ewbc-20220127
0001069157false00010691572022-01-272022-01-27


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)
January 27, 2022

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 North 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 classTrading Symbol(s)Name of each exchange on which registered
Common Stock, par value $0.001 per shareEWBCThe 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 January 27, 2022, East West Bancorp, Inc. (the “Company”) announced its financial results for the quarter and full year ended December 31, 2021. A copy of the Company’s press release (the “Press Release”) is attached as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated by reference in this Item 2.02. The Press Release is “furnished” 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 January 27, 2022, the Company will hold a conference call to discuss its financial results for the quarter and full year ended December 31, 2021 and other matters relating to the Company. The Company has also made available on its website, www.eastwestbank.com, 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 such information be deemed incorporated by reference into any filings the Company has made or may make under the Securities Act or the Exchange Act, except as otherwise expressly stated in such filing.

Item 9.01. Financial Statements and Exhibits

(d) Exhibits
Press Release, dated January 27, 2022.
Presentation Materials, dated January 27, 2022.
104Cover Page Interactive Data (formatted in Inline XBRL).


2




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: January 27, 2022By:/s/ Irene H. Oh 
  Irene H. Oh
  Executive Vice President and Chief Financial Officer


3




Exhibit 99.1
ewbclogoa13a.jpg
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 Investor Relations and Corporate Finance
T: (626) 768-6360
T: (626) 768-6985
E: [email protected]E: [email protected]


EAST WEST BANCORP REPORTS RECORD NET INCOME FOR 2021
OF $873 MILLION AND DILUTED EARNINGS PER SHARE OF $6.10,
BOTH UP BY 54% FROM THE PRIOR YEAR; INCREASES DIVIDEND BY 21%


Pasadena, California – January 27, 2022 – East West Bancorp, Inc. (“East West” or the “Company”) (Nasdaq: EWBC), parent company of East West Bank, today reported its financial results for the full year and fourth quarter of 2021. For the full year 2021, net income was $873.0 million, or $6.10 per diluted share. For the fourth quarter of 2021, net income was $217.8 million, or $1.52 per diluted share.

“East West achieved record earnings in 2021. Our record total revenue of $1.8 billion grew by 13% year-over-year and our record net income of $873 million grew by 54%,” stated Dominic Ng, Chairman and Chief Executive Officer of East West. “We delivered an attractive return on assets of 1.5% and a return on tangible equity1 of 17.2% in 2021. Our outstanding financial performance reflected robust net interest income and fee income growth, industry-leading efficiency, and substantially improved asset quality. Year-over-year, nonperforming assets decreased by 56% and criticized loans declined by 32%.”

“Total loans reached a record $41.7 billion as of December 31, 2021. Loans grew by $4.3 billion or 12% year-over-year, excluding the impact of the Paycheck Protection Program. Total deposits grew to $53.4 billion as of December 31, 2021, an increase of $8.5 billion or 19% year-over-year, driven by strong growth in noninterest-bearing demand deposits. Demand deposits now make up 43% of our deposits, up from 36% a year ago.”

“We wish to thank our team of more than 3,000 associates who work tirelessly to support our customers in their banking needs. Our ability to deliver strong financial performance year in, year out is a direct result of the hard work and dedication of our associates and their commitment to serve our customers with excellence,” continued Ng.

“We are entering 2022 from a position of strength and are pleased to announce a 21% increase in our common stock dividend. We expect to deliver yet another year of outstanding profitability for our shareholders, supported by solid loan and deposit growth, healthy capital levels, and the asset sensitive nature of our balance sheet in a rising interest rate environment,” concluded Ng.






















1 See reconciliation of GAAP to non-GAAP financial measures in Table 13.
1

FINANCIAL HIGHLIGHTS

Twelve Months EndedYear-over-Year Change
($ in millions)December 31, 2021$%
Total Loans (incl. PPP)$41,694$3,3029%
Total Loans (excl. PPP)41,1604,33612
Total Deposits53,3518,48819
Total Revenue$1,817$20513%
Net Income87330554


BALANCE SHEET

•Total Assets – Total assets reached $60.9 billion as of December 31, 2021, compared with $61.0 billion as of September 30, 2021. Year-over-year, total assets grew $8.7 billion or 17% from $52.2 billion as of December 31, 2020.

Fourth quarter 2021 average interest-earning assets of $58.9 billion grew by $704.6 million, or 5% linked quarter annualized, from $58.2 billion in the third quarter of 2021. The quarter-over-quarter growth in average interest-earning assets mainly consisted of a $1.1 billion increase in average available-for-sale (“AFS”) debt securities and a $572.4 million increase in average loans, partially offset by a $986.0 million decrease in average interest-bearing cash and deposits with banks. Excluding Paycheck Protection Program (“PPP”) loans, average loans grew by $1.0 billion, or 10% linked quarter annualized.

•Record Loans – Total loans reached $41.7 billion as of December 31, 2021, up by $1.2 billion, or 12% annualized, from $40.5 billion as of September 30, 2021. Excluding PPP loans, total loans grew by $1.5 billion, or 15% linked quarter annualized, with growth well diversified throughout our major loan categories of commercial real estate (“CRE”), commercial and industrial (“C&I”), and residential mortgage. Year-over-year, total loans grew 9% from $38.4 billion as of December 31, 2020. Excluding PPP loans, total loans grew $4.3 billion or 12% year-over-year. PPP loans totaled $534.2 million as of December 31, 2021.

Fourth quarter 2021 average loans of $40.5 billion grew by $572.4 million, or 6% linked quarter annualized. Excluding PPP loans, average loans grew by $1.0 billion, or 10% annualized, from the third quarter of 2021. The strongest growth was from average C&I loans (excluding PPP), which increased 16% linked quarter annualized. Average total CRE loans and average residential mortgage loans both increased 8% linked quarter annualized.

•Total Deposits – Total deposits were $53.4 billion as of December 31, 2021, essentially unchanged from $53.4 billion as of September 30, 2021, and up $8.5 billion or 19% from $44.9 billion as of December 31, 2020. Noninterest-bearing demand deposits totaled $22.8 billion as of December 31, 2021, down by $330.0 million, or 6% annualized, from $23.2 billion as of September 30, 2021, and up by $6.5 billion, or 40%, from $16.3 billion as of December 31, 2020. Noninterest-bearing demand deposits made up 43% of total deposits as of both December 31, 2021 and September 30, 2021, up from 36% as of December 31, 2020.

Fourth quarter 2021 average deposits of $54.3 billion grew by $819.6 million, or 6% linked quarter annualized. Growth in the fourth quarter average deposits was led by noninterest-bearing demand deposits, which increased by $850.0 million, or 15% linked quarter annualized. This was followed by 10% annualized growth in money market deposits, partially offset by decreases in time and interest-bearing checking accounts.

•Strong Capital Levels – As of December 31, 2021, stockholders’ equity was $5.8 billion, or $41.13 per common share, and tangible equity2 per common share was $37.79. Tangible equity per common share increased by 3% quarter-over-quarter and increased by 12% year-over-year. As of December 31, 2021, the tangible equity to tangible assets ratio2 was 8.88%, the common equity tier 1 (“CET1”) capital ratio was 12.8%, and the total risk-based capital ratio was 14.1%.







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

•Dividend Increase – The first quarter 2022 common stock dividend was increased by 21%, or seven cents per share. The new quarterly dividend is $0.40 per share, up from $0.33 per share. The new annual dividend is $1.60 per share, compared with $1.32 per share previously.


OPERATING RESULTS

Full Year Earnings – Full year 2021 net income was $873.0 million, or $6.10 per diluted share, an increase of 54% from $567.8 million, or $3.97 per diluted share, for the full year 2020.

Fourth Quarter Earnings – Fourth quarter 2021 net income was $217.8 million, or $1.52 per diluted share, compared with $225.4 million, or $1.57 per diluted share, for the third quarter of 2021. Quarter-over-quarter, net income decreased by 3% and diluted earnings per share decreased by 3.5%.


Fourth Quarter 2021 Compared to Third Quarter 2021

Net Interest Income and Net Interest Margin
Net interest income (“NII”) totaled $405.7 million, an increase of 10% annualized from $395.7 million. Net interest margin (“NIM”) of 2.73% increased by three basis points from 2.70%.
•Excluding the impact of PPP loans, adjusted NII3 totaled $396.1 million, an increase of 16% annualized from $380.5 million. PPP loans contributed $9.6 million to NII in the fourth quarter, compared with $15.2 million in the third quarter.
•Adjusted NII growth reflected higher interest income from growth in loans and AFS debt securities, as well as lower interest expense because of a lower cost of funds.
•Adjusted NIM3 of 2.70% increased by six basis points from 2.64%. The quarter-over-quarter adjusted NIM expansion was driven by a favorable shift in the asset mix into higher interest earning assets, and a lower cost of deposits.
•The average loan yield was 3.59%, down two basis points from the third quarter, and the adjusted average loan yield3 of 3.56% was unchanged quarter-over-quarter.
•The average cost of funds of 0.12% decreased by two basis points from 0.14%. This reflected growth in average demand deposits, and a continued decline in the cost of interest-bearing deposits. The average cost of deposits of 0.10% decreased by two basis points from 0.12%.

Noninterest Income
Noninterest income totaled $71.5 million in the fourth quarter, compared with $73.1 million in the third quarter.
•Quarter-over-quarter, lending fees increased $3.2 million or 18%, reflecting higher syndication, trade finance and loan commitment fees. Deposit account fees increased $1.5 million or 8%, due to growth in commercial account fees.
•Interest rate contracts (“IRC”) and other derivative income was $1.9 million in the fourth quarter, compared with $7.2 million in the third quarter. The $5.2 million quarter-over-quarter decrease was due to lower customer-driven IRC revenue and a smaller favorable change in the credit valuation adjustment, compared with the previous quarter.



















3 See reconciliation of GAAP to non-GAAP financial measures in Table 14.
3

Noninterest Expense
Noninterest expense totaled $210.1 million in the fourth quarter, compared with $205.4 million in the third quarter. Fourth quarter noninterest expense consisted of $177.7 million of adjusted noninterest expense4, $31.8 million in amortization of tax credit and other investments, and $0.6 million in amortization of core deposit intangibles.
•Adjusted noninterest expense of $177.7 million increased by 7% from $166.7 million in the third quarter. The quarter-over-quarter change reflects increased bonus and incentive compensation expense in the fourth quarter, which was primarily related to full year business activity, as well as higher charitable contributions in other operating expense.
•Amortization of tax credit and other investments totaled $31.8 million, compared with $38.0 million in the third quarter. Quarter-over-quarter variability in the amortization of tax credits and other investments partially reflects the impact of investments that close in a given period.
•The adjusted efficiency ratio4 was 37.2% in the fourth quarter, compared with 35.6% in the third quarter.


TAX RELATED ITEMS

Full year 2021 income tax expense was $183.4 million and the effective tax rate was 17.4%, compared with income tax expense of $118.0 million and an effective tax rate of 17.2% for the full year 2020. Fourth quarter 2021 income tax expense was $59.3 million and the effective tax rate was 21.4%, compared with income tax expense of $48.0 million and an effective tax rate of 17.5% for the third quarter of 2021.


ASSET QUALITY

Quarter-over-quarter, nonperforming assets (“NPAs”) decreased by 40%, to 0.17% of total assets, and criticized loans were down 18%, to 2.00% of loans held-for-investment (“HFI”). Year-over-year, NPAs decreased by 56% and criticized loans decreased by 32%.
1
•The NPA ratio improved by 11 basis points quarter-over-quarter and by 28 basis points year-over-year. As of December 31, 2021, NPAs were $103.5 million, or 0.17% of total assets, compared with $172.6 million, or 0.28% of total assets, as of September 30, 2021, and $234.9 million, or 0.45% of total assets, as of December 31, 2020.
•The criticized loan ratio improved by 50 basis points quarter-over-quarter and by 117 basis points year-over-year. As of December 31, 2021, criticized loans totaled $833.1 million, or 2.00% of loans HFI, compared with $1.0 billion, or 2.50% of loans HFI, as of September 30, 2021, and $1.2 billion, or 3.17% of loans HFI as of December 31, 2020.
•The allowance for loan losses (“ALLL”) totaled $541.6 million, or 1.30% of loans HFI, as of December 31, 2021, compared with $560.4 million, or 1.38% of loans HFI, as of September 30, 2021, and $620.0 million, or 1.61% of loans HFI, as of December 31, 2020. The quarter-over-quarter decrease in the ALLL largely reflects an improved macroeconomic forecast, partially offset by higher downside scenario weightings. Consequently, the Company recorded a negative $10.0 million provision for credit losses during the fourth quarter of 2021.
•Fourth quarter 2021 net charge-offs were $9.8 million, or annualized 0.10% of average loans HFI, down from $13.5 million, or annualized 0.13% of average loans HFI, for the third quarter of 2021. The net charge-off ratio for the full year of 2021 was 0.13%, a decrease from 0.17% for the full year 2020.

















