EX-99.1 2 ewbc9918k9302018.htm EXHIBIT 99.1

| Exhibit 99.1
| East West Bancorp, Inc.
135 N. Los Robles Ave., 7th Fl.
Pasadena, CA 91101
Tel. 626.768.6000

NEWS RELEASE |  |  |

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

EAST WEST BANCORP REPORTS NET INCOME FOR THIRD QUARTER 2018
OF $171 MILLION AND DILUTED EARNINGS PER SHARE OF $1.17, BOTH UP BY 29% YEAR-OVER-YEAR
Pasadena, California — October 18, 2018 - East West Bancorp, Inc. (“East West” or the “Company”) (Nasdaq: EWBC), parent company of East West Bank, the financial bridge between the United States and Greater China, today reported its financial results for the third quarter of 2018. For the third quarter of 2018, net income was $171 million, or $1.17 per diluted share, up by 29% year-over-year compared to $133 million, or $0.91 per diluted share, for the third quarter of 2017. Third quarter 2018 return on average assets of 1.76%, return on average equity of 16.2% and return on average tangible 1 equity of 18.5% were all up significantly year-over-year.
“Total loans grew $968 million, or 13% annualized, to a record $31.2 billion as of September 30, 2018 from $30.2 billion as of June 30, 2018,” stated Dominic Ng, Chairman and Chief Executive Officer of East West. “Total deposits grew $853 million, or 10% annualized, to a record $33.6 billion as of September 30, 2018 from $32.8 billion as of June 30, 2018.”
“Driven by our sustained loan growth, net interest income reached a record $349 million in the third quarter of 2018, an increase of 2% quarter-over-quarter and 15% year-over-year,” continued Ng. “Our current quarter adjusted 2 efficiency ratio of 39.9% was stable compared to the prior quarter. For the third quarter of 2018, our adjusted pre-tax, pre-provision income 3 was $238 million, an increase of 1% quarter-over-quarter and an increase of 13% year-over-year.”
“In conclusion, with year-to-date results of strong loan growth and an expanding net interest margin, we are on track for another year of record earnings for 2018. Our net interest income continues to reach higher levels quarter after quarter, and our attractive profitability remains a valued proposition for shareholders,” concluded Ng.

1 See reconciliation of GAAP to non-GAAP financial measures in Table 15.
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.

1

HIGHLIGHTS OF RESULTS

• | Quarterly Earnings — Third quarter 2018 net income of $171.3 million and diluted earnings per share (“EPS”) of $1.17 both decreased by 1% compared to second quarter 2018 net income of $172.3 million and diluted EPS of $1.18. Net income and EPS both grew by 29% year-over-year.

• | Net Interest Income Growth and Net Interest Margin — Third quarter 2018 net interest income was $348.7 million, a quarterly increase of $7.0 million, or 2%. Net interest income growth primarily reflected loan growth and loan yield expansion, partially offset by growth in time deposits and an increase in the cost of deposits. Third quarter 2018 net interest margin (“NIM”) of 3.76% declined by seven basis points linked quarter. Net interest income grew by 15% year-over-year, and NIM expanded by 24 basis points year-over-year.

• | Record Loans — Total loans of $31.2 billion as of September 30, 2018 were up $968.3 million, or 13% linked quarter annualized, from $30.2 billion as of June 30, 2018. The largest increase in loans this quarter was in commercial and industrial loans, followed by single-family mortgages. Total loans grew by 9% year-over-year.

• | Record Deposits — Total deposits of $33.6 billion as of September 30, 2018 were up $853.0 million, or 10% linked quarter annualized, from $32.8 billion as of June 30, 2018. The sequential quarter growth was largely from an increase in time deposits. Total deposits grew by 7% year-over-year.

• | Asset Quality Metrics — The allowance for loan losses was $310.0 million, or 0.99% of loans held-for-investment (“HFI”), as of September 30, 2018, compared to $301.6 million, or 1.00% of loans HFI, as of June 30, 2018. For the third quarter of 2018, annualized net charge-offs were 0.05% of average loans HFI, compared to annualized net charge-offs of 0.14% of average loans HFI for the previous quarter. Non-purchased credit impaired (“Non-PCI”) nonperforming assets were $114.6 million, or 0.29% of total assets, as of September 30, 2018, compared to $103.5 million, or 0.27% of total assets, as of June 30, 2018.

• | Capital Levels — Capital levels for East West continue to be strong. As of September 30, 2018, stockholders’ equity was $4.2 billion, or $29.29 per share. Tangible equity 4 per common share was $25.91 as of September 30, 2018, an increase of 4% linked quarter and 14% year-over-year. As of September 30, 2018, the tangible equity to tangible assets ratio 4 was 9.73%, the Common Equity Tier 1 (“CET1”) capital ratio was 12.3%, and the total risk-based capital ratio was 13.8%.

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

2

QUARTERLY RESULTS SUMMARY

|  | Quarter Ended
($ in millions, except per share data) |  | September 30, 2018 |  | June 30, 2018 |  | September 30, 2017
Net income |  | $ | 171.3 |  |  | $ | 172.3 |  |  | $ | 132.7 |
Adjusted net income (1) |  | $ | 171.3 |  |  | $ | 172.3 |  |  | $ | 130.5 |
Earnings per share (diluted) |  | $ | 1.17 |  |  | $ | 1.18 |  |  | $ | 0.91 |
Adjusted earnings per share (diluted) (1) |  | $ | 1.17 |  |  | $ | 1.18 |  |  | $ | 0.89 |
Book value per common share |  | $ | 29.29 |  |  | $ | 28.39 |  |  | $ | 26.17 |
Tangible equity (1) per common share |  | $ | 25.91 |  |  | $ | 25.01 |  |  | $ | 22.71 |
Tangible equity to tangible assets ratio (1) |  | 9.73 | % |  | 9.64 | % |  | 9.17 | %
Return on average assets (2) |  | 1.76 | % |  | 1.84 | % |  | 1.46 | %
Return on average equity (2) |  | 16.2 | % |  | 17.0 | % |  | 14.0 | %
Return on average tangible equity (1)(2) |  | 18.5 | % |  | 19.5 | % |  | 16.3 | %
Adjusted return on average assets (1)(2) |  | 1.76 | % |  | 1.84 | % |  | 1.44 | %
Adjusted return on average equity (1)(2) |  | 16.2 | % |  | 17.0 | % |  | 13.8 | %
Adjusted return on average tangible equity (1)(2) |  | 18.5 | % |  | 19.5 | % |  | 16.1 | %
Adjusted pre-tax, pre-provision profitability ratio (1)(2) |  | 2.44 | % |  | 2.50 | % |  | 2.32 | %
Net interest income |  | $ | 348.7 |  |  | $ | 341.7 |  |  | $ | 303.2 |
Net interest margin (2) |  | 3.76 | % |  | 3.83 | % |  | 3.52 | %
Cost of deposits (2) |  | 0.78 | % |  | 0.64 | % |  | 0.40 | %
Efficiency ratio |  | 45.5 | % |  | 45.5 | % |  | 46.6 | %
Adjusted efficiency ratio (1) |  | 39.9 | % |  | 39.9 | % |  | 39.8 | %

(1) | See reconciliation of GAAP to non-GAAP financial measures in Tables 12, 13, and 15.

(2) | Annualized.

MANAGEMENT OUTLOOK FOR 2018
We have updated our outlook for the full year 2018. We are lowering our anticipated provision for credit losses, narrowing our expected expense growth range, and adjusting the tax rate.
The revised items are as follows:

• | Provision for credit losses to range from $60 million to $65 million (lowered from a range of $70 million to $80 million, previously).

• | Noninterest expense, excluding amortization of tax credit investments and core deposit intangibles, to increase by approximately 9% year-over-year (narrowed from a percentage rate change in the high single digits, previously).

• | Projecting full year effective tax rate of approximately 14% (versus 13%, previously). Other tax items are unchanged: investment in tax-advantaged credits, excluding low income housing tax credits, of $115 million and associated tax credit amortization expense of $100 million for the full year.

We continue to expect end-of-period loans to increase by approximately 10% year-over-year; and anticipate full year net interest margin, excluding the impact of ASC 310-30 discount accretion income, to be approximately 3.75%.
3

OPERATING RESULTS SUMMARY
Third Quarter 2018 Compared to Second Quarter 2018
Net Interest Income and Net Interest Margin
Net interest income totaled $348.7 million, a 2% increase from $341.7 million. Net interest margin decreased by seven basis points to 3.76% from 3.83%.

• | Excluding the impact of ASC 310-30 discount accretion, adjusted 5 net interest income of $345.9 million increased by 3% and adjusted 5 NIM of 3.72% declined by 4 basis points. ASC 310-30 discount accretion income was $2.9 million, a decline from $6.3 million last quarter.

• | Average loans of $30.5 billion grew by $851.3 million, or 11% linked quarter annualized.

• | Average deposits of $33.2 billion grew by $864.8 million, or 11% linked quarter annualized.

• | The yield on loans expanded by seven basis points to 5.02% from 4.95%.

• | The yield on earning assets expanded by six basis points to 4.55% from 4.49%.

• | The cost of deposits increased by 14 basis points to 0.78% from 0.64%.

• | The cost of funds increased by 15 basis points to 0.86% from 0.71%.

Noninterest Income
Noninterest income totaled $46.5 million, a decrease of $1.8 million or 4% from $48.3 million. Excluding the impact of all gains on sales, total fees and other operating income of $41.9 million in the third quarter of 2018 decreased by 6% from $44.6 million.

• | Decrease in derivative fees and other income reflected a lower volume of customer transactions, which was partially offset by an increase in the fair value of interest rate swaps.

• | Decrease in letters of credit fees and foreign exchange income reflected a decline in mark-to-market revaluations for foreign currency balance sheet items.

The following table presents total fees and other operating income for the three months ended September 30, 2018, June 30, 2018, and September 30, 2017.

($ in thousands) |  | Quarter Ended
| September 30, 2018 |  | June 30, 2018 |  | September 30, 2017
Branch fees |  | $ | 9,777 |  |  | $ | 10,140 |  |  | $ | 10,393 |
Letters of credit fees and foreign exchange income |  | 14,649 |  |  | 15,673 |  |  | 10,564 |
Ancillary loan fees and other income |  | 6,795 |  |  | 5,841 |  |  | 5,987 |
Wealth management fees |  | 3,535 |  |  | 4,501 |  |  | 3,461 |
Derivative fees and other income |  | 4,595 |  |  | 6,570 |  |  | 6,663 |
Other fees and operating income |  | 2,569 |  |  | 1,865 |  |  | 3,653 |
Total fees and other operating income |  | $ | 41,920 |  |  | $ | 44,590 |  |  | $ | 40,721 |

Noninterest Expense
Noninterest expense of $179.8 million included $157.7 million of adjusted 6 noninterest expense, $20.8 million in amortization of tax credit and other investments, and $1.4 million in amortization of core deposit intangibles.

• | Adjusted noninterest expense of $157.7 million increased by $2.1 million, or 1%, linked quarter. The increase in noninterest expense compared to the prior quarter was mostly due to an increase in compensation and employee benefits, as well as an increase in other operating expenses, partially offset by decreases in consulting and legal expenses.

• | The adjusted efficiency ratio was unchanged at 39.9% in the third quarter compared to the prior quarter.

5 See reconciliation of GAAP to non-GAAP financial measures in Table 14.
6 See reconciliation of GAAP to non-GAAP financial measures in Table 13.

4

TAX RELATED ITEMS
Tax expense in the third quarter of 2018 was $33.6 million and the effective tax rate was 16%, compared to a tax expense of $24.6 million and an effective tax rate of 13% in the second quarter of 2018.

• | Currently, we are projecting a full year 2018 effective tax rate of approximately 14%, an increase from a projected rate of 13% previously.

