East West Bancorp Inc (EWBC) 2001 Q4 法說會逐字稿

Good day ladies and gentlemen, welcome to the East West Bancorp (Company: East West Bancorp Inc.; Ticker: EWBC; URL: http://www.eastwestbank.com/) fourth quarter earnings conference call.

女士們、先生們，大家好，歡迎參加東西銀行（公司：東西銀行股份有限公司；股票代號：EWBC；網址：http://www.eastwestbank.com/）第四季財報電話會議。

At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. If anyone should require assistance during this call, please press star, then zero on your touch-tone telephone.

目前所有參與者均處於唯讀模式。稍後我們將進行問答環節，屆時將提供相關說明。如果您在通話過程中需要任何協助，請按星號鍵，然後按數字鍵，再按數字鍵。

And as a reminder, ladies and gentlemen, this conference call is being recorded.

再次提醒各位，本次電話會議正在錄音。

I would now like to introduce your host for today's conference, Mr. Steven Canup.

現在我謹向大家介紹今天會議的主持人，史蒂文·卡納普先生。

Sir, you may begin your call.

先生，您可以開始通話了。

Thank you, Operator. Good morning, everyone and thank you for joining us to discuss the financial results for the fourth quarter and full year of 2001. In a moment, Dominic Ng, our Chairman, President and Chief Executive Officer, will provide an overview of the quarter and our outlook for the coming year. Then, Julia Gouw, our Executive Vice President and Chief Financial Officer, will review the financial details. We will then open the call up to questions.

謝謝接線生。各位早安，感謝各位參加本次2001年第四季及全年財務業績討論會。稍後，我們的董事長、總裁兼執行長吳先生將概述本季業績並展望未來。接下來，我們的執行副總裁兼財務長朱莉婭·古將介紹來年的財務細節。之後，我們將開放問答環節。

First, I would like to caution participants that during the course of the conference call management may make projections and other forward-looking statements regarding the event or future financial performances of the company within the meaning of the Safe Harbor Provision of the Private Securities Litigation Reform Act of 1995. We wish to caution you that these forward-looking statements may differ materially from actual results due to a number of risks and uncertainties. For a more detailed description of the factors that affect the company's operating results, we refer you to East West filings with the Securities and Exchange Commission including our Annual Report on Form 10K for the year 2000.

首先，我想提醒各位與會者，在本次電話會議期間，管理層可能會根據《私募證券交易法》安全港條款的規定，就公司未來財務業績或相關事件做出預測和其他前瞻性陳述。1995年訴訟改革法案。我們謹此提醒您，由於許多風險和不確定因素，這些前瞻性陳述可能與實際結果有重大差異。有關影響公司經營績效的因素的更詳細說明，請您參閱 East and West 向美國證券交易委員會提交的文件，包括我們 2000 年的 10-K 表格年度報告。

I would also like to remind listeners that today's call is available on both live and replay format at East West Bank.com and Street Events.com. Now, I'd like to turn the call over to Dominic Ng.

我還要提醒各位聽眾，今天的電話會議可以在 East West Bank.com 和 Street Events.com 上以直播和回放的形式收聽。現在，我想把電話交給 Dominic Ng。

Thank you, Steven.

謝謝你，史蒂文。

Good morning, and thank you for joining us to discuss the results for the fourth quarter and full year of 2001. The feature in this morning's press release, which was reported another year of record earnings and asset quality in 2001. In a few moments, Julia will discuss selected financial items in more detail, but first I would like to spend a few minutes highlighting a number of important achievements for last year.

早安，感謝各位參加本次關於2001年第四季及全年業績的討論。今天上午的新聞稿重點報導了2001年公司獲利和資產品質再次創下歷史新高。稍後，Julia 將更詳細地討論一些財務項目，但首先我想花幾分鐘時間重點介紹去年取得的一些重要成就。

We are particularly pleased to generate record earnings despite the current economic slowdown, while at the same time putting into place throughout the year a number of key foundations on which we can build an even more profitable future.

儘管當前經濟成長放緩，我們仍然取得了創紀錄的盈利，這讓我們感到非常高興。同時，我們將在一年中逐步建立一些關鍵的基礎，以此為基礎，我們可以建立一個更有利可圖的未來。

In all, we believe that we entered 2002 better positioned than at any other time in our history with a well-established banking franchise, strongest balance sheet and most diversified and profitable loan portfolio and deposit base. These successes result from the numerous investments and additions that we made to our banking platform during the past several years. We believe that the investments made during the year 2001 will yield similar returns to the bank and our shareholders in the coming years.

總而言之，我們相信，進入2002年時，我們比歷史上任何時期都處於更有利的地位。我們擁有穩固的銀行特許經營權、強勁的資產負債表以及多元化且盈利能力強的貸款組合和存款基礎。這些成功源自於過去幾年我們對銀行平台的大量投資和擴充。我們相信，2001 年進行的投資將在未來幾年為銀行和我們的股東帶來類似的收益。

Now, let's talk about the asset quality. We believe that in today's environment nothing is of more importance than sustaining the excellent asset quality and portfolio diversification that we have achieved over the past two years.

現在，我們來談談資產品質。我們認為，在當今環境下，沒有什麼比保持我們在過去兩年中取得的卓越資產品質和投資組合多元化更重要的了。

As we have stated previously, we have worked diligently during the past two years to ensure that we were prepared for weakening of the economy following the recent expansion. Through tighter underwriting standards and a careful monitoring of our total loan portfolio, we reduced the level of nonperforming loans and assets every quarter in 2001, achieving the lowest level in over a decade. We are especially pleased to achieve such strong asset quality within the mature and well-established commercial loan portfolio with a high degree of seasoning.