4 See reconciliation of GAAP to non-GAAP financial measures in Table 12.
4

CAPITAL STRENGTH

Capital levels for East West are strong. The following table presents the regulatory capital metrics as of December 31, 2021, September 30, 2021, and December 31, 2020.

EWBC Risk-Based Capital Ratios
($ in millions)
December 31, 2021 (a)
September 30, 2021 (a)
December 31, 2020 (a)
CET1 capital ratio12.8 %12.8 %12.7 %
Tier 1 capital ratio12.8 %12.8 %12.7 %
Total capital ratio14.1 %14.2 %14.3 %
Leverage ratio9.0 %8.8 %9.4 %
Risk-Weighted Assets (“RWA”) (b)
$43,594 $42,128 $38,406 
(a)The Company has elected to use the 2020 CECL transition provision in the calculation of its December 31, 2021, September 30, 2021 and December 31, 2020 regulatory capital ratios. The Company’s December 31, 2021 regulatory capital ratios and RWA are preliminary.
(b)Under regulatory guidelines, on-balance sheet assets and credit equivalent amounts of derivatives and off-balance sheet items are assigned to one of several broad risk categories based on the nature of the obligor, or, if relevant, the guarantor or the nature of any collateral. The aggregate dollar value in each risk category is then multiplied by the risk weight associated with that category. The resulting weighted values from each of the risk categories are aggregated for determining total RWA.


DIVIDEND PAYOUT AND CAPITAL ACTIONS

East West’s Board of Directors has declared first quarter 2022 dividends for the Company’s common stock. The common stock cash dividend of $0.40 per share is payable on February 22, 2022 to stockholders of record on February 7, 2022. This represents a 21% increase, or seven cents per share, to the quarterly common stock dividend, up from $0.33 per share previously. The new annual dividend is $1.60 per share, compared with $1.32 per share previously.

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 fourth quarter of 2021, and has not repurchased any shares since the first quarter of 2020, under this authorization.


Conference Call

East West will host a conference call to discuss fourth quarter and full year 2021 earnings with the public on Thursday, January 27, 2022, at 8:30 a.m. PT/11:30 a.m. ET. The public and investment community are invited to listen as management discusses fourth quarter and full year 2021 results and operating developments.
•The following dial-in information is provided for participation in the conference call: calls within the U.S. – (877) 506-6399; calls within Canada – (855) 669-9657; international calls – (412) 902-6699.
•A presentation to accompany the earnings call will be available on the Investor Relations page of the Company’s website at www.eastwestbank.com/investors.
•A listen-only live broadcast of the call will also be available on the Investor Relations page of the Company’s website at www.eastwestbank.com/investors.
•A replay of the conference call will be available on January 27, 2022, at 11:30 a.m. PT through February 27, 2022. 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: 7293241.










5

About East West

East West Bancorp, Inc. is a public company with total assets of $60.9 billion and is traded on the Nasdaq Global Select Market under the symbol “EWBC”. The Company’s wholly owned subsidiary, East West Bank, is one of the largest independent banks headquartered in California, operating over 120 locations in the United States and in China. The Company’s markets in the United States include California, Georgia, Massachusetts, Nevada, New York, Texas and Washington. In China, East West’s presence includes full-service branches in Hong Kong, Shanghai, Shantou and Shenzhen, and representative offices in Beijing, Chongqing, Guangzhou, and Xiamen. For more information on East West, visit the Company’s website at www.eastwestbank.com.


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

There are a number of important factors that could cause future results to differ materially from historical performance and these forward-looking statements. Factors that might cause such differences, include, but are not limited to: changes in the global economy, including an economic slowdown, or market disruption, level of inflation, interest rate environment, housing prices, employment levels, rate of growth and general business conditions; the impact of any future federal government shutdown and uncertainty regarding the federal government’s debt limit; changes in local, regional and global business, economic and political conditions and geopolitical events; the economic, financial, reputational and other impacts of the ongoing COVID-19 global pandemic including variants thereof and any other pandemic, epidemic or health-related crisis, as well as a deterioration of asset quality and an increase in credit losses due to the COVID-19 global pandemic; changes in laws or the regulatory environment including regulatory reform initiatives and policies of the U.S. Department of Treasury, the Board of Governors of the Federal Reserve System (the “Federal Reserve”), the Federal Deposit Insurance Corporation (“FDIC”), the SEC, the Consumer Financial Protection Bureau (“CFPB”), and the California Department of Financial Protection and Innovation (“DFPI”) – Division of Financial Institutions; the changes and effects thereof in trade, monetary and fiscal policies and laws, including the ongoing trade dispute between the U.S. and the People’s Republic of China and the monetary policies of the Federal Reserve; changes in the commercial and consumer real estate markets; changes in consumer or commercial spending, and savings and borrowing habits, patterns and behaviors; fluctuations in the Company’s stock price; impact from potential changes to income tax laws and regulations, federal spending and economic stimulus programs; the Company’s ability to compete effectively against financial institutions in its banking markets and other entities, including as a result of emerging technologies; the soundness of other financial institutions; success and timing of the Company’s business strategies; the Company’s ability to retain key officers and employees; impact on the Company’s funding costs, net interest income and net interest margin from changes in key variable market interest rates, competition, regulatory requirements and the Company’s product mix; changes in the Company’s costs of operation, compliance and expansion; the Company’s ability to adopt and successfully integrate new technologies into its business in a strategic manner; impact of the benchmark interest rate reform in the U.S. including the transition away from USD London Interbank Offered Rate (“LIBOR”) to alternative reference rates; impact of communications or technology disruption, failure in, or breach of, the Company’s operational or security systems or infrastructure, or those of third parties with which the Company does business, including as a result of cyber-attacks, and other similar matters which could result in, among other things, confidential and/or proprietary information being disclosed or misused and materially impact the Company’s ability to provide services to its clients; adequacy of the Company’s risk management framework, disclosure controls and procedures and internal control over financial reporting; future credit quality and performance, including the Company’s expectations regarding future credit losses and allowance levels; impact of adverse changes to the Company’s credit ratings from major credit rating agencies; impact of adverse judgments or settlements in litigation; impact on the Company’s operations due to political developments, disease pandemics, wars, civil unrest, terrorism or other hostilities that may disrupt or increase volatility in securities or otherwise affect business and economic conditions; heightened regulatory and governmental oversight and scrutiny of the Company’s business practices, including dealings with consumers; impact of reputational risk from negative publicity, fines and penalties and other negative consequences from regulatory violations, legal actions and the Company’s interactions with business partners, counterparties, service providers and other third parties; impact of regulatory enforcement actions; changes in accounting standards as may be required by the Financial Accounting Standards Board (“FASB”) or other regulatory agencies and their impact on critical accounting policies and assumptions; the Company’s capital requirements and its ability to generate capital internally or raise capital on favorable terms; impact on the Company’s liquidity due to changes in the Company’s ability to pay dividends and repurchase common stock and to receive dividends from its subsidiaries; any future strategic acquisitions or divestitures; changes in the equity and debt securities markets; fluctuations in foreign currency exchange rates; impact of increased focus on social, environmental and sustainability matters, which may affect the Company’s operations as well as those of its customers and the economy more broadly; 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, declines in asset values and/or recognition of allowance for credit losses on securities held in the Company’s available-for-sale (“AFS”) debt securities portfolio; and impact of climate change, natural or man-made disasters or calamities, such as wildfires, droughts and earthquakes, all of which are particularly common in California, or other events that may directly or indirectly result in a negative impact on the Company’s financial performance.

For a more detailed discussion of some of the factors that might cause such differences, see the Company’s 2020 Form 10-K under the heading Item 1A. Risk Factors and the information set forth under Item 1A. Risk Factors in the Company’s Quarterly Reports on Form 10-Q. The Company does not undertake, and specifically disclaims any obligation to update or revise any forward-looking statements to reflect the occurrence of events or circumstances after the date of such statements except as required by law.
6

EAST WEST BANCORP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
($ and shares in thousands, except per share data)
(unaudited)
Table 1   
December 31, 2021
% or Basis Point Change
 December 31, 2021September 30, 2021December 31, 2020Qtr-o-QtrYr-o-Yr
Assets   
 Cash and due from banks$527,317$594,631$592,117(11.3)%(10.9)%
Interest-bearing cash with banks3,385,6184,258,2703,425,854(20.5)(1.2)
Cash and cash equivalents3,912,9354,852,9014,017,971(19.4)(2.6)
 Interest-bearing deposits with banks736,492855,162809,728(13.9)(9.0)
 Assets purchased under resale agreements (“resale agreements”)2,353,5032,596,1421,460,000(9.3)61.2 
 Available-for-sale (“AFS”) debt securities (amortized cost of $10,087,179, $9,783,180 and $5,470,523)9,965,3539,713,0065,544,6582.6 79.7 
Federal Home Loan Bank (“FHLB”) and Federal Reserve Bank (“FRB”) stock
77,43477,20083,0460.3 (6.8)
 Loans held-for-sale (“HFS”)635—1,788100.0 (64.5)
 Loans held-for-investment (''HFI'') (net of allowance for loan losses of $541,579, $560,404 and $619,983) 41,152,20239,921,30137,770,9723.1 9.0 
 
Investments in qualified affordable housing partnerships, net
289,741297,367213,555(2.6)35.7 
Investments in tax credit and other investments, net
338,522367,428266,525(7.9)27.0 
 Goodwill465,697465,697465,697— — 
Operating lease right-of-use assets98,63299,78595,460(1.2)3.3 
 Other assets 1,479,5551,713,1211,427,513(13.6)3.6 
 Total assets $60,870,701$60,959,110$52,156,913(0.1)%16.7 %
Liabilities and Stockholders’ Equity   
 Deposits$53,350,532$53,356,190$44,862,752(0.0)%18.9 %
Short-term borrowings——21,009— (100.0)
 FHLB advances249,331248,898652,6120.2 (61.8)
 Assets sold under repurchase agreements (“repurchase agreements”)300,000300,000300,000— — 
 Long-term debt and finance lease liabilities151,997151,795151,7390.1 0.2 
Operating lease liabilities 105,534107,107102,830(1.5)2.6 
 Accrued expenses and other liabilities876,0891,104,919796,796(20.7)10.0 
 Total liabilities55,033,48355,268,90946,887,738(0.4)17.4 
 Stockholders’ equity5,837,2185,690,2015,269,1752.6 10.8 
 Total liabilities and stockholders’ equity $60,870,701$60,959,110$52,156,913(0.1)%16.7 %
 Book value per common share $41.13$40.10$37.222.6 %10.5 %
 
Tangible equity (1) per common share
$37.79$36.75$33.852.8 11.6 
 Number of common shares at period-end141,908141,884141,5650.0 0.2 
Tangible equity to tangible assets ratio (1)
8.88 %8.62 %9.27 %26 bps(39)bps
(1)See reconciliation of GAAP to non-GAAP financial measures in Table 13.
7

EAST WEST BANCORP, INC. AND SUBSIDIARIES
TOTAL LOANS AND DEPOSITS DETAIL
($ in thousands)
(unaudited)
Table 2
December 31, 2021
% Change
  December 31, 2021September 30, 2021December 31, 2020Qtr-o-QtrYr-o-Yr
Loans:   
Commercial:
Commercial and industrial (“C&I”) (1)
$14,150,608 $13,831,649 $13,631,726 2.3 %3.8 %
Commercial real estate (“CRE”):
 
CRE
12,155,047 11,818,065 11,174,611 2.9 8.8 
 
Multifamily residential
3,675,605 3,340,378 3,033,998 10.0 21.1 
 
Construction and land
346,486 376,921 599,692 (8.1)(42.2)
Total CRE
16,177,138 15,535,364 14,808,301 4.1 9.2 
Consumer:
Residential mortgage:
 
Single-family residential
9,093,702 9,021,801 8,185,953 0.8 11.1 
 
Home equity lines of credit (“HELOCs”)2,144,821 1,963,622 1,601,716 9.2 33.9 
Total residential mortgage
11,238,523 10,985,423 9,787,669 2.3 14.8 
Other consumer
127,512 129,269 163,259 (1.4)(21.9)
Total loans HFI (2)
41,693,781 

40,481,705 

38,390,955 3.0 8.6 
Loans HFS
635 — 1,788 100.0 (64.5)
 
Total loans (1)(2)
41,694,416 40,481,705 38,392,743 3.0 8.6 
Allowance for loan losses(541,579)(560,404)(619,983)(3.4)(12.6)
 
Net loans (2)
$41,152,837 $39,921,301 $37,772,760 3.1 8.9 
Deposits:
   
 
Noninterest-bearing demand
$22,845,464 $23,175,471 $16,298,301 (1.4)%40.2 %
 
Interest-bearing checking
6,524,721 6,530,601 6,142,193 (0.1)6.2 
 
Money market
13,130,300 12,555,879 10,740,667 4.6 22.2 
 
Savings
2,888,065 2,855,597 2,681,242 1.1 7.7 
 
Time deposits
7,961,982 8,238,642 9,000,349 (3.4)(11.5)
 
Total deposits
$53,350,532 $53,356,190 $44,862,752 (0.0)%18.9 %
(1)Includes $534.2 million, $807.3 million and $1.57 billion of Paycheck Protection Program (“PPP”) loans as of December 31, 2021, September 30, 2021 and December 31, 2020, respectively. Excluding PPP loans, total loans were $41.16 billion, $39.67 billion and $36.82 billion as of December 31, 2021, September 30, 2021 and December 31, 2020, respectively.
(2)Includes net deferred loan fees, unearned fees, unamortized premiums and unaccreted discounts of $(50.7) million, $(54.3) million and $(58.8) million as of December 31, 2021, September 30, 2021 and December 31, 2020, respectively. Net origination fees related to PPP loans were $(5.7) million, $(13.5) million and $(12.7) million as of December 31, 2021, September 30, 2021 and December 31, 2020, respectively.