CREDIT QUALITY
The allowance for loan losses totaled $310.0 million, or 0.99% of loans HFI, as of September 30, 2018, compared to $301.6 million, or 1.00% of loans HFI, as of June 30, 2018, and $285.9 million, or 1.00% of loans HFI, as of September 30, 2017.

• | The provision for credit losses recorded for the current quarter was $10.5 million, compared to $15.5 million for the second quarter of 2018, and $13.0 million for the third quarter of 2017.

• | Net charge-offs for the current quarter were $3.7 million, or annualized 0.05% of average loans HFI. This compares to net charge-offs of $10.6 million, or annualized 0.14% of average loans HFI, for the second quarter of 2018, and net charge-offs of $4.0 million, or annualized 0.06% of average loans HFI, for the third quarter of 2017.

• | Non-PCI nonperforming assets of $114.6 million, or 0.29% of total assets, as of September 30, 2018, increased from $103.5 million, or 0.27% of total assets, as of June 30, 2018, and decreased from $117.0 million, or 0.32% of total assets, as of September 30, 2017.

CAPITAL STRENGTH
Capital levels for East West continue to be strong. As of September 30, 2018, stockholders’ equity was $4.2 billion, or $29.29 per share. Tangible equity per common share was $25.91 as of September 30, 2018, an increase of 4% linked quarter and 14% year-over-year. The following table presents the regulatory capital ratios for the quarters ended September 30, 2018, June 30, 2018, and September 30, 2017.

EWBC Regulatory Capital Metrics |  | Basel III
($ in millions) |  | September 30, 2018 |  | June 30, 2018 |  | September 30, 2017 |  | Minimum Regulatory Requirements |  | Well Capitalized Regulatory Requirements |  | Fully Phased- in Minimum Regulatory Requirements
CET1 capital ratio |  | 12.3 | % |  | 12.2 | % |  | 11.4 | % |  | 4.5 | % |  | 6.5 | % |  | 7.0 | %
Tier 1 risk-based capital ratio |  | 12.3 | % |  | 12.2 | % |  | 11.4 | % |  | 6.0 | % |  | 8.0 | % |  | 8.5 | %
Total risk-based capital ratio |  | 13.8 | % |  | 13.7 | % |  | 12.9 | % |  | 8.0 | % |  | 10.0 | % |  | 10.5 | %
Tier 1 leverage capital ratio |  | 10.0 | % |  | 10.0 | % |  | 9.4 | % |  | 4.0 | % |  | 5.0 | % |  | 4.0 | %
Risk-Weighted Assets (“RWA”) (b) |  | $ | 31,209 |  |  | $ | 30,415 |  |  | $ | 29,178 |  |  | N/A |  |  | N/A |  |  | N/A |

N/A Not applicable.

(a) | The Company’s September 30, 2018 regulatory capital ratios and RWA are preliminary.

(b) | 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.

5

DIVIDEND PAYOUT AND CAPITAL ACTIONS
East West’s Board of Directors has declared fourth quarter 2018 dividends for the Company’s common stock. The common stock cash dividend of $0.23 per share is payable on November 15, 2018 to stockholders of record on November 1, 2018.
Conference Call
East West will host a conference call to discuss third quarter 2018 earnings with the public on Thursday, October 18, 2018 at 8:30 a.m. PT/11:30 a.m. ET. The public and investment community are invited to listen as management discusses third quarter 2018 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 October 18, 2018 at 11:30 a.m. Pacific Time through November 18, 2018. 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: 10124728.

6

About East West
East West Bancorp, Inc. is a publicly owned company with total assets of $39.1 billion that trades on the Nasdaq Global Select Market under the symbol “EWBC”. The Company’s wholly-owned subsidiary, East West Bank, is the premier bank exclusively focused on the United States and Greater China markets, and is one of the largest independent banks headquartered in California. With over 130 locations worldwide, East West operates in California, Georgia, Massachusetts, Nevada, New York, Texas and Washington in the United States. In Greater China, East West’s presence includes full service branches in Hong Kong, Shanghai, Shantou and Shenzhen, and representative offices in Beijing, Chongqing, Guangzhou, Taipei and Xiamen. For more information about East West, visit the Company’s website at www.eastwestbank.com.
Forward-Looking Statements
Certain matters set forth herein (including any exhibits hereto) constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, including forward-looking statements relating to the Company’s current business plans and expectations regarding future operating results. Forward-looking statements may include, but are not limited to, the use of forward-looking language, such as “likely result in,” “expects,” “anticipates,” “estimates,” “forecasts,” “projects,” “intends to,” or may include other similar words or phrases, such as “believes,” “plans,” “trend,” “objective,” “continues,” “remains,” or similar expressions, or future or conditional verbs, such as “will,” “would,” “should,” “could,” “may,” “might,” “can,” or similar verbs. These forward-looking statements are subject to risks and uncertainties that could cause actual results, performance or achievements to differ materially from those projected. These risks and uncertainties, some of which are beyond our control, include, but are not limited to, our ability to compete effectively against other financial institutions in our banking markets; success and timing of our business strategies; the Company’s ability to retain key officers and employees; changes in interest rates on our net interest income and net interest margin; the effect of changes in the deposit mix on our funding costs and net interest margin; changes in our costs of operation, compliance and expansion; our ability to adopt and successfully integrate new technologies into our business in a strategic manner; impact of failure in, or breach of, our operational or security systems or infrastructure, or those of third parties with whom we do business, including as a result of cyber attacks; and other similar matters which could result in, among other things, confidential and/or proprietary information being disclosed or misused; adequacy of our risk management framework, disclosure controls and procedures and internal control over financial reporting; future credit quality and performance, including our expectations regarding future credit losses and allowance levels; impact of adverse changes to our credit ratings from the major credit rating agencies; impact of adverse judgments or settlements in litigation; changes in the commercial and consumer real estate markets; changes in the United States (“U.S.”) economy, including inflation, employment levels, rate of growth and general business conditions; changes in government interest rate policies; impact of political developments, wars or other hostilities that may disrupt or increase volatility in securities or otherwise affect economic conditions; changes in laws or the regulatory environment including regulatory reform initiatives and policies of the U.S. Department of Treasury, the Board of Governors of the Federal Reserve Board System, the Federal Deposit Insurance Corporation, the U.S. Securities and Exchange Commission, the Consumer Financial Protection Bureau and the California Department of Business Oversight - Division of Financial Institutions; impact of the Dodd-Frank Wall Street Reform and Consumer Protection Act on our business, business practices and cost of operations; 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; impact of regulatory enforcement actions; changes in accounting standards as may be required by the Financial Accounting Standards Board or other regulatory agencies and their impact on critical accounting policies and assumptions; changes in income tax laws and regulations and the impact of the Tax Cuts and Jobs Act; impact of other potential federal tax changes and spending cuts; our capital requirements and our ability to generate capital internally or raise capital on favorable terms; changes in our ability to receive dividends from our subsidiaries; any future strategic acquisitions or divestitures; continuing consolidation in the financial services industry; changes in the equity and debt securities markets; fluctuations of our stock price; fluctuations in foreign currency exchange rates; a recurrence of significant turbulence or disruption in the capital or financial markets, which could result in, among other things, a reduction in the availability of funding or increased funding costs, reduced investor demand for mortgage loans and declines in asset values and/or recognition of other-than-temporary impairment on securities held in our available-for-sale investment securities portfolio; changes in the economy of and monetary policy in the People’s Republic of China; impact of natural or man-made disasters or calamities or conflicts or other events that may directly or indirectly result in a negative impact on the Company’s financial performance; and other factors set forth in the Company’s public reports including its Annual Report on Form 10-K for the year ended December 31, 2017, and particularly the discussion of risk factors within that document. If any of these risks or uncertainties materializes or if any of the assumptions underlying such forward-looking statements proves to be incorrect, the Company’s results could differ materially from those expressed in, implied or projected by such forward-looking statements. The Company assumes no obligation to update such forward-looking statements.
7

EAST WEST BANCORP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
($ and shares in thousands, except per share data)
(unaudited)
Table 1 |  |  |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  | September 30, 2018 % Change
|  |  | September 30, 2018 |  | June 30, 2018 |  | September 30, 2017 |  | Qtr-o-Qtr |  | Yr-o-Yr
Assets |  |  |  |  |  |  |  |  |  |
| Cash and due from banks |  | $ | 408,049 |  |  | $ | 415,653 |  |  | $ | 364,328 |  |  | (1.8 | )% |  | 12.0 | %
| Interest-bearing cash with banks |  | 1,810,738 |  |  | 1,881,818 |  |  | 1,372,421 |  |  | (3.8 | ) |  | 31.9 |
| Cash and cash equivalents |  | 2,218,787 |  |  | 2,297,471 |  |  | 1,736,749 |  |  | (3.4 | ) |  | 27.8 |
| Interest-bearing deposits with banks |  | 400,900 |  |  | 360,900 |  |  | 404,946 |  |  | 11.1 |  |  | (1.0 | )
| Securities purchased under resale agreements (“resale agreements”) (1) |  | 1,035,000 |  |  | 975,000 |  |  | 1,250,000 |  |  | 6.2 |  |  | (17.2 | )
| Investment securities |  | 2,676,510 |  |  | 2,707,444 |  |  | 2,956,776 |  |  | (1.1 | ) |  | (9.5 | )
| Federal Home Loan Bank (“FHLB”) and Federal Reserve Bank (“FRB”) stock |  | 73,729 |  |  | 73,524 |  |  | 73,322 |  |  | 0.3 |  |  | 0.6 |
| Loans held-for-sale (“HFS”) |  | 3,114 |  |  | 14,658 |  |  | 178 |  |  | (78.8 | ) |  | NM |
| Loans held-for-investment (net of allowance for loan losses of $310,041, $301,550 and $285,926) |  | 30,900,144 |  |  | 29,928,829 |  |  | 28,239,431 |  |  | 3.2 |  |  | 9.4 |
| Investments in qualified affordable housing partnerships, net |  | 148,097 |  |  | 152,556 |  |  | 178,344 |  |  | (2.9 | ) |  | (17.0 | )
| Investments in tax credit and other investments, net |  | 232,194 |  |  | 242,595 |  |  | 203,758 |  |  | (4.3 | ) |  | 14.0 |
| Goodwill |  | 465,547 |  |  | 465,547 |  |  | 469,433 |  |  | — |  |  | (0.8 | )
| Other assets |  | 919,084 |  |  | 854,430 |  |  | 795,029 |  |  | 7.6 |  |  | 15.6 |
| Total assets |  | $ | 39,073,106 |  |  | $ | 38,072,954 |  |  | $ | 36,307,966 |  |  | 2.6 | % |  | 7.6 | %
Liabilities and Stockholders’ Equity |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Deposits |  | $ | 33,629,124 |  |  | $ | 32,776,132 |  |  | $ | 31,311,662 |  |  | 2.6 | % |  | 7.4 | %
| Short-term borrowings |  | 56,411 |  |  | 58,523 |  |  | 24,813 |  |  | (3.6 | ) |  | 127.3 |
| FHLB advances |  | 325,596 |  |  | 325,020 |  |  | 323,323 |  |  | 0.2 |  |  | 0.7 |
| Securities sold under repurchase agreements (“repurchase agreements”) (1) |  | 50,000 |  |  | 50,000 |  |  | 50,000 |  |  | — |  |  | — |
| Long-term debt |  | 156,770 |  |  | 161,704 |  |  | 176,513 |  |  | (3.1 | ) |  | (11.2 | )
| Accrued expenses and other liabilities |  | 610,355 |  |  | 587,291 |  |  | 639,759 |  |  | 3.9 |  |  | (4.6 | )
| Total liabilities |  | 34,828,256 |  |  | 33,958,670 |  |  | 32,526,070 |  |  | 2.6 |  |  | 7.1 |
| Stockholders’ equity |  | 4,244,850 |  |  | 4,114,284 |  |  | 3,781,896 |  |  | 3.2 |  |  | 12.2 |
| Total liabilities and stockholders’ equity |  | $ | 39,073,106 |  |  | $ | 38,072,954 |  |  | $ | 36,307,966 |  |  | 2.6 | % |  | 7.6 | %
| Book value per common share |  | $ | 29.29 |  |  | $ | 28.39 |  |  | $ | 26.17 |  |  | 3.2 | % |  | 11.9 | %
| Tangible equity (2) per common share |  | $ | 25.91 |  |  | $ | 25.01 |  |  | $ | 22.71 |  |  | 3.6 |  |  | 14.1 |
| Tangible equity to tangible assets ratio (2) |  | 9.73 | % |  | 9.64 | % |  | 9.17 | % |  | 1.0 |  |  | 6.2 |
| Number of common shares at period-end |  | 144,929 |  |  | 144,905 |  |  | 144,511 |  |  | 0.0 |  |  | 0.3 |

NM Not Meaningful

(1) | Resale and repurchase agreements have been reported net, pursuant to Accounting Standards Codification (“ASC”) 210-20-45, Balance Sheet Offsetting. As of each of September 30, 2018, June 30, 2018 and September 30, 2017, $400.0 million out of $450.0 million of gross repurchase agreements were eligible for netting against gross resale agreements.

