EAST WEST BANCORP INC
For the period ended Mar 31, 2024. Filed May 9, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2024 · Filed May 9, 2024
Extracted filing text, with the paragraph anchors used by the comparison.
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Reconciliation of GAAP to Non-GAAP Financial Measures
To supplement the Company’s unaudited interim Consolidated Financial Statements presented in accordance with U.S. GAAP, the Company uses certain non-GAAP measures of financial performance. Non-GAAP financial measures are not prepared in accordance with, or as an alternative to U.S. GAAP. Generally, a non-GAAP financial measure is a numerical measure of a company’s performance that either excludes or includes amounts, or is subject to adjustments that have such an effect, that are not normally excluded or included in the most directly comparable financial measure that is calculated and presented in accordance with U.S. GAAP. The non-GAAP financial measures discussed in this Form 10-Q are return on average TCE, adjusted efficiency ratio, adjusted diluted EPS, and tangible book value per share. Certain additional non-GAAP financial measures that are components of the foregoing non-GAAP financial measures are also set forth and reconciled in the table below. The Company believes these non-GAAP financial measures, when taken together with the corresponding U.S. GAAP financial measures, provide meaningful supplemental information regarding its performance, and allow comparability to prior periods. These non-GAAP financial measures may be different from non-GAAP financial measures used by other companies, limiting their usefulness for comparison purposes.
The following tables present the reconciliations of U.S. GAAP to non-GAAP financial measures for the periods presented:
| Three Months Ended March 31, | |||
|---|---|---|---|
| ($ in thousands) · 2024 · 2023 | |||
| Net income | (a) | $285,075 | $322,439 |
| Add: Amortization of core deposit intangibles | — | 441 | |
| Amortization of mortgage servicing assets | 308 | 356 | |
| Tax effect of amortization adjustments (1) | (91) | (233) | |
| Tangible net income (non-GAAP) | (b) | $285,292 | $323,003 |
| Average stockholders’ equity | (c) | $6,992,558 | $6,183,324 |
| Less: Average goodwill | (465,697) | (465,697) | |
| Average other intangible assets (2) | (6,473) | (7,696) | |
| Average tangible book value (non-GAAP) | (d) | $6,520,388 | $5,709,931 |
| ROE (3) | (a)/(c) | 16.40% | 21.15% |
| Return on average TCE (3) (non-GAAP) | (b)/(d) | 17.60% | 22.94% |
| Three Months Ended March 31, | |||
|---|---|---|---|
| ($ in thousands) · 2024 · 2023 | |||
| Net interest income before provision for credit losses | (a) | $565,139 | $599,861 |
| Total noninterest income | 78,988 | 59,978 | |
| Total revenue | (b) | $644,127 | $659,839 |
| Noninterest income | 78,988 | 59,978 | |
| Add: Net loss on AFS debt security (4) | — | 10,000 | |
| Adjusted noninterest income (non-GAAP) | (c) | 78,988 | 69,978 |
| Adjusted revenue (non-GAAP) | (a)+(c)=(d) | $644,127 | $669,839 |
| Total noninterest expense | (e) | $246,875 | $218,447 |
| Less: Amortization of tax credit and other investments | (13,207) | (10,110) | |
| Amortization of core deposit intangibles | — | (441) | |
| FDIC charge (5) | (10,305) | — | |
| Repurchase agreements’ extinguishment cost (6) | — | (3,872) | |
| Adjusted noninterest expense (non-GAAP) | (f) | $223,363 | $204,024 |
| Efficiency ratio | (e)/(b) | 38.33% | 33.11% |
| Adjusted efficiency ratio (non-GAAP) | (f)/(d) | 34.68% | 30.46% |
| Three Months Ended March 31, | |||
|---|---|---|---|
| ($ and shares in thousands, except per share data) · 2024 · 2023 | |||
| Net income | (a) | $285,075 | $322,439 |
| Add: FDIC charge (5) | 10,305 | — | |
| Net loss on AFS debt security (4) | — | 10,000 | |
| Tax effect of adjustment (1) | (3,046) | (2,929) | |
| Adjusted net income (non-GAAP) | (b) | $292,334 | $329,510 |
| Diluted weighted-average number of shares outstanding | (c) | $140,261 | $141,913 |
| Diluted EPS | (a)/(c) | 2.03 | 2.27 |
| Add: FDIC charge (5) | 0.05 | — | |
| Net loss on AFS debt security (4) | — | 0.05 | |
| Adjusted diluted EPS (non-GAAP) | (b)/(c) | $2.08 | $2.32 |
(1)Applied statutory tax rate of 29.56% for the first quarter of 2024 and 29.29% for the first quarter of 2023.
(2)Includes core deposit intangibles and mortgage servicing assets.
(3)Annualized.
(4)Represents the net loss related to an AFS debt security that was written-off in the first quarter of 2023.
(5)During the first quarter of 2024, the Company recorded a $10 million pre-tax FDIC charge (included in Deposit insurance premiums and regulatory assessments on the Consolidated Statement of Income).
(6)The Company prepaid $300 million of repurchase agreements and incurred a debt extinguishment cost of $4 million in the first quarter of 2023.
| ($ and shares in thousands, except per share data) · March 31, 2024 · December 31, 2023 | |||
|---|---|---|---|
| Stockholders’ equity | (a) | $7,023,232 | $6,950,834 |
| Less: Goodwill | (465,697) | (465,697) | |
| Other intangible assets (1) | (6,234) | (6,602) | |
| Tangible book value (non-GAAP) | (b) | $6,551,301 | $6,478,535 |
| Number of common shares at period-end | (c) | 139,121 | 140,027 |
| Book value per share | (a)/(c) | $50.48 | $49.64 |
| Tangible book value per share (non-GAAP) | (b)/(c) | $47.09 | $46.27 |
(1)Includes core deposit intangibles and mortgage servicing assets.
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