UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

 

FORM 10-Q

 

Mark One

 

þ                                   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended September 30, 2012

 

or

 

¨                                   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from ________ to ________

 

Commission file number 000-24939

 

 

EAST WEST BANCORP, INC.

(Exact name of registrant as specified in its charter)

 

Delaware

95-4703316

(State or other jurisdiction of

(I.R.S. Employer

incorporation or organization)

Identification No.)

 

135 N. Los Robles Ave, 7th Floor, Pasadena, California 91101

(Address of principal executive offices) (Zip Code)

 

(626) 768-6000

(Registrant’s telephone number, including area code)

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ   No ¨

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes þ   No ¨

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definition of “large accelerated filer and accelerated filer” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer
þ

 

Accelerated filer
¨

Non-accelerated filer
¨

Smaller reporting company
¨

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨   No þ

 

Number of shares outstanding of the issuer’s common stock on the latest practicable date: 140,317,126 shares of common stock as of October 31, 2012.

 



 

TABLE OF CONTENTS

 

 

 

 

 

PART I - FINANCIAL INFORMATION

 

4

 

 

 

 

Item 1.

Condensed Consolidated Financial Statements (Unaudited)

 

4

 

 

 

 

 

Notes to Condensed Consolidated Financial Statements (Unaudited)

 

9

 

 

 

 

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

62

 

 

 

 

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

 

89

 

 

 

 

Item 4.

Controls and Procedures

 

89

 

 

 

 

PART II - OTHER INFORMATION

 

90

 

 

 

 

Item 1.

Legal Proceedings

 

90

 

 

 

 

Item 1A.

Risk Factors

 

90

 

 

 

 

 

 

 

 

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

 

90

 

 

 

 

Item 3.

Defaults Upon Senior Securities

 

90

 

 

 

 

Item 4.

Mine Safety Disclosures

 

90

 

 

 

 

Item 5.

Other Information

 

91

 

 

 

 

Item 6.

Exhibits

 

91

 

 

 

 

SIGNATURE

 

92

 

2


 


 

Forward-Looking Statements

 

Certain matters discussed in this Quarterly Report contain or incorporate statements that we believe are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Exchange Act”), and Rule 175 promulgated thereunder, and Section 21E of the Securities Exchange Act of 1934, as amended, and Rule 3b-6 promulgated thereunder. These statements relate to our financial condition, results of operations, plans, objectives, future performance or business. They usually can be identified by the use of forward-looking language, such as “will likely result,” “may,” “are expected to,” “is anticipated,” “estimate,” “forecast,” “projected,” “intends to,” or may include other similar words or phrases, such as “believes,” “plans,” “trend,” “objective,” “continue,” “remain,” or similar expressions, or future or conditional verbs, such as “will,” “would,” “should,” “could,” “might,” “can,” or similar verbs. You should not place undue reliance on these statements, as they are subject to risks and uncertainties, including, but not limited to, those described in the documents incorporated by reference. When considering these forward-looking statements, you should keep in mind these risks and uncertainties, as well as any cautionary statements we make. Moreover, you should treat these statements as speaking only as of the date they are made and based only on information then actually known to us.

 

There are a number of important factors that could cause future results to differ materially from historical performance and these forward-looking statements. Factors that might cause such a difference include, but are not limited to:

 

·                                         our ability to manage the loan portfolio acquired from FDIC-assisted acquisitions within the limits of the loss protection provided by the FDIC;

·                                         changes in our borrowers’ performance on loans;

·                                         changes in the commercial and consumer real estate markets;

·                                         changes in our costs of operation, compliance and expansion;

·                                         changes in the economy, including inflation;

·                                         changes in government interest rate policies;

·                                         changes in laws or the regulatory environment;

·                                         changes in critical accounting policies and judgments;

·                                         changes in accounting policies or procedures as may be required by the Financial Accounting Standards Board or other regulatory agencies;

·                                         changes in the equity and debt securities markets;

·                                         changes in competitive pressures on financial institutions;

·                                         effect of additional provision for loan losses;

·                                         fluctuations of our stock price;

·                                         success and timing of our business strategies;

·                                         impact of reputational risk created by these developments on such matters as business generation and retention, funding and liquidity;

·                                         impact of the European debt crisis;

·                                         impact of potential federal tax increases and spending cuts;

·                                         changes in our ability to receive dividends from our subsidiaries; and

·                                         political developments, wars or other hostilities may disrupt or increase volatility in securities or otherwise affect economic conditions.

 

For a more detailed discussion of some of the factors that might cause such differences, see the Company’s 2011 Form 10-K under the heading “ITEM 1A. RISK FACTORS” and the information set forth under “RISK FACTORS” in this Form 10-Q. The Company does not undertake, and specifically disclaims any obligation to update any forward-looking statements to reflect the occurrence of events or circumstances after the date of such statements except as required by law.

 

3



 

PART I – FINANCIAL INFORMATION

 

EAST WEST BANCORP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

 

(In thousands, except share data)

(Unaudited)

 

 

 

September 30,

 

December 31,

 

 

 

2012

 

2011

 

ASSETS

 

 

 

 

 

Cash and cash equivalents

 

  $

1,816,372

 

  $

1,431,185

 

Short-term investments

 

347,001

 

61,834

 

Federal funds sold

 

20,000

 

 

Securities purchased under resale agreements

 

1,100,000

 

786,434

 

Investment securities available-for-sale, at fair value (with amortized cost of $2,240,496 at September 30, 2012 and $3,132,968 at December 31, 2011)

 

2,237,848

 

3,072,578

 

Loans held for sale

 

157,869

 

278,603

 

Loans receivable, excluding covered loans (net of allowance for loan losses of $223,637 at September 30, 2012 and $209,876 at December 31, 2011)

 

10,916,386

 

10,061,788

 

Covered loans (net of allowance for loan losses of $5,877 at September 30, 2012 and $6,647 at December 31, 2011)

 