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

8

EAST WEST BANCORP, INC. AND SUBSIDIARIES
TOTAL LOANS AND DEPOSITS DETAIL
($ in thousands)
(unaudited)
Table 2 |  |  |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  | September 30, 2018 % Change
|  |  | September 30, 2018 |  | June 30, 2018 |  | September 30, 2017 |  | Qtr-o-Qtr |  | Yr-o-Yr
Loans: |  |  |  |  |  |  |  |  |  |
Commercial lending: |  |  |  |  |  |  |  |  |  |
| Commercial and industrial (“C&I”) |  | $ | 11,517,054 |  |  | $ | 11,059,019 |  |  | $ | 10,645,156 |  |  | 4.1 | % |  | 8.2 | %
| Commercial real estate (“CRE”) |  | 9,262,327 |  |  | 9,054,567 |  |  | 8,843,776 |  |  | 2.3 |  |  | 4.7 |
| Multifamily residential |  | 2,090,563 |  |  | 2,032,522 |  |  | 1,876,956 |  |  | 2.9 |  |  | 11.4 |
| Construction and land |  | 605,033 |  |  | 623,837 |  |  | 683,404 |  |  | (3.0 | ) |  | (11.5 | )
Consumer lending: |  |  |  |  |  |  |  |  |  |
| Single-family residential |  | 5,684,587 |  |  | 5,316,895 |  |  | 4,356,009 |  |  | 6.9 |  |  | 30.5 |
| Home equity lines of credit (“HELOCs”) |  | 1,717,440 |  |  | 1,769,511 |  |  | 1,767,420 |  |  | (2.9 | ) |  | (2.8 | )
| Other consumer |  | 333,181 |  |  | 374,028 |  |  | 352,636 |  |  | (10.9 | ) |  | (5.5 | )
| Total loans held-for-investment (1)(2) |  | 31,210,185 |  |  | 30,230,379 |  |  | 28,525,357 |  |  | 3.2 |  |  | 9.4 |
Loans HFS |  | 3,114 |  |  | 14,658 |  |  | 178 |  |  | (78.8 | ) |  | NM |
| Total loans (1)(2) |  | 31,213,299 |  |  | 30,245,037 |  |  | 28,525,535 |  |  | 3.2 |  |  | 9.4 |
Allowance for loan losses |  | (310,041 | ) |  | (301,550 | ) |  | (285,926 | ) |  | 2.8 |  |  | 8.4 |
| Net loans (1)(2) |  | $ | 30,903,258 |  |  | $ | 29,943,487 |  |  | $ | 28,239,609 |  |  | 3.2 | % |  | 9.4 | %
Deposits: |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Noninterest-bearing demand |  | $ | 10,794,370 |  |  | $ | 10,739,333 |  |  | $ | 10,992,674 |  |  | 0.5 | % |  | (1.8 | )%
| Interest-bearing checking |  | 4,383,672 |  |  | 4,323,698 |  |  | 4,108,859 |  |  | 1.4 |  |  | 6.7 |
| Money market |  | 7,608,191 |  |  | 7,634,850 |  |  | 7,939,031 |  |  | (0.3 | ) |  | (4.2 | )
| Savings |  | 2,100,958 |  |  | 2,218,228 |  |  | 2,476,557 |  |  | (5.3 | ) |  | (15.2 | )
| Total core deposits |  | 24,887,191 |  |  | 24,916,109 |  |  | 25,517,121 |  |  | (0.1 | ) |  | (2.5 | )
| Time deposits |  | 8,741,933 |  |  | 7,860,023 |  |  | 5,794,541 |  |  | 11.2 |  |  | 50.9 |
| Total deposits |  | $ | 33,629,124 |  |  | $ | 32,776,132 |  |  | $ | 31,311,662 |  |  | 2.6 | % |  | 7.4 | %

NM Not Meaningful

(1) | Includes $(42.4) million, $(40.4) million and $(29.2) million as of September 30, 2018, June 30, 2018 and September 30, 2017, respectively, of net deferred loan fees, unearned fees, unamortized premiums and unaccreted discounts.

(2) | Includes ASC 310-30 discount of $24.5 million, $26.8 million and $39.1 million as of September 30, 2018, June 30, 2018 and September 30, 2017, respectively.

9

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 |  | September 30, 2018 % Change
|  |  | September 30, 2018 |  | June 30, 2018 |  | September 30, 2017 |  | Qtr-o-Qtr |  | Yr-o-Yr
Interest and dividend income |  | $ | 422,185 |  |  | $ | 400,311 |  |  | $ | 339,910 |  |  | 5.5 | % |  | 24.2 | %
Interest expense |  | 73,465 |  |  | 58,632 |  |  | 36,755 |  |  | 25.3 |  |  | 99.9 |
Net interest income before provision for credit losses |  | 348,720 |  |  | 341,679 |  |  | 303,155 |  |  | 2.1 |  |  | 15.0 |
Provision for credit losses |  | 10,542 |  |  | 15,536 |  |  | 12,996 |  |  | (32.1 | ) |  | (18.9 | )
Net interest income after provision for credit losses |  | 338,178 |  |  | 326,143 |  |  | 290,159 |  |  | 3.7 |  |  | 16.5 |
Noninterest income |  | 46,502 |  |  | 48,268 |  |  | 49,470 |  |  | (3.7 | ) |  | (6.0 | )
Noninterest expense |  | 179,815 |  |  | 177,419 |  |  | 164,345 |  |  | 1.4 |  |  | 9.4 |
Income before income taxes |  | 204,865 |  |  | 196,992 |  |  | 175,284 |  |  | 4.0 |  |  | 16.9 |
Income tax expense |  | 33,563 |  |  | 24,643 |  |  | 42,624 |  |  | 36.2 |  |  | (21.3 | )
Net income |  | $ | 171,302 |  |  | $ | 172,349 |  |  | $ | 132,660 |  |  | (0.6 | )% |  | 29.1 | %
Earnings per share (“EPS”) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
- Basic |  | $ | 1.18 |  |  | $ | 1.19 |  |  | $ | 0.92 |  |  | (0.6 | )% |  | 28.8 | %
- Diluted |  | $ | 1.17 |  |  | $ | 1.18 |  |  | $ | 0.91 |  |  | (0.7 | ) |  | 28.9 |
Weighted average number of shares outstanding |  |  |  |  |  |  |  |  |  |  |  |
- Basic |  | 144,921 |  |  | 144,899 |  |  | 144,498 |  |  | 0.0 | % |  | 0.3 | %
- Diluted |  | 146,173 |  |  | 146,091 |  |  | 145,882 |  |  | 0.1 |  |  | 0.2 |
|  |  | Three Months Ended |  | September 30, 2018 % Change
|  |  | September 30, 2018 |  | June 30, 2018 |  | September 30, 2017 |  | Qtr-o-Qtr |  | Yr-o-Yr
Noninterest income: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Branch fees |  | $ | 9,777 |  |  | $ | 10,140 |  |  | $ | 10,393 |  |  | (3.6 | )% |  | (5.9 | )%
| Letters of credit fees and foreign exchange income |  | 14,649 |  |  | 15,673 |  |  | 10,564 |  |  | (6.5 | ) |  | 38.7 |
| Ancillary loan fees and other income |  | 6,795 |  |  | 5,841 |  |  | 5,987 |  |  | 16.3 |  |  | 13.5 |
| Wealth management fees |  | 3,535 |  |  | 4,501 |  |  | 3,461 |  |  | (21.5 | ) |  | 2.1 |
| Derivative fees and other income |  | 4,595 |  |  | 6,570 |  |  | 6,663 |  |  | (30.1 | ) |  | (31.0 | )
| Net gains on sales of loans |  | 1,145 |  |  | 2,354 |  |  | 2,360 |  |  | (51.4 | ) |  | (51.5 | )
| Net gains on sales of available-for-sale investment securities |  | 35 |  |  | 210 |  |  | 1,539 |  |  | (83.3 | ) |  | (97.7 | )
| Net gains on sales of fixed assets |  | 3,402 |  |  | 1,114 |  |  | 1,043 |  |  | 205.4 |  |  | 226.2 |
| Net gain on sale of business |  | — |  |  | — |  |  | 3,807 |  |  | — |  |  | (100.0 | )
| Other fees and operating income |  | 2,569 |  |  | 1,865 |  |  | 3,653 |  |  | 37.7 |  |  | (29.7 | )
Total noninterest income |  | $ | 46,502 |  |  | $ | 48,268 |  |  | $ | 49,470 |  |  | (3.7 | )% |  | (6.0 | )%
Noninterest expense: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Compensation and employee benefits |  | $ | 96,733 |  |  | $ | 93,865 |  |  | $ | 79,583 |  |  | 3.1 | % |  | 21.5 | %
| Occupancy and equipment expense |  | 17,292 |  |  | 16,707 |  |  | 16,635 |  |  | 3.5 |  |  | 3.9 |
| Deposit insurance premiums and regulatory assessments |  | 6,013 |  |  | 5,832 |  |  | 5,676 |  |  | 3.1 |  |  | 5.9 |
| Legal expense |  | 1,544 |  |  | 2,837 |  |  | 3,316 |  |  | (45.6 | ) |  | (53.4 | )
| Data processing |  | 3,289 |  |  | 3,327 |  |  | 3,004 |  |  | (1.1 | ) |  | 9.5 |
| Consulting expense |  | 2,683 |  |  | 5,120 |  |  | 4,087 |  |  | (47.6 | ) |  | (34.4 | )
| Deposit related expense |  | 2,600 |  |  | 2,922 |  |  | 2,413 |  |  | (11.0 | ) |  | 7.7 |
| Computer software expense |  | 5,478 |  |  | 5,549 |  |  | 4,393 |  |  | (1.3 | ) |  | 24.7 |
| Other operating expense |  | 23,394 |  |  | 20,779 |  |  | 21,411 |  |  | 12.6 |  |  | 9.3 |
| Amortization of tax credit and other investments |  | 20,789 |  |  | 20,481 |  |  | 23,827 |  |  | 1.5 |  |  | (12.8 | )
Total noninterest expense |  | $ | 179,815 |  |  | $ | 177,419 |  |  | $ | 164,345 |  |  | 1.4 | % |  | 9.4 | %