正如我們之前所述，過去兩年我們一直努力確保為近期經濟擴張後可能的疲軟做好準備。我們透過更嚴格的貸款審批標準和對整體貸款組合的密切監控，2001年，我們每季都降低了不良貸款和不良資產水平，達到了十多年來的最低水準。尤其令我們感到欣慰的是，在成熟且運作良好的商業貸款組合中，我們實現瞭如此高的資產質量，該組合的資產累積時間也相當長。

Secondly, during 2001 we made significant investments in our deposit franchise, which not only yielded positive results during the year, but will continue to enhance our earnings in the next several years as we fully realize the benefits of a core deposit base. Total average core deposits increased by 69 percent for the fourth quarter to 1.1 billion and at year-end accounted for a record 46 percent of total deposits. This represents a 463 million growth in core deposits for the year. We are particularly encouraged to see a healthy balance between deposit growth from our commercial banking centers built around the formal prime bank operations, as well as the tremendous success in our retail banking operations.

其次，在 2001 年，我們對存款業務進行了大量投資，這不僅在當年取得了積極的成果，而且隨著我們充分發揮核心存款基礎的優勢，未來幾年還將繼續提高我們的收益。第四季核心存款總額平均成長69%，達11億，年底佔總存款的46%，創歷史新高。這意味著全年核心存款增加了4.63億。我們尤其感到鼓舞的是，圍繞正規主要銀行業務建立的商業銀行中心的存款成長與零售銀行業務的巨大成功之間保持著健康的平衡。

We benefited tremendously from our core deposit growth this year as demonstrated by the recovery in our net interest margin to four percent level by the end of the year. We believe, however, that the full benefit of our success in increasing core deposits will be realized in the coming years as higher rate and loan growth maximize the returns from our deposit franchise.

今年，我們核心存款的成長為我們帶來了巨大的收益，年底淨利差回升至4%便是最好的證明。然而，我們相信，隨著利率上升和…的持續走強，核心存款成長的全部益處將在未來幾年逐步顯現。貸款成長能夠最大限度地提高我們存款業務的回報。

While we anticipate continued growth in core deposit this year, we expect that the rate of increase will be low, in the 10 to 15 percent range and that our retail operations, including the 99 Ranch market branches, will account for a greater percentage of the growth than the commercial banking centers. We remain on track to open the first 99-ranch location during the first quarter, and have already attracted deposits to this operation from employees of the supermarket.

雖然我們預計今年核心存款將繼續成長，但我們預計成長率會較低，介於 10% 到 15% 之間，而且我們的零售業務，包括 99 Ranch 超市分店，與商業銀行中心相比，其成長佔比將更高。我們仍按計劃在第一季開設首家99大華超市門市，並且已經吸引了該超市員工的存款。

Finally, I would like to highlight a number of qualitative improvements that we made to our banking franchise during the year that we believe will serve as strong foundations for further growth in 2002.

最後，我想重點介紹我們在過去一年中對銀行業務所做的一些定性改進，我們相信這些改進將為 2002 年的進一步發展奠定堅實的基礎。

During the year we worked diligently to strengthen our position as one of California's premier commercial banks. We added several experienced and capable banking professionals, extended our leading position in a number of niche markets such as affordable housing financing, entertainment industry deposit service and specialized export financing and a renewed emphasis on our consumer products. All of these actions contributed to our relationship-based business and allow us to focus our customers on service, experience and expertise, rather than lowest pricing and highest advance rates.

在過去一年中，我們努力鞏固了自己作為加州一流商業銀行的地位。我們新增了多位經驗豐富、能力卓越的銀行專業人士，並擴大了我們在多個細分市場（例如經濟適用房融資）的領先地位。娛樂產業存款服務和專業出口融資，以及對消費品業務的重新重視，所有這些舉措都有助於我們建立以客戶關係為基礎的業務模式，使我們能夠專注於為客戶提供服務、經驗和專業知識，而不是最低價格和最高預付款率。

The ability to generate business based on such relationship was demonstrated in the fact that we grew our loan portfolio by 19 percent or 346 million for the year despite more stringent underwriting criteria and reduced borrowing demand.

我們利用這種關係創造業務的能力體現在，儘管承銷標準更加嚴格，借款需求減少，但我們的貸款組合仍成長了 19%，即 3.46 億美元。

We believe that all the success of 2001 demonstrated ability of our platform to generate strong earning power throughout a variety of economic and interest rate cycles, as well as to allow us to continue to invest in our franchise in order to support future earnings growth.

我們相信，2001 年的所有成功都證明了我們的平台能夠在各種經濟和利率週期中產生強大的獲利能力，並使我們能夠繼續投資於我們的特許經營權，以支持未來的獲利成長。

I will now turn the call over to Julia to discuss selected financial results.

現在我將把電話交給茱莉亞，讓她討論一些財務表現。

Thank you Dominic. I will briefly review the major financial ratios for the quarter, as well as current trends in our operation.

謝謝多米尼克。我將簡要回顧本季的主要財務比率，以及我們目前的營運趨勢。

Diluted earnings per share for the fourth quarter totaled thirty-nine cents, while diluted cash earnings per share equaled forty-two cents. This compares to forty cents and forty-three cents per share for the fourth quarter of 2000. The decreasing earnings per share resulted from a lower than typical effective tax rate in the fourth quarter of 2000, when we recognized five months of benefits from our rate in the quarter. The effective tax rate for the fourth quarter of 2001 was 26.3 percent compared to 19.4 percent a year ago.

第四季稀釋後每股收益為 39 美分，稀釋後每股現金收益為 42 美分。相較之下，2000 年第四季的稀釋後每股收益和現金收益分別為 40 美分和 43 美分。每股盈餘下降是由於實際稅率低於往年水準所致。2000年第四季度，我們確認了五個月的稅率優惠。 2001年第四季的實際稅率為26.3%，而上年同期為19.4%。

Pretax income for the quarter totaled 12.9 million, eight percent greater than 11.9 million reported in the final quarter of 2000. For the year, diluted earnings per share grew by five percent to 1.61, while diluted cash earnings per share rose by 6 percent to a dollar seventy-two cents. Total net income for the year equaled a record 38.8 million, nine percent above the figure for 2000. The growth in pretax earnings for the quarter was driven by a higher balance of average loans and earnings assets, higher on interest income and continued strength in asset quality offset by higher operating expenses, a higher provision and tax rate.

