INFINITE
POSSIBILITIES
TWO MARKETS. ONE FOCUS.
East West Bancorp | 2014 Annual Report
INFINITE POSSIBILITIES
FROM OUR STRONGER
NETWORK
Global trade today is defined by the financial and trade relationships
between the United States and Greater China, the two largest
economies in the world. East West Bank is committed to providing
the vital geographic connections, specialized skills and cross-border
infrastructure to assist our customers in achieving their business objectives
in both the United States and Greater China.
In 2014, East West Bank continued to make investments to increase our footprint
and strengthen our network to facilitate more efficient trade and investment activities
for our customers. As the premier financial bridge between the United States and
Greater China, we are connecting these two markets and creating infinite possibilities.
TOTAL ASSETS
in billions
$8.3
2005
$10.8
2006
$11.9
2007
$12.4
2008
$20.6
2009
$20.7
2010
$22.0
2011
$22.5
2012
$24.7
2013
$28.7
2014
A message from our
CHAIRMAN AND CEO
2014 was another record year for East West. Our strong
financial performance would not have been possible without
the hard work and contributions of our talented associates.
Dominic Ng
“We believe our strong financial
performance in 2014 is a result
of the growth opportunities in
the markets we serve.”
In the U.S. and in Greater China,
2014, or $2.38 per diluted share, an
we are in markets with thriving
East West Bank is esteemed for
increase of 13% per diluted share
business opportunities. With
its relationship-driven approach
from 2013. Not only did we achieve
our collaborative, team-based
to cross-border banking. Our
our fifth consecutive year of record
approach, our dedicated associates
emphasis on creative solutions
earnings in 2014, we also
formulate creative solutions to
to exceed customer expectations
outperformed many of our peers,
exceed customer expectations.
is sustained by the seasoned
increasing both net interest income
expertise and professionalism of
and fee income from the prior year,
In the five years since we acquired
our employees, and backed by our
and resulting in a return on assets
values, chief among them absolute
of 1.24% and a return on equity
integrity, respect and fairness in
of 12.61%.
United Commercial Bank, East
West Bank has built a stronger
and more diversified balance
sheet. In 2014, we acquired and
all our business decisions. These
strengths combined provide Infinite
Possibilities for our customers,
employees and shareholders —
We believe our strong financial
integrated MetroCorp Bancshares,
performance in 2014 is a result
a $1.6 billion asset bank based in
of the growth opportunities in
Houston, adding $1.2 billion to our
02
Annual Report 2014
the theme of this year’s annual report.
the markets we serve. From Los
loan portfolio and $1.3 billion to
Angeles to New York City in the
our deposit portfolio.
East West Bank achieved record net
United States, to Hong Kong
income of $342.5 million for the year
and Shanghai in Greater China,
03
Annual Report 2014
“Our strong financial results
for 2014 are built upon years
of planning, strategy and
successful execution.”
In 2014, our full-service banking
Our strong financial results for 2014
infrastructure further expanded
are built upon years of planning,
in China to meet the growing
strategy and successful execution.
cross-border banking needs of our
I believe that our strong foundation,
customers. Additionally, we grew our
along with the growth opportunities
wealth management team in both
in the markets we serve and the
the U.S. and Hong Kong to better
tireless efforts of our dedicated
serve the demands of this growing
employees, will provide positive
customer base.
returns to customers, shareholders
and the communities we serve for
many years to come.
Sincerely,
Dominic Ng
Chairman and Chief Executive Officer
04
Annual Report 2014
Highlights of 2014
BUILDING A
STRONGER BRIDGE
2014 was an exceptional year of progress for East West Bank, paving the way for our
continued success in the future. Along with our outstanding financial results — double-digit
increases in both net income and earnings per share — we strengthened our position as the
leading financial bridge between the United States and Greater China.
Throughout 2014, East West Bank continued to support the growth potential of our customers.
In all sectors where we have specialized industry expertise, including: agriculture, aviation,
entertainment and media, life sciences, high tech and real estate — our comprehensive
knowledge, combined with our seasoned cross-border experience, provides invaluable support
for our customers. Further, throughout 2014, we continued to make investments to enhance
our product offerings and capabilities, including wealth management and foreign exchange
services. Our focus on cross-border collaborations and teamwork allows us to more effectively
serve our customers’ needs and differentiate the value we provide.
HERE ARE A FEW HIGHLIGHTS
IN WHAT WAS A STELLAR YEAR.
