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Press release from Business Wire

East West Bancorp Reports Net Income for Third Quarter 2012 of $71.1 Million, up 14% from Prior Year, and Earnings Per Share of $0.48, up 17% from Prior Year

Wednesday, October 17, 2012

East West Bancorp Reports Net Income for Third Quarter 2012 of $71.1 Million, up 14% from Prior Year, and Earnings Per Share of $0.48, up 17% from Prior Year17:08 EDT Wednesday, October 17, 2012 PASADENA, Calif. (Business Wire) -- East West Bancorp, Inc. (Nasdaq: EWBC), parent company of East West Bank, the financial bridge between the United States and Greater China, today reported financial results for the third quarter of 2012. For the third quarter of 2012, net income was $71.1 million or $0.48 per dilutive share. East West increased third quarter net income by $8.7 million or 14% and increased earnings per dilutive share $0.07 or 17% from the prior year period. “We are pleased with our solid financial results for the third quarter of 2012. Third quarter earnings per share totaled $0.48, up 17% from the prior year period, and our seventh consecutive quarter of earnings per share growth,” stated Dominic Ng, Chairman and Chief Executive Officer of East West. “Our strong financial performance in the third quarter was driven by healthy growth in our loan and deposit portfolios, which resulted in increased total revenue, net income and earnings per share from both the prior quarter and prior year period. During the third quarter of 2012, East West grew non-covered commercial and trade finance loans by $314.1 million or 9%, and increased core deposits by $329.7 million or 3% to a record $11.4 billion from June 30, 2012.” “Although the interest rate and economic environment continues to be challenging for East West and the banking industry, we are confident that we will continue to perform well. For the third quarter of 2012, our return on assets totaled 1.30%, up 17 basis points from the prior year period, and our return on equity totaled 12.43%, up 144 basis points from the prior year period,” continued Ng. “At this point, we believe we are well on our way to another year of record earnings for East West for the full year 2012. As the premier financial bridge between the East and the West, we continue to win new business and grow our market share as evidenced by our solid financial results. As we look to 2013 and beyond, we are confident that we will be able to continue to deliver healthy financial results and return strong value to our shareholders,” concluded Ng.                 Quarterly Results Summary   For the three months ended, Dollars in millions, except per share September 30, 2012           June 30, 2012 September 30, 2011 Net income $ 71.11 $ 70.56 $ 62.43 Net income available to common shareholders $ 69.40 $ 68.84 $ 60.72 Earnings per share (diluted) $ 0.48 $ 0.47 $ 0.41 Tangible book value per common share $ 13.07 $ 12.67 $ 11.83   Return on average assets 1.30 % 1.32 % 1.13 % Return on average common equity 12.43 % 12.46 % 10.99 %   Net interest margin, adjusted(1) 3.95 % 4.01 % 3.98 % Cost of deposits 0.41 % 0.45 % 0.65 % Efficiency ratio 42.20 % 41.54 % 41.19 %     Third Quarter 2012 HighlightsStrong Third Quarter Earnings – For the third quarter of 2012, net income was $71.1 million or $0.48 per dilutive share. Net income increased by $553 thousand from the second quarter of 2012 and $8.7 million or 14% from the third quarter of 2011. Earnings per dilutive share grew $0.01 or 2% from the second quarter of 2012 and $0.07 or 17% from the third quarter of 2011. Repurchase of 2.3 Million Shares of Common Stock – During the third quarter of 2012, we repurchased 2.3 million shares of our common stock for a total cost of $50.0 million. Strong Loan Growth – Quarter to date, non-covered loans, excluding loans held for sale, grew $360.3 million or 3%. This growth was largely due to increases in commercial and trade finance loans, commercial real estate loans and single family loans, which grew $314.1 million or 9%, $74.6 million or 2% and $47.7 million or 2%, respectively. Total loans, including loans covered under loss-share agreements grew $142.4 million or 1% quarter to date. Strong Core Deposit Growth – Core deposit growth continued in the third quarter and increased by $329.7 million to a record $11.4 billion or 64% of total deposits. Total deposits increased to a record $17.7 billion, an increase of $324.6 million or 2% from $17.3 billion as of June 30, 2012. Cost of Deposits Down 4 bps from Q2 2012 and Down 24 bps from Q3 2011 – The cost of deposits improved to 0.41% for the third quarter of 2012, down from 0.45% in the second quarter of 2012 and 0.65% in the third quarter of 2011. The cost of funds improved to 0.67% for the third quarter of 2012, down from 0.71% in the second quarter of 2012 and 0.93% in the third quarter of 2011. Nonperforming Assets Down to 0.66% of Total Assets – Nonperforming assets decreased to $144.1 million, or 0.66% of total assets at September 30, 2012, an $11.6 million or 7% decrease from June 30, 2012 and a $24.8 million or 15% decrease from September 30, 2011. Management Guidance The Company is providing guidance for the fourth quarter and full year of 2012. Management currently estimates that fully diluted earnings per share for the full year of 2012 will range from $1.87 to $1.89, an increase of $0.27 to $0.29 or 17% to 18% from the full year of 2011. Management currently estimates that fully diluted earnings per share for the fourth quarter of 2012 will range from $0.47 to $0.49 per dilutive share. This EPS guidance for the fourth quarter of 2012 is based on the following assumptions: Stable balance sheet A stable interest rate environment and an adjusted net interest margin of approximately 3.90%1 Provision for loan losses for non-covered loans of approximately $10 to $13 million for the quarter Total noninterest expense of approximately $100 million for the quarter, net of amounts to be reimbursed by the FDIC Effective tax rate of approximately 34% Balance Sheet Summary At September 30, 2012, total assets increased to $21.8 billion compared to $21.5 billion at June 30, 2012. The increase in total assets during the third quarter was primarily attributable to an increase in non-covered loans, securities purchased under resale agreements and investment securities with a partial offsetting decrease in cash and cash