本季稅前收入總計 1,290 萬美元，比 2000 年第四季報告的 1,190 萬美元成長了 8%。全年稀釋後每股收益成長了 5%，達到 1.61 美元，而稀釋後每股現金收益成長了 6%，達到 1.72 美元。全年淨利總額達到創紀錄的3880萬，比2000年成長9%。本季稅前利潤的成長主要得益於平均貸款和收益資產餘額的增加。更高利息收入和資產品質的持續強勁增長被更高的營運費用、更高的撥備和稅率所抵消。

Net interest income totaled 26.6 million, 18 percent above the prior year. This represented a net interest margin of four percent compared to 4.01 percent for the fourth quarter of 2000. The margin continues to benefit from higher average loans and earnings assets and the substantial reduction in the cost of funds offset by a decrease in the yields in earnings assets. The yield on earnings assets for the fourth quarter decreased to 6.39 percent compared to 8.61 percent in the prior year period, while the cost of funds fell to 2.5 percent compared to 4.77 percent.

淨利息收入總計2660萬，較上年成長18%。這相當於淨利差為 4%，而 2000 年第四季為 4.01%。淨利差繼續受益於平均貸款和收益資產的增加以及資金成本的大幅下降，但收益資產收益率的下降抵消了部分影響。第四季獲利資產收益率從去年同期的 8.61% 下降至 6.39%，而資金成本從 4.77% 下降至 2.5%。

Assuming a flat interest rate environment, we anticipate that the cost of funds decreased slightly during the first quarter, then stabilized for the remainder of the year resulting in a net interest margin in the low 4.0 percent range.

假設利率環境保持不變，我們預計第一季資金成本略有下降，然後在今年剩餘時間內保持穩定，從而使淨息差達到 4.0% 左右。

We provided 2.5 million in loan loss provision during the fourth quarter, compared to 300,000 in the last year's fourth quarter. While our asset quality remains strong and we do not see any systemic problems in our portfolio, we believe that this level of provisioning is prudent in light of continued loan growth and an uncertain economy.

我們在第四季提列了250萬英鎊的貸款損失準備金，而去年同期為30萬英鎊。儘管我們的資產品質依然穩健，且我們認為我們的投資組合中不存在任何系統性問題，鑑於貸款持續成長和經濟狀況不明朗，我們認為這種撥備水準是審慎的。

Core noninterest income again rose during the quarter totaling 5.1 million or 41 percent higher than the year ago quarter. Total noninterest income for the quarter equals 5.4 million, 57 percent above the prior year period. The growth in core noninterest income came primarily from higher loan fees associated with our commercial and residential mortgage lending operation, higher branch fees, increased letters of credit income from our affordable housing lending and higher other income from insurance sales commissions. Generating additional fee income will continue to be a focus for 2002.

本季核心非利息收入再次成長，總計 510 萬美元，比去年同期成長 41%。本季非利息收入總額為540萬美元，較上年同期成長57%。核心非利息收入的成長主要來自商業和住宅抵押貸款業務相關的貸款手續費增加以及分行手續費增加。來自經濟適用房貸款的信用狀收入增加，以及來自保險銷售佣金的其他收入增加。 2002年，我們將持續致力於增加手續費收入。

Total operating expenses increased to 16.6 million, 20 percent above last year's fourth quarter. Cash operating expenses, which exclude amortization of intangibles, equals 15.7 million, 21 percent above the fourth quarter of 2000. The higher expenses result from a higher compensation expense related to the acquisition of Prime Bank, as well as organic staff growth, higher occupancy expense from new branch locations, as well as general operating costs associated with our recent expansion. In addition, during the fourth quarter of 2001 we accrued for a one-time deposit-related bonus program that yielded significant increases in our core deposit base. The efficiency ratio for the quarter was 46.2 percent, compared to 45.5 percent for the fourth quarter of 2000.

總營運支出增至1,660萬美元，較去年第四季成長20%。不包括無形資產攤銷的現金營運支出為1,570萬美元，較2000年第四季成長21%。支出增加主要是因為與薪酬相關的支出增加。收購Prime Bank，以及員工自然成長、新分行更高的租金支出，以及近期擴張帶來的其他一般營運成本，都導致了上述成長。此外，在2001年第四季，我們也提列了一次性存款相關獎金計畫的資金。核心礦藏基礎顯著成長。本季效率比率為46.2%，而2000年第四季為45.5%。

We believe that we made the majority of the necessary investments in our platform during 2001 and the operating expenses in 2002 will increase in the mid to high single digit range with a targeted efficiency ratio in the low to mid40 percent range.

我們相信，我們在 2001 年對我們的平台進行了大部分必要的投資，2002 年的營運費用將以個位數中高段位成長，目標效率比率在 40% 左右。

As discussed previously, the effective tax rates for the quarter was 26.3 percent compared to 19.4 percent for the 2000 quarter. We anticipate a tax rate for 2002 approximately equal to the rate of the fourth quarter due primarily to the rate as well as our affordable housing ownership tax credits.

如前所述，本季實際稅率為26.3%，而2000年同期為19.4%。我們預計2002年的稅率將與第四季大致相同，這主要是由於稅率以及我們提供的經濟適用房所有權稅收抵免政策所致。

Asset quality: As Dominic mentioned earlier, asset quality remained strong during the quarter despite a continued slow down in the economy. Total nonperforming assets decreased to 20 basis points of asset for 5.8 million compared to 30 basis points or 7.4 million at the end of 2000. Nonaccrual loans fell to 17 basis points of total loans or 3.7 million from 20 basis points or 3.7 million a year ago. Net charge off for the quarter totaled 955,000, an annualized 18 basis point of average loans and for the year were 4.1 million or 21 basis points compared to 1.1 million, or 26 basis points, for the fourth quarter of 2000 and 3.7 million, or 22 basis points, for the full year of 2000.

