East West Bancorp Reports Net Income for Second Quarter 2021 of $225 Million and Diluted Earnings Per Share Of $1.57

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PASADENA, Calif., July 22, 2021--(BUSINESS WIRE)--East West Bancorp, Inc. ("East West" or the "Company") (Nasdaq: EWBC), parent company of East West Bank, today reported its financial results for the second quarter of 2021. Net income for the second quarter of 2021 was $224.7 million, or $1.57 per diluted share. Second quarter 2021 return on average assets was 1.56% and return on average equity was 16.6%.

"East West had a very strong quarter of robust growth, expanding profitability and improving asset quality," stated Dominic Ng, Chairman and Chief Executive Officer of East West. "As of June 30, 2021, our total loans reached a record $40.1 billion and our total deposits reached a record $52.6 billion."

"Excluding the impact of the Paycheck Protection Program, loans grew by 12% annualized in the second quarter, with solid growth across our residential mortgage, commercial, and commercial real estate loan portfolios. Total deposits grew by 25% annualized, and noninterest-bearing demand deposits reached 41% of total deposits as of June 30, 2021. Our diversified growth reflects the strength of our business model, our commercial and consumer customer mix, and our geographic footprint in dynamic metropolitan areas of the United States."

"Quarter-over-quarter, our revenue grew by 17% annualized and operating expenses decreased, driving adjusted pre-tax, pre-provision income growth of 33% annualized and expanding profitability," continued Ng. "Our solid financial performance for the second quarter resulted in adjusted pre-tax, pre-provision profitability1 of 2.0% and a return on average tangible equity2 of 18.3%."

"Asset quality continues to be healthy. Criticized loans fell by 15% quarter-over-quarter; net charge-offs were 0.13% of average loans, annualized, and the nonperforming assets ratio declined by seven basis points to 0.38% of total assets. Accordingly, we recorded a negative $15.0 million provision for credit losses in the second quarter."

"We are pleased with our results this quarter and are positive about our outlook for the rest of the year," concluded Ng. "The hard work and outstanding execution by all our associates builds a strong foundation for East West’s continued growth and success in the years to come. We are well poised to help our communities and customers thrive as the economy expands."

BALANCE SHEET

  • Record Assets – Total assets reached $59.9 billion as of June 30, 2021, up by $3.0 billion, or 21% annualized, from $56.9 billion as of March 31, 2021.

    Second quarter 2021 average interest-earning assets of $54.9 billion grew by $2.0 billion, or 16% linked quarter annualized. The growth in average interest-earning assets consisted of a $1.5 billion increase in average available-for-sale ("AFS") debt securities, an $893.0 million increase in average loans, and a $667.7 million increase in average assets purchased under resale agreements ("resale agreements"), partially offset by a $1.0 billion decrease in average interest-bearing cash and deposits with banks. The increase in average AFS debt securities and resale agreements largely reflected activity during the first quarter of 2021; on an end-of-period basis, AFS debt securities increased by $610.2 million and resale agreements increased by $139.1 million between June 30, 2021, and March 31, 2021.

  • Record Loans – Total loans reached $40.1 billion as of June 30, 2021, up by $484.6 million, or 5% annualized, from $39.6 billion as of March 31, 2021. Excluding Paycheck Protection Program ("PPP") loans of $1.4 billion as of June 30, 2021, total loans grew by $1.1 billion, or 12% linked quarter annualized. During the second quarter of 2021, $695.5 million of PPP loans outstanding were forgiven by the Small Business Administration. The Company funded 5,523 new PPP loans totaling $896.5 million in the first half of 2021.

    Second quarter 2021 average loans of $39.6 billion grew by $893.0 million, or 9% linked quarter annualized. Excluding PPP loans, average loans grew by $953.6 million, or 10% annualized, from the first quarter of 2021. The strong loan growth during the quarter was broad-based, with the strongest growth from average residential mortgage loans, which increased by 19% linked quarter annualized. Average total CRE loans grew by 8% linked quarter annualized, and average C&I loans, excluding PPP, grew by 6% linked quarter annualized.

  • Record Deposits – Total deposits reached $52.6 billion as of June 30, 2021, up by $3.0 billion, or 25% annualized, from $49.5 billion as of March 31, 2021. Noninterest-bearing demand deposits reached a record $21.8 billion as of June 30, 2021, up by $2.9 billion, or 61% annualized, from $18.9 billion as of March 31, 2021. Noninterest-bearing demand deposits made up 41% of total deposits as of June 30, 2021, up from 38% as of March 31, 2021, or 34% as of June 30, 2020.

    Second quarter 2021 average deposits of $50.2 billion grew by $2.3 billion, or 20% linked quarter annualized. Growth in the second quarter was led by noninterest-bearing demand deposits, which increased by 36% linked quarter annualized. Time deposits decreased quarter-over-quarter, reflecting run-off of higher rate certificates of deposit.

  • Capital Levels – Capital levels for East West are strong. As of June 30, 2021, stockholders’ equity was $5.5 billion, or $39.10 per common share, and tangible equity3 per common share was $35.75. As of June 30, 2021, the tangible equity to tangible assets ratio3 was 8.54%, the common equity tier 1 ("CET1") capital ratio was 12.8%, and the total risk-based capital ratio was 14.3%.

OPERATING RESULTS

Second Quarter Earnings – Second quarter 2021 net income was $224.7 million, or $1.57 per diluted share, an increase of 10% from $205.0 million, or $1.44 per diluted share, for the first quarter of 2021.

Second Quarter 2021 Compared to First Quarter 2021

Net Interest Income and Net Interest Margin

Net interest income ("NII") totaled $376.5 million, an increase of 26% annualized from $353.7 million. Net interest margin ("NIM") of 2.75% increased by four basis points from 2.71%.