equivalents. Average earning assets increased during the third quarter of 2012, up $265.6 million or 1% compared to the prior quarter. The increase in average earning assets during the third quarter was primarily attributable to an increase in average loans receivable and securities purchased under resale agreements, offset by a decrease in average investment securities. Total loans receivable at September 30, 2012 equaled $14.5 billion, compared to $14.3 billion as of June 30, 2012. During the third quarter non-covered loan balances, excluding loans held for sale, grew $360.3 million or 3%. This growth was largely due to increases in commercial and trade finance loans, commercial real estate loans and single family loans, which grew $314.1 million or 9% and $74.6 million or 2% and $47.7 million or 2%, respectively. Covered Loans Covered loans totaled $3.2 billion as of September 30, 2012, a decrease of $238.0 million or 7% from June 30, 2012. The decrease in the covered loan portfolio was primarily due to payoffs and paydown activity, as well as charge-offs. The covered loan portfolio is comprised of loans acquired from the FDIC-assisted acquisitions of United Commercial Bank (UCB) and Washington First International Bank (WFIB) which are covered under loss-share agreements with the FDIC. During the third quarter of 2012, we recorded a net decrease in the FDIC indemnification asset and receivable included in noninterest (loss)/income of ($26.8) million, largely due to continued improved credit performance of the UCB portfolio as compared to our original estimate. Deposits and Borrowings At September 30, 2012, total deposits increased to $17.7 billion, up $324.6 million or 2% from $17.3 billion as of June 30, 2012. In the third quarter of 2012, the Company continued to successfully grow low-cost, commercial deposits. Total core deposits increased 3% quarter over quarter to $11.4 billion at September 30, 2012, largely due to a $290.4 million or 8% increase in noninterest-bearing demand deposits which grew to $4.1 billion as of September 30, 2012. Time deposits remained stable and slightly decreased as we continue to reduce our reliance on higher cost time deposits and focus our strategy on growing core deposits. During the third quarter of 2012, the Company prepaid $75.0 million of subordinated debt carrying an effective interest rate of 1.60%, incurring a prepayment penalty of $42 thousand, which is included in noninterest expense. Third Quarter 2012 Operating ResultsNet Interest Income Net interest income, adjusted for the net impact of covered loan dispositions, totaled $196.3 million for the third quarter of 2012, an increase of $1.6 million from $194.7 million in the prior quarter.1 The core net interest margin, excluding the net impact to interest income of $25.6 million resulting from covered loan activity and amortization of the FDIC indemnification asset, totaled 3.95% for the third quarter of 2012. This compares to a core net interest margin, excluding the net impact to interest income of $38.5 million resulting from covered loan activity and amortization of the FDIC indemnification asset, of 4.01% for the second quarter of 2012.1 The increase in net interest income from the prior quarter stemmed from higher average interest earning assets, which increased $265.6 million or 1% quarter over quarter, largely fueled by higher total average loans outstanding, which increased $103.8 million or 1% quarter over quarter. The increase in earnings assets for the third quarter reduced the impact of the decrease in the core net interest margin to 3.95% for the third quarter of 2012, down 6 basis points from the prior quarter. As previously discussed, with the extended low interest rate environment, downward pressure on the net interest margin is expected to continue to be a challenge for East West and the rest of the banking industry. However, East West continues to successfully maximize our asset yields by growing our loan portfolio and earning assets, minimizing our cost of funds, and while also ensuring prudent interest rate risk management. The cost of funds decreased 4 basis points from 0.71% in the second quarter of 2012 to 0.67% in the third quarter of 2012. The reduction in the cost of funds and interest expense is primarily due to management's ongoing actions to reduce higher cost funding and time deposits, and grow core deposits. During the third quarter, the Company reduced the average cost of time deposits from 0.84% in the second quarter of 2012 to 0.78% in the third quarter of 2012. In addition, the Company increased core deposit balances by 3%, quarter over quarter. These combined actions resulted in an overall reduction in the cost of deposits of 4 basis points to 0.41% for the third quarter of 2012 from 0.45% in the prior quarter. Management expects to maintain a relatively stable net interest margin and expects the adjusted net interest margin to be approximately 3.90% for the fourth quarter of 2012. Noninterest Income/(Loss) & Expense The Company reported total noninterest income for the third quarter of 2012 of $2.8 million, an increase from noninterest (loss) of ($11.7) million in the second quarter of 2012 and ($13.5) million in the third quarter of 2011. The increase in noninterest income from the prior quarter and prior year is primarily attributable to a decrease in the net reduction of the FDIC indemnification asset and FDIC receivable. Branch fees, letter of credit and foreign exchange income, ancillary loan fees and other operating income increased and totaled $24.0 million in the third quarter of 2012, an increase from $22.2 million in the second quarter of 2012 and $21.2 million in the third quarter of 2011. In addition, included in noninterest income for the third quarter of 2012 were net gains on sales of loans of $5.3 million, and net gains on sales of investment securities of $93 thousand. A summary of fees and other operating income for the third quarter of 2012, compared to the second quarter of 2012 and third quarter of 2011 is detailed below:                         Quarter Ended % Change ($ in thousands) September 30, 2012June 30, 2012September 30, 2011 (Yr/Yr)   Branch fees $ 8,347 $ 8,641 $ 8,872 -6 % Letters of credit fees and foreign exchange income 7,166 5,101 6,450 11 % Ancillary loan fees 1,817 2,188 2,076 -12 % Other operating income   6,699   6,277   3,835 75 % Total fees & other operating