資產品質：正如Dominic先前提到的，儘管經濟持續放緩，但本季資產品質仍保持強勁。不良資產總額降至資產的20個基點，為580萬美元，而2000年底為30個基點，為740萬美元。非應計貸款佔總貸款的比例從去年同期的20個基點（370萬筆）降至17個基點（370萬筆）。本季淨沖銷總額為95.5萬筆，年化平均沖銷額為18個基點；全年淨沖銷額為410萬筆（21個基點），而去年同期為110萬筆（26個基點）。2000 年第四季為 370 萬，2000 年全年為 22 個基點。

The continued decrease in the level of nonperforming assets reflects the more stringent underwriting standards initiated in the early 2000, a proactive management of our loan portfolio and the overall health of our customer base. We continue to expect total net charge for 2002 at or below our 35 basis point target. The portfolio remains well-diversified with very strong ratios.

不良資產水準的持續下降反映了2000年代初開始實施的更嚴格的承保標準。我們對貸款組合和客戶群的整體健康狀況進行了積極主動的管理。我們仍預期2002年淨費用總額將達到或低於35個基點的目標值。貸款組合保持良好的多元化，各項比率都非常強勁。

At the year-end, the average balance for commercial real estate loans was 1.1 million, with an average original loan-to-value of 52.1 percent and an average seasoning of 3.2 years. For the fourth quarter in a row, we did not have any commercial real estates 90 days or more delinquent. Commercial business loans had an average balance of 388,000 and an average seasoning of 2.1 million.

截至年末，商業房地產貸款的平均餘額為110萬美元，平均原始貸款價值比為52.1%，平均帳齡為3.2年。連續第四個季度，我們沒有出現任何逾期90天或以上的商業房地產貸款。商業貸款的平均餘額為 388,000，平均帳齡為 210 萬。

Multifamily loans had an average loan balance of 449,000, a 54.2 percent loan-to-value ratio, a seasoning of 3.7 years and no loan 90 days delinquent. The loan loss reserve totaled 27.6 million or 1.28 percent of loan and 753 percent of nonaccrual loans.

多戶住宅貸款的平均貸款餘額為 449,000，貸款價值比率為 54.2%，貸款期限為 3.7 年，沒有貸款逾期 90 天。貸款損失準備金總額為 2,760 萬，佔貸款總額的 1.28%，佔非應計貸款的 753%。

Finally, the bank remained well-capitalized with a tier one risk base capital ratio of 9.77 percent, a total risk base capital ratio of 10.95 percent and a tier one leverage ratio of 8.22 percent. We have sufficient capital to support our anticipated growth and expect to remain our ratios in this general range during 2002.

最後，該銀行資本充足，一級風險基礎資本比率為 9.77%，總風險基礎資本比率為 10.95%，一級槓桿比率為 8.22%。我們擁有充足的資金來支持預期的成長。預計2002年我們的各項比率將維持在這大致範圍內。

During the fourth quarter we purchased 2.1 million worth of share and 12.8 million for the full year. The Board authorized an additional seven million for our buyback program during the quarter, bringing the combined authorized amount to 8.9 million.

第四季我們回購了價值210萬美元的股票，全年回購額為1,280萬美元。董事會在本季批准了額外的700萬美元用於股票回購計劃，使累計授權金額達到890萬美元。

I will now turn the call back to Dominic.

現在我將把電話轉回給多明尼克。

Thank you, Julia.

謝謝你，茱莉亞。

So, in summary, we are pleased with the results of last year and believe that they reflect the sound balance between earnings growth and continued investment in our franchise. Especially in such uncertain economic conditions, we remain committed to building our platform on the strongest foundation we can create and are confident that these efforts in 2001 will yield significant positive results for our shareholders in 2002. I will now open the call to questions.

總而言之，我們對去年的業績感到滿意，並認為這些業績反映了獲利成長和對我們特許經營業務的持續投資之間的良好平衡。尤其是在當前經濟情勢不明朗的情況下，我們仍致力於打造最堅實的基礎，並相信2001年的這些努力將在2002年為我們的股東帶來顯著的正面成果。現在開始接受提問。

Thank you.

謝謝。

Ladies and gentlemen, if you have a question at this time, please press the one key on your touch-tone telephone. If your question has been answered or you wish to remove yourself from the queue, please press the pound key and if you are using a speakerphone, please lift the handset before asking a question.

女士們、先生們，如果您現在有任何疑問，請按您按鍵式電話上的數字鍵1。如果您的問題已得到解答或您想退出排隊，請按井號鍵（#）。如果您使用的是免持電話，請在提問前拿起聽筒。

Once again, ladies and gentlemen, if you have a question at this time, please press the one key.

女士們、先生們，再次提醒，如果您現在有任何問題，請按數字鍵 1。

One moment.

稍等片刻。

Our first question comes from Scott Valentin of Friedman Billings.

我們的第一個問題來自 Friedman Billings 公司的 Scott Valentin。

Morning, Dominic. Morning, Julia.

早上好，多明尼克。早上好，朱莉婭。

Hi, Scott.

嗨，斯科特。

Hi, Scott.

嗨，斯科特。

Question on the 99 Ranch Supermarkets. You mentioned you hoped to have one open shortly. What's the buildout timeframe on that and how many branches do you plan to have open during '02 and, I guess, what would be the cost implications?

關於99大華超市的問題。您提到希望盡快開設分店。請問建設週期是多久？ 2002年計畫開設幾家分店？成本大概是多少？

We are going to start with two branches and, in fact, the first one we're opening in Arcadia, which will start basically the first week of February and immediately after that will be another in the city of San Gabriel, which is also in February and, at this point, we are looking at these are the two branches we're going to start. And then we'll look at it in about six months to see how things go and then can see potentially additional branches open in Irvine. Most likely, I think, at most for the year will be four branches.