3,178,585

 

3,923,142

 

Total loans receivable, net

 

14,094,971

 

13,984,930

 

FDIC indemnification asset

 

368,473

 

511,135

 

Other real estate owned, net

 

40,007

 

29,350

 

Other real estate owned covered, net

 

27,613

 

63,624

 

Total other real estate owned

 

67,620

 

92,974

 

Investment in affordable housing partnerships

 

178,962

 

144,445

 

Premises and equipment, net

 

114,627

 

118,926

 

Accrued interest receivable

 

88,814

 

89,686

 

Due from customers on acceptances

 

30,365

 

198,774

 

Premiums on deposits acquired, net

 

58,746

 

67,190

 

Goodwill

 

337,438

 

337,438

 

Other assets

 

794,059

 

792,535

 

TOTAL

 

  $

21,813,165

 

  $

21,968,667

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

Customer deposit accounts:

 

 

 

 

 

Noninterest-bearing

 

  $

4,118,502

 

  $

3,492,795

 

Interest-bearing

 

13,547,925

 

13,960,207

 

Total deposits

 

17,666,427

 

17,453,002

 

Federal Home Loan Bank advances

 

363,119

 

455,251

 

Securities sold under repurchase agreements

 

995,000

 

1,020,208

 

Bank acceptances outstanding

 

30,365

 

198,774

 

Long-term debt

 

137,178

 

212,178

 

Accrued expenses and other liabilities

 

302,867

 

317,511

 

Total liabilities

 

19,494,956

 

19,656,924

 

 

 

 

 

 

 

COMMITMENTS AND CONTINGENCIES (Note 12)

 

 

 

 

 

 

 

 

 

 

 

STOCKHOLDERS’ EQUITY

 

 

 

 

 

Preferred stock, $0.001 par value, 5,000,000 shares authorized; Series A, non-cumulative convertible, 200,000 shares issued and 85,710 shares outstanding in 2012 and 2011.

 

83,027

 

83,027

 

Common stock, $0.001 par value, 200,000,000 shares authorized; 157,124,126 and 156,798,011 shares issued in 2012 and 2011, respectively; 140,300,832 and 149,327,907 shares outstanding in 2012 and 2011, respectively.

 

157

 

157

 

Additional paid in capital

 

1,462,270

 

1,443,883

 

Retained earnings

 

1,095,743

 

934,617

 

Treasury stock, at cost – 16,823,294 shares in 2012 and 7,470,104 shares in 2011

 

(321,471

)

(116,001

)

Accumulated other comprehensive loss, net of tax

 

(1,517

)

(33,940

)

Total stockholders’ equity

 

2,318,209

 

2,311,743

 

TOTAL

 

  $

21,813,165

 

  $

21,968,667

 

 

See accompanying notes to condensed consolidated financial statements.

 

4



 

EAST WEST BANCORP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share data)

(Unaudited)

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

 

September 30,

 

September 30,

 

 

 

 

 

 

 

 

 

 

 

 

 

2012

 

2011

 

2012

 

2011

 

INTEREST AND DIVIDEND INCOME

 

 

 

 

 

 

 

 

 

Loans receivable, including fees

 

  $

232,195

 

  $

244,523

 

  $

691,270

 

  $

712,822

 

Investment securities

 

10,380

 

24,503

 

48,525

 

66,613

 

Securities purchased under resale agreements

 

5,530

 

5,064

 

14,602

 

14,443

 

Investment in Federal Home Loan Bank stock

 

127

 

75

 

514

 

432

 

Investment in Federal Reserve Bank stock

 

719

 

710

 

2,146

 

2,128

 

Due from banks and short-term investments

 

5,211

 

7,866

 

17,517

 

15,106

 

Total interest and dividend income

 

254,162

 

282,741

 

774,574

 

811,544

 

INTEREST EXPENSE

 

 

 

 

 

 

 

 

 

Customer deposit accounts

 

18,202

 

28,216

 

57,543

 

83,328

 

Federal funds purchased

 

 

 

2

 

 

Federal Home Loan Bank advances

 

1,468

 

3,013

 

4,963

 

12,746

 

Securities sold under repurchase agreements

 

11,664

 

12,218

 

34,977

 

36,351

 

Long-term debt

 

920

 

1,424

 

3,106

 

4,783

 

Other borrowings

 

 

88

 

 

384

 

Total interest expense

 

32,254

 

44,959

 

100,591

 

137,592

 

Net interest income before provision for loan losses

 

221,908

 

237,782

 

673,983

 

673,952

 

Provision for loan losses, excluding covered loans

 

13,321

 

22,297

 

46,395

 

72,797

 

Provision (reversal) for loan losses on covered loans

 

5,179

 

(297

)

5,705

 

2,209

 

Net interest income after provision for loan losses

 

203,408

 

215,782

 

621,883

 

598,946

 

NONINTEREST INCOME (LOSS)

 

 

 

 

 

 

 

 

 

Impairment loss on investment securities

 

 

 

(5,165

)

(5,555

)

Less: Noncredit-related impairment loss recorded in other comprehensive income

 

 

 

5,066

 

5,091

 

Net impairment loss on investment securities recognized in earnings

 

 

 

(99

)

(464

)

Decrease in FDIC indemnification asset and receivable

 

(26,757

)

(43,451

)

(72,520

)

(79,700

)

Branch fees

 

8,347

 

8,872

 

25,282

 

25,704

 

Net gain on sales of investment securities

 

93

 

3,191

 

647

 

6,823

 

Net gain on sale of fixed assets

 

40

 

30

 

113

 

2,236

 

Letters of credit fees and commissions

 

5,001

 

3,555

 

13,814

 

9,989

 

Foreign exchange income

 

2,165

 

2,895

 

4,524

 

7,647

 

Ancillary loan fees

 

1,817

 

2,076

 

6,013

 

6,122

 

Income from life insurance policies

 

982

 

982

 

2,931

 

3,088

 