8

EAST WEST BANCORP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF INCOME
($ and shares in thousands, except per share data)
(unaudited)
Table 3
Three Months EndedDecember 31, 2021
% Change
December 31, 2021September 30, 2021December 31, 2020Qtr-o-QtrYr-o-Yr
Interest and dividend income (1)
$422,708 $415,307 $381,348 1.8 %10.8 %
Interest expense
17,011 19,601 34,767 (13.2)(51.1)
Net interest income before provision for credit losses
405,697 395,706 346,581 2.5 17.1 
(Reversal of) provision for credit losses(10,000)(10,000)24,340 — NM
Net interest income after provision for credit losses
415,697 405,706 322,241 2.5 29.0 
Noninterest income71,489 73,109 69,832 

(2.2)2.4 
Noninterest expense210,105 205,384 178,651 2.3 17.6 
Income before income taxes
277,081 273,431 213,422 1.3 29.8 
Income tax expense
59,285 47,982 49,338 23.6 20.2 
Net income
$217,796 $225,449 $164,084 (3.4)%32.7 %
Earnings per share (“EPS”)
   
- Basic
$1.53 $1.59 $1.16 (3.4)%32.4 %
- Diluted
$1.52 $1.57 $1.15 (3.5)32.0 
Weighted-average number of shares outstanding
- Basic
141,907 141,880 141,564 0.0 %0.2 %
- Diluted
143,323 143,143 142,529 0.1 0.6 
 
 
Three Months EndedDecember 31, 2021
% Change
 
 
December 31, 2021September 30, 2021December 31, 2020Qtr-o-QtrYr-o-Yr
Noninterest income:
   
 
Lending fees
$20,739 $17,516 $18,387 18.4 %12.8 %
Deposit account fees20,028 18,508 14,256 8.2 40.5 
Interest rate contracts and other derivative income1,932 7,156 12,967 (73.0)(85.1)
 
Foreign exchange income
13,343 13,101 6,679 1.8 99.8 
 
Wealth management fees
5,291 5,598 4,497 (5.5)17.7 
 
Net gains on sales of loans
2,308 3,329 3,058 (30.7)(24.5)
 
Gains on sales of AFS debt securities
390 354 432 10.2 (9.7)
Other investment income 2,982 5,349 3,989 (44.3)(25.2)
Other income
4,476 2,198 5,567 103.6 (19.6)
Total noninterest income$71,489 $73,109 $69,832 (2.2)%2.4 %
Noninterest expense:
   
 
Compensation and employee benefits
$114,743 $105,751 $105,400 8.5 %8.9 %
 
Occupancy and equipment expense
15,846 15,851 16,548 (0.0)(4.2)
 
Deposit insurance premiums and regulatory assessments
4,772 4,641 3,995 2.8 19.4 
Deposit account expense4,307 4,136 3,501 4.1 23.0 
Data processing4,175 3,575 4,707 16.8 (11.3)
Computer software expense7,494 8,426 7,027 (11.1)6.6 
Consulting expense1,539 1,635 1,537 (5.9)0.1 
 
Legal expense
2,175 2,363 1,673 (8.0)30.0 
 
Other operating expense
23,254 20,998 22,000 10.7 5.7 
Amortization of tax credit and other investments31,800 38,008 12,263 (16.3)159.3 
Total noninterest expense$210,105 $205,384 $178,651 2.3 %17.6 %
NM - Not meaningful.
(1)Includes $9.6 million, $15.2 million and $14.2 million of interest income related to PPP loans for the three months ended December 31, 2021, September 30, 2021 and December 31, 2020, respectively.
9

EAST WEST BANCORP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF INCOME
($ and shares in thousands, except per share data)
(unaudited)
Table 4
 Year EndedDecember 31, 2021
% Change
  December 31, 2021December 31, 2020Yr-o-Yr
Interest and dividend income (1)
$1,618,734 $1,595,042 1.5%
Interest expense
87,163 217,849 (60.0)
Net interest income before provision for credit losses
1,531,571 1,377,193 11.2
(Reversal of ) provision for credit losses(35,000)210,653 NM
Net interest income after provision for credit losses
1,566,571 1,166,540 34.3
Noninterest income 285,895 235,547 21.4
Noninterest expense796,089 716,322 11.1
Income before income taxes
1,056,377 685,765 54.0
Income tax expense
183,396 117,968 55.5
Net income
$872,981 $567,797 53.7%
EPS
  
- Basic
$6.16 $3.99 54.3%
- Diluted
$6.10 $3.97 53.6
Weighted-average number of shares outstanding
- Basic
141,826 142,336 (0.4)%
- Diluted
143,140 142,991 0.1
 
 
Year EndedDecember 31, 2021
% Change
 
 
December 31, 2021December 31, 2020Yr-o-Yr
Noninterest income:
  
 
Lending fees
$77,704 $74,842 3.8%
 
Deposit account fees
71,261 48,148 48.0
Interest rate contracts and other derivative income22,913 31,685 (27.7)
 
Foreign exchange income
48,977 22,370 118.9
 
Wealth management fees
25,751 17,494 47.2
 
Net gains on sales of loans
8,909 4,501 97.9
 
Gains on sales of AFS debt securities1,568 12,299 (87.3)
Other investment income16,852 10,641 58.4
Other income
11,960 13,567 (11.8)
Total noninterest income$285,895 $235,547 21.4%
Noninterest expense:
  
 
Compensation and employee benefits
$433,728 $404,071 7.3%
 
Occupancy and equipment expense
62,996 66,489 (5.3)
 
Deposit insurance premiums and regulatory assessments
17,563 15,128 16.1
Deposit account expense16,152 13,530 19.4
Data processing
16,263 16,603 (2.0)
Computer software expense
30,600 29,033 5.4
Consulting expense
6,517 5,391 20.9
 
Legal expense
8,015 7,766 3.2
 
Other operating expense
81,798 79,489 2.9
Amortization of tax credit and other investments122,457 70,082 74.7
Repurchase agreements’ extinguishment cost— 8,740 (100.0)
Total noninterest expense$796,089 $716,322 11.1%
NM - Not meaningful.
(1)Includes $55.2 million and $43.3 million of interest income related to PPP loans for the years ended December 31, 2021 and 2020, respectively.
10

EAST WEST BANCORP, INC. AND SUBSIDIARIES
SELECTED AVERAGE BALANCES
($ in thousands)
(unaudited)
Table 5
Three Months EndedDecember 31, 2021
% Change		Year EndedDecember 31, 2021
% Change
  December 31,
2021		September 30,
2021		December 31,
2020		Qtr-o-QtrYr-o-YrDecember 31,
2021		December 31,
2020		Yr-o-Yr
Loans:
     
Commercial:
 
C&I (1)
$13,592,203 $13,531,338 $13,332,194 0.4%2.0%$13,656,720 $13,074,883 4.5%
CRE:
 
CRE
11,954,535 11,747,607 11,067,392 1.88.011,663,144 10,828,037 7.7
 
Multifamily residential
3,434,274 3,248,281 3,051,472 5.712.53,213,582 3,009,365 6.8
 
Construction and land
340,940 415,812 588,665 (18.0)(42.1)445,333 597,118 (25.4)
Total CRE
15,729,749 15,411,700 14,707,529 2.17.015,322,059 14,434,520 6.1
Consumer:
Residential mortgage:
 
Single-family residential
9,031,677 8,962,533 7,990,035 0.813.08,742,565 7,613,706 14.8
 
HELOCs
2,052,383 1,912,629 1,558,781 7.331.71,859,073 1,480,516 25.6
Total residential mortgage
11,084,060 10,875,162 9,548,816 1.916.110,601,638 9,094,222 16.6
Other consumer
126,557 141,951 137,186 (10.8)(7.7)136,280 195,392 (30.3)
 
Total loans (2)
$40,532,569 $39,960,151 $37,725,725 1.4%7.4%$39,716,697 $36,799,017 7.9%
Interest-earning assets
$58,944,082 $58,239,480 $49,703,349 1.2%18.6%$56,256,388 $46,239,709 21.7%
Total assets
$62,183,137 $61,359,533 $52,466,325 1.3%18.5%$59,251,091 $48,937,793 21.1%
Deposits:     
Noninterest-bearing demand
$24,019,333 $23,169,323 $16,311,010 3.7%47.3%$21,271,410 $13,823,152 53.9%
Interest-bearing checking
6,462,471 6,646,515 6,067,849 (2.8)6.56,543,817 5,357,934 22.1
Money market
12,920,174 12,604,827 10,626,940 2.521.612,428,025 9,881,284 25.8
Savings
2,841,352 2,792,702 2,450,980 1.715.92,746,933 2,234,913 22.9
Time deposits
8,072,917 8,283,265 8,965,337 (2.5)(10.0)8,493,511 9,465,608 (10.3)
Total deposits
$54,316,247 $53,496,632 $44,422,116 1.5%22.3%$51,483,696 $40,762,891 26.3%
Interest-bearing liabilities
$31,011,536 $31,039,410 $29,666,559 (0.1)%4.5%$31,077,459 $28,798,277 7.9%
Stockholders’ equity
$5,786,237 $5,680,306 $5,243,203 1.9%10.4%$5,559,212 $5,082,186 9.4%
(1)Includes average balances of PPP loans of $677.2 million, $1.11 billion and $1.70 billion for the three months ended December 31, 2021, September 30, 2021 and December 31, 2020, respectively, and $1.39 billion and $1.24 billion for the years ended December 31, 2021 and 2020, respectively.
(2)Includes loans HFS.

11

EAST WEST BANCORP, INC. AND SUBSIDIARIES
QUARTER-TO-DATE AVERAGE BALANCES, YIELDS AND RATES
($ in thousands)
(unaudited)
Table 6
 
 
Three Months Ended
 
 
December 31, 2021September 30, 2021
 
 
Average Average Average Average
 
 
BalanceInterest
Yield/Rate (1)
BalanceInterest
Yield/Rate (1)
Assets
      
Interest-earning assets:
      
 
Interest-bearing cash and deposits with banks
$6,050,870 $3,750 0.25 %$7,036,823 $4,521 0.25 %
 
Resale agreements2,440,636 9,162 1.49 %2,382,741 8,957 1.49 %
 
AFS debt securities
9,842,691 42,367 1.71 %8,782,682 37,826 1.71 %
 
Loans (2)
40,532,569 366,936 3.59 %39,960,151 363,503 3.61 %
 
FHLB and FRB stock
77,316 493 2.53 %77,083 500 2.57 %
 
Total interest-earning assets
58,944,082 422,708 2.85 %58,239,480 415,307 2.83 %
Noninterest-earning assets:
      
 
Cash and due from banks
652,126 627,640   
 
Allowance for loan losses(558,645)(584,827)  
 
Other assets
3,145,574 3,077,240   
 
Total assets
$62,183,137   $61,359,533   
Liabilities and Stockholders’ Equity
     
Interest-bearing liabilities:
      
 
Checking deposits
$6,462,471 $1,846 0.11 %$6,646,515 $3,186 0.19 %
 
Money market deposits
12,920,174 3,172 0.10 %12,604,827 3,446 0.11 %
 
Savings deposits
2,841,352 1,734 0.24 %2,792,702 1,943 0.28 %
 
Time deposits
8,072,917 6,617 0.33 %8,283,265 7,395 0.35 %
 
Federal funds purchased and other short-term borrowings
730 — — %620 — — %
 
FHLB advances
249,048 856 1.36 %248,614 857 1.37 %
 
Repurchase agreements313,075 2,018 2.56 %310,997 2,012 2.57 %
 
Long-term debt and finance lease liabilities
151,769 768 2.01 %151,870 762 1.99 %
 
Total interest-bearing liabilities
31,011,536 17,011 0.22 %31,039,410 19,601 0.25 %
Noninterest-bearing liabilities and stockholders’ equity:
     
 
Demand deposits
24,019,333 23,169,323 
 
Accrued expenses and other liabilities
1,366,031 1,470,494 
 
Stockholders’ equity
5,786,237 5,680,306 
 
Total liabilities and stockholders’ equity
$62,183,137 $61,359,533 
Interest rate spread
 2.63 %2.58 %
Net interest income and net interest margin
 $405,697 2.73 %$395,706 2.70 %
Adjusted net interest income and adjusted net interest margin (3)
$396,105 2.70 %$380,494 2.64 %
(1)Annualized.
(2)Includes loans HFS. Average balances of PPP loans were $677.2 million and $1.11 billion for the three months ended December 31, 2021 and September 30, 2021, respectively.
(3)Net interest income and net interest margin for the three months ended December 31, 2021 and September 30, 2021 have been adjusted for the impact of PPP loans. See reconciliation of GAAP to non-GAAP financial measures in Table 14.
12