我們將先開設兩家分店，事實上，第一家分店將在阿卡迪亞開業，基本上會在二月的第一周開始營業，緊接著在聖加布里埃爾市也會開設一家分店，也是在二月份。我們計劃先開設這兩家分店。之後我們會觀察大約六個月的情況，看看進展如何，然後再考慮在爾灣開設更多分店。我認為，今年最多可能開設四家分店。

OK.

好的。

And, with regards to Rick, is there any political risk that might go away in the future.

至於里克，是否存在未來可能消失的政治風險？

At this point of time, you know, it looks like we will continue to benefit from the Rick for 2002.

就目前來看，我們似乎將在 2002 年繼續受益於 Rick。

OK. Thank you very much.

好的，非常感謝。

Thank you.

謝謝。

Thank you, Scott.

謝謝你，斯科特。

Once again ladies and gentlemen, if you have a question at this time, please press the one key.

各位女士、先生，如果您現在有任何問題，請按數字鍵 1。

Our next question comes from Lana Chan of CIBC World Markets.

下一個問題來自加拿大帝國商業銀行世界市場的 Lana Chan。

Hi, good morning.

您好，早安。

Good morning.

早安.

Two questions.

兩個問題。

One on the margin, with the possibility of rates going up a little bit at the end of '02, does your margin benefit in that kind of scenario? Can it go higher than the four percent? And, I guess, are there still a sizable amount of time deposits that are repricing over the next two quarters?

一個處於邊緣，有可能如果利率在2002年底略有上漲，您的利潤率在這種情況下會受益嗎？利潤率有可能超過4%嗎？另外，我想問的是，未來兩季是否還有相當數量的定期存款需要重新定價？

In term of the margins, yes, we are now asset sensitive so if rates do go up we will benefit. Based upon the flat-rate environment we are projecting, you know, about the low 4.0 percent but we will benefit if rates started to rise. And in terms of the CDs, the CDs as of December, the cost of funds have really come down to 3.38 percent so we will just benefit slightly from that repricing of the CD.

就利潤率而言，是的，我們現在對資產價格比較敏感，所以如果利率上升，我們將受益。基於目前的固定利率環境，我們預期利率會在4.0%左右，但如果利率開始上升，我們將從中獲益。至於 CD，截至 12 月，CD 的資金成本確實已降至 3.38%，因此我們將從 CD 的重新定價中略微受益。

OK. And my second question was related to fee income this quarter. It looks like you had a nice increase from the third quarter. I wanted to see if there was anything unusual in there, or if that's a sustainable level going forward.

好的。我的第二個問題與本季的手續費收入有關。看起來你們第三季業績有了不錯的成長。我想看看這其中是否存在什麼異常情況，或者這是否是一個可持續的增長水平。

The fee income has been doing very well this year because of the, you know, refinancing, the fixed rate market for the mortgage lending and when the refinancing volume really goes up and there are fixed rate loans, we solve those loans and just pick up the fee income. And, also, we benefit the increase from the letters of credit on the affordable housing that we booked in the third quarter.

今年手續費收入表現非常好，因為你知道，再融資、抵押貸款的固定利率市場，以及當再融資量真正上升且有固定利率貸款時，我們解決這些貸款問題，就能獲得手續費收入。此外，我們也受惠於第三季預訂的經濟適用房信用證的成長。

So at this point in time, it looks like it's quite sustainable for the fourth quarter, while the core fee income about five million and we do expect, you know, unless the volume of the refinancing drops, you know, significantly in 2002, it will be off that. We are not expecting a major increase for 2002; probably the core fee income will increase somewhere about 10 percent in comparison to 2001.

所以就目前來看，第四季應該能夠維持這種勢頭。核心手續費收入約五百萬，我們預計，除非2002年再融資規模大幅下降，否則收入將低於這個數字。我們預計2002年不會大幅成長；與 2001 年相比，核心費用收入可能會成長 10% 左右。

Also for the refi-market, when the rate cycle went up, not only do you have refi-volume would slow down but also a lot of the customers would prefer at that point to go with adjustable. Our policy has been, which has been for the last 20 some odd years, that we will keep adjustable loan in our portfolio and sell the fixed rate to the conduit market. So, if the customer goes back to adjustable rate, then we'll have more loans in our portfolio and a little bit less fee and what will happen in the fourth quarter was we have a lot more fees generated because of selling these fixed-rate loans to secondary markets and then have less loan in our portfolio.

此外，對於再融資市場而言，當利率週期上升時，不僅再融資量會放緩，而且許多客戶在那時也會更傾向於選擇浮動利率貸款。過去二十多年來，我們的政策一直是：將浮動利率貸款保留在我們的投資組合中，並將固定利率貸款出售給第三方市場。因此，如果客戶重新選擇浮動利率貸款，我們將有更多浮動利率貸款可供選擇。我們投資組合中的貸款數量減少了，費用也略有減少。第四季的情況是，由於我們將這些固定利率貸款出售給二級市場，我們產生了更多的費用，因此我們投資組合中的貸款數量減少了。

OK, great, thanks.

好的，太好了，謝謝。

Thank you.

謝謝。

Our next question comes from Mark Agah of RBC Capital Markets.

下一個問題來自加拿大皇家銀行資本市場的馬克·阿加。

Hi, good morning.

您好，早安。

Good morning.

早安.

Very impressive numbers in the core deposit growth. We're now sitting at, I guess, 46 percent core deposits and you've indicated, Dominic, that the rate of growth should slow relative to time deposit growth this year, I would assume, from the retail branches and 99 Ranch.

核心礦床成長數據非常驚人。目前，核心礦床佔比約為46%，正如你所說，多明尼克，今年零售分店和 99 Ranch 的成長速度相對於定期存款的成長速度應該會放緩。

What is a long-term goal for the company, in general, in terms of core deposits as a percentage of the overall deposit mix, first of all. And, second of all, what is that going to mean for your degree of asset sensitivity, potentially, as we get into rising rates? I would assume if you have more cheap deposits and we get into rising rates you could actually become a little bit more asset sensitive and margin could benefit even more.