income $ 24,029 $ 22,207 $ 21,233 13 %   Noninterest expense totaled $101.0 million for the third quarter of 2012, a decrease of $652 thousand from the second quarter of 2012 and $3.6 million from the third quarter of 2011. Noninterest expense, excluding amounts to be reimbursed by the FDIC on covered assets and prepayment penalties for other borrowings, totaled $97.9 million for the third quarter of 2012.1 A summary of noninterest expense for the third quarter of 2012, compared to the second quarter of 2012 and third quarter of 2011 is detailed below:                           ($ in thousands) Quarter EndedSeptember 30, 2012June 30, 2012September 30, 2011 Total noninterest expense: $ 100,956 $ 101,608 $ 104,552 Amounts to be reimbursed by the FDIC on covered assets (80% of actual expense amount) 3,005 2,683 3,539 Prepayment penalties for FHLB advances and other borrowings   42   2,336   3,826 Noninterest expense excluding reimbursable amounts and prepayment penalties for FHLB advances and other borrowings $ 97,909 $ 96,589 $ 97,187   Total noninterest expense for the third quarter, excluding amounts to be reimbursed by the FDIC on covered assets and prepayment penalties for other borrowings, increased $1.3 million from the second quarter of 2012 to $97.9 million. The small increase in noninterest expense, excluding amounts to be reimbursed by the FDIC on covered assets and prepayment penalties for other borrowings, was primarily due to an increase in legal expense, offset by a decrease in compensation and employee benefits. Credit cycle costs, which include other real estate owned expense, loan related expense, and legal expense totaled $14.9 million for the third quarter of 2012, as compared to $12.8 million for the second quarter of 2012 and $15.7 million for the third quarter of 2011. Of the total credit cycle costs incurred in the third quarter, $3.8 million is related to covered loans and other real estate owned for which we expect that 80% or $3.0 million is reimbursable by the FDIC. Management anticipates that for the fourth quarter of 2012, noninterest expense will total approximately $100.0 million, net of amounts reimbursable from the FDIC. The effective tax rate for the third quarter remained unchanged from the prior quarter at 32.4%. The effective tax rate is reduced from the statutory tax rate primarily due to the utilization of tax credits related to affordable housing investments. The expected effective tax rate for the remainder of 2012 is approximately 34%. Credit QualityNon-covered Loans As a result of continued credit quality improvement, nonperforming assets as of September 30, 2012, were down to $144.1 million, a decrease of 7% from the previous quarter and 15% from the prior year quarter. The provision for loan losses for non-covered loans declined to $13.3 million for the third quarter of 2012, a decrease of $3.3 million or 20% from the prior quarter, and a decrease of $9.0 million or 40% as compared to the third quarter of 2011. Additionally, nonaccrual loans, excluding covered loans, decreased to $104.1 million or 0.72% of total loans as of September 30, 2012. Total net charge-offs on the non-covered loans decreased to $10.6 million for the third quarter of 2012, down from $11.7 million in the second quarter of 2012. East West continues to maintain an allowance for non-covered loan losses at $223.6 million or 2.00% of non-covered loans receivable at September 30, 2012. This compares to an allowance for non-covered loan losses of $219.5 million or 2.03% of non-covered loans at June 30, 2012 and $211.7 million or 2.16% of non-covered loans at September 30, 2011. The total nonperforming assets, excluding covered assets, to total assets ratio was under 1.00% for the twelfth consecutive quarter with nonperforming assets of $144.1 million or 0.66% of total assets at September 30, 2012. Covered Loans During the third quarter of 2012, the Company recorded provision for loan losses on covered loans of $5.2 million, resulting from charge-offs of $6.5 million on three covered loans outside of the scope of ASC 310-30. As these loans are covered under loss-sharing agreements with the FDIC, the Company recorded income of $5.2 million or 80% of the charge-off amount of $6.5 million in noninterest income as a net increase in the FDIC receivable, resulting in a net impact to earnings for the third quarter of ($1.3) million.                           Capital Strength   (Dollars in millions)September 30, 2012Well CapitalizedRegulatoryRequirementTotal Excess AboveWell CapitalizedRequirement   Tier 1 leverage capital ratio 9.7 % 5.00 % $ 992 Tier 1 risk-based capital ratio 15.3 % 6.00 % 1,253 Total risk-based capital ratio 16.6 % 10.00 % 885 Tangible common equity to tangible assets ratio 8.6 % N/A N/A Tangible common equity to risk weighted assets ratio 13.7 % N/A N/A   Our capital ratios remain very strong. As of September 30, 2012, our Tier 1 leverage capital ratio totaled 9.7%, our Tier 1 risk-based capital ratio totaled 15.3% and our total risk-based capital ratio totaled 16.6%. The Company is focused on active capital management and is committed to maintaining strong capital levels that exceed regulatory requirements while also supporting balance sheet growth and providing a strong return to our shareholders. During the third quarter of 2012, the Company repurchased 2.3 million shares of common stock at an average price of $21.86 per share, or $50.0 million in total cost. Under the repurchase program authorized by East West's Board of Directors earlier in the year, management had the authority to repurchase up to a total of $200.0 million of the Company's common stock. As of September 30, 2012, the Company had completed the authorized repurchase program, purchasing a total of 9.1 million shares of common stock at a total cost of $199.9 million during the year. Dividend Payout East West's Board of Directors has declared fourth quarter dividends on the common stock and Series A Preferred Stock. The common stock cash dividend of $0.10 is payable on or about November 23, 2012 to shareholders of record on November 9, 2012. The dividend on the Series A Preferred Stock of $20.00 per share is payable on November 1, 2012 to shareholders of record on October 15, 2012. Conference Call East West will host a conference call to discuss third quarter 2012 earnings with the public on Thursday, October 18, 2012, at 8:30 a.m. PDT/11:30 