Net gain on sales of loans

 

5,346

 

5,452

 

16,900

 

18,753

 

Other operating income

 

5,717

 

2,853

 

15,231

 

9,789

 

Total noninterest income (loss)

 

2,751

 

(13,545

)

12,836

 

9,987

 

NONINTEREST EXPENSE

 

 

 

 

 

 

 

 

 

Compensation and employee benefits

 

40,509

 

39,885

 

129,781

 

119,025

 

Occupancy and equipment expense

 

14,162

 

12,580

 

40,737

 

37,353

 

Amortization of investments in affordable housing partnerships and other investments

 

3,378

 

5,287

 

12,269

 

14,410

 

Amortization of premiums on deposits acquired

 

2,734

 

3,067

 

8,445

 

9,403

 

Deposit insurance premiums and regulatory assessments

 

3,461

 

2,430

 

10,776

 

16,454

 

Loan related expenses

 

4,011

 

5,208

 

12,667

 

12,591

 

Other real estate owned expense

 

2,683

 

4,489

 

18,034

 

29,738

 

Legal expense

 

8,213

 

6,028

 

19,536

 

16,920

 

Prepayment penalty for FHLB advances and other borrowings

 

42

 

3,826

 

3,699

 

12,281

 

Data processing

 

2,313

 

1,827

 

6,974

 

6,530

 

Deposit related expenses

 

1,388

 

1,667

 

4,472

 

4,199

 

Consulting expense

 

2,692

 

2,094

 

5,727

 

6,098

 

Other operating expenses

 

15,370

 

16,164

 

44,210

 

43,936

 

Total noninterest expense

 

100,956

 

104,552

 

317,327

 

328,938

 

INCOME BEFORE PROVISION FOR INCOME TAXES

 

105,203

 

97,685

 

317,392

 

279,995

 

PROVISION FOR INCOME TAXES

 

34,093

 

35,253

 

107,642

 

100,967

 

NET INCOME

 

71,110

 

62,432

 

209,750

 

179,028

 

PREFERRED STOCK DIVIDENDS

 

1,714

 

1,714

 

5,142

 

5,143

 

NET INCOME AVAILABLE TO COMMON STOCKHOLDERS

 

  $

69,396

 

  $

60,718

 

  $

204,608

 

  $

173,885

 

EARNINGS PER SHARE AVAILABLE TO COMMON STOCKHOLDERS

 

 

 

 

 

 

 

 

 

BASIC

 

  $

0.49

 

  $

0.41

 

  $

1.42

 

  $

1.18

 

DILUTED

 

  $

0.48

 

  $

0.41

 

  $

1.40

 

  $

1.17

 

WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING

 

 

 

 

 

 

 

 

 

BASIC

 

139,621

 

147,162

 

142,348

 

147,013

 

DILUTED

 

145,358

 

153,453

 

148,051

 

153,372

 

DIVIDENDS DECLARED PER COMMON SHARE

 

  $

0.10

 

  $

0.05

 

  $

0.30

 

  $

0.11

 

 

See accompanying notes to condensed consolidated financial statements.

 

5



 

EAST WEST BANCORP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands)

(Unaudited)

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

 

September 30,

 

September 30,

 

 

 

 

 

 

 

 

 

 

 

 

 

2012

 

2011

 

2012

 

2011

 

Net income

 

  $

71,110

 

  $

62,432

 

  $

209,750

 

  $

179,028

 

Other comprehensive income, net of tax:

 

 

 

 

 

 

 

 

 

Unrealized gain on investment securities available-for-sale:

 

 

 

 

 

 

 

 

 

Unrealized holding gains/(losses) arising during period

 

15,355

 

(24,015

)

36,627

 

(1,446

)

Reclassification adjustment for net gains included in net income

 

(54

)

(1,850

)

(375

)

(3,957

)

Noncredit-related impairment loss on securities

 

 

 

(2,938

)

(2,953

)

Foreign currency translation adjustments

 

(900

)

57

 

(900

)

(736

)

Unrealized gain (loss) on other asset investment

 

5

 

(217

)

9

 

(89

)

Other comprehensive income (loss)

 

14,406

 

(26,025

)

32,423

 

(9,181

)

COMPREHENSIVE INCOME

 

  $

85,516

 

  $

36,407

 

  $

242,173

 

  $

169,847

 

 

See accompanying notes to condensed consolidated financial statements.

 

6



 

EAST WEST BANCORP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(In thousands, except share data)

(Unaudited)

 

 

 

 

 

Additional

 

 

 

Additional

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

Paid In

 

 

 

Paid In

 

 

 

 

 

Other

 

 

 

 

 

 

 

Capital

 

 

 

Capital

 

 

 

 

 

Comprehensive

 

Total

 

 

 

Preferred

 

Preferred

 

Common

 

Common

 

Retained

 

Treasury

 

Income (Loss),

 

Stockholders’

 

 

 

Stock

 

Stock

 

Stock

 

Stock

 

Earnings

 

Stock

 

Net of Tax

 

Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BALANCE, JANAURY 1, 2011

 

  $

 

  $

83,058

 

  $

156

 

  $

1,434,277

 

  $

720,116

 

  $

(111,262

)

  $

(12,414

)

  $

2,113,931

 

Net income

 

 

 

 

 

 

 

 

 

179,028

 

 

 

 

 

179,028

 

Other comprehensive income

 

 

 

 

 

 

 

 

 

 

 

 

 

(9,181

)

(9,181

)

Stock compensation costs

 

 

 

 

 

 

 

9,330

 

 

 

 

 

 

 

9,330

 

Tax benefit from stock compensation plans, net

 

 

 

 

 

 

 

546

 

 

 

 

 

 

 

546

 

Issuance of 597,232 shares of common stock pursuant to various stock compensation plans and agreements

 

 

 

 

 

 

 

3,663

 

 

 

 

 

 

 

3,663

 

Conversion of 31 shares of Series A preferred stock into 2,014 shares of common stock