首先，就公司整體而言，核心存款佔總存款比例的長期目標是什麼？其次，這對貴公司的資產敏感度意味著什麼？或許，隨著利率上升，情況會有所改變？我猜想，如果你擁有更多低成本存款，而利率又上升，你對資產的敏感度可能會更高，利潤率可能會從中受益更多。

Any comments on that?

對此有何評論？

First of all, I think that ever since we converted the bank from an S&L to a commercial bank back in 1995, the goal was to really move the deposits more from time CDs to core and that we've been able to transition from over 80 percent of time deposit now to actually today 46 percent. But, I think, anything above 40 percent is a good mix and we'd like to get it up to 50 percent if we can but I don't think that, you know, sometimes that will be a very realistic goal in a very short period of time. So, we are going to be trying to work around the mid 40's range.

首先，我認為自從我們在 1995 年將銀行從儲蓄貸款機構轉型為商業銀行以來，我們的目標就是將存款從定期存款更多地轉移到核心存款，而我們已經成功地將定期存款的比例從目前的 80% 以上過渡到了今天的 46%。但我認為，40%以上的比例就比較理想了，如果可以的話，我們希望達到50%，但我覺得在很短的時間內達到50%可能不太現實。所以，我們會努力將比例維持在40%左右。

Now in terms of -- and I still feel that we will continue to be able to grow this core deposit from the commercial banking side, but the fact is that the 99 Ranch market opening will allow us to have plenty of opportunities to get low-cost deposit. And when I say low-cost deposit, I don't necessarily look at that it has to be checking account or savings account or money market account because from the retail side we have actually CD deposits currently that we're paying very, very low rate and as long as the rate is low we take it.

現在，就商業銀行業務而言——我仍然認為我們能夠繼續成長核心存款——但事實是，99 Ranch 市場的開業將為我們提供大量獲得低成本存款的機會。我所說的低成本存款，我不一定要看是支票帳戶、儲蓄帳戶還是貨幣市場帳戶，因為從零售角度來看，我們目前實際上有定期存款，利率非常非常低，只要利率低，我們就接受。

And, so, the fact is with all these lower-cost deposits that we have currently, that we enjoy, I believe that, obviously today we are looking more asset sensitive, could've been even more asset sensitive but our philosophy at East West is that, we never want to get too one-sided because, you know, if we're trying to be too greedy today and looking at the interest rate environment and aggressively sort of make bad on one end, one day when it goes to the other end it will hurt us deeply. So our approach and philosophy have always been, leave plenty of profit on the table.

因此，事實上，憑藉我們目前擁有的所有這些低成本存款，我相信，顯然今天我們對資產的敏感度更高，本來可以更加敏感，但東西銀行的理念是，我們永遠不想過於偏向一方，因為，你知道，如果我們今天太貪婪，在利率環境下激進地追求利潤最大化，那麼總有一天，當利率環境逆轉時，我們會遭受沉重的打擊。因此，我們始終堅持的策略和理念是：盡可能保留利潤空間。

As long as we are able to achieve pretty solid results we are trying to stay as interest-rate neutral as possible. So when it gets to be a little bit too much on the other end, we probably would do something to try to neutralize it and that's been the philosophy. It's not only in the interest rate side, we look at on our credit it's the same philosophy.

只要我們能夠取得相當不錯的業績，我們就會盡量保持利率中立。所以，當利率上升幅度過大時，我們可能會採取一些措施來中和它，這始終是我們的策略。不只是利率方面，我們在信貸方面也秉持同樣的理念。

Two years ago, when we were looking at record earnings after record earnings for three or four years in a row and also with return of equity exceeding 20 percent and looked like that it would shoot in the 25 percentile, we recognized in 1999 that this economy just cannot sustain and therefore, we start paring down our loan portfolio to a much lower sort of dollar amount per customer or per industry and things like that. And giving up the profit, however, resulting in today's high asset quality and that's kind of like the general theme of East West, we view credit and interest-rate risk in the same manner that we always want to make sure that we don't go too far into the other end. But, no question about it is that if rates start going up we would not be able to work fast enough to stay interest-rate neutral and, therefore, we have to benefit from it.

兩年前，我們看到公司連續三、四年獲利屢創新高，股本回報率也超過20%，看起來它會跌至 25% 的水平，我們在 1999 年意識到這種經濟形勢無法持續，因此，我們開始大幅縮減貸款組合，降低每個客戶或每個行業的貸款金額等等。然而，放棄利潤卻造就瞭如今的高資產質量，這有點像是東西方投資的總體主題，我們看待信用和利率風險的方式相同，我們始終希望確保我們不會走向另一個極端。但毫無疑問，如果利率開始上升，我們將無法足夠迅速地採取行動來保持利率中性，因此，我們必須從中獲益。

Right.

正確的。

Again, what is your assumption for rate this year?

那麼，您對今年的利率預期是多少？

Flat rate.

扁平率。

Throughout the year?

全年如此嗎？

Yeah, throughout the year.

是的，全年都是如此。

Is there anything right now -- flipping sides on the asset quality, I mean, everything looked great this quarter. Is there anything down there in Southern California and, obviously, we're extremely weak up here in Northern Cal, but in Southern Cal we hear everyone say it's so much stronger now. Is there any signs of deterioration down there? Anything that concerns you, at this point, from the commercial real estate side?

