninterest expense 187,696 178,876 177,663 4.9 5.6
Income before income taxes 112,273 164,010 223,177 (31.5) (49.7)
Income tax expense 12,921 19,186 72,797 (32.7) (82.3)
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-average number 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<br>% Change
June 30, 2020 March 31, 2020 June 30, 2019 Qtr-o-Qtr Yr-o-Yr
Noninterest income:
$ 21,946 $ 15,773 $ 16,423 39.1 % 33.6 %
10,872 10,447 9,607 4.1 13.2
4,562 7,819 7,286 (41.7) (37.4)
3,091 5,353 3,800 (42.3) (18.7)
6,107 7,073 10,398 (13.7) (41.3)
132 950 15 (86.1) 780.0
9,640 1,529 1,447 530.5 566.2
966 1,921 706 (49.7) 36.8
1,321 3,184 3,077 (58.5) (57.1)
Total noninterest income $ 58,637 $ 54,049 $ 52,759 8.5 % 11.1 %
Noninterest expense:
$ 96,955 $ 101,960 $ 100,531 (4.9) % (3.6) %
16,217 17,076 17,362 (5.0) (6.6)
3,700 3,427 2,919 8.0 26.8
1,530 3,197 2,355 (52.1) (35.0)
4,480 3,826 3,460 17.1 29.5
1,413 1,217 2,069 16.1 (31.7)
3,353 3,563 3,338 (5.9) 0.4
7,301 6,166 6,211 18.4 17.5
19,248 21,119 22,679 (8.9) (15.1)
24,759 17,325 16,739 42.9 47.9
8,740 — — 100.0 100.0
Total noninterest expense $ 187,696 $ 178,876 $ 177,663 4.9 % 5.6 %

All values are in US Dollars.

(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
Six Months Ended June 30, 2020<br>% Change
June 30, 2020 June 30, 2019 Yr-o-Yr
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 credit losses 706,482 729,787 (3.2)
Provision for credit losses 176,313 41,824 321.6
Net interest income after provision for credit losses 530,169 687,963 (22.9)
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)
Six Months Ended June 30, 2020<br>% Change
June 30, 2020 June 30, 2019 Yr-o-Yr
Noninterest income:
$ 37,719 $ 31,392 20.2 %
21,319 19,075 11.8
12,381 12,301 0.7
8,444 7,574 11.5
13,180 13,614 (3.2)
1,082 930 16.3
11,169 3,008 271.3
2,887 1,908 51.3
4,505 5,088 (11.5)
Total noninterest income $ 112,686 $ 94,890 18.8 %
Noninterest expense:
$ 198,915 $ 202,830 (1.9) %
33,293 34,680 (4.0)
7,127 6,007 18.6
4,727 4,580 3.2
8,306 6,617 25.5
2,630 4,128 (36.3)
6,916 6,842 1.1
13,467 12,289 9.6
40,367 44,968 (10.2)
42,084 41,644 1.1
8,740 — 100.0
Total noninterest expense $ 366,572 $ 364,585 0.5 %

All values are in US Dollars.

(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
Three Months Ended June 30, 2020<br>% Change Six Months Ended June 30, 2020<br>% 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:
$ 13,560,719 $ 12,166,178 $ 12,003,277 11.5 % 13.0 % $ 12,863,449 $ 11,925,003 7.9 %
10,812,399 10,485,683 9,501,566 3.1 13.8 10,649,041 9,439,946 12.8
2,987,311 2,889,844 2,510,271 3.4 19.0 2,938,577 2,504,320 17.3
594,965 641,079 675,967 (7.2) (12.0) 618,022 630,459 (2.0)
14,394,675 14,016,606 12,687,804 2.7 13.5 14,205,640 12,574,725 13.0
Consumer:
7,506,546 7,257,367 6,373,715 3.4 17.8 7,381,956 6,263,246 17.9
1,444,933 1,442,450 1,607,311 0.2 (10.1) 1,443,692 1,629,637 (11.4)
8,951,479 8,699,817 7,981,026 2.9 12.2 8,825,648 7,892,883 11.8
234,900 271,367 309,267 (13.4) (24.0) 253,134 307,033 (17.6)
$ 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:
$ 13,534,873 $ 11,117,710 $ 10,237,868 21.7 % 32.2 % $ 12,326,291 $ 10,155,079 21.4 %
4,687,178 5,001,672 5,221,110 (6.3) (10.2) 4,844,425 5,245,845 (7.7)
9,893,816 9,013,381 7,856,055 9.8 25.9 9,453,599 7,967,831 18.6
2,149,965 2,076,270 2,106,626 3.5 2.1 2,113,118 2,099,058 0.7
9,634,696 10,264,007 9,904,726 (6.1) (2.7) 9,949,351 9,658,181 3.0
$ 39,900,528 $ 37,473,040 $ 35,326,385 6.5 % 12.9 % $ 38,686,784 $ 35,125,994 10.1 %
Interest-bearing liabilities $ 28,362,618 $ 27,593,341 $ 25,860,541 2.8 % 9.7 % $ 27,977,979 $ 25,657,814 9.0 %
Stockholders’ equity $ 4,982,446 $ 5,022,005 $ 4,684,348 (0.8) % 6.4 % $ 5,002,226 $ 4,611,231 8.5 %

All values are in US Dollars.

(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
Balance Interest Yield/Rate ^(1)^ Balance Interest Yield/Rate ^(1)^
Assets
Interest-earning assets:
$ 3,435,920 $ 4,564 0.53 % $ 2,973,006 $ 11,108 1.50 %
1,037,473 5,514 2.14 % 882,142 5,625 2.56 %
3,719,209 21,004 2.27 % 3,274,740 20,142 2.47 %
37,141,773 367,393 3.98 % 35,153,968 411,869 4.71 %
78,867 301 1.54 % 78,675 446 2.28 %
45,413,242 398,776 3.53 % 42,362,531 449,190 4.26 %
Noninterest-earning assets:
498,908 510,512
(566,473) (492,297)
2,883,237 2,374,763
$ 48,228,914 $ 44,755,509
Liabilities and Stockholders’ Equity
Interest-bearing liabilities:
$ 4,687,178 $ 5,404 0.46 % $ 5,001,672 $ 10,246 0.82 %
9,893,816 8,093 0.33 % 9,013,381 22,248 0.99 %
2,149,965 1,445 0.27 % 2,076,270 1,817 0.35 %
9,634,696 31,457 1.31 % 10,264,007 42,092 1.65 %
242,185 265 0.44 % 59,978 556 3.73 %
653,665 3,343 2.06 % 693,357 4,166 2.42 %
418,681 3,540 3.40 % 332,417 3,991 4.83 %
682,432 1,454 0.86 % 152,259 1,367 3.61 %
28,362,618 55,001 0.78 % 27,593,341 86,483 1.26 %
Noninterest-bearing liabilities and stockholders’ equity:
13,534,873 11,117,710
1,348,977 1,022,453
4,982,446 5,022,005
$ 48,228,914 $ 44,755,509
Interest rate spread 2.75 % 3.00 %
Net interest income and net interest margin $ 343,775 3.04 % $ 362,707 3.44 %

All values are in US Dollars.

(1)Annualized.