FACILITATING
ENTERTAINMENT AND
MEDIA PARTNERSHIPS
Over the years, East West Bank
has cultivated strong ties in the
entertainment industry in both the
U.S. and China, facilitating co-
productions and partnerships in
these two countries. China’s film
market is the world’s second largest
next to the U.S. Our prospects
could not be brighter for serving the
cross-border financial needs in this
industry and transforming today’s
new business opportunities into
tomorrow’s blockbuster movies.
Le Vision Pictures is a leading
film production and distribution
company in China. In 2014, the
company released numerous box
office hits in China, including The
Expendables 3 and Coming Home,
and generated total box office
revenues of approximately US$380
million. When Le Vision strategically
expanded overseas by opening a
new Los Angeles office, East West
Bank, with our cross-border and
entertainment industry expertise,
was the perfect banking partner.
We provided financing for Le Vision’s
exclusive distribution in China
of the upcoming Lionsgate film
Gods of Egypt. East West Bank’s
cross-border expertise and market
presence made it easy for Le Vision
to conduct financial transactions in
both USD and RMB currencies.
We also helped Le Vision’s
executives to connect with top
Hollywood production and
distribution companies. The efficient
collaboration and coordination
between our banking experts in the
U.S. and China resulted in East West
Bank becoming an indispensable
partner to Le Vision as it continues
to expand in the global market.
PROVIDING VITAL
CONNECTIONS
New business opportunities
are the fuel that accelerates a
company’s growth engine. At East
West Bank, we help our customers
seize new business opportunities
not only through our cross-
border knowledge, infrastructure,
and expertise, but also through
introductions to vital cross-border
connections that open doors to
international growth and culminate
in business success.
This was the case with our customer
Ray Franscioni, owner of a U.S.-
08
Annual Report 2014
based agribusiness growing over
8,000 acres of row crop vegetables
and cultivating over 2,000 acres
of vineyards in the Monterey and
San Benito counties of California.
Historically, Ray sold grapes to
major wineries in the region. Aware
of China’s growing demand for
wine imports, Ray perceived a new
business opportunity. He had long
wanted to create his own private
label and distribute estate-grown
wine in the United States and key
overseas markets, in particular
China. Opportunity knocked at last.
East West Bank provided Ray with
a line of credit and equipment
financing to support the existing
farming and vineyard operations,
as well as the development of his
new winery. East West Bank also
introduced Ray to a customer of
the bank, who was interested in
exporting Ray’s wine to China.
Today, Ray’s “Puma Road” wine
is distributed in China. Having
established a trusting partnership,
Ray and his new partner are now
in discussion about future
expansion opportunities. This
success story is just another
example of East West
Bank’s acute focus on
relationship-driven banking.
EXPANDING OUR CROSS-
BORDER NETWORK
As our bridge extends
geographically, we are able to reach
more customers with our products
and capabilities in both the U.S. and
Greater China. In 2014, we acquired
MetroCorp Bancshares, a $1.6 billion
asset bank based in Houston,
extending our market reach
throughout Texas and Southern
California. In Greater China, our
representative office in Shenzhen was
converted into a full-service branch to
help our customers facilitate trade
activities between mainland China,
Hong Kong and the U.S. In Shanghai,
we opened a branch in the Shanghai
Pilot Free Trade Zone (FTZ), giving us
the opportunity to assist customers
with their complex financial needs.
The FTZ exemplifies China’s growing
commitment to liberalize trade and
investment, positioning East West
Bank at the forefront of these
economic reforms.
BEIJING
BOSTON
NEW YORK
SEATTLE
SHANGHAI
Opened a branch in the Shanghai
Pilot Free Trade Zone, giving
us the opportunity to assist
customers with their complex
financial needs.
CHONGQING
SAN FRANCISCO
LOS ANGELES
LAS VEGAS
SAN DIEGO
XIAMEN
SHANTOU
TAIPEI
GUANGZHOU
SHENZHEN
HONG KONG
2ND LARGEST
INDEPENDENT BANK HEADQUARTERED
IN SOUTHERN CALIFORNIA
5 Full-Service Branches:
Hong Kong, Shanghai,
Shanghai FTZ, Shantou, Shenzhen
5 Representative Offices:
Beijing, Chongqing,
Guangzhou, Taipei, Xiamen
Converted our representative
office in Shenzhen into a
full-service branch to help
our customers facilitate trade
activities between mainland
China, Hong Kong and the U.S.