  • Excluding the impact of PPP loans, adjusted NII4 totaled $361.1 million, an increase of 27% annualized from $338.7 million. Adjusted NIM4 of 2.73% expanded by three basis points from 2.70%. PPP loans contributed $15.4 million to NII in the second quarter, compared with $15.0 million in the first quarter.

  • NII growth reflected higher interest income, due to average loan, AFS debt securities and resale agreement volume growth, and decreased interest expense, due to a lower cost of deposits, a reduction of time deposit balances and pay off of FHLB advances. During the second quarter, $400.0 million of FHLB advances with an average rate of 2.25% matured.

  • The yield on average earning assets of 2.92% was relatively stable quarter-over-quarter, contracting by one basis point from 2.93%. The average loan yield of 3.57% was likewise relatively stable, contracting by one basis point from 3.58%. Quarter-over-quarter, yields on AFS debt securities and resale agreements were lower, but the overall mix of earning assets was higher yielding due to a reduction of average interest-bearing cash and deposits with banks.

  • The average cost of deposits of 0.14% decreased by four basis points from 0.18%. The average cost of interest-bearing deposits of 0.24% decreased by six basis points from 0.30%. The decrease in the cost of deposits primarily reflects continued downward repricing of time deposits to market rates, and a reduction in rates paid on money market accounts.

Noninterest Income

Noninterest income totaled $68.4 million in the second quarter, down from $72.9 million in the first quarter. Quarter-over-quarter growth in foreign exchange income, lending fees, deposit account fees, and wealth management fees drove a 15% increase in customer-driven fee income. However, the growth in customer-driven fee income was offset by an unfavorable change in the credit valuation adjustment of interest rate contracts and other derivatives.

  • Included in interest rate contracts and other derivative income are fair value changes primarily due to the quarter-over-quarter change in the credit valuation adjustment. These fair value changes amounted to a $5.4 million loss in the second quarter, reflecting a quarter-over-quarter decline in long-term benchmark interest rates. In the first quarter, the comparable amount was a $14.1 million gain, reflecting an increase in long-term benchmark interest rates during the period.

  • Other investment income totaled $7.6 million in the second quarter, up from $0.9 million in the first quarter, reflecting increased valuations of Community Reinvestment Act-related investments.

Noninterest Expense

Noninterest expense totaled $189.5 million. Second quarter noninterest expense consisted of $161.5 million of adjusted noninterest expense5, $27.3 million in amortization of tax credit and other investments, and $0.7 million in amortization of core deposit intangibles.

  • Adjusted noninterest expense of $161.5 million decreased by 2% from $165.0 million in the first quarter. Compensation and employee benefits expense decreased from a seasonally higher first quarter.

  • Amortization of tax credit and other investments totaled $27.3 million, an increase from $25.4 million in the first quarter. Second quarter amortization of tax credit and other investments included $0.9 million of recoveries related to DC Solar tax credit investments. These recoveries amounted to $0.6 million after tax.

  • The adjusted efficiency ratio5 was 36.3% in the second quarter, an improvement from 38.7% in the first quarter.

TAX RELATED ITEMS

Second quarter 2021 income tax expense was $45.6 million and the effective tax rate was 17%. Year-to-date for the first six months of 2021, the effective tax rate was 15%. For the full year, the Company expects the effective tax rate to be approximately 15%.

ASSET QUALITY

  • Quarter-over-quarter, criticized loans fell by $184.9 million, or 15%, with decreases of 23% in special mention and 9% in classified loans. The allowance for loan losses ("ALLL") totaled $585.7 million, or 1.46% of loans held-for-investment ("HFI"), as of June 30, 2021, compared with $607.5 million, or 1.53% of loans HFI, as of March 31, 2021.

  • Quarter-over-quarter, the ALLL decreased by $21.8 million, and the ALLL coverage ratio of loans HFI decreased by seven basis points. The change in the ALLL reflects an improved macroeconomic forecast, improved loan risk ratings, and lower expected losses over the expected life of the loans.

  • As a result of the improvements noted above, during the second quarter of 2021, the Company recorded a negative $15.0 million provision for credit losses.

  • Second quarter 2021 net charge-offs were $13.3 million, or annualized 0.13% of average loans HFI, down by $131 thousand, or one basis point, from $13.4 million, or annualized 0.14% of average loans HFI, for the first quarter of 2021.

  • As of June 30, 2021, criticized loans totaled $1,032.0 million, or 2.58% of loans HFI, an improvement of 49 basis points from $1,216.9 million, or 3.07% of loans HFI, as of March 31, 2021. Special mention loans decreased by 23% to $386.8 million as of June 30, 2021, down from $504.2 million as of March 31, 2021. Classified loans decreased by 9% to $645.2 million as of June 30, 2021, down from $712.7 million as of March 31, 2021.

  • Nonperforming assets were $225.7 million, or 0.38% of total assets, as of June 30, 2021, compared with $258.1 million, or 0.45% of total assets, as of March 31, 2021.

CAPITAL STRENGTH

Capital levels for East West are strong. The following table presents the regulatory capital ratios as of June 30, 2021, March 31, 2021, and June 30, 2020.

EWBC Regulatory Capital Metrics

Basel III

($ in millions)

June 30,

2021 (a)

March 31,

2021 (a)

June 30,

2020 (a)

Minimum

Capital

Ratio

Well

Capitalized

Ratio

Minimum

Capital Ratio +

Conservation

Buffer (b)

Risk-Based Capital Ratios:

CET1 capital ratio

12.8

%

12.7

%

12.7

%

4.5

%

6.5

%

7.0

%

Tier 1 capital ratio

12.8

%

12.7

%

12.7

%

6.0

%

8.0

%

8.5

%

Total capital ratio

14.3

%

14.3

%

14.4

%

8.0

%

10.0

%

10.5

%

Leverage ratio

9.1

%

9.1

%

9.7

%

4.0

%

5.0

%

4.0

%

Risk-Weighted Assets ("RWA") (c)

$

40,609

$

39,572

$

36,199

N/A

N/A

N/A

N/A Not applicable.

