East West Bancorp Posts $76.6 Million In Net Earnings
In a press conference Wednesday, East West Bancorp (Nasdaq: EWBC), parent of East West Bank with Westside offices in Beverly Hills and Century City, announced it has posted 2009 net earnings of $76.6 million.
“We did quite well,” Dominic Ng, chairman/CEO said. This represents a return to profitability for the bank which Ng admitted had a difficult 2008, the only loss year for East West in nearly 30 years. “We had so many years of record earning that we forgot how it feels to have losses.”
Before 2008 East West posted impressive profits every year for more than a decade with net income of $161.2 million in 2007 and $143.4 million in 2006. The bank has come back in an even better position, Ng says.
“Our core business remains strong and we are back on track to deliver solid profitability and create long-term value for our shareholders this year and beyond.”
Ng also stressed the bank’s stability and strength. With 20 percent risk-based capital and fewer problem loans, the bank is in better shape than many of it’s competitors, Ng said.
“People don’t have to worry about their deposits,” he continued. “They were safe in 2008 and 2009 and they’re safer now.”
For the fourth quarter 2009, net income was $259.7 million, an increase of $328.3 million over a loss reported in the third quarter. For the full 2009 year, the net $76.6 million income was an increase of $126.3 million.
The fourth-quarter earnings include a pre-tax gain of $471 million from the FDIC-assisted acquisitor of United Commercial Bank (UCB), offset by a $140 million provision for loan losses and a $45.8 million impairment losses on investment securities. The acquisition of the assets and deposit franchise of UCB nearly doubles East West’s size to $20.6 billion and gives it twice as many branches.
“The acquisition was a chance for us to take advantage of the market and has expedited our return to profitablity. It serves as an immediate catalyst to further our growth, Ng said. “Besides expanding the bank’s geographic reach, the acquisition will truly make East West Bank a financial bridge.”
“As the market leader in the Asian-American banking sector, East West has positive brand recognition,” Ng stated. “As widely reported in the Asian-American media, our acquisition served to stabilize deposits and strengthen customer confidence in the entire Asian-American baking sector.”
The integration of UCB is progression smoothly, Ng says, so as to continue business as usual with no customer frustration. All branches are expected to have East West signage by the end of April . The acquisition means seven branches will close, one of them already set for shuttering by the UCB board.
East West Bancorp is a publicly owned company with $20.6 billion in assets. The company’s wholly owned subsidiary, East West Bank, in the third largest independent commercial bank headquartered in California with 135 branches worldwide, including 111 branches in California. In Greater China, East West’s presence includes four full-service branches, including two in Hong Kong, one in Shanghai and one in Shantou. The bank also has representative offices in Beijing, Guangzhou, Shanghai and Shenzhen, China and Taipei, Taiwan.