[July 19, 2018]

East West Bancorp Reports Net Income for Second Quarter 2018 of $172 Million and Diluted Earnings Per Share of $1.18

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 second quarter of 2018. For the second quarter of 2018, net income was $172 million or $1.18 per diluted share.

"Total loans grew $644 million, or 9% annualized, to a record $30.2 billion as of June 30, 2018 from $29.6 billion as of March 31, 2018," stated Dominic Ng, Chairman and Chief Executive Officer of East West. "Total deposits grew $167 million, or 2% annualized, to a record $32.8 billion as of June 30, 2018 from $32.6 billion as of March 31, 2018."

"East West delivered solid results in the second quarter of 2018. Compared to the first quarter, our net interest margin expanded by 10 basis points to 3.83% and our net interest income grew by 5% to $342 million. Our second quarter adjusted pre-tax, pre-provision income¹ reached $234 million, an increase of 7% quarter-over-quarter and 18% year-over-year," continued Ng.

"In the second quarter, our return on assets reached 1.84% and our return on equity reached 17.0%. Our strong profitability supports our organic growth, capital ratio expansion, and the increase to our common stock dividend, which we have raised by 15%."

"As our profitability and revenue grow, we continue to invest in the bank. Our ongoing investment initiatives include adding talent throughout the organization, enhancing our customers' experience, and strengthening our risk management infrastructure. Our initiatives demonstrate our commitment to our customers and employees, and our focus on generating long-term value for our shareholders," concluded Ng.

HIGHLIGHTS OF RESULTS

• Quarterly Earnings - Second quarter 2018 net income of $172.3 million and diluted earnings per share ("EPS") of $1.18 both decreased by 8% compared to first quarter 2018 net income of $187.0 million and diluted EPS of $1.28. Linked quarter comparisons are impacted by the sale of Desert Community Bank ("DCB") branches in the first quarter of 2018, which contributed an after-tax gain on sale of $22.2 million or $0.15 per share. Excluding this gain, second quarter net income increased by 5% from adjusted² net income of $164.9 million for the first quarter of 2018; second quarter diluted EPS increased by 4% from the adjusted² diluted EPS of $1.13 for the first quarter of 2018.

• Net Interest Income Growth and Net Interest Margin Expansion - Second quarter 2018 net interest income was $341.7 million, a quarterly increase of $15.0 million, or 5%, primarily due to the expansion of loan yields and loan growth, partially offset by an increase in deposit costs. Second quarter 2018 net interest margin ("NIM") of 3.83% expanded by 10 basis points linked quarter.

• Record Loans - Total loans of $30.2 billion as of June 30, 2018 were up $643.6 million, or 9% linked quarter annualized, from $29.6 billion as of March 31, 2018. The strongest loan growth came from the single-family mortgage portfolio, followed by commercial and industrial loans. Total loans grew by 11% year-over-year.
• Record Deposits - Total deposits of $32.8 billion as of June 30, 2018 were up $167.4 million, or 2% linked quarter annualized, from $32.6 billion as of March 31, 2018. The sequential quarter growth was largely from an increase in time deposits. Total deposits grew by 5% year-over-year.

• Asset Quality Metrics - The allowance for loan losses was $301.6 million, or 1.00% of loans held-for-investment ("HFI"), as of June 30, 2018, compared to $297.7 million, or 1.01% of loans HFI, as of March 31, 2018. For the second quarter of 2018, annualized net charge-offs were 0.15% of average loans HFI, compared to annualized net charge-offs of 0.13% of average loans HFI for the previous quarter. Non-purchased credit impaired ("Non-PCI") nonperforming assets were $103.5 million, or 0.27% of total assets, as of June 30, 2018. This is a decrease of $27.4 million or 21% from $131.0 million, or 0.35% of total assets, as of March 31, 2018.
• Capital Levels - Capital levels for East West continue to be strong. As of June 30, 2018, stockholders' equity was $4.1 billion, or $28.39 per share. Tangible equity³ per common share was $25.01 as of June 30, 2018, an increase of 4% linked quarter and 14% year-over-year. As of June 30, 2018, the tangible equity to tangible assets ratio was 9.64%, the Common Equity Tier 1 ("CET1") capital ratio was 12.2%, and the total risk-based capital ratio was 13.7%.

MANAGEMENT OUTLOOK FOR 2018

We have updated our outlook for the full year 2018, adjusting some components relative to a quarter ago. Compared to our full year 2017 results, our outlook for the expected full year 2018 results is as follows:

• End of Period Loans: increase at a percentage rate of approximately 10%.
• Net Interest Margin (excluding the impact of ASC 310-30 discount accretion): we expect full year NIM to be approximately 3.75%.
• Noninterest Expense (excluding tax credit amortization & deposit premium amortization): increase at a percentage rate in the high single digits.
• Provision for Credit Losses: in the range of $70 million to $80 million.
• Tax Items: projecting investment in tax-advantaged credits of $115 million, excluding low income housing tax credits, and associated tax credit amortization expense of $100 million. Projecting full year effective tax rate of approximately 13%.
• Interest Rates: our outlook assumes one more fed funds rate increase in September 2018.

OPERATING RESULTS SUMMARY

Second Quarter 2018 Compared to First Quarter 2018

Net Interest Income and Net Interest Margin

Net interest income totaled $341.7 million, a 5% increase from $326.7 million. Net interest margin expanded by 10 basis points to 3.83% from 3.73%.