現在資產品質方面有什麼變化嗎？我的意思是，這季度一切看起來都很好。南加州那邊有變化嗎？顯然，北加州這邊非常疲軟，但我們聽說南加州現在強多了。樓下有沒有破損跡象？從商業不動產的角度來看，目前有什麼讓你擔憂的問題嗎？

Real estate so far has been still, I would say on the commercial side, still look pretty decent. The fact is the whole country, I think, is slowing down and when we hear, you know, these sudden, you know, K-Mart (Company: K-Mart Corporation; Ticker: KM ; URL: http://www.kmart.com/) and filing bankruptcy and all that, it does have a ripple effect to a degree to here in terms of unemployment rate, so I look at it that while I'm pleased to see how strong this real estate market is today, I am somewhat cautious, I would say optimistically cautious, about I'm not real sure how long it will last, but, obviously, I think the biggest benefit Southern California has today is that we went through a major recession in the early and mid 90's and therefore we're still sort of on the way to recovery and on top of that I see that because of that recession in the early '90s that the whole Los Angeles area and Orange County have become so diversified in different industries.

就目前而言，商業房地產市場依然相當不錯。事實上，我認為整個國家的經濟都在放緩，當我們聽到像K-Mart（公司：K-Mart Corporation；股票代碼：KM；網址：http://www.kmart.com/）突然申請破產之類的消息時，這在一定程度上會對失業率產生連鎖反應。所以，雖然我很高興看到如今房地產市場的強勁勢頭，但我還是有些謹慎，或者說是樂觀的謹慎，因為我不太確定這種勢頭能持續多久。不過，很顯然，我認為南加州如今最大的優勢在於，我們經歷了年初的一場嚴重經濟衰退。90 年代中期，我們仍在復甦的路上。此外，我認為正是由於 90 年代初的經濟衰退，整個洛杉磯地區和橙縣的產業變得如此多元化。

That's why, even though today there are, you know, some particular segment I think has some difficulty, you know, it's just that there's so many other things going on right now that makes the economy still staying strong. Now, hopefully, that will be sustainable for the next few years, you know, and then that will be no problem. But at this point, you know, I think it's too early to tell because I usually like to see at least one or two years later on and then once healed, no problem, then I think there's absolutely no problem.

這就是為什麼，儘管目前某些特定領域確實面臨一些困難，但由於其他許多因素的推動，經濟仍然保持強勁。希望這種強勁勢頭能夠持續幾年。到那時就沒問題了。但你知道，我覺得現在下結論還太早，因為我通常喜歡至少觀察一兩年，等傷口完全癒合後，如果沒問題，那我覺得就絕對沒問題了。

OK. Thank you.

好的，謝謝。

Thank you.

謝謝。

Our next question comes from James Leonard of Leonard Management Group .

我們的下一個問題來自 Leonard Management Group 的 James Leonard。

Good morning, folks.

各位早安。

Good morning.

早安.

I wish you'd talk a little bit about your capital. You're certainly adequately capitalized and some might think you're overly capitalized. And you're in the process of, you're certainly buying back some stock which is helpful in some ways, but at the same time you're selling off your much of your loan production, which some people might think could be more profitable if you would keep it until you certainly have the capital to support it.

我希望你能稍微談談你的資金狀況。你的資金絕對充足，有些人甚至可能認為你的資金過於雄厚。你們目前正在回購一些股票，這在某些方面是有幫助的，但同時，你們也在出售大部分貸款業務，有些人可能會認為，如果保留這些業務，可能會更有利可圖。直到你確實有足夠的資金來支持它。

Would you just talk a little bit about what your strategy is, your philosophy on capitalizing the bank and making sure that you're effectively utilizing your capital?

您能否簡單談談您的策略、您對銀行資本的概念，以及如何確保有效運用您的資本？

In terms of the capital, we always wanted to stay well capitalized within the repertory definition. Now, besides making the minimum capital requirement by the sort of the FDIC standard, we feel that, you know, to be prudent we relatively have little bit excess capital that just in case opportunity comes along and that's always been the philosophy. But, I mean, as we have done so far we are not hesitant to go back and buy back stock when opportunities come along and during the last few years we have continued to do that.

就資本而言，我們一直希望維持在符合標準範圍內的充足資本。除了滿足聯邦存款保險公司（FDIC）規定的最低資本要求外，我們認為，為了謹慎起見，我們保留了一些額外的資本，以備不時之需。機會來了，我們就會這樣做，這始終是我們的理念。我的意思是，就像我們迄今為止所做的那樣，當機會出現時，我們毫不猶豫地回購股票，過去幾年我們也一直在這樣做。

And then we continue to look for potential opportunities. I think if we look back in the history of the last three years, we've made three bank acquisitions, one insurance agency acquisition and we expanded and are currently now in this 99 Ranch Market.

然後我們會繼續尋找潛在的機會。回顧過去三年，我們收購了三家銀行，收購了一家保險代理公司，並且不斷擴張，目前已經進入了99 Ranch Market市場。

We got a lot of stuff on the plate, you know, just by looking at the history that what we need to do to use the capital, so, I think that it never hurt to have a little bit excess capital in case something come along.

你知道，我們有很多事情要做，看看過去就知道了我們需要用這些資金做什麼，所以，我認為多一些盈餘資金以備不時之需也無妨。

And that's pretty much our philosophy and also recognizing the economy today and I would believe that the regulators today would very much to like see banks have excess capital than running very tight. And since we are a bank that's been growing very nicely and I believe that, you know, that will be in the view of the regulators that that was something that they would like to see. We have a little bit more cushion there in the capital to support the growth in the future.

這基本上就是我們的理念，同時我們也意識到當前的經濟狀況，我相信監管機構現在更希望看到銀行擁有充足的資本，而不是資金過於緊張。而且，我們是一家發展勢頭良好的銀行，我相信，你知道，監管機構會認為這是他們樂見的。我們在這方面還有一些資本緩衝，可以支持未來的成長。

Like our current situation because of that philosophy that we took, you know, for the last 28 years of East West history, we have never once had a regulatory problem. And that allows us to every time when we go out there and try to make an acquisition or expand in an area that may be a little bit unique and new to the banking industry, the examiners always have the confidence to give their stamp of approval to East West on a very timely manner. And so I look at that excess capital not necessarily as not efficient use of our money, but, in fact, one of the premiums we have to have in order to afford us to efficiently do business in a banking environment.