(a)

The Company has elected to use the 2020 CECL transition provision in the calculation of its June 30, 2021, March 31, 2020, and June 30, 2020 regulatory capital ratios. The Company’s June 30, 2021 regulatory capital ratios and RWA are preliminary.

(b)

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

(c)

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

DIVIDEND PAYOUT AND CAPITAL ACTIONS

East West’s Board of Directors has declared third quarter 2021 dividends for the Company’s common stock. The common stock cash dividend of $0.33 per share is payable on August 16, 2021, to stockholders of record on August 2, 2021.

On March 3, 2020, East West’s Board of Directors authorized the repurchase of up to $500 million of East West’s common stock. East West did not repurchase any shares during the second quarter of 2021, and has not repurchased any shares since the first quarter of 2020, under this authorization.

Conference Call

East West will host a conference call to discuss second quarter 2021 earnings with the public on Thursday, July 22, 2021, at 8:30 a.m. PT/11:30 a.m. ET. The public and investment community are invited to listen as management discusses second quarter 2021 results and operating developments.

  • The following dial-in information is provided for participation in the conference call: calls within the U.S. – (877) 506-6399; calls within Canada – (855) 669-9657; international calls – (412) 902-6699.

  • A presentation to accompany the earnings call will be available on the Investor Relations page of the Company’s website at www.eastwestbank.com/investors.

  • A listen-only live broadcast of the call will also be available on the Investor Relations page of the Company’s website at www.eastwestbank.com/investors.

  • A replay of the conference call will be available on July 22, 2021, at 11:30 a.m. PT through August 22, 2021. 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: 10157563.

About East West

East West Bancorp, Inc. is a public company with total assets of $59.9 billion and is traded on the Nasdaq Global Select Market under the symbol "EWBC". The Company’s wholly owned subsidiary, East West Bank, is one of the largest independent banks headquartered in California, operating over 120 locations in the United States and in China. The Company’s markets in the United States include California, Georgia, Massachusetts, Nevada, New York, Texas and Washington. In China, East West’s presence includes full service branches in Hong Kong, Shanghai, Shantou and Shenzhen, and representative offices in Beijing, Chongqing, Guangzhou, and Xiamen. For more information on East West, visit the Company’s website at www.eastwestbank.com.

Forward-Looking Statements

Certain matters set forth herein (including any exhibits hereto) contain forward-looking statements that are intended to be covered by the safe harbor for such statements provided by the Private Securities Litigation Reform Act of 1995. In addition, the Company may make forward-looking statements in other documents that it files with, or furnishes to, the U.S. Securities and Exchange Commission (the "SEC") and management may make forward-looking statements to analysts, investors, media members and others. Forward-looking statements are statements that are not historical facts, and are based on current expectations, estimates and projections about the Company’s industry, management’s beliefs and certain assumptions made by management, many of which, by their nature, are inherently uncertain and beyond the Company’s control, such as the future impacts of the COVID-19 pandemic. These statements relate to the Company’s financial condition, results of operations, plans, objectives, future performance and/or business. They usually can be identified by the use of forward-looking language, such as "likely result in," "expects," "anticipates," "estimates," "forecasts," "projects," "intends to," "assumes," "believes," "plans," "trend," "objective," "continues," "remains," "will," "would," "should," "could," "may," "might," "can," or similar expressions, and the negative thereof. You should not place undue reliance on these statements, as they are subject to risks and uncertainties, including, but not limited to, those described in the documents incorporated by reference. When considering these forward-looking statements, you should keep in mind these risks and uncertainties, as well as any cautionary statements the Company may make. Moreover, you should treat these statements as speaking only as of the date they are made and based only on information then actually known to the Company.

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

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

__________________________________________________________

1 See reconciliation of GAAP to non-GAAP financial measures in Table 12.
2 See reconciliation of GAAP to non-GAAP financial measures in Table 13.
3 See reconciliation of GAAP to non-GAAP financial measures in Table 13.
4 See reconciliation of GAAP to non-GAAP financial measures in Table 14.
5 See reconciliation of GAAP to non-GAAP financial measures in Table 12.

EAST WEST BANCORP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEET

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

(unaudited)

Table 1

June 30, 2021
% or Basis Point Change

June 30, 2021

March 31, 2021

June 30, 2020

Qtr-o-Qtr

Yr-o-Yr

Assets

Cash and due from banks

$

626,716

$

582,270

$

602,974

7.6

%

3.9

%

Interest-bearing cash with banks

5,371,089

4,036,863

3,930,528

33.1

36.7

Cash and cash equivalents

5,997,805

4,619,133

4,533,502

29.8

32.3

Interest-bearing deposits with banks

830,279

741,923

531,591

11.9

56.2

Assets purchased under resale agreements ("resale agreements")

2,299,184

2,160,038

1,260,000

6.4

82.5

Available-for-sale ("AFS") debt securities (amortized cost of $8,411,142, $7,904,546 and $3,823,714)

8,399,460

7,789,213

3,884,574

7.8

116.2

Federal Home Loan Bank ("FHLB") and Federal Reserve Bank ("FRB") stock

76,931

83,250

78,963

(7.6

)

(2.6

)

Loans held-for-sale ("HFS")

1,819

3,875

100.0

(53.1

)

Loans held-for-investment (''HFI'') (net of allowance for loan losses of $585,724, $607,506 and $632,071)