 

 

 

(31

)

 

 

31

 

 

 

 

 

 

 

 

Issuance of 27,831 shares pursuant to Director retainer fee

 

 

 

 

 

 

 

520

 

 

 

 

 

 

 

520

 

Cancellation of 180,152 shares of common stock due to forfeitures of issued restricted stock

 

 

 

 

 

 

 

3,073

 

 

 

(3,073)

 

 

 

 

27,938 shares of restricted stock surrendered due to employee tax liability

 

 

 

 

 

 

 

 

 

 

 

(619)

 

 

 

(619

)

Preferred stock dividends

 

 

 

 

 

 

 

 

 

(5,143

)

 

 

 

 

(5,143

)

Common stock dividends

 

 

 

 

 

 

 

 

 

(16,406

)

 

 

 

 

(16,406

)

Repurchase of 1,517,555 common stock warrants

 

 

 

 

 

 

 

(14,500)

 

 

 

 

 

 

 

(14,500

)

BALANCE, SEPTEMBER 30, 2011

 

  $

 

  $

83,027

 

  $

156

 

  $

1,436,940

 

  $

877,595

 

  $

(114,954

)

  $

(21,595

)

  $

2,261,169

 

BALANCE, JANAURY 1, 2012

 

  $

 

  $

83,027

 

  $

157

 

  $

1,443,883

 

  $

934,617

 

  $

(116,001

)

  $

(33,940

)

  $

2,311,743

 

Net income

 

 

 

 

 

 

 

 

 

209,750

 

 

 

 

 

209,750

 

Other comprehensive income

 

 

 

 

 

 

 

 

 

 

 

 

 

32,423

 

32,423

 

Stock compensation costs

 

 

 

 

 

 

 

11,567

 

 

 

 

 

 

 

11,567

 

Tax benefit from stock compensation plans, net

 

 

 

 

 

 

 

461

 

 

 

 

 

 

 

461

 

Issuance of 299,964 shares of common stock pursuant to various stock compensation plans and agreements

 

 

 

 

 

 

 

3,136

 

 

 

 

 

 

 

3,136

 

Issuance of 26,151 shares pursuant to Director retainer fee

 

 

 

 

 

 

 

570

 

 

 

 

 

 

 

570

 

Cancellation of 154,508 shares of common stock due to forfeitures of issued restricted stock

 

 

 

 

 

 

 

2,653

 

 

 

(2,653

)

 

 

 

130,577 shares of restricted stock surrendered due to employee tax liability

 

 

 

 

 

 

 

 

 

 

 

(2,867

)

 

 

(2,867

)

Preferred stock dividends

 

 

 

 

 

 

 

 

 

(5,142

)

 

 

 

 

(5,142

)

Common stock dividends

 

 

 

 

 

 

 

 

 

(43,482

)

 

 

 

 

(43,482

)

Purchase of 9,068,105 shares of treasury stock pursuant to the Stock Repurchase Program

 

 

 

 

 

 

 

 

 

 

 

(199,950)

 

 

 

(199,950

)

BALANCE, SEPTEMBER 30, 2012

 

  $

 

  $

83,027

 

  $

157

 

  $

1,462,270

 

  $

1,095,743

 

  $

(321,471

)

  $

(1,517

)

  $

2,318,209

 

 

See accompanying notes to condensed consolidated financial statements.

 

7



 

EAST WEST BANCORP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

 

 

 

Nine Months Ended

 

 

 

September 30,

 

 

 

2012

 

2011

 

CASH FLOWS FROM OPERATING ACTIVITIES

 

 

 

 

 

Net income

 

  $

209,750

 

  $

179,028

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

Depreciation and amortization

 

58,978

 

48,823

 

(Accretion) of discount and amortization of premiums, net

 

(152,297

)

(162,319

)

Decrease in FDIC indemnification asset and receivable

 

72,520

 

79,700

 

Stock compensation costs

 

12,137

 

9,850

 

Deferred tax expense

 

12,131

 

64,398

 

Provision for loan losses

 

52,100

 

75,006

 

Impairment on other real estate owned

 

13,342

 

22,440

 

Net gain on sales of investment securities, loans and other assets

 

(22,654

)

(29,586

)

Originations and purchases of loans held for sale

 

(58,237

)

(40,193

)

Proceeds from sales of loans held for sale

 

 

30,180

 

Prepayment penalty for Federal Home Loan Bank advances and other borrowings, net

 

3,699

 

12,281

 

Prepayment penalty on modification of Federal Home Loan Bank advances

 

(37,678

)

 

Net proceeds from FDIC shared-loss agreements

 

83,801

 

147,121

 

Net change in accrued interest receivable and other assets

 

(71,753

)

(134,500

)

Net change in accrued expenses and other liabilities

 

(15,983

)

(100,393

)

Other net operating activities

 

(3,293

)

(2,383

)

Total adjustments

 

(53,187

)

20,425

 

Net cash provided by operating activities

 

156,563

 

199,453

 

CASH FLOWS FROM INVESTING ACTIVITIES

 

 

 

 

 

Net decrease (increase) in:

 

 

 

 

 

Loans

 

88,965

 

(720,348

)

Short-term investments

 

(285,167

)

77,551

 

Federal funds sold

 

(20,000

)

(30,000

)

Purchases of:

 

 

 

 

 

Securities purchased under resale agreements

 

(750,000

)

(1,119,711

)

Investment securities available-for-sale

 

(1,250,317

)

(2,464,002

)

Loans receivable

 

(371,352

)

(569,946

)

Premises and equipment

 

(5,826

)

(7,460

)

Investments in affordable housing partnerships

 

(45,500

)

(22,756

)

Proceeds from sale of:

 

 

 

 

 

Investment securities available-for-sale

 

1,130,024

 

602,625

 

Loans receivable

 

61,979

 

151,961

 

Loans held for sale originated for investment

 

338,022

 

607,291

 

Other real estate owned

 