a.m. EDT. The public and investment community are invited to listen as management discusses third quarter results and operating developments. The following dial-in information is provided for participation in the conference call: Calls within the US – (877) 317-6789; Calls within Canada – (866) 605-3852; International calls – (412) 317-6789. A listen-only live broadcast of the call also will be available on the investor relations page of the Company's website at www.eastwestbank.com. About East West East West Bancorp is a publicly owned company with $21.8 billion in assets 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. East West is a premier bank focused exclusively on the United States and Greater China markets and operates over 120 locations worldwide, including in the United States markets of California, New York, Georgia, Massachusetts, Texas and Washington. In Greater China, East West's presence includes a full service branch in Hong Kong and representative offices in Beijing, Shenzhen and Taipei. Through a wholly-owned subsidiary bank, East West's presence in Greater China also includes full service branches in Shanghai and Shantou and a representative office in Guangzhou. For more information on East West Bancorp, visit the Company's website at www.eastwestbank.com. Forward-Looking StatementsCertain matters set forth herein (including any exhibits hereto) constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including forward-looking statements relating to the Company's current business plans and expectations regarding future operating results. These forward-looking statements are subject to risks and uncertainties that could cause actual results, performance or achievements to differ materially from those projected. These risks and uncertainties include, but are not limited to, local, regional, national and international economic, political or industry conditions and events and the impact they may have on us and our customers; our ability to attract deposits and other sources of liquidity; continued deterioration in values of real estate in California and other states where our bank makes loans, both residential and commercial; our ability to manage the loan portfolios acquired from FDIC-assisted acquisitions within the limits of the loss protection provided by the FDIC; changes in the financial performance and/or condition of our borrowers; changes in the level of nonperforming assets, reserve requirements, and charge-offs; the effect of changes in laws, regulations, and accounting standards, and related costs of these changes;inflation, interest rate, securities market and monetary fluctuations; changes in the competitive environment among financial and bank holding companies and other financial service providers; changes in our organization, management; the adequacy of our enterprise risk management framework; the ability to manage our growth and the effect of acquisitions we may make and the integration of acquired businesses and branching efforts; our success at managing the risks involved in the foregoing items and other factors set forth in the Company's public reports including its Annual Report on Form 10-K for the year ended December 31, 2011, and particularly the discussion of risk factors within that document.1 See reconciliation of the GAAP financial measure to the non-GAAP financial measure in the tables attached.                   EAST WEST BANCORP, INC.CONDENSED CONSOLIDATED BALANCE SHEETS(In thousands, except per share amounts)(unaudited)   September 30, 2012June 30, 2012September 30, 2011 Assets Cash and cash equivalents $ 1,836,372 $ 2,459,614 $ 1,135,888 Short-term investments 347,001 254,714 66,009 Securities purchased under resale agreements 1,100,000 675,000 951,824 Investment securities 2,237,848 1,873,739 3,279,592 Loans receivable, excluding covered loans (net of allowance for loan losses of $223,637, $219,454 and $211,738) 11,074,255 10,693,466 9,830,686 Covered loans, net   3,178,585     3,416,613     4,139,902   Total loans receivable, net 14,252,840 14,110,079 13,970,588 Federal Home Loan Bank and Federal Reserve Bank stock 165,825 171,971 190,765 FDIC indemnification asset 368,473 409,287 569,157 Other real estate owned, net 40,007 43,222 21,178 Other real estate owned covered, net 27,613 35,577 87,298 Premiums on deposits acquired, net 58,746 61,480 70,115 Goodwill 337,438 337,438 337,438 Other assets   1,041,002     1,093,613     1,133,194   Total assets $ 21,813,165   $ 21,525,734   $ 21,813,046     Liabilities and Stockholders' Equity Deposits $ 17,666,427 $ 17,341,872 $ 17,308,700 Federal Home Loan Bank advances 363,119 362,885 457,075 Securities sold under repurchase agreements 995,000 995,000 1,024,949 Long-term debt 137,178 212,178 214,178 Other borrowings — — 4,955 Accrued expenses and other liabilities   333,232     318,859     542,020   Total liabilities 19,494,956 19,230,794 19,551,877 Stockholders' equity   2,318,209     2,294,940     2,261,169   Total liabilities and stockholders' equity $ 21,813,165   $ 21,525,734   $ 21,813,046   Book value per common share $ 15.93 $ 15.51 $ 14.62 Tangible book value per common share $ 13.07 $ 12.67 $ 11.83 Number of common shares at period end 140,301 142,646 148,962   Ending BalancesSeptember 30, 2012June 30, 2012September 30, 2011 Loans receivable Real estate - single family $ 2,065,622 $ 2,017,877 $ 1,517,954 Real estate - multifamily 911,781 912,941 942,428 Real estate - commercial 3,519,601 3,444,957 3,459,001 Real estate - land and construction 250,872 299,739 372,140 Commercial 3,732,785 3,418,637 3,012,152 Consumer   674,547     700,719     503,575   Total non-covered loans receivable, excluding loans held for sale 11,155,208 10,794,870 9,807,250 Loans held for sale 157,869 137,812 251,920 Covered loans, net   3,178,585     3,416,613     4,139,902   Total loans receivable 14,491,662 14,349,295 14,199,072 Unearned fees, premiums and discounts (15,185 ) (19,762 ) (16,746 ) Allowance for loan losses on non-covered loans   (223,637 )   (219,454 )   (211,738 ) Net loans receivable $ 14,252,840 $ 14,110,079 $ 13,970,588   Deposits Noninterest-bearing demand $ 4,118,502 $ 3,828,116 $ 3,377,559 Interest-bearing checking 1,167,477 1,044,439 948,679 Money market 4,785,447 4,913,524 4,434,983 Savings   1,298,431     1,254,072     1,063,086   Total core deposits 11,369,857 11,040,151 9,824,307 Time deposits   6,296,570     6,301,721     