(2)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: 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
Balance Interest Yield/Rate ^(1)^ Balance Interest Yield/Rate ^(1)^
Assets
Interest-earning assets:
$ 3,435,920 $ 4,564 0.53 % $ 2,852,060 $ 16,800 2.37 %
1,037,473 5,514 2.14 % 999,835 7,404 2.98 %
3,719,209 21,004 2.27 % 2,551,383 15,685 2.47 %
37,141,773 367,393 3.98 % 32,981,374 434,450 5.28 %
78,867 301 1.54 % 76,449 505 2.65 %
45,413,242 398,776 3.53 % 39,461,101 474,844 4.83 %
Noninterest-earning assets:
498,908 439,449
(566,473) (321,335)
2,883,237 1,966,226
$ 48,228,914 $ 41,545,441
Liabilities and Stockholders’ Equity
Interest-bearing liabilities:
$ 4,687,178 $ 5,404 0.46 % $ 5,221,110 $ 15,836 1.22 %
9,893,816 8,093 0.33 % 7,856,055 28,681 1.46 %
2,149,965 1,445 0.27 % 2,106,626 2,477 0.47 %
9,634,696 31,457 1.31 % 9,904,726 50,970 2.06 %
242,185 265 0.44 % 35,575 361 4.07 %
653,665 3,343 2.06 % 533,841 4,011 3.01 %
418,681 3,540 3.40 % 50,000 3,469 27.83 %
682,432 1,454 0.86 % 152,608 1,713 4.50 %
28,362,618 55,001 0.78 % 25,860,541 107,518 1.67 %
Noninterest-bearing liabilities and stockholders’ equity:
13,534,873 10,237,868
1,348,977 762,684
4,982,446 4,684,348
$ 48,228,914 $ 41,545,441
Interest rate spread 2.75 % 3.16 %
Net interest income and net interest margin $ 343,775 3.04 % $ 367,326 3.73 %

All values are in US Dollars.

(1)Annualized.

(2)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: 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
Balance Interest Yield/Rate ^(1)^ Balance Interest Yield/Rate ^(1)^
Assets
Interest-earning assets:
$ 3,204,463 $ 15,672 0.98 % $ 2,716,128 $ 32,210 2.38 %
959,807 11,139 2.33 % 1,017,320 15,310 3.03 %
3,496,974 41,146 2.37 % 2,596,590 31,433 2.44 %
36,147,871 779,262 4.34 % 32,699,644 857,984 5.29 %
78,771 747 1.91 % 75,348 1,218 3.26 %
43,887,886 847,966 3.89 % 39,105,030 938,155 4.84 %
Noninterest-earning assets:
504,710 453,725
(529,385) (317,909)
2,629,000 1,903,306
$ 46,492,211 $ 41,144,152
Liabilities and Stockholders’ Equity
Interest-bearing liabilities:
$ 4,844,425 $ 15,650 0.65 % $ 5,245,845 $ 30,091 1.16 %
9,453,599 30,341 0.65 % 7,967,831 58,915 1.49 %
2,113,118 3,262 0.31 % 2,099,058 4,704 0.45 %
9,949,351 73,549 1.49 % 9,658,181 96,259 2.01 %
151,081 821 1.09 % 47,939 977 4.11 %
673,511 7,509 2.24 % 436,475 6,990 3.23 %
375,549 7,531 4.03 % 50,000 6,961 28.07 %
417,345 2,821 1.36 % 152,485 3,471 4.59 %
27,977,979 141,484 1.02 % 25,657,814 208,368 1.64 %
Noninterest-bearing liabilities and stockholders’ equity:
12,326,291 10,155,079
1,185,715 720,028
5,002,226 4,611,231
$ 46,492,211 $ 41,144,152
Interest rate spread 2.87 % 3.20 %
Net interest income and net interest margin $ 706,482 3.24 % $ 729,787 3.76 %

All values are in US Dollars.

(1)Annualized

(2)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 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<br>Basis Point Change
June 30, 2020 March 31, 2020 June 30, 2019 Qtr-o-Qtr Yr-o-Yr
Return on average assets 0.83 % 1.30 % 1.45 % (47) bps (62) bps
Adjusted return on average assets ^(2)^ 0.83 % 1.30 % 1.74 % (47) (91)
Return on average equity 8.02 % 11.60 % 12.88 % (358) (486)
Adjusted return on average equity ^(2)^ 8.02 % 11.60 % 15.45 % (358) (743)
Return on average tangible equity ^(2)^ 8.96 % 12.93 % 14.51 % (397) (555)
Adjusted return on average tangible equity ^(2)^ 8.96 % 12.93 % 17.39 % (397) (843)
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 average interest-earning assets 3.53 % 4.26 % 4.83 % (73) (130)
Average cost of interest-bearing deposits 0.71 % 1.17 % 1.57 % (46) (86)
Average cost of deposits 0.47 % 0.82 % 1.11 % (35) (64)
Average cost of funds 0.53 % 0.90 % 1.19 % (37) (66)
Adjusted pre-tax, pre-provision profitability ratio ^(2)^ 2.08 % 2.30 % 2.51 % (22) (43)
Adjusted noninterest expense/average assets ^(2)^ 1.28 % 1.44 % 1.54 % (16) (26)
Efficiency ratio 46.64 % 42.92 % 42.29 % 372 435
Adjusted efficiency ratio ^(2)^ 38.09 % 38.54 % 38.03 % (45) bps 6 bps
Six Months Ended ^(1)^ June 30, 2020<br>Basis Point Change
June 30, 2020 June 30, 2019 Yr-o-Yr
Return on average assets 1.06 % 1.54 % (48) bps
Adjusted return on average assets ^(2)^ 1.06 % 1.71 % (65)
Return on average equity 9.82 % 13.75 % (393)
Adjusted return on average equity ^(2)^ 9.82 % 15.28 % (546)
Return on average tangible equity ^(2)^ 10.95 % 15.50 % (455)
Adjusted return on average tangible equity ^(2)^ 10.95 % 17.21 % (626)
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 average interest-earning assets 3.89 % 4.84 % (95)
Average cost of interest-bearing deposits 0.94 % 1.53 % (59)
Average cost of deposits 0.64 % 1.09 % (45)
Average cost of funds 0.71 % 1.17 % (46)
Adjusted pre-tax, pre-provision profitability ratio ^(2)^ 2.19 % 2.47 % (28)
Adjusted noninterest expense/average assets ^(2)^ 1.36 % 1.57 % (21)
Efficiency ratio 44.75 % 44.21 % 54
Adjusted efficiency ratio ^(2)^ 38.31 % 38.88 % (57) bps

(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 the allowance for loan losses with a current expected credit loss model (“CECL”). The Company adopted ASU 2016-13 using the modified retrospective approach on January 1, 2020. As a result, prior comparative periods have not been adjusted for the CECL model. In addition, ASU 2016-13 introduces the concept of Purchased Credit Deteriorated (“PCD”) financial assets, which replaces purchased credit-impaired (“PCI”) assets. For PCD assets, the initial allowance for loan losses is added to the purchase price and is considered to be part of the PCD loan amortized cost basis, hence, there is no income statement impact on acquisition. This contrasts with PCI loans where allowance for loan losses only reflects losses that are incurred by the Company after the acquisition. The allowance for loan losses is evaluated each quarter and adjusted as necessary by recognizing a loan loss expense or a reversal of loan loss expense. There were no PCD loans during the three and six months ended June 30, 2020.
Three Months Ended June 30, 2020
Commercial Consumer Total
CRE Residential Mortgage
C&I CRE Multi-Family<br>Residential Construction<br>and Land Single-<br>Family<br>Residential HELOCs Other<br>Consumer
Allowance for loan losses, March 31, 2020 $ 362,629 $ 132,819 $ 16,530 $ 11,018 $ 26,822 $ 3,881 $ 3,304 $ 557,003
Provision for (reversal of) credit losses on loans 37,862 43,315 7,908 7,526 (1,667) 205 (849) 94,300
Gross charge-offs (20,378) (320) — — — (221) (30) (20,949)
Gross recoveries 602 226 620 7 159 2 93 1,709
Total net (charge-offs) recoveries (19,776) (94) 620 7 159 (219) 63 (19,240)
Foreign currency translation adjustment 8 — — — — — — 8
Allowance for loan losses, June 30, 2020 $ 380,723 $ 176,040 $ 25,058 $ 18,551 $ 25,314 $ 3,867 $ 2,518 $ 632,071
Three Months Ended March 31, 2020
Commercial Consumer Total
CRE Residential Mortgage
C&I CRE Multi-Family<br>Residential Construction<br>and Land Single-<br>Family<br>Residential HELOCs Other<br>Consumer
Allowance for loan losses, December 31, 2019 $ 238,376 $ 40,509 $ 22,826 $ 19,404 $ 28,527 $ 5,265 $ 3,380 $ 358,287
Impact of ASU 2016-13 adoption 74,237 72,169 (8,112) (9,889) (3,670) (1,798) 2,221 125,158
Allowance for loan losses, January 1, 2020 $ 312,613 $ 112,678 $ 14,714 $ 9,515 $ 24,857 $ 3,467 $ 5,601 $ 483,445
Provision for (reversal of) credit losses on loans 60,618 11,435 1,281 1,482 1,700 412 (2,272) 74,656
Gross charge-offs (11,977) (954) — — — — (26) (12,957)
Gross recoveries 1,575 9,660 535 21 265 2 1 12,059
Total net (charge-offs) recoveries (10,402) 8,706 535 21 265 2 (25) (898)
Foreign currency translation adjustment (200) — — — — — — (200)
Allowance for loan losses, March 31, 2020 $ 362,629 $ 132,819 $ 16,530 $ 11,018 $ 26,822 $ 3,881 $ 3,304 $ 557,003

