Page Overview 57 Selected Financial Data 59 Financial Review 60 Results of Operations 61 Net Interest Income 61 Noninterest Income 65 Noninterest Expense 67 Income Taxes 67 Operating Segment Results 68 Balance Sheet Analysis 72 Debt Securities 72 Loan Portfolio 75 Foreign Outstandings 81 Capital 82 Deposits and Other Sources of Funds 82 Regulatory Capital and Ratios 83 Other Matters 84 Off-Balance Sheet Arrangements 85 Risk Management 86 Credit Risk Management 86 Liquidity Risk Management 96 Market Risk Management 98 Critical Accounting Policies and Estimates 104 Reconciliation of GAAP to Non-GAAP Financial Measures 104 Forward-Looking Statements 106 56
The following discussion provides information on the results of operations, financial condition, liquidity and capital resources of
(referred to herein on an unconsolidated basis as “East West” and on a consolidated basis by the “Company”, “we” or “EWBC”), and its subsidiaries, including its banking subsidiary,
East West is a bank holding company incorporated in
and is registered under the Bank Holding Company Act. The Company started its activities on
We are committed to increasing long-term shareholder value by increasing loans, deposits and income, improving profitability and investing for the future, while managing risk, expense and capital. Our business model is built on customer loyalty and engagement, understanding our customers’ financial goals and meeting their financial needs through our various products and services. The Company’s approach focuses on finding and deepening client relationships that meet our risk / return parameters. This guides our decision-making in all aspects of our operations: the products we develop, the expertise we cultivate, and the infrastructure we build to help our clients do business. We expect our relationship-driven business model to continue to drive organic growth and expand our targeted customer base. We continually invest in technology to improve the customer experience, strengthen critical business infrastructure, and streamline core processes, while appropriately managing operating expenses. Our risk management activities aim to ensure that the Company identifies and manages risks in order to maintain safety and soundness while maximizing profitability.
Coronavirus disease 2019 Global pandemic
Throughout the 2019 Coronavirus Disease (“COVID-19”) pandemic, the Company has focused on serving its customers and communities and maintaining the well-being of its employees. The Company has been and may continue to be affected by the pandemic. As COVID-19 cases began to decline in the first half of 2021, the spread of new, more contagious variants has had an impact on the scale and duration of this health crisis. Ongoing efforts to contain the virus and immunization progress, along with the possibility of further government stimulus, could accelerate macroeconomic recovery. We do not know and cannot quantify all the specific impacts, and the extent to which the COVID-19 pandemic could adversely affect our business, financial condition and operating results, regulatory capital and liquidity ratios. in 2021.
The Company also participated in the
ad hoc vehicle purchased stakes in these loans amounting to
For more information on PPP and others
In response to the pandemic, the Company has implemented protocols and processes to execute its business continuity plans to protect its employees and support its customers. As state and local governments relaxed restrictions on temporary business closures, we reopened more branches and actively planned our
For more information, see section 2. Management’s Discussion and Analysis and Analysis of Financial Position and Results of Operations (“MD&A”) – Risk Management – Credit Risk Management and – Liquidity Risk Management, and – Balance sheet analysis –
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