76,239

 

135,461

 

Premises and equipment

 

12

 

9,200

 

Repayments, maturities and redemptions of investment securities available-for-sale

 

999,518

 

1,447,842

 

Paydowns, maturities and termination of securities purchased under resale agreements

 

436,434

 

667,887

 

Redemption of Federal Home Loan Bank stock

 

18,943

 

19,424

 

Other net investing activities

 

(360

)

(99

)

Net cash provided by (used in) investing activities

 

421,614

 

(1,215,080

)

CASH FLOWS FROM FINANCING ACTIVITIES

 

 

 

 

 

Net increase (decrease) in:

 

 

 

 

 

Deposits

 

213,425

 

1,668,073

 

Short-term borrowings

 

(25,208

)

(58,596

)

Proceeds from:

 

 

 

 

 

Issuance of common stock pursuant to various stock plans and agreements

 

3,136

 

3,663

 

Payment for:

 

 

 

 

 

Repayment of FHLB advances

 

(57,615

)

(760,274

)

Repayment of long-term debt

 

(75,000

)

(21,918

)

Repayment of notes payable and other borrowings

 

 

(6,250

)

Repurchase of common stock warrants

 

 

(14,500

)

Repurchase of shares of treasury stock pursuant to the Stock Repurchase Plan

 

(199,950

)

 

Cash dividends

 

(48,472

)

(21,512

)

Other net financing activities

 

(2,406

)

(73

)

Net cash (used in) provided by financing activities

 

(192,090

)

788,613

 

Effect of exchange rate changes on cash and cash equivalents

 

(900

)

(1,047

)

NET INCREASE IN CASH AND CASH EQUIVALENTS

 

385,187

 

(228,061

)

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD

 

1,431,185

 

1,333,949

 

CASH AND CASH EQUIVALENTS, END OF PERIOD

 

  $

1,816,372

 

  $

1,105,888

 

SUPPLEMENTAL CASH FLOW INFORMATION:

 

 

 

 

 

Cash paid during the period for:

 

 

 

 

 

Interest

 

  $

104,829

 

  $

135,037

 

Income tax payments, net of refunds

 

188,739

 

262,988

 

Noncash investing and financing activities:

 

 

 

 

 

Loans transferred to loans held for sale, net

 

148,755

 

631,407

 

Transfers to other real estate owned

 

62,862

 

140,987

 

Loans to facilitate sales of other real estate owned and short sale

 

3,060

 

8,792

 

Loans to facilitate sales of loans

 

1,018

 

21,637

 

Loans to facilitate sales of premises and equipment

 

 

11,100

 

Conversion of preferred stock to common stock

 

 

31

 

 

See accompanying notes to condensed consolidated financial statements.

 

8



 

EAST WEST BANCORP, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

(Unaudited)

 

NOTE 1 — BASIS OF PRESENTATION

 

The condensed consolidated financial statements include the accounts of East West Bancorp, Inc. (referred to herein on an unconsolidated basis as “East West” and on a consolidated basis as the “Company”) and its wholly-owned subsidiaries, East West Bank and subsidiaries (“East West Bank” or the “Bank”) and East West Insurance Services, Inc. Intercompany transactions and accounts have been eliminated in consolidation. East West also has seven wholly-owned subsidiaries that are statutory business trusts (the “Trusts”). In accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 810, the Trusts are not consolidated into the accounts of East West Bancorp, Inc.

 

The interim condensed consolidated financial statements, presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”), are unaudited and reflect all adjustments that, in the opinion of management, are necessary for a fair statement of financial condition and results of operations for the interim periods. All adjustments are of a normal and recurring nature. Results for the three and nine months ended September 30, 2012 are not necessarily indicative of results that may be expected for any other interim period or for the year as a whole. Certain information and note disclosures normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted. Events subsequent to the condensed consolidated balance sheet date have been evaluated through the date the financial statements are issued for inclusion in the accompanying financial statements. The unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2011.

 

Certain prior year balances have been reclassified to conform to current year presentation.

 

NOTE 2 — SIGNIFICANT ACCOUNTING POLICIES

 

Comprehensive Income—The term “comprehensive income” describes the total of all components of comprehensive income, including net income and other comprehensive income. “Other comprehensive income” refers to revenues, expenses, and gains and losses that are included in comprehensive income but are excluded from net income because they have been recorded directly in equity under the provisions of other Financial Accounting Standards Board statements. In accordance with the adoption of ASU 2011-05, Comprehensive Income (Topic 220): Presentation of Comprehensive Income, the Company presents comprehensive income in the condensed consolidated statements of comprehensive income, which was formerly presented in the condensed consolidated statements of changes in stockholders’ equity.

 

Recent Accounting Standards

 

In April 2011, the FASB issued ASU 2011-02, Receivables (Topic 310) A Creditor’s Determination of Whether a Restructuring Is a Troubled Debt Restructuring. ASU 2011-02 clarifies the guidance on the two conditions that must exist in evaluating whether a restructuring constitutes a troubled debt restructuring:  that the restructuring constitutes a concession and that the debtor is experiencing financial difficulties. In addition, ASU 2011-02 clarifies that a creditor is precluded from using the effective interest rate test in the debtor’s guidance on restructuring of payables (paragraph 470-60-55-10) when evaluating whether a restructuring constitutes a troubled debt restructuring. The amendments in ASU 2011-02 were effective for the first interim or annual period beginning on or after June 15, 2011, and should be applied retrospectively to the beginning of the annual period of adoption.

 

9



 

Additionally, ASU 2011-02 finalizes the effective date for the disclosures required by paragraphs 310-10-50-33 through 50-34, which were deferred by ASU 2011-01, for interim and annual periods beginning on or after June 15, 2011. The adoption of this guidance did not have a material effect on the Company’s condensed consolidated financial statements.

