EAST WEST BANCORP INC (Form: 8-K, Received: 01/23/2020 10:04:08)



	Exhibit 99.1

	East West Bancorp, Inc.
	135 N. Los Robles Ave., 7th Fl.
	Pasadena, CA 91101
	Tel. 626.768.6000



NEWS RELEASE
NEWS RELEASE



FOR INVESTOR INQUIRIES, CONTACT:
Irene Oh	Julianna Balicka
Chief Financial Officer	Director of Strategy and Corporate Development
T: (626) 768-6360	T: (626) 768-6985
E: irene.oh@eastwestbank.com	E: julianna.balicka@eastwestbank.com

EAST WEST BANCORP REPORTS NET INCOME FOR 2019

OF $674 MILLION AND DILUTED EARNINGS PER SHARE OF $4.61;

RECORD REVENUE OF $1.7 BILLION

Pasadena, California — January 23, 2020 — East West Bancorp, Inc. (“East West” or the “Company”) (Nasdaq: EWBC), parent company of East West Bank, the financial bridge between the United States and Greater China, today reported its financial results for the full year and fourth quarter of 2019. For the full year 2019, net income was $674.0 million or $4.61 per diluted share. For the fourth quarter of 2019, net income was $188.2 million or $1.29 per diluted share.

“2019 ended a transformational decade for East West, during which we more than doubled our asset size to $44.2 billion and grew both our commercial loans and our noninterest-bearing deposits nearly five-fold. Today, our loan portfolio is well-balanced between commercial, commercial real estate and residential mortgage loans, and our deposits are also well-balanced between commercial and consumer accounts,” stated Dominic Ng, Chairman and Chief Executive Officer of East West.

“Over the course of the decade, we expanded the breadth of our banking products and services in cash management, foreign exchange and interest rate risk hedging advisory, wealth management, and commercial lending solutions. As a result, we strengthened the resilience of our balance sheet, and achieved substantial earnings growth, increasing our diluted earnings per share by 458% to $4.61 in 2019, up from $0.83 in 2010.”

“In 2019, total loans grew $2.4 billion, or 7% year-over-year, to a record $34.8 billion as of December 31, 2019. Total deposits grew $1.9 billion, or 5% year-over-year, to a record $37.3 billion,” continued Ng. “Full year 2019 revenue of $1.7 billion grew by 5% year-over-year, a result of a strong contribution from fee income and record net interest income of $1.5 billion. Loan growth drove net interest income growth, overcoming net interest margin compression from three cuts to the fed funds rate.”

“Overall, we earned a return on average assets of 1.59% in 2019 and a return on average equity of 14.2%. Our growth and profitability reflect the strength of our diverse business model, which we are confident is a strong foundation for continued solid financial performance in the decade ahead,” concluded Ng.

HIGHLIGHTS OF RESULTS

•

Full Year Earnings — Full year 2019 net income was $674.0 million and diluted earnings per share (“EPS”) were $4.61, both down by 4% compared to full year 2018 net income of $703.7 million and diluted EPS of $4.81. Full year 2019 adjusted¹ net income was $707.9 million and adjusted¹ diluted EPS were $4.84, both up by 4% compared to full year 2018 adjusted¹ net income of $681.5 million and adjusted¹diluted EPS of $4.66.

•

Fourth Quarter Earnings — Fourth quarter 2019 net income was $188.2 million and diluted EPS were $1.29, both up by 10% from third quarter 2019 net income of $171.4 million and diluted EPS of $1.17. Fourth quarter 2019 net income and diluted EPS were both up by 9% from fourth quarter 2018 net income of $173.0 million and diluted EPS of $1.18. Fourth quarter 2019 adjusted¹ net income was $187.1 million and adjusted¹ diluted EPS were $1.28, up by 9% quarter-over-quarter and up by 8% year-over-year.


•	Net Interest Income and Net Interest Margin — Full year 2019 net interest income (“NII”) of $1.5 billion increased by $81.3 million or 6% year-over-year. Full year 2019 net interest margin (“NIM”) of 3.64% contracted by 14 basis points year-over-year from 3.78% for the full year 2018.

Fourth quarter 2019 NII was $368.2 million, a quarterly decrease of $1.6 million or 0.4% from third quarter 2019. Fourth quarter 2019 NIM was 3.47%, a 12 basis point contraction from 3.59% in the previous quarter. Quarter-over-quarter, the average loan yield contracted by 20 basis points, and the average cost of deposits decreased by 11 basis points.


•	Record Loans — Total loans of $34.8 billion as of December 31, 2019 increased by $2.4 billion, or 7%, from $32.4 billion as of December 31, 2018; and increased by $753.7 million, or 9% annualized, from $34.0 billion as of September 30, 2019.

Full year 2019 average loans of $33.4 billion grew $3.1 billion, or 10% year-over-year. Average loan growth in 2019 was equally distributed across commercial real estate, residential mortgage and commercial loans. Fourth quarter 2019 average loans of $34.4 billion grew $748.7 million, or 9% linked quarter annualized. Average loan growth in the fourth quarter was led by commercial real estate, followed by residential mortgage.


•	Record Deposits — Total deposits of $37.3 billion as of December 31, 2019 increased by $1.9 billion, or 5%, from $35.4 billion as of December 31, 2018; and increased by $664.7 million, or 7% annualized, from $36.7 billion as of September 30, 2019.

Full year 2019 average deposits of $36.0 billion grew $2.8 billion, or 8% year-over-year. Average deposit growth in 2019 primarily came from growth in time deposits and interest-bearing checking, partially offset by a decrease in noninterest-bearing demand accounts. Fourth quarter 2019 average deposits of $37.4 billion grew $910.9 million, or 10% linked quarter annualized. Average deposit growth in the fourth quarter was led by interest-bearing checking, noninterest-bearing demand and money market accounts, partially offset by a decrease in time deposits.

•

Asset Quality Metrics — The allowance for loan losses was $358.3 million, or 1.03% of loans held-for-investment (“HFI”) as of December 31, 2019; the comparable ratios were 1.02% as of September 30, 2019, and 0.96% as of December 31, 2018. Non-purchased credit impaired (“Non-PCI”) nonperforming assets were $121.5 million, or 0.27% of total assets as of December 31, 2019; the comparable ratios were 0.31% as of September 30, 2019, and 0.23% as of December 31, 2018.

Full year 2019 net charge-offs were $52.8 million, or 0.16% of average loans HFI; the provision for credit losses was $98.7 million. Fourth quarter 2019 net charge-offs were $8.3 million, or annualized 0.10% of average loans HFI; the provision for credit losses was $18.6 million.


•	Capital Levels — Capital levels for East West are strong. As of December 31, 2019, stockholders’ equity was $5.0 billion, or $34.46 per share. Tangible equity² per common share was $31.15 as of December 31, 2019, an increase of 3% linked quarter and 15% year-over-year.

As of December 31, 2019, the tangible equity to tangible assets ratio² was 10.4%, the common equity tier 1 (“CET1”) capital ratio was 12.9%, and the total risk-based capital ratio was 14.4%.




¹ See reconciliation of GAAP to non-GAAP financial measures in Table 13.
² See reconciliation of GAAP to non-GAAP financial measures in Table 16.

OPERATING RESULTS SUMMARY

Fourth Quarter 2019 Compared to Third Quarter 2019

Net Interest Income and Net Interest Margin

Net interest income totaled $368.2 million, a decrease of 0.4% from $369.8 million. Net interest margin of 3.47% contracted by 12 basis points from 3.59%.


•	Average loans of $34.4 billion grew $748.7 million, or 9% linked quarter annualized.


•	Average interest-earning assets of $42.1 billion grew $1.2 billion, or 12% linked quarter annualized. In addition to loan growth, average available-for-sale investment securities increased by $840.9 million, partially offset by decreases from interest-bearing cash and deposits with banks as well as from resale agreements.


•	Average deposits of $37.4 billion grew $910.9 million, or 10% linked quarter annualized.


•	The average yield on loans contracted by 20 basis points to 4.91% from 5.11%, reflecting a 25-basis point reduction in the fed funds rate and a decline in LIBOR rates during the current quarter. The yield on average interest-earning assets contracted by 22 basis points to 4.40% from 4.62%.


•	The average cost of deposits decreased by 11 basis points to 0.94% from 1.05%, and the average cost of interest-bearing deposits decreased by 15 basis points to 1.34% from 1.49%.

Noninterest Income

Noninterest income totaled $63.0 million, a 22% increase from $51.5 million.


•	The largest linked-quarter change in noninterest income was a $9.4 million increase in interest rate contracts and other derivative income to $17.8 million, which reflected a combination of strong customer demand for interest rate hedging products and a favorable quarter-over-quarter change in the credit valuation adjustment.


•	Quarter-over-quarter, lending fees of $17.2 million increased by $2.2 million, other investment income of $2.7 million increased by $2.0 million; foreign exchange income of $6.0 million decreased by $2.0 million.

Noninterest Expense

Noninterest expense totaled $193.4 million, a 9% increase from $176.6 million.


•	Fourth quarter noninterest expense consisted of $165.3 million of adjusted³ noninterest expense, $27.0 million in amortization of tax credit and other investments, and $1.0 million in amortization of core deposit intangibles.


•	Adjusted noninterest expense of $165.3 million increased by $6.6 million, or 4%, from $158.6 million. The largest linked-quarter change was a $3.2 million increase in compensation and employee benefits expense to $101.1 million. Quarter-over-quarter, other operating expense of $24.5 million increased by $1.7 million, and computer software expense of $7.6 million increased by $1.1 million.


•	The adjusted³ efficiency ratio was 38.3% in the fourth quarter, compared to 37.7% in the third quarter.

TAX RELATED ITEMS

Full year 2019 income tax expense was $169.9 million and the effective tax rate was 20%. Included in the full year 2019 income tax expense was a $30.1 million reversal of certain previously claimed tax credits. Adjusted, income tax expense⁴ was $139.8 million and the effective tax rate⁴ was 17% for the full year 2019. This compares to income tax expense of $115.0 million and an effective tax rate of 14% for the full year 2018.


•	Fourth quarter 2019 income tax expense was $31.1 million and the effective tax rate was 14%, compared to income tax expense of $35.0 million and an effective tax rate of 17% for the third quarter of 2019.




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

CREDIT QUALITY

The allowance for loan losses totaled $358.3 million, or 1.03% of loans HFI, as of December 31, 2019, compared to $345.6 million, or 1.02% of loans HFI, as of September 30, 2019, and $311.3 million, or 0.96% of loans HFI, as of December 31, 2018.


•	Non-PCI nonperforming assets were $121.5 million, or 0.27% of total assets, as of December 31, 2019, compared to $134.5 million, or 0.31% of total assets, as of September 30, 2019, and $93.0 million, or 0.23% of total assets, as of December 31, 2018.


•	Full year 2019 net charge-offs were $52.8 million, or 0.16% of average loans HFI, compared to 0.13% of average loans HFI for the full year 2018. Fourth quarter 2019 net charge-offs were $8.3 million, or annualized 0.10% of average loans HFI, compared to annualized 0.26% of average loans HFI for the third quarter of 2019, and annualized 0.20% of average loans HFI for the fourth quarter of 2018.


•	Full year 2019 provision for credit losses was $98.7 million, compared to $64.3 million for the full year 2018. Fourth quarter 2019 provision for credit losses was $18.6 million, compared to $38.3 million for the third quarter of 2019, and $18.0 million for the fourth quarter of 2018.

CAPITAL STRENGTH

Capital levels for East West are strong. The following table presents the regulatory capital ratios as of December 31, 2019, September 30, 2019, and December 31, 2018.




EWBC Regulatory Capital Metrics	Basel III
($ in millions)	December 31, 2019 ^(a)			September 30, 2019			December 31, 2018			Minimum Capital Ratio		Well Capitalized Ratio		Minimum Capital Ratio + Conservation Buffer ^(b)

CET1 capital ratio	12.9		%	12.8		%	12.2		%	4.5	%	6.5	%	7.0	%
Tier 1 risk-based capital ratio	12.9		%	12.8		%	12.2		%	6.0	%	8.0	%	8.5	%
Total risk-based capital ratio	14.4		%	14.2		%	13.7		%	8.0	%	10.0	%	10.5	%
Tier 1 leverage capital ratio	10.3		%	10.3		%	9.9		%	4.0	%	5.0	%	4.0	%
Risk-Weighted Assets (“RWA”) ^(c)	$	35,136		$	34,424		$	32,497		N/A		N/A		N/A

N/A Not applicable.


(a)	The Company’s December 31, 2019 regulatory capital ratios and RWA are preliminary.


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

(c)

Under regulatory guidelines, on-balance sheet assets and credit equivalent amounts of derivatives and off-balance sheet items are assigned to one of several broad risk categories based on the nature of the obligor, or, if relevant, the guarantor or the nature of any collateral. The aggregate dollar value in each risk category is then multiplied by the risk weight associated with that category. The resulting weighted values from each of the risk categories are aggregated for determining total RWA.

DIVIDEND PAYOUT AND CAPITAL ACTIONS

East West’s Board of Directors has declared first quarter 2020 dividends for the Company’s common stock. The common stock cash dividend of $0.275 per share is payable on February 14, 2020 to shareholders of record on February 3, 2020.

Conference Call

East West will host a conference call to discuss fourth quarter and full year 2019 earnings with the public on Thursday, January 23, 2020 at 8:30 a.m. PT/11:30 a.m. ET. The public and investment community are invited to listen as management discusses fourth quarter and full year 2019 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 23, 2020 at 11:30 a.m. Pacific Time through February 23, 2020. The replay numbers are: within the U.S. — (877) 344-7529; within Canada — (855) 669-9658; International calls — (412) 317-0088; and the replay access code is: 10137935.