EAST WEST BANCORP, INC. AND SUBSIDIARIES
QUARTER-TO-DATE AVERAGE BALANCES, YIELDS AND RATES
($ in thousands)
(unaudited)
Table 7
 Three Months Ended
December 31, 2021December 31, 2020
Average Average Average Average
BalanceInterest
Yield/Rate (1)
BalanceInterest
Yield/Rate (1)
Assets
      
Interest-earning assets:
      
 
Interest-bearing cash and deposits with banks
$6,050,870 $3,750 0.25 %$5,609,965 $4,458 0.32 %
 
Resale agreements2,440,636 9,162 1.49 %1,257,826 4,955 1.57 %
 
AFS debt securities
9,842,691 42,367 1.71 %5,029,820 22,914 1.81 %
 
Loans (2)
40,532,569 366,936 3.59 %37,725,725 348,578 3.68 %
 
FHLB and FRB stock
77,316 493 2.53 %80,013 443 2.20 %
 
Total interest-earning assets
58,944,082 422,708 2.85 %49,703,349 381,348 3.05 %
Noninterest-earning assets:
      
 
Cash and due from banks
652,126 580,989   
 
Allowance for loan losses(558,645)(618,207)  
 
Other assets
3,145,574 2,800,194   
 
Total assets
$62,183,137   $52,466,325   
Liabilities and Stockholders’ Equity
     
Interest-bearing liabilities:
      
 
Checking deposits
$6,462,471 $1,846 0.11 %$6,067,849 $4,218 0.28 %
 
Money market deposits
12,920,174 3,172 0.10 %10,626,940 5,542 0.21 %
 
Savings deposits
2,841,352 1,734 0.24 %2,450,980 1,655 0.27 %
 
Time deposits
8,072,917 6,617 0.33 %8,965,337 16,727 0.74 %
 
Federal funds purchased and other short-term borrowings
730 — — %47,500 276 2.31 %
 
FHLB advances
249,048 856 1.36 %653,748 3,137 1.91 %
 
Repurchase agreements313,075 2,018 2.56 %335,737 2,080 2.46 %
 
Long-term debt and finance lease liabilities
151,769 768 2.01 %518,468 
(3)
1,132 0.87 %
 
Total interest-bearing liabilities
31,011,536 17,011 0.22 %29,666,559 34,767 0.47 %
Noninterest-bearing liabilities and stockholders’ equity:
      
 
Demand deposits
24,019,333 16,311,010 
 
Accrued expenses and other liabilities
1,366,031 1,245,553 
 
Stockholders’ equity
5,786,237 5,243,203 
 
Total liabilities and stockholders’ equity
$62,183,137 $52,466,325 
Interest rate spread
 2.63 %2.58 %
Net interest income and net interest margin
 $405,697 2.73 %$346,581 2.77 %
Adjusted net interest income and adjusted net interest margin (4)
$396,105 2.70 %$332,701 2.76 %
(1)Annualized.
(2)Includes loans HFS. Average balances of PPP loans were $677.2 million and $1.70 billion for the three months ended December 31, 2021 and 2020, respectively.
(3)Primarily includes average balances from the Federal Reserve Paycheck Protection Program Liquidity Facility (“PPPLF”), which was repaid in full during the fourth quarter of 2020.
(4)Net interest income and net interest margin for the three months ended December 31, 2021 and 2020 have been adjusted for the impact of PPP loans. Net interest margin for the three months ended December 31, 2020 has been adjusted for advances from the PPPLF. See reconciliation of GAAP to non-GAAP financial measures in Table 14.

13

EAST WEST BANCORP, INC. AND SUBSIDIARIES
YEAR-TO-DATE AVERAGE BALANCES, YIELDS AND RATES
($ in thousands)
(unaudited)
Table 8
 Year Ended
December 31, 2021December 31, 2020
Average Average Average Average
BalanceInterestYield/RateBalanceInterestYield/Rate
Assets
      
Interest-earning assets:
      
 
Interest-bearing cash and deposits with banks
$6,071,896 $15,531 0.26 %$4,236,430 $25,175 0.59 %
 
Resale agreements (1)
2,107,157 32,239 1.53 %1,101,434 21,389 1.94 %
 
AFS debt securities8,281,234 143,983 1.74 %4,023,668 82,553 2.05 %
 
Loans (2)
39,716,697 1,424,900 3.59 %36,799,017 1,464,382 3.98 %
 
FHLB and FRB stock
79,404 2,081 2.62 %79,160 1,543 1.95 %
 
Total interest-earning assets
56,256,388 1,618,734 2.88 %46,239,709 1,595,042 3.45 %
Noninterest-earning assets:
      
 
Cash and due from banks
615,255 528,406   
 
Allowance for loan losses
(592,211)(577,560)  
 
Other assets
2,971,659 2,747,238   
 
Total assets
$59,251,091 $48,937,793   
Liabilities and Stockholders’ Equity
     
Interest-bearing liabilities:
      
 
Checking deposits
$6,543,817 $13,023 0.20 %$5,357,934 $24,213 0.45 %
 
Money market deposits
12,428,025 15,041 0.12 %9,881,284 42,720 0.43 %
 
Savings deposits
2,746,933 7,496 0.27 %2,234,913 6,398 0.29 %
 
Time deposits
8,493,511 33,599 0.40 %9,465,608 111,411 1.18 %
 
Federal funds purchased and other short-term borrowings
1,584 42 2.65 %108,398 1,504 1.39 %
 
FHLB advances
404,789 6,881 1.70 %664,370 13,792 2.08 %
 
Repurchase agreements (1)
306,845 7,999 2.61 %350,849 11,766 3.35 %
 
Long-term debt and finance lease liabilities
151,955 3,082 2.03 %734,921 
(3)
6,045 0.82 %
 
Total interest-bearing liabilities
31,077,459 87,163 0.28 %28,798,277 217,849 0.76 %
Noninterest-bearing liabilities and stockholders’ equity:
 
Demand deposits
21,271,410 13,823,152 
 
Accrued expenses and other liabilities
1,343,010 1,234,178 
 
Stockholders’ equity
5,559,212 5,082,186 
 
Total liabilities and stockholders’ equity
$59,251,091 $48,937,793 
Interest rate spread
 2.60 %2.69 %
Net interest income and net interest margin
 $1,531,571 2.72 %$1,377,193 2.98 %
Adjusted net interest income and adjusted net interest margin (4)
$1,476,373 2.69 %$1,335,968 2.97 %
(1)Average balances of resale and repurchase agreements for the year ended December 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 and gross repurchase agreements for the year ended December 31, 2020 were 1.94% and 3.25%, respectively.
(2)Includes loans HFS. Average balances of PPP loans were $1.39 billion and $1.24 billion for the years ended December 31, 2021 and 2020, respectively.
(3)Primarily includes average balances of PPPLF, which was repaid in full during the fourth quarter of 2020.
(4)Net interest income and net interest margin for the year ended December 31, 2021 and 2020 have been adjusted for the impact of PPP loans. Net interest margin for the year ended December 31, 2020 has been adjusted for advances from the PPPLF. See reconciliation of GAAP to non-GAAP financial measures in Table 14.


14

EAST WEST BANCORP, INC. AND SUBSIDIARIES
SELECTED RATIOS
(unaudited)
Table 9
Three Months Ended (1)
December 31, 2021
Basis Point Change
 
 
December 31, 2021September 30, 2021December 31, 2020Qtr-o-QtrYr-o-Yr
 
Return on average assets
1.39 %1.46 %1.24 %(7)bps15 bps
 
Return on average equity
14.93 %15.75 %12.45 %(82)248 
Return on average tangible equity (2)
16.32 %17.25 %13.77 %(93)255 
Adjusted return on average tangible equity (2)
16.32 %17.25 %13.56 %(93)276 
 
Interest rate spread
2.63 %2.58 %2.58 %5 5 
 
Net interest margin
2.73 %2.70 %2.77 %3 (4)
Adjusted net interest margin (2)
2.70 %2.64 %2.76 %6 (6)
Average loan yield
3.59 %3.61 %3.68 %(2)(9)
Adjusted average loan yield (2)
3.56 %3.56 %3.69 %— (13)
 
Yield on average interest-earning assets
2.85 %2.83 %3.05 %2 (20)
Average cost of interest-bearing deposits
0.18 %0.21 %0.40 %(3)(22)
 
Average cost of deposits
0.10 %0.12 %0.25 %(2)(15)
 
Average cost of funds
0.12 %0.14 %0.30 %(2)(18)
Adjusted pre-tax, pre-provision profitability ratio (2)
1.91 %1.95 %1.90 %(4)1 
 
Adjusted noninterest expense/average assets (2)
1.13 %1.08 %1.26 %5 (13)
Efficiency ratio
44.03 %43.81 %42.90 %22 113 
 
Adjusted efficiency ratio (2)
37.24 %35.55 %39.76 %169 bps(252)bps
Year EndedDecember 31, 2021
Basis Point Change
December 31, 2021December 31, 2020Yr-o-Yr
Return on average assets
1.47 %1.16 %31 bps
Return on average equity
15.70 %11.17 %453 
Return on average tangible equity (2)
17.24 %12.42 %482 
Adjusted return on average tangible equity (2)
17.24 %12.37 %487 
Interest rate spread
2.60 %2.69 %(9)
Net interest margin
2.72 %2.98 %(26)
Adjusted net interest margin (2)
2.69 %2.97 %(28)
Average loan yield
3.59 %3.98 %(39)
Adjusted average loan yield (2)
3.57 %4.00 %(43)
Yield on average interest-earning assets
2.88 %3.45 %(57)
Average cost of interest-bearing deposits
0.23 %0.69 %(46)
Average cost of deposits
0.13 %0.45 %(32)
Average cost of funds
0.17 %0.51 %(34)
Adjusted pre-tax, pre-provision profitability ratio (2)
1.94 %2.00 %(6)
Adjusted noninterest expense/average assets (2)
1.13 %1.30 %(17)
Efficiency ratio
43.80 %44.42 %(62)
Adjusted efficiency ratio (2)
36.91 %39.30 %(239)bps
(1)Annualized except for efficiency ratio.
(2)See reconciliation of GAAP to non-GAAP financial measures in Tables 12, 13 and 14.
15

EAST WEST BANCORP, INC. AND SUBSIDIARIES
ALLOWANCE FOR LOAN LOSSES & OFF-BALANCE-SHEET CREDIT EXPOSURES
($ in thousands)
(unaudited)
Table 10
Three Months Ended December 31, 2021
CommercialConsumer
C&ITotal CRETotal Residential MortgageOther ConsumerTotal
Allowance for loan losses, September 30, 2021$342,142 $192,260 $21,684 $4,318 $560,404 
Provision for (reversal of) credit losses on loans(a)2,397 (9,416)(1,519)(940)(9,478)
Gross charge-offs(12,328)(2,872)— (1,454)(16,654)
Gross recoveries5,605 836 430 — 6,871 
Total net (charge-offs) recoveries(6,723)(2,036)430 (1,454)(9,783)
Foreign currency translation adjustment436 — — — 436 
Allowance for loan losses, December 31, 2021$338,252 $180,808 $20,595 $1,924 $541,579 


Three Months Ended September 30, 2021
CommercialConsumer
C&ITotal CRETotal Residential MortgageOther ConsumerTotal
Allowance for loan losses, June 30, 2021$362,528 $199,530 $19,468 $4,198 $585,724 
(Reversal of) provision for credit losses on loans(a)(23,365)8,527 2,972 130 (11,736)
Gross charge-offs(1,154)(16,903)(912)(10)(18,979)
Gross recoveries4,203 1,106 156 — 5,465 
Total net recoveries (charge-offs)3,049 (15,797)(756)(10)(13,514)
Foreign currency translation adjustment(70)— — — (70)
Allowance for loan losses, September 30, 2021$342,142 $192,260 $21,684 $4,318 $560,404 



Three Months Ended December 31, 2020
CommercialConsumer
C&ITotal CRETotal Residential MortgageOther ConsumerTotal
Allowance for loan losses, September 30, 2020$389,021 $201,018 $25,895 $2,318 $618,252 
Provision for (reversal of) credit losses on loans(a)15,041 12,837 (7,848)(184)19,846 
Gross charge-offs(8,759)(12,518)— (5)(21,282)
Gross recoveries2,033 266 163 1 2,463 
Total net (charge-offs) recoveries(6,726)(12,252)163 (4)(18,819)
Foreign currency translation adjustment704 — — — 704 
Allowance for loan losses, December 31, 2020$398,040 $201,603 $18,210 $2,130 $619,983 