10

EAST WEST BANCORP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF INCOME
($ and shares in thousands, except per share data)
(unaudited)
Table 4 |  |  |  |  |  |
|  |  | Nine Months Ended |  | September 30, 2018 % Change
|  |  | September 30, 2018 |  | September 30, 2017 |  | Yr-o-Yr
Interest and dividend income |  | $ | 1,194,369 |  |  | $ | 965,354 |  |  | 23.7 | %
Interest expense |  | 177,277 |  |  | 99,986 |  |  | 77.3 |
Net interest income before provision for credit losses |  | 1,017,092 |  |  | 865,368 |  |  | 17.5 |
Provision for credit losses |  | 46,296 |  |  | 30,749 |  |  | 50.6 |
Net interest income after provision for credit losses |  | 970,796 |  |  | 834,619 |  |  | 16.3 |
Noninterest income |  | 169,214 |  |  | 212,542 |  |  | (20.4 | )
Noninterest expense |  | 526,369 |  |  | 486,188 |  |  | 8.3 |
Income before income taxes |  | 613,641 |  |  | 560,973 |  |  | 9.4 |
Income tax expense |  | 82,958 |  |  | 140,247 |  |  | (40.8 | )
Net income |  | $ | 530,683 |  |  | $ | 420,726 |  |  | 26.1 | %
EPS |  |  |  |  |  |  |  |  |
- Basic |  | $ | 3.66 |  |  | $ | 2.91 |  |  | 25.8 | %
- Diluted |  | $ | 3.63 |  |  | $ | 2.88 |  |  | 25.9 |
Weighted average number of shares outstanding |  |  |  |  |  |  |
- Basic |  | 144,829 |  |  | 144,412 |  |  | 0.3 | %
- Diluted |  | 146,158 |  |  | 145,849 |  |  | 0.2 |
|  |  | Nine Months Ended |  | September 30, 2018 % Change
|  |  | September 30, 2018 |  | September 30, 2017 |  | Yr-o-Yr
Noninterest income: |  |  |  |  |  |  |  |
| Branch fees |  | $ | 30,347 |  |  | $ | 30,638 |  |  | (0.9 | )%
| Letters of credit fees and foreign exchange income |  | 39,924 |  |  | 34,370 |  |  | 16.2 |
| Ancillary loan fees and other income |  | 18,217 |  |  | 16,876 |  |  | 7.9 |
| Wealth management fees |  | 10,989 |  |  | 11,177 |  |  | (1.7 | )
| Derivative fees and other income |  | 17,855 |  |  | 12,934 |  |  | 38.0 |
| Net gains on sales of loans |  | 5,081 |  |  | 6,660 |  |  | (23.7 | )
| Net gains on sales of available-for-sale investment securities |  | 2,374 |  |  | 6,733 |  |  | (64.7 | )
| Net gains on sales of fixed assets |  | 5,602 |  |  | 74,092 |  |  | (92.4 | )
| Net gain on sale of business |  | 31,470 |  |  | 3,807 |  |  | NM |
| Other fees and operating income |  | 7,355 |  |  | 15,255 |  |  | (51.8 | )
Total noninterest income |  | $ | 169,214 |  |  | $ | 212,542 |  |  | (20.4 | )%
Noninterest expense: |  |  |  |  |  |  |  |  |
| Compensation and employee benefits |  | $ | 285,832 |  |  | $ | 244,930 |  |  | 16.7 | %
| Occupancy and equipment expense |  | 50,879 |  |  | 47,829 |  |  | 6.4 |
| Deposit insurance premiums and regulatory assessments |  | 18,118 |  |  | 17,384 |  |  | 4.2 |
| Legal expense |  | 6,636 |  |  | 8,930 |  |  | (25.7 | )
| Data processing |  | 10,017 |  |  | 9,009 |  |  | 11.2 |
| Consulting expense |  | 10,155 |  |  | 10,775 |  |  | (5.8 | )
| Deposit related expense |  | 8,201 |  |  | 7,283 |  |  | 12.6 |
| Computer software expense |  | 16,081 |  |  | 13,823 |  |  | 16.3 |
| Other operating expense |  | 61,780 |  |  | 60,166 |  |  | 2.7 |
| Amortization of tax credit and other investments |  | 58,670 |  |  | 66,059 |  |  | (11.2 | )
Total noninterest expense |  | $ | 526,369 |  |  | $ | 486,188 |  |  | 8.3 | %

NM Not Meaningful
11

EAST WEST BANCORP, INC. AND SUBSIDIARIES
SELECTED AVERAGE BALANCES
($ in thousands)
(unaudited)
Table 5 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | Three Months Ended |  | September 30, 2018 % Change |  | Nine Months Ended |  | September 30, 2018 % Change
|  |  | September 30, 2018 |  | June 30, 2018 |  | September 30, 2017 |  | Qtr-o-Qtr |  | Yr-o-Yr |  | September 30, 2018 |  | September 30, 2017 |  | Yr-o-Yr
Loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial lending: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| C&I |  | $ | 11,127,338 |  |  | $ | 10,747,074 |  |  | $ | 10,259,807 |  |  | 3.5 | % |  | 8.5 | % |  | $ | 10,863,851 |  |  | $ | 10,066,832 |  |  | 7.9 | %
| CRE |  | 9,134,784 |  |  | 9,038,228 |  |  | 8,518,461 |  |  | 1.1 |  |  | 7.2 |  |  | 9,060,338 |  |  | 8,339,620 |  |  | 8.6 |
| Multifamily residential |  | 2,056,456 |  |  | 1,970,538 |  |  | 1,808,236 |  |  | 4.4 |  |  | 13.7 |  |  | 1,990,913 |  |  | 1,743,179 |  |  | 14.2 |
| Construction and land |  | 622,272 |  |  | 667,997 |  |  | 672,875 |  |  | (6.8 | ) |  | (7.5 | ) |  | 649,150 |  |  | 667,299 |  |  | (2.7 | )
Consumer lending: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Single-family residential |  | 5,495,824 |  |  | 5,103,008 |  |  | 4,163,900 |  |  | 7.7 |  |  | 32.0 |  |  | 5,126,073 |  |  | 3,850,221 |  |  | 33.1 |
| HELOCs |  | 1,741,890 |  |  | 1,787,036 |  |  | 1,768,952 |  |  | (2.5 | ) |  | (1.5 | ) |  | 1,769,253 |  |  | 1,779,236 |  |  | (0.6 | )
| Other consumer |  | 319,473 |  |  | 332,885 |  |  | 337,548 |  |  | (4.0 | ) |  | (5.4 | ) |  | 330,703 |  |  | 336,695 |  |  | (1.8 | )
| Total loans (1)(2) |  | $ | 30,498,037 |  |  | $ | 29,646,766 |  |  | $ | 27,529,779 |  |  | 2.9 | % |  | 10.8 | % |  | $ | 29,790,281 |  |  | $ | 26,783,082 |  |  | 11.2 | %
Investment securities |  | $ | 2,727,219 |  |  | $ | 2,735,023 |  |  | $ | 2,963,122 |  |  | (0.3 | )% |  | (8.0 | )% |  | $ | 2,771,727 |  |  | $ | 3,060,688 |  |  | (9.4 | )%
Interest-earning assets |  | $ | 36,822,293 |  |  | $ | 35,767,808 |  |  | $ | 34,208,533 |  |  | 2.9 | % |  | 7.6 | % |  | $ | 36,039,382 |  |  | $ | 33,542,941 |  |  | 7.4 | %
Total assets |  | $ | 38,659,262 |  |  | $ | 37,568,895 |  |  | $ | 35,937,567 |  |  | 2.9 | % |  | 7.6 | % |  | $ | 37,874,434 |  |  | $ | 35,290,542 |  |  | 7.3 | %
Deposits: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Noninterest-bearing demand |  | $ | 10,639,554 |  |  | $ | 10,984,950 |  |  | $ | 10,655,860 |  |  | (3.1 | )% |  | (0.2 | )% |  | $ | 10,968,958 |  |  | $ | 10,323,254 |  |  | 6.3 | %
| Interest-bearing checking |  | 4,515,256 |  |  | 4,387,479 |  |  | 4,014,290 |  |  | 2.9 |  |  | 12.5 |  |  | 4,487,314 |  |  | 3,830,004 |  |  | 17.2 |
| Money market |  | 7,613,030 |  |  | 7,880,601 |  |  | 7,997,648 |  |  | (3.4 | ) |  | (4.8 | ) |  | 7,919,845 |  |  | 7,968,457 |  |  | (0.6 | )
| Savings |  | 2,194,792 |  |  | 2,214,793 |  |  | 2,423,312 |  |  | (0.9 | ) |  | (9.4 | ) |  | 2,286,402 |  |  | 2,334,752 |  |  | (2.1 | )
| Total core deposits |  | 24,962,632 |  |  | 25,467,823 |  |  | 25,091,110 |  |  | (2.0 | ) |  | (0.5 | ) |  | 25,662,519 |  |  | 24,456,467 |  |  | 4.9 |
| Time deposits |  | 8,277,129 |  |  | 6,907,174 |  |  | 5,974,793 |  |  | 19.8 |  |  | 38.5 |  |  | 6,976,359 |  |  | 5,873,217 |  |  | 18.8 |
| Total deposits |  | $ | 33,239,761 |  |  | $ | 32,374,997 |  |  | $ | 31,065,903 |  |  | 2.7 | % |  | 7.0 | % |  | $ | 32,638,878 |  |  | $ | 30,329,684 |  |  | 7.6 | %
Interest-bearing liabilities |  | $ | 23,190,465 |  |  | $ | 21,938,134 |  |  | $ | 20,989,149 |  |  | 5.7 | % |  | 10.5 | % |  | $ | 22,233,394 |  |  | $ | 20,813,224 |  |  | 6.8 | %
Stockholders’ equity |  | $ | 4,197,675 |  |  | $ | 4,062,311 |  |  | $ | 3,756,207 |  |  | 3.3 | % |  | 11.8 | % |  | $ | 4,061,977 |  |  | $ | 3,630,062 |  |  | 11.9 | %

(1) | Includes ASC 310-30 discount of $25.9 million, $30.0 million and $41.9 million for the three months ended September 30, 2018, June 30, 2018 and September 30, 2017, respectively, and $29.9 million and $45.3 million for the nine months ended September 30, 2018 and 2017, respectively.

(2) | Includes loans HFS.