IN CALIFORNIA
93 BRANCHES
130+ LOCATIONS
2,700+ EMPLOYEES
THROUGHOUT THE U.S. AND GREATER CHINA
ATLANTA
DALLAS
HOUSTON
Acquired MetroCorp Bancshares,
a $1.6 billion asset bank based in
Houston, extending our market
reach throughout Texas and
Southern California.
IMPROVING OUR
PRODUCTS AND SERVICES
At East West Bank, we are
continually broadening our services
and products. Our mobile banking
apps enable customers to check
their account balances, deposit
checks and pay bills on the go,
among other capabilities. We take
great satisfaction in making banking
convenient for our customers.
services is increasing, we continued
to grow our bilingual and bicultural
wealth management teams in the
U.S. and Hong Kong. Whether we
are providing guidance for first-
time investors or estate planning
for established customers seeking
to bestow their legacy to future
generations, our investment
professionals will construct a
personalized plan to help them
reach their goals.
Recognizing that the demand for
wealth management products and
Further, we continued to develop
our foreign exchange capabilities
and increase the number of team
members, deepening our ability to
provide our cross-border customers
with currency risk management best
practices from a trusted partner.
We are constantly seeking ways to
optimize the customer experience
through the products and services
we provide. We have been making
great strides, and we are pleased
to be acknowledged by Hurun
Report as the “Best Bank for Global
Chinese in the USA” in its Best of
the Best Awards 2015.
A SECURE
INFRASTRUCTURE
customers from fraudulent activity
both on and offline.
With data breaches increasingly
a concern for companies in all
industry sectors, we have further
strengthened our traditional,
online and mobile banking
security infrastructure to ensure
the safety and security of our
customers’ personal data.
Our multilayered security strategy
mitigates attacks across our
network down to the system and
application levels, protecting our
TALENT AND LEADERSHIP
DEVELOPMENT
At East West Bank, our most
valuable asset is our people.
With that in mind, we have created
programs to fill leadership and
managerial roles internally through
associate development and career
planning, improving the level of
associate engagement, productivity
and retention. Examples of the
programs we have created include
a leadership development program
to hone the strategic thinking and
business skills of our managers, and
a high-potential program whereby
tomorrow’s leaders are identified,
and their skills are cultivated to
prepare them for greater
responsibilities ahead.
Together, these continuous
improvements in our products,
processes and people provide our
customers with consistently superior
service as they endeavor to achieve
infinite possibilities.
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Annual Report 2014
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Annual Report 2014
LONG-STANDING COMMITMENT
TO OUR COMMUNITIES
East West Bank is privileged to serve as the premier financial bridge between the U.S. and Greater
China, but our commitment to building connections doesn’t stop there. Equally important to us is
our ability to help make the communities we serve more vibrant places to live and work. In 2014,
we continued in our efforts to help provide more affordable housing, improve financial literacy
and assist the underprivileged. We’re more than a bank; we strive to be a conduit for change.
We stand as an institution devoted to improving the lives of people and businesses by
applying our knowledge, expertise and resources to help a wide base of customers,
including underserved populations.
— Operation HOPE
“Operation HOPE truly values our partnership with
East West Bank that has lasted for many years. Thanks
to the generous support of East West Bank, we are able
to continue Dr. Martin Luther King’s work by taking the
step from Civil Rights to Silver Rights, providing financial and
economic empowerment tools and services to youth, adults and
families who need it most.”
– Lance Triggs, CEO, Los Angeles and Division President,
HOPE Financial Dignity Centers Operation HOPE, Inc.
AFFORDABLE
HOUSING
In 2014, we continued to finance
low-income housing in the
communities we serve. Since 1996,
we have provided more than $1.44
billion in financing for affordable
housing projects.
We financed the development
of the Alhambra, a 160-unit
multifamily housing complex in
Davis, California. The apartments
are restricted to tenants with a
maximum income of 80% of the
median income for the area. Rental
rates are approximately 20% to 35%
less than the current market.
Additionally, we financed the
development of Kitts Corner, a
216-unit multifamily project in
Federal Way, Washington. Tenancy
is restricted to those earning no
more than 60% of the median
income for the area. Rental rates for
Kitts Corner average approximately
20% less than the current market
for apartments as large as five
bedrooms with top-notch amenities.
The project increases the availability
of homes to lower-income families
in the area by 500%.
These are just two examples of
the many vital affordable housing
projects we have financed through
the years in the communities we
serve. For the past two decades,
providing financing for low-income
housing has been a focus of our
community development program.
We are proud to state that many
of the projects we have financed
over the years have contributed to
making the communities we serve
more vibrant places to live and work.