All values are in US Dollars.

Three Months Ended June 30, 2019
Commercial Consumer Total
CRE Residential Mortgage
C&I CRE Multi-Family Residential Construction and Land Single- Family Residential HELOCs Other Consumer
Allowance for loan losses, March 31, 2019 $ 189,757 $ 39,224 $ 19,169 $ 22,349 $ 35,759 $ 7,401 $ 4,235 $ 317,894
Provision for (reversal of) credit losses on loans (a) 26,140 (1,250) 58 173 (3,068) (1,224) (98) 20,731
Gross charge-offs (11,745) — — — — — (14) (11,759)
Gross recoveries 1,713 1,837 53 439 72 — 7 4,121
Total net (charge-offs) recoveries (10,032) 1,837 53 439 72 — (7) (7,638)
Foreign currency translation adjustment (362) — — — — — — (362)
Allowance for loan losses, June 30, 2019 $ 205,503 $ 39,811 $ 19,280 $ 22,961 $ 32,763 $ 6,177 $ 4,130 $ 330,625
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 Total
CRE Residential Mortgage
C&I CRE Multi-Family Residential Construction and Land Single- Family Residential HELOCs Other Consumer
Allowance for loan losses, December 31, 2019 $ 238,376 $ 40,509 $ 22,826 $ 19,404 $ 28,527 $ 5,265 $ 3,380 $ 358,287
Impact of ASU 2016-13 adoption 74,237 72,169 (8,112) (9,889) (3,670) (1,798) 2,221 125,158
Allowance for loan losses, January 1, 2020 $ 312,613 $ 112,678 $ 14,714 $ 9,515 $ 24,857 $ 3,467 $ 5,601 $ 483,445
Provision for (reversal of) credit losses on loans 98,480 54,750 9,189 9,008 33 617 (3,121) 168,956
Gross charge-offs (32,355) (1,274) — — — (221) (56) (33,906)
Gross recoveries 2,177 9,886 1,155 28 424 4 94 13,768
Total net (charge-offs) recoveries (30,178) 8,612 1,155 28 424 (217) 38 (20,138)
Foreign currency translation adjustment (192) — — — — — — (192)
Allowance for loan losses, June 30, 2020 $ 380,723 $ 176,040 $ 25,058 $ 18,551 $ 25,314 $ 3,867 $ 2,518 $ 632,071

All values are in US Dollars.

Six Months Ended June 30, 2019
Commercial Consumer Total
CRE Residential Mortgage
C&I CRE Multi-Family Residential Construction and Land Single- Family Residential HELOCs Other Consumer
Allowance for loan losses, December 31. 2018 $ 189,117 $ 40,666 $ 19,885 $ 20,290 $ 31,340 $ 5,774 $ 4,250 $ 311,322
Provision for (reversal of) credit losses on loans (a) 41,404 (2,914) (939) 2,169 1,349 401 (99) 41,371
Gross charge-offs (28,989) — — — — — (28) (29,017)
Gross recoveries 3,964 2,059 334 502 74 2 7 6,942
Total net (charge-offs) recoveries (25,025) 2,059 334 502 74 2 (21) (22,075)
Foreign currency translation adjustment 7 — — — — — — 7
Allowance for loan losses, June 30, 2019 $ 205,503 $ 39,811 $ 19,280 $ 22,961 $ 32,763 $ 6,177 $ 4,130 $ 330,625
Three Months Ended Six Months Ended
--- --- --- --- --- --- --- --- --- --- --- --- ---
June 30, 2020 March 31, 2020 June 30, 2019 June 30, 2020 June 30, 2019
Unfunded Credit Facilities
Allowance for unfunded credit commitments, beginning of period ^(1)^ $ 20,829 $ 11,158 $ 14,505 $ 11,158 $ 12,566
Impact of ASU 2016-13 adoption — 10,457 — 10,457 —
Provision for (reversal of) credit losses on unfunded credit <br> commitments (b) 8,143 (786) (1,486) 7,357 453
Allowance for unfunded credit commitments, end of period ^(1)^ $ 28,972 $ 20,829 $ 13,019 $ 28,972 $ 13,019
Provision for credit losses (a) + (b) $ 102,443 $ 73,870 $ 19,245 $ 176,313 $ 41,824

1

(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 on January 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 as of January 1, 2020. Nonaccrual loans as of June 30, 2020 and March 31, 2020 include all loans that are 90 or more days past due, unless the loan is well-collateralized or guaranteed by government agencies, and in the process of collection. Nonaccrual loans presented as of June 30, 2019 included only Non-PCI nonaccrual loans.
Nonperforming Assets^^ June 30, 2020 March 31, 2020 June 30, 2019
Total <br>Nonaccrual loans Total <br>Nonaccrual loans Non-PCI <br>Nonaccrual Loans
Commercial:
C&I 84,823 $ 89,079 $ 73,150
CRE:
CRE 6,298 20,914
Multifamily residential 803 1,027
Total CRE 7,101 21,941
Consumer:
Residential mortgage:
Single-family residential 17,536 13,075
HELOCs 10,446 7,344
Total residential mortgage 27,982 20,419
Other consumer 2,506 2,504
Total nonaccrual loans 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, 2020 March 31, 2020 June 30, 2019
Nonperforming assets to total assets 0.41 % 0.33 % 0.28 %
Nonaccrual loans to loans HFI 0.48 % 0.35 % 0.35 %
Allowance for loan losses to loans HFI 1.70 % 1.55 % 0.98 %
Allowance for loan losses to nonaccrual loans 353.47 % 439.73 % 280.16 %
Annualized quarterly net charge-offs to average loans HFI 0.21 % 0.01 % 0.09 %

All values are in US Dollars.

