East West Bancorp Inc (EWBC) 2005 Q2 法說會逐字稿

Good day ladies and gentlemen and welcome to the Q 2 2005 MetroCorp Bancshares, Incorporated earnings. My name is Candice (ph) and I will be your coordinator for today.

(Operator Instructions)

I would now like to turn the presentation over to the host for today's conference, Mr. George Lee, President and Chief Executive Officer, please proceed sir.

Thank you and good morning every one. The second quarter operating results as we have released in our earnings release were encouraging, but not surprising to our management team.

Some fundamental improvements we have made to the key functional areas are gaining momentum and we expect the same trend to continue. We were able to achieve our improvements by approve -- improving our efficiency ratio. So we're at 64% for the second quarter of '04, and now we're down to 61% for the second quarter of '05, in spite of the fact that we are incurring higher audit costs, higher Sarbines Oxley expenses, investments into our recent acquisition of First United Bank. We are confident and pleased with the results of our other quality effort. Our loan increase of 10% of the last twelve months is well controlled, and we believe that the quality of the new loans is well within our guidelines. Our deposit and interest margin is well managed, the 8% deposit growth over 12 months came under a very intense market environment and we foresee the same intensity to continue.

There are no surprises to the progress we're making with our Sarbines Oxley effort, we expect to beat all the time lines, we're also expect to close our acquisition of First United Bank in California before the end of the year.

So, ladies and gentlemen this is a pretty mundane and expected set of results. The management team is on our path and we expect the same thing to continue.

With this I would like to open this for your questions.

Thank you.

(Operator instructions)

Our first question comes from Bryce Rowe of Legg Mason. Please proceed.

Thank you. Morning guys.

Morning Bryce.

George a just a couple of questions on asset (ph) quality, first wanted to get a little bit more clarity on the charge off, I see that there was an $800,000 charge off tied to one loan, was that loan previously classified as non performing?

Yes Bryce, with me is Terry Tangen, our Chief Credit Officer. I am going to let him take the question, and also sitting here is David Choi, our Chief Financial Officer and Berg Baker, our Chief Lending Officer. So with the four of us we will be answering all your questions.

Okay.

This question I turn that over to Terry.

Okay, hi Terry.

Hi Bryce. Yes that loan was on non accrual, that charge down was taken as part of what we anticipate will be the final resolution of that including the pay off for the remaining amount.

Okay, And when would you expect that to occur?

We hope that that will occur this quarter.

Okay, and can you give us an idea of what the nature of that line was, is it a hospitality one?

No, this was the wholesale business, we have been working with this one for quite some time and gotten significant pay downs on the original principal and this final resolution.

Okay.

And this loan was fully preserved on a specific basis to have them for a period of time.

Okay, and what was the total amount of the loan.

Total amount approximately two million five.

Okay. May be this is another question for you Terry, can you state to the increase in non performing loans, total up about two million bucks, and we saw non performing assets actually come down but wanted to understand why the non performing loans increased.

Basically that was one relationship of about a little over $3 million that had been on the over 90s at the end of the prior quarter.

Okay.

We'd anticipated better results than what we had looked at and so we decided that that was more appropriately a non performing loan so basically moved out of that category into NPLs.

Okay, now and this is more of a subjective question, but just wondering where do you see non performing loans going over the next 12 months in the -- you guys have talked about them coming down as they have over the last year, year to two years, do you think we'll continue to see that, that trend?

Yes, I believe that we will continue to see the trend going towards what I have always shared with you guys.

Okay, now and then just one final wrap up question for David. David, what percentage of loans is tied to the primary?

We have found 90% of our loans are either variable or adjustable.

Okay.

And about 10% of our loan portfolio is fixed rate. That percentage continues to hold right now.

Okay. Thank you.

Thank you Bryce.

(Operator Instructions)

Well, with no further questions, I would like to thank you all for your participation and please feel free to contact me if you have anything that you have in mind that you did not ask. But we look forward to the next quarter.

Thank you very much.

Thank you for your participation in today's conference. This concludes the presentation, you may now disconnect, have a great day