FINANCIAL
LITERACY
The foundation of East West Bank’s
community efforts is financial
literacy. In 2014, we deepened
this commitment through our
partnership with Operation HOPE
in two programs: “Banking on Our
Future” and “HOPE Business in a
Box Academy.” We also continued
our financial literacy partnerships
with other organizations, such as
Junior Achievement and the FDIC,
through its Money Smart program.
The Banking on Our Future
program is focused on keeping
the most at-risk youths free from
repeating the cycles of poverty
and despair that have trapped their
families and communities. The
program’s mission is to empower
youth by teaching financial literacy
and providing them with tools
for success. The HOPE Business
in a Box Academy program,
cosponsored by Operation HOPE
and Gallup, seeks to nurture the
talents of young people through
role modeling and instruction to
become future entrepreneurs and
business leaders.
Similarly, our long-standing
partnerships with Junior
Achievement and the FDIC,
support education initiatives across
the country to improve financial
literacy, help people set personal
financial goals, and learn the tools
of financial management.
Other projects in 2014 included
our partnership with the Houston
Rockets basketball team in the
“Save Smart, Score Big” financial
literacy program. Through
this program, our employees
volunteered and taught financial
management and responsibility to
students at two schools in Houston
— Henry F. MacGregor Elementary
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Annual Report 2014
and Harmony School of Ingenuity.
East West Bank also made financial
contributions to these schools,
which went toward a new state-
of-the-art computer lab for the
students at Henry F. MacGregor
Elementary, and new facilities for
the students at Harmony School of
Ingenuity.
We also continue our partnership
with the U.S. Small Business
Administration and provide small
business and minority loans, and
multilingual workshops.
GIVING BACK TO
OUR COMMUNITY
In 2014, we teamed up for the
seventh year in a row with the
Lakers Youth Foundation to kick
off its annual “Season of Giving.”
This program provides families
in need with financial assistance,
helping them share in the joy of
the holiday season.
Among the series of events
funded by this program in 2014
was a Thanksgiving Feast at the
Downtown Women’s Center in
Los Angeles. At this event, our
employees volunteered to prepare
dinner for homeless and low-income
women. We also participated in the
turkey and pie giveaway event at
the Salvation Army in Inglewood,
California, distributing full
Thanksgiving dinners to families.
The Season of Giving also included
the Holiday Party for Kids event at
the Toyota Sports Center in
El Segundo, California. The event
brought together 100 children from
a local public school, members of
the Lakers basketball team and our
East West Bank employees who
“The Real Change Movement is an innovative program that leverages
public goodwill to make a lasting improvement in the lives of our
homeless population in Pasadena. This collaborative effort is made
possible by our network of community partners and the foundational
financial support of East West Bank.”
– Bill Bogaard, Mayor of Pasadena
— Julia S. Gouw, President and COO
of East West Bank, showing support for
the Real Change Movement
300 East West Bank participants at
the 2014 United Way HomeWalk —
“We truly value our partnership
with East West Bank. Thanks to their
generous support, United Way can
continue its mission to break the cycle of
poverty, ensuring our neighbors have a place
to call home, our students graduate on time
ready for college and a career, and
families are financially secure.”
– Elise Buik, President and CEO,
United Way of Greater Los Angeles
volunteered to help celebrate the
holiday season. In addition, we also
partnered with the Lakers to join
the U.S. Marine Corps annual
Toys for Tots program, providing
toys and gifts for 50 children from
the Boys and Girls Clubs of Whittier
and East Los Angeles.
At East West, we have been a
supporter of the United Way for the
past 18 years. Our companywide
commitment to this organization
has raised millions of dollars for
those in greatest need. Last year,
our contributions supported the
United Way of Greater Los Angeles’
“Creating Pathways Out of Poverty”
initiative, whose mission statement
is to break the cycle of poverty for
our most vulnerable neighbors,
which include families, students,
veterans and the homeless.
this event, 300 East West Bank
employees participated to help
raise money to provide permanent
housing for the homeless.
Further, in 2014, East West Bank
was a partner in the Real Change
Movement, an initiative focused on
raising awareness and raising funds
for the issues of homelessness.
In 2014, we also entered our eighth
annual United Way HomeWalk. At
Together, we are building a
stronger community.
East West Bank volunteers lent a hand to prepare dinner for
homeless and low-income women at the Downtown
Women’s Center in Los Angeles —
— Jeremy Lin spent time and played games
with underserved youth at the Lakers Youth
Foundation’s “Season of Giving” kick off
event with East West Bank
NET INCOME
in millions
2014
2013
2012
$
3
$
4
2
$
2
9
2
.