39,485,775

38,981,242

36,597,341

1.3

7.9

Investments in qualified affordable housing partnerships, net

287,432

284,862

201,888

0.9

42.4

Investments in tax credit and other investments, net

364,187

361,438

251,318

0.8

44.9

Goodwill

465,697

465,697

465,697

Operating lease right-of-use assets

102,609

94,483

94,898

8.6

8.1

Other assets

1,543,698

1,292,867

1,503,946

19.4

2.6

Total assets

$

59,854,876

$

56,874,146

$

49,407,593

5.2

%

21.1

%

Liabilities and Stockholders’ Equity

Deposits

$

52,582,575

$

49,547,136

$

40,672,678

6.1

%

29.3

%

Short-term borrowings

252,851

(100.0

)

FHLB advances

248,464

653,035

656,759

(62.0

)

(62.2

)

Assets sold under repurchase agreements ("repurchase agreements")

300,000

300,000

300,000

Long-term debt and finance lease liabilities

151,997

152,195

1,580,442

(1)

(0.1

)

(90.4

)

Operating lease liabilities

110,105

101,828

102,708

8.1

7.2

Accrued expenses and other liabilities

914,187

834,925

854,912

9.5

6.9

Total liabilities

54,307,328

51,589,119

44,420,350

5.3

22.3

Stockholders’ equity

5,547,548

5,285,027

4,987,243

5.0

11.2

Total liabilities and stockholders’ equity

$

59,854,876

$

56,874,146

$

49,407,593

5.2

%

21.1

%

Book value per common share

$

39.10

$

37.26

$

35.25

4.9

%

10.9

%

Tangible equity (2) per common share

$

35.75

$

33.90

$

31.86

5.5

12.2

Number of common shares at period-end

141,878

141,843

141,486

0.0

0.3

Tangible equity to tangible assets ratio (2)

8.54

%

8.53

%

9.21

%

1

bp

(67

)

bps

(1)

Includes $1.43 billion of advances from the Federal Reserve Paycheck Protection Program Liquidity Facility ("PPPLF") as of June 30, 2020.

(2)

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

EAST WEST BANCORP, INC. AND SUBSIDIARIES

TOTAL LOANS AND DEPOSITS DETAIL

($ in thousands)

(unaudited)

Table 2

June 30, 2021
% Change

June 30, 2021

March 31, 2021

June 30, 2020

Qtr-o-Qtr

Yr-o-Yr

Loans:

Commercial:

Commercial and industrial ("C&I") (1)

$

13,790,461

$

14,081,110

$

13,422,691

(2.1

)%

2.7

%

Commercial real estate ("CRE"):

CRE

11,711,369

11,563,034

10,902,114

1.3

7.4

Multifamily residential

3,219,796

3,066,515

3,032,385

5.0

6.2

Construction and land

460,678

459,254

567,716

0.3

(18.9

)

Total CRE

15,391,843

15,088,803

14,502,215

2.0

6.1

Consumer:

Residential mortgage:

Single-family residential

8,869,370

8,524,287

7,660,094

...

15.8

Home equity lines of credit ("HELOCs")

1,872,166

1,749,172

1,461,951

7.0

28.1

Total residential mortgage

10,741,536

...

10,273,459

9,122,045

4.6

17.8

Other consumer

147,659

145,376

182,461

1.6

(19.1

)

Total loans HFI (2)

40,071,499

39,588,748

37,229,412

1.2

7.6

Loans HFS

1,819

3,875

100.0

(53.1

)

Total loans (2)

40,073,318

39,588,748

37,233,287

1.2

7.6

Allowance for loan losses

(585,724

)

(607,506

)

(632,071

)

(3.6

)

(7.3

)

Net loans (2)

$

39,487,594

$

38,981,242

$

36,601,216

1.3

7.9

Deposits:

Noninterest-bearing demand

$

21,816,721

$

18,919,298

$

13,940,420

15.3

%

56.5

%

Interest-bearing checking

6,762,178

7,005,693

5,280,887

(3.5

)

28.1

Money market

12,853,812

12,218,957

10,002,624

5.2

28.5

Savings

2,719,106

2,604,355

2,186,199

4.4

24.4

Time deposits

8,430,758

8,798,833

9,262,548

(4.2

)

(9.0

)

Total deposits

$

52,582,575

$

49,547,136

$

40,672,678

6.1

%

29.3

%

(1)

Includes $1.43 billion, $2.07 billion and $1.75 billion of Paycheck Protection Program ("PPP") loans as of June 30, 2021, March 31, 2021 and June 30, 2020, respectively.

(2)

Includes net deferred loan fees, unearned fees, unamortized premiums and unaccreted discounts of $(67.0) million, $(76.9) million and $(72.1) million as of June 30, 2021, March 31, 2021 and June 30, 2020, respectively. Net origination fees related to PPP loans were $(25.9) million, $(34.3) million and $(25.4) million as of June 30, 2021, March 31, 2021 and June 30, 2020, 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

June 30, 2021
% Change

June 30, 2021

March 31, 2021

June 30, 2020

Qtr-o-Qtr

Yr-o-Yr

Interest and dividend income (1)

$

399,333

$

381,386

$

398,776

4.7

%

0.1

%

Interest expense

22,860

27,691

55,001

(17.4

)

(58.4

)

Net interest income before provision for credit losses

376,473

353,695

343,775

6.4

9.5

(Reversal of) provision for credit losses

(15,000

)

102,443

(100.0

)

NM

Net interest income after provision for credit losses

391,473

353,695

241,332

10.7

62.2

Noninterest income

68,431

72,866

55,707

(2)

(6.1

)

22.8

Noninterest expense

189,523

191,077

184,766

(2)

(0.8

)

2.6

Income before income taxes

270,381

235,484

112,273

14.8

140.8

Income tax expense

45,639

30,490

12,921

49.7

253.2

Net income

$

224,742

$

204,994

$

99,352

9.6

%

126.2

%

Earnings per share ("EPS")