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 of certain previously claimed tax credits related to the DC Solar tax credit investments (“DC Solar”). The table below shows the computation of the Company’s effective tax rate excluding the impact of the DC Solar tax credits reversal. Management believes that excluding the impact of the DC Solar tax credits reversal from the effective tax rate computation allows comparability to prior periods.
Three Months Ended Six Months Ended
June 30, 2020 March 31, 2020 June 30, 2019 June 30, 2020 June 30, 2019
Income tax expense $ 12,921 $ 19,186 $ 72,797 $ 32,107 $ 103,864
Less: Reversal of certain previously claimed tax credits related to DC Solar — — (30,104) — (30,104)
Adjusted income tax expense $ 12,921 $ 19,186 $ 42,693 $ 32,107 $ 73,760
Income before income taxes 112,273 164,010 223,177 276,283 418,268
Effective tax rate 11.5 % 11.7 % 32.6 % 11.6 % 24.8 %
Less: Reversal of certain previously claimed tax credits related to DC Solar — % — % (13.5) % — % (7.2) %
Adjusted effective tax rate 11.5 % 11.7 % 19.1 % 11.6 % 17.6 %

All values are in US Dollars.

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 7.0 million pre-tax impairment charge and reversed 30.1 million of certain previously claimed tax credits related to the DC Solar tax credit investments (“DC Solar”), respectively. Management believes that presenting the computations of the adjusted net income, adjusted diluted earnings per common share, adjusted return on average assets and adjusted return on average equity that adjust for the above discussed non-recurring items provides clarity to financial statement users regarding the ongoing performance of the Company and allows comparability to prior periods.
Three Months Ended
June 30, 2020 March 31, 2020 June 30, 2019
Net income $ 99,352 $ 144,824 $ 150,380
Add: Reversal of certain previously claimed tax credits related to DC Solar — — 30,104
Adjusted net income $ 99,352 $ 144,824 $ 180,484
Diluted weighted-average number of shares outstanding 141,827 145,285 146,052
Diluted EPS $ 0.70 $ 1.00 $ 1.03
Diluted EPS impact of reversal of certain previously claimed tax credits related to DC Solar — — 0.21
Adjusted diluted EPS $ 0.70 $ 1.00 $ 1.24
Average total assets $ 48,228,914 $ 44,755,509 $ 41,545,441
Average stockholders’ equity $ 4,982,446 $ 5,022,005 $ 4,684,348
Return on average assets (1) 0.83 % 1.30 % 1.45 %
Adjusted return on average assets (1) 0.83 % 1.30 % 1.74 %
Return on average equity (1) 8.02 % 11.60 % 12.88 %
Adjusted return on average equity (1) 8.02 % 11.60 % 15.45 %
Six Months Ended
June 30, 2020 June 30, 2019
Net income $ 244,176 $ 314,404
Add: Impairment charge related to DC Solar (2) — 6,978
Tax effect of adjustments (3) — (2,063)
Add: Reversal of certain previously claimed tax credits related to DC Solar — 30,104
Adjusted net income $ 244,176 $ 349,423
Diluted weighted average number of shares outstanding 143,560 146,016
Diluted EPS $ 1.70 $ 2.15
Diluted EPS impact of impairment charge related to DC Solar, net of tax — 0.03
Diluted EPS impact of reversal of certain previously claimed tax credits related to DC Solar — 0.21
Adjusted diluted EPS $ 1.70 $ 2.39
Average total assets $ 46,492,211 $ 41,144,152
Average stockholders’ equity $ 5,002,226 $ 4,611,231
Return on average assets (1) 1.06 % 1.54 %
Adjusted return on average assets (1) 1.06 % 1.71 %
Return on average equity (1) 9.82 % 13.75 %
Adjusted return on average equity (1) 9.82 % 15.28 %

All values are in US Dollars.

(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 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 agreements. 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, 2020 March 31, 2020 June 30, 2019
Net interest income before provision for credit losses $ 343,775 $ 362,707 $ 367,326
Total noninterest income 58,637 54,049 52,759
Total revenue $ 402,412 $ 416,756 $ 420,085
Total noninterest expense $ 187,696 $ 178,876 $ 177,663
Less: Amortization of tax credit and other investments (24,759) (17,325) (16,739)
Amortization of core deposit intangibles (931) (953) (1,152)
Repurchase agreements’ extinguishment cost (8,740) — —
Adjusted noninterest expense $ 153,266 $ 160,598 $ 159,772
Efficiency ratio 46.64 % 42.92 % 42.29 %
Adjusted efficiency ratio 38.09 % 38.54 % 38.03 %
Adjusted pre-tax, pre-provision income $ 249,146 $ 256,158 $ 260,313
Average total assets $ 48,228,914 $ 44,755,509 $ 41,545,441
Adjusted pre-tax, pre-provision profitability ratio (1) 2.08 % 2.30 % 2.51 %
Adjusted noninterest expense/average assets (1) 1.28 % 1.44 % 1.54 %
Six Months Ended
June 30, 2020 June 30, 2019
Net interest income before provision for credit losses $ 706,482 $ 729,787
Total noninterest income 112,686 94,890
Total revenue 819,168 824,677
Total noninterest expense $ 366,572 $ 364,585
Less: Amortization of tax credit and other investments (42,084) (41,644)
Amortization of core deposit intangibles (1,884) (2,326)
Repurchase agreements’ extinguishment cost (8,740) —
Adjusted noninterest expense $ 313,864 $ 320,615
Efficiency ratio 44.75 % 44.21 %
Adjusted efficiency ratio 38.31 % 38.88 %
Adjusted pre-tax, pre-provision income $ 505,304 $ 504,062
Average total assets $ 46,492,211 $ 41,144,152
Adjusted pre-tax, pre-provision profitability ratio (1) 2.19 % 2.47 %
Adjusted noninterest expense /average assets (1) 1.36 % 1.57 %

All values are in US Dollars.

(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 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, 2020 March 31, 2020 June 30, 2019
Stockholders’ equity $ 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 $ 4,508,056 $ 4,422,519 $ 4,249,944
Total assets $ 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 $ 48,928,406 $ 45,468,079 $ 42,407,709
Total stockholders’ equity to total assets ratio 10.09 % 10.67 % 11.04 %
Tangible equity to tangible assets ratio 9.21 % 9.73 % 10.02 %

All values are in US Dollars.

Adjusted return on average tangible equity represents adjusted tangible net income divided by average tangible equity. Adjusted tangible net income excludes the after-tax impacts of the amortization of core deposit intangibles and mortgage servicing assets, impairment charge and the reversal of certain previously claimed tax credits related to DC Solar (where applicable). 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, 2020 March 31, 2020 June 30, 2019 June 30, 2020 June 30, 2019
Net Income $ 99,352 $ 144,824 $ 150,380 $ 244,176 $ 314,404
Add: Amortization of core deposit intangibles 931 953 1,152 1,884 2,326
Amortization of mortgage servicing assets 458 584 1,013 1,042 1,337
Tax effect of adjustments ^(2)^ (394) (436) (640) (830) (1,083)
Tangible net income (e) $ 100,347 $ 145,925 $ 151,905 $ 246,272 $ 316,984
Add: Impairment charge related to DC Solar ^(3)^ — — — — 6,978
Tax effect of adjustment ^(2)^ — — — — (2,063)
Add: Reversal of certain previously claimed tax credits related to DC Solar — — 30,104 — 30,104
Adjusted tangible net income (f) $ 100,347 $ 145,925 $ 151,905 $ 246,272 $ 352,003
Average stockholders’ equity $ 4,982,446 $ 5,022,005 $ 4,684,348 $ 5,002,226 $ 4,611,231
Less: Average goodwill (465,697) (465,697) (465,697) (465,697) (465,629)
Average other intangible assets ^(1)^ (14,247) (15,588) (20,380) (14,918) (21,116)
Average tangible equity (g) $ 4,502,502 $ 4,540,720 $ 4,198,271 $ 4,521,611 $ 4,124,486
Return on average tangible equity ^(4)^ (e)/(g) 8.96 % 12.93 % 14.51 % 10.95 % 15.50 %
Adjusted return on average tangible equity ^(4)^ (f)/(g) 8.96 % 12.93 % 17.39 % 10.95 % 17.21 %

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

(2)Applied statutory rate of 28.35% for the three and six months ended June 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.