就像我們目前所處的境地，正是因為我們採取了那種理念，你知道的。在東西銀行過去28年的發展歷程中，我們從未遇到任何監管問題。這使得我們每次嘗試在銀行業可能比較獨特和新穎的領域進行收購或擴張時，都能順利開展業務。審查員總是很有信心及時批准東西方公司的申請。因此，我認為這部分超額資本並非一定意味著資金使用效率低下，實際上，它是我們為了維持營運而必須擁有的額外收益之一。在銀行業務環境中有效率地開展業務。

Can I interpret that to mean that you're likely to continue to run in excess of eight percent of tier one capital?

我的理解是，這意味著你們很可能會繼續維持超過 8% 的一級資本？

Oh, yes, you know, that's a minimum, you know, we would like to have at least a minimum of eight percent tier one leverage capital.

哦，是的，你知道，這是最低要求，我們希望至少有 8% 的一級槓桿資本。

OK. Thank you.

好的，謝謝。

Our next question comes from Todd Stender of Crowell Weedon & Co.

我們的下一個問題來自 Crowell Weedon & Co. 公司的 Todd Stender。

Yes, good morning everybody.

是的，大家早安。

Hi.

你好。

Good morning.

早安.

Couple questions.

幾個問題。

If you could speak about some of the factors that contributed to the drop in your trade finance during the year and maybe some projections for 2002.

如果您能談談導致貴公司今年貿易融資下降的一些因素，以及 2002 年的一些預測，那就太好了。

Thanks.

謝謝。

OK.

好的。

In terms of the trade finance, that will be one of the areas we have clearly, for two factors, one is that for industry concentration and we started in 1999 fourth quarter looking at our overall credit portfolio and we made a decision that with a couple of industry that we feel that we have over concentration and they happen some of them are in the trade finance area, we start tearing down the exposure.

就貿易融資而言，這將是我們重點關注的領域之一，原因有二：一是產業集中度，而我們從1999年就開始關注這個問題。第四季度，我們審視了整體信貸組合，並決定對一些我們認為過度集中的行業（其中一些恰好是貿易融資領域）開始降低敞口。

Secondly, we also had clients that have grown to a size that we feel that for unsecured credit we should not, sort of like, continue to support single-handedly. And we decided that we either are going to participate with other banks or we need to clients to graduate from East West to go to a much bigger bank. Couple of that reason have reduced in a, sort of like a decrease in the loan balance while we're still growing that portfolio in terms of number customers we actually have more, but there are some sizable customers or some industry that caused the balance to go down.

其次，我們還有一些客戶規模已經發展到一定程度，我們認為對於無擔保信貸，我們不應該再獨自承擔全部責任。因此，我們決定要么與其他銀行合作，要么讓這些客戶從東西銀行轉到規模更大的銀行。其中一些原因導致貸款餘額減少，雖然我們仍在擴大客戶組合（實際上客戶數量更多了），但部分客戶規模較大，或者某些行業存在一些問題。這導致餘額下降。

Besides, that, one other key factor is in this export import business, obviously particularly on the import side, because the slow down the U.S. economy and our customers do not have as much orders, you know, to ship to U.S. business and because the consumer market has slowed down a little bit, so, our customer really don't need to use the line as extensively as it used to. And, on top of that, in terms of the marketing efforts we have not been very aggressively this year to go after new customers because with the general slow down of the economy it is obviously not prudent at this point to get a lot of trade finance customers out there wanting to switch bank because they have financial problems, you know and that's the last thing I want to do is start, you know, start seeking those customers.

除此之外，還有一個關鍵因素，顯然在進出口業務中，尤其是在進口方面，因為美國經濟放緩，我們的客戶向美國企業發貨的訂單減少了，而且由於消費市場有所放緩，所以，我們的客戶確實不再像以前那樣頻繁地使用這條線路了。此外，就行銷而言，我們今年並沒有非常積極地拓展新客戶，因為鑑於整體經濟放緩，此時獲取大量貿易融資顯然並不明智。你知道，有些客戶因為財務問題想要換銀行，而我最不想做的就是去爭取這些客戶。

And besides all these factors one of the things that we've done well in the year 2001 is that we have start focusing more on the fee income side and, I think, that is an area that we will do more in year 2002 and 2003 and forward that is that, doing more in terms of more asset backed processor for other banks and a few community banks in California that do not have the international trade finance expertise. I would love to have East West to take care of that, but they don't want to let go of their customers, so, we in term, help them to become their back off support to process their LC business. So what we end up getting is just a fee income, but we do not have the credit exposure, we also do not have the customer relationship and that's the kind of work that we'll continue to do more in the future.

除了以上所有因素之外，我們在2001年做得比較好的一件事是，我們開始更加關注費用收入方面，並且我認為，在 2002 年和 2003 年及以後，我們將更專注於這一領域，即為其他銀行以及加州一些缺乏國際貿易融資專業知識的社區銀行提供更多資產支援處理服務。我很希望東西銀行能處理這件事，但他們不想失去客戶，所以，作為交換，我們幫助他們成為處理信用證業務的後備支援。這樣一來，我們最終只能獲得手續費收入，而無需承擔任何信用風險。我們目前還沒有建立起客戶關係，而這正是我們未來需要繼續努力的方向。

OK. Thank you.

好的，謝謝。

Thank you.

謝謝。

At this time, it appears we have no further questions. I would like to turn the program back over to you for any further remarks.

目前看來，我們沒有其他問題了。我想把發言權交還給您，請您再發表任何意見。

Well, if there's no other questions I'm looking forward to talk to you all again when we release our first quarter year 2002 earnings and thank you very much.

如果沒有其他問題，我期待在發布 2002 年第一季財報時再次與大家交流，非常感謝。

Bye, bye.

再見。

Ladies and gentlemen, thank you for participating in today's conference. This does conclude the call, you may now disconnect.

女士們、先生們，感謝各位參加今天的會議。通話到此結束，您可以掛斷電話了。