- Basic

$

1.58

$

1.45

$

0.70

9.5

%

125.6

%

- Diluted

$

1.57

$

1.44

$

0.70

9.5

124.3

Weighted-average number of shares outstanding

- Basic

141,868

141,646

141,486

0.2

%

0.3

%

- Diluted

143,040

142,844

141,827

0.1

0.9

Three Months Ended

June 30, 2021
% Change

June 30, 2021

March 31, 2021

June 30, 2020

Qtr-o-Qtr

Yr-o-Yr

Noninterest income:

Lending fees

$

21,092

$

18,357

$

21,946

14.9

%

(3.9

)%

Deposit account fees

17,342

15,383

10,872

12.7

59.5

Interest rate contracts and other derivative (loss) income

(3,172

)

16,997

6,107

NM

NM

Foreign exchange income

13,007

9,526

4,562

36.5

185.1

Wealth management fees

7,951

6,911

3,091

15.0

157.2

Net gains on sales of loans

1,491

1,781

132

(16.3

)

NM

Gains on sales of AFS debt securities

632

192

9,640

229.2

(93.4

)

Other investment income (expense)

7,596

925

(1,964

)

(2)

721.2

NM

Other income

2,492

2,794

1,321

(10.8

)

88.6

Total noninterest income

$

68,431

$

72,866

$

55,707

(2)

(6.1

)%

22.8

%

Noninterest expense:

Compensation and employee benefits

$

105,426

$

107,808

$

96,955

(2.2

)%

8.7

%

Occupancy and equipment expense

15,377

15,922

16,217

(3.4

)

(5.2

)

Deposit insurance premiums and regulatory assessments

4,274

3,876

3,700

10.3

15.5

Deposit account expense

3,817

3,892

3,353

(1.9

)

13.8

Data processing

4,035

4,478

4,480

(9.9

)

(9.9

)

Computer software expense

7,521

7,159

7,301

5.1

3.0

Consulting expense

1,868

1,475

1,413

26.6

32.2

Legal expense

1,975

1,502

1,530

31.5

29.1

Other operating expense

17,939

19,607

19,248

(8.5

)

(6.8

)

Amortization of tax credit and other investments

27,291

25,358

21,829

(2)

7.6

25.0

Repurchase agreements’ extinguishment cost

8,740

(100.0

)

Total noninterest expense

$

189,523

$

191,077

$

184,766

(2)

(0.8

)%

2.6

%

NM - Not meaningful.

(1)

Includes $15.4 million, $15.0 million and $21.3 million of interest income related to PPP loans for the three months ended June 30, 2021, March 31, 2021 and June 30, 2020, respectively.

(2)

Starting fourth quarter of 2020, the Company has reclassified certain income/losses from equity method investments from Amortization of tax credit and other investments to Other investment income, with no effect on net income. June 30, 2020 comparative amounts have been revised to conform with the current presentation.

EAST WEST BANCORP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF INCOME

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

(unaudited)

Table 4

Six Months Ended

June 30, 2021
% Change

June 30, 2021

June 30, 2020

Yr-o-Yr

Interest and dividend income (1)

$

780,719

$

847,966

(7.9)%

Interest expense

50,551

141,484

(64.3)

Net interest income before provision for credit losses

730,168

706,482

3.4

(Reversal of ) provision for credit losses

(15,000)

176,313

NM

Net interest income after provision for credit losses

745,168

530,169

40.6

Noninterest income

141,297

111,213

(2)

27.1

Noninterest expense

380,600

365,099

(2)

4.2

Income before income taxes

505,865

276,283

83.1

Income tax expense

76,129

32,107

137.1

Net income

$

429,736

$

244,176

76.0%

EPS

- Basic

$

3.03

$

1.71

77.7%

- Diluted

$

3.01

$

1.70

76.7

Weighted-average number of shares outstanding

- Basic

141,758

143,150

(1.0)%

- Diluted

142,963

143,560

(0.4)

Six Months Ended

June 30, 2021
% Change

June 30, 2021

June 30, 2020

Yr-o-Yr

Noninterest income:

Lending fees

$

39,449

$

37,719

4.6%

Deposit account fees

32,725

21,319

53.5

Interest rate contracts and other derivative income

13,825

13,180

4.9

Foreign exchange income

22,533

12,381

82.0

Wealth management fees

14,862

8,444

76.0

Net gains on sales of loans

3,272

1,082

202.4

Gains on sales of AFS debt securities

824

11,169

(92.6)

Other investment income

8,521

1,414

(2)

502.6

Other income

5,286

4,505

17.3

Total noninterest income

$

141,297

$

111,213

(2)

27.1%

Noninterest expense:

Compensation and employee benefits

$

213,234

$

198,915

7.2%

Occupancy and equipment expense

31,299

33,293

(6.0)

Deposit insurance premiums and regulatory assessments

8,150

7,127

14.4

Deposit account expense

7,709

6,916

11.5

Data processing

8,513

8,306

2.5

Computer software expense

14,680

13,467

9.0

Consulting expense

3,343

2,630

27.1

Legal expense

3,477

4,727

(26.4)

Other operating expense

37,546

40,367

(7.0)

Amortization of tax credit and other investments

52,649

40,611

(2)

29.6

Repurchase agreements’ extinguishment cost

8,740

(100.0)

Total noninterest expense

$

380,600

$

365,099

(2)

4.2%

NM - Not meaningful.

(1)

Includes $30.4 million and $21.3 million of interest income related to PPP loans for the six months ended June 30, 2021 and 2020, respectively.

(2)

Starting fourth quarter of 2020, the Company has reclassified certain income/losses from equity method investments from Amortization of tax credit and other investments to Other investment income, with no effect on net income. June 30, 2020 comparative amounts have been revised to conform with the current presentation.