22

ewbc2q20earningspresenta

EWBC Earnings Results Second Quarter 2020 July 23, 2020

Forward-Looking Statements Forward-Looking Statements Certain matters set forth herein (including any exhibits hereto) constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, including forward-looking statements relating to 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. 2

East West Response to COVID-19 Employees SBA Paycheck Protection Program . Developed detailed return to office plan with . Processed and funded $1.8 billion for over phased return for associates. 7,200 small to medium-sized businesses and . Continue work-from-home plans for nonprofit organizations during 2Q20. associates who can perform work remotely. . Prepared locations: temperature screening, . Funds used to support over 170,000 plexiglass panels, PPE. employees. . All branches resumed normal business . Median loan size: $60,000. hours, including all 13 that were temporarily . Over 60% of loans under $100,000. closed due to COVID-19. COVID-19 Related Payment Deferrals Active Deferrals as of 6/30/2020 # of Deferrals $ of Deferrals % Deferred LTV of Deferred . 90% are 3-month deferrals. C&I 72 140 mil 1.2% N/A . Of the $1.6bn C&I and CRE loan CRE 235 1,431 mil 9.9% 53.4% Subtotal 307 1,571 mil 6.0% N/A deferrals, 45% are still making Residential Mortgage 2,917 1,309 mil 14.3% 50.7% partial payments during the Total Loans 3,224 2,880 mil 7.7% N/A deferral period. 3

Summary of Second Quarter 2020 Results Profitability: Returns on Assets & Equity 2.00% 40.0% 2Q20 1.74% 1.67% 1.58% Net Income 30.0% 1.30% $99 million 17.4% 15.7% 16.6% 0.83% 20.0% 12.9% 9.0% 2Q20 15.5% 14.1% 14.9% 10.0% 11.6% Diluted EPS 8.0% 0.00% 0.0% $0.70 2Q19* 3Q19 4Q19* 1Q20 2Q20 ROAA ROAE ROATE* Total Revenue * See reconciliation of GAAP to non-GAAP financial measures in the appendix and in the Company’s Earnings Press Releases. ROAA, ROAE & ROATE adjusted in 2Q19 & 4Q19 for non-GAAP items. $402 million Pre-Tax, Pre-Provision Income & PTPP Ratio Record Loans $260 $263 $266 $256 $249 4.00% $37.2 billion $250 3.50% $200 2.51% 3.00% 2.42% 2.37% 2.30% 2.08% 2.50% Record Deposits $150 $ $ in millions 2.50% 2.00% 2.30% $40.7 billion $100 1.83% 1.50% 1.00% $50 1.42% 0.50% 0.25% Adj.* Efficiency Ratio $- 0.00% 2Q19 3Q19 4Q19 1Q20 2Q20 38.1% Adj.* PTPP income Adj.* PTPP profitability ratio Avg. Fed Funds rate * See reconciliation of GAAP to non-GAAP financial measures in the appendix and in the Company’s Earnings Press Releases. 4

2Q20: Summary Balance Sheet $ in millions, except per share data 06.30.20 03.31.20 % Change Notable Items Cash equivalents & ST investments $ 5,065 $ 3,374 50% Strong, well-diversified balance sheet. AFS debt securities & repo assets 5,145 4,556 13% Gross loans (ex. PPP) $ 35,487 $ 35,895 -1% . Total loan growth: $1.3bn, +15% annualized. PPP loans 1,747 - NM . Total deposit growth: $2.0bn, +21% Total loans, net of discounts $ 37,233 $ 35,895 4% annualized. Allowance for loan losses ("ALLL") (632) (557) 13% . Loan-to-deposit ratio of 91.5% as of Net Loans $ 36,601 $ 35,338 4% 06.30.20, decrease from 92.8% as of Other assets 2,597 2,681 -3% 03.31.20: reflects strong deposit growth in Total Assets $ 49,408 $ 45,949 8% 2Q20. Customer deposits $ 40,673 $ 38,687 5% . Greater China loans: $1.2bn as of Short-term borrowings 253 67 278% 06.30.20, -2% Q-o-Q. FHLB advances & repo funding 957 1,096 -13% . Greater China deposits: $2.2bn as of PPP Liquidity Facility 1,428 - NM 06.30.20, +7% Q-o-Q. Other LT debt & finance lease liab. 152 152 0% . Funded the PPP loans through the Paycheck Other liabilities 958 1,043 -8% Protection Program Liquidity Facility Total Liabilities $ 44,420 $ 41,046 8% (“PPPLF”) by drawing on $1.4bn, Total Stockholders' Equity $ 4,987 $ 4,903 2% strengthening already substantial liquidity and bolstering balance sheet capacity to Book value per share $ 35.25 $ 34.67 2% serve customers. Tangible equity per share $ 31.86 $ 31.27 2% . Strong liquidity: available borrowing capacity Gross loans / deposits 91.5% 92.8% (124) bp of $15.7bn as of 06.30.20, up from $13.0bn ALLL / gross loans 1.70% 1.55% 15 bp as of 03.31.20. 5

2Q20: Strong Capital Ratios . Growing Equity: Book value per share of $35.25 as of 06.30.20: +2% Q-o-Q and +8% Y-o-Y. . Tangible equity* per share of $31.86 as of 06.30.20: +2% Q-o-Q and +9% Y-o-Y. . Tangible equity* to tangible assets ratio of 9.2% as of 06.30.20. . Increasing risk-based capital ratios: CET1 capital, Tier 1 capital & total capital ratios all increased Q-o-Q as of 06.30.20. . Capital return to shareholders: . Dividend: Quarterly common stock dividend of 27.5 cents per share, or annualized $1.10 per share. . No buybacks during 2Q20. 13.9% 14.4% 12.4% 12.7% 12.4% 12.7% 10.5% 10.2% 9.7% 8.5% 7.0% 5.0% CET1 Tier 1 Total Leverage capital ratio capital ratio capital ratio ratio Higher of the Regulatory requirement for the Minimum Capital Ratio + 2.5% Conservation Buffer, EWBC as of 03.31.20 EWBC as of 06.30.20 or the Well Capitalized Ratio Note: regulatory capital ratios as of 06.30.20 are preliminary. * See reconciliation of GAAP to non-GAAP financial measures in the appendix of this presentation and in the Company’s Earnings Press Releases. 6

2Q20: Record Loans of $37.2 billion Loan Mix as of 06.30.20: $37.2 billion* . EOP loan growth: 4% Q-o-Q (+15% LQA). ($ in billions) . Avg. loan growth: 6% Q-o-Q (+23% LQA). $1.7 $9.3 5% . C&I: 2Q growth from PPP. 25% . PPP: average balance of $1.5bn in 2Q20. . Real estate portfolio growth: total CRE: +11% LQA; $11.7 $14.5 31% residential mortgage: +12% LQA. 39% . As of 06.30.20, total C&I commitments of $16.1bn: $11.7bn in loans outstanding (ex. PPP) plus $4.5bn in C&I (ex. PPP) PPP Total CRE Residential mortgage & other consumer undisbursed commitments. . C&I loan line utilization: 72% as of 06.30.20, down Average Loans & Growth 45 $45.0 from 75% as of 03.31.20, and up from 71% as of 12.31.19. $37.1 $40.0 40 $34.4 $35.2 $33.0 $33.7 +9% +23% 1.5 35 $35.0 +8% +9% . Undertook rigorous loan portfolio review in 2Q20, 30 9.0 9.1 $30.0 8.3 8.6 8.8 covering over 50% of the C&I and CRE loan 25 $25.0 portfolios. 20 $20.0 12.7 12.9 13.4 14.0 14.4 15 $15.0 $ $ in billions 10 $10.0 5 12.0 12.2 12.2 12.2 12.1 $5.0 0 $- 2Q19 3Q19 4Q19 1Q20 2Q20 * Loan balances of $37.2bn as of 06.30.20 are net of deferred loan fees, unearned C&I (ex. PPP) PPP Total CRE Residential mortgage & other consumer fees, unamortized premiums and unaccreted discounts of $(72.1) million. PPP balances LQA avg. loan growth of $1.75bn as of 06.30.20 are net of origination fees of $(25.4). 7