5
5
8
.
0
1
.
7
Julia S. Gouw
“We remain committed to maintaining
strong capital levels that support our
balance sheet growth, while providing
a strong return to shareholders.”
A message from our
PRESIDENT AND COO
For the fifth year in a row, East West Bank has generated record
earnings. We earned $342.5 million, or $2.38 per diluted share for
2014, an increase in diluted earnings per share of 13% from 2013.
For the full year 2014, our return on assets was 1.24%, and our return
on equity was 12.61%. Our corporate goal is to be one of the best
performing banks and consistently outperform peer banks. In 2014,
East West Bank was ranked in the top 20 of the 100 best banks in
America by Forbes for the fifth consecutive year. We believe our
financial results for 2014 reflect a strong achievement of our goal.
Our ability to prudently and
profitably increase our loans and
deposits, while maintaining strong
credit quality and operating efficiency,
underpins our robust financial
performance year after year.
In 2014, total loans increased to
a record $21.8 billion, an increase
of $3.7 billion or 20% year-over-
year. Excluding the impact of the
MetroCorp acquisition, which closed
in January 2014, loan growth during
the year was $2.5 billion, or 14%.
We experienced strong organic
growth across the loan portfolio,
including commercial and industrial
loans, commercial real estate and
residential real estate loans.
East West Bank also continues to
actively grow low-cost core deposits
from our retail and commercial
customers. Core deposits reached a
record $17.9 billion in 2014, of which
$7.4 billion were noninterest-bearing
demand deposits. Our total deposits
reached a record $24.0 billion as of
December 31, 2014. Excluding the
impact of $1.3 billion in deposits
added from the MetroCorp
acquisition, the year-over-year
deposit growth was $2.3 billion, or
11%. The increasing diversification
of both loans and deposits over the
past five years has transformed our
balance sheet.
Total fee income for 2014 was
$134.3 million, an increase of $19.0
million, or 16% from 2013. Although
our fee income as a percentage of
total revenue is lower than many
of our peers, we are making great
progress toward increasing these
noncapital-intensive business lines.
We continued to maintain strong
asset quality and operating
efficiency. As of December 31,
2014, noncovered, nonperforming
assets were 0.45% of total assets, an
improvement of 8 basis points from
December 31, 2013. Additionally,
our efficiency ratio for the full year
2014 was 45.28%, up slightly from
43.76% for the full year 2013, but
still lower than many of our peers.
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Annual Report 2014
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Annual Report 2014
LOAN GROWTH
in billions
TOTAL LOANS
25TOP
LARGEST
PUBLIC BANKS
in the U.S. by market capitalization
$6.8
2005
$8.3
2006
$8.8
2007
$8.2
2008
$14.1
2009
$13.7
2010
$14.5
2011
$15.1
2012
$18.1
2013
$21.8
2014
DEPOSIT GROWTH
in billions
TOTAL DEPOSITS
We ended 2014 with total
stockholders’ equity of $2.9 billion
and tangible equity of $2.3 billion.
As of December 31, 2014, East
West’s Tier 1 risk-based capital and
total risk-based ratios were 11.0%
and 12.6%, respectively, compared
to the well-capitalized requirements
of 6% and 10%, respectively.
Effective January 1, 2015, the risk
weighting of many of our assets will
change due to the impact of Basel
III risk weighting requirements and
the end of the UCB commercial
loss share agreement. If these
risk weighting changes had been
applied effective December 31,
2014, our capital levels would
still be substantially higher than
the well-capitalized regulatory
requirements. We remain committed
to maintaining strong capital levels
that support our balance sheet
growth, while providing a strong
return to shareholders. In early 2015,
the board of directors approved an
increase in the annual dividend rate
from $0.72 to $0.80 per share, an
increase of 11%.
Looking back on another great year
of record achievement for East West
Bank, we are confident in the value
of our strategy to be the bridge
between the East and the West. We
will continue to dedicate resources
to improve our capabilities, build
our infrastructure and ensure strong
risk management to provide infinite
possibilities to our customers and
our shareholders for many more
years to come.
Sincerely,
Julia S. Gouw
President and Chief Operating Officer
$6.3
2005
$7.2
2006
$7.3
2007
$8.1
2008
$15.0
2009
$15.6
2010
$17.5
2011
$18.3
2012
$20.4
2013
$24.0
2014
19
Annual Report 2014
INVESTOR
INFORMATION
COMMON STOCK AND DIVIDENDS
East West Bancorp, Inc. common
stock trades on the NASDAQ Global
Select market under the symbol EWBC.