7,484,393   Total deposits $ 17,666,427 $ 17,341,872 $ 17,308,700                       EAST WEST BANCORP, INC.CONDENSED CONSOLIDATED STATEMENTS OF INCOME(In thousands, except per share amounts)(unaudited)   Quarter EndedSeptember 30, 2012June 30, 2012September 30, 2011   Interest and dividend income $ 254,162 $ 266,362 $ 282,741 Interest expense   (32,254 )   (33,205 )   (44,959 ) Net interest income before provision for loan losses 221,908 233,157 237,782 Provision for loan losses, excluding covered loans (13,321 ) (16,595 ) (22,297 ) (Provision) reversal for loan losses on covered loans   (5,179 )   1,095     297   Net interest income after provision for loan losses 203,408 217,657 215,782 Noninterest income (loss) 2,751 (11,655 ) (13,545 ) Noninterest expense   (100,956 )   (101,608 )   (104,552 ) Income before provision for income taxes 105,203 104,394 97,685 Provision for income taxes   34,093     33,837     35,253   Net income 71,110 70,557 62,432 Preferred stock dividend   (1,714 )   (1,714 )   (1,714 ) Net income available to common stockholders $ 69,396 $ 68,843 $ 60,718 Net income per share, basic $ 0.49 $ 0.48 $ 0.41 Net income per share, diluted $ 0.48 $ 0.47 $ 0.41 Shares used to compute per share net income: - Basic 139,621 142,107 147,162 - Diluted 145,358 147,786 153,453     Quarter EndedSeptember 30, 2012June 30, 2012September 30, 2011 Noninterest income (loss): Branch fees $ 8,347 $ 8,641 $ 8,872 Decrease in FDIC indemnification asset and FDIC receivable (26,757 ) (40,345 ) (43,451 ) Net gain on sales of loans 5,346 6,375 5,452 Letters of credit fees and foreign exchange income 7,166 5,101 6,450 Net gain on sales of investment securities 93 71 3,191 Net gain on sale of fixed assets 40 37 30 Ancillary loan fees 1,817 2,188 2,076 Other operating income   6,699     6,277     3,835   Total noninterest income (loss): $ 2,751 $ (11,655 ) $ (13,545 )   Noninterest expense: Compensation and employee benefits $ 40,509 $ 42,863 $ 39,885 Occupancy and equipment expense 14,162 13,057 12,580 Loan related expenses 4,011 4,175 5,208 Other real estate owned expense 2,683 4,486 4,489 Deposit insurance premiums and regulatory assessments 3,461 3,323 2,430 Prepayment penalties for FHLB advances and other borrowings 42 2,336 3,826 Legal expense 8,213 4,150 6,028 Amortization of premiums on deposits acquired 2,734 2,838 3,067 Data processing 2,313 2,197 1,827 Consulting expense 2,692 1,568 2,094 Amortization of investments in affordable housing partnerships 3,378 4,425 5,287 Other operating expense   16,758     16,190     17,831   Total noninterest expense $ 100,956 $ 101,608 $ 104,552                     EAST WEST BANCORP, INC.CONDENSED CONSOLIDATED STATEMENTS OF INCOME(In thousands, except per share amounts)(unaudited)   Year To DateSeptember 30, 2012September 30, 2011   Interest and dividend income $ 774,574 $ 811,544 Interest expense   (100,591 )   (137,592 ) Net interest income before provision for loan losses 673,983 673,952 Provision for loan losses, excluding covered loans (46,395 ) (72,797 ) Provision for loan losses on covered loans   (5,705 )   (2,209 ) Net interest income after provision for loan losses 621,883 598,946 Noninterest income 12,836 9,987 Noninterest expense   (317,327 )   (328,938 ) Income before provision for income taxes 317,392 279,995 Provision for income taxes   107,642     100,967   Net income 209,750 179,028 Preferred stock dividend   (5,142 )   (5,143 ) Net income available to common stockholders $ 204,608 $ 173,885 Net income per share, basic $ 1.42 $ 1.18 Net income per share, diluted $ 1.40 $ 1.17 Shares used to compute per share net income: - Basic 142,348 147,013 - Diluted 148,051 153,372     Year To DateSeptember 30, 2012September 30, 2011 Noninterest income: Branch fees $ 25,282 $ 25,704 Decrease in FDIC indemnification asset and FDIC receivable (72,520 ) (79,700 ) Net gain on sales of loans 16,900 18,753 Letters of credit fees and foreign exchange income 18,338 17,636 Net gain on sales of investment securities 647 6,823 Net gain on sale of fixed assets 113 2,236 Impairment loss on investment securities (99 ) (464 ) Ancillary loan fees 6,013 6,122 Other operating income   18,162     12,877   Total noninterest income $ 12,836 $ 9,987   Noninterest expense: Compensation and employee benefits $ 129,781 $ 119,025 Occupancy and equipment expense 40,737 37,353 Loan related expenses 12,667 12,591 Other real estate owned expense 18,034 29,738 Deposit insurance premiums and regulatory assessments 10,776 16,454 Prepayment penalties for FHLB advances and other borrowings 3,699 12,281 Legal expense 19,536 16,920 Amortization of premiums on deposits acquired 8,445 9,403 Data processing 6,974 6,530 Consulting expense 5,727 6,098 Amortization of investments in affordable housing partnerships 12,269 14,410 Other operating expense   48,682     48,135   Total noninterest expense $ 317,327 $ 328,938                       EAST WEST BANCORP, INC.SELECTED FINANCIAL INFORMATION(In thousands)(unaudited)   Average BalancesQuarter EndedSeptember 30, 2012June 30, 2012September 30, 2011 Loans receivable Real estate - single family $ 2,039,136 $ 1,991,863 $ 1,382,715 Real estate - multifamily 902,367 914,223 945,007 Real estate - commercial 3,506,638 3,458,288 3,447,983 Real estate - land and construction 284,294 313,992 416,640 Commercial 3,574,563 3,278,965 2,859,985 Consumer   812,321     785,341     773,229   Total loans receivable, excluding covered loans 11,119,319 10,742,672 9,825,559 Covered loans   3,299,459     3,572,300     4,253,687   Total loans receivable 14,418,778 14,314,972 14,079,246 Investment securities 2,084,165 2,487,725 3,255,701 Earning assets 19,774,467 19,508,910 19,810,633 Total assets 21,686,220 21,527,394 21,978,123   Deposits Noninterest-bearing demand $ 3,949,807 $ 3,724,399 $ 3,236,683 Interest-bearing checking 1,090,227 978,085 895,223 Money market 4,957,938 4,831,665 4,453,224 Savings   1,290,159     1,232,663     1,048,004   Total core deposits 11,288,131 10,766,812 9,633,134 Time deposits   6,226,133     6,474,566     7,665,429   Total deposits 17,514,264 17,241,378 17,298,563 Interest-bearing liabilities 15,094,664 15,118,148 15,842,752 Stockholders' equity 2,304,804 2,305,942 2,275,803     Selected RatiosQuarter EndedSeptember 30, 2012June 30, 2012September 30, 2011 For The Period Return on average assets 1.30 % 1.32 % 1.13 % Return on average common equity 12.43 % 12.46 % 10.99 % Interest rate spread 4.26 % 4.61 % 4.53 % Net interest margin 4.46 % 4.81 % 4.76 % Yield on earning assets 5.11 % 5.49 % 5.66 % Cost of deposits 0.41 % 0.45 % 0.65 % Cost of funds 0.67 % 0.71 % 0.93 % Noninterest expense/average assets(1) 1.74 % 1.72 % 1.67 % Efficiency ratio(2) 42.20 % 41.54 % 41.19 %   (1)     Excludes the amortization of intangibles, amortization of premiums on deposits acquired, amortization of investments in affordable housing partnerships and prepayment penalties for FHLB advances and other borrowings. (2) Represents noninterest expense, excluding the amortization of intangibles, amortization of premiums on deposits acquired, amortization of investments in affordable housing partnerships and prepayment penalties for FHLB advances and other borrowings, divided by the aggregate of net interest income before provision for loan losses and noninterest income, excluding items that are non-recurring in nature.                     