 

In April 2011, the FASB issued ASU 2011-03, Transfers and Servicing (Topic 860):  Reconsideration of Effective Control for Repurchase Agreements. ASU 2011-03 removes the transferor’s ability criterion from the consideration of effective control for repos and other agreements that both entitle and obligate the transferor to repurchase or redeem financial assets before their maturity. The amendments in ASU 2011-03 remove from the assessment of effective control (1) the criterion requiring the transferor to have the ability to repurchase or redeem the financial assets on substantially the agreed terms, even in the event of default by the transferee, and (2) the collateral maintenance implementation guidance related to that criterion. The FASB indicates that eliminating the transferor’s ability criterion and related implementation guidance from an entity’s assessment of effective control should improve the accounting for repos and other similar transactions. The amendments in ASU 2011-03 were effective for the first interim or annual period beginning on or after December 15, 2011 and are to be applied prospectively to transactions or modifications of existing transactions that occur on or after the effective date. The adoption of this guidance did not have a material effect on the Company’s condensed consolidated financial statements.

 

In May 2011, the FASB issued ASU 2011-04, Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs. ASU 2011-04 addresses convergence between GAAP and International Financial Reporting Standards (“IFRS”) requirements for measurement of and disclosures about fair value. The amendments are not expected to have a significant impact on companies applying GAAP. Key provisions of the amendment include: a prohibition on grouping financial instruments for purposes of determining fair value, except when an entity manages market and credit risks on the basis of the entity’s net exposure to the group; an extension of the prohibition against the use of a blockage factor to all fair value measurements (that prohibition currently applies only to financial instruments with quoted prices in active markets); and a requirement that for recurring Level 3 fair value measurements, entities disclose quantitative information about unobservable inputs, a description of the valuation process used and qualitative details about the sensitivity of the measurements. In addition, for items not carried at fair value but for which fair value is disclosed, entities will be required to disclose the level within the fair value hierarchy that applies to the fair value measurement disclosed. The amendments in ASU 2011-04 were effective during interim and annual periods beginning after December 15, 2011. The adoption of this guidance did not have a material effect on the Company’s condensed consolidated financial statements.

 

In June 2011, the FASB issued ASU 2011-05, Comprehensive Income (Topic 220): Presentation of Comprehensive Income. ASU 2011-05 requires companies to present the components of net income and other comprehensive income either as one continuous statement or as two consecutive statements. It eliminates the option to present components of other comprehensive income as part of the statement of changes in stockholders’ equity. The standard does not change the items which must be reported in other comprehensive income, how such items are measured, or when they must be reclassified to net income. The FASB amended ASU 2011-05 in December 2011, with the issuance of ASU 2011-12, Comprehensive Income (Topic 220): Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05. ASU 2011-12 defers only changes in ASU 2011-05 that relate to the presentation of reclassification adjustments. Both standards were effective for interim and annual periods beginning after December 15, 2011. The adoption of these standards only affected the presentation of the Company’s condensed consolidated financial statements and did not have an impact on the financial amounts presented in the statements.

 

10



 

In September 2011, the FASB issued ASU 2011-08, Intangibles—Goodwill and Other (Topic 350): Testing Goodwill for Impairment. ASU 2011-08 gives companies the option to qualitatively determine whether they can bypass the two-step goodwill impairment test under ASC 350-20, Intangibles—Goodwill and Other: Goodwill. Under ASU 2011-08, if a company chooses to perform a qualitative assessment and determines that it is more likely than not (a more than 50 percent likelihood) that the fair value of a reporting unit is less than its carrying amount, it would then perform Step 1 of the annual goodwill impairment test in ASC 350-20 and, if necessary, proceed to Step 2. Otherwise, no further evaluation would be necessary. The amended guidance is effective for interim and annual periods beginning after December 15, 2011. The Company has elected to continue to assess the two-step goodwill impairment, quantitatively. As such, this guidance did not have an impact on the Company’s condensed consolidated financial statements.

 

In December 2011, the FASB issued ASU 2011-11, Balance Sheet (Topic 210): Disclosures about Offsetting Assets and Liabilities. ASU 2011-11 addresses the differences in offsetting requirements between GAAP and IFRS by enhancing disclosures about financial instruments and derivative instruments that are either offset in accordance with GAAP or are subject to an enforceable master netting arrangement or similar agreement. Entities are required to disclose both gross information and net information about both instruments and transactions eligible for offset in the statement of financial position and instruments and transactions subject to an agreement similar to a master netting arrangement. The guidance is effective for interim and annual reporting periods beginning on or after January 1, 2013, and must be applied retrospectively to all comparative periods presented. Early adoption is permitted. The Company does not expect the adoption of this guidance to have a material effect on its condensed consolidated financial statements.

 

In October 2012, the FASB issued ASU 2012-06, Business Combinations (Topic 805): Subsequent Accounting for an Indemnification Asset Recognized at the Acquisition Date as a Result of a Government-Assisted Acquisition of a Financial Institution.ASU 2012-06 clarifies the applicable guidance for subsequently measuring an indemnification asset recognized as a result of a government-assisted acquisition of a financial institution. The standard instructs that when a reporting entity recognizes an indemnification asset, it should subsequently account for the change in the measurement of the indemnification asset on the same basis as the change in the assets subject to indemnification. Any amortization of changes in value should be limited to the contractual term of the indemnification agreement. The amended guidance is effective for interim and annual periods beginning on or after December 15, 2012. Early adoption is permitted. The adoption of this guidance did not have a material effect on the Company’s condensed consolidated financial statements, as the Company had applied this methodology prior to the issuance of this ASU.