16

EAST WEST BANCORP, INC. AND SUBSIDIARIES
ALLOWANCE FOR LOAN LOSSES & OFF-BALANCE-SHEET CREDIT EXPOSURES
($ in thousands)
(unaudited)
Table 10 (continued)
Year Ended December 31, 2021
CommercialConsumer
C&ITotal CRETotal Residential MortgageOther ConsumerTotal
Allowance for loan losses, December 31, 2020$398,040 $201,603 $18,210 $2,130 $619,983 
(Reversal of) provision for credit losses on loans(a)(39,715)6,782 2,710 1,286 (28,937)
Gross charge-offs(32,490)(31,514)(1,091)(1,497)(66,592)
Gross recoveries11,906 3,937 766 5 16,614 
Total net charge-offs(20,584)(27,577)(325)(1,492)(49,978)
Foreign currency translation adjustment511 — — — 511 
Allowance for loan losses, December 31, 2021$338,252 $180,808 $20,595 $1,924 $541,579 

Year Ended December 31, 2020
CommercialConsumer
C&ITotal CRETotal Residential MortgageOther ConsumerTotal
Allowance for loan losses, December 31, 2019$238,376 $82,739 $33,792 $3,380 $358,287 
Impact of ASU 2016-13 adoption74,237 54,168 (5,468)2,221 125,158 
Allowance for loan losses, January 1, 2020$312,613 $136,907 $28,324 $5,601 $483,445 
Provision for (reversal of) credit losses on loans(a)145,212 67,387 (10,527)(3,381)198,691 
Gross charge-offs(66,225)(15,206)(221)(185)(81,837)
Gross recoveries5,428 12,515 634 95 18,672 
Total net (charge-offs) recoveries(60,797)(2,691)413 (90)(63,165)
Foreign currency translation adjustment1,012 — — — 1,012
Allowance for loan losses, December 31, 2020$398,040 $201,603 $18,210 $2,130 $619,983 

Three Months EndedYear Ended
December 31, 2021September 30, 2021December 31, 2020December 31, 2021December 31, 2020
Unfunded Credit Facilities
Allowance for unfunded credit commitments, beginning of period (1)
$28,036 $26,300 $29,083 $33,577 $11,158 
Impact of ASU 2016-13 adoption— — — — 10,457 
(Reversal of) provision for credit losses on unfunded credit commitments(b)(522)1,736 4,494 (6,063)11,962 
Allowance for unfunded credit commitments, end of period (1)
$27,514 $28,036 $33,577 $27,514 $33,577 
(Reversal of) provision for credit losses(a)+(b)$(10,000)$(10,000)$24,340 $(35,000)$210,653 
(1)Included in Accrued expenses and other liabilities on the Consolidated Balance Sheet.



17

EAST WEST BANCORP, INC. AND SUBSIDIARIES
CRITICIZED LOANS, NONPERFORMING ASSETS AND CREDIT QUALITY RATIOS
($ in thousands)
(unaudited)
Table 11
Criticized LoansDecember 31, 2021September 30, 2021December 31, 2020
Special mention loans$384,694 $448,497 $564,555 
Classified loans448,362 561,787 652,880 
Total criticized loans$833,056 $1,010,284 $1,217,435 
Nonperforming Assets
December 31, 2021September 30, 2021December 31, 2020
Nonaccrual loans:
Commercial:
C&I$59,023 $97,157 $133,939 
Total CRE9,942 15,359 50,214 
Consumer:
Total residential mortgage24,164 18,153 28,510 
Other consumer52 2,491 2,491 
Total nonaccrual loans93,181 133,160 215,154 
Other real estate owned, net363 28,800 15,824 
Other nonperforming assets9,938 10,681 3,890 
Total nonperforming assets$103,482 $172,641 $234,868 
Credit Quality RatiosDecember 31, 2021September 30, 2021December 31, 2020
Annualized quarterly net charge-offs to average loans HFI
0.10 %0.13 %0.20 %
Annual net charge-offs to average loans HFI0.13 %N/A0.17 %
Special mention loans to loans HFI0.92 %1.11 %1.47 %
Classified loans to loans HFI1.08 %1.39 %1.70 %
Criticized loans to loans HFI2.00 %2.50 %3.17 %
Nonperforming assets to total assets0.17 %0.28 %0.45 %
Nonaccrual loans to loans HFI0.22 %0.33 %0.56 %
Allowance for loan losses to loans HFI1.30 %1.38 %1.61 %


18

EAST WEST BANCORP, INC. AND SUBSIDIARIES
GAAP TO NON-GAAP RECONCILIATION
($ in thousands)
(unaudited)
Table 12
Adjusted efficiency ratio represents adjusted noninterest expense divided by revenue. Adjusted pre-tax, pre-provision profitability ratio represents revenue less adjusted noninterest expense, divided by average total assets. Adjusted noninterest expense excludes the amortization of tax credit and other investments, the amortization of core deposit intangibles and the extinguishment cost on repurchase 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
 December 31, 2021September 30, 2021December 31, 2020
Net interest income before provision for credit losses(a)$405,697 $395,706 $346,581 
Total noninterest income71,489 73,109 69,832 
Total revenue(b)$477,186 $468,815 $416,413 
Total noninterest expense(c)$210,105 $205,384 $178,651 
Less: Amortization of tax credit and other investments(31,800)(38,008)(12,263)
Amortization of core deposit intangibles(602)(705)(823)
Adjusted noninterest expense(d)$177,703 $166,671 $165,565 
Efficiency ratio(c)/(b)44.03 %43.81 %42.90 %
Adjusted efficiency ratio(d)/(b)37.24 %35.55 %39.76 %
Adjusted pre-tax, pre-provision income (b)-(d) = (e)$299,483 $302,144 $250,848 
Average total assets(f)$62,183,137 $61,359,533 $52,466,325 
Adjusted pre-tax, pre-provision profitability ratio (1)
(e)/(f)1.91 %1.95 %1.90 %
Adjusted noninterest expense/average assets (1)
(d)/(f)1.13 %1.08 %1.26 %
 Year Ended
 December 31, 2021December 31, 2020
Net interest income before provision for credit losses(g)$1,531,571 $1,377,193 
Total noninterest income285,895 235,547 
Total revenue(h)1,817,466 1,612,740 
Total noninterest expense(i)$796,089 $716,322 
Less: Amortization of tax credit and other investments(122,457)(70,082)
Amortization of core deposit intangibles(2,749)(3,634)
Repurchase agreements’ extinguishment cost— (8,740)
Adjusted noninterest expense(j)$670,883 $633,866 
Efficiency ratio(i)/(h)43.80 %44.42 %
Adjusted efficiency ratio(j)/(h)36.91 %39.30 %
Adjusted pre-tax, pre-provision income (h)-(j) = (k)$1,146,583 $978,874 
Average total assets (l)$59,251,091 $48,937,793 
Adjusted pre-tax, pre-provision profitability ratio(k)/(l)1.94 %2.00 %
Adjusted noninterest expense/average assets(j)/(l)1.13 %1.30 %
(1)Annualized.

19

EAST WEST BANCORP, INC. AND SUBSIDIARIES
GAAP TO NON-GAAP RECONCILIATION
($ in thousands)
(unaudited)
Table 13   
The Company uses certain non-GAAP financial measures to provide supplemental information regarding the Company’s performance. Tangible equity and tangible equity to tangible assets ratio are non-GAAP financial measures. Tangible equity and tangible assets represent stockholders’ equity and total assets, respectively, which have been reduced by goodwill and other intangible assets. Given that the use of such measures and ratios is more prevalent in the banking industry, and such measures and ratios are used by banking regulators and analysts, the Company has included them below for discussion.
 December 31, 2021September 30, 2021December 31, 2020
Stockholders’ equity (a)$5,837,218 $5,690,201 $5,269,175 
Less: Goodwill(465,697)(465,697)(465,697)
Other intangible assets (1)
(9,334)(9,849)(11,899)
Tangible equity (b)$5,362,187 $5,214,655 $4,791,579 
Total assets(c)$60,870,701 $60,959,110 $52,156,913 
Less: Goodwill(465,697)(465,697)(465,697)
Other intangible assets (1)
(9,334)(9,849)(11,899)
Tangible assets (d)$60,395,670 $60,483,564 $51,679,317 
Total stockholders’ equity to total assets ratio(a)/(c)9.59 %9.33 %10.10 %
Tangible equity to tangible assets ratio (b)/(d)8.88 %8.62 %9.27 %
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, recoveries and uncertain tax position 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 EndedYear Ended
December 31, 2021September 30, 2021December 31, 2020December 31, 2021December 31, 2020
Net income$217,796 $225,449 $164,084 $872,981 $567,797 
Add: Amortization of core deposit intangibles
602 705 823 2,749 3,634 
          Amortization of mortgage servicing assets
415 430 428 1,679 1,920 
Tax effect of amortization adjustments (2)
(293)(322)(355)(1,274)(1,575)
Tangible net income(e)$218,520 $226,262 $164,980 $876,135 $571,776 
Adjustments related to DC Solar
Less: Recoveries (3)
— — (10,739)— (10,739)
Tax effect of recoveries (2)
— — 3,047 — 3,047 
Add: Uncertain tax position recorded in income tax expense— — 5,127 — 5,127 
Adjusted tangible net income(f)$218,520 $226,262 $162,415 $876,135 $569,211 
Average stockholders’ equity $5,786,237 $5,680,306 $5,243,203 $5,559,212 $5,082,186 
Less: Average goodwill(465,697)(465,697)(465,697)(465,697)(465,697)
          Average other intangible assets (1)
(9,611)(10,135)(12,182)(10,535)(13,769)
Average tangible equity (g)$5,310,929 $5,204,474 $4,765,324 $5,082,980 $4,602,720 
Return on average tangible equity(e)/(g)16.32 %
(4)
17.25 %
(4)
13.77 %
(4)
17.24 %12.42 %
Adjusted return on average tangible equity(f)/(g)16.32 %
(4)
17.25 %
(4)
13.56 %
(4)
17.24 %12.37 %
(1)Includes core deposit intangibles and mortgage servicing assets.
(2)Applied statutory tax rate of 28.77% for the three and twelve months ended December 31, 2021. Applied statutory tax rate of 28.37% for the three months ended September 30, 2021, and for the three and twelve months ended December 31, 2020.
(3)Included in Amortization of tax credit and other investments on the Consolidated Statement of Income.
(4)Annualized.

20

EAST WEST BANCORP, INC. AND SUBSIDIARIES
GAAP TO NON-GAAP RECONCILIATION
($ in thousands)
(unaudited)
Table 14
In April 2020, the Company started accepting applications under the PPP administered by the Small Business Administration (“SBA”) under the Coronavirus Aid, Relief, and Economic Security Act and began to originate loans to qualified small businesses. In January 2021, the Company began processing applications under the second round of the SBA’s PPP in response to the Consolidated Appropriations Act, 2021 signed by the President on December 27, 2020. The PPP ended on May 31, 2021.
These loans are included in the Company’s C&I portfolio, have an interest rate of one percent and are 100% guaranteed by the SBA. Loan processing fees paid to the Company from the SBA are accounted for as loan origination fees, where net deferred fees are recognized on a straight line basis over the estimated life of the loan as a yield adjustment on the loans. If a loan is paid off or forgiven by the SBA prior to its projected estimated life, the remaining unamortized deferred fees will be recognized as interest income in that period. The Company drew down $1.44 billion from the PPPLF during the second quarter of 2020. The remaining balance of $1.43 billion as of September 2020 was repaid in full during the fourth quarter of 2020.
Adjusted loan yield and adjusted net interest margin for the three and twelve months ended December 31, 2021 and 2020, and three months ended September 30, 2021 exclude the impact of PPP loans. Net interest margin for the three and twelve months ended December 31, 2020 has also been adjusted for advances from the PPPLF. Management believes that presenting the adjusted average loan yield and adjusted net interest margin provide comparability to prior periods and these non-GAAP financial measures provide supplemental information regarding the Company’s performance.
Three Months EndedYear Ended
Yield on Average LoansDecember 31, 2021September 30, 2021December 31, 2020December 31, 2021December 31, 2020
Interest income on loans(a)$366,936 $363,503 $348,578 $1,424,900 $1,464,382 
Less: Interest income on PPP loans
(9,592)(15,212)(14,204)(55,198)(43,271)
Adjusted interest income on loans (b)$357,344 $348,291 $334,374 $1,369,702 $1,421,111 
Average loans(c)$40,532,569 $39,960,151 $37,725,725 $39,716,697 $36,799,017 
Less: Average PPP loans(677,224)(1,111,404)(1,704,608)(1,393,302)(1,236,246)
Adjusted average loans(d)$39,855,345 $38,848,747 $36,021,117 $38,323,395 $35,562,771 
Average loan yield(a)/(c)3.59 %
(1)
3.61 %
(1)
3.68 %
(1)
3.59 %3.98 %
Adjusted average loan yield(b)/(d)3.56 %
(1)
3.56 %
(1)
3.69 %
(1)
3.57 %4.00 %
Net Interest Margin
Net interest income before provision for credit losses(e)$405,697 $395,706 $346,581 $1,531,571 $1,377,193 
Less: Interest income on PPP loans(9,592)(15,212)(14,204)(55,198)(43,271)
Add: Interest expense on advances from the PPPLF— — 324 — 2,046 
Adjusted net interest income(f)$396,105 $380,494 $332,701 $1,476,373 $1,335,968 
Average interest-earning assets(g)$58,944,082 $58,239,480 $49,703,349 $56,256,388 $46,239,709 
Less: Average PPP loans(677,224)(1,111,404)(1,704,608)(1,393,302)(1,236,246)
Adjusted average interest-earning assets
(h)$58,266,858 $57,128,076 $47,998,741 $54,863,086 $45,003,463 
Net interest margin(e)/(g)2.73 %
(1)
2.70 %
(1)
2.77 %
(1)
2.72 %2.98 %
Adjusted net interest margin(f)/(h)2.70 %
(1)
2.64 %
(1)
2.76 %
(1)
2.69 %2.97 %
(1)Annualized.
21
EWBC Earnings Results Fourth Quarter and Full Year 2021 January 27, 2022