EAST WEST BANCORP, INC.SELECTED FINANCIAL INFORMATION(In thousands)(unaudited)   Average BalancesYear To DateSeptember 30, 2012September 30, 2011 Loans receivable Real estate - single family $ 1,969,929 $ 1,259,419 Real estate - multifamily 915,898 952,426 Real estate - commercial 3,482,550 3,407,097 Real estate - land and construction 315,964 460,512 Commercial 3,345,493 2,458,701 Consumer   818,560     920,248   Total loans receivable, excluding covered loans 10,848,394 9,458,403 Covered loans   3,574,076     4,477,467   Total loans receivable 14,422,470 13,935,870 Investment securities 2,509,911 3,100,000 Earning assets 19,602,770 19,318,212 Total assets 21,634,877 21,484,046   Deposits Noninterest-bearing demand $ 3,740,901 $ 2,966,343 Interest-bearing checking 1,010,718 820,518 Money market 4,818,954 4,400,912 Savings   1,235,582     1,018,215   Total core deposits 10,806,155 9,205,988 Time deposits   6,514,294     7,487,935   Total deposits 17,320,449 16,693,923 Interest-bearing liabilities 15,176,330 15,785,667 Stockholders' equity 2,305,485 2,211,373     Selected RatiosYear To DateSeptember 30, 2012September 30, 2011 For The Period Return on average assets 1.30 % 1.11 % Return on average common equity 12.30 % 10.92 % Interest rate spread 4.39 % 4.45 % Net interest margin 4.59 % 4.66 % Yield on earning assets 5.28 % 5.62 % Cost of deposits 0.44 % 0.67 % Cost of funds 0.71 % 0.98 % Noninterest expense/average assets(1) 1.81 % 1.82 % Efficiency ratio(2) 42.64 % 42.79 %   (1)     Excludes the amortization of intangibles, amortization of premiums on deposits acquired, amortization of investments in affordable housing partnerships and prepayment penalties for FHLB advances and other borrowings. (2) Represents noninterest expense, excluding the amortization of intangibles, amortization of premiums on deposits acquired, amortization of investments in affordable housing partnerships and prepayment penalties for FHLB advances and other borrowings, divided by the aggregate of net interest income before provision for loan losses and noninterest income, excluding items that are non-recurring in nature.                                 EAST WEST BANCORP, INC.QUARTER TO DATE AVERAGE BALANCES, YIELDS AND RATES PAID(In thousands)(unaudited)   Quarter EndedSeptember 30, 2012September 30, 2011AverageAverageVolumeInterestYield(1)VolumeInterestYield(1)   ASSETSInterest-earning assets: Due from banks and short-term investments $ 1,586,995 $ 5,211 1.31 % $ 1,164,302 $ 7,866 2.68 % Securities purchased under resale agreements 1,515,761 5,530 1.45 % 1,117,493 5,064 1.80 % Investment securities available-for-sale 2,084,165 10,380 1.98 % 3,255,701 24,503 2.99 % Loans receivable 11,119,319 128,896 4.61 % 9,825,559 120,596 4.87 % Loans receivable - covered 3,299,459 103,299 12.46 % 4,253,687 123,927 11.56 % Federal Home Loan Bank and Federal Reserve Bank stock   168,768     846 2.00 %   193,891     785 1.61 % Total interest-earning assets   19,774,467     254,162 5.11 %   19,810,633     282,741 5.66 %   Noninterest-earning assets: Cash and cash equivalents 233,111 254,918 Allowance for loan losses (229,474 ) (225,395 ) Other assets   1,908,116     2,137,967   Total assets $ 21,686,220   $ 21,978,123       LIABILITIES AND STOCKHOLDERS' EQUITYInterest-bearing liabilities: Checking accounts 1,090,227 838 0.31 % 895,223 936 0.41 % Money market accounts 4,957,938 4,437 0.36 % 4,453,224 4,798 0.43 % Savings deposits 1,290,159 764 0.24 % 1,048,004 756 0.29 % Time deposits 6,226,133 12,163 0.78 % 7,665,429 21,726 1.12 % Federal funds purchased 9 — — 462 — — Federal Home Loan Bank advances 362,966 1,468 1.61 % 508,913 3,013 2.35 % Securities sold under repurchase agreements 995,000 11,664 4.66 % 1,035,466 12,218 4.68 % Long-term debt 172,232 920 2.13 % 222,490 1,424 2.54 % Other borrowings   —     — —     13,541     88 2.58 % Total interest-bearing liabilities   15,094,664     32,254 0.85 %   15,842,752     44,959 1.13 %   Noninterest-bearing liabilities: Demand deposits 3,949,807 3,236,683 Other liabilities 336,945 622,885 Stockholders' equity   2,304,804     2,275,803   Total liabilities and stockholders' equity $ 21,686,220   $ 21,978,123     Interest rate spread 4.26 % 4.53 %   Net interest income and net interest margin $ 221,908 4.46 % $ 237,782 4.76 %   Net interest income and net interest margin, adjusted(2) $ 196,285 3.95 % $ 198,489 3.98 %   (1)     Annualized. (2) Amounts exclude the net impact of covered loan dispositions and amortization of the FDIC indemnification asset of $25.6 million and $39.3 million for the three months ended September 30, 2012 and 2011, respectively.                                 