About East West

East West Bancorp, Inc. is a publicly owned company with total assets of $44.2 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. East West is a premier bank focused exclusively on the United States and Greater China markets and operates over 125 locations worldwide, including in the United States markets of California, Georgia, Massachusetts, Nevada, New York, Texas and Washington. In Greater China, East West’s presence includes full service branches in Hong Kong, Shanghai, Shantou and Shenzhen, and representative offices in Beijing, Chongqing, Guangzhou, and Xiamen. For more information on East West, visit the Company’s website at www.eastwestbank.com.

Forward-Looking Statements

Certain matters set forth herein (including any exhibits hereto) constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, including forward-looking statements relating to our current business plans and expectations regarding future operating results. Forward-looking statements may include, but are not limited to, the use of forward-looking language, such as “likely result in,” “expects,” “anticipates,” “estimates,” “forecasts,” “projects,” “intends to,” “assumes,” or may include other similar words or phrases, such as “believes,” “plans,” “trend,” “objective,” “continues,” “remains,” or similar expressions, or future or conditional verbs, such as “will,” “would,” “should,” “could,” “may,” “might,” “can,” or similar verbs, and the negative thereof. These forward-looking statements are subject to risks and uncertainties that could cause actual results, performance or achievements to differ materially from those projected. These risks and uncertainties, some of which are beyond our control, include, but are not limited to, the 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; our ability to compete effectively against other financial institutions in our banking markets; success and timing of our business strategies; our ability to retain key officers and employees; impact on our funding costs, net interest income and net interest margin due to changes in key variable market interest rates, competition, regulatory requirements and our product mix; changes in our costs of operation, compliance and expansion; our ability to adopt and successfully integrate new technologies into our business in a strategic manner; impact of benchmark interest rate reform in the United States (“U.S.”) that resulted in the Secured Overnight Financing Rate (“SOFR”) selected as the preferred alternative reference rate to the London Interbank Offered Rate; impact of failure in, or breach of, our operational or security systems or infrastructure, or those of third parties with whom we do business, including as a result of cyber attacks; and other similar matters which could result in, among other things, confidential and/or proprietary information being disclosed or misused; adequacy of our risk management framework, disclosure controls and procedures and internal control over financial reporting; future credit quality and performance, including our expectations regarding future credit losses and allowance levels; impact of adverse changes to our credit ratings from major credit rating agencies; impact of adverse judgments or settlements in litigation; changes in the commercial and consumer real estate markets; changes in consumer spending and savings habits; changes in the U.S. economy, including inflation, deflation, employment levels, rate of growth and general business conditions; government intervention in the financial system, including changes in government interest rate policies; impact of political developments, wars or other hostilities that may disrupt or increase volatility in securities or otherwise affect economic conditions; changes in laws or the regulatory environment including regulatory reform initiatives and policies of the U.S. Department of Treasury, the Board of Governors of the Federal Reserve Board System, the Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency, the U.S. Securities and Exchange Commission, the Consumer Financial Protection Bureau and the California Department of Business Oversight — Division of Financial Institutions; impact of the Dodd-Frank Wall Street Reform and Consumer Protection Act on our business, business practices, cost of operations and executive compensation; heightened regulatory and governmental oversight and scrutiny of our business practices, including dealings with consumers; impact of reputational risk from negative publicity, fines and penalties and other negative consequences from regulatory violations and legal actions and from our interactions with business partners, counterparties, service providers and other third parties; impact of regulatory enforcement actions; changes in accounting standards as may be required by the Financial Accounting Standards Board or other regulatory agencies and their impact on critical accounting policies and assumptions; changes in income tax laws and regulations; impact of other potential federal tax changes and spending cuts; our capital requirements and our ability to generate capital internally or raise capital on favorable terms; changes in our ability to receive dividends from our subsidiaries; any future strategic acquisitions or divestitures; continuing consolidation in the financial services industry; changes in the equity and debt securities markets; fluctuations in our stock price; fluctuations in foreign currency exchange rates; a recurrence of significant turbulence or disruption in the capital or financial markets, which could result in, among other things, a reduction in the availability of funding or increases in funding costs, a reduction in investor demand for mortgage loans and declines in asset values and/or recognition of other-than-temporary impairment on securities held in our available-for-sale investment securities portfolio; impact of natural or man-made disasters or calamities or conflicts or other events that may directly or indirectly result in a negative impact on our financial performance; and other factors set forth in our public reports including its Annual Report on Form 10-K for the year ended December 31, 2018, and particularly the discussion of risk factors within that document. If any of these risks or uncertainties materializes or if any of the assumptions underlying such forward-looking statements proves to be incorrect, our results could differ materially from those expressed in, implied or projected by such forward-looking statements. We assume no obligation to update or revise such forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by law.



EAST WEST BANCORP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
($ and shares in thousands, except per share data)
(unaudited)
Table 1

											December 31, 2019 % or Basis Point Change
		December 31, 2019			September 30, 2019			December 31, 2018			Qtr-o-Qtr			Yr-o-Yr
Assets
	Cash and due from banks	$	536,221		$	475,291		$	516,291		12.8	%		3.9	%
	Interest-bearing cash with banks	2,724,928			2,566,990			2,485,086			6.2			9.7
	Cash and cash equivalents	3,261,149			3,042,281			3,001,377			7.2			8.7
	Interest-bearing deposits with banks	196,161			160,423			371,000			22.3			(47.1	)
	Securities purchased under resale agreements (“resale agreements”) ⁽¹⁾	860,000			860,000			1,035,000			—			(16.9	)
	Available-for-sale (“AFS”) investment securities	3,317,214			3,284,034			2,741,847			1.0			21.0
	Federal Home Loan Bank (“FHLB”) and Federal Reserve Bank (“FRB”) stock	78,580			78,334			74,069			0.3			6.1
	Loans held-for-sale (“HFS”)	434			294			275			47.6			57.8
	Loans held-for-investment (''HFI'') (net of allowance for loan losses of $358,287, $345,576 and $311,322)	34,420,252			33,679,400			32,073,867			2.2			7.3
	Investments in qualified affordable housing partnerships, net	207,037			190,000			184,873			9.0			12.0
	Investments in tax credit and other investments, net	254,140			211,603			231,635			20.1			9.7
	Goodwill	465,697			465,697			465,547			—			0.0
	Operating lease right-of-use assets	99,973			103,894			—			(3.8	)		100.0
	Other assets	1,035,459			1,198,699			862,866			(13.6	)		20.0
	Total assets	$	44,196,096		$	43,274,659		$	41,042,356		2.1	%		7.7	%

Liabilities and Stockholders’ Equity
	Deposits	$	37,324,259		$	36,659,526		$	35,439,628		1.8	%		5.3	%
	Short-term borrowings	28,669			47,689			57,638			(39.9	)		(50.3	)
	FHLB advances	745,915			745,494			326,172			0.1			128.7
	Securities sold under repurchase agreements (“repurchase agreements”) ⁽¹⁾	200,000			50,000			50,000			300.0			300.0
	Long-term debt and finance lease liabilities	152,270			152,390			146,835			(0.1	)		3.7
	Operating lease liabilities	108,083			112,142			—			(3.6	)		100.0
	Accrued expenses and other liabilities	619,283			624,754			598,109			(0.9	)		3.5
	Total liabilities	39,178,479			38,391,995			36,618,382			2.0			7.0
	Stockholders’ equity	5,017,617			4,882,664			4,423,974			2.8			13.4
	Total liabilities and stockholders’ equity	$	44,196,096		$	43,274,659		$	41,042,356		2.1	%		7.7	%

	Book value per common share	$	34.46		$	33.54		$	30.52		2.7	%		12.9	%
	Tangible equity ⁽²⁾ per common share	$	31.15		$	30.22		$	27.15		3.1			14.7
	Number of common shares at period-end	145,625			145,568			144,961			0.0			0.5
	Tangible equity to tangible assets ratio ⁽²⁾	10.38		%	10.28		%	9.71		%	10		bps	67		bps

(1)

Resale and repurchase agreements have been reported net, pursuant to Accounting Standards Codification (“ASC”) 210-20-45-11, Balance Sheet Offsetting: Repurchase and Reverse Repurchase Agreements. Out of $450.0 million of gross repurchase agreements, $250.0 million, $400.0 million, and $400.0 million were eligible for netting against gross resale agreements as of December 31, 2019, September 30, 2019 and December 31, 2018, respectively.


(2)	See reconciliation of GAAP to non-GAAP financial measures in Table 16.



EAST WEST BANCORP, INC. AND SUBSIDIARIES
TOTAL LOANS AND DEPOSITS DETAIL
($ in thousands)
(unaudited)
Table 2

											December 31, 2019 % Change
		December 31, 2019			September 30, 2019			December 31, 2018			Qtr-o-Qtr		Yr-o-Yr
Loans:
Commercial:
	Commercial and industrial (“C&I”)	$	12,150,931		$	12,301,002		$	12,056,970		(1.2	)%	0.8	%
	Commercial real estate (“CRE”):
	CRE	10,278,448			9,749,583			9,260,199			5.4		11.0
	Multifamily residential	2,856,374			2,589,203			2,470,668			10.3		15.6
	Construction and land	628,499			719,900			538,794			(12.7	)	16.6
	Total CRE	13,763,321			13,058,686			12,269,661			5.4		12.2
Consumer:
	Residential mortgage:
	Single-family residential	7,108,590			6,811,014			6,036,454			4.4		17.8
	Home equity lines of credit (“HELOCs”)	1,472,783			1,540,121			1,690,834			(4.4	)	(12.9	)
	Total residential mortgage	8,581,373			8,351,135			7,727,288			2.8		11.1
	Other consumer	282,914			314,153			331,270			(9.9	)	(14.6	)
Total loans HFI ⁽¹⁾⁽²⁾		34,778,539			34,024,976			32,385,189			2.2		7.4
Loans HFS		434			294			275			47.6		57.8
	Total loans ⁽¹⁾⁽²⁾	34,778,973			34,025,270			32,385,464			2.2		7.4
Allowance for loan losses		(358,287		)	(345,576		)	(311,322		)	3.7		15.1
	Net loans ⁽¹⁾⁽²⁾	$	34,420,686		$	33,679,694		$	32,074,142		2.2	%	7.3	%

Deposits:
	Noninterest-bearing demand	$	11,080,036		$	10,806,937		$	11,377,009		2.5	%	(2.6	)%
	Interest-bearing checking	5,200,755			4,837,391			4,584,447			7.5		13.4
	Money market	8,711,964			8,400,353			8,262,677			3.7		5.4
	Savings	2,117,196			2,094,638			2,146,429			1.1		(1.4	)
	Time deposits	10,214,308			10,520,207			9,069,066			(2.9	)	12.6
	Total deposits	$	37,324,259		$	36,659,526		$	35,439,628		1.8	%	5.3	%


(1)	Includes $(43.2) million, $(39.8) million and $(48.9) million as of December 31, 2019, September 30, 2019 and December 31, 2018, respectively, of net deferred loan fees, unearned fees, unamortized premiums and unaccreted discounts.


(2)	Includes ASC 310-30 discount of $14.3 million, $16.7 million and $22.2 million as of December 31, 2019, September 30, 2019 and December 31, 2018, respectively.



EAST WEST BANCORP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF INCOME
($ and shares in thousands, except per share data)
(unaudited)
Table 3

		Three Months Ended						December 31, 2019 % Change
		December 31, 2019		September 30, 2019		December 31, 2018		Qtr-o-Qtr		Yr-o-Yr
Interest and dividend income		$	467,233	$	476,912	$	457,334	(2.0	)%	2.2	%
Interest expense		99,014		107,105		87,918		(7.6	)	12.6
Net interest income before provision for credit losses		368,219		369,807		369,416		(0.4	)	(0.3	)
Provision for credit losses		18,577		38,284		17,959		(51.5	)	3.4
Net interest income after provision for credit losses		349,642		331,523		351,457		5.5		(0.5	)
Noninterest income		63,013		51,474		41,695		22.4		51.1
Noninterest expense		193,373		176,630		188,097		9.5		2.8
Income before income taxes		219,282		206,367		205,055		6.3		6.9
Income tax expense		31,067		34,951		32,037		(11.1	)	(3.0	)
Net income		$	188,215	$	171,416	$	173,018	9.8	%	8.8	%
Earnings per share (“EPS”)
- Basic		$	1.29	$	1.18	$	1.19	9.8	%	8.3	%
- Diluted		$	1.29	$	1.17	$	1.18	9.7		8.6
Weighted average number of shares outstanding
- Basic		145,624		145,559		144,960		0.0	%	0.5	%
- Diluted		146,318		146,120		146,133		0.1		0.1

		Three Months Ended						December 31, 2019 % Change
		December 31, 2019		September 30, 2019		December 31, 2018		Qtr-o-Qtr		Yr-o-Yr
Noninterest income:
	Lending fees	$	17,244	$	15,035	$	15,168	14.7	%	13.7	%
	Deposit account fees	9,843		9,729		9,346		1.2		5.3
	Foreign exchange income	6,032		8,065		7,191		(25.2	)	(16.1	)
	Wealth management fees	4,215		4,841		2,796		(12.9	)	50.8
	Interest rate contracts and other derivative income	17,828		8,423		1,125		111.7		NM
	Net gains on sales of loans	1,068		2,037		1,509		(47.6	)	(29.2	)
	Net gains on sales of AFS investment securities	864		58		161		NM		NM
	Net gains on sales of fixed assets	66		48		1,081		37.5		(93.9	)
	Other investment income	2,678		663		801		303.9		234.3
	Other income	3,175		2,575		2,517		23.3		26.1
Total noninterest income		$	63,013	$	51,474	$	41,695	22.4	%	51.1	%
Noninterest expense:
	Compensation and employee benefits	$	101,051	$	97,819	$	93,790	3.3	%	7.7	%
	Occupancy and equipment expense	17,138		17,912		18,017		(4.3	)	(4.9	)
	Deposit insurance premiums and regulatory assessments	3,371		3,550		3,093		(5.0	)	9.0
	Legal expense	2,141		1,720		2,145		24.5		(0.2	)
	Data processing	3,588		3,328		3,160		7.8		13.5
	Consulting expense	3,159		2,559		1,424		23.4		121.8
	Deposit related expense	3,749		3,584		3,043		4.6		23.2
	Computer software expense	7,626		6,556		6,205		16.3		22.9
	Other operating expense	24,512		22,769		26,262		7.7		(6.7	)
	Amortization of tax credit and other investments	27,038		16,833		30,958		60.6		(12.7	)
Total noninterest expense		$	193,373	$	176,630	$	188,097	9.5	%	2.8	%

NM - Not meaningful.