06.30.20: Diversified Commercial Loan Portfolio Total Loans: C&I Loans by Industry as % of Total Loans Outstanding Total Residential Mortgage & 3% General Manufacturing & Wholesale Other Consumer Other Consumer 3% Oil & Gas 25% 3% Private Equity $11.7 billion 2% Entertainment $37.2 C&I 2% Real Estate Related 2% Technology & Life Science billion 31% 2% Consumer Goods 2% Clean Energy Total Loans 1% Healthcare 1% Grocers & Food Producers Total CRE 39% 10% All Other C&I PPP 5% Oil & Gas exposure: . Loans O/S: $1.3bn loans as of 06.30.20, down 6% Q-o-Q from $1.4bn. . Total commitments: $1.6bn as of 06.30.20, down by 8% Q-o-Q from $1.8bn. . Allowance for loan loss coverage: 9% of O&G portfolio. . Portfolio mix: 62% E&P; 32% midstream & downstream; 6% oilfield services & other. . E&P production mix through 2020: by volume: 29% oil, 55% gas & 16% NGL; by revenue: 58% oil, 33% gas & 9% NGL. . Production hedged: 73% oil and 74% gas hedged for 2020; and 46% oil and 61% gas hedged for 2021. 8

06.30.20: Diversified Commercial Real Estate Portfolio Total Loans: Total CRE Loans by Property Type as % of Total CRE Geographic Distribution Total Loans Outstanding Total Residential Other WA 8% Mortgage & 3% Other Consumer Retail, 9% TX 25% 6% NY PPP $14.5 billion MFR, 8% 6% $14.5 5% $37.2 Total CRE billion billion 39% Office, 7% SoCal Total CRE 54% Total Loans Industrial, 6% loans NorCal 23% C&I Hotel, 5% 31% All Other CRE, 4% . Geographic distribution reflects EWBC’s branch footprint. . Owner-occupied loans in CRE: $2.2bn, or 6% of total loans outstanding. . Included in All Other CRE are construction & land loans of $568mm, or 1.5% of total loans. Total construction & land exposure of $935mm comprises loans O/S plus $367mm in undisbursed commitments. 9

06.30.20: Low LTV Commercial Real Estate Portfolio LTV Distribution of Total CRE LTV & Size by Property Type > 70% >65% to 70% Average Weight. Avg. 7% 4% ($ in mm) Loan Size LTV Retail $ 2.2 mm 50% Multifamily 1.2 mm 52% >60% to 65% Office 3.8 mm 54% 16% $2.3 million Industrial 2.3 mm 51% Avg. size <=50% 52% 40% Hotel 8.2 mm 54% Construction & Weigh. avg. LTV 9.5 mm* 52% >55% to 60% Land 17% Other 1.9 mm 49% >50% to 55% Total CRE $ 2.3 mm 52% 16% * Construction & Land avg. size based on total commitment. . High percentage of CRE loans have full recourse & personal guarantees from individuals or guarantors with substantial net worth. . Many of our customers have long-term relationships with East West Bank. 10

06.30.20: Low LTV Single Family Mortgage Portfolio Geographic Distribution of SFR LTV Distribution SFR >60% 7% <=50% 32% $385,000 $7.7 billion Avg. outstanding Single-family SFR size mortgage >55% to 60% 53% 47% Avg. LTV >50% to 55% 14% . Single-family residential (SFR): $7.7bn as of 06.30.20, primarily originated through East West Bank branches. . Residential mortgage origination volume: $777mm in 2Q20, comprising $567mm of SFR and $210mm of HELOC originations, increased 6% Q-o-Q. Transaction volume picked up in May and June after a slower April. . Refinance transactions: 68% of residential mortgage origination volume in 2Q20, vs. 62% in 1Q20. 11

06.30.20: Low LTV HELOC Portfolio Geographic Distribution of HELOC LTV* Distribution HELOC >60% :: 3% Other WA 5% 10% >55% to 60% NY 33% $362,000 13% $1.5 billion SoCal Avg. HELOC 48% commitment HELOC <=50% Loan balance 49% 57% Avg. LTV* NorCal 24% * Combined LTV for 1st and 2nd >50% to 55% liens. Based on 7% commitment. . Home Equity Line of Credit (HELOC): $1.5bn loans outstanding plus $1.6bn in undisbursed commitments, for total commitment of $3.1bn as of 06.30.20. Utilization rate of 48% in 2Q20. . Similar to SFR loans, HELOCs primarily originated through East West Bank branches. . As of 06.30.20, 84% of HELOCs were in first lien position. 12

2Q20: Allowance for Loan Losses & Credit Costs Allowance for Loan Losses Coverage Ratio Provision for Credit Losses & Net Charge-offs 0.70% $632 4.80% 220 0.50% $557 0.26% $483 0.21% 0.30% $500 3.60% 0.09% 0.10% 0.01% $358 0.10% $311 102 $ $ in millions 2.40% 110 1.70% -0.10% 1.39% 1.55% 74 0.96% 1.03% $ in millions -0.30% 1.20% 38 19 22 19 19 -0.50% 8 8 1 $- 0.00% - -0.70% 12.31.18 12.31.19 01.01.20 (CECL) 03.31.20 06.30.20 2Q19 3Q19 4Q19 1Q20 2Q20 Allowance for loan losses ALLL/Loans HFI Provision for credit losses Net Charge-offs NCO ratio Composition of ALLL Over Time: . Allowance coverage of loans HFI: 1.70% as of 06.30.20. Total: $632 Total:1.70% . ALLL coverage change by loan type: Total: $557 31 0.34% . C&I (ex. PPP): 3.3%, +38bp Q-o-Q Total: $483 34 . Oil & Gas: 9.0%, +112bps Q-o-Q. 220 1.51% . All Other C&I: 2.6%, +28bps Q-o-Q. 33 160 Total: $358 . Total CRE: 1.5%, +38bps Q-o-Q (hotel, retail). 137 37 . Resi. mortgage & other consumer: 0.3%, -3bps Q-o-Q. 83 . 2Q20 provision for credit losses of $102mm: coverage portfolioby . Provision primarily driven by a more adverse macroeconomic 363 381 3.26% 313 $ in millions; ratio is allowance allowance isratio $ in millions; forecast as of 06.30.20, relative to 03.31.20, as well as loan 238 risk rating downgrades. 0 . Charge-offs primarily from oil & gas: $14mm or 64% of gross 12.31.19 01.01.20 (CECL) 03.31.20 06.30.20 06.30.20 charge-offs in 2Q20. ALLL by Loan Type: C&I (ex. PPP) Total CRE Residential mortgage & other consumer 13