EAST WEST BANCORP, INC. AND SUBSIDIARIES

SELECTED AVERAGE BALANCES

($ in thousands)

(unaudited)

Table 5

Three Months Ended

June 30, 2021
% Change

Six Months Ended

June 30, 2021
% Change

June 30, 2021

March 31, 2021

June 30, 2020

Qtr-o-Qtr

Yr-o-Yr

June 30, 2021

June 30, 2020

Yr-o-Yr

Loans:

Commercial:

C&I (1)

$

13,811,966

$

13,693,869

$

13,560,719

0.9

%

1.9

%

$

13,753,244

$

12,863,449

6.9

%

CRE:

CRE

11,616,916

11,325,679

10,812,399

2.6

7.4

11,472,102

10,649,041

7.7

Multifamily residential

3,125,001

3,042,079

2,987,311

2.7

4.6

3,083,769

2,938,577

4.9

Construction and land

477,860

549,337

594,965

(13.0

)

(19.7

)

513,401

618,022

(16.9

)

Total CRE

15,219,777

14,917,095

14,394,675

2.0

5.7

15,069,272

14,205,640

6.1

Consumer:

Residential mortgage:

Single-family residential

8,650,706

8,315,052

7,506,546

4.0

15.2

8,483,806

7,381,956

14.9

HELOCs

1,800,213

1,666,233

1,444,933

8.0

24.6

1,733,593

1,443,692

20.1

Total residential mortgage

10,450,919

9,981,285

8,951,479

4.7

16.8

10,217,399

8,825,648

15.8

Other consumer

139,608

137,058

234,900

1.9

(40.6

)

138,340

253,134

(45.3

)

Total loans (2)

$

39,622,270

$

38,729,307

$

37,141,773

2.3

%

6.7

%

$

39,178,255

$

36,147,871

8.4

%

Interest-earning assets

$

54,901,209

$

52,852,045

$

45,413,242

3.9

%

20.9

%

$

53,882,288

$

43,887,886

22.8

%

Total assets

$

57,771,837

$

55,594,283

$

48,228,914

3.9

%

19.8

%

$

56,689,075

$

46,492,211

21.9

%

Deposits:

Noninterest-bearing demand

$

19,717,315

$

18,093,696

$

13,534,873

9.0

%

45.7

%

$

18,909,991

$

12,326,291

53.4

%

Interest-bearing checking

6,671,358

6,393,034

4,687,178

4.4

42.3

6,532,965

4,844,425

34.9

Money market

12,596,515

11,573,847

9,893,816

8.8

27.3

12,088,006

9,453,599

27.9

Savings

2,676,865

2,674,476

2,149,965

0.1

24.5

2,675,677

2,113,118

26.6

Time deposits

8,518,936

9,112,662

9,634,696

(6.5

)

(11.6

)

8,814,159

9,949,351

(11.4

)

Total deposits

$

50,180,989

$

47,847,715

$

39,900,528

4.9

%

25.8

%

$

49,020,798

$

38,686,784

26.7

%

Interest-bearing liabilities

$

31,394,114

$

30,863,568

$

28,362,618

1.7

%

10.7

%

$

31,130,307

$

27,977,979

11.3

%

Stockholders’ equity

$

5,425,952

$

5,338,098

$

4,982,446

1.6

%

8.9

%

$

5,382,267

$

5,002,226

7.6

%

(1)

Includes average balances of PPP loans of $1.87 billion, $1.93 billion and $1.47 billion for the three months ended June 30, 2021, March 31, 2021 and June 30, 2020, respectively, and $1.90 billion and $732.5 million for the six months ended June 30, 2021 and 2020, respectively.

(2)

Includes loans HFS.

EAST WEST BANCORP, INC. AND SUBSIDIARIES

QUARTER-TO-DATE AVERAGE BALANCES, YIELDS AND RATES

($ in thousands)

(unaudited)

Table 6

Three Months Ended

June 30, 2021

March 31, 2021

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

$

5,072,225

$

3,628

0.29

%

$

6,117,799

$

3,632

0.24

%

Resale agreements

2,129,567

8,021

1.51

%

1,461,900

6,099

1.69

%

AFS debt securities

7,997,005

34,690

1.74

%

6,459,875

29,100

1.83

%

Loans (2)

39,622,270

352,453

3.57

%

38,729,307

342,008

3.58

%

FHLB and FRB stock

80,142

541

2.71

%

83,164

547

2.67

%

Total interest-earning assets

54,901,209

399,333

2.92

%

52,852,045

381,386

2.93

%

Noninterest-earning assets:

Cash and due from banks

600,053

580,277

Allowance for loan losses

(607,523)

(618,589)

Other assets

2,878,098

2,780,550

Total assets

$

57,771,837

$

55,594,283

Liabilities and Stockholders’ Equity

Interest-bearing liabilities:

Checking deposits

$

6,671,358

$

3,777

0.23

%

$

6,393,034

$

4,214

0.27

%

Money market deposits

12,596,515

3,712

0.12

%

11,573,847

4,711

0.17

%

Savings deposits

2,676,865

2,078

0.31

%

2,674,476

1,741

0.26

%

Time deposits

8,518,936

8,431

0.40

%

9,112,662

11,156

0.50

%

Federal funds purchased and other short-term borrowings

336

%

4,703

42

3.62

%

FHLB advances

474,887

2,099

1.77

%

652,758

3,069

1.91

%

Repurchase agreements

303,118

1,991

2.63

%

300,000

1,978

2.67

%

Long-term debt and finance lease liabilities

152,099

772

2.04

%

152,088

780

2.08

%

Total interest-bearing liabilities

31,394,114

22,860

0.29

%

30,863,568

27,691

0.36

%

Noninterest-bearing liabilities and stockholders’ equity:

Demand deposits

19,717,315

18,093,696

Accrued expenses and other liabilities

1,234,456

1,298,921

Stockholders’ equity

5,425,952

5,338,098

Total liabilities and stockholders’ equity

$

57,771,837

$

55,594,283

Interest rate spread

2.63

%

2.57

%

Net interest income and net interest margin

$

376,473

2.75

%

$

353,695

2.71

%

Adjusted net interest income and adjusted net interest margin (3)

$

361,096

2.73

%

$

338,678

2.70

%

(1)

Annualized.

