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EAST WEST BANCORP ANNUAL REPORT 1 | East West Bancorp 2016 Annual Report East West Bank Largest independent bank at a glance based in Southern California Top 25 largest banks in the U.S. by market cap 43 years of operating history East West Bancorp 2016 Annual Report | 2 116 branches Offices across across the U.S. Greater China California ................................. 89 Full-service Representative Georgia ....................................... 3 branches offices 1 of only 3 Massachusetts ......................... 2 Hong Kong Beijing Nevada .........................................1 Shanghai Chongqing U.S. banks with a New York ................................... 6 Shanghai FTZ Guangzhou license in China Texas ...........................................11 Shantou Taipei Washington ..............................4 Shenzhen Xiamen $35 Top 15 billion 15% Top 25 largest banks in the U.S. asset size America’s best banks 10 year deposit CAGR* by market cap by Forbes since 2010 *Compound Annual Growth Rate 15% 5% 3% EWBC S&P 500 KBW Bank 43 Index years 12% 2,900 15% of operating history associates to serve 10 year loan CAGR* annualized TSR* since our customers going public in 1999 *Compound Annual Growth Rate *Total Shareholder Return. Source: Bloomberg. w 3 | East West Bancorp 2016 Annual Report A Message from our Chairman and CEO Dominic Ng Dear Shareholders, In 2016, East West delivered another For the coming years, we continue to year of strong financial performance, see attractive opportunities for growth based on solid growth and industry- in pursuing our cross-border business leading profitability. Against a backdrop banking strategy, which was a key driver of persistently low interest rates, our of loan growth in 2016, and in which we results stood out favorably. This year, have made substantial investments. the general outlook for the banking In my view, with the geopolitical noise industry turned a corner as interest rates between the United States and China, began to move higher in late 2016. East East West’s expertise in both markets West’s asset sensitive position makes us makes us more valuable to our customers. optimistic about the new environment, In my “Perspectives on China” section of and we look forward to producing strong this report, I discuss in more detail financial performance in 2017 and beyond, China’s economic outlook and reform continuing our track record of creating plans, as well as the evolving relations long-term shareholder value. between the U.S. and China. w East West Bancorp 2016 Annual Report | 4 Our 2016 returns on assets and equity were in the top 10% of publicly traded banks in the U.S. As of December 31, 2016, our total assets In addition to cross-border banking, we see reached a record $34.8 billion. We are the tremendous value in growing our retail and largest independent bank headquartered small business banking franchise, which in Southern California and one of the top are both the basis for our strong deposit 25 largest banks in the U.S. by market position as well as a profitable and highly capitalization. As the largest state economy diversified source of commercial loans and one of the largest economies in the and commercial real estate loans. At East world, California is a dynamic market that West, we believe that small businesses fuels our domestic business, supporting are a critical component of the American broad-based growth in loans and deposits. economy and we are committed to Our branch footprint is in some of the supporting their growth. most vibrant metropolitan markets in the country, including Los Angeles, Looking into the future, I am confident that San Francisco, New York, Seattle, Dallas, the East West value proposition for our and Houston. customers will continue to be unparalleled. 5 | East West Bancorp 2016 Annual Report Strong Financial Performance in 2016 Our full year 2016 record net income of RETURN ON ASSETS $432 million grew by 12% year-over-year, 1.4% 1.30% and our record earnings per share of $2.97 1.25% 1.27% also grew by 12% from 2015. Consistently 1.2% achieving industry-leading profitability 1.0% metrics is a hallmark of East West’s Peer median financial performance and 2016 did not 0.8% disappoint. Our full year 2016 return on 0.6% assets of 1.3%, return on equity of 13.1%, 2014 2015 2016 and return on tangible equity of 15.7% were all in the top 10% of publicly traded banks in the United States. East West’s RETURN ON EQUITY tangible equity per share expanded by 14% 13.1% 12% year-over-year to $20.27, a growth 12.7% 12.7% rate in the top 15% of publicly traded banks 12% in the U.S. I am pleased with East West’s 10% Peer financial performance in a year of increased median investment in technology and infrastructure 8% to enhance our risk management, product 6% offerings, and client experience. 