Good morning and welcome to the East West Bancorp second quarter 2010 earnings conference call. All participants will be in listen-only mode. (Operator Instructions) After today's presentation, there will be an opportunity to ask questions. (Operator Instructions) Please note that this is being recorded. I would now like to turn the conference over to Ms. Kelly Adams. Please go ahead.

: First, we would like to caution you that during the course of this call, management may make projections or other forward-looking statements regarding events or future financial performance of the company within the meaning of the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements may differ materially from the actual results due to a number of risks and uncertainties. For a more detailed description of factors that affect the company’s operating results, please refer you to the filings with the Securities and Exchange Commission, including our annual report on Form 10-K for the year ended December 31st, 2009. Today’s call is also being recorded and will be available in replay format at eastwestbank.com and streetevents.com. I will now turn the call over to Dominic.

Thank you, Kelly. Good morning, and thank you all for joining us in today’s call. We’re pleased to announce yesterday that East West reported earnings for the second quarter of $36.3 million or $0.21 per diluted share, $11.4 million or $0.08 higher than the first quarter of 2010. I’m going to touch on just a few highlights for the quarter, and ask Julia and Irene to discuss our results in more detail. For East West to continue on an upward trend during the second quarter, reflecting credit quality metrics, gross low-cost core deposits, and a stable net interest margin. Also during the second quarter, we acquired Washington First International Bank in our second FDIC assisted transaction. Although smaller in size, this transaction was nearly accretive to earnings. And we expected that. The future opportunities from this acquisition for market share expansion and operating efficiencies will be beneficial for East West. Asset quality continues to trend positively for East West. For the third quarter in a row, East West had a non-performing asset-to-total asset ratio of under 1%, substantially better than many of our peer banks. Additionally, the provision for loan losses decreased 28%. Our net charge offs decreased 14% from the previous quarter. Further, we have experienced a decline in loan delinquency levels. Specifically, we have noticed a decline in 30-day to 60-day and 60-day to 90-day delinquent commercial real estate loans, which further demonstrated the ability of this portfolio. Our seasoned commercial real estate portfolio continues to perform well, with only $18.3 million in non-performing loans or only 0.52% of this portfolio. As expected, we’ve also noticed a sharp decline in 30-day to 60-day and 60-day to 90-day delinquent residential construction loans as our concentration in this portfolio has diminished. We think these factors are a good indicator that…

Thank you very much, Dominic, and good morning to everyone. On June 11, 2010, we acquired the banking operations of Washington First International Bank, acquiring four branches in the Seattle area, with total assets of $482.6 million and assumed $395.9 million in deposits. In addition to the two branches in the Seattle area that we are paying from the acquisition of United Commercial Bank in November 2009, East West currently operates six branches in the greater Seattle area. With our entry size, we now believe that our combined presence will be mutually beneficial to growing our customer base in this region through our legacy EWB and WFIB networks. Overall, the integration of WFIB is progressing smoothly. We expect that all loan systems will be converted before the end of this month, and that the core system will be integrated by end of October. With the integration of UCB completed in the second quarter, we believe that operating efficiency will continue to improve. For the second quarter, non-interest expense totaled $125.3 million, down approximately 10% from the first quarter of 2010. Our second quarter non-interest expense included many non-recurring expenses, which I would like to discuss in more detail. During the quarter, we've prepaid settle home loan bank advances totaling $740 million and paid a prepayment penalty of $3.9 million, which is included as a non-interest expense item. Additionally, as we disclosed in the press release, we incurred expenses related to the acquisitions and integration of UCB and WFIB that are not expected to recur in the future. These additional expenses were $3.6 million in the second quarter and are comprised of severance expense of about $1.5 million and other integration-related expenses of $2.1 million, which will primarily comprise of consultant and other acquisition-related fees. We also incurred a number of…

