Profile: East West Bancorp Inc (EWBC.O)
9 Feb 2016
East West Bancorp, Inc. (East West), incorporated on August 26, 1998, is a bank holding company. East West’s principal business is to serve as a holding company for East West Bank (Bank) and other banking or banking-related subsidiaries. The Bank offers deposit products, including the traditional range of personal and business checking and savings accounts, time deposits and individual retirement accounts, travelers’ checks, safe deposit boxes, and MasterCard and Visa merchant deposit services. The Bank’s lending activities include commercial and residential real estate, construction, trade finance, and commercial business, including accounts receivable, small business administration (SBA), inventory and working capital loans. The Bank provides commercial business loans to small and medium-sized businesses. In addition, the Bank is focused on providing financing to clients needing a financial bridge that facilitates their business transactions between Asia and the United States.
The Company has three operating segments: Retail Banking, Commercial Banking and Other. The Retail Banking segment focuses primarily on retail operations through the Bank’s branch network. The Commercial Banking segment, which includes C&I and CRE, primarily generates commercial loans through the efforts of the commercial lending offices located in California, New York, Texas, Washington, Massachusetts, Nevada and Georgia. Furthermore, the Commercial Banking segment also offers international finance and trade services and products. The remaining centralized functions, including the treasury operations of the Company are included in the Other segment.
In addition to the Bank, the Company has six other subsidiaries established as statutory business trusts as of December 31, 2014 and one subsidiary that provides business and consumer insurance services. The Trusts were set up for the purpose of issuing junior subordinated debt to third party investors.
The Bank conducts traditional savings and loan business by making long-term, single-family and multifamily residential loans and commercial real estate (CRE) loans. It also provides commercial business and trade finance loans for companies primarily located in the United States. The Bank has three wholly owned subsidiaries: E-W Services, Inc., a bank that holds property used by the Bank in its operations; East-West Investments, Inc., primarily acts as a trustee in connection with real estate secured loans, and East West Bank (China) Limited.
The Company offers a broad range of products designed to meet the credit needs of its borrowers. The Company’s lending activities consist of income producing CRE loans, construction loans, land loans, commercial business loans, trade finance loans, student loans, single-family residential loans, multifamily residential loans and other consumer loans. As of December 31, 2014, the Company had $21.51 billion in net consolidated loans.
The CRE loan portfolio includes income producing real estate loans, construction loans and land loans. CRE loans accounted for $6.13 billion or 30% of the non-covered loan portfolio as of December 31, 2014. The C&I loan portfolio includes commercial business and trade finance loans. The Company also offers international trade services and products, including letters of credit, revolving lines of credit, import loans, bankers’ acceptances, working capital lines, domestic purchase financing and pre-export financing. As of December 31, 2014, the C&I loans portfolio accounted for a total of $7.84 billion or 39% of the Company’s loan portfolio. The residential loan portfolio consists of both single-family and multifamily loans. As of December 31, 2014, $4.82 billion or 24% of the loan portfolio were residential. The consumer loans segment includes non-guaranteed student loans, HELOCs, auto loans, and insurance premium financing loans. Consumer loans accounted for $1.46 billion as of December 31, 2014.
Income from investing activities provides a significant portion of the Company’s total income. The Company aims to maintain an investment portfolio with an appropriate mix of fixed-rate and adjustable-rate securities with relatively short maturities to minimize overall interest rate risk. The Company’s investment securities portfolio primarily consists of the United States Treasury securities, the United States government agency securities, the United States government sponsored enterprise debt securities, the United States government sponsored enterprise and other mortgage-backed securities, municipal securities and corporate debt securities. Total investment securities available-for-sale valued $2.63 billion as of December 31, 2014.
Sources of Funds
East West’s principal source of funds is dividends that may be paid by its subsidiaries. The Company’s other sources of funds include proceeds from the issuance of its common stock in connection with stock option and employee stock purchase plans.
The Company offers deposit account products, including non-interest bearing demand deposits, money market, interest-bearing checking and time deposits, to both consumer and commercial customers. As of December 31, 2014, the Company had $24.01 billion in total consolidated deposits.
East West utilizes a combination of short-term and long-term borrowings to manage its liquidity position. FHLB advances were $317.2 million as of December 31, 2014. Long-term debt includes junior subordinated debt and a term loan. The Company also utilizes securities sold under repurchase agreements to manage its liquidity position. Repurchase agreements totaled $795 million as of December 31, 2014.
East West Bancorp Inc
135 N Los Robles Ave Fl 7
PASADENA CA 91101-4525