EAST WEST BANCORP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF INCOME
($ and shares in thousands, except per share data)
(unaudited)
Table 4

		Year Ended				December 31, 2019 % Change
		December 31, 2019		December 31, 2018		Yr-o-Yr
Interest and dividend income		$	1,882,300	$	1,651,703	14.0	%
Interest expense		414,487		265,195		56.3
Net interest income before provision for credit losses		1,467,813		1,386,508		5.9
Provision for credit losses		98,685		64,255		53.6
Net interest income after provision for credit losses		1,369,128		1,322,253		3.5
Noninterest income		209,377		210,909		(0.7	)
Noninterest expense		734,588		714,466		2.8
Income before income taxes		843,917		818,696		3.1
Income tax expense		169,882		114,995		47.7
Net income		$	674,035	$	703,701	(4.2	)%
EPS
- Basic		$	4.63	$	4.86	(4.6	)%
- Diluted		$	4.61	$	4.81	(4.2	)
Weighted average number of shares outstanding
- Basic		145,497		144,862		0.4	%
- Diluted		146,179		146,169		0.0

		Year Ended				December 31, 2019 % Change
		December 31, 2019		December 31, 2018		Yr-o-Yr
Noninterest income:
	Lending fees	$	63,670	$	59,758	6.5	%
	Deposit account fees	38,648		39,176		(1.3	)
	Foreign exchange income	26,398		21,259		24.2
	Wealth management fees	16,668		13,785		20.9
	Interest rate contracts and other derivative income	39,865		18,980		110.0
	Net gains on sales of loans	4,035		6,590		(38.8	)
	Net gains on sales of AFS investment securities	3,930		2,535		55.0
	Net gains on sales of fixed assets	114		6,683		(98.3	)
	Net gain on sale of business	—		31,470		(100.0	)
	Other investment income	5,249		1,207		334.9
	Other income	10,800		9,466		14.1
Total noninterest income		$	209,377	$	210,909	(0.7	)%
Noninterest expense:
	Compensation and employee benefits	$	401,700	$	379,622	5.8	%
	Occupancy and equipment expense	69,730		68,896		1.2
	Deposit insurance premiums and regulatory assessments	12,928		21,211		(39.1	)
	Legal expense	8,441		8,781		(3.9	)
	Data processing	13,533		13,177		2.7
	Consulting expense	9,846		11,579		(15.0	)
	Deposit related expense	14,175		11,244		26.1
	Computer software expense	26,471		22,286		18.8
	Other operating expense	92,249		88,042		4.8
	Amortization of tax credit and other investments	85,515		89,628		(4.6	)
Total noninterest expense		$	734,588	$	714,466	2.8	%



EAST WEST BANCORP, INC. AND SUBSIDIARIES
SELECTED AVERAGE BALANCES
($ in thousands)
(unaudited)
Table 5

		Three Months Ended						December 31, 2019 % Change				Year Ended				December 31, 2019 % Change
		December 31, 2019		September 30, 2019		December 31, 2018		Qtr-o-Qtr		Yr-o-Yr		December 31, 2019		December 31, 2018		Yr-o-Yr
Loans:
Commercial:
	C&I	$	12,237,081	$	12,203,341	$	11,554,737	0.3	%	5.9	%	$	12,073,820	$	11,037,992	9.4	%
	CRE:
	CRE	10,006,424		9,685,092		9,179,181		3.3		9.0		9,642,301		8,955,920		7.7
	Multifamily residential	2,771,555		2,561,648		2,347,321		8.2		18.1		2,588,347		2,215,121		16.8
	Construction and land	668,147		694,665		582,311		(3.8	)	14.7		656,142		632,303		3.8
	Total CRE	13,446,126		12,941,405		12,108,813		3.9		11.0		12,886,790		11,803,344		9.2
Consumer:
	Residential mortgage:
	Single-family residential	6,934,361		6,636,227		5,854,551		4.5		18.4		6,526,415		5,309,689		22.9
	HELOCs	1,506,346		1,557,358		1,709,022		(3.3	)	(11.9	)	1,580,343		1,754,071		(9.9	)
	Total residential mortgage	8,440,707		8,193,585		7,563,573		3.0		11.6		8,106,758		7,063,760		14.8
	Other consumer	286,096		322,951		307,752		(11.4	)	(7.0	)	305,768		324,918		(5.9	)
	Total loans ⁽¹⁾⁽²⁾	$	34,410,010	$	33,661,282	$	31,534,875	2.2	%	9.1	%	$	33,373,136	$	30,230,014	10.4	%

Interest-earning assets		$	42,114,123	$	40,919,386	$	38,688,647	2.9	%	8.9	%	$	40,320,804	$	36,707,142	9.8	%
Total assets		$	44,471,242	$	43,136,273	$	40,525,188	3.1	%	9.7	%	$	42,484,885	$	38,542,569	10.2	%

Deposits:
	Noninterest-bearing demand	$	10,976,368	$	10,712,612	$	11,447,345	2.5	%	(4.1	)%	$	10,502,618	$	11,089,537	(5.3	)%
	Interest-bearing checking	5,540,300		4,947,511		4,449,541		12.0		24.5		5,244,867		4,477,793		17.1
	Money market	8,592,058		8,344,993		8,180,426		3.0		5.0		8,220,236		7,985,526		2.9
	Savings	2,118,911		2,154,592		2,124,697		(1.7	)	(0.3	)	2,118,060		2,245,644		(5.7	)
	Time deposits	10,180,922		10,337,990		8,783,068		(1.5	)	15.9		9,961,289		7,431,749		34.0
	Total deposits	$	37,408,559	$	36,497,698	$	34,985,077	2.5	%	6.9	%	$	36,047,070	$	33,230,249	8.5	%

Interest-bearing liabilities		$	27,522,469	$	26,773,253	$	24,122,509	2.8	%	14.1	%	$	26,408,961	$	22,709,554	16.3	%
Stockholders’ equity		$	4,977,759	$	4,838,281	$	4,335,110	2.9	%	14.8	%	$	4,760,845	$	4,130,822	15.3	%


(1)	Includes ASC 310-30 discount of $16.0 million, $18.2 million and $23.8 million for the three months ended December 31, 2019, September 30, 2019 and December 31, 2018, respectively, and $18.9 million and $28.4 million for the years ended December 31, 2019 and 2018, respectively.


(2)	Includes loans HFS.



EAST WEST BANCORP, INC. AND SUBSIDIARIES
QUARTER-TO-DATE AVERAGE BALANCES, YIELDS AND RATES
($ in thousands)
(unaudited)
Table 6

		Three Months Ended
		December 31, 2019							September 30, 2019
		Average					Average		Average					Average
		Balance			Interest		Yield/Rate ⁽¹⁾		Balance			Interest		Yield/Rate ⁽¹⁾
Assets
Interest-earning assets:
	Interest-bearing cash and deposits with banks	$	3,270,431		$	14,925	1.81	%	$	3,547,626		$	19,772	2.21	%
	Resale agreements ⁽²⁾	863,261			5,749		2.64	%	981,196			6,881		2.78	%
	AFS investment securities	3,491,961			20,192		2.29	%	2,651,069			15,945		2.39	%
	Loans ⁽³⁾	34,410,010			425,773		4.91	%	33,661,282			433,658		5.11	%
	FHLB and FRB stock	78,460			594		3.00	%	78,213			656		3.33	%
	Total interest-earning assets	42,114,123			467,233		4.40	%	40,919,386			476,912		4.62	%

Noninterest-earning assets:
	Cash and due from banks	534,326							441,898
	Allowance for loan losses	(355,759		)					(328,523		)
	Other assets	2,178,552							2,103,512
	Total assets	$	44,471,242						$	43,136,273

Liabilities and Stockholders’ Equity
Interest-bearing liabilities:
	Checking deposits	$	5,540,300		$	13,589	0.97	%	$	4,947,511		$	14,488	1.16	%
	Money market deposits	8,592,058			25,223		1.16	%	8,344,993			26,943		1.28	%
	Savings deposits	2,118,911			2,266		0.42	%	2,154,592			2,656		0.49	%
	Time deposits	10,180,922			47,935		1.87	%	10,337,990			52,733		2.02	%
	Federal funds purchased and other short-term borrowings	43,313			404		3.70	%	40,433			382		3.75	%
	FHLB advances	745,732			4,686		2.49	%	745,263			5,021		2.67	%
	Repurchase agreements ⁽²⁾	148,892			3,382		9.01	%	50,000			3,239		25.70	%
	Long-term debt and finance lease liabilities	152,341			1,529		3.98	%	152,471			1,643		4.28	%
	Total interest-bearing liabilities	27,522,469			99,014		1.43	%	26,773,253			107,105		1.59	%

Noninterest-bearing liabilities and stockholders’ equity:
	Demand deposits	10,976,368							10,712,612
	Accrued expenses and other liabilities	994,646							812,127
	Stockholders’ equity	4,977,759							4,838,281
	Total liabilities and stockholders’ equity	$	44,471,242						$	43,136,273

Interest rate spread							2.97	%						3.03	%
Net interest income and net interest margin					$	368,219	3.47	%				$	369,807	3.59	%
Adjusted net interest income and adjusted net interest margin ⁽⁴⁾					$	362,166	3.41	%				$	367,286	3.56	%


(1)	Annualized.

(2)

Average balances of resale and repurchase agreements have been reported net, pursuant to ASC 210-20-45-11, Balance Sheet Offsetting: Repurchase and Reverse Repurchase Agreements. The weighted-average yields of gross resale agreements were 2.49% and 2.57% for the three months ended December 31, 2019 and September 30, 2019, respectively. The weighted-average interest rates of gross repurchase agreements were 4.35% and 4.68% for the three months ended December 31, 2019 and September 30, 2019, respectively.


(3)	Includes loans HFS. ASC 310-30 discount was $16.0 million and $18.2 million for the three months ended December 31, 2019 and September 30, 2019, respectively.


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



EAST WEST BANCORP, INC. AND SUBSIDIARIES
QUARTER-TO-DATE AVERAGE BALANCES, YIELDS AND RATES
($ in thousands)
(unaudited)
Table 7

		Three Months Ended
		December 31, 2019							December 31, 2018
		Average					Average		Average					Average
		Balance			Interest		Yield/Rate ⁽¹⁾		Balance			Interest		Yield/Rate ⁽¹⁾
Assets
Interest-earning assets:
	Interest-bearing cash and deposits with banks	$	3,270,431		$	14,925	1.81	%	$	3,373,608		$	19,476	2.29	%
	Resale agreements ⁽²⁾	863,261			5,749		2.64	%	1,035,000			7,819		3.00	%
	AFS investment securities	3,491,961			20,192		2.29	%	2,671,257			14,531		2.16	%
	Loans ⁽³⁾	34,410,010			425,773		4.91	%	31,534,875			414,517		5.22	%
	FHLB and FRB stock	78,460			594		3.00	%	73,907			991		5.32	%
	Total interest-earning assets	42,114,123			467,233		4.40	%	38,688,647			457,334		4.69	%

Noninterest-earning assets:
	Cash and due from banks	534,326							482,767
	Allowance for loan losses	(355,759		)					(314,019		)
	Other assets	2,178,552							1,667,793
	Total assets	$	44,471,242						$	40,525,188

Liabilities and Stockholders’ Equity
Interest-bearing liabilities:
	Checking deposits	$	5,540,300		$	13,589	0.97	%	$	4,449,541		$	9,963	0.89	%
	Money market deposits	8,592,058			25,223		1.16	%	8,180,426			27,640		1.34	%
	Savings deposits	2,118,911			2,266		0.42	%	2,124,697			2,257		0.42	%
	Time deposits	10,180,922			47,935		1.87	%	8,783,068			39,459		1.78	%
	Federal funds purchased and other short-term borrowings	43,313			404		3.70	%	57,198			624		4.33	%
	FHLB advances	745,732			4,686		2.49	%	325,826			2,903		3.53	%
	Repurchase agreements ⁽²⁾	148,892			3,382		9.01	%	50,000			3,396		26.95	%
	Long-term debt and finance lease liabilities	152,341			1,529		3.98	%	151,753			1,676		4.38	%
	Total interest-bearing liabilities	27,522,469			99,014		1.43	%	24,122,509			87,918		1.45	%

Noninterest-bearing liabilities and stockholders’ equity:
	Demand deposits	10,976,368							11,447,345
	Accrued expenses and other liabilities	994,646							620,224
	Stockholders’ equity	4,977,759							4,335,110
	Total liabilities and stockholders’ equity	$	44,471,242						$	40,525,188

Interest rate spread							2.97	%						3.24	%
Net interest income and net interest margin					$	368,219	3.47	%				$	369,416	3.79	%
Adjusted net interest income and adjusted net interest margin ⁽⁴⁾					$	362,166	3.41	%				$	363,606	3.73	%


(1)	Annualized.

