NasdaqGS:EWBC

Stock Analysis Report

Executive Summary

East West Bancorp, Inc. operates as the bank holding company for East West Bank that provides a range of personal and commercial banking services to businesses and individuals in the United States and Greater China.

Rewards

Trading at 54.3% below its fair value

Earnings are forecast to grow 4.62% per year

Earnings have grown 15.2% per year over the past 5 years

Risk Analysis

Unstable dividend track record



Snowflake Analysis

Flawless balance sheet, good value and pays a dividend.


Similar Companies

Share Price & News

How has East West Bancorp's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: EWBC has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

1.0%

EWBC

2.7%

US Banks

1.1%

US Market


1 Year Return

-1.3%

EWBC

22.7%

US Banks

17.8%

US Market

Return vs Industry: EWBC underperformed the US Banks industry which returned 22.7% over the past year.

Return vs Market: EWBC underperformed the US Market which returned 17.8% over the past year.


Shareholder returns

EWBCIndustryMarket
7 Day1.0%2.7%1.1%
30 Day1.2%0.9%1.4%
90 Day0.5%10.0%3.9%
1 Year0.9%-1.3%26.3%22.7%20.3%17.8%
3 Year-1.1%-5.9%31.8%22.6%44.8%35.4%
5 Year33.3%21.6%80.2%60.2%71.3%52.4%

Price Volatility Vs. Market

How volatile is East West Bancorp's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is East West Bancorp undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: EWBC ($46.01) is trading below our estimate of fair value ($100.78)

Significantly Below Fair Value: EWBC is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: EWBC is good value based on its PE Ratio (10.1x) compared to the Banks industry average (12.7x).

PE vs Market: EWBC is good value based on its PE Ratio (10.1x) compared to the US market (18.4x).


Price to Earnings Growth Ratio

PEG Ratio: EWBC is poor value based on its PEG Ratio (2.2x)


Price to Book Ratio

PB vs Industry: EWBC is overvalued based on its PB Ratio (1.4x) compared to the US Banks industry average (1.2x).


Next Steps

Future Growth

How is East West Bancorp forecast to perform in the next 1 to 3 years based on estimates from 10 analysts?

4.6%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: EWBC's forecast earnings growth (4.6% per year) is above the savings rate (1.7%).

Earnings vs Market: EWBC's earnings (4.6% per year) are forecast to grow slower than the US market (14.2% per year).

High Growth Earnings: EWBC's earnings are forecast to grow, but not significantly.

Revenue vs Market: EWBC's revenue (3.5% per year) is forecast to grow slower than the US market (7.4% per year).

High Growth Revenue: EWBC's revenue (3.5% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: EWBC's Return on Equity is forecast to be low in 3 years time (12.9%).


Next Steps

Past Performance

How has East West Bancorp performed over the past 5 years?

15.2%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: EWBC has high quality earnings.

Growing Profit Margin: EWBC's current net profit margins (44.8%) are higher than last year (44.7%).


Past Earnings Growth Analysis

Earnings Trend: EWBC's earnings have grown by 15.2% per year over the past 5 years.

Accelerating Growth: EWBC's earnings growth over the past year (7%) is below its 5-year average (15.2% per year).

Earnings vs Industry: EWBC earnings growth over the past year (7%) underperformed the Banks industry 27.1%.


Return on Equity

High ROE: EWBC's Return on Equity (13.5%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is East West Bancorp's financial position? (This company is analysed differently as a bank or financial institution)


Financial Position Analysis


Debt to Equity History and Analysis


Balance Sheet

Inventory Level: EWBC has a low level of unsold assets or inventory.

Debt Coverage by Assets: EWBC's debt is covered by short term assets (assets are 3.9x debt).


Financial Institutions Analysis

Asset Level: EWBC's level of assets compared to its equity is low.

Allowance for Bad Loans: EWBC has a sufficient allowance for bad loans.

Low Risk Liabilities: EWBC's liabilities are made up of primarily low risk sources of funding.

Loan Level: EWBC has an acceptable proportion of non-loan assets held.

Low Risk Deposits: EWBC's loans are broadly funded by customer deposits.

Level of Bad Loans: EWBC has an appropriate level of bad loans (0.39%)


Next Steps

Dividend

What is East West Bancorp's current dividend yield, its reliability and sustainability?

2.39%

Current Dividend Yield


Dividend Yield vs Market

company2.4%marketbottom25%1.4%markettop25%3.7%industryaverage2.8%forecastin3Years2.5%

Current dividend yield vs market & industry

Notable Dividend: EWBC's dividend (2.39%) is higher than the bottom 25% of dividend payers in the US market (1.44%).

High Dividend: EWBC's dividend (2.39%) is low compared to the top 25% of dividend payers in the US market (3.67%).


Stability and Growth of Payments

Stable Dividend: EWBC's dividend payments have been volatile in the past 10 years.

Growing Dividend: EWBC's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its low payout ratio (22.3%), EWBC's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: EWBC's dividends in 3 years are forecast to be well covered by earnings (24.7% payout ratio).


Next Steps

Management

What is the CEO of East West Bancorp's salary, the management and board of directors tenure and is there insider trading?

9.3yrs

Average management tenure


CEO

Dominic Ng (60yo)

27.9yrs

Tenure

US$7,587,684

Compensation

Mr. Dominic Ng has been the Chairman and Chief Executive Officer of East West Bancorp, Inc. since 1992 and serves as its President since August 24, 2018. Mr. Ng has also been Chairman and Chief Executive O ...


CEO Compensation Analysis

Compensation vs Market: Dominic's total compensation ($USD7.59M) is about average for companies of similar size in the US market ($USD6.70M).