12

EAST WEST BANCORP, INC. AND SUBSIDIARIES
QUARTER-TO-DATE AVERAGE BALANCES, YIELDS AND RATES
($ in thousands)
(unaudited)
Table 6 |  |  |  |  |  |  |  |  |  |  |  |
|  |  | Three Months Ended
|  |  | September 30, 2018 |  | June 30, 2018
|  |  | Average |  |  |  | Average |  | Average |  |  |  | Average
|  |  | Balance |  | Interest |  | Yield/Rate (1) |  | Balance |  | Interest |  | Yield/Rate (1)
Assets |  |  |  |  |  |  |  |  |  |  |  |
Interest-earning assets: |  |  |  |  |  |  |  |  |  |  |  |
| Interest-bearing cash and deposits with banks |  | $ | 2,521,002 |  |  | $ | 13,353 |  |  | 2.10 | % |  | $ | 2,316,194 |  |  | $ | 11,715 |  |  | 2.03 | %
| Resale agreements (2) |  | 1,002,500 |  |  | 7,393 |  |  | 2.93 | % |  | 996,154 |  |  | 7,182 |  |  | 2.89 | %
| Investment securities |  | 2,727,219 |  |  | 15,180 |  |  | 2.21 | % |  | 2,735,023 |  |  | 15,059 |  |  | 2.21 | %
| Loans (3) |  | 30,498,037 |  |  | 385,538 |  |  | 5.02 | % |  | 29,646,766 |  |  | 365,555 |  |  | 4.95 | %
| FHLB and FRB stock |  | 73,535 |  |  | 721 |  |  | 3.89 | % |  | 73,671 |  |  | 800 |  |  | 4.36 | %
| Total interest-earning assets |  | 36,822,293 |  |  | 422,185 |  |  | 4.55 | % |  | 35,767,808 |  |  | 400,311 |  |  | 4.49 | %
Noninterest-earning assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Cash and due from banks |  | 424,350 |  |  |  |  |  |  | 432,401 |  |  |  |  |  |  |
| Allowance for loan losses |  | (301,557 | ) |  |  |  |  |  | (292,645 | ) |  |  |  |  |  |
| Other assets |  | 1,714,176 |  |  |  |  |  |  | 1,661,331 |  |  |  |  |  |  |
| Total assets |  | $ | 38,659,262 |  |  |  |  |  |  |  |  | $ | 37,568,895 |  |  |  |  |  |  |
Liabilities and Stockholders’ Equity |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest-bearing liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Checking deposits |  | $ | 4,515,256 |  |  | $ | 9,551 |  |  | 0.84 | % |  | $ | 4,387,479 |  |  | $ | 8,416 |  |  | 0.77 | %
| Money market deposits |  | 7,613,030 |  |  | 21,411 |  |  | 1.12 | % |  | 7,880,601 |  |  | 18,805 |  |  | 0.96 | %
| Savings deposits |  | 2,194,792 |  |  | 2,308 |  |  | 0.42 | % |  | 2,214,793 |  |  | 2,035 |  |  | 0.37 | %
| Time deposits |  | 8,277,129 |  |  | 31,762 |  |  | 1.52 | % |  | 6,907,174 |  |  | 22,009 |  |  | 1.28 | %
| Federal funds purchased and other short-term borrowings |  | 58,218 |  |  | 643 |  |  | 4.38 | % |  | 11,695 |  |  | 124 |  |  | 4.25 | %
| FHLB advances |  | 325,246 |  |  | 2,732 |  |  | 3.33 | % |  | 324,665 |  |  | 2,552 |  |  | 3.15 | %
| Repurchase agreements (2) |  | 50,000 |  |  | 3,366 |  |  | 26.71 | % |  | 50,000 |  |  | 3,042 |  |  | 24.40 | %
| Long-term debt |  | 156,794 |  |  | 1,692 |  |  | 4.28 | % |  | 161,727 |  |  | 1,649 |  |  | 4.09 | %
| Total interest-bearing liabilities |  | 23,190,465 |  |  | 73,465 |  |  | 1.26 | % |  | 21,938,134 |  |  | 58,632 |  |  | 1.07 | %
Noninterest-bearing liabilities and stockholders’ equity: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Demand deposits |  | 10,639,554 |  |  |  |  |  |  | 10,984,950 |  |  |  |  |
| Accrued expenses and other liabilities |  | 631,568 |  |  |  |  |  |  | 583,500 |  |  |  |  |
| Stockholders’ equity |  | 4,197,675 |  |  |  |  |  |  | 4,062,311 |  |  |  |  |
| Total liabilities and stockholders’ equity |  | $ | 38,659,262 |  |  |  |  |  |  | $ | 37,568,895 |  |  |  |  |
Interest rate spread |  |  |  |  |  |  | 3.29 | % |  |  |  |  |  | 3.42 | %
Net interest income and net interest margin |  |  |  |  | $ | 348,720 |  |  | 3.76 | % |  |  |  | $ | 341,679 |  |  | 3.83 | %
Adjusted net interest income and adjusted net interest margin (4) |  |  |  |  | $ | 345,857 |  |  | 3.72 | % |  |  |  | $ | 335,380 |  |  | 3.76 | %

(1) | Annualized.

(2) | Average balances of resale and repurchase agreements have been reported net, pursuant to ASC 210-20-45, Balance Sheet Offsetting. The weighted-average yields of gross resale agreements were 2.63% and 2.60% for the three months ended September 30, 2018 and June 30, 2018, respectively. The weighted-average rates of gross repurchase agreements were 4.65% and 4.43% for the three months ended September 30, 2018 and June 30, 2018, respectively.

(3) | Includes loans HFS and ASC 310-30 discount of $25.9 million and $30.0 million for the three months ended September 30, 2018 and June 30, 2018, respectiv ely.

(4) | See reconciliation of GAAP to non-GAAP financial measures in Table 14.

13

EAST WEST BANCORP, INC. AND SUBSIDIARIES
QUARTER-TO-DATE AVERAGE BALANCES, YIELDS AND RATES
($ in thousands)
(unaudited)
Table 7 |  |  |  |  |  |  |  |  |  |  |  |
|  |  | Three Months Ended
|  |  | September 30, 2018 |  | September 30, 2017
|  |  | 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 |  | $ | 2,521,002 |  |  | $ | 13,353 |  |  | 2.10 | % |  | $ | 2,344,561 |  |  | $ | 9,630 |  |  | 1.63 | %
| Resale agreements (2) |  | 1,002,500 |  |  | 7,393 |  |  | 2.93 | % |  | 1,297,826 |  |  | 7,901 |  |  | 2.42 | %
| Investment securities |  | 2,727,219 |  |  | 15,180 |  |  | 2.21 | % |  | 2,963,122 |  |  | 14,828 |  |  | 1.99 | %
| Loans (3) |  | 30,498,037 |  |  | 385,538 |  |  | 5.02 | % |  | 27,529,779 |  |  | 306,939 |  |  | 4.42 | %
| FHLB and FRB stock |  | 73,535 |  |  | 721 |  |  | 3.89 | % |  | 73,245 |  |  | 612 |  |  | 3.31 | %
| Total interest-earning assets |  | 36,822,293 |  |  | 422,185 |  |  | 4.55 | % |  | 34,208,533 |  |  | 339,910 |  |  | 3.94 | %
Noninterest-earning assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Cash and due from banks |  | 424,350 |  |  |  |  |  |  | 387,705 |  |  |  |  |  |  |
| Allowance for loan losses |  | (301,557 | ) |  |  |  |  |  | (276,467 | ) |  |  |  |  |  |
| Other assets |  | 1,714,176 |  |  |  |  |  |  | 1,617,796 |  |  |  |  |  |  |
| Total assets |  | $ | 38,659,262 |  |  |  |  |  |  |  |  | $ | 35,937,567 |  |  |  |  |  |  |
Liabilities and Stockholders’ Equity |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest-bearing liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Checking deposits |  | $ | 4,515,256 |  |  | $ | 9,551 |  |  | 0.84 | % |  | $ | 4,014,290 |  |  | $ | 4,768 |  |  | 0.47 | %
| Money market deposits |  | 7,613,030 |  |  | 21,411 |  |  | 1.12 | % |  | 7,997,648 |  |  | 11,828 |  |  | 0.59 | %
| Savings deposits |  | 2,194,792 |  |  | 2,308 |  |  | 0.42 | % |  | 2,423,312 |  |  | 1,810 |  |  | 0.30 | %
| Time deposits |  | 8,277,129 |  |  | 31,762 |  |  | 1.52 | % |  | 5,974,793 |  |  | 12,680 |  |  | 0.84 | %
| Federal funds purchased and other short-term borrowings |  | 58,218 |  |  | 643 |  |  | 4.38 | % |  | 29,661 |  |  | 212 |  |  | 2.84 | %
| FHLB advances |  | 325,246 |  |  | 2,732 |  |  | 3.33 | % |  | 322,973 |  |  | 1,947 |  |  | 2.39 | %
| Repurchase agreements (2) |  | 50,000 |  |  | 3,366 |  |  | 26.71 | % |  | 50,000 |  |  | 2,122 |  |  | 16.84 | %
| Long-term debt |  | 156,794 |  |  | 1,692 |  |  | 4.28 | % |  | 176,472 |  |  | 1,388 |  |  | 3.12 | %
| Total interest-bearing liabilities |  | 23,190,465 |  |  | 73,465 |  |  | 1.26 | % |  | 20,989,149 |  |  | 36,755 |  |  | 0.69 | %
Noninterest-bearing liabilities and stockholders’ equity: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Demand deposits |  | 10,639,554 |  |  |  |  |  |  | 10,655,860 |  |  |  |  |
| Accrued expenses and other liabilities |  | 631,568 |  |  |  |  |  |  | 536,351 |  |  |  |  |
| Stockholders’ equity |  | 4,197,675 |  |  |  |  |  |  | 3,756,207 |  |  |  |  |
| Total liabilities and stockholders’ equity |  | $ | 38,659,262 |  |  |  |  |  |  | $ | 35,937,567 |  |  |  |  |
Interest rate spread |  |  |  |  |  |  | 3.29 | % |  |  |  |  |  | 3.25 | %
Net interest income and net interest margin |  |  |  |  | $ | 348,720 |  |  | 3.76 | % |  |  |  | $ | 303,155 |  |  | 3.52 | %
Adjusted net interest income and adjusted net interest margin (4) |  |  |  |  | $ | 345,857 |  |  | 3.72 | % |  |  |  | $ | 298,620 |  |  | 3.46 | %

(1) | Annualized.

(2) | Average balances of resale and repurchase agreements have been reported net, pursuant to ASC 210-20-45, Balance Sheet Offsetting. The weighted-average yields of gross resale agreements are 2.63% and 2.29% for the three months ended September 30, 2018 and 2017, respectively. The weighted-average rates of gross repurchase agreements are 4.65% and 3.56% for the three months ended September 30, 2018 and 2017, respectively.

(3) | Includes loans HFS and ASC 310-30 discount of $25.9 million and $41.9 million for the three months ended September 30, 2018 and 2017, respectively.

(4) | See reconciliation of GAAP to non-GAAP financial measures in Table 14.

14

EAST WEST BANCORP, INC. AND SUBSIDIARIES
YEAR-TO-DATE AVERAGE BALANCES, YIELDS AND RATES
($ in thousands)
(unaudited)
Table 8 |  |  |  |  |  |  |  |  |  |  |  |
|  |  | Nine Months Ended
|  |  | September 30, 2018 |  | September 30, 2017
|  |  | 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 |  | $ | 2,387,712 |  |  | $ | 36,013 |  |  | 2.02 | % |  | $ | 2,073,322 |  |  | $ | 22,298 |  |  | 1.44 | %
| Resale agreements (2) |  | 1,016,044 |  |  | 21,509 |  |  | 2.83 | % |  | 1,552,198 |  |  | 25,222 |  |  | 2.17 | %
| Investment securities |  | 2,771,727 |  |  | 45,695 |  |  | 2.20 | % |  | 3,060,688 |  |  | 43,936 |  |  | 1.92 | %
| Loans (3) |  | 29,790,281 |  |  | 1,088,997 |  |  | 4.89 | % |  | 26,783,082 |  |  | 872,039 |  |  | 4.35 | %
| FHLB and FRB stock |  | 73,618 |  |  | 2,155 |  |  | 3.91 | % |  | 73,651 |  |  | 1,859 |  |  | 3.37 | %
| Total interest-earning assets |  | 36,039,382 |  |  | 1,194,369 |  |  | 4.43 | % |  | 33,542,941 |  |  | 965,354 |  |  | 3.85 | %
Noninterest-earning assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Cash and due from banks |  | 433,299 |  |  |  |  |  |  | 387,440 |  |  |  |  |  |  |
| Allowance for loan losses |  | (293,403 | ) |  |  |  |  |  | (268,477 | ) |  |  |  |  |  |
| Other assets |  | 1,695,156 |  |  |  |  |  |  | 1,628,638 |  |  |  |  |  |  |
| Total assets |  | $ | 37,874,434 |  |  |  |  |  |  | $ | 35,290,542 |  |  |  |  |  |  |
Liabilities and Stockholders’ Equity |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest-bearing liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Checking deposits |  | $ | 4,487,314 |  |  | $ | 24,694 |  |  | 0.74 | % |  | $ | 3,830,004 |  |  | $ | 12,538 |  |  | 0.44 | %
| Money market deposits |  | 7,919,845 |  |  | 56,056 |  |  | 0.95 | % |  | 7,968,457 |  |  | 30,409 |  |  | 0.51 | %
| Savings deposits |  | 2,286,402 |  |  | 6,364 |  |  | 0.37 | % |  | 2,334,752 |  |  | 4,525 |  |  | 0.26 | %
| Time deposits |  | 6,976,359 |  |  | 68,319 |  |  | 1.31 | % |  | 5,873,217 |  |  | 34,331 |  |  | 0.78 | %
| Federal funds purchased and other short-term borrowings |  | 23,805 |  |  | 774 |  |  | 4.35 | % |  | 40,772 |  |  | 877 |  |  | 2.88 | %
| FHLB advances |  | 327,978 |  |  | 7,544 |  |  | 3.08 | % |  | 414,355 |  |  | 5,738 |  |  | 1.85 | %
| Repurchase agreements (2) |  | 50,000 |  |  | 8,714 |  |  | 23.30 | % |  | 170,330 |  |  | 7,538 |  |  | 5.92 | %
| Long-term debt |  | 161,691 |  |  | 4,812 |  |  | 3.98 | % |  | 181,337 |  |  | 4,030 |  |  | 2.97 | %
| Total interest-bearing liabilities |  | 22,233,394 |  |  | 177,277 |  |  | 1.07 | % |  | 20,813,224 |  |  | 99,986 |  |  | 0.64 | %
Noninterest-bearing liabilities and stockholders’ equity: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Demand deposits |  | 10,968,958 |  |  |  |  |  |  | 10,323,254 |  |  |  |  |
| Accrued expenses and other liabilities |  | 610,105 |  |  |  |  |  |  | 524,002 |  |  |  |  |
| Stockholders’ equity |  | 4,061,977 |  |  |  |  |  |  | 3,630,062 |  |  |  |  |
| Total liabilities and stockholders’ equity |  | $ | 37,874,434 |  |  |  |  |  |  | $ | 35,290,542 |  |  |  |  |
Interest rate spread |  |  |  |  |  |  | 3.36 | % |  |  |  |  |  | 3.21 | %
Net interest income and net interest margin |  |  |  |  | $ | 1,017,092 |  |  | 3.77 | % |  |  |  | $ | 865,368 |  |  | 3.45 | %
Adjusted net interest income and net interest margin (4) |  |  |  |  | $ | 1,002,730 |  |  | 3.72 | % |  |  |  | $ | 851,339 |  |  | 3.39 | %