As of December 31, 2014, there
were 143,582,229 shares of common
stock outstanding.
The following table sets forth the range of
closing prices for the company’s common
stock for each of the quarters in the years
ended December 31, 2014 and 2013.
YEAR ENDED DECEMBER 31:
2014
2013
First quarter
Second quarter
Third quarter
Fourth quarter
HIGH
LOW
HIGH
LOW
$38.10
$31.73
$25.78
$22.29
36.79
32.69
27.50
22.67
36.72
33.27
3 1 .95
27.98
39.31
31.65
35.15
32.1 8
East West Bancorp quarterly cash dividends on common stock, when and if declared
by the board of directors, are distributed in February, May, August and November.
ANNUAL MEETING
The 2015 Annual Meeting of
Stockholders will be held at 2:00 p.m.
Pacific Daylight Time on Tuesday,
May 5, 2015, at:
East West Bank
Corporate Headquarters
135 N. Los Robles Avenue, 6th Floor
Pasadena, CA 91101
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Annual Report 2014
Formal notice of the meeting with a
proxy card and proxy statement is being
mailed to all stockholders of record as
of March 9, 2015.
The proxy statement, annual report on
Form 10-K and proxy card are available at:
eastwestbank.com/annual.
STOCK TRANSFER
STATEMENT
Shareholders with inquiries about
accounts, lost stock certificates or
changes of address may contact the
Computershare customer service
department by calling 877.254.8651,
available 24 hours a day. Written
correspondence may be sent to the
following address:
Computershare
250 Royall Street
Canton, Massachusetts 02021
FINANCIAL INFORMATION
AND MAILINGS
You may obtain the company’s annual
reports on Form 10-K, quarterly financial
results and other financial information
by writing or calling:
East West Bancorp, Inc.
Investor Relations
135 N. Los Robles Avenue, 7th Floor
Pasadena, California 91101
626.768.6000
Alternatively, company information and
news releases are also available at
www.eastwestbank.com. To receive
company news releases via e-mail, please
contact Investor Relations at the telephone
number or address above or sign up at
www.eastwestbank.com/investors.
East West Bancorp, Inc. and Subsidiaries
FIVE-YEAR SUMMARY OF SELECTED
FINANCIAL INFORMATION
(in thousands, except per share data)
Summary of Operations
Interest and dividend income
Interest expense
Net interest income before provision for loan losses
Provision for loan losses on non-covered loans
Provision for loan losses on covered loans
Net interest income after provision for loan losses
Noninterest (loss) income (1)
Noninterest expense
Income before provision for income taxes
Provision for income taxes
Net income
Preferred stock dividends, amortization of preferred stock
discount, and inducement of preferred stock conversion
Net income available to common stockholders
Per Common Share
Basic earnings
Diluted earnings
Dividends declared
Book value
2014
2013
2012
2011
2010
$ 1,153,698
112,820
1,040,878
44,125
5,033
991,720
(11,714)
564,551
415,455
72,972
342,483
—
342,483
2.39
2.38
0.72
19.85
$
$
$
$
$
$ 1,068,685
112,492
956,193
18,336
4,028
933,829
(92,468)
415,511
425,850
130,805
295,045
$ 1,051,095
132,168
918,927
60,168
5,016
853,743
(5,618)
422,533
425,592
143,942
281,650
$ 1,080,448
177,422
903,026
92,584
2,422
808,020
10,924
435,610
383,334
138,100
245,234
3,428
291,617
2.11
2.10
0.60
17.18
$
$
$
$
$
$
$
$
$
$
6,857
274,793
6,857
238,377
$
1.92
1.89
0.40
16.39
$
$
$
$
1.62
1.60
0.16
14.92
$ 1,095,831
201,117
894,714
195,934
4,225
694,555
39,270
477,916
255,909
91,345
164,564
43,126
121,438
0.88
0.83
0.04
13.67
$
$
$
$
$
Average Common Shares Outstanding:
Basic
Diluted
Common shares outstanding at period-end