 

11



 

NOTE 3 — FAIR VALUE

 

Fair value is defined as the price that would be received to sell an asset or be paid to transfer a liability in an orderly transaction between market participants at the measurement date. In determining fair value, the Company uses various methods including market and income approaches. Based on these approaches, the Company utilizes certain assumptions that market participants would use in pricing the asset or liability. These inputs can be readily observable, market corroborated, or generally unobservable inputs. The Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. Based on the observability of the inputs used in the valuation techniques, the Company is required to provide the following information according to the fair value hierarchy noted below. The hierarchy is based on the quality and reliability of the information used to determine fair values. The hierarchy gives the highest priority to quoted prices available in active markets and the lowest priority to data lacking transparency. Financial assets and liabilities carried at fair value will be classified and disclosed in one of the following three categories:

 

·

Level 1 – Quoted prices for identical instruments that are highly liquid, observable and actively traded in over-the-counter markets. Level 1 financial instruments typically include U.S. Treasury securities.

 

 

·

Level 2 – Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable and can be corroborated by market data. Level 2 financial instruments typically include U.S. Government debt and agency mortgage-backed securities, municipal securities, corporate debt securities, single issuer trust preferred securities, equity swap agreements, foreign exchange options, interest rate swaps, impaired loans and other real estate owned (“OREO”).

 

 

·

Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation. This category typically includes pooled trust preferred securities and derivatives payable.

 

The Company records investment securities available-for-sale, equity swap agreements, derivative liabilities, foreign exchange options, interest rate swaps and short-term foreign exchange contracts at fair value on a recurring basis. Certain other assets such as impaired loans, other real estate owned, loans held for sale, goodwill, premiums on acquired deposits and other investments are recorded at fair value on a nonrecurring basis. Nonrecurring fair value measurements typically involve assets that are periodically evaluated for impairment and for which any impairment is recorded in the period in which the remeasurement is performed.

 

In determining the appropriate hierarchy levels, the Company performs a detailed analysis of assets and liabilities that are subject to fair value disclosure. The following tables present both financial and nonfinancial assets and liabilities that are measured at fair value on a recurring and nonrecurring basis. These assets and liabilities are reported on the condensed consolidated balance sheets at their fair values as of September 30, 2012 and December 31, 2011. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to their fair value measurement. There were no transfers in and out of Levels 1 and 3 or Levels 2 and 3 during the first nine months of 2012 and 2011.

 

12


 

 


 

 

 

Assets (Liabilities) Measured at Fair Value on a Recurring Basis

 

 

 

as of September 30, 2012

 

 

 

 

 

Quoted Prices in

 

Significant

 

 

 

 

 

Fair Value

 

Active Markets

 

Other

 

Significant

 

 

 

Measurements

 

for Identical

 

Observable

 

Unobservable

 

 

 

September 30,

 

Assets

 

Inputs

 

Inputs

 

 

 

2012

 

(Level 1)

 

(Level 2)

 

(Level 3)

 

 

 

(In thousands)

 

Investment securities available-for-sale:

 

 

 

 

 

 

 

 

 

U.S. Treasury securities

 

  $

400,032

 

  $

400,032

 

  $

 

  $

 

U.S. Government agency and U.S. Government sponsored enterprise debt securities

 

198,045

 

 

198,045

 

 

U.S. Government agency and U.S. Government sponsored enterprise mortgage-backed securities:

 

 

 

 

 

 

 

 

 

Commercial mortgage-backed securities

 

85,826

 

 

85,826

 

 

Residential mortgage-backed securities

 

1,003,897

 

 

1,003,897

 

 

Municipal securities

 

113,597

 

 

113,597

 

 

Corporate debt securities:

 

 

 

 

 

 

 

 

 

Investment grade

 

412,719

 

 

412,719

 

 

Non-investment grade

 

13,610

 

 

9,761

 

3,849

 

Other securities

 

10,122

 

 

10,122

 

 

Total investment securities available-for-sale

 

  $

2,237,848

 

  $

400,032

 

  $

1,833,967

 

  $

3,849

 

Equity swap agreements

 

  $

205

 

  $

 

  $

205

 

  $

 

Foreign exchange options

 

4,371

 

 

4,371

 

 

Interest rate swaps

 

34,059

 

 

34,059

 

 

Short-term foreign exchange contracts

 

1,118

 

 

1,118

 

 

Derivative liabilities

 

(38,849

)

 

(35,915

)

(2,934

)

 

 

 

Assets (Liabilities) Measured at Fair Value on a Recurring Basis

 

 

 

as of December 31, 2011

 

 

 

 

 

Quoted Prices in

 

Significant

 

 

 

 

 

Fair Value

 

Active Markets

 

Other

 

Significant

 

 

 

Measurements

 

for Identical

 

Observable

 

Unobservable

 

 

 

December 31,

 

Assets

 

Inputs

 

Inputs

 

 

 

2011

 

(Level 1)

 

(Level 2)

 

(Level 3)

 

 

 

(In thousands)

 

Investment securities available-for-sale:

 

 

 

 

 

 

 

 

 

U.S. Treasury securities

 

  $

20,725

 

  $

20,725

 

  $

 

  $

 

U.S. Government agency and U.S. Government sponsored enterprise debt securities

 

576,578

 

 

576,578

 

 

U.S. Government agency and U.S. Government sponsored enterprise mortgage-backed securities:

 

 

 

 

 

 

 

 

 

Commercial mortgage-backed securities

 

49,315

 

 

49,315

 

 

Residential mortgage-backed securities

 

993,770

 

 

993,770

 

 

Municipal securities

 

79,946

 

 

79,946

 

 

Corporate debt securities:

 

 

 

 

 

 

 

 

 

Investment grade

 

1,322,561

 

 

1,322,561

 

 

Non-investment grade

 

19,615

 

 

17,380

 

2,235

 

Other securities

 

10,068

 

 

10,068

 

 

Total investment securities available-for-sale

 

  $

3,072,578

 

  $

20,725

 

  $

3,049,618

 

  $

2,235

 

Equity swap agreements

 

  $

202

 

  $

 

  $

202

 

  $

 

Foreign exchange options

 

3,899

 

 

3,899

 

 

Interest rate swaps

 

20,474

 

 

20,474

 

 

Short-term foreign exchange contracts

 

1,403

 

 

1,403

 

 

Derivative liabilities

 