(2)

Includes loans HFS.

(3)

Net interest income and net interest margin for the three months ended June 30, 2021 and March 31, 2021 have been adjusted for the impact of PPP loans. See reconciliation of GAAP to non-GAAP financial measures in Table 14.

EAST WEST BANCORP, INC. AND SUBSIDIARIES

QUARTER-TO-DATE AVERAGE BALANCES, YIELDS AND RATES

($ in thousands)

(unaudited)

Table 7

Three Months Ended

June 30, 2021

June 30, 2020

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

$

5,072,225

$

3,628

0.29%

$

3,435,920

$

4,564

0.53%

Resale agreements

2,129,567

8,021

1.51%

1,037,473

5,514

2.14%

AFS debt securities

7,997,005

34,690

1.74%

3,719,209

21,004

2.27%

Loans (2)

39,622,270

352,453

3.57%

37,141,773

367,393

3.98%

FHLB and FRB stock

80,142

541

2.71%

78,867

301

1.54%

Total interest-earning assets

54,901,209

399,333

2.92 %

45,413,242

398,776

3.53 %

Noninterest-earning assets:

Cash and due from banks

600,053

498,908

Allowance for loan losses

(607,523)

(566,473)

Other assets

2,878,098

2,883,237

Total assets

$

57,771,837

$

48,228,914

Liabilities and Stockholders’ Equity

Interest-bearing liabilities:

Checking deposits

$

6,671,358

$

3,777

0.23%

$

4,687,178

$

5,404

0.46%

Money market deposits

12,596,515

3,712

0.12%

9,893,816

8,093

0.33%

Savings deposits

2,676,865

2,078

0.31%

2,149,965

1,445

0.27%

Time deposits

8,518,936

8,431

0.40%

9,634,696

31,457

1.31%

Federal funds purchased and other short-term borrowings

336

—%

242,185

265

0.44%

FHLB advances

474,887

2,099

1.77%

653,665

3,343

2.06%

Repurchase agreements

303,118

1,991

2.63%

418,681

3,540

3.40%

Long-term debt and finance lease liabilities

152,099

772

2.04%

682,432

(3)

1,454

0.86%

Total interest-bearing liabilities

31,394,114

22,860

0.29%

28,362,618

55,001

0.78%

Noninterest-bearing liabilities and stockholders’ equity:

Demand deposits

19,717,315

13,534,873

Accrued expenses and other liabilities

1,234,456

1,348,977

Stockholders’ equity

5,425,952

4,982,446

Total liabilities and stockholders’ equity

$

57,771,837

$

48,228,914

Interest rate spread

2.63%

2.75%

Net interest income and net interest margin

$

376,473

2.75%

$

343,775

3.04%

Adjusted net interest income and adjusted net interest margin (4)

$

361,096

2.73%

$

322,949

2.96%

(1)

Annualized.

(2)

Includes loans HFS.

(3)

Primarily includes average balances of PPPLF, which was repaid in full during the fourth quarter of 2020.

(4)

Net interest income and net interest margin for the three months ended June 30, 2021 and June 30, 2020 have been adjusted for the impact of PPP loans. Net interest margin for the three months ended June 30, 2020 has been adjusted for advances from the PPPLF. See reconciliation of GAAP to non-GAAP financial measures in Table 14.

EAST WEST BANCORP, INC. AND SUBSIDIARIES

YEAR-TO-DATE AVERAGE BALANCES, YIELDS AND RATES

($ in thousands)

(unaudited)

Table 8

Six Months Ended

June 30, 2021

June 30, 2020

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

$

5,592,124

$

7,260

0.26%

$

3,204,463

$

15,672

0.98%

Resale agreements (2)

1,797,578

14,120

1.58%

959,807

11,139

2.33%

AFS debt securities

7,232,686

63,790

1.78%

3,496,974

41,146

2.37%

Loans (3)

39,178,255

694,461

3.57%

36,147,871

779,262

4.34%

FHLB and FRB stock

81,645

1,088

2.69%

78,771

747

1.91%

Total interest-earning assets

53,882,288

780,719

2.92%

43,887,886

847,966

3.89%

Noninterest-earning assets:

Cash and due from banks

590,219

504,710

Allowance for loan losses

(613,026

)

(529,385

)

Other assets

2,829,594

2,629,000

Total assets

$

56,689,075

$

46,492,211

Liabilities and Stockholders’ Equity

Interest-bearing liabilities:

Checking deposits

$

6,532,965

$

7,991

0.25%

$

4,844,425

$

15,650

0.65%

Money market deposits

12,088,006

8,423

0.14%

9,453,599

30,341

0.65%

Savings deposits

2,675,677

3,819

0.29%

2,113,118

3,262

0.31%

Time deposits

8,814,159

19,587

0.45%

9,949,351

73,549

1.49%

Federal funds purchased and other short-term borrowings

2,508

42

3.38%

151,081

821

1.09%

FHLB advances

563,331

5,168

1.85%

673,511

7,509

2.24%

Repurchase agreements (2)

301,567

3,969

2.65%

375,549

7,531

4.03%

Long-term debt and finance lease liabilities

152,094

1,552

2.06%

417,345

(4)

2,821

1.36%

Total interest-bearing liabilities

31,130,307

50,551

0.33%

27,977,979

141,484

1.02%

Noninterest-bearing liabilities and stockholders’ equity:

Demand deposits

18,909,991

12,326,291

Accrued expenses and other liabilities

1,266,510

1,185,715

Stockholders’ equity

5,382,267

5,002,226

Total liabilities and stockholders’ equity

$

56,689,075

$

46,492,211

Interest rate spread

2.59%

2.87%

Net interest income and net interest margin

$

730,168

2.73%

$

706,482

3.24%

Adjusted net interest income and adjusted net interest margin (5)

$

699,774

2.71%

$

685,656

3.20%

(1)

Annualized.