142,952
143,563
143,582
137,342
139,574
137,631
141,457
147,175
140,294
147,093
153,467
149,328
137,478
147,102
148,543
At Year End:
Total assets
Non-covered loans, net of allowance
Covered loans, net of allowance
Investment securities
Customer deposits
Long-term debt
Federal Home Loan Bank advances
Stockholders’ equity
Financial Ratios:
Return on average assets
Return on average equity
Common dividend payout ratio
Average stockholders’ equity to average assets
Net interest margin
Asset Quality Ratios:
Net charge-offs on non-covered loans to average
total non-covered loans
Nonperforming assets to total assets
Allowance for loan losses on non-covered loans
to total gross non-covered loans
$ 28,738,049
19,994,081
1,474,189
2,626,365
24,008,774
225,848
317,241
2,850,568
$ 24,730,068
15,412,715
2,187,898
2,733,797
20,412,918
226,868
315,092
2,364,225
$ 22,536,110
11,710,190
2,935,595
2,607,029
18,309,354
137,178
312,975
2,382,122
$ 21,968,667
10,061,788
3,923,142
3,072,578
17,453,002
212,178
455,251
2,311,743
$ 20,700,537
8,430,199
4,800,876
2,875,941
15,641,259
235,570
1,214,148
2,113,931
%
1.24
12.61
30.37
9.83
4.03
%
0.14
0.45
1.27
%
1.25
12.59
28.57
9.95
4.38
%
0.03
0.53
1.54
%
1.29
12.14
20.96
10.62
4.63
%
0.38
0.63
1.92
%
1.14
10.98
10.02
10.36
4.66
%
1.16
0.80
2.04
%
0.82
7.02
4.57
11.62
5.05
%
2.35
0.94
2.64
(1) Changes in FDIC indemnification asset and receivable/payable was a charge of $201.4 million, $228.6 million, $122.3 million, $100.1 million
and $83.2 million in 2014, 2013, 2012, 2011 and 2010, respectively. There were no other-than-temporary impairment (“OTTI”) charges
related to investment securities in 2014 and 2013. 2012, 2011 and 2010 include OTTI charges related to investment securities of
$99 thousand, $633 thousand and $16.7 million, respectively. Pre-tax gain on acquisition was $22.9 million in 2010.
East West Bancorp, Inc. and Subsidiaries
CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data)
East West Bancorp, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data)
December 31,
2014
2013
Year Ended December 31,
2014
2013
2012
Assets
Cash and cash equivalents
Short-term investments
Securities purchased under resale agreements
Investment securities available-for-sale, at fair value
Loans held for sale
Non-covered loans (net of allowance for loan losses of $258,174 in 2014
and $241,930 in 2013)
Covered loans (net of allowance for loan losses of $3,505 in 2014
and $7,745 in 2013)
Total loans receivable, net
FDIC indemnification asset, net
Other real estate owned, net
Other real estate owned covered, net
Total other real estate owned
Investment in Federal Home Loan Bank stock, at cost
Investment in Federal Reserve Bank stock, at cost
Investment in affordable housing partnerships, net
Premises and equipment (net of accumulated depreciation of $85,409 in 2014
and $69,768 in 2013)
Premiums on deposits acquired, net
Goodwill
Other assets
Total
Liabilities and Stockholders’ Equity
Customer deposit accounts:
Noninterest-bearing
Interest-bearing
Total deposits
Securities sold under repurchase agreements
Payable to FDIC, net
Federal Home Loan Bank advances
Long-term debt
Accrued expenses and other liabilities
Total liabilities
STOCKHOLDERS’ EQUITY
Common stock, $0.001 par value, 200,000,000 shares authorized; 163,772,218 and
163,098,008 shares issued in 2014 and 2013, respectively; 143,582,229 and
137,630,896 shares outstanding in 2014 and 2013, respectively.
Additional paid in capital
Retained earnings
Treasury stock, at cost — 20,189,989 shares in 2014 and 25,467,112 shares in 2013.