(1) | Annualized

(2) | Average balances of resale and repurchase agreements have been reported net, pursuant to ASC 210-20-45, Balance Sheet Offsetting. The weighted-average yields of gross resale agreements are 2.59% and 2.13% for the nine months ended September 30, 2018 and 2017, respectively. The weighted-average rates of gross repurchase agreements are 4.36% and 3.42% for the nine months ended September 30, 2018 and 2017, respectively.

(3) | Includes loans HFS and ASC 310-30 discount of $29.9 million and $45.3 million for the nine months ended September 30, 2018 and 2017, respectively.

(4) | See reconciliation of GAAP to non-GAAP financial measures in Table 14.

15

EAST WEST BANCORP, INC. AND SUBSIDIARIES
SELECTED RATIOS
(unaudited)
Table 9 |  |  |  |  |  |  |  |  |  |  |
|  | Three Months Ended (1) |  | September 30, 2018 Basis Point Change
|  |  | September 30, 2018 |  | June 30, 2018 |  | September 30, 2017 |  | Qtr-o-Qtr |  | Yr-o-Yr |
| Return on average assets |  | 1.76 | % |  | 1.84 | % |  | 1.46 | % |  | (8 | ) | bps | 30 |  | bps
| Adjusted return on average assets (2) |  | 1.76 | % |  | 1.84 | % |  | 1.44 | % |  | (8 | ) |  | 32 |  |
| Return on average equity |  | 16.19 | % |  | 17.02 | % |  | 14.01 | % |  | (83 | ) |  | 218 |  |
| Adjusted return on average equity (2) |  | 16.19 | % |  | 17.02 | % |  | 13.78 | % |  | (83 | ) |  | 241 |  |
| Return on average tangible equity (2) |  | 18.47 | % |  | 19.50 | % |  | 16.33 | % |  | (103 | ) |  | 214 |  |
| Adjusted return on average tangible equity (2) |  | 18.47 | % |  | 19.50 | % |  | 16.06 | % |  | (103 | ) |  | 241 |  |
| Interest rate spread |  | 3.29 | % |  | 3.42 | % |  | 3.25 | % |  | (13 | ) |  | 4 |  |
| Net interest margin |  | 3.76 | % |  | 3.83 | % |  | 3.52 | % |  | (7 | ) |  | 24 |  |
| Adjusted net interest margin (2) |  | 3.72 | % |  | 3.76 | % |  | 3.46 | % |  | (4 | ) |  | 26 |  |
| Average loan yield |  | 5.02 | % |  | 4.95 | % |  | 4.42 | % |  | 7 |  |  | 60 |  |
| Adjusted average loan yield (2) |  | 4.97 | % |  | 4.86 | % |  | 4.35 | % |  | 11 |  |  | 62 |  |
| Yield on average interest-earning assets |  | 4.55 | % |  | 4.49 | % |  | 3.94 | % |  | 6 |  |  | 61 |  |
| Cost of interest-bearing deposits |  | 1.14 | % |  | 0.96 | % |  | 0.60 | % |  | 18 |  |  | 54 |  |
| Cost of deposits |  | 0.78 | % |  | 0.64 | % |  | 0.40 | % |  | 14 |  |  | 38 |  |
| Cost of funds |  | 0.86 | % |  | 0.71 | % |  | 0.46 | % |  | 15 |  |  | 40 |  |
| Adjusted pre-tax, pre-provision profitability ratio (2) |  | 2.44 | % |  | 2.50 | % |  | 2.32 | % |  | (6 | ) |  | 12 |  |
| Adjusted noninterest expense/average assets (2) |  | 1.62 | % |  | 1.66 | % |  | 1.53 | % |  | (4 | ) |  | 9 |  |
| Efficiency ratio |  | 45.50 | % |  | 45.50 | % |  | 46.61 | % |  | 0 |  |  | (111 | ) |
| Adjusted efficiency ratio (2) |  | 39.89 | % |  | 39.89 | % |  | 39.79 | % |  | 0 |  | bps | 10 |  | bps
|  |  | Nine Months Ended (1) |  | September 30, 2018 Basis Point Change |  |  |  |
|  |  | September 30, 2018 |  | September 30, 2017 |  | Yr-o-Yr |  |  |  |
| Return on average assets |  | 1.87 | % |  | 1.59 | % |  | 28 |  | bps |  |  |  |
| Adjusted return on average assets (2) |  | 1.80 | % |  | 1.43 | % |  | 37 |  |  |  |  |  |
| Return on average equity |  | 17.47 | % |  | 15.50 | % |  | 197 |  |  |  |  |  |
| Adjusted return on average equity (2) |  | 16.74 | % |  | 13.89 | % |  | 285 |  |  |  |  |  |
| Return on average tangible equity (2) |  | 20.03 | % |  | 18.15 | % |  | 188 |  |  |  |  |  |
| Adjusted return on average tangible equity (2) |  | 19.20 | % |  | 16.28 | % |  | 292 |  |  |  |  |  |
| Interest rate spread |  | 3.36 | % |  | 3.21 | % |  | 15 |  |  |  |  |  |
| Net interest margin |  | 3.77 | % |  | 3.45 | % |  | 32 |  |  |  |  |  |
| Adjusted net interest margin (2) |  | 3.72 | % |  | 3.39 | % |  | 33 |  |  |  |  |  |
| Average loan yield |  | 4.89 | % |  | 4.35 | % |  | 54 |  |  |  |  |  |
| Adjusted average loan yield (2) |  | 4.82 | % |  | 4.28 | % |  | 54 |  |  |  |  |  |
| Yield on average interest-earning assets |  | 4.43 | % |  | 3.85 | % |  | 58 |  |  |  |  |  |
| Cost of interest-bearing deposits |  | 0.96 | % |  | 0.55 | % |  | 41 |  |  |  |  |  |
| Cost of deposits |  | 0.64 | % |  | 0.36 | % |  | 28 |  |  |  |  |  |
| Cost of funds |  | 0.71 | % |  | 0.43 | % |  | 28 |  |  |  |  |  |
| Adjusted pre-tax, pre-provision profitability ratio (2) |  | 2.44 | % |  | 2.23 | % |  | 21 |  |  |  |  |  |
| Adjusted noninterest expense/average assets (2) |  | 1.64 | % |  | 1.57 | % |  | 7 |  |  |  |  |  |
| Efficiency ratio |  | 44.37 | % |  | 45.10 | % |  | (73 | ) |  |  |  |  |
| Adjusted efficiency ratio (2) |  | 40.13 | % |  | 41.38 | % |  | (125 | ) | bps |  |  |  |

(1) | Annualized except for efficiency ratio.

(2) | See reconciliation of GAAP to non-GAAP financial measures in Tables 12, 13, 14 and 15.

16

EAST WEST BANCORP, INC. AND SUBSIDIARIES
ALLOWANCE FOR CREDIT LOSSES
($ in thousands)
(unaudited)
Table 10 |  |  |  |  |  |  |  |  |  |
|  |  | Three Months Ended |  | Nine Months Ended
|  |  | September 30, 2018 |  | June 30, 2018 |  | September 30, 2017 |  | September 30, 2018 |  | September 30, 2017
Non-Purchased Credit Impaired (“Non-PCI”) Loans |  |  |  |  |  |  |  |  |  |
| Allowance for non-PCI loans, beginning of period |  | $ | 301,511 |  |  | $ | 297,607 |  |  | $ | 276,238 |  |  | $ | 287,070 |  |  | $ | 260,402 |
| Provision for loan losses on non-PCI loans |  | 12,650 |  |  | 15,139 |  |  | 13,458 |  |  | 47,722 |  |  | 32,184 |
| Net (charge-offs) recoveries: |  |  |  |  |  |  |  |  |  |
| Commercial lending: |  |  |  |  |  |  |  |  |  |
| C&I |  | (4,051 | ) |  | (12,383 | ) |  | (5,397 | ) |  | (27,600 | ) |  | (10,597 | )
| CRE |  | 2 |  |  | 2 |  |  | 549 |  |  | 431 |  |  | 1,541 |
| Multifamily residential |  | 77 |  |  | 1,061 |  |  | 634 |  |  | 1,471 |  |  | 1,329 |
| Construction and land |  | 23 |  |  | 258 |  |  | 61 |  |  | 716 |  |  | 24 |
| Consumer lending: |  |  |  |  |  |  |  |  |  |
| Single-family residential |  | 295 |  |  | 629 |  |  | 175 |  |  | 1,107 |  |  | 428 |
| HELOCs |  | — |  |  | — |  |  | (55 | ) |  | — |  |  | (31 | )
| Other consumer |  | (5 | ) |  | (162 | ) |  | (8 | ) |  | (183 | ) |  | 125 |
| Total net charge-offs |  | (3,659 | ) |  | (10,595 | ) |  | (4,041 | ) |  | (24,058 | ) |  | (7,181 | )
| Foreign currency translation adjustments |  | (492 | ) |  | (640 | ) |  | 203 |  |  | (724 | ) |  | 453 |
| Allowance for non-PCI loans, end of period |  | 310,010 |  |  | 301,511 |  |  | 285,858 |  |  | 310,010 |  |  | 285,858 |
Purchased Credit Impaired (“PCI”) Loans |  |  |  |  |  |  |  |  |  |  |  |
| Allowance for PCI loans, beginning of period |  | 39 |  |  | 47 |  |  | 78 |  |  | 58 |  |  | 118 |
| Reversal of loan losses on PCI loans |  | (8 | ) |  | (8 | ) |  | (10 | ) |  | (27 | ) |  | (50 | )
| Allowance for PCI loans, end of period |  | 31 |  |  | 39 |  |  | 68 |  |  | 31 |  |  | 68 |
| Allowance for loan losses |  | 310,041 |  |  | 301,550 |  |  | 285,926 |  |  | 310,041 |  |  | 285,926 |
Unfunded Credit Facilities |  |  |  |  |  |  |  |  |  |  |  |  |
| Allowance for unfunded credit reserves, beginning of period |  | 14,019 |  |  | 13,614 |  |  | 15,188 |  |  | 13,318 |  |  | 16,121 |
| (Reversal of) provision for unfunded credit reserves |  | (2,100 | ) |  | 405 |  |  | (452 | ) |  | (1,399 | ) |  | (1,385 | )
| Allowance for unfunded credit reserves, end of period |  | 11,919 |  |  | 14,019 |  |  | 14,736 |  |  | 11,919 |  |  | 14,736 |
| Allowance for credit losses |  | $ | 321,960 |  |  | $ | 315,569 |  |  | $ | 300,662 |  |  | $ | 321,960 |  |  | $ | 300,662 |