(2)

Average balances of resale and repurchase agreements for the six months ended June 30, 2020 have been reported net, pursuant to ASC 210-20-45-11, Balance Sheet Offsetting: Repurchase and Reverse Repurchase Agreements. The weighted-average yields of gross resale and gross repurchase agreements for the six months ended June 30, 2020 were 2.32% and 3.76%, respectively.

(3)

Includes loans HFS.

(4)

Primarily includes average balances of PPPLF, which was repaid in full during the fourth quarter of 2020.

(5)

Net interest income and net interest margin for the six months ended June 30, 2021 and June 30, 2020 have been adjusted for the impact of PPP loans. Net interest margin for the six months ended June 30, 2020 has been adjusted for advances from the PPPLF. See reconciliation of GAAP to non-GAAP financial measures in Table 14.

EAST WEST BANCORP, INC. AND SUBSIDIARIES

SELECTED RATIOS

(unaudited)

Table 9

Three Months Ended (1)

June 30, 2021
Basis Point Change

June 30, 2021

March 31, 2021

June 30, 2020

Qtr-o-Qtr

Yr-o-Yr

Return on average assets

1.56

%

1.50

%

0.83

%

6

bps

73

bps

Return on average equity

16.61

%

15.57

%

8.02

%

104

859

Return on average tangible equity (2)

18.28

%

17.17

%

8.96

%

111

932

Interest rate spread

2.63

%

2.57

%

2.75

%

6

(12)

Net interest margin

2.75

%

2.71

%

3.04

%

4

(29)

Adjusted net interest margin (2)

2.73

%

2.70

%

2.96

%

3

(23)

Average loan yield

3.57

%

3.58

%

3.98

%

(1)

(41)

Adjusted average loan yield (2)

3.58

%

3.60

%

3.90

%

(2)

(32)

Yield on average interest-earning assets

2.92

%

2.93

%

3.53

%

(1)

(61)

Average cost of interest-bearing deposits

0.24

%

0.30

%

0.71

%

(6)

(47)

Average cost of deposits

0.14

%

0.18

%

0.47

%

(4)

(33)

Average cost of funds

0.18

%

0.23

%

0.53

%

(5)

(35)

Adjusted pre-tax, pre-provision profitability ratio (2)

1.97

%

1.91

%

2.05

%

6

(8)

Adjusted noninterest expense/average assets (2)

1.12

%

1.20

%

1.28

%

(8)

(16)

Efficiency ratio

42.60

%

44.79

%

46.25

%

(219)

(365)

Adjusted efficiency ratio (2)

36.30

%

38.68

%

38.37

%

(238)

bps

(207)

bps

Six Months Ended (1)

June 30, 2021
Basis Point Change

June 30, 2021

June 30, 2020

Yr-o-Yr

Return on average assets

1.53

%

1.06

%

47

bps

Return on average equity

16.10

%

9.82

%

628

Return on average tangible equity (2)

17.73

%

10.95

%

678

Interest rate spread

2.59

%

2.87

%

(28)

Net interest margin

2.73

%

3.24

%

(51)

Adjusted net interest margin (2)

2.71

%

3.20

%

(49)

Average loan yield

3.57

%

4.34

%

(77)

Adjusted average loan yield (2)

3.59

%

4.30

%

(71)

Yield on average interest-earning assets

2.92

%

3.89

%

(97)

Average cost of interest-bearing deposits

0.27

%

0.94

%

(67)

Average cost of deposits

0.16

%

0.64

%

(48)

Average cost of funds

0.20

%

0.71

%

(51)

Adjusted pre-tax, pre-provision profitability ratio (2)

1.94

%

2.18

%

(24)

Adjusted noninterest expense/average assets (2)

1.16

%

1.36

%

(20)

Efficiency ratio

43.67

%

44.65

%

(98)

Adjusted efficiency ratio (2)

37.47

%

38.38

%

(91)

bps

(1)

Annualized except for efficiency ratio.

(2)

See reconciliation of GAAP to non-GAAP financial measures in Tables 12, 13 and 14.

EAST WEST BANCORP, INC. AND SUBSIDIARIES

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

($ in thousands)

(unaudited)

Table 10

Three Months Ended June 30, 2021

Commercial

Consumer

Total

C&I

Total CRE

Total
Residential
Mortgage

Other
Consumer

Total

Allowance for loan losses, March 31, 2021

$

394,084

$

192,895

$

18,509

$

2,018

$

607,506

(Reversal of) provision for credit losses on loans

(a)

(22,586

)

10,747

859

2,209

(8,771

)

Gross charge-offs

(10,572

)

(4,456

)

(32

)

(15,060

)

Gross recoveries

1,338

344

100

3

1,785

Total net (charge-offs) recoveries

(9,234

)

(4,112

)

100

(29

)

(13,275

)

Foreign currency translation adjustment

264

264

Allowance for loan losses, June 30, 2021

$

362,528

$

199,530

$

19,468

$

4,198

$

585,724

Three Months Ended March 31, 2021

Commercial

Consumer

Total

C&I

Total CRE

Total
Residential
Mortgage

Other
Consumer

Total

Allowance for loan losses, December 31, 2020

$

398,040

$

201,603

$

18,210

$

2,130

$

619,983

Provision for (reversal of) credit losses on loans

(a)

3,839

(3,076

)

398