Second Quarter 2016 INVESTOR PRESENTATION September 2016
Safe Harbor Statement This presentation may include forward-looking statements that involve inherent risks and uncertainties. East West Bancorp, Inc. cautions readers that a number of important factors could cause actual results to differ materially from those in any forward-looking statements. These factors include economic conditions and competition in the geographic and business areas in which East West Bancorp and its subsidiaries operate, inflation or deflation, fluctuation in interest rates, legislation and governmental regulations, investigation of acquired banks and other factors discussed in the Company’s filings with the SEC. 2
East West Profile East West Bank is the largest independent bank based in Los Angeles, CA. With $33 billion in total assets, 43 years of operating history, and 2,800 associates, East West Bank is the leading bank serving the Asian community in the U.S. 130 + LOCATIONS UNITED STATES GREATER CHINA THROUGHOUT 120 + Locations 10 Locations Across 60+ cities in 10 metropolitan areas 5 Full-service branches 5 Representative offices 89 U.S. branches in California Shenzhen Shantou Las Vegas Seattle Shanghai & Beijing Shanghai FTZ San Francisco Houston Chongqing Taipei Atlanta Dallas Los Angeles New York Boston San Diego Xiamen Guangzhou Hong Kong 3
East West Bank Milestones The Going Size Expansion in Today Beginning Public Doubles TX and CA 1973 1999 2009 2014 2016 First EWB Branch EWBC begins Acquired $10 billion Presence expanded 6-months net opens for business. to trade on United Commercial in TX and CA with income: First S&L bank serving Nasdaq. Bank and doubled acquisition of $210.8 million the Asian American asset size to over $2 billion in assets and assets of market in Southern $20 billion. MetroCorp. $33.0 billion. California. Acquired China Opened new banking license. branches in Shanghai FTZ and Shenzhen. 1980s 1991 1995 1998 2005 2007 2013 Branch network Assets Converted Initiated Annual net First full-service New branch in expanded in CA. exceed to state management- income branch in Greater Las Vegas. $1 billion. chartered led buyout. exceeds China opened in commercial $100 million. Hong Kong. Bank. 4
East West Bank’s Advantage BRIDGE THE U.S. THE CHINA VALUE FOR BANKING FACTOR FACTOR CUSTOMERS EXPERTISE Largest U.S. bank serving China is the 2 nd largest Knowledge and Help navigate complicated the Asian community. world economy. experience in: business transactions. Culture Among the top 30 largest Foreign direct investment in Geography Broaden opportunities with public banks. Economics the U.S. continues to rise. our partners and resources. Business practices Bank of choice for new Cross-border trade between Customized solutions meet Chinese-American Well-connected with U.S. and Greater China the unique financial needs immigrants. companies is strong. business leaders and across various industries. service professionals. Ranked by Forbes as top EWB is one of the few U.S. Beyond banking approach 15 of America’s best Cross-border products banks with a banking license helps customers assimilate banks (2010-2015). in China. and services. seamlessly into a new country. 10 locations in Greater Long-term relationship China. building. 5
Bank Rankings by Total Assets and Market Cap Rank Total Assets (as of 06.30.16) $ Billion Rank Market Cap (as of 08.31.16) $ Billion 1 JPMorgan Chase & Co. 2,466.1 1 Wells Fargo & Company 256.3 2 Bank of America Corporation 2,186.6 2 JPMorgan Chase & Co. 243.8 3 Wells Fargo & Company 1,889.2 3 Bank of America Corporation 164.7 4 Citigroup Inc. 1,818.8 4 Citigroup Inc. 138.7 5 U.S. Bancorp 438.5 5 U.S. Bancorp 75.6 6 Bank of New York Mellon Corporation 372.4 6 Bank of New York Mellon Corporation 44.5 7 PNC Financial Services Group, Inc. 361.3 7 PNC Financial Services Group, Inc. 44.3 8 Capital One Financial Corporation 339.1 8 Capital One Financial Corporation 36.2 9 State Street Corporation 255.4 9 BB&T Corporation 31.4 10 BB&T Corporation 221.9 10 State Street Corporation 27.4 11 SunTrust Banks, Inc. 199.1 11 SunTrust Banks, Inc. 21.8 12 Citizens