17

| EAST WEST BANCORP, INC. AND SUBSIDIARIES
| CREDIT QUALITY
| ($ in thousands)
| (unaudited)
Table 11 |  |  |  |  |  |
Non-PCI Nonperforming Assets |  | September 30, 2018 |  | June 30, 2018 |  | September 30, 2017
Nonaccrual loans: |  |  |  |  |  |
Commercial lending: |  |  |  |  |  |
| C&I |  | $ | 72,797 |  |  | $ | 57,097 |  |  | $ | 73,384 |
| CRE |  | 24,752 |  |  | 25,748 |  |  | 24,802 |
| Multifamily residential |  | 1,761 |  |  | 1,727 |  |  | 2,620 |
| Construction and land |  | — |  |  | — |  |  | 4,183 |
Consumer lending: |  |  |  |  |  |
| Single-family residential |  | 5,222 |  |  | 7,625 |  |  | 6,639 |
| HELOCs |  | 6,872 |  |  | 8,135 |  |  | 3,097 |
| Other consumer |  | 2,491 |  |  | 2,491 |  |  | — |
| Total nonaccrual loans |  | 113,895 |  |  | 102,823 |  |  | 114,725 |
Other real estate owned, net |  | 748 |  |  | 709 |  |  | 2,289 |
| Total nonperforming assets |  | $ | 114,643 |  |  | $ | 103,532 |  |  | $ | 117,014 |
Credit Quality Ratios |  | September 30, 2018 |  | June 30, 2018 |  | September 30, 2017
Non-PCI nonperforming assets to total assets (1) |  | 0.29 | % |  | 0.27 | % |  | 0.32 | %
Non-PCI nonaccrual loans to loans held-for-investment (1) |  | 0.36 | % |  | 0.34 | % |  | 0.40 | %
Allowance for loan losses to loans held-for-investment (1) |  | 0.99 | % |  | 1.00 | % |  | 1.00 | %
Allowance for loan losses to non-PCI nonaccrual loans |  | 272.22 | % |  | 293.27 | % |  | 249.23 | %
Annualized quarterly net charge-offs to average loans held-for-investment |  | 0.05 | % |  | 0.14 | % |  | 0.06 | %

(1) | Total assets and loans held-for-investment include PCI loans of $345.0 million, $383.7 million and $532.3 million as of September 30, 2018, June 30, 2018 and September 30, 2017, respectively.

18

EAST WEST BANCORP, INC. AND SUBSIDIARIES
GAAP TO NON-GAAP RECONCILIATION
($ and shares in thousands, except for per share data)
(unaudited)
Table 12 |  |  |  |  |  |  |  |
During the first quarter of 2017, the Company consummated a sale and leaseback transaction on a commercial property and recognized a pre-tax gain on sale of $71.7 million. During the third quarter of 2017, the Company sold its insurance brokerage business, East West Insurance Services, Inc. (“EWIS”) and recognized a pre-tax gain on sale of $3.8 million. During the first quarter of 2018, the Company sold its Desert Community Bank (“DCB”) branches and recognized a pre-tax gain on sale of $31.5 million. Management believes that presenting the computations of the adjusted net income, adjusted diluted earnings per common share, adjusted return on average assets and adjusted return on average equity that exclude the impact of after-tax gains on the sales of the commercial property, EWIS business and DCB branches (where applicable) provides clarity to financial statement users regarding the ongoing performance of the Company and allows comparability to prior periods.
|  |  |  | Three Months Ended
|  |  |  | September 30, 2018 |  | June 30, 2018 |  | September 30, 2017
Net income |  | (a) |  | $ | 171,302 |  |  | $ | 172,349 |  |  | $ | 132,660 |
Less: Gain on sale of business, net of tax (1) |  | (b) |  | — |  |  | — |  |  | (2,206 | )
Adjusted net income |  | (c) |  | $ | 171,302 |  |  | $ | 172,349 |  |  | $ | 130,454 |
Diluted weighted average number of shares outstanding |  | (d) |  | 146,173 |  |  | 146,091 |  |  | 145,882 |
Diluted EPS |  | (a)/(d) |  | $ | 1.17 |  |  | $ | 1.18 |  |  | $ | 0.91 |
Diluted EPS impact of gain on sale of business, net of tax |  | (b)/(d) |  | — |  |  | — |  |  | (0.02 | )
Adjusted diluted EPS |  |  |  | $ | 1.17 |  |  | $ | 1.18 |  |  | $ | 0.89 |
Average total assets |  | (e) |  | $ | 38,659,262 |  |  | $ | 37,568,895 |  |  | $ | 35,937,567 |
Average stockholders’ equity |  | (f) |  | $ | 4,197,675 |  |  | $ | 4,062,311 |  |  | $ | 3,756,207 |
Return on average assets (2) |  | (a)/(e) |  | 1.76 | % |  | 1.84 | % |  | 1.46 | %
Adjusted return on average assets (2) |  | (c)/(e) |  | 1.76 | % |  | 1.84 | % |  | 1.44 | %
Return on average equity (2) |  | (a)/(f) |  | 16.19 | % |  | 17.02 | % |  | 14.01 | %
Adjusted return on average equity (2) |  | (c)/(f) |  | 16.19 | % |  | 17.02 | % |  | 13.78 | %
|  |  |  | Nine Months Ended |  |
|  |  |  | September 30, 2018 |  | September 30, 2017 |  |
Net income |  | (g) |  | $ | 530,683 |  |  | $ | 420,726 |  |  |
Less: Gain on sale of the commercial property, net of tax (1) |  | (h) |  | — |  |  | (41,526 | ) |  |
Gain on sale of business, net of tax (1) |  | (i) |  | (22,167 | ) |  | (2,206 | ) |  |
Adjusted net income |  | (j) |  | $ | 508,516 |  |  | $ | 376,994 |  |  |
Diluted weighted average number of shares outstanding |  | (k) |  | 146,158 |  |  | 145,849 |  |  |
Diluted EPS |  | (g)/(k) |  | $ | 3.63 |  |  | $ | 2.88 |  |  |
Diluted EPS impact of gain on sale of the commercial property, net of tax |  | (h)/(k) |  | — |  |  | (0.28 | ) |  |
Diluted EPS impact of gain on sale of business, net of tax |  | (i)/(k) |  | (0.15 | ) |  | (0.02 | ) |  |
Adjusted diluted EPS |  |  |  | $ | 3.48 |  |  | $ | 2.58 |  |  |
Average total assets |  | (l) |  | $ | 37,874,434 |  |  | $ | 35,290,542 |  |  |
Average stockholders’ equity |  | (m) |  | $ | 4,061,977 |  |  | $ | 3,630,062 |  |  |
Return on average assets (2) |  | (g)/(l) |  | 1.87 | % |  | 1.59 | % |  |
Adjusted return on average assets (2) |  | (j)/(l) |  | 1.80 | % |  | 1.43 | % |  |
Return on average equity (2) |  | (g)/(m) |  | 17.47 | % |  | 15.50 | % |  |
Adjusted return on average equity (2) |  | (j)/(m) |  | 16.74 | % |  | 13.89 | % |  |

(1) | Statutory rate of 29.56% was applied for the three months ended June 30, 2018, and the three and nine months ended September 30, 2018. Statutory rate of 42.05% was applied for the three and nine months ended September 30, 2017.

(2) | Annualized.

19

EAST WEST BANCORP, INC. AND SUBSIDIARIES
GAAP TO NON-GAAP RECONCILIATION
($ in thousands)
(unaudited)
Table 13 |  |  |  |  |  |  |  |
Adjusted efficiency ratio represents adjusted noninterest expense divided by adjusted revenue. Adjusted pre-tax, pre-provision profitability ratio represents the aggregate of adjusted revenue less adjusted noninterest expense, divided by average total assets. Adjusted revenue represents the aggregate of net interest income and adjusted noninterest income, where adjusted noninterest income excludes the gains on the sales of the commercial property, EWIS business and DCB branches that were sold in the first quarter of 2017, third quarter of 2017 and first quarter of 2018, respectively (where applicable). Adjusted noninterest expense excludes the amortization of tax credit and other investments and the amortization of core deposit intangibles. Management believes that the measures and ratios presented below provide clarity to financial statement users regarding the ongoing performance of the Company and allow comparability to prior periods.
|  |  |  | Three Months Ended
|  |  |  | September 30, 2018 |  | June 30, 2018 |  | September 30, 2017
Net interest income before provision for credit losses |  | (a) |  | $ | 348,720 |  |  | $ | 341,679 |  |  | $ | 303,155 |
Total noninterest income |  |  |  | 46,502 |  |  | 48,268 |  |  | 49,470 |
Total revenue |  | (b) |  | 395,222 |  |  | 389,947 |  |  | 352,625 |
Noninterest income |  |  |  | 46,502 |  |  | 48,268 |  |  | 49,470 |
Less: Gain on sale of business |  |  |  | — |  |  | — |  |  | (3,807 | )
Adjusted noninterest income |  | (c) |  | $ | 46,502 |  |  | $ | 48,268 |  |  | $ | 45,663 |
Adjusted revenue |  | (a)+(c) = (d) |  | $ | 395,222 |  |  | $ | 389,947 |  |  | $ | 348,818 |
Total noninterest expense |  | (e) |  | $ | 179,815 |  |  | $ | 177,419 |  |  | $ | 164,345 |
Less: Amortization of tax credit and other investments |  |  |  | (20,789 | ) |  | (20,481 | ) |  | (23,827 | )
Amortization of core deposit intangibles |  |  |  | (1,369 | ) |  | (1,373 | ) |  | (1,735 | )
Adjusted noninterest expense |  | (f) |  | $ | 157,657 |  |  | $ | 155,565 |  |  | $ | 138,783 |
Efficiency ratio |  | (e)/(b) |  | 45.50 | % |  | 45.50 | % |  | 46.61 | %
Adjusted efficiency ratio |  | (f)/(d) |  | 39.89 | % |  | 39.89 | % |  | 39.79 | %
Adjusted pre-tax, pre-provision income |  | (d)-(f) = (g) |  | $ | 237,565 |  |  | $ | 234,382 |  |  | $ | 210,035 |
Average total assets |  | (h) |  | $ | 38,659,262 |  |  | $ | 37,568,895 |  |  | $ | 35,937,567 |
Adjusted pre-tax, pre-provision profitability ratio (1) |  | (g)/(h) |  | 2.44 | % |  | 2.50 | % |  | 2.32 | %
Adjusted noninterest expense (1)/average assets |  | (f)/(h) |  | 1.62 | % |  | 1.66 | % |  | 1.53 | %
|  |  |  | Nine Months Ended |  |
|  |  |  | September 30, 2018 |  | September 30, 2017 |  |
Net interest income before provision for credit losses |  | (i) |  | $ | 1,017,092 |  |  | $ | 865,368 |  |  |
Total noninterest income |  |  |  | 169,214 |  |  | 212,542 |  |  |
Total revenue |  | (j) |  | 1,186,306 |  |  | 1,077,910 |  |  |
Noninterest income |  |  |  | 169,214 |  |  | 212,542 |  |  |
Less: Gain on sale of the commercial property |  |  |  | — |  |  | (71,654 | ) |  |
Gain on sale of business |  |  |  | (31,470 | ) |  | (3,807 | ) |  |
Adjusted noninterest income |  | (k) |  | $ | 137,744 |  |  | $ | 137,081 |  |  |
Adjusted revenue |  | (i)+(k) = (l) |  | $ | 1,154,836 |  |  | $ | 1,002,449 |  |  |
Total noninterest expense |  | (m) |  | $ | 526,369 |  |  | $ | 486,188 |  |  |
Less: Amortization of tax credit and other investments |  |  |  | (58,670 | ) |  | (66,059 | ) |  |
Amortization of core deposit intangibles |  |  |  | (4,227 | ) |  | (5,314 | ) |  |
Adjusted noninterest expense |  | (n) |  | $ | 463,472 |  |  | $ | 414,815 |  |  |
Efficiency ratio |  | (m)/(j) |  | 44.37 | % |  | 45.10 | % |  |
Adjusted efficiency ratio |  | (n)/(l) |  | 40.13 | % |  | 41.38 | % |  |
Adjusted pre-tax, pre-provision income |  | (l)-(n) = (o) |  | $ | 691,364 |  |  | $ | 587,634 |  |  |
Average total assets |  | (p) |  | $ | 37,874,434 |  |  | $ | 35,290,542 |  |  |
Adjusted pre-tax, pre-provision profitability ratio (1) |  | (o)/(p) |  | 2.44 | % |  | 2.23 | % |  |
Adjusted noninterest expense (1)/average assets |  | (n)/(p) |  | 1.64 | % |  | 1.57 | % |  |