 
Forward-Looking Statements 2 Forward-Looking Statements This presentation contains forward-looking statements that are intended to be covered by the safe harbor for such statements provided by the Private Securities Litigation Reform Act of 1995. These statements are based on the current beliefs and expectations of the management of East West Bancorp, Inc. (the “Company”) and are subject to significant risks and uncertainties. You should not place undue reliance on these statements. Factors that could cause the Company’s actual results to differ materially from those described in the forward-looking statements include, among others, changes in the U.S. economy or local, regional and global business, economic and political conditions and geopolitical events; the impacts of the ongoing COVID-19 pandemic; changes in laws or the regulatory environment, including trade, monetary and fiscal policies and laws; and changes in the commercial and consumer real estate markets and in consumer spending and savings habits. These factors also consist of those contained in the Company’s filings with the Securities and Exchange Commission, including the “Risk Factors” section of the Company’s Annual Report on Form 10-K for the year ended December 31, 2020. When considering these forward-looking statements, you should keep in mind these risks and uncertainties, as well as any cautionary statements the Company may make. These statements speak only as of the date they are made and are based only on information then actually known to the Company. The Company does not undertake to update any forward-looking statements except as required by law. Non-GAAP Financial Measures Certain financial information in this presentation has not been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and is presented on a non-GAAP basis. Investors should refer to the reconciliations included in this presentation and should consider the Company’s non-GAAP measures in addition to, not as a substitute for or superior to, measures prepared in accordance with GAAP. These measures may not be comparable to similarly titled measures used by other companies.

 
11.2% 15.7% FY 2020 FY 2021 Highlights of Fourth Quarter and Full Year 2021 3 Return on Average Assets Adjusted Pre-Tax, Pre-Provision Income* & Profitability Ratio* Return on Average Tangible Equity*Return on Average Equity Adj. PTPP income* Adj. PTPP profitability ratio* $ in m ill io ns * See reconciliation of GAAP to non-GAAP financial measures in the appendix and in the Company’s Earnings Press Releases. 4Q21 Net income $218 million 2021 Net income $873 million 4Q21 Diluted EPS $1.52 2021 Diluted EPS $6.10 4Q21 Revenue $477 million 2021 Revenue $1.8 billion Record loans $41.7 billion Total deposits $53.4 billion Tangible equity*/share $37.79 1.24% 1.46% 1.39% 4Q20 3Q21 4Q21 1.16% 1.47% FY 2020 FY 2021 12.4% 15.7% 14.9% 4Q20 3Q21 4Q21 13.8% 17.2% 16.3% 4Q20 3Q21 4Q21 12.4% 17.2% FY 2020 FY 2021 $251 $302 $299 1.90% 1.95% 1.91% 4Q20 3Q21 4Q21 $979 $1,147 2.00% 1.94% FY 2020 FY 2021

 
$ in millions, except per share data 12.31.21 09.30.21 Cash equivalents & ST investments $ 4,649 5,708 $ (1,059) AFS debt securities & repo assets 12,319 12,309 10 Gross loans (ex. PPP) $ 41,160 39,675 $ 1,485 PPP loans 534 807 (273) Total loans $ 41,694 40,482 $ 1,212 Allowance for loan losses (ALLL) (542) (560) 18 Net Loans $ 41,152 39,922 $ 1,230 Other assets 2,751 3,020 (269) Total Assets $ 60,871 60,959 $ (88) Customer deposits $ 53,351 53,356 $ (5) FHLB advances & repo funding 549 549 - Other ST & LT debt & finance lease liab. 152 152 - Other liabilities 981 1,212 (231) Total Liabilities $ 55,033 55,269 $ (236) Total Stockholders' Equity $ 5,837 5,690 $ 147 Book value per share $ 41.13 40.10 $ 1.03 Tangible equity per share* $ 37.79 36.75 $ 1.04 Tang. equity to tang. assets ratio* 8.88% 8.62% 26 bp Q-o-Q Change 4 12.31.21: Strong, Well-Diversified Balance Sheet Record Loans as of 12.31.21: $41.7 billion ($ in billions) C&I (ex. PPP) Resi. mortgage & other consumerTotal CREPPP IB Checking & SavingsMMDADDA Time Total Deposits of 12.31.21: $53.4 billion ($ in billions) * See reconciliation of GAAP to non-GAAP financial measures in the appendix and in the Company’s Earnings Press Releases. $13.6 33% $0.5 1% $16.2 39% $11.4 27% 22.8 43% 13.1 25% 9.5 17% 8.0 15%

 
12.7% 12.7% 14.3% 9.4% 12.8% 12.8% 14.2% 8.8% 12.8% 12.8% 14.1% 9.0% CET1 capital ratio Tier 1 capital ratio Total capital ratio Leverage ratio EWBC 12.31.20 EWBC 09.30.21 EWBC 12.31.21** 12.31.21: Strong Capital Ratios  Book value per share of $41.13 as of 12.31.21: +3% Q-o-Q and +10.5% Y-o-Y.  Tangible equity per share* of $37.79 as of 12.31.21: +3% Q-o-Q and +12% Y-o-Y.  Tangible equity to tangible assets ratio* of 8.88% as of 12.31.21, +26 bps from 09.30.21.  Dividend increase: 1Q22 quarterly common stock dividend of $0.40 per share, an increase of 21% or 7 cents from $0.33 per share in 4Q21. Increased annual dividend equivalent to $1.60 per share.  No buybacks during 4Q21. 5 **The Company has elected to use the 2020 CECL transition provision in the calculation of its December 31, 2021, September 30, 2021 and December 31, 2020 regulatory capital ratios. The Company’s December 31, 2021 regulatory capital ratios are preliminary. * See reconciliation of GAAP to non-GAAP financial measures in the appendix and in the Company’s Earnings Press Releases.

 
PPP 1% Total CRE 39% Total Resi. Mortgage & Other Consumer 27% C&I 33% 6 Total Loans: C&I Loans by Industry as % of Total Loans Outstanding 12.31.21: Diversified Commercial Loan Portfolio  C&I loans (ex. PPP): $13.6bn loans O/S plus $6.2bn undisbursed commitments: $19.8bn total commitments as of 12.31.21.  EOP loans O/S: up $592mm, +18% Q-o-Q annualized.  Total commitments: up $865mm, +18% Q-o-Q annualized.  Avg. loans O/S: up $495mm, +16% Q-o-Q annualized.  C&I utilization: 69% as of 12.31.21, unchanged from 09.30.21.  PPP loans: $534mm as of 12.31.21, down from $807mm as of 09.30.21.  China loans O/S (mainland + Hong Kong): $1.8bn as of 12.31.21, up from $1.7bn as of 09.30.21. Portfolio primarily consists of C&I loans, well-diversified by industry. $13.6bn 4% 12% General Manufacturing & Wholesale Private Equity Entertainment 1% Oil & Gas, 1% Food-related Industries 1% Healthcare, 1% Consumer Goods Real Estate related Clean Energy Technology & Life Science All Other C&I $41.7 billion Total Loans } 4% 3% 2% 2% 2%

 
SoCal 53% NorCal 22% NY 5% TX 8% WA 3% Other 9% C&I 33% PPP 1% Retail, 9% MFR, 9% Office, 7% Industrial, 7% Hotel, 5% All other CRE, 2% Total Resi. Mortgage & Other Consumer 27% Total CRE 39% 12.31.21: Diversified Commercial Real Estate Portfolio 7 Total Loans: Total CRE Loans by Property Type as % of Total Loans Outstanding  Total CRE loans: $16.2bn as of 12.31.21: up $642mm, +16% Q-o-Q annualized.  Avg. CRE loans: up $318mm, +8% Q-o-Q annualized.  Owner-occupied CRE: $2.4bn as of 12.31.21, or 6% of total loans.  Geographic distribution of CRE reflects EWBC’s branch footprint.  Construction & land loans (in All other CRE): $346mm, or 0.8% of total loans. Total construction & land exposure of $713mm: loans O/S plus $367mm in undisbursed commitments. $16.2 billion Total CRE Loans Total CRE: Distribution by Geography $16.2bn $41.7 billion Total Loans

 
<=50% 40% >50% to 55% 17% >55% to 60% 16% >60% to 65% 16% >65% to 70% 6% >70% 5% Total CRE: Distribution by LTV 8 12.31.21: Low LTV Commercial Real Estate Portfolio Average Loan Size Weight. Avg. LTV Retail $ 2.2 mm 48% Multifamily 1.4 mm 52% Office 3.9 mm 54% Industrial 2.5 mm 49% Hotel 8.8 mm 54% Construction & Land* 11.0 mm 57% Other 3.0 mm 48% Total CRE $ 2.5 mm 51% CRE LTV & Size by Property Type * 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. $2.5 million Avg. size of loan outstanding 51% Avg. LTV

 
<=50% 39% >50% to 55% 12% >55% to 60% 41% >60% 8% SoCal 41% NorCal 16% NY 27% WA 7% TX 2% Other 7% 12.31.21: Low LTV Residential Mortgage Portfolio 9 Resi. Mortgage: Distribution by Geography Resi. Mortgage: Distribution by LTV $11.2 billion Resi. Mortgage Loans Outstanding $406,000 Avg. loan size* 51% Avg. LTV*  Residential mortgage (SFR + HELOC) loans: $11.2bn loans O/S as of 12.31.21: up $253mm, +9% Q-o-Q annualized.  SFR: $9.1bn as of 12.31.21.  HELOC: $2.1bn loans O/S + $2.5bn in undisbursed commitments: $4.6bn total with 46% utilization as of 12.31.21.  Avg. resi. mortgage loans: up $209mm, +8% Q-o-Q annualized.  Residential mortgage origination volume: residential mortgage origination volume of $1.0bn in 4Q21, up +4% Q-o-Q and -4% Y-o-Y.  FY origination volume of $4.3bn, up +29% Y-o-Y.  Primarily originated through East West Bank branches.  As of 12.31.21, 86% of HELOC commitments in first lien position. * Combined LTV for 1st and 2nd liens; based on commitment. Avg. size based on loan O/S for SFR and commitment for HELOC.

 
0.45% 0.45% 0.38% 0.28% 0.17% 12.31.20 03.31.21 06.30.21 09.30.21 12.31.21 Nonaccrual Ratio by Loan Portfolio (subset of Classified) (as of 12.31.21) 12.31.21: Asset Quality Metrics by Portfolio 10 Criticized Loans / Total Loans Criticized Ratio by Loan Portfolio (as of 12.31.21) NPAs / Total Assets Nonaccrual loans OREO & other NPAs Special Mention loans Classified loans Special Mention loans Classified loans 14.1% 3.4% 1.8% 0.3% C&I: O&G (ex. PPP) All other C&I (ex. PPP) CRE Resi. mortgage & consumer 4.5% 0.2% 0.1% 0.2% C&I: O&G (ex. PPP) All other C&I (ex. PPP) CRE Resi. mortgage & consumer 1.5% 1.3% 1.0% 1.1% 0.9% 1.7% 1.8% 1.6% 1.4% 1.1% 3.2% 3.1% 2.6% 2.5% 2.0% 12.31.20 03.31.21 06.30.21 09.30.21 12.31.21  Criticized loans down 18% Q-o-Q: $833mm as of 12.31.21, or 2.0% of loans, down from $1.0bn, or 2.5% of loans, as of 09.30.21. Criticized loan ratio improved by 50 bps Q-o-Q.  Y-o-Y, criticized loans down 32%, from $1.2bn. Criticized loan ratio improved by 117 bps, from 3.2% of loans as of 12.31.20.  Special mention: $385mm as of 12.31.21, or 0.9% of loans.  Classified: $448mm as of 12.31.21, or 1.1% of loans.  Nonperforming assets down 40% Q-o-Q: $103.5mm as of 12.31.21, or 0.17% of total assets, vs. $173mm, or 0.28% of total assets, as of 09.30.21. Reflects payoffs and upgrades of C&I, plus a CRE property sale.  Y-o-Y, NPAs down 56%, from $235mm. NPA ratio improved by 28 bps, from 0.45% of assets as of 12.31.20.  Accruing loans 30-89 days past due up 10% Q-o-Q: $45mm as of 12.31.21, or 0.11% of loans, vs. $41mm, or 0.10% of loans, as of 09.30.21.  Y-o-Y, accruing PD down 11%, from $51mm. Accruing PD loan ratio improved by 2 bps, from 0.13% of loans as of 12.31.20.  Oil & Gas (“O&G”) Loan Portfolio as of 12.31.21:  Total commitments: $912mm, and loans O/S: $601mm. Commitments decreased 5% Q-o-Q and 32% Y-o-Y.  Improving asset quality: O&G criticized loans: $85mm as of 12.31.21, down 43% Q-o-Q from $148mm as of 09.30.21, and down 74% from $324mm as of 12.31.20.