Thank you very much, Julia, and good morning to everyone. I’d like to provide a little more color on our financial results for the quarter. The net income for the second quarter of $36.3 million or $0.21 per diluted share was an improvement of $11.4 million or $0.08 from the first quarter of 2010, an improvement of $128.4 million or $2.04 over net income from the second quarter of 2009. Our core net interest margin, excluding the impact of the yield adjustments, remained strong at 3.98% for the quarter, compared to 4.02% in the first quarter of 2010. For the second quarter of 2010, yield adjustments were $29.8 million related to discount accretion on early payoffs and recoveries on UCB covered loans. This compares to $81.3 million of yield adjustment in the first quarter of 2010. Early pre-payments on the covered portfolio have stabilized since we first took over UCB in November of 2009, leading to smaller yield adjustments in each subsequent quarter. Excluding the impact of the yield adjustments, net interest income for the second quarter totaled $173.9 million, relatively unchanged from the prior quarter, an increase of $85.6 million or 97% from the second quarter of 2009. In addition to the discount accretion on early payoffs and recoveries of $29.8 million, we recorded about $6 million in normal discount accretion on the SOP 033 loans for loans obtained from the UCB acquisition, and also a partial month accretion on the WFIB transaction. This amount does fluctuate based on actual cash flows and charge-off activity experienced in each period. Ultimately, the actual loss experienced for the individual full-week traded under SOP 033 for the UCB loan portfolio may differ from our initial analysis. But at this point in time, we feel very comfortable with the credit loss assumptions. Other…

Thank you, Irene. And thank you everyone for joining the call this morning. And I will now open the call to questions.

(Operator Instructions) Our first question comes from Ken Zerbe at Morgan Stanley. Ken Zerbe – Morgan Stanley: Okay. Thanks. A couple of quick questions here, the first one, just into the EPS guidance, the $0.19 to $0.22, when I look at all the numbers, I get – it's bottom in that range. Does the EPS guidance that you provided include yield adjustments, yet the NIM assumption does not include yield adjustments?

So there’ll be some early disposals that will increase the earnings a little bit. So that is inputted in the EPS guidance, but not in the quarter mix. So there will be some flexibility. Every quarter you would expect that there’ll be some disposal and we will have some additional income. Ken Zerbe – Morgan Stanley: Understood. Okay. So that is included already in your EPS guidance.

Right. Ken Zerbe – Morgan Stanley: Okay. Great. And then, is there any – in terms of reimbursable expenses that you highlighted as being one-time items. The way we should think about it, is there any recoveries in the third quarter? Or does that – or is it already included in the second quarter in a different line item that was offset?

It’s already in the second quarter. That’s why the offset is in the decrease in the FDIC indemnification assets. And we still report on the other income. So every quarter, the timing is the same. Every time we have expenses that are reimbursable, it got closed up, the expenses on the expense, and then the recovery is on the other income.

But it’s not a one-time item. It’s a recurring – it’s a recurring item that was ongoing for a while because as long as we have the REOs that we were selling, that they are covered by the FDIC that we will be going through that reimbursable process to collect our 80% from the FDIC. So therefore, it’s a recurring, rather than a one-time.

Yes. And the reason though we broke it out was because it’s so confusing because it grossed up on the balance sheet, where you have a total expense, a non-interest expense. And then, you also have the 80% of the receivable and non-interest income, so just to provide additional clarification on the REO expense amount. That’s why we broke it out that way. Ken Zerbe – Morgan Stanley: Okay. Now, that is helpful. And then last question, just your appetite for additional acquisitions?

Well, we have the capacity to do it. The only issue we all get back down to is whether we will find if anything strategically fits. And if we looked at United Commercial Bank and Washington International Bank, both of them were strategically fit to our – our core business. And so, we made a move. So if we see something similar in nature that we feel that is a good fit for us, obviously, we’ll be ready any time. The question is that we are somewhat choosy in terms of making sure that we find the right acquisition. We would not be inclined to just throw ourselves into the bid any time there is an FDIC-assisted transaction available. And that that’s not the long term goal of East West to run our core business. Ken Zerbe – Morgan Stanley: Okay. All right. Thank you very much.

Thank you.

Our next question comes from Mike Zaremski at Credit Suisse. Mike Zaremski – Credit Suisse: Hi, thanks. On the guidance, can you help me reconcile? For next quarter, you’re saying a $105 million of non-interest expense. And I think you said core this quarter was about $97 million. So it’s the increased OREO, or maybe I’m thinking about it wrong.