Compensation vs Earnings: Dominic's compensation has been consistent with company performance over the past year.


Management Age and Tenure

9.3yrs

Average Tenure

57yo

Average Age

Experienced Management: EWBC's management team is seasoned and experienced (9.3 years average tenure).


Board Age and Tenure

9.7yrs

Average Tenure

64yo

Average Age

Experienced Board: EWBC's board of directors are considered experienced (9.7 years average tenure).


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

BuyUS$100,02804 Sep 19
Catherine Zhou
EntityIndividual
Role
Senior Key Executive
Executive VP
Shares2,512
Max PriceUS$39.82
BuyUS$250,81629 Aug 19
Douglas Krause
EntityIndividual
Role
Chief Legal Officer
Executive VP
Shares6,400
Max PriceUS$39.19
BuyUS$250,24029 Aug 19
Irene Oh
EntityIndividual
Role
Chief Financial Officer
Executive VP & CFO
Shares6,400
Max PriceUS$39.10
BuyUS$38,51429 Aug 19
Rudolph Estrada
EntityIndividual
Role
Lead Director
Lead Director
Shares1,000
Max PriceUS$38.51
BuyUS$97,97529 Aug 19
Iris Chan
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares2,500
Max PriceUS$39.19
BuyUS$38,11129 Aug 19
Lester Sussman
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares1,000
Max PriceUS$38.11
BuyUS$1,000,31429 Aug 19
Dominic Ng
EntityIndividual
Role
Chief Executive Officer
Chairman
Shares25,840
Max PriceUS$40.40
BuyUS$50,59129 Aug 19
Andy Yen
EntityIndividual
Role
Senior Key Executive
Executive VP and Head of International & Commercial Banking
Shares1,300
Max PriceUS$38.92
BuyUS$38,69127 Aug 19
Paul Irving
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares1,000
Max PriceUS$38.69
SellUS$116,36204 Mar 19
Chi Husan Liu
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares2,108
Max PriceUS$55.20
SellUS$100,11429 Jan 19
Rudolph Estrada
EntityIndividual
Role
Lead Director
Lead Director
Shares1,902
Max PriceUS$52.64

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Management Team

  • Dominic Ng (60yo)

    Chairman

    • Tenure: 27.9yrs
    • Compensation: US$7.59m
  • Doug Krause (62yo)

    Executive VP

    • Tenure: 23.9yrs
    • Compensation: US$1.45m
  • Andy Yen (61yo)

    Executive VP and Head of International & Commercial Banking

    • Tenure: 14.9yrs
    • Compensation: US$911.03k
  • Julianna Balicka

    Director of Strategy & Corporate Development

    • Tenure: 0yrs
  • Irene Oh (41yo)

    Executive VP & CFO

    • Tenure: 9.9yrs
    • Compensation: US$2.00m
  • Catherine Zhou

    Executive VP

    • Tenure: 2.2yrs
    • Compensation: US$1.89m
  • Bennett Pozil (57yo)

    Head of Corporate Banking - East West Bank and Executive Vice President of East West Bank

    • Tenure: 8.7yrs
  • Robert Lo (54yo)

    Head of Commercial Real Estate Banking - East West Bank and Executive VP of East West Bank

    • Tenure: 5.9yrs
  • Emily Wang

    Director of Marketing

    • Tenure: 0yrs
  • Gary Teo (46yo)

    Head of HR

    • Tenure: 4.9yrs

Board Members

  • Dominic Ng (60yo)

    Chairman

    • Tenure: 27.9yrs
    • Compensation: US$7.59m
  • Rudolph Estrada (71yo)

    Lead Director

    • Tenure: 6.4yrs
    • Compensation: US$380.50k
  • Herman Li (66yo)

    Independent Director

    • Tenure: 21.9yrs
    • Compensation: US$211.50k
  • Jack Liu (60yo)

    Independent Director

    • Tenure: 21.9yrs
    • Compensation: US$215.00k
  • Paul Irving (67yo)

    Independent Director

    • Tenure: 9.7yrs
    • Compensation: US$199.50k
  • Iris Chan (73yo)

    Independent Director

    • Tenure: 9.7yrs
    • Compensation: US$199.50k
  • Archie Deskus (53yo)

    Independent Director

    • Tenure: 0.2yrs
  • Les Sussman (64yo)

    Independent Director

    • Tenure: 4.2yrs
    • Compensation: US$213.50k
  • Molly Campbell (58yo)

    Independent Director

    • Tenure: 5.3yrs
    • Compensation: US$192.00k

Company Information

East West Bancorp, Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: East West Bancorp, Inc.
  • Ticker: EWBC
  • Exchange: NasdaqGS
  • Founded: 1998
  • Industry: Regional Banks
  • Sector: Banks
  • Market Cap: US$6.725b
  • Shares outstanding: 145.63m
  • Website: https://www.eastwestbank.com

Number of Employees


Location

  • East West Bancorp, Inc.
  • 135 North Los Robles Avenue
  • 7th Floor
  • Pasadena
  • California
  • 91101
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
EWBCNasdaqGS (Nasdaq Global Select)YesCommon StockUSUSDFeb 1999
EW2DB (Deutsche Boerse AG)YesCommon StockDEEURFeb 1999

Biography

East West Bancorp, Inc. operates as the bank holding company for East West Bank that provides a range of personal and commercial banking services to businesses and individuals in the United States and Grea ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/12/11 23:34
End of Day Share Price2019/12/11 00:00
Earnings2019/09/30
Annual Earnings2018/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.