Financial Group, Inc. 145.2 12 M&T Bank Corporation 18.6 13 Fifth Third Bancorp 143.6 13 Northern Trust Corporation 16.0 14 Regions Financial Corporation 126.2 14 Fifth Third Bancorp 15.5 15 M&T Bank Corporation 123.8 15 KeyCorp 13.6 16 Northern Trust Corporation 121.5 16 Citizens Financial Group, Inc. 12.9 17 KeyCorp 101.2 17 Regions Financial Corporation 12.5 18 Huntington Bancshares Incorporated 74.0 18 First Republic Bank 11.5 19 Comerica Incorporated 71.3 19 Huntington Bancshares Incorporated 10.9 20 First Republic Bank 64.7 20 Comerica Incorporated 8.2 21 Zions Bancorporation 59.6 21 Signature Bank 6.7 22 SVB Financial Group 43.1 22 Zions Bancorporation 6.3 23 People's United Financial, Inc. 40.2 23 SVB Financial Group 5.8 24 First Niagara Financial Group, Inc. 40.0 24 East West Bancorp, Inc. 5.4 25 Popular, Inc. 37.6 25 PacWest Bancorp 5.2 26 Signature Bank 36.5 26 People's United Financial, Inc. 5.1 27 East West Bancorp, Inc. 33.0 27 Commerce Bancshares, Inc. 4.9 28 First Citizens BancShares, Inc. 32.2 28 Bank of the Ozarks, Inc. 4.7 29 BOK Financial Corporation 32.0 29 BOK Financial Corporation 4.5 30 Synovus Financial Corp. 29.5 30 Cullen/Frost Bankers, Inc. 4.5 Source: S&P Global Market Intelligence. 6
Strong Growth and Performance ($ in billions) Total Assets** Stockholders' Equity** $3.3 $33.0 $3.1 $2.9 $32.4 $28.7 $2.4 $2.4 $2.3 $2.3 $20.6 $20.7 $22.0 $22.5 $24.7 $2.1 $1.6 $1.2 $10.8 $11.9 $12.4 $1.0 06 07 08 09 10 11 12 13 14 15 2Q16 06 07 08 09 10 11 12 13 14 15 2Q16 QTD QTD Total Deposits Total Loans $28.2 $24.3 $27.5 $24.0 $21.8 $23.7 $15.0 $15.6 $17.5 $18.3 $20.4 $18.1 $14.1 $13.7 $14.5 $15.1 $8.8 $8.3 $8.2 $8.1 $7.2 $7.3 06 07 08 09 10 11 12 13 14 15 2Q16 06 07 08 09 10 11 12 13 14 15 2Q16 QTD QTD * CAGR from December 31, 2006 – June 30, 2016. ** 2010-2014 were restated to reflect the adoption of new accounting guidance related to the Company's investments in qualified affordable housing projects, Accounting Standards Update (“ASU”) 2014-01. 7
Six Consecutive Years of Strong Earnings Growth 19% CAGR for Net Earnings $384.7 $345.9 ($ in millions) $293.3 $277.7 $242.8 $210.8 $164.6 $76.6 2009 2010 2011 2012 2013 2014 2015 2016 YTD 26% CAGR for Net Earnings per share UCBH acquisition Nov. 2009 $2.66 $2.41 doubles $2.09 bank size $1.87 $1.58 $1.45 $0.83 $0.33 2009 2010 2011 2012 2013 2014 2015 2016 YTD Note: 2010-2014 were restated to reflect the adoption of new accounting guidance related to the Company's investments in qualified affordable housing projects, Accounting Standards Update (“ASU”) 2014-01. 8
Second Quarter 2016 Highlights QoQ YoY 2Q16 1Q16 Change 2Q15 Change ($ in millions, except per share data) Net income $ 103.3 $ 107.5 -4% $ 98.7 +5% Earnings per share (diluted) $ 0.71 $ 0.74 -4% $ 0.68 +4% At period-end Total loans 24,287.5 23,796.7 +2% 22,160.0 +10% $ $ $ Total deposits $ 28,217.2 $ 28,596.2 -1% $ 25,528.2 +11% $ $ $ Total assets 32,952.2 33,109.2 -<1% 30,064.1 +10% Selected ratios Return on average assets 1.27% 1.33% -6 bps 1.34% -7 bps Return on average equity 12.71% 13.59% -88 bps 13.25% -54 bps Net interest margin 3.31% 3.32% -1 bp 3.31% unchanged Cost of deposits 0.29% 0.28% +1 bp 0.29% unchanged Cost of funds 0.35% 0.34% +1 bp 0.43% -8 bps Adjusted efficiency ratio 1 44.59% 44.53% +6 bps 40.36% +4.23% 1 Represents noninterest expense, excluding repurchase agreements’ extinguishment costs, amortization of tax credit and other i nvestments and amortization of premiums on deposits acquired, divided by the aggregate of net interest income before provision for credit losses, and noninterest income. 9
Second Quarter Net Interest Income and Margin 3.60% 3.50% 3.32% 3.32% 3.31% 3.31% 3.40% 3.26% 3.30% $253.6 $252.2 $246.9 3.20% $240.3 ($ in millions) $227.5 3.10% 3.00% 2.90% 2.80% $150 2.70% 2Q15 3Q15 4Q15 1Q16 2Q16 Net Interest Income Net Interest Margin Net Interest Income Net Interest Margin $253.6 million 3.31% 2Q16 Net Interest Income 2Q16 Net Interest Margin +$1.4 million or +1% -1 basis point From 1Q16 Net Interest Income From 1Q16 Net Interest Margin Due to loan portfolio growth 10
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