 
24.3 0.0 (15.0) (10.0) (10.0) 18.8 13.4 13.3 13.5 9.8 0.20% 0.14% 0.13% 0.13% 0.10% -0.05%-20.0 4Q20 1Q21 2Q21 3Q21 4Q21 Provision for credit losses Net charge-offs NCO ratio (ann.) $620 $608 $586 $560 $542 1.61% 1.53% 1.46% 1.38% 1.30% 1.68% 1.62% 1.52% 1.41% 1.32% 0.50% $200 $700 12.31.20 03.31.21 06.30.21 09.30.21 12.31.21 ALLL ALLL/Loans HFI ALLL/Loans HFI (ex. PPP) ALLL by Loan Type:  ALLL coverage of loans: 1.30% as of 12.31.21, equivalent to 1.32% ex. PPP loans.  Q-o-Q, ALLL coverage ratio (ex. PPP) declined 9 bps.  O&G ALLL coverage decreased to 8.4% in 4Q21 from 9.5% in 3Q21. All other C&I ALLL coverage of 2.2% unchanged Q-o-Q. CRE ALLL coverage decreased to 1.1% from 1.2%.  Q-o-Q change in ALLL largely reflects an improved macro- economic forecast. CRE segments saw improvements in variables such as vacancy rates, rent rates and cap rates. Operating backdrop for O&G segment is better. This was partially offset by higher downside scenario weightings due to uncertainty related to the Omicron variant of COVID-19.  Negative provision for credit losses in 4Q21: $(10mm).  Net charge-offs: $9.8mm in 4Q21, vs. $13.5mm in 3Q21. NCO ratio of 0.10% (ann.), down from 0.13% (ann.) in 3Q21. 4Q21: Allowance for Loan Losses & Credit Costs 11 Composition of ALLL by Portfolio: Allowance for Loan Losses Coverage Ratio $ in m ill io ns Provision for Credit Losses & Net Charge-offs $ in m ill io ns $ in m ill io ns ; r at io is a llo w an ce co ve ra ge b y po rtf ol io Oil & gas C&I Total CREAll other C&I (ex. PPP) Resi. mortgage & consumer 64 50 9.5% 8.4% 278 288 2.2% 2.2% 192 181 1.2% 1.1% 26 23 0.2% 0.2% 09.30.21 12.31.21 09.30.21 12.31.21 Total: $560 Total:1.38%Total: $542 Total:1.30%

 
4Q21: Summary Income Statement 12 * See slide 17 for noninterest income detail by category. Comments  Noninterest income:  Mark-to-market (“MTM”) adjustments in interest rate contracts (“IRC”) & other derivative income amounted to $0.4mm in 4Q21, vs. $2.5mm in 3Q21. This reflects a smaller favorable change in the credit valuation adjustment, compared with the previous quarter.  Amortization of tax credit & other investments in 4Q21 totaled $32mm, vs. $38mm in 3Q21: Q-o-Q variability in amortization of tax credits and other investments reflects the impact of investments that close in a given period.  Tax rate:  For the full year 2021, effective tax rate was 17%. 4Q21 effective tax rate was 21%. ** See reconciliation of GAAP to non-GAAP financial measures in the appendix and in the Company’s Earnings Press Releases. 4Q21 vs. 3Q21 $ in millions, except per share data & ratios 4Q21 3Q21 $ Change % Change Net interest income (ex. PPP) $ 396.1 $ 380.5 15.6 4% PPP income 9.6 15.2 (5.6) -37% Total net interest income $ 405.7 $ 395.7 $ 10.0 2.5% Fee income & net GOS of loans* 63.3 62.7 0.6 1% GOS of AFS debt securities 0.4 0.4 NM 10% Other 7.8 10.0 (2.2) -22% Total noninterest income $ 71.5 $ 73.1 $ (1.6) -2% Total revenue $ 477.2 $ 468.8 $ 8.4 2% Adjusted noninterest expense** $ 177.7 $ 166.7 $ 11.0 7% Amortization of tax credit & other investments + core deposit intangibles 32.4 38.7 (6.3) -16% Total noninterest expense $ 210.1 $ 205.4 $ 4.7 2% Provision for credit losses $ (10.0) $ (10.0) $ - 0% Income tax expense 59.3 48.0 11.3 24% Effective tax rate 21% 17.5% 3.5% Net Income (GAAP) $ 217.8 $ 225.4 $ (7.6) -3% Diluted EPS $ 1.52 $ 1.57 $ (0.05) -3.5% Weigh. avg. diluted shares (in mm) 143.3 143.1 0.2 0.1%

 
16.3 18.1 19.7 23.2 24.0 10.6 11.6 12.6 12.6 12.98.5 9.0 9.4 9.4 9.39.0 9.1 8.5 8.3 8.1$44.4 $47.8 $50.2 $53.5 $54.3 4Q20 1Q21 2Q21 3Q21 4Q21 11.6 11.8 11.9 12.4 12.9 14.7 14.9 15.2 15.4 15.7 9.7 10.1 10.6 11.1 11.2 1.7 1.9 1.9 1.1 0.7$37.7 $38.7 $39.6 $40.0 $40.5 4Q20 1Q21 2Q21 3Q21 4Q21 4Q21: Average Balance Sheet: Growth & Mix 13  4Q21 avg. loan growth: +6% LQA (+$572mm Q-o-Q) or +10% LQA ex. PPP (+$1.0bn). Growth in all major loan portfolios, with strongest growth from C&I ex. PPP.  4Q21 avg. deposit growth: +6% LQA (+$820mm Q-o-Q). Growth was led by non-IB DDA: +15% LQA (+$850mm Q-o-Q). Declines in IB-checking and time deposits reflect outflow of higher-rate accounts.  Avg. DDA made up 44% of avg. deposits in 4Q21, up from 43% in 3Q21 and 37% in 4Q20.  4Q21 AEA growth & favorable mix shift: +5% LQA (+$705mm Q-o-Q): +$1.1bn in AFS debt securities, +$572mm in loans, -$986mm in IB cash and deposits with banks. $ in b ill io ns Average Loans & Growth +11% +9% +6% LQA avg. total loan growth C&I (ex. PPP) Total CRE Residential mortgage & other consumerPPP Average Deposits & Growth Avg. Earning Asset (AEA) Mix & Loan-to-Deposit Ratio LQA avg. total deposit growthDDA MMDA IB Checking & Savings Time $ in b ill io ns +26% +31% +20% +6% +3% 13% 15% 19% 19% 21% 11% 12% 9% 12% 10% L/D: 85% L/D: 81% L/D: 79% L/D: 75% L/D: 75% 40%-20% 100% 4Q20 1Q21 2Q21 3Q21 4Q21 Loans / AEA Securities & other / AEA IB Cash & equivalent / AEA Avg. Loan / Deposit Ratio

 
$347 $354 $376 $396 $406 2.77% 2.71% 2.75% 2.70% 2.73% 2.76% 2.70% 2.73% 2.64% 2.70% 4Q20 1Q21 2Q21 3Q21 4Q21 NII NIM Adj. NIM* 4Q21: Net Interest Income & Net Interest Margin 14  4Q21 NII: $406mm, +2.5% Q-o-Q (+10% annualized) from $396mm in 3Q21. 4Q21 NIM: 2.73%, +3 bps Q-o-Q.  4Q21 adj. NII* (ex. PPP): $396mm, +4% Q-o-Q (+16% ann.) from $380.5mm in 3Q21.  4Q21 adj. NIM*: 2.70%, +6 bps Q-o-Q.  NII related to PPP: $10mm in 4Q21 ($8mm of deferred fees & $2mm of interest income) vs. $15mm in 3Q21.  As of 12.31.21, $6mm of PPP deferred fees remaining to accrete into income.  Q-o-Q increase in adj. NIM: favorable average earning asset mix shift (+4 bps) and a lower cost of IB deposits (+2 bps). Impact to NIM from Q-o-Q Change in Yields, Rates, & Balance Sheet Mix $ in m ill io ns 3Q21 adj. NIM* 4Q21 adj. NIM* Avg. Earning Asset mix shift GAAP NIM: 2.70% +4 bps +2 bps 3Q21 NIM (ex. PPP): 2.64% GAAP NIM: 2.73% * See reconciliation of GAAP to non-GAAP financial measures in the appendix and in the Company’s Earnings Press Releases. Net Interest Income & Net Interest Margin * Adj. NIM excludes net interest income related to PPP loans. Lower cost of IB deposits 4Q21 NIM (ex. PPP): 2.70%

 
369 360 358 356 356 0.15% 0.12% 0.10% 0.09% 0.09% 0 400 4Q20 1Q21 2Q21 3Q21 4Q21 Adj. avg. loan yield (ex. PPP) Avg. Prime Rate Avg. 1M LIBOR Rate 337 336 421 420 339 336 413 415 341 335 405 411 341 337 403 408 C&I (ex. PPP) Total CRE SFR HELOC 1Q21 2Q21 3Q21 4Q21 4Q21: Average Loan Yields 15 Adj. Avg. Loan Yield* (in bps) Relative to Prime Rate & LIBOR Average Loan Yield (in bps) by Portfolio GAAP Yield: 361 bps GAAP Yield: 368 bps GAAP Yield: 358 bps * See reconciliation of GAAP to non-GAAP financial measures in the appendix and in the Company’s Earnings Press Releases. GAAP Yield: 357 bps Total fixed and hybrid in fixed period 33% (ex PPP). Variable: LIBOR rates Hybrid in fixed rate period Fixed rate Variable: Prime rate Variable: all other rates PPP Loan Portfolio by Index Rate (12.31.21)  As of 12.31.21, $5.6bn of variable rate loans had fully indexed interest rates below floors. Of those, $1.9bn were 25 bps or less from their floor rate, $1.3bn were 25 to 50 bps from their floor rate, and $0.6bn were 50 to 75 bps from their floor rate. Note: SFR yield computation based on 30/360 days. 3.25% GAAP Yield: 359 bps 18% 15% 26% 33% 7% 1%

 
25 18 14 12 10 40 30 24 21 18 0.00 4Q20 1Q21 2Q21 3Q21 4Q21 Cost of total deposits Cost of IB deposits Avg. Fed Funds rate $24.0 44% $12.9 24% $9.3 17% $8.1 15% 4Q21: Average Cost of Deposits 16 Average Cost of Deposits (in bps) Relative to Fed Funds Rate  Spot rate of total deposits: 0.09% as of 12.31.21 (vs. 0.11% as of 09.30.21).  Spot rate of IB deposits: 0.16% as of 12.31.21 (vs. 0.19% as of 09.30.21).  Repricing of maturing CDs to lower rates reached equilibrium:  Domestic CD spot rate as of 12.31.21: 0.21% (down from 0.24% as of 09.30.21).  Originations & renewals of domestic CDs in 4Q21: $4.9bn @ blended rate of 0.20% and weighted avg. duration of 4mo. Average Cost of Deposits (in bps) by Type DDA MMDA IB Checking & Savings Time 4Q21 Average Deposits: $54.3 billion ($ in billions) 0.25% 18 30 27 17 26 50 14 24 23 12 31 40 12 21 19 11 28 35 10 18 11 10 24 33 Cost of total deposits Cost of IB deposits IB Checking MMDA Savings Time 1Q21 2Q21 3Q21 4Q21