EAST WEST BANCORP, INC.YEAR TO DATE AVERAGE BALANCES, YIELDS AND RATES PAID(In thousands)(unaudited)   Year To DateSeptember 30, 2012September 30, 2011AverageAverageVolumeInterestYield(1)VolumeInterestYield(1)   ASSETSInterest-earning assets: Due from banks and short-term investments $ 1,380,753 $ 17,517 1.69 % $ 1,052,091 $ 15,106 1.92 % Securities purchased under resale agreements 1,113,963 14,602 1.75 % 1,029,000 14,443 1.88 % Investment securities available-for-sale 2,509,911 48,525 2.58 % 3,100,000 66,613 2.87 % Loans receivable 10,848,394 380,097 4.68 % 9,458,403 355,246 5.02 % Loans receivable - covered 3,574,076 311,173 11.63 % 4,477,467 357,576 10.68 % Federal Home Loan Bank and Federal Reserve Bank stock   175,673     2,660 2.02 %   201,251     2,560 1.70 % Total interest-earning assets   19,602,770     774,574 5.28 %   19,318,212     811,544 5.62 %   Noninterest-earning assets: Cash and cash equivalents 246,253 269,700 Allowance for loan losses (226,267 ) (230,020 ) Other assets   2,012,121     2,126,154   Total assets $ 21,634,877   $ 21,484,046       LIABILITIES AND STOCKHOLDERS' EQUITYInterest-bearing liabilities: Checking accounts 1,010,718 2,251 0.30 % 820,518 2,283 0.37 % Money market accounts 4,818,954 12,681 0.35 % 4,400,912 16,621 0.50 % Savings deposits 1,235,582 1,993 0.22 % 1,018,215 2,421 0.32 % Time deposits 6,514,294 40,618 0.83 % 7,487,935 62,003 1.11 % Federal funds purchased 2,972 2 0.11 % 113 — — Federal Home Loan Bank advances 396,120 4,963 1.67 % 751,822 12,746 2.27 % Securities sold under repurchase agreements 998,924 34,977 4.68 % 1,059,770 36,351 4.59 % Long-term debt 198,766 3,106 2.09 % 231,087 4,783 2.77 % Other borrowings   —     — —     15,295     384 3.36 % Total interest-bearing liabilities   15,176,330     100,591 0.89 %   15,785,667     137,592 1.17 %   Noninterest-bearing liabilities: Demand deposits 3,740,901 2,966,343 Other liabilities 412,161 520,663 Stockholders' equity   2,305,485     2,211,373   Total liabilities and stockholders' equity $ 21,634,877   $ 21,484,046     Interest rate spread 4.39 % 4.45 %   Net interest income and net interest margin $ 673,983 4.59 % $ 673,952 4.66 %   Net interest income and net interest margin, adjusted(2) $ 595,147 4.06 % $ 575,353 3.98 %   (1)     Annualized. (2) Amounts exclude the net impact of covered loan dispositions and amortization of the FDIC indemnification asset of $78.8 million and $98.6 million for the nine months ended September 30, 2012 and 2011, respectively.                       EAST WEST BANCORP, INC.QUARTERLY ALLOWANCE FOR LOAN LOSSES RECAP(In thousands)(unaudited)     Quarter Ended9/30/20126/30/20129/30/2011NON-COVERED LOANS Allowance for non-covered loans, beginning of period $ 219,454 $ 214,253 $ 213,825 Allowance for unfunded loan commitments and letters of credit 1,502 274 - Provision for loan losses, excluding covered loans 13,321 16,595 22,297   Net Charge-offs: Real estate - single family 1,595 273 1,563 Real estate - multifamily 1,101 1,021 2,069 Real estate - commercial 785 2,179 1,157 Real estate - land and construction 1,796 665 12,855 Commercial 4,878 6,624 6,487 Consumer   485     906     253   Total net charge-offs   10,640     11,668     24,384   Allowance for non-covered loans, end of period $ 223,637   $ 219,454   $ 211,738     COVERED LOANS Allowance for covered loans, beginning of period(1) $ 7,173 $ 8,268 $ 6,731 Provision (reversal) for loan losses, covered loans 5,179 (1,095 ) (297 )   Net Charge-offs: Real estate - land and construction 1,509 — — Commercial   4,966     —     —   Total net charge-offs   6,475     —     —   Allowance for covered loans, end of period(1) $ 5,877   $ 7,173   $ 6,434     UNFUNDED LOAN COMMITMENTS AND LETTERS OF CREDIT: Allowance balance, beginning of period $ 12,504 $ 12,778 $ 11,197 (Reversal of) provision for unfunded loan commitments and letters of credit   (1,502 )   (274 )   -   Allowance balance, end of period $ 11,002   $ 12,504   $ 11,197   GRAND TOTAL, END OF PERIOD $ 240,516   $ 239,131   $ 229,369     Nonperforming assets to total assets(2) 0.66 % 0.72 % 0.77 % Allowance for loan losses on non-covered loans to total gross non-covered loans held for investment at end of period 2.00 % 2.03 % 2.16 % Allowance for loan losses on non-covered loans and unfunded loan commitments to total gross non-covered loans held for investment at end of period 2.10 % 2.15 % 2.27 % Allowance on non-covered loans to non-covered nonaccrual loans at end of period 214.85 % 195.18 % 143.35 % Nonaccrual loans to total loans(3) 0.72 % 0.78 % 1.04 %   (1)     This allowance is related to drawdowns on commitments that were in existence as of the acquisition dates of WFIB and UCB and, therefore, are covered under the shared-loss agreements with the FDIC. Allowance on these subsequent drawdowns is accounted for as part of the allowance for loan losses. (2) Nonperforming assets excludes covered loans and covered REOs. Total assets includes covered assets. (3) Nonaccrual loans excludes covered loans. Total loans includes covered loans.                           EAST WEST BANCORP, INC.TOTAL NON-PERFORMING ASSETS, EXCLUDING COVERED ASSETS(In thousands)(unaudited)   AS OF SEPTEMBER 30, 2012Total Nonaccrual Loans90+ DaysDelinquentUnder 90+ DaysDelinquentTotalNonaccrualLoansREO AssetsTotalNon-PerformingAssetsLoan Type Real estate - single family $ 7,742 $ 1,010 $ 8,752 $ 3,993 $ 12,745 Real estate - multifamily 11,594 11,440 23,034 106 23,140 Real estate - commercial 17,229 3,478 20,707 22,939 43,646 Real estate - land and construction 29,065 652 29,717 12,600 42,317 Commercial 13,902 4,241 18,143 37 18,180 Consumer   3,739   -   3,739   332   4,071 Total$83,271$20,821$104,092$40,007$144,099     AS OF JUNE 30, 2012Total Nonaccrual Loans90+ DaysDelinquentUnder 90+ DaysDelinquentTotalNonaccrualLoansREO AssetsTotalNon-PerformingAssetsLoan Type Real estate - single family $ 6,405 $ 1,350 $ 7,755 $ 5,055 $ 12,810 Real estate - multifamily 9,278 11,129 20,407 117 20,524 Real estate - commercial 22,751 2,092 24,843 24,906 49,749 Real estate - land and construction 32,390 669 33,059 12,759 45,818 Commercial 17,072 6,000 23,072 53 23,125 Consumer   3,298   -   3,298   332   3,630 Total$91,194$21,240$112,434$43,222$155,656     AS OF SEPTEMBER 30, 2011Total Nonaccrual Loans90+ DaysDelinquentUnder 90+ DaysDelinquentTotalNonaccrualLoansREO AssetsTotalNon-PerformingAssetsLoan Type Real estate - single family $ 7,173 $ 99 $ 7,272 $ 4,118 $ 11,390 Real estate - multifamily 12,906 5,468 18,374 - 18,374 Real estate - commercial 40,063 17,544 57,607 6,188 63,795 Real estate - land and construction 43,593 3,532 47,125 10,654 57,779 Commercial 11,121 3,275 14,396 142 14,538 Consumer   2,935   -   2,935   76   3,011 Total$117,791$29,918$147,709$21,178$168,887           EAST WEST BANCORP, INC.GAAP TO NON-GAAP RECONCILIATION(In thousands)(unaudited)   The tangible common equity to risk weighted assets and tangible common equity to tangible assets ratios are non-GAAP disclosures. The Company uses certain non-GAAP financial measures to provide supplemental information regarding the Company's performance to provide additional disclosure. As the use of tangible common equity to tangible assets ratio is more prevalent in the banking industry and with banking regulators and analysts, we have included the tangible common equity to risk-weighted assets and tangible common equity to tangible assets ratios.   