(2)

Average balances of resale and repurchase agreements have been reported net, pursuant to ASC 210-20-45-11, Balance Sheet Offsetting: Repurchase and Reverse Repurchase Agreements. The weighted-average yields of gross resale agreements were 2.49% and 2.72% for the three months ended December 31, 2019 and 2018, respectively. The weighted-average interest rates of gross repurchase agreements were 4.35% and 4.77% for the three months ended December 31, 2019 and 2018, respectively.


(3)	Includes loans HFS. ASC 310-30 discount was $16.0 million and $23.8 million for the three months ended December 31, 2019 and 2018, respectively.


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



EAST WEST BANCORP, INC. AND SUBSIDIARIES
YEAR-TO-DATE AVERAGE BALANCES, YIELDS AND RATES
($ in thousands)
(unaudited)
Table 8

		Year Ended
		December 31, 2019							December 31, 2018
		Average					Average		Average					Average
		Balance			Interest		Yield/Rate		Balance			Interest		Yield/Rate
Assets
Interest-earning assets:
	Interest-bearing cash and deposits with banks	$	3,065,426		$	67,028	2.19	%	$	2,645,544		$	55,704	2.11	%
	Resale agreements ⁽¹⁾	969,384			27,819		2.87	%	1,020,822			29,328		2.87	%
	AFS investment securities	2,836,004			67,570		2.38	%	2,737,071			60,011		2.19	%
	Loans⁽²⁾	33,373,136			1,717,415		5.15	%	30,230,014			1,503,514		4.97	%
	FHLB and FRB stock	76,854			2,468		3.21	%	73,691			3,146		4.27	%
	Total interest-earning assets	40,320,804			1,882,300		4.67	%	36,707,142			1,651,703		4.50	%

Noninterest-earning assets:
	Cash and due from banks	471,060							445,768
	Allowance for loan losses	(330,125		)					(298,600		)
	Other assets	2,023,146							1,688,259
	Total assets	$	42,484,885						$	38,542,569

Liabilities and Stockholders’ Equity
Interest-bearing liabilities:
	Checking deposits	$	5,244,867		$	58,168	1.11	%	$	4,477,793		$	34,657	0.77	%
	Money market deposits	8,220,236			111,081		1.35	%	7,985,526			83,696		1.05	%
	Savings deposits	2,118,060			9,626		0.45	%	2,245,644			8,621		0.38	%
	Time deposits	9,961,289			196,927		1.98	%	7,431,749			107,778		1.45	%
	Federal funds purchased and other short-term borrowings	44,881			1,763		3.93	%	32,222			1,398		4.34	%
	FHLB advances	592,257			16,697		2.82	%	327,435			10,447		3.19	%
	Repurchase agreements ⁽¹⁾	74,926			13,582		18.13	%	50,000			12,110		24.22	%
	Long-term debt and finance lease liabilities	152,445			6,643		4.36	%	159,185			6,488		4.08	%
	Total interest-bearing liabilities	26,408,961			414,487		1.57	%	22,709,554			265,195		1.17	%

Noninterest-bearing liabilities and stockholders’ equity:
	Demand deposits	10,502,618							11,089,537
	Accrued expenses and other liabilities	812,461							612,656
	Stockholders’ equity	4,760,845							4,130,822
	Total liabilities and stockholders’ equity	$	42,484,885						$	38,542,569

Interest rate spread							3.10	%						3.33	%
Net interest income and net interest margin					$	1,467,813	3.64	%				$	1,386,508	3.78	%
Adjusted net interest income and adjusted net interest margin ⁽³⁾					$	1,455,342	3.61	%				$	1,366,336	3.72	%

(1)

Average balances of resale and repurchase agreements have been reported net, pursuant to ASC 210-20-45-11, Balance Sheet Offsetting: Repurchase and Reverse Repurchase Agreements. The weighted-average yields of gross resale agreements were 2.65% and 2.63% for the years ended December 31, 2019 and 2018, respectively. The weighted-average interest rates of gross repurchase agreements were 4.74% and 4.46% for the years ended December 31, 2019 and 2018, respectively.


(2)	Includes loans HFS. ASC 310-30 discount was $18.9 million and $28.4 million for the years ended December 31, 2019 and 2018, respectively.


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



EAST WEST BANCORP, INC. AND SUBSIDIARIES
SELECTED RATIOS
(unaudited)
Table 9

		Three Months Ended ⁽¹⁾							December 31, 2019 Basis Point Change
		December 31, 2019		September 30, 2019		December 31, 2018			Qtr-o-Qtr			Yr-o-Yr
	Return on average assets	1.68	%	1.58	%	1.69	%		10		bps	(1	)	bps
	Adjusted return on average assets ⁽²⁾	1.67	%	1.58	%	1.69	%		9			(2	)
	Return on average equity	15.00	%	14.06	%	15.83	%		94			(83	)
	Adjusted return on average equity ⁽²⁾	14.91	%	14.06	%	15.83	%		85			(92	)
	Return on average tangible equity ⁽²⁾	16.71	%	15.75	%	17.97	%		96			(126	)
	Adjusted return on average tangible equity ⁽²⁾	16.61	%	15.75	%	17.97	%		86			(136	)
	Interest rate spread	2.97	%	3.03	%	3.24	%		(6	)		(27	)
	Net interest margin	3.47	%	3.59	%	3.79	%		(12	)		(32	)
	Adjusted net interest margin ⁽²⁾	3.41	%	3.56	%	3.73	%		(15	)		(32	)
	Average loan yield	4.91	%	5.11	%	5.22	%		(20	)		(31	)
	Adjusted average loan yield ⁽²⁾	4.84	%	5.08	%	5.14	%		(24	)		(30	)
	Yield on average interest-earning assets	4.40	%	4.62	%	4.69	%		(22	)		(29	)
	Average cost of interest-bearing deposits	1.34	%	1.49	%	1.34	%		(15	)		—
	Average cost of deposits	0.94	%	1.05	%	0.90	%		(11	)		4
	Average cost of funds	1.02	%	1.13	%	0.98	%		(11	)		4
	Adjusted pre-tax, pre-provision profitability ratio ⁽²⁾	2.37	%	2.42	%	2.50	%		(5	)		(13	)
	Adjusted noninterest expense/average assets ⁽²⁾	1.47	%	1.46	%	1.53	%		1			(6	)
	Efficiency ratio	44.84	%	41.93	%	45.75	%		291			(91	)
	Adjusted efficiency ratio ⁽²⁾	38.33	%	37.66	%	37.92	%		67		bps	41		bps



		Year Ended				December 31, 2019 Basis Point Change
		December 31, 2019		December 31, 2018		Yr-o-Yr
	Return on average assets	1.59	%	1.83	%	(24	)	bps
	Adjusted return on average assets ⁽²⁾	1.67	%	1.77	%	(10	)
	Return on average equity	14.16	%	17.04	%	(288	)
	Adjusted return on average equity ⁽²⁾	14.87	%	16.50	%	(163	)
	Return on average tangible equity ⁽²⁾	15.88	%	19.48	%	(360	)
	Adjusted return on average tangible equity ⁽²⁾	16.68	%	18.87	%	(219	)
	Interest rate spread	3.10	%	3.33	%	(23	)
	Net interest margin	3.64	%	3.78	%	(14	)
	Adjusted net interest margin ⁽²⁾	3.61	%	3.72	%	(11	)
	Average loan yield	5.15	%	4.97	%	18
	Adjusted average loan yield ⁽²⁾	5.11	%	4.90	%	21
	Yield on average interest-earning assets	4.67	%	4.50	%	17
	Average cost of interest-bearing deposits	1.47	%	1.06	%	41
	Average cost of deposits	1.04	%	0.71	%	33
	Average cost of funds	1.12	%	0.78	%	34
	Adjusted pre-tax, pre-provision profitability ratio ⁽²⁾	2.43	%	2.46	%	(3	)
	Adjusted noninterest expense/average assets ⁽²⁾	1.52	%	1.61	%	(9	)
	Efficiency ratio	43.80	%	44.73	%	(93	)
	Adjusted efficiency ratio ⁽²⁾	38.43	%	39.55	%	(112	)	bps


(1)	Annualized except for efficiency ratio.


(2)	See reconciliation of GAAP to non-GAAP financial measures in Tables 13, 14, 15 and 16.



EAST WEST BANCORP, INC. AND SUBSIDIARIES
ALLOWANCE FOR CREDIT LOSSES
($ in thousands)
(unaudited)
Table 10

		Three Months Ended									Year Ended
		December 31, 2019			September 30, 2019			December 31, 2018			December 31, 2019			December 31, 2018
Non-Purchased Credit Impaired (“Non-PCI”) Loans
	Allowance for non-PCI loans, beginning of period	$	345,576		$	330,620		$	310,010		$	311,300		$	287,070
	Provision for loan losses on non-PCI loans	20,843			37,884			17,321			100,115			65,043
	Net (charge-offs) recoveries:
	Commercial:
	C&I	(11,009		)	(23,450		)	(21,227		)	(59,484		)	(48,827		)
	CRE:
	CRE	1,254			875			4,763			4,188			5,194
	Multifamily residential	1,480			42			286			1,856			1,757
	Construction and land	13			21			24			536			740
	Total CRE	2,747			938			5,073			6,580			7,691
	Consumer:
	Residential mortgage:
	Single-family residential	2			49			106			125			1,213
	HELOCs	—			5			38			7			38
	Total residential mortgage	2			54			144			132			1,251
	Other consumer	(5		)	(5		)	(2		)	(31		)	(185		)
	Total net charge-offs	(8,265		)	(22,463		)	(16,012		)	(52,803		)	(40,070		)
	Foreign currency translation adjustments	133			(465		)	(19		)	(325		)	(743		)
	Allowance for non-PCI loans, end of period	358,287			345,576			311,300			358,287			311,300
Purchased Credit Impaired (“PCI”) Loans
	Allowance for PCI loans, beginning of period	—			5			31			22			58
	Reversal of loan losses on PCI loans	—			(5		)	(9		)	(22		)	(36		)
	Allowance for PCI loans, end of period	—			—			22			—			22
	Allowance for loan losses	358,287			345,576			311,322			358,287			311,322
Unfunded Credit Facilities
	Allowance for unfunded credit reserves, beginning of period	13,424			13,019			11,919			12,566			13,318
	Provision for (reversal of) unfunded credit reserves	(2,266		)	405			647			(1,408		)	(752		)
	Allowance for unfunded credit reserves, end of period	11,158			13,424			12,566			11,158			12,566
	Allowance for credit losses	$	369,445		$	359,000		$	323,888		$	369,445		$	323,888



	EAST WEST BANCORP, INC. AND SUBSIDIARIES
	CREDIT QUALITY
	($ in thousands)
	(unaudited)
Table 11

Non-PCI Nonperforming Assets		December 31, 2019			September 30, 2019			December 31, 2018

Nonaccrual loans:
	Commercial:
	C&I	$	74,835		$	90,830		$	43,840
	CRE:
	CRE	16,441			18,942			24,218
	Multifamily residential	819			551			1,260
	Total CRE	17,260			19,493			25,478
	Consumer:
	Residential mortgage:
	Single-family residential	14,865			9,484			5,259
	HELOCs	10,742			9,924			8,614
	Total residential mortgage	25,607			19,408			13,873
	Other consumer	2,517			2,495			2,502
	Total nonaccrual loans	120,219			132,226			85,693
Other real estate owned, net		125			1,122			133
Other nonperforming assets		1,167			1,167			7,167
	Total nonperforming assets	$	121,511		$	134,515		$	92,993


Credit Quality Ratios		December 31, 2019			September 30, 2019			December 31, 2018

Non-PCI nonperforming assets to total assets ⁽¹⁾		0.27		%	0.31		%	0.23		%
Non-PCI nonaccrual loans to loans HFI ⁽¹⁾		0.35		%	0.39		%	0.26		%
Allowance for loan losses to loans HFI ⁽¹⁾		1.03		%	1.02		%	0.96		%
Allowance for loan losses to non-PCI nonaccrual loans		298.03		%	261.35		%	363.30		%
Annualized quarterly net charge-offs to average loans HFI		0.10		%	0.26		%	0.20		%
Annual net charge-offs to average loans HFI		0.16		%	N/A			0.13		%

N/A - Not applicable


(1)	Total assets and loans HFI include PCI loans of $222.9 million, $240.7 million and $308.0 million as of December 31, 2019, September 30, 2019 and December 31, 2018, respectively.



EAST WEST BANCORP, INC. AND SUBSIDIARIES
GAAP TO NON-GAAP RECONCILIATION
($ in thousands)
(unaudited)
Table 12
During the second quarter of 2019, the Company reversed $30.1 million of certain previously claimed tax credits related to the DC Solar tax credit investments (“DC Solar”). The table below shows the computation of the Company’s effective tax rate excluding the impact of the DC Solar tax credits reversal. Management believes that excluding the impact of the DC Solar tax credits reversal from the effective tax rate computation allows comparability to prior periods.