Mike, the $105 million does include what our estimate right now is of what the expenses related to the covered assets will be. However, the difference from what we’re considering to be core right now, the $97 million and the $105 million, what we’re showing next quarter, does that include items. The $105 million does include items that are more non-core in nature that maybe related to the integration of UCB and WFIB. In addition, Mike, with the WFIB, we applied them June 11th. So as a result, the expenses for the next quarter will be the fourth quarter. So there'll be an increase in the expenses there, too. Mike Zaremski – Credit Suisse: So with the – so then, I guess with the next quarter, when you release earnings and with the – you're not saying the organic run rates are really higher. They will become non-recurring items in there. So when you show core next quarter, you’ll say it might be similar to the $96 million, $97 million again?

Yes. But we’ll take a look at that time, how much of that will be recurring to the fourth quarter and over. Mike Zaremski – Credit Suisse: Okay. And next on – how are you guys thinking about current cash levels in terms of deploying the excess liquidity or are you guys going to take any duration risks? What’s going on with (inaudible) there?

We would like to grow our C&I loan portfolio. As Dominic mentioned, we have very good progress. Our annualized loan growth on the C&I loans was 24% quarter-to-quarter. But we will continue to look at different opportunities on investment securities. Right now, we’re trying to refuse taking too much duration risks because we don’t also get compensated with the loans of late being very low. But we always look at different deals, opportunities on the investment securities. But our number one priority would be to grow our C&I loan portfolio. Mike Zaremski – Credit Suisse: I guess that leads into my last question. Sorry that I interrupted.

No, go ahead. Mike Zaremski – Credit Suisse: My last question was on C&I loan growth, what – is it pent up demand driving that growth? Are you guys hiring new teams? What’s the sustainability, what you guys are thinking of?

I think if – we are definitely hiring more new C&I lenders. And also, the existing C&I lenders that we have, we do have quite a – quite a good-sized group of C&I lenders that have been settled in the bank for awhile just stepping up a little bit more in terms of the marketing. Now, keep in mind in 2007, 2008, and a large portion of 2009 with the market conditions and our focus on driving down non-performance assets to the lowest level in the industry, most of our lenders were somewhat internally driven for the last few years. And they have not been actively out in the market to grow business and so forth. Where we are today – and in fact, I would say that several months ago knowing that we have a really good strong balance sheet with strong capital, and if earnings – core earnings will be coming and getting better and better every quarter just because the fact that not only they're our core – I mean, our balance sheet has plenty of income flowing in, but the fact that the credit metrics that we have at less than 1% non-performing assets, we have very low downside in a credit cost issue. We have encouraged our existing lenders to start stepping up, going out to the market, and start growing businesses. Now, commercial C&I loans are very different than, I'm going to say, mortgages. It would take a lot longer lead time to get them to start bringing the business in. And even when we get the commitments, it'll still get a little bit lead time to get some outstanding balances. But as we have indicated in the second quarter, we have shown a quarter-to-quarter 6% increase in C&I and trade finance loans. And…

Thank you.

The next question comes from Joe Morford at RBC. Joe Morford – RBC: Good morning, everyone.

Good morning

Good morning. Joe Morford – RBC: I guess just taking the expense question one step further and looking beyond the third quarter, either the fourth or going into 2011, once you realized the savings in WFIB and further efficiencies in UCB, what normalized expense run rate would you be targeting at this point?

I think in a couple of quarters, we are projecting around $100 million, something like that. And we’ll continue to review because as Dominic mentioned about building the C&I some of the club savings that we have will be replaced with further hiring and investments in the C&I platform. Joe Morford – RBC: Okay. And with that, $100 million includes any of these reimbursable expenses that you’re expecting in the near term?

Yes, so our portion, that 20% that we are taking in. Joe Morford – RBC: Okay.

We would always exclude the 80% that is reimbursable by FDIC.

Yes. So one of the challenges right now for your review purpose is that the number never quite looked right. You know why? Because we're always going to have these – a large chunk of expenses that we – it's work that we provide for FDIC that we have incurred, but because under generally accepted accounting principles, we have to show gross. So therefore, every quarter, you would see expenses that look over stated. And then we have to tell you that while – with those expenses that will be reimbursable from the FDIC. But by the way, there’s another line item up in the non-interest income area that shows the net effect that we would in the net – the non-interest income portion of the reimbursable expenses of the FDIC, and then down with that expense item. However right now, according to GAAP, we need to show it gross, so that’s why it becomes so confusing. But if we're able to net it, then you – I mean we'll be able to give you that number much easier. But we'll always explain it. Every quarter, we're going to explain it. Joe Morford – RBC: Right. Okay. Fair enough. To be clear, the net – $100 million is not a gross number, net.