As ofSeptember 30, 2012 Stockholders' equity $ 2,318,209 Less: Preferred equity (83,027 ) Goodwill and other intangible assets   (400,842 ) Tangible common equity $ 1,834,340     Risk-weighted assets   13,402,985     Tangible common equity to risk-weighted assets ratio   13.7 %     As ofSeptember 30, 2012 Total assets $ 21,813,165 Less: Goodwill and other intangible assets   (400,842 ) Tangible assets $ 21,412,323     Tangible common equity to tangible assets ratio 8.6 %                       EAST WEST BANCORP, INC.GAAP TO NON-GAAP RECONCILIATION(In thousands)(unaudited)   Operating noninterest expense is a non-GAAP disclosure. The Company uses certain non-GAAP financial measures to provide supplemental information regarding the Company's performance to provide additional disclosure. These are noninterest expense line items that are non-core in nature. Operating noninterest expense excludes such non-core noninterest expense line items. The Company believes that presenting operating noninterest expense provides more clarity to the users of financial statements regarding the core noninterest expense amounts.   Quarter EndedSeptember 30, 2012June 30, 2012September 30, 2011 Total noninterest expense: $ 100,956 $ 101,608 $ 104,552 Amounts to be reimbursed by the FDIC on covered assets (80% of actual expense amount) 3,005 2,683 3,539 Prepayment penalties for FHLB advances and other borrowings   42   2,336   3,826 Noninterest expense excluding reimbursable amounts and prepayment penalties for FHLB advances and other borrowings $ 97,909 $ 96,589 $ 97,187                       EAST WEST BANCORP, INC.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 to provide additional disclosure. The net interest income on covered loans includes amounts that are non-core in nature. As such, the Company believes that presenting the net interest income on covered loans excluding such non-core items provides additional clarity to the users of financial statements regarding the covered loan yield, comparability to prior periods and the ongoing performance of the Company.   Quarter Ended September 30, 2012 Average Volume Interest Yield(1) Loans receivable - covered $ 3,299,459 $ 103,299 12.46 % Less net impact of covered loan dispositions and amortization of the FDIC indemnification asset   (25,623 ) Covered loans excluding net impact of covered loan dispositions and amortization of the FDIC indemnification asset $ 77,676   9.37 %     Quarter Ended June 30, 2012 Average Volume Interest Yield(1) Loans receivable - covered $ 3,572,300 $ 112,510 12.67 % Less net impact of covered loan dispositions and amortization of the FDIC indemnification asset   (38,504 ) Covered loans excluding net impact of covered loan dispositions and amortization of the FDIC indemnification asset $ 74,006   8.33 %   (1) Annualized.                   EAST WEST BANCORP, INC.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 to provide additional disclosure. The net interest margin includes amounts that are non-core in nature. As such, the Company believes that presenting the net interest income and net interest margin excluding such non-core items provides additional clarity to the users of financial statements regarding the core net interest income and net interest margin, comparability to prior periods and the ongoing performance of the Company.   Quarter Ended September 30, 2012 Average Volume Interest Yield(1) Total interest-earning assets $ 19,774,467 $ 254,162 5.11 % Net interest income and net interest margin 221,908 4.46 % Less net impact of covered loan dispositions and amortization of the FDIC indemnification asset   (25,623 ) Net interest income and net interest margin, excluding net impact of covered loan dispositions and amortization of the FDIC indemnification asset $ 196,285   3.95 %     Quarter Ended June 30, 2012 Average Volume Interest Yield(1) Total interest-earning assets $ 19,508,910 $ 266,362 5.49 % Net interest income and net interest margin 233,157 4.81 % Less net impact of covered loan dispositions and amortization of the FDIC indemnification asset   (38,504 ) Net interest income and net interest margin, excluding net impact of covered loan dispositions and amortization of the FDIC indemnification asset $ 194,653   4.01 %     Quarter Ended September 30, 2011 Average Volume Interest Yield(1) Total interest-earning assets $ 19,810,633 $ 282,741 5.66 % Net interest income and net interest margin 237,782 4.76 % Less net impact of covered loan dispositions and amortization of the FDIC indemnification asset   (39,293 ) Net interest income and net interest margin, excluding net impact of covered loan dispositions and amortization of the FDIC indemnification asset $ 198,489   3.98 %   (1) Annualized.                     EAST WEST BANCORP, INC.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 to provide additional disclosure. The net interest margin includes amounts that are non-core in nature. As such, the Company believes that presenting the net interest income and net interest margin excluding such non-core items provides additional clarity to the users of financial statements regarding the core net interest income and net interest margin, comparability to prior periods and the ongoing performance of the Company.   Year to Date September 30, 2012 Average Volume Interest Yield(1) Total interest-earning assets $ 19,602,770 $ 774,574 5.28 % Net interest income and net interest margin 673,983 4.59 % Less net impact of covered loan dispositions and amortization of the FDIC indemnification asset   (78,836 ) Net interest income and net interest margin, excluding net impact of covered loan dispositions and amortization of the FDIC indemnification asset $ 595,147   4.06 %     Year to Date September 30, 2011 Average Volume Interest Yield(1) Total interest-earning assets $ 19,318,212 $ 811,544 5.62 % Net interest income and net interest margin 673,952 4.66 % Less net impact of covered loan dispositions and amortization of the FDIC indemnification asset   (98,599 ) Net interest income and net interest margin, excluding net impact of covered loan dispositions and amortization of the FDIC indemnification asset $ 575,353   3.98 %   (1) Annualized. East West Bancorp, Inc.Irene OhChief Financial Officer(626) 768-6360