(1) | Annualized.

20

EAST WEST BANCORP, INC. AND SUBSIDIARIES
GAAP TO NON-GAAP RECONCILIATION
($ in thousands)
(unaudited)
Table 14 |  |  |  |  |  |  |  |  |  |  |  |
Management believes that presenting the adjusted average loan yield and adjusted net interest margin that exclude the ASC 310-30 discount accretion impact provides clarity to financial statement users regarding the change in loan contractual yields and allows comparability to prior periods.
|  |  |  | Three Months Ended |  | Nine Months Ended
Yield on Average Loans |  |  |  | September 30, 2018 |  | June 30, 2018 |  | September 30, 2017 |  | September 30, 2018 |  | September 30, 2017
Interest income on loans |  | (a) |  | $ | 385,538 |  |  | $ | 365,555 |  |  | $ | 306,939 |  |  | $ | 1,088,997 |  |  | $ | 872,039 |
Less: ASC 310-30 discount accretion income |  |  |  | (2,863 | ) |  | (6,299 | ) |  | (4,535 | ) |  | (14,362 | ) |  | (14,029 | )
Adjusted interest income on loans |  | (b) |  | $ | 382,675 |  |  | $ | 359,256 |  |  | $ | 302,404 |  |  | $ | 1,074,635 |  |  | $ | 858,010 |
Average loans |  | (c) |  | $ | 30,498,037 |  |  | $ | 29,646,766 |  |  | $ | 27,529,779 |  |  | $ | 29,790,281 |  |  | $ | 26,783,082 |
Add: ASC 310-30 discount |  |  |  | 25,852 |  |  | 29,997 |  |  | 41,875 |  |  | 29,939 |  |  | 45,255 |
Adjusted average loans |  | (d) |  | $ | 30,523,889 |  |  | $ | 29,676,763 |  |  | $ | 27,571,654 |  |  | $ | 29,820,220 |  |  | $ | 26,828,337 |
Average loan yield (1) |  | (a)/(c) |  | 5.02 | % |  | 4.95 | % |  | 4.42 | % |  | 4.89 | % |  | 4.35 | %
Adjusted average loan yield (1) |  | (b)/(d) |  | 4.97 | % |  | 4.86 | % |  | 4.35 | % |  | 4.82 | % |  | 4.28 | %
Net Interest Margin |  |  |  |  |  |  |  |  |  |  |  |
Net interest income |  | (e) |  | $ | 348,720 |  |  | $ | 341,679 |  |  | $ | 303,155 |  |  | $ | 1,017,092 |  |  | $ | 865,368 |
Less: ASC 310-30 discount accretion income |  |  |  | (2,863 | ) |  | (6,299 | ) |  | (4,535 | ) |  | (14,362 | ) |  | (14,029 | )
Adjusted net interest income |  | (f) |  | $ | 345,857 |  |  | $ | 335,380 |  |  | $ | 298,620 |  |  | $ | 1,002,730 |  |  | $ | 851,339 |
Average interest-earning assets |  | (g) |  | $ | 36,822,293 |  |  | $ | 35,767,808 |  |  | $ | 34,208,533 |  |  | $ | 36,039,382 |  |  | $ | 33,542,941 |
Add: ASC 310-30 discount |  |  |  | 25,852 |  |  | 29,997 |  |  | 41,875 |  |  | 29,939 |  |  | 45,255 |
Adjusted average interest-earning assets |  | (h) |  | $ | 36,848,145 |  |  | $ | 35,797,805 |  |  | $ | 34,250,408 |  |  | $ | 36,069,321 |  |  | $ | 33,588,196 |
Net interest margin (1) |  | (e)/(g) |  | 3.76 | % |  | 3.83 | % |  | 3.52 | % |  | 3.77 | % |  | 3.45 | %
Adjusted net interest margin (1) |  | (f)/(h) |  | 3.72 | % |  | 3.76 | % |  | 3.46 | % |  | 3.72 | % |  | 3.39 | %

(1) | Annualized.

21

EAST WEST BANCORP, INC. AND SUBSIDIARIES
GAAP TO NON-GAAP RECONCILIATION
($ in thousands)
(unaudited)
Table 15 |  |  |  |  |  |  |  |
The Company uses certain non-GAAP financial measures to provide supplemental information regarding the Company’s performance. Tangible equity and tangible equity to tangible assets ratio are non-GAAP financial measures. Tangible equity and tangible assets represent stockholders’ equity and total assets, respectively, which have been reduced by goodwill and other intangible assets. Given that the use of such measures and ratios is more prevalent in the banking industry, and such measures and ratios are used by banking regulators and analysts, the Company has included them below for discussion.
|  |  |  | September 30, 2018 |  | June 30, 2018 |  | September 30, 2017
Stockholders’ equity |  | (a) |  | $ | 4,244,850 |  |  | $ | 4,114,284 |  |  | $ | 3,781,896 |
Less: Goodwill |  |  |  | (465,547 | ) |  | (465,547 | ) |  | (469,433 | )
Other intangible assets (1) |  |  |  | (23,656 | ) |  | (25,029 | ) |  | (30,245 | )
Tangible equity |  | (b) |  | $ | 3,755,647 |  |  | $ | 3,623,708 |  |  | $ | 3,282,218 |
Total assets |  | (c) |  | $ | 39,073,106 |  |  | $ | 38,072,954 |  |  | $ | 36,307,966 |
Less: Goodwill |  |  |  | (465,547 | ) |  | (465,547 | ) |  | (469,433 | )
Other intangible assets (1) |  |  |  | (23,656 | ) |  | (25,029 | ) |  | (30,245 | )
Tangible assets |  | (d) |  | $ | 38,583,903 |  |  | $ | 37,582,378 |  |  | $ | 35,808,288 |
Total stockholders’ equity to total assets ratio |  | (a)/(c) |  | 10.86 | % |  | 10.81 | % |  | 10.42 | %
Tangible equity to tangible assets ratio |  | (b)/(d) |  | 9.73 | % |  | 9.64 | % |  | 9.17 | %
Adjusted return on average tangible equity represents adjusted tangible net income divided by average tangible equity. Adjusted tangible net income excludes the after-tax effects of the amortization of core deposit intangibles and mortgage servicing assets and the after-tax gains on the sales of the commercial property, EWIS business and DCB branches (where applicable). Given that the use of such measures and ratios is more prevalent in the banking industry, and such measures and ratios are used by banking regulators and analysts, the Company has included them below for discussion.
|  |  |  | Three Months Ended
|  |  |  | September 30, 2018 |  | June 30, 2018 |  | September 30, 2017
Net Income |  |  |  | $ | 171,302 |  |  | $ | 172,349 |  |  | $ | 132,660 |
Add: Amortization of core deposit intangibles, net of tax (2) |  |  |  | 964 |  |  | 967 |  |  | 1,006 |
Amortization of mortgage servicing assets, net of tax (2) |  |  |  | 324 |  |  | 305 |  |  | 307 |
Tangible net income |  | (e) |  | $ | 172,590 |  |  | $ | 173,621 |  |  | $ | 133,973 |
Less: Gain on sale of business, net of tax (2) |  |  |  | — |  |  | — |  |  | (2,206 | )
Adjusted tangible net income |  | (f) |  | $ | 172,590 |  |  | $ | 173,621 |  |  | $ | 131,767 |
Average stockholders’ equity |  |  |  | $ | 4,197,675 |  |  | $ | 4,062,311 |  |  | $ | 3,756,207 |
Less: Average goodwill |  |  |  | (465,547 | ) |  | (465,547 | ) |  | (469,433 | )
Average other intangible assets (1) |  |  |  | (24,530 | ) |  | (25,648 | ) |  | (31,408 | )
Average tangible equity |  | (g) |  | $ | 3,707,598 |  |  | $ | 3,571,116 |  |  | $ | 3,255,366 |
Return on average tangible equity (3) |  | (e)/(g) |  | 18.47 | % |  | 19.50 | % |  | 16.33 | %
Adjusted return on average tangible equity (3) |  | (f)/(g) |  | 18.47 | % |  | 19.50 | % |  | 16.06 | %
|  |  |  | Nine Months Ended |  |
|  |  |  | September 30, 2018 |  | September 30, 2017 |  |
Net Income |  |  |  | $ | 530,683 |  |  | $ | 420,726 |  |  |
Add: Amortization of core deposit intangibles, net of tax (2) |  |  |  | 2,977 |  |  | 3,080 |  |  |
Amortization of mortgage servicing assets, net of tax (2) |  |  |  | 962 |  |  | 814 |  |  |
Tangible net income |  | (h) |  | $ | 534,622 |  |  | $ | 424,620 |  |  |  |
Less: Gain on sale of the commercial property, net of tax (2) |  |  |  | — |  |  | (41,526 | ) |  |
Gain on sale of business, net of tax (2) |  |  |  | (22,167 | ) |  | (2,206 | ) |  |
Adjusted tangible net income |  | (i) |  | $ | 512,455 |  |  | $ | 380,888 |  |  |
Average stockholders’ equity |  |  |  | $ | 4,061,977 |  |  | $ | 3,630,062 |  |  |
Less: Average goodwill |  |  |  | (466,615 | ) |  | (469,433 | ) |  |
Average other intangible assets (1) |  |  |  | (26,080 | ) |  | (33,152 | ) |  |
Average tangible equity |  | (j) |  | $ | 3,569,282 |  |  | $ | 3,127,477 |  |  |  |
Return on average tangible equity (3) |  | (h)/(j) |  | 20.03 | % |  | 18.15 | % |  |
Adjusted return on average tangible equity (3) |  | (i)/(j) |  | 19.20 | % |  | 16.28 | % |  |

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

(2) | Statutory rate of 29.56% was applied for the three months ended June 30, 2018, and the three and nine months ended September 30, 2018. Statutory rate of 42.05% was applied for the three and nine months ended Septembe r 30, 2017.

(3) | Annualized.

22