It is not, it is not. And I think that the easiest way also for you to project the future is to not also include the income – the 80%. Joe Morford – RBC: Right. Okay.

Yes, because the net-net number – there's no clarity to the net number as to the gross number. Joe Morford – RBC: Okay. And then, just separately, would you have what the troubled debt restructuring number was for the quarter? And how much, if any, of that is already included in the non-accrual category?

The troubled debt restructurings that are not included already in non-accrual loans are about $45 million. I'll go back – I have to get back to you on the number of what is included in non-accruals, Joe. Joe Morford – RBC: Okay. Thanks, Irene.

The next question comes from Aaron Deer at Sandler O'Neill. Aaron Deer – Sandler O'Neill: Hi. Good morning, everyone.

Hi. Aaron Deer – Sandler O'Neill: I guess if we could circle back for a minute the yield adjustments, I'm trying to understand the impact that the discount accretion might have on a go-forward basis and maybe where that settles out. Do you have a sense yet of what ongoing number that might be or maybe what the discount accretion was so far this quarter and in July?

Yes. For the quarter, the normal discount accretion is about $6 million. We expect the run rate from where – around $8 million. There'll be some fluctuations quarter-to-quarter. But one thing is that every quarter – and actually, it is a poor earnings. Every quarter, we will have a payoff where the loans will be paid off at par, but it got carried at their value that is lower than that. It's yield accretive from this disposal, the $29 million. And the net impact is 20% that belongs to the bank. So every quarter, you'll see some excess yield of the accretion coming from this disposal. So there are two components. One is the core accretion, and then the disposal.

And Aaron, we haven't run the calculations for July yet. We do it at the end of the month. But overall, the payoff is the pay-down activity has subsided, even from the reduction that we saw in the second quarter. Aaron Deer – Sandler O'Neill: Okay. That's helpful. And then, I guess with the – I'm curious, when performing UCB loans mature, are you renewing those as East West credit? Or are you renewing them under the same terms in order to retain the loss coverage?

Normally speaking, in a performing loan, we will – if we renew it under the same terms and conditions, primarily with the same commitment amounts, it is covered under loss share for that five-year period for C&I loans or commercial loan and 10 years for single family. If we renew it and it isn't according to the original commitment that existed as of 11/06, then it would fall outside the loss share. Predominantly, they are renewed in accordance to the original commitment and continue to be covered. Aaron Deer – Sandler O’Neill Partners: Okay. And then, so knowing that, what kind of ongoing quarterly accretion would you expect to see on that covered loan book?

There'll be always some. Just like any portfolio, Aaron, like Irene said this quarter, so far, we see a loan accretion. It’s a common goal, depending also on the market, how competitive the market is. Aaron Deer – Sandler O’Neill Partners: Okay. Thank you.

The next question is from Brett Rabatin at Sterne, Agee. Brett Rabatin – Sterne, Agee: Good morning. I wanted to ask the TARP repayment question, if you can provide any color around or your thoughts on TARP repayment.

Well, as we indicated for the last two or three quarters, our plan is to wait for three consecutive quarters of core earnings. And then, we will then (inaudible) and request TARP repayment. So we just completed three consecutive quarters of core earnings, but we will be – right after we finish the earnings call, we're going to be – start working on – with our primary regulators in terms of paying off TARP. Brett Rabatin – Sterne, Agee: Okay. And then, I wanted to ask on the bigger legacy portfolios or ways to land A and D. I wanted to ask on that portfolio, what you’re seeing generally from here. Obviously, credit has gotten better capacity quarters in that portfolio. What do the prospects look like in the remaining piece you have left?