Accumulated other comprehensive income (loss), net of tax
Total stockholders’ equity
Total
$ 1,039,885
338,714
1,225,000
2,626,365
45,950
$
895,820
257,473
1,300,000
2,733,797
204,970
19,994,081
15,412,715
1,474,189
21,468,270
—
27,612
4,499
32,111
31,239
54,451
178,652
180,900
45,309
469,433
1,001,770
2,187,898
17,600,613
74,708
18,900
21,373
40,273
62,330
48,333
164,776
177,710
46,920
337,438
784,907
$ 28,738,049
$ 24,730,068
$
7,381,030
16,627,744
24,008,774
795,000
96,106
317,241
225,848
444,512
25,887,481
$ 5,821,899
14,591,019
20,412,918
995,000
—
315,092
226,868
415,965
22,365,843
164
1,677,767
1,598,598
(430,198)
4,237
2,850,568
163
1,571,670
1,360,130
(537,279)
(30,459)
2,364,225
$28,738,049
$24,730,068
Interest and Dividend Income
Loans receivable, including fees
Investment securities
Securities purchased under resale agreements
Investment in Federal Home Loan Bank and Federal Reserve Bank stock
Due from banks and short-term investments
Total interest and dividend income
Interest Expense
Customer deposit accounts
Federal Home Loan Bank advances
Securities sold under repurchase agreements
Long-term debt
Other borrowings
Total interest expense
Net interest income before provision for loan losses
Provision for loan losses on non-covered loans
Provision for loan losses on covered loans
Net interest income after provision for loan losses
Noninterest (Loss) Income
Impairment loss on investment securities
Less: Noncredit-related impairment loss recorded in other comprehensive income
Net impairment loss on investment securities recognized in earnings
Changes in FDIC indemnification asset and receivable/payable
Branch fees
Net gains on sales of investment securities
Letters of credit fees and commissions
Ancillary loan fees
Foreign exchange income
Net gains on sales of loans
Dividend and other investment income
Other commission and fee income
Other operating income
Total noninterest loss
Noninterest Expense
Compensation and employee benefits
Occupancy and equipment expense
Amortization of investments in affordable housing partnerships and
other tax credit investments
Amortization of premiums on deposits acquired
Deposit insurance premiums and regulatory assessments
Loan related expenses
Other real estate owned (income) expense
Legal expense
Data processing
Other operating expenses
Total noninterest expense
Income Before Taxes
Provision For Income Taxes
Net Income
Preferred Stock Dividends
$1,059,205
44,684
20,323
6,272
23,214
1,153,698
65,486
4,116
38,395
4,823
—
112,820
1,040,878
44,125
5,033
991,720
—
—
—
(201,417)
37,866
10,851
25,941
10,616
11,381
39,132
5,464
29,419
19,033
(11,714)
231,838
63,815
75,660
10,204
21,922
3,438
(3,591)
53,018
15,888
92,359
564,551
415,455
72,972
342,483
—
$979,394
43,846
21,236
6,869
17,340
1,068,685
63,496
4,173
41,381
3,436
6
112,492
956,193
18,336
4,028
933,829
—
—
—
(228,585)
32,036
12,089
22,116
9,368
12,658
7,750
993
20,400
18,707
(92,468)
175,906
56,641
27,268
9,365
16,550
12,520
(1,128)
31,718
9,095
77,576
415,511
425,850
130,805
295,045
3,428
$945,530
58,184
20,392
4,673
22,316
1,051,095
75,895
6,248
46,166
3,855
4
132,168
918,927
60,168
5,016
853,743
(5,165)
5,066
(99)
(122,251)
30,906
757
19,104
8,831
7,166
17,045
(439)
16,349
17,013
(5,618)
171,374
55,475
18,058
10,906
14,130
14,987
22,349
25,441
9,231
80,582
422,533
425,592
143,942
281,650
6,857
Net Income Available to Common Stockholders
$
342,483
$
291,617
$
274,793
Earnings Per Share Available to Common Stockholders
Basic
Diluted
Weighted Average Number of Shares Outstanding
Basic
Diluted
$
$
2.39
2.38
$
$
2.11
2.10
$
$
1.92
1.89
142,952
143,563
137,342
139,574
141,457
147,175
Dividends Declared Per Common Share
$
0.72
$
0.60
$
0.40
23
Annual Report 2014
BOARD OF
DIRECTORS
Molly Campbell
Director, Financial Management Systems
Los Angeles World Airports
John Lee
Vice Chair
East West Bank
Herman Y. Li
Chairman
C&L Restaurant Group, Inc.
Jack C. Liu, Esq.
Alliance International Law Offices
Dominic Ng
Chairman and CEO
East West Bank
Keith W. Renken
Managing Partner
Renken Enterprises
Iris S. Chan
Chief Executive Officer
Ameriway, Inc.
Rudolph I. Estrada
President and CEO
Estradagy Business Advisors
Julia S. Gouw
President and COO
East West Bank
Paul H. Irving
Chairman
Milken Institute Center for the
Future of Aging
Tak-Chuen Clarence Kwan
Retired Senior Partner
Deloitte LLP
24
Annual Report 2014
At East West Bank, we strive to create
infinite possibilities for our customers,
employees and shareholders. Our financial
bridge between the United States and Greater
China is more than just a fundamental means
of conducting business; it’s also a way to
connect cultures, communities and people.
East West Bancorp
2014 Annual Report
Corporate Headquarters
135 N. Los Robles Avenue
Pasadena, CA 91101
626.768.6000
eastwestbank.com