		Three Months Ended									Year Ended
		December 31, 2019			September 30, 2019			December 31, 2018			December 31, 2019			December 31, 2018
Income tax expense	(a)	$	31,067		$	34,951		$	32,037		$	169,882		$	114,995
Less: Reversal of certain previously claimed tax credits related to DC Solar	(b)	—			—			—			(30,104		)	—
Adjusted income tax expense	(c)	$	31,067		$	34,951		$	32,037		$	139,778		$	114,995

Income before income taxes	(d)	219,282			206,367			205,055			843,917			818,696

Effective tax rate	(a)/(d)	14.2		%	16.9		%	15.6		%	20.1		%	14.0		%
Less: Reversal of certain previously claimed tax credits related to DC Solar	(b)/(d)	—		%	—		%	—		%	(3.5		)%	—		%
Adjusted effective tax rate	(c)/(d)	14.2		%	16.9		%	15.6		%	16.6		%	14.0		%



EAST WEST BANCORP, INC. AND SUBSIDIARIES
GAAP TO NON-GAAP RECONCILIATION
($ and shares in thousands, except for per share data)
(unaudited)
Table 13
During the first, second and fourth quarters of 2019, the Company recorded a $7.0 million pre-tax impairment charge, reversed $30.1 million of certain previously claimed tax credits and recorded a $1.6 million pre-tax impairment recovery related to DC Solar, respectively. During the first quarter of 2018, the Company sold its Desert Community Bank (“DCB”) branches and recognized a pre-tax gain on sale of $31.5 million. Management believes that presenting the computations of the adjusted net income, adjusted diluted earnings per common share, adjusted return on average assets and adjusted return on average equity that adjust for the above discussed non-recurring items provides clarity to financial statement users regarding the ongoing performance of the Company and allows comparability to prior periods.

		Three Months Ended
		December 31, 2019			September 30, 2019			December 31, 2018
Net income	(a)	$	188,215		$	171,416		$	173,018
Less: Impairment recovery related to DC Solar ⁽²⁾		(1,583		)	—			—
Tax effect of adjustment⁽³⁾		468			—			—
Adjusted net income	(b)	$	187,100		$	171,416		$	173,018

Diluted weighted average number of shares outstanding		146,318			146,120			146,133
Diluted EPS		$	1.29		$	1.17		$	1.18
Diluted EPS impact of impairment recovery related to DC Solar, net of tax		(0.01		)	—			—
Adjusted diluted EPS		$	1.28		$	1.17		$	1.18

Average total assets	(c)	$	44,471,242		$	43,136,273		$	40,525,188
Average stockholders’ equity	(d)	$	4,977,759		$	4,838,281		$	4,335,110
Return on average assets ⁽¹⁾	(a)/(c)	1.68		%	1.58		%	1.69		%
Adjusted return on average assets ⁽¹⁾	(b)/(c)	1.67		%	1.58		%	1.69		%
Return on average equity ⁽¹⁾	(a)/(d)	15.00		%	14.06		%	15.83		%
Adjusted return on average equity ⁽¹⁾	(b)/(d)	14.91		%	14.06		%	15.83		%

		Year Ended
		December 31, 2019			December 31, 2018
Net income	(e)	$	674,035		$	703,701
Add: Impairment charge related to DC Solar ⁽²⁾		6,978			—
Less: Impairment recovery related to DC Solar ⁽²⁾		(1,583		)	—
Gain on sale of business		—			(31,470		)
Tax effect of adjustments ⁽³⁾		(1,595		)	9,303
Add: Reversal of certain previously claimed tax credits related to DC Solar		30,104			—
Adjusted net income	(f)	$	707,939		$	681,534

Diluted weighted average number of shares outstanding		146,179			146,169
Diluted EPS		$	4.61		$	4.81
Diluted EPS impact of impairment charge related to DC Solar, net of tax		0.03			—
Diluted EPS impact of impairment recovery related to DC Solar, net of tax		(0.01		)	—
Diluted EPS impact of gain on sale of business, net of tax		—			(0.15		)
Diluted EPS impact of reversal of certain previously claimed tax credits related to DC Solar		0.21			—
Adjusted diluted EPS		$	4.84		$	4.66

Average total assets	(g)	$	42,484,885		$	38,542,569
Average stockholders’ equity	(h)	$	4,760,845		$	4,130,822
Return on average assets	(e)/(g)	1.59		%	1.83		%
Adjusted return on average assets	(f)/(g)	1.67		%	1.77		%
Return on average equity	(e)/(h)	14.16		%	17.04		%
Adjusted return on average equity	(f)/(h)	14.87		%	16.50		%


(1)	Annualized.


(2)	Included in Amortization of tax credit and other investments.


(3)	Applied statutory rate of 29.56%.



EAST WEST BANCORP, INC. AND SUBSIDIARIES
GAAP TO NON-GAAP RECONCILIATION
($ in thousands)
(unaudited)
Table 14
Adjusted efficiency ratio represents adjusted noninterest expense divided by adjusted revenue. Adjusted pre-tax, pre-provision profitability ratio represents the aggregate of adjusted revenue less adjusted noninterest expense, divided by average total assets. Adjusted revenue represents the aggregate of net interest income and adjusted noninterest income, where adjusted noninterest income excludes the gain on the sale of the DCB branches that were sold in the first quarter of 2018 (where applicable). Adjusted noninterest expense excludes the amortization of tax credit and other investments and the amortization of core deposit intangibles. 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, 2019			September 30, 2019			December 31, 2018
Net interest income before provision for credit losses	(a)	$	368,219		$	369,807		$	369,416
Total noninterest income		63,013			51,474			41,695
Total revenue	(b)	$	431,232		$	421,281		$	411,111

Total noninterest expense	(c)	$	193,373		$	176,630		$	188,097
Less: Amortization of tax credit and other investments		(27,038		)	(16,833		)	(30,958		)
Amortization of core deposit intangibles		(1,044		)	(1,148		)	(1,265		)
Adjusted noninterest expense	(d)	$	165,291		$	158,649		$	155,874
Efficiency ratio	(c)/(b)	44.84		%	41.93		%	45.75		%
Adjusted efficiency ratio	(d)/(b)	38.33		%	37.66		%	37.92		%
Adjusted pre-tax, pre-provision income	(b)-(d) = (e)	$	265,941		$	262,632		$	255,237
Average total assets	(f)	$	44,471,242		$	43,136,273		$	40,525,188
Adjusted pre-tax, pre-provision profitability ratio ⁽¹⁾	(e)/(f)	2.37		%	2.42		%	2.50		%
Adjusted noninterest expense ⁽¹⁾/average assets	(d)/(f)	1.47		%	1.46		%	1.53		%

		Year Ended
		December 31, 2019			December 31, 2018
Net interest income before provision for credit losses	(g)	$	1,467,813		$	1,386,508
Total noninterest income		209,377			210,909
Total revenue	(h)	1,677,190			1,597,417
Noninterest income		209,377			210,909
Less: Gain on sale of business		—			(31,470		)
Adjusted noninterest income	(i)	$	209,377		$	179,439
Adjusted revenue	(g)+(i) = (j)	$	1,677,190		$	1,565,947

Total noninterest expense	(k)	$	734,588		$	714,466
Less: Amortization of tax credit and other investments		(85,515		)	(89,628		)
Amortization of core deposit intangibles		(4,518		)	(5,492		)
Adjusted noninterest expense	(l)	$	644,555		$	619,346
Efficiency ratio	(k)/(h)	43.80		%	44.73		%
Adjusted efficiency ratio	(l)/(j)	38.43		%	39.55		%
Adjusted pre-tax, pre-provision income	(j)-(l) = (m)	$	1,032,635		$	946,601
Average total assets	(n)	$	42,484,885		$	38,542,569
Adjusted pre-tax, pre-provision profitability ratio	(m)/(n)	2.43		%	2.46		%
Adjusted noninterest expense /average assets	(l)/(n)	1.52		%	1.61		%


(1)	Annualized.



EAST WEST BANCORP, INC. AND SUBSIDIARIES
GAAP TO NON-GAAP RECONCILIATION
($ in thousands)
(unaudited)
Table 15
Management believes that presenting the adjusted average loan yield and adjusted net interest margin that exclude the ASC 310-30 discount accretion impact provides clarity to financial statement users regarding the change in loan contractual yields and allows comparability to prior periods.

Yield on Average Loans		Three Months Ended												Year Ended
Yield on Average Loans		December 31, 2019				September 30, 2019				December 31, 2018				December 31, 2019			December 31, 2018
Interest income on loans	(a)	$	425,773			$	433,658			$	414,517			$	1,717,415		$	1,503,514
Less: ASC 310-30 discount accretion income		(6,053		)		(2,521		)		(5,810		)		(12,471		)	(20,172		)
Adjusted interest income on loans	(b)	$	419,720			$	431,137			$	408,707			$	1,704,944		$	1,483,342

Average loans	(c)	$	34,410,010			$	33,661,282			$	31,534,875			$	33,373,136		$	30,230,014
Add: ASC 310-30 discount		16,012				18,172				23,833				18,915			28,400
Adjusted average loans	(d)	$	34,426,022			$	33,679,454			$	31,558,708			$	33,392,051		$	30,258,414

Average loan yield	(a)/(c)	4.91		%	⁽¹⁾	5.11		%	⁽¹⁾	5.22		%	⁽¹⁾	5.15		%	4.97		%
Adjusted average loan yield	(b)/(d)	4.84		%	⁽¹⁾	5.08		%	⁽¹⁾	5.14		%	⁽¹⁾	5.11		%	4.90		%

Net Interest Margin
Net interest income	(e)	$	368,219			$	369,807			$	369,416			$	1,467,813		$	1,386,508
Less: ASC 310-30 discount accretion income		(6,053		)		(2,521		)		(5,810		)		(12,471		)	(20,172		)
Adjusted net interest income	(f)	$	362,166			$	367,286			$	363,606			$	1,455,342		$	1,366,336

Average interest-earning assets	(g)	$	42,114,123			$	40,919,386			$	38,688,647			$	40,320,804		$	36,707,142
Add: ASC 310-30 discount		16,012				18,172				23,833				18,915			28,400
Adjusted average interest-earning assets	(h)	$	42,130,135			$	40,937,558			$	38,712,480			$	40,339,719		$	36,735,542

Net interest margin	(e)/(g)	3.47		%	⁽¹⁾	3.59		%	⁽¹⁾	3.79		%	⁽¹⁾	3.64		%	3.78		%
Adjusted net interest margin	(f)/(h)	3.41		%	⁽¹⁾	3.56		%	⁽¹⁾	3.73		%	⁽¹⁾	3.61		%	3.72		%


(1)	Annualized.



EAST WEST BANCORP, INC. AND SUBSIDIARIES
GAAP TO NON-GAAP RECONCILIATION
($ in thousands)
(unaudited)
Table 16
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, 2019			September 30, 2019			December 31, 2018
Stockholders’ equity	(a)	$	5,017,617		$	4,882,664		$	4,423,974
Less: Goodwill		(465,697		)	(465,697		)	(465,547		)
Other intangible assets ⁽¹⁾		(16,079		)	(17,435		)	(22,365		)
Tangible equity	(b)	$	4,535,841		$	4,399,532		$	3,936,062

Total assets	(c)	$	44,196,096		$	43,274,659		$	41,042,356
Less: Goodwill		(465,697		)	(465,697		)	(465,547		)
Other intangible assets ⁽¹⁾		(16,079		)	(17,435		)	(22,365		)
Tangible assets	(d)	$	43,714,320		$	42,791,527		$	40,554,444
Total stockholders’ equity to total assets ratio	(a)/(c)	11.35		%	11.28		%	10.78		%
Tangible equity to tangible assets ratio	(b)/(d)	10.38		%	10.28		%	9.71		%



Adjusted return on average tangible equity represents adjusted tangible net income divided by average tangible equity. Adjusted tangible net income excludes the after-tax impacts of the amortization of core deposit intangibles and mortgage servicing assets, impairment charge/(recovery) related to DC Solar and the gain on the sale of the DCB branches; and the reversal of certain previously claimed tax credits related to DC Solar (where applicable). Given that the use of such measures and ratios is more prevalent in the banking industry, and such measures and ratios are used by banking regulators and analysts, the Company has included them below for discussion.

		Three Months Ended												Year Ended
		December 31, 2019				September 30, 2019				December 31, 2018				December 31, 2019			December 31, 2018
Net Income		$	188,215			$	171,416			$	173,018			$	674,035		$	703,701
Add: Amortization of core deposit intangibles		1,044				1,148				1,265				4,518			5,492
Amortization of mortgage servicing assets		567				834				448				2,738			1,814
Tax effect of adjustments ⁽²⁾		(476		)		(586		)		(506		)		(2,145		)	(2,160		)
Tangible net income	(e)	$	189,350			$	172,812			$	174,225			$	679,146		$	708,847
Add: Impairment charge related to DC Solar ⁽³⁾		—				—				—				6,978			—
Less: Impairment recovery related to DC Solar ⁽³⁾		(1,583		)		—				—				(1,583		)	—
Gain on sale of business		—				—				—				—			(31,470		)
Tax effect of adjustment ⁽²⁾		468				—				—				(1,595		)	9,303
Add: Reversal of certain previously claimed tax credits related to DC Solar		—				—				—				30,104			—
Adjusted tangible net income	(f)	$	188,235			$	172,812			$	174,225			$	713,050		$	686,680

Average stockholders’ equity		$	4,977,759			$	4,838,281			$	4,335,110			$	4,760,845		$	4,130,822
Less: Average goodwill		(465,697		)		(465,697		)		(465,547		)		(465,663		)	(466,346		)
Average other intangible assets ⁽¹⁾		(16,793		)		(18,391		)		(23,130		)		(19,340		)	(25,337		)
Average tangible equity	(g)	$	4,495,269			$	4,354,193			$	3,846,433			$	4,275,842		$	3,639,139
Return on average tangible equity	(e)/(g)	16.71		%	⁽⁴⁾	15.75		%	⁽⁴⁾	17.97		%	⁽⁴⁾	15.88		%	19.48		%
Adjusted return on average tangible equity	(f)/(g)	16.61		%	⁽⁴⁾	15.75		%	⁽⁴⁾	17.97		%	⁽⁴⁾	16.68		%	18.87		%


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


(2)	Applied statutory rate of 29.56%.