2014 2015 2016 As of December 31, 2016, our total loans RETURN ON reached a record $25.5 billion, up 8% from TANGIBLE EQUITY* a year ago. Total deposits reached a record 18% $29.9 billion, up 9% from the prior year. 16.0% 15.6% 15.7% 14% Our loan growth in 2016 was broad-based across all of our major portfolio segments. Peer 10% Over the past decade, we diversified our median loan mix to be well balanced between 6% commercial loans, commercial real estate 2014 2015 2016 loans, and consumer lending. In my view, * For reconciliation of GAAP to non-GAAP financial this is a prudent approach to achieve measures, please see the Company's financial stability through varying macroeconomic press releases. scenarios and credit cycles. I would like to Note: Peer group comprised of publicly traded banks highlight that over 75% of our loan portfolio in the U.S. as of December 31, 2016. SOURCE: S&P Global Market Intelligence. East West Bancorp 2016 Annual Report | 6 is variable rate, tied largely to short-term interest rate 2016 was a year of significant investments at East West. indices, which is an advantageous position for revenue We examined our systems, controls and processes, growth in a rising interest rate environment. actively upgrading them to ensure scalable future growth and improve operational excellence. We invested in Strong deposit growth was an important highlight of East technology and human capital to strengthen our risk West’s results in 2016, driven by robust core deposit management infrastructure. To better serve our diverse growth. Core deposits grew by 16% year-over-year, client base, we expanded our product capabilities, comprising 81% of total deposits as of December 31, 2016 enhancing our offerings in foreign exchange and cash compared to 48% ten years ago. Noninterest-bearing management services. deposits reached a record $10.2 billion or 34% of total deposits at year-end, reflecting a substantial mix shift over Making ongoing investments is vital for East West to the past ten years. From a funding perspective, we feel maintain our leading position among regional banks. that we are well positioned to navigate a rising interest These investments strengthen our unique cross-border rate environment. As of December 31, 2016, our loan-to- approach and support our core retail and small business deposit ratio was 85%, giving us ample room for positive banking franchise, reinforcing sound and profitable balance sheet leverage and growth in 2017. growth for the future. Transformation of East West’s Balance Sheet LOAN MIX DEPOSIT MIX Today, our loan portfolio is more diversified across key Core deposits, made up of noninterest-bearing demand categories. Commercial loans grew to 38% at the end of deposits, money market accounts, checking and savings, 2016 from 15% a decade ago, and commercial real estate comprised 81% of total deposits at the end of 2016, loans decreased to 34% from 60%. compared to 48% ten years ago. 19% 34% 15% 38% 34% 60% 19% 29% 52% 25% 47% 28% 2006 2016 2006 2016 Commercial loans Commercial real estate loans Noninterest-bearing demand deposits Other core deposits Consumer loans, including single-family & multifamily mortgages Time deposits 7 | East West Bancorp 2016 Annual Report Acknowledgements After more than a decade of serving on our In conclusion, as we progress on our U.S. board of directors, Mr. John M. Lee, Vice and Greater China strategy, East West Chairman of East West Bancorp and East will continue to develop innovative West Bank, is retiring at the end of May banking solutions, building infrastructure 2017. John’s long relationship with East and expertise in order to provide superior West began at the bank’s inception – he service to our clients. We are optimistic was East West’s first general manager about the future and our ability to grow when we opened for business in 1973. In profitably and prudently. 1980, John co-founded Standard Bank, a federal savings bank, growing the thrift to On behalf of East West, I would like to over $900 million in assets. Under his thank our clients for their support and leadership, Standard Bank was consistently business, our shareholders for their distinguished as a top 10 best performing trust and confidence in our company, thrift in the U.S. for much of its operating and our 2,900 associates for their history. In 2006, East West acquired exceptional efforts. Standard Bank, at which point we welcomed John back to East West as Sincerely, Vice Chairman of our board. We sincerely thank John for his many contributions and years of service to East West. We will miss his depth of knowledge about banking, his wisdom Dominic Ng and thoughtful guidance. Chairman and Chief Executive Officer In October 2016, we welcomed Greg Guyett as President and Chief Operating Officer of East West Bancorp and East West Bank.

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