Well, the balance now is about $650 million, slightly less than that, which is at a very, very low level. And since we continue to monitor that portfolio and always write it down in a – to the new fair value, we believe that unless the value deteriorates dramatically in the additional losses coming from that portfolio, we’ll not be (inaudible). Brett Rabatin – Sterne, Agee: Okay. And then just lastly, I wanted to ask on the credit marks you have on the acquired portfolio. Can you discuss the thoughts around the potential portfolio exceeding the performance that you have on the credit marks?

From time to time, we will continue to review the pool in the covered loans. And as such, whether the credit marks we have are adequate or do we need additional amounts. But at this moment, we feel that it’s adequate, the interim credit marks. But it’s something that is an ongoing review. In the future, if there’s a quarter that we feel that our analysis shows that we have too much credit marks, then we would reverse that. Likewise, if the credit marks – if it’s not adequate at a certain pool and that that will (inaudible), then we have to provide additional provisions. But that’s ongoing. All-in-all, though, we believe that with $1.1 billion credit marks in the covered loans that the total credit marks would be pretty sufficient. Brett Rabatin – Sterne, Agee: Okay. Great. Thanks for the color.

(Operator Instructions) Our next question comes from Lana Chan at BMO Capital Markets. Lana Chan – BMO Capital Markets: Hi, good morning. Just on credit quality, do you have some – the number for inflows to the non-performers this quarter? And did you sell any non-performing loans this quarter as well?

Well, the inflows to non-performing loans were about $75 million. So that’s down compared to where we were last quarter, which was about $100 million or so. We also sold some non-performing loans. We sold about $77 million during the quarter, also again, lower than what we were last quarter. Lana Chan – BMO Capital Markets: And what are you seeing now in terms of the opportunities for additional loan sales? We’ve seen a couple of things be more aggressive in the second quarter as liquidities improve. What do you guys know?

Well, sometimes it’s time. We've got very good offers. But given our non-performing assets' so low, we would devaluate because sometimes it’s better to foreclose as solid as REO because when you have (inaudible) title, the price would be better. Eventually, you'll see a slowdown in the loan sales in the second quarter. But some of the offers we've got seemed to be improve, compared to before. And in addition, the 30-day to 89-day day delinquents had dropped, compared to the first quarter about 30%. So we don’t want to sell the notes at a steep discount just to sell down the property loans. And we will evaluate. If we think that we will get much better value at REO, we will go ahead and foreclose the property. Lana Chan – BMO Capital Markets: Okay. Thank you. And just one more question, you guys did some balance sheet repositioning in the second quarter with the debt prepayments, selling some consumer loans and the (inaudible) portfolio, anymore of that's going to happen in the next couple of quarters?

Not in that magnitude. The Federal Home Loan Bank advances in – the long term rates have come down. So since we have excess liquidities and in a higher rate, so it’s an opportunity for us to reduce cost of funding, and also for the securities. Again, we were concerned with this longer duration security. So when we have an opportunity to sell it at a gain, we reduce the duration risk by selling those securities. But we don’t have much of this longer term duration investment securities anymore. So if we do something, it will not be in that magnitude, Lana. Lana Chan – BMO Capital Markets: Okay. Thanks, Julia.

Okay. Thank you.

Our next question comes from Aaron Deer at Sandler O'Neill. Aaron Deer – Sandler O'Neill: Hi, just two quick follow-ups on that point. One was the – the (inaudible) that you did with respect to the student warranty, is there anymore of that to come or something similar to that that we might see in future quarters?

We would consider it. What happened is for the – we got the opportunity to sell it at good price. Or also, we have news inflows coming in from additional commitments that we have that we know are going to come in the future months. So with that, we took the opportunity this quarter. And we'd evaluate it next quarter or a quarter there afterwards, depending on the fifth blow and to where we think our balances will be. Aaron Deer – Sandler O'Neill: Okay. And then, where does the duration of securities portfolio stand (inaudible)?

Pretty sharp. . Aaron Deer – Sandler O'Neill: Okay. And any metric you can provide on that?

We don’t have the calculations, but I would say that the maximum, two, two-and-a-half years. Aaron Deer – Sandler O'Neill: Okay. That’s helpful. Thank you all.

This concludes our question-and-answer session. I would like to turn the conference back over to Dominic Ng for any closing remarks.

Well, thank you all for joining our call. And now, we look forward to talking to you again in our next quarter conference call. Thank you.