(3)	Included in Amortization of tax credit and other investments.


(4)	Annualized.

EWBC Earnings Results Fourth Quarter and Full Year 2019 January 23, 2020

Forward-Looking Statements Forward-Looking Statements Certain matters set forth herein (including any exhibits hereto) constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, including forward-looking statements relating to our current business plans and expectations regarding future operating results. Forward-looking statements may include, but are not limited to, the use of forward-looking language, such as “likely result in,” “expects,” “anticipates,” “estimates,” “forecasts,” “projects,” “intends to,” “assumes,” or may include other similar words or phrases, such as “believes,” “plans,” “trend,” “objective,” “continues,” “remains,” or similar expressions, or future or conditional verbs, such as “will,” “would,” “should,” “could,” “may,” “might,” “can,” or similar verbs, and the negative thereof. These forward-looking statements are subject to risks and uncertainties that could cause actual results, performance or achievements to differ materially from those projected. These risks and uncertainties, some of which are beyond our control, include, but are not limited to, the 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; our ability to compete effectively against other financial institutions in our banking markets; success and timing of our business strategies; our ability to retain key officers and employees; impact on our funding costs, net interest income and net interest margin due to changes in key variable market interest rates, competition, regulatory requirements and our product mix; changes in our costs of operation, compliance and expansion; our ability to adopt and successfully integrate new technologies into our business in a strategic manner; impact of benchmark interest rate reform in the United States (“U.S.”) that resulted in the Secured Overnight Financing Rate (“SOFR”) selected as the preferred alternative reference rate to the London Interbank Offered Rate; impact of failure in, or breach of, our operational or security systems or infrastructure, or those of third parties with whom we do business, including as a result of cyber attacks; and other similar matters which could result in, among other things, confidential and/or proprietary information being disclosed or misused; adequacy of our risk management framework, disclosure controls and procedures and internal control over financial reporting; future credit quality and performance, including our expectations regarding future credit losses and allowance levels; impact of adverse changes to our credit ratings from major credit rating agencies; impact of adverse judgments or settlements in litigation; changes in the commercial and consumer real estate markets; changes in consumer spending and savings habits; changes in the U.S. economy, including inflation, deflation, employment levels, rate of growth and general business conditions; government intervention in the financial system, including changes in government interest rate policies; impact of political developments, wars or other hostilities that may disrupt or increase volatility in securities or otherwise affect economic conditions; changes in laws or the regulatory environment including regulatory reform initiatives and policies of the U.S. Department of Treasury, the Board of Governors of the Federal Reserve Board System, the Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency, the U.S. Securities and Exchange Commission, the Consumer Financial Protection Bureau and the California Department of Business Oversight — Division of Financial Institutions; impact of the Dodd-Frank Wall Street Reform and Consumer Protection Act on our business, business practices, cost of operations and executive compensation; heightened regulatory and governmental oversight and scrutiny of our business practices, including dealings with consumers; impact of reputational risk from negative publicity, fines and penalties and other negative consequences from regulatory violations and legal actions and from our interactions with business partners, counterparties, service providers and other third parties; impact of regulatory enforcement actions; changes in accounting standards as may be required by the Financial Accounting Standards Board or other regulatory agencies and their impact on critical accounting policies and assumptions; changes in income tax laws and regulations; impact of other potential federal tax changes and spending cuts; our capital requirements and our ability to generate capital internally or raise capital on favorable terms; changes in our ability to receive dividends from our subsidiaries; any future strategic acquisitions or divestitures; continuing consolidation in the financial services industry; changes in the equity and debt securities markets; fluctuations in our stock price; fluctuations in foreign currency exchange rates; a recurrence of significant turbulence or disruption in the capital or financial markets, which could result in, among other things, a reduction in the availability of funding or increases in funding costs, a reduction in investor demand for mortgage loans and declines in asset values and/or recognition of other-than-temporary impairment on securities held in our available-for-sale investment securities portfolio; impact of natural or man-made disasters or calamities or conflicts or other events that may directly or indirectly result in a negative impact on our financial performance; and other factors set forth in our public reports including its Annual Report on Form 10-K for the year ended December 31, 2018, and particularly the discussion of risk factors within that document. If any of these risks or uncertainties materializes or if any of the assumptions underlying such forward-looking statements proves to be incorrect, our results could differ materially from those expressed in, implied or projected by such forward-looking statements. We assume no obligation to update or revise such forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by law. 2

Highlights of Fourth Quarter and Full Year 2019 Results $ in millions, except Fourth Quarter Q-o-Q Change Y-o-Y Change Full Year Y-o-Y Change per share data 2019 vs. 3Q19 vs. 4Q18 2019 vs. FY 2018 Earnings Net income $ 188.2 10% 9% $ 674.0 (4)% Adj.* net income $ 187.1 9% 8% $ 707.9 4% EPS $ 1.29 10% 9% $ 4.61 (4)% Adj.* EPS $ 1.28 9% 8% $ 4.84 4% NII $ 368.2 (0.4)% (0.3)% $ 1,467.8 6% NIM 3.47% (12) bps (32) bps 3.64% (14) bps Balance Sheet Loans $ 34,779 2% 7% $ 34,779 7% Deposits $ 37,324 2% 5% $ 37,324 5% TBVPS* $ 31.15 3% 15% $ 31.15 15% Credit Quality NCO ratio 0.10% (16) bps (10) bps 0.16% 3 bps NPAs to total assets 0.27% (4) bps 4 bps 0.27% 4 bps * See reconciliation of GAAP to non-GAAP financial measures in the appendix of this presentation and in the Company’s Earnings Press Releases. 3

4Q19 Earnings Growth and Profitability Net Income and Diluted EPS Adjusted* Net Income and Diluted EPS $188 $180 $187 $173 $173 $171 $164 $171 $169 $1.28 $150 $1.29 -2% +7% $1.24 -5% +9% $1.18 $1.17 $1.18 $1.16 $1.17 $1.12 $1.03 $ $ inmillions, except per share data $ $ inmillions, except per share data 4Q18 1Q19 2Q19 3Q19 4Q19 4Q18 1Q19* 2Q19* 3Q19 4Q19* Net income Diluted EPS PTPP Income & PTPP Profitability Ratio Profitability Ratios (Adj.* in 1Q19, 2Q19 & 4Q19) 2.00% 40.0% $255 $260 $263 $266 1.74% $244 5.00% 1.69% 1.68% 1.67% $250 1.58% 4.50% 30.0% $200 4.00% 3.50% 18.0% 17.4% $150 17.0% 15.7% 16.6% 20.0% 2.51% 3.00% $ $ inmillions 2.50% 2.43% 2.42% 2.37% $100 2.50% 15.8% 15.5% 15.1% 14.9% 10.0% 2.00% 14.1% $50 1.50% $- 1.00%0.00% 0.0% 4Q18 1Q19 2Q19 3Q19 4Q19 4Q18 1Q19* 2Q19* 3Q19 4Q19* Adj.* PTPP income Adj.* PTPP profitability ratio Return on avg. assets Return on avg. equity Return on avg. tang. eq.* * See reconciliation of GAAP to non-GAAP financial measures in the appendix of this presentation and in the Company’s Earnings Press Releases. 4

4Q19 Record Loans of $34.8 billion 4Q19 EOP Loan Mix: $34.8 billion . EOP loan growth of 7% Y-o-Y and 2% Q-o-Q. ($ in billions) . FY 2019 avg. loan growth of 10% Y-o-Y. . Avg. growth in CRE: $1.1bn (+9% Y-o-Y). $8.8 25% . Avg. growth in residential mortgage: $1.0bn (+15% Y-o-Y). $12.2 . Avg. growth in C&I: $1.0bn (+9% Y-o-Y). 35% . 4Q19 avg. loan yield: 4.91%, down 20 bps Q-o-Q. $13.8 40% . Reflects one 25 basis point cut to the fed funds rate & decline in LIBOR rates during 4Q19. C&I Total CRE Residential mortgage & other consumer Average Loans Average Loan Yield $33.0 $33.7 $34.4 35 $32.4 $35.0 5.50% 5.50% $31.5 6.00% 5.28% 5.30% +11% +7% +8% +9% 4.83% 30 $30.0 8.3 8.6 8.8 5.00% 7.8 8.1 5.22% 5.30% 5.28% 5.11% 25 $25.0 4.91% 4.00% 20 13.4 $20.0 12.1 12.5 12.7 12.9 3.00% 15 $15.0 $ $ inbillions 2.00% 2.50% 2.44% 10 $10.0 2.35% 2.17% 1.00% 1.79% 5 11.6 11.8 12.0 12.2 12.2 $5.0 0 $- 0.00% 4Q18 1Q19 2Q19 3Q19 4Q19 4Q18 1Q19 2Q19 3Q19 4Q19 C&I C&ITotal CRETotal CREResidentialResidential mortgage mortgage & other & consumerother consumerLQA average loan growth Avg. loan yield Avg. Prime Rate Avg. 1M LIBOR Rate 5

4Q19 Record Deposits of $37.3 billion 4Q19 EOP Deposit Mix: $37.3 billion . 12.31.19 EOP loan-to-deposit ratio of 93.2%. ($ in billions) . EOP deposit growth of 5% Y-o-Y and 2% Q-o-Q. . FY 2019 avg. deposit growth of 8% Y-o-Y. $7.3 . Avg. growth in time: $2,530mm (+34% Y-o-Y). 20% $11.1 . Avg. growth in IB checking: $767mm (+17% Y-o-Y). 30% . Avg. growth in MMDA: $235mm (+3% Y-o-Y). $8.7 . Avg. change in DDA: -$587mm (-5% Y-o-Y). 23% . Avg. change in savings: -$128mm (-6% Y-o-Y). $10.2 27% . 4Q19 avg. cost of deposits: 0.94%, down 11 bps Q-o-Q. 4Q19 avg. cost of IB deposits: 1.34%, down 15 bps Q-o-Q. . Cost of deposits as of 12.31.19: 0.90%, down 11 bps Q-o-Q; DDA Time MMDA IB Checking & Savings Cost of IB deposits as of 12.31.19: 1.28%, down 15 bps Q-o-Q. Average Deposits Avg. Cost of Deposits Relative to Fed Funds & 1M LIBOR $37.4 40 $36.5 $40.0 $35.0 $34.9 $35.3 3.00% +5% +13% +10% 2.50% 2.50% 35 -1% $35.0 7.6 2.50% 2.35% 2.30% 6.6 7.3 7.2 30 7.3 $30.0 2.50% 2.44% 1.83% 2.00% 2.28% 25 8.3 8.6 $25.0 8.2 8.1 7.9 2.17% 20 $20.0 1.50% 1.79% $ $ inbillions 15 8.8 9.9 10.3 10.2 $15.0 9.4 1.00% $10.0 1.57% 10 1.34% 1.50% 1.49% 1.34% 1.11% 0.50% 0.90% 1.07% 1.05% 0.94% 5 11.4 10.1 10.2 10.7 11.0 $5.0 0 $- 0.00% 4Q18 1Q19 2Q19 3Q19 4Q19 4Q18 1Q19 2Q19 3Q19 4Q19 DDA Time MMDA IB Checking & Savings LQA average deposit growth Avg. cost of deposits Avg. cost of IB deposits Avg. 1M LIBOR Rate Avg. Fed Funds Rate 6

4Q19 Summary Income Statement $ in millions, except per share data 4Q19 3Q19 $ Change % Change Notable & Tax-Related Items Adjusted net interest income $ 362.2 $ 367.3 $ (5.1) (1.4) % . Adjusted** 4Q19 EPS: $1.28. ASC 310-30 discount 6.1 2.5 3.5 140 % accretion income . Included in amortization of tax credit and other investments: $1.6mm Net interest income 368.2 369.8 (1.6) (0.4) % impairment recovery related to Fee income & net gains on 52.5 50.9 1.7 3 % certain tax credit investments, which sales of loans* were impaired in 1Q19. Other 10.5 0.6 9.9 NM . Recovery adds $0.01 to EPS. Total noninterest income* 63.0 51.5 11.5 22 % . 4Q19 effective tax rate: 14%. Adjusted noninterest expense 165.3 158.6 6.6 4 % 3Q19 effective tax rate: 17%. Amortization of tax credit and other investments, and core 28.1 18.0 10.1 56 % . FY 2019 income tax expense was deposit intangibles $170mm & effective tax rate was 20%, which included a $30.1mm Total noninterest expense 193.4 176.6 16.7 9 % reversal of certain previously claimed Provision for credit losses 18.6 38.3 19.7 (51) % tax credits. . Adjusted** for this item, FY 2019 Income tax expense 31.1 35.0 (3.9) (11) % income tax expense was $140mm & Net income $ 188.2 $ 171.4 $ 16.8 10 % effective tax rate was 17%. Diluted EPS $ 1.29 $ 1.17 $ 0.12 10 % . For FY 2020, projecting an effective tax rate of approximately 15%. * See slide 10 for noninterest income detail by category. ** See reconciliation of GAAP to non-GAAP financial measures in the appendix of this presentation and in the Company’s Earnings Press Releases. 7