2Q20: Asset Quality Metrics Special Mention Loans Total: $576mm Classified Loans 21.6% Total: $674mm $6 $36 1% 5% 11.0% 36 0.4% $140 $164 24% 19824% Classified:1.4% $276 SM: 41% $276 30 0.3% 1.8% of 1.5% of 48% total loans total loans 104 0.7% 164 1.6% 4.8% 4.1% 2.9% $154 $198 2.7% 27% 2.3% 30% 258 2.3% 1.6% 1.0% 1.1% 1.4% 276 21.6% 0.7% 0.3% Special mention Special loan mention portfolio byratio 0.2% 0.4% 0.1% loan byratio portfolio Classified 55 4.1% - 03.31.20: 1.5% of loans 06.30.20: 1.5% of loans 03.31.20: 1.2% of loans 06.30.20: 1.8% of loans 03.31.20 03.31.20 Ratio 06.30.20 06.30.20 Ratio C&I: oil & gas All Other C&I (ex. PPP) CRE Resi. mortgage & consumer Nonperforming Assets & NPA Ratio . Criticized loans: 3.4% of total loans as of 06.30.20: $1,250mm. 220 $202 . Special mention: 1.5% of total loans: $576mm. . Classified: 1.8% of total loans. $674mm as of 06.30.20. $151 $115 $122 . Nonaccrual loans: 0.48% of total loans as of 06.30.20. $93 $179mm as of 06.30.20. $ $ in millions 0.41% . Q-o-Q increase largely due to inflows of oil & gas and 0.33% CRE loans, partially offset by pay-offs and charge-offs of 0.31% 0.27% 0.23% C&I loans. 0 12.31.17 12.31.18 12.31.19 03.31.20 06.30.20 . Accruing loans 30-89 days past due: 0.30% of total Nonaccrual loans OREO & other NPA NPAs/Total assets loans as of 06.30.20. $113mm as of 06.30.20. Nonaccrual loans prior to January 1, 2020 include only Non-PCI nonaccrual loans due to adoption of ASU 2016-13 on January 1, 2020. 14

2Q20: Record Deposits of $40.7 billion Deposit Mix as of 06.30.20: $40.7 billion . EOP loan-to-deposit ratio of 91.5% as of 06.30.20. ($ in billions) . EOP deposit growth of 5% Q-o-Q (+21% LQA). . Avg. deposit growth of 6% Q-o-Q (+26% LQA). $9.3 . Growth in avg. DDA: $2.4bn (+87% LQA). Avg. DDA 23% $13.9 increased to 34% of total deposits, up from 30% in 1Q20. 34% . Growth driven by strong growth from consumer and small $7.5 business commercial customers, and PPP funds held in 18% deposit accounts. $10.0 . Intentional run-off of higher-cost balances. 25% . Continued decrease in deposit costs: repricing of maturing CDs to lower rates, as well as further run-off of higher-cost DDA MMDA IB Checking & Savings Time balances. Average Deposits . Cost of total deposits: 0.47% avg. rate in 2Q; spot rate as of $39.9 06.30.20: 0.39%. $37.4 $37.5 40 $36.5 $40.0 $35.3 +26% . Cost of IB deposits: 0.71% avg. rate in 2Q; spot rate as of +13% +10% +1% 35 9.6 $35.0 06.30.20: 0.59%. 10.2 10.3 30 9.9 10.3 $30.0 6.9 . Domestic CD spot rate as of 06.30.20: 1.08%. Future 25 7.1 $25.0 7.3 7.2 7.6 maturities of CDs with interest rate >1.00%: 20 $20.0 9.9 . 3Q20: $2.0bn @ blended rate of 1.56%. $15.0 15 $ in billions 8.3 8.6 9.0 7.9 . 4Q20: $1.4bn @ blended rate of 1.45%. 10 $10.0 13.5 . 1Q21: $1.3bn @ blended rate of 1.26%. 5 10.2 10.7 11.0 11.1 $5.0 0 $- . Originations & renewals of CDs in 2Q20: $4.0bn @ blended 2Q19 3Q19 4Q19 1Q20 2Q20 rate of 0.43%. DDA MMDA IB Checking & Savings Time LQA average deposit growth . Compared to $4.6bn @ blended rate of 1.10% in 1Q20. . Q-o-Q decrease in rate reflects fed funds rate cuts in March. 15

2Q20: Summary Income Statement 2Q20 vs. 1Q20 $ in millions, except per share data 2Q20 1Q20 $ Change % Change Notable Items Net Interest Income $ 343.8 $ 362.7 $ (18.9) -5% Fee income & net gains on sales of . Gains on sales of AFS debt securities of 52.2 54.4 (2.2) -4% loans* $10mm, driven by $132mm in sales of Gains on sales of AFS debt securities 9.6 1.5 8.1 530% municipal bonds in 2Q20. Other (3.2) (1.9) (1.3) NM . Debt extinguishment costs of $9mm. Total Noninterest Income* $ 58.6 $ 54.0 $ 4.6 8% Prepaid $150mm of repurchase Total Revenue $ 402.4 $ 416.8 $ (14.3) -3% agreements in 2Q20. Adjusted noninterest expense $ 153.3 $ 160.6 $ (7.3) -5% . Amortization of tax credit & other Debt extinguishment costs 8.7 - 8.7 NM investments: $25mm in 2Q20 vs. $17mm Amortization of tax credit & other 25.7 18.3 7.4 41% in 1Q20. investments + core deposit intangibles Total Noninterest Expense $ 187.7 $ 178.9 $ 8.8 5% . Q-o-Q change reflects valuation Provision for credit losses on loans $ 94.3 $ 74.7 19.7 26% adjustments on other investments, Provision for credit losses on unfunded and timing of tax credit investment. 8.1 (0.8) 8.9 NM commitments . 2Q20 effective tax rate: 12%, Provision for credit losses $ 102.4 $ 73.9 $ 28.6 39% unchanged from 1Q20. Income tax expense 12.9 19.2 (6.3) -33% Effective tax rate 12% 12% 0% . Q-o-Q weighted average diluted shares Net Income $ 99.4 $ 144.8 $ (45.5) -31% decreased by 2% due to stock repurchase activity in Mar. 2020. Diluted EPS $ 0.70 $ 1.00 $ (0.30) -30% Weigh. avg. diluted shares (in mm) 141.8 145.3 (3.5) -2% * See slide 18 for noninterest income detail by category. 16

2Q20: Net Interest Income & Net Interest Margin Net Interest Income & Net Interest Margin . 2Q20 NII: $344mm, down by $19mm or -5% Q-o-Q. 2Q included $21mm of PPP loan income, net of interest expense on PPPLF. 400 $367 $370 $368 $363 . 2Q20 NIM: 3.04%, down 40 bps Q-o-Q. 350 $344 300 . Impact to NIM from change in yields & rates (Q-o-Q): 250 . -65 bps from lower loan yields. 200 3.73% . -10 bps from lower other earning asset yields. 150 3.59% $ $ in millions 3.47% 3.44% . -8 bps from balance sheet mix shift. 100 3.04% 50 . +35 bps from lower funding costs. 0 . +8 bps of impact from PPP. 2Q19 3Q19 4Q19 1Q20 2Q20 . Loan repricing front-loaded in quarter: 31% of portfolio linked NII Net Interest Margin to LIBOR (predominantly 1M) and 27% linked to Prime rates. Average Loan Yield Relative to Prime & 1M LIBOR Avg. Cost of Deposits Relative to Fed Funds 6.00% 6.00% 2.50% 5.50% 5.30% 2.30% 4.91% 5.00% 4.71% 5.00% 5.28% 5.11% 1.83% 4.83% 3.98% 4.00% 4.00% 4.42% 3.00% 2.44% 3.00% 2.17% 3.25% 1.42% 1.79% 2.00% 1.41% 2.00% 1.57% 1.49% 1.34% 1.11% 1.17% 1.05% 0.94% 0.71% 1.00% 0.36% 1.00% 0.82% 0.47% 0.25% 0.00% 0.00% 2Q19 3Q19 4Q19 1Q20 2Q20 2Q19 3Q19 4Q19 1Q20 2Q20 Avg. cost of deposits Avg. cost of IB deposits Avg. loan yield Avg. Prime Rate Avg. 1M LIBOR Rate Avg. Fed Funds Rate 17