(24,164

)

 

(21,530

)

(2,634

)

 

13



 

 

 

Assets Measured at Fair Value on a Non-Recurring Basis

 

 

 

as of and for the Three Months Ended September 30, 2012

 

 

 

 

 

Quoted Prices in

 

Significant

 

 

 

Total Gains

 

 

 

Fair Value

 

Active Markets

 

Other

 

Significant

 

(Losses) for the

 

 

 

Measurements

 

for Identical

 

Observable

 

Unobservable

 

Three Months Ended

 

 

 

September 30,

 

Assets

 

Inputs

 

Inputs

 

September 30,

 

 

 

2012

 

(Level 1)

 

(Level 2)

 

(Level 3)

 

2012

 

 

 

(In thousands)

 

Non-covered impaired loans:

 

 

 

 

 

 

 

 

 

 

 

Total residential

 

  $

24,978

 

  $

 

  $

24,978

 

  $

 

  $

(4,509

)

Total commercial real estate

 

13,671

 

 

13,671

 

 

(6,414

)

Total commercial and industrial

 

9,557

 

 

1,512

 

8,045

 

(1,379

)

Total consumer

 

 

 

 

 

 

Total non-covered impaired loans

 

  $

48,206

 

  $

 

  $

40,161

 

  $

8,045

 

  $

(12,302

)

 

 

 

 

 

 

 

 

 

 

 

 

Non-covered OREO

 

  $

5,528

 

  $

 

  $

5,528

 

  $

 

  $

(1,470

)

Covered OREO (1)

 

  $

8,688

 

  $

 

  $

8,688

 

  $

 

  $

(1,597

)

Loans held for sale

 

  $

 

  $

 

  $

 

  $

 

  $

 

 

 

 

Assets Measured at Fair Value on a Non-Recurring Basis

 

 

 

as of and for the Three Months Ended September 30, 2011

 

 

 

 

 

Quoted Prices in

 

Significant

 

 

 

Total Gains

 

 

 

Fair Value

 

Active Markets

 

Other

 

Significant

 

(Losses) for the

 

 

 

Measurements

 

for Identical

 

Observable

 

Unobservable

 

Three Months Ended

 

 

 

September 30,

 

Assets

 

Inputs

 

Inputs

 

September 30,

 

 

 

2011

 

(Level 1)

 

(Level 2)

 

(Level 3)

 

2011

 

 

 

(In thousands)

 

Non-covered impaired loans:

 

 

 

 

 

 

 

 

 

 

 

Total residential

 

  $

9,637

 

  $

 

  $

9,637

 

  $

 

  $

(3,142

)

Total commercial real estate

 

40,997

 

 

40,997

 

 

(16,645

)

Total commercial and industrial

 

4,405

 

 

 

4,405

 

(6,328

)

Total consumer

 

315

 

 

315

 

 

(265

)

Total non-covered impaired loans

 

  $

55,354

 

  $

 

  $

50,949

 

  $

4,405

 

  $

(26,380

)

 

 

 

 

 

 

 

 

 

 

 

 

Non-covered OREO

 

  $

36

 

  $

 

  $

36

 

  $

 

  $

(17

)

Covered OREO (1)

 

  $

18,068

 

  $

 

  $

18,068

 

  $

 

  $

(3,252

)

Loans held for sale

 

  $

2,714

 

  $

 

  $

2,714

 

  $

 

  $

(260

)

 


(1)                Covered OREO results from the WFIB and UCB FDIC-assisted acquisitions for which the Company entered into shared-loss agreements with the FDIC whereby the FDIC will reimburse the Company for 80% of eligible losses. As such, the Company’s liability for losses is 20% of the $1.6 million in losses, or $319 thousand, and 20% of the $3.3 million in losses, or $650 thousand, for the three months ended September 30, 2012 and 2011, respectively.

 

14



 

 

 

Assets Measured at Fair Value on a Non-Recurring Basis

 

 

 

as of and for the Nine Months Ended September 30, 2012

 

 

 

 

 

Quoted Prices in

 

Significant

 

 

 

Total Gains

 

 

 

Fair Value

 

Active Markets

 

Other

 

Significant

 

(Losses) for the

 

 

 

Measurements

 

for Identical

 

Observable

 

Unobservable

 

Nine Months Ended

 

 

 

September 30,

 

Assets

 

Inputs

 

Inputs

 

September 30,

 

 

 

2012

 

(Level 1)

 

(Level 2)

 

(Level 3)

 

2012

 

 

 

(In thousands)

 

Non-covered impaired loans:

 

 

 

 

 

 

 

 

 

 

 

Total residential

 

  $

31,090

 

  $

 

  $

31,090

 

  $

 

  $

(6,660

)

Total commercial real estate

 

24,730

 

 

24,730

 

 

(8,527

)

Total commercial and industrial

 

9,835

 

 

2,623

 

7,212

 

(9,827

)

Total consumer

 

379

 

 

379

 

 

(321

)

Total non-covered impaired loans

 

  $

66,034

 

  $

 

  $

58,822

 

  $

7,212

 

  $

(25,335

)

 

 

 

 

 

 

 

 

 

 

 

 

Non-covered OREO

 

  $

7,286

 

  $

 

  $

7,286

 

  $

 

  $

(4,145

)

Covered OREO (1)

 

  $

15,919

 

  $

 

  $

15,919

 

  $

 

  $

(9,286

)

Loans held for sale

 

  $

 

  $

 

  $

 

  $

 

  $

(4,730

)

 

 

 

Assets Measured at Fair Value on a Non-Recurring Basis

 

 

 

as of and for the Nine Months Ended September 30, 2011

 

 

 

 

 

Quoted Prices in

 

Significant

 

 

 

Total Gains

 

 

 

Fair Value

 

Active Markets

 

Other

 

Significant

 

(Losses) for the

 

 

 

Measurements

 

for Identical

 

Observable

 

Unobservable

 

Nine Months Ended