4Q19 Net Interest Income & Net Interest Margin . 4Q19 NII: $368.2mm, down by $1.6mm or 0.4% Q-o-Q. Net Interest Income . 4Q19 NIM: 3.47%, down 12 bps Q-o-Q. $369 $362 $367 $370 $368 . Impact to NIM from change in yields & rates (Q-o-Q): +1% +1% -0.4% -2% . -15 bps from lower loan yields, incl. fees & discounts. . -4 bps from lower other earning asset yields. . -4 bps from asset mix shift: increased share of avg. AFS investment securities in mix. $ $ inmillions . +11 bps from lower funding costs. . 4Q19 Adj.* NIM: 3.41%, down 15 bps Q-o-Q. $150 . 4Q19 ASC 310-30 discount accretion income of $6.1mm, 4Q18 1Q19 2Q19 3Q19 4Q19 vs. $2.5mm in 3Q19. Net Interest Income NII growth . Accretable ASC 310-30 discount: $10.0mm as of 12.31.19. NIM relative to Fed Funds, Prime Rate & 1M LIBOR Q-o-Q Change in Avg. Loan Yield & Cost of Deposits Fed funds Fed funds cuts: cut: 5.50% 5.50% 20 6.00% 5.28% 5.30% 17 (50) bps (25) bps 4.83% 12 5.00% 8 3.79% 3.79% 3.73% 4 4.00% 3.59% 3.47% 3.00% 2.35% 2.50% 2.50% 2.30% 1.83% (2) 2.00% 2.28% 2.50% 2.44% 2.17% (6) Fed funds 1.00% 1.79% (11) hike: (17) 0.00% + 25 bps (20) 4Q18 1Q19 2Q19 3Q19 4Q19 4Q18 1Q19 2Q19 3Q19 4Q19 NIM Avg. Prime Rate Avg. 1M LIBOR Rate Avg. Fed Funds Rate Change in avg. loan yield (in bps) Change in avg. cost of deposits (in bps) *See reconciliation of GAAP to non-GAAP financial measures in the appendix of this presentation and in the Company’s Earnings Press Releases. 8

Loan Portfolio: Underlying Interest Rate Detail EWBC’s Loan Portfolio Breakdown: Fixed, Hybrid, & Variable Rate Loans (as of December 31, 2019) Breakdown by interest rate indices % of Breakdown by loan type % of $ in mm. total loans $ in mm. total loans Total Fixed rate loans 4,399.0 13% C&I 1,574.5 5% Hybrid loans in fixed rate period: CRE 1,191.7 3% Resetting within 1 year 854.6 2% SFR, HELOC, & other consumer 1,632.8 5% Resetting: 1 to 2 years 869.8 3% Total Fixed rate loans 4,399.0 13% Resetting: 2 to 3 years 1,482.0 4% CRE 2,435.5 7% Resetting: > 3 years 3,445.2 10% SFR, HELOC, & other consumer 4,216.0 12% Total Hybrid loans in fixed rate period 6,651.5 19% Total Hybrid loans in fixed rate period 6,651.5 19% Variable rate loans: C&I 7,081.9 20% Linked to 1-M LIBOR (or shorter) 9,368.6 27% CRE 4,554.9 13% Linked to 2-M or 3-M LIBOR 1,712.1 5% SFR, HELOC, & other consumer 266.0 1% Linked to 6-M or 1-Y LIBOR 822.1 2% Subtotal - Variable rate loans linked to LIBOR 11,902.8 34% Linked to LIBOR rates 11,902.8 34% C&I 2,829.1 8% Linked to Prime rates 9,647.2 28% CRE 5,339.5 15% Linked to all other interest rate indices 2,138.9 6% SFR, HELOC, & other consumer 1,478.6 4% Total Variable rate loans 23,688.8 68% Subtotal - Variable rate loans linked to Prime 9,647.2 28% Other (NPLs, premiums, discounts) 39.6 0% C&I 661.7 2% Total gross loans 34,779.0 100% CRE 246.7 1% SFR, HELOC, & other consumer 1,230.5 4% . The share of fixed rate loans and hybrid loans Subtotal - Variable rate loans - all other indices 2,138.9 6% in fixed rate period was 32% as of 12.31.19, Total Variable rate loans 23,688.8 68% Other (NPLs, premiums, discounts) 39.6 0% compared to 28% as of 12.31.18. SFR loan Total gross loans 34,779.0 100% growth contributed to this shift. Note: Hybrid loans shows those still in fixed rate period. Hybrid loans already subject to variable rate are shown in Variable loans. Note: Loans (HFI & HFS) net of deferred fees, premiums, or discounts, and gross of ALLL. 9

4Q19 Noninterest Income Detail 60.0 Fee Income & Net Gains on Sales of Loans * $60.0 Total noninterest income of $63.0mm in 4Q19 vs. $51.5mm in 3Q19. $52.5 $50.9 $48.9 1.1 2% . Fee income and net gains on sales of loans: 50.0 2.0 $50.0 $52.5mm in 4Q19, up $1.7mm or +3% Q-o-Q. 14.1 27% . IRC and other derivative income of $17.8mm in 4Q19: 11.8 11.1 $38.8 $39.1 40.0 $40.0 . Customer-driven IRC revenue of $14.1mm, increase 0.9 1.5 of $3.0mm Q-o-Q, reflects strong customer demand 2.8 4.9 3.8 4.8 4.2 8% 2.8 for interest rate hedging products. 3.8 30.0 7.3 6.0 11% $30.0 . Credit valuation adjustment of $3.7mm, Q-o-Q 7.2 8.1 5.0 increase of $6.4mm, driven by increase in long-term interest rates. $ $ inmillions 9.6 9.8 19% 20.0 9.3 9.5 9.7 $20.0 . Lending fees: $17.2mm in 4Q19, +$2.2mm Q-o-Q. . Deposit account fees: $9.8mm in 4Q19, +$0.1mm Q-o-Q. 10.0 $10.0 17.2 33% 15.2 15.0 16.4 15.0 Interest Rate Contracts and Other Derivative Income Detail 0.0 $- ($ in millions) 4Q18 1Q19 2Q19 3Q19 4Q19 4Q18 1Q19 2Q19 3Q19 4Q19 4Q19 Mix Revenue $ 2.8 $ 4.9 $ 11.8 $ 11.1 $ 14.1 Lending fees Deposit account fees Foreign exchange income Wealth management fees CVA (1.7) (1.7) (1.4) (2.7) 3.7 IRC revenue Net gains on sales of loans Total $ 1.1 $ 3.2 $ 10.4 $ 8.4 $ 17.8 * Fee income excludes: credit valuation adjustment (“CVA”) related to interest rate contracts (“IRC”) and other derivatives; net gains on . Revenue – interest rate contracts and other derivatives transaction fees. sales of securities; gains on sale of fixed assets, and other income. . CVA – related to interest rate contracts and other derivatives. 10

4Q19 Operating Expense & Efficiency Adjusted* Noninterest Expense Noninterest Expense & Efficiency Ratio $165 70.0% $161 $160 $159 $165.3 $156 $160.8 $170.0 $155.9 $159.8 $158.6 160.0 37.9% 39.8% 38.0% 37.7% 38.3% 26.7 16% $150.0 25.5 24.8 26.9 140.0 27.8 9.2 9.7 11.2 7% $130.0 9.9 9.4 2.1 2.1 3.2 2% 120.0 1.4 2.6 17.3 17.4 17.1 10% $110.0 18.0 17.9 4.5 5.4 6.0 4% $100 0.0% 100.0 3.6 5.5 $90.0 4Q18 1Q19 2Q19 3Q19 4Q19 Adj.* noninterest expense Adj.* efficiency ratio 80.0 $ $ inmillions $70.0 60.0 $50.0 102.3 100.5 101.1 61% 93.8 97.8 40.0 $30.0 . 4Q19 total noninterest expense: $193.4mm, increase of 9% Q-o-Q from $176.6mm. 20.0 $10.0 . 4Q19 adj.* noninterest expense: $165.3mm, increase of 4% Q-o-Q from $158.6mm. Largest increase in 0.0 $(10.0) 4Q18 1Q19 2Q19 3Q19 4Q19 4Q19 Mix compensation and employee benefits expense. Comp and employee benefits Deposit & loan related Occupancy & Equipment Consulting . Essentially stable 5-quarter adj.* efficiency ratio range Computer software & Data processing Other operating expense of 37.7% to 39.8%. *See reconciliation of GAAP to non-GAAP financial measures in the appendix of this presentation and in the Company’s Earnings Press Releases. 11

Asset Quality Metrics Allowance for Loan Losses Provision for Credit Losses & Net Charge-off Ratio $110 $99 $358 0.90% $311 $287 2.40% 0.70% $261 $64 $53 0.50% $46 inmillions 1.02% 1.03% $40 0.99% 0.96% 1.20% $36 $ $ inmillions $ $ 0.30% $27 $23 0.10% 0.15% 0.13% 0.16% $- 0.00% 0.08% $- -0.10% 12.31.16 12.31.17 12.31.18 12.31.19 12.31.16 12.31.17 12.31.18 12.31.19 Allowance for loan losses ALLL/Loans HFI Net charge-offs Provision expense NCOs/Avg. loans HFI Nonperforming Assets* . Allowance coverage of loans HFI: 1.03% as of 1.00% $130 12.31.19, compared to 1.02% as of 09.30.19 and $122 $115 0.96% as of 12.31.18. 0.80% $100 $93 . Nonperforming assets to total assets ratio: 0.27% as of 0.60% 12.31.19, compared to 0.31% as of 09.30.19 and 0.23% as of 12.31.18. 0.40% $ $ inmillions 0.37% . 4Q19 net charge-off ratio: 0.10% of avg. loans HFI 0.31% 0.27% 0.20% 0.23% annualized, compared to 0.26% annualized in 3Q19. FY 2019 net charge-off ratio: 0.16% of avg. loans HFI. $- 0.00% 12.31.16 12.31.17 12.31.18 12.31.19 . 4Q19 provision for credit losses: $18.6mm. Nonperforming assets NPAs/Total assets FY 2019 provision for credit losses: $99.0mm. * Nonperforming assets and net charge-offs exclude purchased credit impaired loans. HFI represents held-for-investment. 12

Strong Capital Ratios . Tangible equity* per common share increased by 15% Y-o-Y. . Tangible equity to tangible assets ratio* increased by 67 bps Y-o-Y. . Regulatory capital ratios increased by 45 bps to 75 bps Y-o-Y. . Quarterly common stock dividend of 27.5 cents per share, or annualized $1.10 per share. EWBC’s Capital Position 0.16 $32.00 14.4% $31.15 13.7% 0.14 12.9% 12.9% 12.2% 12.2% $31.00 0.12 10.4% 10.5% 10.3% $30.00 9.7% 9.9% 0.1 8.5% $29.00 0.08 7.0% $28.00 0.06 $27.15 4.0% $27.00 0.04 0.02 $26.00 0 $25.00 Tangible equity* Tangible equity to CET1 risk-based Tier 1 risk-based Total risk-based Tier 1 leverage per share tangible assets ratio* capital ratio capital ratio capital ratio capital ratio Minimum Capital Ratio + Conservation Buffer EWBC 12.31.18 EWBC 12.31.19 *See reconciliation of GAAP to non-GAAP financial measures in the appendix of this presentation and in the Company’s Earnings Press Releases. Note: The Company’s December 31, 2019 regulatory capital ratios are preliminary. 13

Management Outlook: Full Year 2020 FY 2020 expectations Earnings drivers compared to FY 2019 results 2019 actual End of Period Loans . Increase at a percentage rate of 7% to 8%. $34.8 billion +7% Y-o-Y Net Interest Margin . 3.40% to 3.45%, 3.64% including the impact of ASC 310-30 discount accretion. -14 bps Y-o-Y Net Interest Income . Flat to an increase of 2% year-over-year, $1.5 billion including ASC 310-30 discount accretion income. +6% Y-o-Y Noninterest Expense . Increase at a percentage rate of approximately 4%, $645 million excluding tax credit investment & core deposit intangible +4% Y-o-Y amortization. Provision for Credit Losses . $90 million to $120 million. $99 million Takes into account expected volatility as a result of the CECL +54% Y-o-Y model. Tax Items . Full year effective tax rate of approx. 15%, Effective tax rate: including the impact of tax credit investments. 20% Interest Rates . No change to the fed funds rate in the year 2020. Fed funds decreased: -75 bps 14