• Average loans of $29.6 billion grew by $434.9 million, or 6% linked quarter annualized.
• Average deposits of $32.4 billion grew by $83.5 million, or 1% linked quarter annualized.
• The yield on loans expanded by 26 basis points to 4.95% from 4.69%.
• The yield on earning assets expanded by 24 basis points to 4.49% from 4.25%.
• The cost of deposits increased by 15 basis points to 0.64% from 0.49%.
• The cost of funds increased by 15 basis points to 0.71% from 0.56%.

Noninterest Income

Total noninterest income totaled $48.3 million, a decrease from $74.4 million in the first quarter, which included a pre-tax gain of $31.5 million from the sale of DCB branches. Excluding the impact of all gains on sales, total fees and other operating income of $44.6 million in the second quarter of 2018 increased by 17% from $38.2 million.

• The increase in letters of credit fees and foreign exchange income largely reflects 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 June 30, 2018, March 31, 2018, and June 30, 2017.

Noninterest Expense

Noninterest expense of $177.4 million included $155.6 million of adjusted⁴ noninterest expense, $20.5 million in amortization of tax credit and other investments, and $1.4 million in amortization of core deposit intangibles.

• Adjusted noninterest expense of $155.6 million increased by $5.3 million, or 4%, linked quarter. Compared to the prior quarter, we had larger increases in consulting, legal and computer software expenses. These were partially offset by a decrease in compensation and employee benefits from a seasonally higher first quarter, as well as a decrease in deposit insurance premiums and regulatory assessments.
• The adjusted⁴ efficiency ratio was 39.9% in the second quarter, compared to 40.6% in the first quarter.

TAX RELATED ITEMS

Tax expense in the second quarter of 2018 was $24.6 million and the effective tax rate was 13%, compared to a tax expense of $24.8 million and an effective tax rate of 12% in the first quarter of 2018.

• Tax expense in the first quarter included two discrete items: the accounting for stock-based compensation and the reversal of a liability related to state taxes for prior years, which reduced tax expense by $4.8 million and $3.9 million, respectively.
• Currently, we are projecting a full year 2018 effective tax rate of approximately 13%; previously, we had projected an effective tax rate of 16%. The reduction in the tax rate for the second quarter and full year 2018 to 13% largely reflects a new tax credit investment added in the quarter.

CREDIT QUALITY

The allowance for loan losses totaled $301.6 million, or 1.00% of loans HFI, as of June 30, 2018, compared to $297.7 million, or 1.01% of loans HFI, as of March 31, 2018, and $276.3 million, or 1.02% of loans HFI, as of June 30, 2017.

• The provision for credit losses recorded for the current quarter was $15.5 million, compared to $20.2 million for the first quarter of 2018, and $10.7 million for the second quarter of 2017.
• Net charge-offs for the current quarter were $11.2 million, or annualized 0.15% of average loans HFI. This compares to net charge-offs of $9.4 million, or annualized 0.13% of average loans HFI, for the first quarter of 2018, and net recoveries of $2.6 million, or annualized 0.04% of average loans HFI, for the second quarter of 2017.
• Non-PCI nonperforming assets of $103.5 million, or 0.27% of total assets, as of June 30, 2018, decreased from $131.0 million, or 0.35% of total assets, as of March 31, 2018, and $133.0 million, or 0.37% of total assets, as of June 30, 2017.

CAPITAL STRENGTH

Capital levels for East West continue to be strong. As of June 30, 2018, stockholders' equity was $4.1 billion, or $28.39 per share. Tangible equity per common share was $25.01 as of June 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 June 30, 2018, March 31, 2018, and June 30, 2017.

DIVIDEND PAYOUT AND CAPITAL ACTIONS

East West's Board of Directors has declared third quarter 2018 dividends for the Company's common stock. The common stock cash dividend of $0.23 per share is payable on August 15, 2018 to stockholders of record on August 1, 2018. As announced on May 29, 2018, this is a 15% increase to the quarterly common stock dividend, up from $0.20 per share previously.

Conference Call

East West will host a conference call to discuss second quarter 2018 earnings with the public on Thursday, July 19, 2018 at 8:30 a.m. PT/11:30 a.m. ET. The public and investment community are invited to listen as management discusses second 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 July 19, 2018 at 11:30 a.m. Pacific Time through August 19, 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: 10121411.

About East West

East West Bancorp, Inc. is a publicly owned company with total assets of $38.1 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; changes in the commercial and consumer real estate markets; changes in our costs of operation, compliance and expansion; 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; 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; heightened regulatory and governmental oversight and scrutiny of the Company's business practices, including dealings with consumers; changes in the economy of and monetary policy in the People's Republic of China; 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; 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 the equity and debt securities markets; future credit quality and performance, including our expectations regarding future credit losses and allowance levels; fluctuations of our stock price; fluctuations in foreign currency exchange rates; success and timing of our business strategies; our ability to adopt and successfully integrate new technologies into our business in a strategic manner; impact of reputational risk from negative publicity, fines and penalties and other negative consequences from regulatory violations and legal actions; impact of adverse judgments or settlements in litigation; impact of regulatory enforcement actions; changes in our ability to receive dividends from our subsidiaries; impact of political developments, wars or other hostilities that may disrupt or increase volatility in securities or otherwise affect economic conditions; 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; continuing consolidation in the financial services industry; our capital requirements and our ability to generate capital internally or raise capital on favorable terms; impact of the Dodd-Frank Wall Street Reform and Consumer Protection Act on our business, business practices and cost of operations; impact of adverse changes to our credit ratings from the major credit rating agencies; 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; changes in interest rates on our net interest income and net interest margin; the effect of changes in the level of checking or savings account deposits on our funding costs and net interest margin; 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; the Company's ability to retain key officers and employees; any future strategic acquisitions or divestitures; 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.