 
18.4 18.4 21.1 17.5 20.7 33% 14.3 15.4 17.3 18.5 20.0 32% 6.7 9.5 13.0 13.1 13.3 21% 4.5 6.9 8.0 5.6 5.3 8% 6.2 2.9 2.2 4.7 1.6 2% 3.0 1.7 1.5 3.3 2.4 4% $53.1 $54.8 $63.1 $62.7 $63.3 4Q20 1Q21 2Q21 3Q21 4Q21 4Q21 Mix Lending Fees Deposit Account Fees Foreign Exchange Income Wealth Management Fees IRC Revenue Gain on Loans 4Q21: Noninterest Income Detail Total noninterest income: $71.5mm in 4Q21, compared with $73mm in 3Q21.  Fee income and net gains on sales of loans: $63mm in 4Q21, essentially stable compared with both 3Q21 and 2Q21, and up 19% year-over-year.  Q-o-Q and Y-o-Y growth in lending fees reflects higher syndication, trade finance and loan commitment fees.  Q-o-Q and Y-o-Y growth in deposit account fees reflects growth in commercial account fees and treasury management services.  Interest rate contracts and other derivative income: customer-driven revenue decreased Q-o-Q to $1.6mm, reflecting lower transaction volume. Y-o-Y and Q-o-Q decrease reflects lower customer demand in a low interest rate environment. 17 Interest Rate Contracts and Other Derivative Income Detail ($ in millions) 4Q20 1Q21 2Q21 3Q21 4Q21 Revenue $ 6.2 $ 2.9 $ 2.2 $ 4.7 $ 1.6 MTM 6.8 14.1 (5.4) 2.5 0.4 Total $ 13.0 $ 17.0 $ (3.2) $ 7.2 $ 2.0 * Fee income excludes MTM adjustments related to IRC and other derivatives; net gains on sales of securities; other investment income and other income. Fee Income* & Net Gains on Sales of Loans $ in m ill io ns

 
$166 $165 $162 $167 $178 39.8% 38.7% 36.3% 35.6% 37.2% 30.0% 60.0% $130 $180 4Q20 1Q21 2Q21 3Q21 4Q21 Adj. noninterest expense* Adj. efficiency ratio* 4Q21: Operating Expense & Efficiency 18 Adjusted Noninterest Expense* $ in m ill io ns Adj. Noninterest Expense* & Adj. Efficiency Ratio*  4Q21 noninterest expense: $210mm.  4Q21 adj. noninterest expense*: $178mm, up $11mm from $167mm in 3Q21 (+7% Q-o-Q).  Q-o-Q change was driven by higher bonus and incentive compensation expense, related to full year business activity, and higher charitable contributions in other operating expenses.  Y-o-Y, 4Q21 adj. noninterest expense up 7%. FY2021 adj. noninterest expense of $671mm up +6% Y-o-Y.  Adj. efficiency ratio* was 37% in 4Q21, vs. 36% in 3Q21 and 40% in 4Q20. FY2021 adj. efficiency ratio of 37% improved from 39% in FY2020.  Consistently achieving industry-leading operating efficiency. $ in m ill io ns * See reconciliation of GAAP to non-GAAP financial measures in the appendix and in the Company’s Earnings Press Releases. 105.4 107.8 105.4 105.8 114.7 65% 16.5 15.9 15.4 15.9 15.8 9% 11.7 11.6 11.6 12.0 11.7 7%7.5 7.8 8.1 8.8 9.1 5% 24.5 21.9 21.0 24.2 26.4 14% $165.6 $165.0 $161.5 $166.7 $177.7 4Q20 1Q21 2Q21 3Q21 4Q21 4Q21 Mix Comp and employee benefits Occupancy & Equipment Computer software & Data processing Deposit related expenses All other

 
Management Outlook: Full Year 2022 19 Earnings drivers FY 2022 expectations compared with FY 2021 results 2021 actual End of Period Loans (ex. PPP)  Increase at a percentage rate of approximately 12% Y-o-Y. $41.2 billion (ex. PPP) +12% Y-o-Y (ex. PPP) Adj. Net Interest Income* (ex. PPP)  Increase at a percentage rate of approximately 17% to 19% Y-o-Y. $1.5 billion +10.5% Y-o-Y Adj. Noninterest Expense* (ex. tax credit investment & core deposit intangible amortization)  Increase at a percentage rate of approximately 7% to 8% Y-o-Y. $671 million +6% Y-o-Y Credit Items  Provision for credit losses below $50 million. $(35) million in 2021 & $211 million in 2020 Tax Items  Full-year 2022 effective tax rate of approximately 17% to 18%, including the impact of tax credit investments. FY effective tax rate: 17% Interest Rates  Four Fed Funds rate hikes of 25-bps in: March, June, September and December 2022.  Forward interest rate curve as of 01.26.22. No change to Fed Funds rate in 2021 * See reconciliation of GAAP to non-GAAP financial measures in the appendix and in the Company’s Earnings Press Releases.

 
APPENDIX

 
Three Months Ended December 31, 2021 September 30, 2021 December 31, 2020 Net interest income before provision for credit losses (a) $ 405,697 $ 395,706 $ 346,581 Total noninterest income 71,489 73,109 69,832 Total revenue (b) $ 477,186 $ 468,815 $ 416,413 Total noninterest expense (c) $ 210,105 $ 205,384 $ 178,651 Less: Amortization of tax credit and other investments (31,800) (38,008) (12,263) Amortization of core deposit intangibles (602) (705) (823) Adjusted noninterest expense (d) $ 177,703 $ 166,671 $ 165,565 Efficiency ratio (c)/(b) 44.03% 43.81% 42.90% Adjusted efficiency ratio (d)/(b) 37.24% 35.55% 39.76% Adjusted pre-tax, pre-provision income (b)-(d) = (e) $ 299,483 $ 302,144 $ 250,848 Average total assets (f) $ 62,183,137 $ 61,359,533 $ 52,466,325 Adjusted pre-tax, pre-provision profitability ratio (1) (e)/(f) 1.91% 1.95% 1.90% Adjusted noninterest expense/average assets (1) (d)/(f) 1.13% 1.08% 1.26% Appendix: GAAP to Non-GAAP Reconciliation 21 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. (1) Annualized

 
Year Ended December 31, 2021 December 31, 2020 Net interest income before provision for credit losses (g) $ 1,531,571 $ 1,377,193 Total noninterest income 285,895 235,547 Total revenue (h) 1,817,466 1,612,740 Total noninterest expense (i) $ 796,089 $ 716,322 Less: Amortization of tax credit and other investments (122,457) (70,082) Amortization of core deposit intangibles (2,749) (3,634) Repurchase agreements’ extinguishment cost — (8,740) Adjusted noninterest expense (j) $ 670,883 $ 633,866 Efficiency ratio (i)/(h) 43.80% 44.42% Adjusted efficiency ratio (j)/(h) 36.91% 39.30% Adjusted pre-tax, pre-provision income (h)-(j) = (k) $ 1,146,583 $ 978,874 Average total assets (l) $ 59,251,091 $ 48,937,793 Adjusted pre-tax, pre-provision profitability ratio (k)/(l) 1.94% 2.00% Adjusted noninterest expense/average assets (j)/(l) 1.13% 1.30% Appendix: GAAP to Non-GAAP Reconciliation 22 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.

 
Appendix: GAAP to Non-GAAP Reconciliation 23 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. December 31, 2021 September 30, 2021 December 31, 2020 Stockholders’ equity (a) $ 5,837,218 $ 5,690,201 $ 5,269,175 Less: Goodwill (465,697) (465,697) (465,697) Other intangible assets (1) (9,334) (9,849) (11,899) Tangible equity (b) $ 5,362,187 $ 5,214,655 $ 4,791,579 Total assets (c) $ 60,870,701 $ 60,959,110 $ 52,156,913 Less: Goodwill (465,697) (465,697) (465,697) Other intangible assets (1) (9,334) (9,849) (11,899) Tangible assets (d) $ 60,395,670 $ 60,483,564 $ 51,679,317 Total stockholders’ equity to total assets ratio (a)/(c) 9.59% 9.33% 10.10% Tangible equity to tangible assets ratio (b)/(d) 8.88% 8.62% 9.27%

 
Appendix: GAAP to Non-GAAP Reconciliation 24 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, recoveries and uncertain tax position 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 tax rate of 28.77% for the three and twelve months ended December 31, 2021. Applied statutory tax rate of 28.37% for the three months ended September 30, 2021, and for the three and twelve months ended December 31, 2020. (3) Included in Amortization of tax credit and other investments on the Consolidated Statement of Income. (4) Annualized. Three Months Ended Year Ended December 31, 2021 September 30, 2021 December 31, 2020 December 31, 2021 December 31, 2020 Net income $ 217,796 $ 225,449 $ 164,084 $ 872,981 $ 567,797 Add: Amortization of core deposit intangibles 602 705 823 2,749 3,634 Amortization of mortgage servicing assets 415 430 428 1,679 1,920 Tax effect of amortization adjustments (2) (293) (322) (355) (1,274) (1,575) Tangible net income (e) $ 218,520 $ 226,262 $ 164,980 $ 876,135 $ 571,776 Adjustments related to DC Solar Less: Recoveries (3) — — (10,739) — (10,739) Tax effect of recoveries (2) — — 3,047 — 3,047 Add: Uncertain tax position recorded in income tax expense — — 5,127 — 5,127 Adjusted tangible net income (f) $ 218,520 $ 226,262 $ 162,415 $ 876,135 $ 569,211 Average stockholders’ equity $ 5,786,237 $ 5,680,306 $ 5,243,203 $ 5,559,212 $ 5,082,186 Less: Average goodwill (465,697) (465,697) (465,697) (465,697) (465,697) Average other intangible assets (1) (9,611) (10,135) (12,182) (10,535) (13,769) Average tangible equity (g) $ 5,310,929 $ 5,204,474 $ 4,765,324 $ 5,082,980 $ 4,602,720 Return on average tangible equity (e)/(g) 16.32% (4) 17.25% (4) 13.77% (4) 17.24% 12.42% Adjusted return on average tangible equity (f)/(g) 16.32% (4) 17.25% (4) 13.56% (4) 17.24% 12.37%

 
25 Appendix: GAAP to Non-GAAP Reconciliation EAST WEST BANCORP, INC. AND SUBSIDIARIES GAAP TO NON-GAAP RECONCILIATION ($ in thousands) (unaudited) In April 2020, the Company started accepting applications under the PPP administered by the Small Business Administration (“SBA”) under the Coronavirus Aid, Relief, and Economic Security Act and began to originate loans to qualified small businesses. In January 2021, the Company began processing applications under the second round of the SBA’s PPP in response to the Consolidated Appropriations Act, 2021 signed by the President on December 27, 2020. The PPP ended on May 31, 2021. These loans are included in the Company’s C&I portfolio, have an interest rate of one percent and are 100% guaranteed by the SBA. Loan processing fees paid to the Company from the SBA are accounted for as loan origination fees, where net deferred fees are recognized on a straight line basis over the estimated life of the loan as a yield adjustment on the loans. If a loan is paid off or forgiven by the SBA prior to its projected estimated life, the remaining unamortized deferred fees will be recognized as interest income in that period. The Company drew down $1.44 billion from the PPPLF during the second quarter of 2020. The remaining balance of $1.43 billion as of September 2020 was repaid in full during the fourth quarter of 2020. Adjusted loan yield and adjusted net interest margin for the three and twelve months ended December 31, 2021 and 2020, and three months ended September 30, 2021 exclude the impact of PPP loans. Net interest margin for the three and twelve months ended December 31, 2020 has also been adjusted for advances from the PPPLF. Management believes that presenting the adjusted average loan yield and adjusted net interest margin provide comparability to prior periods and these non-GAAP financial measures provide supplemental information regarding the Company’s performance. Three Months Ended Year Ended Yield on Average Loans December 31, 2021 September 30, 2021 December 31, 2020 December 31, 2021 December 31, 2020 Interest income on loans (a) $ 366,936 $ 363,503 $ 348,578 $ 1,424,900 $ 1,464,382 Less: Interest income on PPP loans (9,592) (15,212) (14,204) (55,198) (43,271) Adjusted interest income on loans (b) $ 357,344 $ 348,291 $ 334,374 $ 1,369,702 $ 1,421,111 Average loans (c) $ 40,532,569 $ 39,960,151 $ 37,725,725 $ 39,716,697 $ 36,799,017 Less: Average PPP loans (677,224) (1,111,404) (1,704,608) (1,393,302) (1,236,246) Adjusted average loans (d) $ 39,855,345 $ 38,848,747 $ 36,021,117 $ 38,323,395 $ 35,562,771 Average loan yield (a)/(c) 3.59% (1) 3.61% (1) 3.68% (1) 3.59% 3.98% Adjusted average loan yield (b)/(d) 3.56% (1) 3.56% (1) 3.69% (1) 3.57% 4.00% Net interest income before provision for credit losses (e) $ 405,697 $ 395,706 $ 346,581 $ 1,531,571 $ 1,377,193 Less: Interest income on PPP loans (9,592) (15,212) (14,204) (55,198) (43,271) Add: Interest expense on advances from the PPPLF — — 324 — 2,046 Adjusted net interest income (f) $ 396,105 $ 380,494 $ 332,701 $ 1,476,373 $ 1,335,968 Average interest-earning assets (g) $ 58,944,082 $ 58,239,480 $ 49,703,349 $ 56,256,388 $ 46,239,709 Less: Average PPP loans (677,224) (1,111,404) (1,704,608) (1,393,302) (1,236,246) Adjusted average interest-earning assets (h) $ 58,266,858 $ 57,128,076 $ 47,998,741 $ 54,863,086 $ 45,003,463 Net interest margin (e)/(g) 2.73% (1) 2.70% (1) 2.77% (1) 2.72% 2.98% Adjusted net interest margin (f)/(h) 2.70% (1) 2.64% (1) 2.76% (1) 2.69% 2.97% (1) Annualized