APPENDIX

Appendix: GAAP to Non-GAAP Reconciliation EAST WEST BANCORP, INC. AND SUBSIDIARIES GAAP TO NON-GAAP RECONCILIATION ($ in thousands, except per share data) (unaudited) During the second quarter of 2019, the Company reversed $30.1 million of certain previously claimed tax credits related to the DC Solar tax credit investments (“DC Solar”). The table below shows the computation of the Company’s effective tax rate excluding the impact of the DC Solar tax credits reversal. Management believes that excluding the impact of the DC Solar tax credits reversal from the effective tax rate computation allows comparability to prior periods. Three Months Ended Year Ended December 31, September 30, December 31, December 31, December 31, 2019 2019 2018 2019 2018 Income tax expense (a) $ 31,067 $ 34,951 $ 32,037 $ 169,882 $ 114,995 Less: Reversal of certain previously claimed tax credits related to DC Solar (b) — — — (30,104) — Adjusted income tax expense (c) $ 31,067 $ 34,951 $ 32,037 $ 139,778 $ 114,995 Income before income taxes (d) 219,282 206,367 205,055 843,917 818,696 Effective tax rate (a)/(d) 14.2% 16.9% 15.6% 20.1% 14.0% Less: Reversal of certain previously claimed tax credits related to DC Solar (b)/(d) —% — % — % (3.5)% — % Adjusted effective tax rate (c)/(d) 14.2% 16.9% 15.6% 16.6% 14.0% 16

Appendix: GAAP to Non-GAAP Reconciliation EAST WEST BANCORP, INC. AND SUBSIDIARIES GAAP TO NON-GAAP RECONCILIATION ($ in thousands, except per share data) (unaudited) During the first, second and fourth quarters of 2019, the Company recorded a $7.0 million pre-tax impairment charge, reversed $30.1 million of certain previously claimed tax credits and recorded a $1.6 million pre-tax impairment recovery related to DC Solar, respectively. During the first quarter of 2018, the Company sold its Desert Community Bank (“DCB”) branches and recognized a pre-tax gain on sale of $31.5 million. Management believes that presenting the computations of the adjusted net income, adjusted diluted earnings per common share, adjusted return on average assets and adjusted return on average equity that adjust for the above discussed non-recurring items provides clarity to financial statement users regarding the ongoing performance of the Company and allows comparability to prior periods. Three Months Ended September 30, December 31, 2019 2019 December 31, 2018 Net income (a) $ 188,215 $ 171,416 $ 173,018 Less: Impairment recovery related to DC Solar (2) (1,583) — — Tax effect of adjustment (3) 468 — — Adjusted net income (b) $ 187,100 $ 171,416 $ 173,018 Diluted weighted average number of shares outstanding 146,318 146,120 146,133 Diluted EPS $ 1.29 $ 1.17 $ 1.18 Diluted EPS impact of impairment recovery related to DC Solar, net of tax (0.01) — — Adjusted diluted EPS $ 1.28 $ 1.17 $ 1.18 Average total assets (c) $ 44,471,242 $ 43,136,273 $ 40,525,188 Average stockholders’ equity (d) $ 4,977,759 $ 4,838,281 $ 4,335,110 Return on average assets (1) (a)/(c) 1.68% 1.58% 1.69% Adjusted return on average assets (1) (b)/(c) 1.67% 1.58% 1.69% Return on average equity (1) (a)/(d) 15.00% 14.06% 15.83% Adjusted return on average equity (1) (b)/(d) 14.91% 14.06% 15.83% (1) Annualized. (2) Included in Amortization of tax credit and other investments. (3) Applied statutory rate of 29.56%. 17

Appendix: GAAP to Non-GAAP Reconciliation EAST WEST BANCORP, INC. AND SUBSIDIARIES GAAP TO NON-GAAP RECONCILIATION ($ in thousands, except per share data) (unaudited) During the first, second and fourth quarters of 2019, the Company recorded a $7.0 million pre-tax impairment charge, reversed $30.1 million of certain previously claimed tax credits and recorded a $1.6 million pre-tax impairment recovery related to DC Solar, respectively. During the first quarter of 2018, the Company sold its Desert Community Bank (“DCB”) branches and recognized a pre-tax gain on sale of $31.5 million. Management believes that presenting the computations of the adjusted net income, adjusted diluted earnings per common share, adjusted return on average assets and adjusted return on average equity that adjust for the above discussed non-recurring items provides clarity to financial statement users regarding the ongoing performance of the Company and allows comparability to prior periods. Year Ended December 31, 2019 December 31, 2018 Net income (e) $ 674,035 $ 703,701 Add: Impairment charge related to DC Solar (2) 6,978 — Less: Impairment recovery related to DC Solar (2) (1,583) — Gain on sale of business — (31,470) Tax effect of adjustments (3) (1,595) 9,303 Add: Reversal of certain previously claimed tax credits related to DC Solar 30,104 — Adjusted net income (f) $ 707,939 $ 681,534 Diluted weighted average number of shares outstanding 146,179 146,169 Diluted EPS $ 4.61 $ 4.81 Diluted EPS impact of impairment charge related to DC Solar, net of tax 0.03 — Diluted EPS impact of impairment recovery related to DC Solar, net of tax (0.01) — Diluted EPS impact of gain on sale of business, net of tax — (0.15) Diluted EPS impact of reversal of certain previously claimed tax credits related to DC Solar 0.21 — Adjusted diluted EPS $ 4.84 $ 4.66 Average total assets (g) $ 42,484,885 $ 38,542,569 Average stockholders’ equity (h) $ 4,760,845 $ 4,130,822 Return on average assets (e)/(g) 1.59% 1.83% Adjusted return on average assets (f)/(g) 1.67% 1.77% Return on average equity (e)/(h) 14.16% 17.04% Adjusted return on average equity (f)/(h) 14.87% 16.50% (1) Annualized. (2) Included in Amortization of tax credit and other investments. (3) Applied statutory rate of 29.56%. 18

Appendix: GAAP to Non-GAAP Reconciliation (cont’d) EAST WEST BANCORP, INC. AND SUBSIDIARIES GAAP TO NON-GAAP RECONCILIATION ($ in thousands) (unaudited) Adjusted efficiency ratio represents adjusted noninterest expense divided by adjusted revenue. Adjusted pre-tax, pre-provision profitability ratio represents the aggregate of adjusted revenue less adjusted noninterest expense, divided by average total assets. Adjusted revenue represents the aggregate of net interest income and adjusted noninterest income, where adjusted noninterest income excludes the gain on the sale of the DCB branches that were sold in the first quarter of 2018 (where applicable). Adjusted noninterest expense excludes the amortization of tax credit and other investments and the amortization of core deposit intangibles. 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, 2019 September 30, 2019 December 31, 2018 Net interest income before provision for credit losses (a) $ 368,219 $ 369,807 $ 369,416 Total noninterest income 63,013 51,474 41,695 Total revenue (b) $ 431,232 $ 421,281 $ 411,111 Total noninterest expense (c) $ 193,373 $ 176,630 $ 188,097 Less: Amortization of tax credit and other investments (27,038) (16,833) (30,958) Amortization of core deposit intangibles (1,044) (1,148) (1,265) Adjusted noninterest expense (d) $ 165,291 $ 158,649 $ 155,874 Efficiency ratio (c)/(b) 44.84 % 41.93 % 45.75 % Adjusted efficiency ratio (d)/(b) 38.33 % 37.66 % 37.92 % Adjusted pre-tax, pre-provision income (b)-(d) = (e) $ 265,941 $ 262,632 $ 255,237 Average total assets (f) $ 44,471,242 $ 43,136,273 $ 40,525,188 Adjusted pre-tax, pre-provision profitability ratio (1) (e)/(f) 2.37 % 2.42 % 2.50 % Adjusted noninterest expense (1)/average assets (d)/(f) 1.47 % 1.46 % 1.53 % (1) Annualized. 19

Appendix: GAAP to Non-GAAP Reconciliation (cont’d) EAST WEST BANCORP, INC. AND SUBSIDIARIES GAAP TO NON-GAAP RECONCILIATION ($ in thousands) (unaudited) Management believes that presenting the adjusted average loan yield and adjusted net interest margin that exclude the ASC 310-30 discount accretion impact provides clarity to financial statement users regarding the change in loan contractual yields and allows comparability to prior periods. Three Months Ended Year Ended December 31, September 30, December 31, December 31, December 31, Yield on Average Loans 2019 2019 2018 2019 2018 Interest income on loans (a) $ 425,773 $ 433,658 $ 414,517 $ 1,717,415 $ 1,503,514 Less: ASC 310-30 discount accretion income (6,053) (2,521) (5,810) (12,471) (20,172) Adjusted interest income on loans (b) $ 419,720 $ 431,137 $ 408,707 $ 1,704,944 $ 1,483,342 Average loans (c) $ 34,410,010 $ 33,661,282 $ 31,534,875 $ 33,373,136 $ 30,230,014 Add: ASC 310-30 discount 16,012 18,172 23,833 18,915 28,400 Adjusted average loans (d) $ 34,426,022 $ 33,679,454 $ 31,558,708 $ 33,392,051 $ 30,258,414 Average loan yield (a)/(c) 4.91 % (1) 5.11 % (1) 5.22 % (1) 5.15 % 4.97 % Adjusted average loan yield (b)/(d) 4.84 % (1) 5.08 % (1) 5.14 % (1) 5.11 % 4.90 % Net Interest Margin Net interest income (e) $ 368,219 $ 369,807 $ 369,416 $ 1,467,813 $ 1,386,508 Less: ASC 310-30 discount accretion income (6,053) (2,521) (5,810) (12,471) (20,172) Adjusted net interest income (f) $ 362,166 $ 367,286 $ 363,606 $ 1,455,342 $ 1,366,336 Average interest-earning assets (g) $ 42,114,123 $ 40,919,386 $ 38,688,647 $ 40,320,804 $ 36,707,142 Add: ASC 310-30 discount 16,012 18,172 23,833 18,915 28,400 Adjusted average interest-earning assets (h) $ 42,130,135 $ 40,937,558 $ 38,712,480 $ 40,339,719 $ 36,735,542 Net interest margin (e)/(g) 3.47 % (1) 3.59 % (1) 3.79 % (1) 3.64 % 3.78 % Adjusted net interest margin (f)/(h) 3.41 % (1) 3.56 % (1) 3.73 % (1) 3.61 % 3.72 % (1) Annualized. 20

Appendix: GAAP to Non-GAAP Reconciliation (cont’d) 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. December 31, 2019 September 30, 2019 December 31, 2018 Stockholders’ equity (a) $ 5,017,617 $ 4,882,664 $ 4,423,974 Less: Goodwill (465,697) (465,697) (465,547) Other intangible assets (1) (16,079) (17,435) (22,365) Tangible equity (b) $ 4,535,841 $ 4,399,532 $ 3,936,062 Total assets (c) $ 44,196,096 $ 43,274,659 $ 41,042,356 Less: Goodwill (465,697) (465,697) (465,547) Other intangible assets (1) (16,079) (17,435) (22,365) Tangible assets (d) $ 43,714,320 $ 42,791,527 $ 40,554,444 Total stockholders’ equity to total assets ratio (a)/(c) 11.35% 11.28% 10.78% Tangible equity to tangible assets ratio (b)/(d) 10.38% 10.28% 9.71% (1) Includes core deposit intangibles and mortgage servicing assets. 21

Appendix: GAAP to Non-GAAP Reconciliation (cont’d) EAST WEST BANCORP, INC. AND SUBSIDIARIES GAAP TO NON-GAAP RECONCILIATION ($ in thousands) (unaudited) Adjusted return on average tangible equity represents adjusted tangible net income divided by average tangible equity. Adjusted tangible net income excludes the after-tax impacts of the amortization of core deposit intangibles and mortgage servicing assets, impairment charge/(recovery) related to DC Solar and the gain on the sale of the DCB branches; and the reversal of certain previously claimed tax credits related to DC Solar (where applicable). Given that the use of such measures and ratios is more prevalent in the banking industry, and such measures and ratios are used by banking regulators and analysts, the Company has included them below for discussion. Three Months Ended Year Ended December 31, September 30, December 31, December 31, December 31, 2019 2019 2018 2019 2018 Net Income $ 188,215 $ 171,416 $ 173,018 $ 674,035 $ 703,701 Add: Amortization of core deposit intangibles 1,044 1,148 1,265 4,518 5,492 Amortization of mortgage servicing assets 567 834 448 2,738 1,814 Tax effect of adjustments (2) (476) (586) (506) (2,145) (2,160) Tangible net income (e) $ 189,350 $ 172,812 $ 174,225 $ 679,146 $ 708,847 Add: Impairment charge related to DC Solar (3) — — — 6,978 — Less: Impairment recovery related to DC Solar (3) (1,583) — — (1,583) — Gain on sale of business — — — — (31,470) Tax effect of adjustment (2) 468 — — (1,595) 9,303 Add: Reversal of certain previously claimed tax credits related to DC Solar — — — 30,104 — Adjusted tangible net income (f) $ 188,235 $ 172,812 $ 174,225 $ 713,050 $ 686,680 Average stockholders’ equity $ 4,977,759 $ 4,838,281 $ 4,335,110 $ 4,760,845 $ 4,130,822 Less: Average goodwill (465,697) (465,697) (465,547) (465,663) (466,346) Average other intangible assets (1) (16,793) (18,391) (23,130) (19,340) (25,337) Average tangible equity (g) $ 4,495,269 $ 4,354,193 $ 3,846,433 $ 4,275,842 $ 3,639,139 Return on average tangible equity (e)/(g) 16.71% (4) 15.75% (4) 17.97% (4) 15.88% 19.48% Adjusted return on average tangible equity (f)/(g) 16.61% (4) 15.75% (4) 17.97% (4) 16.68% 18.87% (1) Includes core deposit intangibles and mortgage servicing assets. (2) Applied statutory rate of 29.56%. (3) Included in Amortization of tax credit and other investments. (4) Annualized. 22



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



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



	EAST WEST BANCORP, INC.

Date: January 23, 2020	By:	/s/ Irene H. Oh
		Irene H. Oh
		Executive Vice President and Chief Financial Officer