2Q20: Noninterest Income Detail Fee Income & Net Gains on Sales of Loans * Total noninterest income: $59mm in 2Q20 vs. 60.0 $54mm in 1Q20. $54.4 $52.5 $52.2 $50.9 . Fee income and net gains on sales of loans: $48.9 50.0 $52mm in 2Q20, down $2mm or -4% Q-o-Q. 14.1 11.6 22% 14.1 11.8 11.1 . Decrease reflects lower customer transaction 40.0 volumes across several fee income lines of 3.1 6% 5.4 business. 3.8 4.8 4.2 4.6 9% 30.0 6.0 7.8 . Lending fees: $22mm in 2Q20, increased by 7.3 8.1 10.9 21% $6mm Q-o-Q, primarily due to an increase in the valuation of warrants received as part of lending $ $ in millions 9.8 9.6 10.4 20.0 9.7 relationships. 10.0 21.9 42% 17.2 16.4 15.0 15.8 Interest Rate Contracts and Other Derivative Income Detail 0.0 ($ in millions) 2Q19 3Q19 4Q19 1Q20 2Q20 2Q19 3Q19 4Q19 1Q20 2Q20 2Q20 Mix Revenue $ 11.8 $ 11.1 $ 14.1 $ 14.1 $ 11.6 Lending fees Deposit account fees Foreign exchange income CVA (1.4) (2.7) 3.7 (7.0) (5.5) Wealth management fees IRC revenue Net gains on sales of loans Total $ 10.4 $ 8.4 $ 17.8 $ 7.1 $ 6.1 * Fee income excludes: credit valuation adjustment (“CVA”) related to interest rate contracts (“IRC”) and other derivatives; net gains on . Revenue – interest rate contracts and other derivatives transaction fees. sales of securities; gains on sale of fixed assets, and other income. . CVA – related to interest rate contracts and other derivatives. 18

2Q20: Operating Expense & Efficiency Adjusted* Noninterest Expense Noninterest Expense & Efficiency Ratio 180.0 $165 $165.3 $160 $159 $161 70.0% $159.8 $158.6 $160.6 $170 $153 160.0 $153.3 26.7 38.0% 37.7% 38.3% 38.5% 38.1% 24.8 26.8 24.2 140.0 21.5 13% 3.2 2.1 1.2 5.4 2.6 6.0 6.1 1.4 1% 3.6 5.4 4% 9.7 11.2 10.0 120.0 9.9 11.8 8% 17.4 17.1 17.1 17.9 16.2 11% $- 0.0% 100.0 2Q19 3Q19 4Q19 1Q20 2Q20 Adj.* noninterest expense Adj.* efficiency ratio 80.0 $ $ in millions 60.0 100.5 97.8 101.1 102.0 97.0 63% . 2Q20 total noninterest expense: $188mm, increase 40.0 of 5% Q-o-Q. . 2Q20 adj.* noninterest expense: $153mm, decrease 20.0 of 5% Q-o-Q and down 4% Y-o-Y. 0.0 . Largest Q-o-Q decrease in compensation and 2Q19 3Q19 4Q19 1Q20 2Q20 2Q20 Mix employee benefits expense, followed by other Comp and employee benefits Occupancy & Equipment operating and legal expense. Computer software & Data processing Deposit & loan related Consulting Other operating expense . Notable decreases in other operating expense: marketing promotion expenses, travel expense. *See reconciliation of GAAP to non-GAAP financial measures in the appendix of this presentation and in the Company’s Earnings Press Releases. 19

APPENDIX

Appendix: GAAP to Non-GAAP Reconciliation EAST WEST BANCORP, INC. AND SUBSIDIARIES GAAP TO NON-GAAP RECONCILIATION ($ in thousands, except per share data) (unaudited) During the first and second quarters of 2019, the Company recorded a $7.0 million pre-tax impairment charge and reversed $30.1 million of certain previously claimed tax credits related to the DC Solar tax credit investments (“DC Solar”), respectively. Management believes that presenting the computations of the adjusted net income, adjusted diluted earnings per common share, adjusted return on average assets and adjusted return on average equity that adjust for the above discussed non-recurring items provides clarity to financial statement users regarding the ongoing performance of the Company and allows 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 of certain previously claimed tax credits related to DC Solar — — 30,104 Adjusted net income (b) $ 99,352 $ 144,824 $ 180,484 Diluted weighted-average number of shares outstanding 141,827 145,285 146,052 Diluted EPS $ 0.70 $ 1.00 $ 1.03 Diluted EPS impact of reversal of certain previously claimed tax credits related to DC Solar — — 0.21 Adjusted diluted EPS $ 0.70 $ 1.00 $ 1.24 Average total assets (c) $ 48,228,914 $ 44,755,509 $ 41,545,441 Average stockholders’ equity (d) $ 4,982,446 $ 5,022,005 $ 4,684,348 Return on average assets (1) (a)/(c) 0.83 % 1.30 % 1.45 % Adjusted return on average assets (1) (b)/(c) 0.83 % 1.30 % 1.74 % Return on average equity (1) (a)/(d) 8.02 % 11.60 % 12.88 % Adjusted return on average equity (1) (b)/(d) 8.02 % 11.60 % 15.45 % (1) Annualized. 21

Appendix: GAAP to Non-GAAP Reconciliation EAST WEST BANCORP, INC. AND SUBSIDIARIES GAAP TO NON-GAAP RECONCILIATION ($ in thousands) (unaudited) 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 agreements. 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, 2020 March 31, 2020 June 30, 2019 Net interest income before provision for credit losses (a) $ 343,775 $ 362,707 $ 367,326 Total noninterest income 58,637 54,049 52,759 Total revenue (b) $ 402,412 $ 416,756 $ 420,085 Total noninterest expense (c) $ 187,696 $ 178,876 $ 177,663 Less: Amortization of tax credit and other investments (24,759) (17,325) (16,739) Amortization of core deposit intangibles (931) (953) (1,152) Repurchase agreements’ extinguishment cost (8,740) — — Adjusted noninterest expense (d) $ 153,266 $ 160,598 $ 159,772 Efficiency ratio (c)/(b) 46.64 % 42.92 % 42.29 % Adjusted efficiency ratio (d)/(b) 38.09 % 38.54 % 38.03 % Adjusted pre-tax, pre-provision income (b)-(d) = (e) $ 249,146 $ 256,158 $ 260,313 Average total assets (f) $ 48,228,914 $ 44,755,509 $ 41,545,441 Adjusted pre-tax, pre-provision profitability ratio (1) (e)/(f) 2.08 % 2.30 % 2.51 % Adjusted noninterest expense/average assets (1) (d)/(f) 1.28 % 1.44 % 1.54 % (1) Annualized. 22

Appendix: GAAP to Non-GAAP Reconciliation EAST WEST BANCORP, INC. AND SUBSIDIARIES GAAP TO NON-GAAP RECONCILIATION ($ in thousands) (unaudited) The Company uses certain non-GAAP financial measures to provide supplemental information regarding the Company’s performance. Tangible equity and 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. (1) Includes core deposit intangibles and mortgage servicing assets. 23

Appendix: GAAP to Non-GAAP Reconciliation (cont’d) EAST WEST BANCORP, INC. AND SUBSIDIARIES GAAP TO NON-GAAP RECONCILIATION ($ in thousands) (unaudited) Adjusted return on average tangible equity represents adjusted tangible net income divided by average tangible equity. Adjusted tangible net income excludes the after-tax impacts of the amortization of core deposit intangibles and mortgage servicing assets, impairment charge and the reversal of certain previously claimed tax credits related to DC Solar (where applicable). 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. (1) Includes core deposit intangibles and mortgage servicing assets. (2) Applied statutory rate of 28.35% for the three and six months ended June 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. 24

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