East West Bancorp, Inc. Q3 2008 Earnings Call Transcript

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Question-and-Answer Session

Operator

(Operator Instructions) Your first question comes from the line of Joe Morford with RBC Capital Markets.

Joe Morford - RBC Capital Markets

Thanks. Good morning.

Dominic Ng

Good morning.

Joe Morford - RBC Capital Markets

I just wondered if you could comment on the values realized in the sales of non-performing loans and REO in the quarter, and how do they compare to the carrying values on your books at June 30^th? Also, along those lines, based on your ongoing review of the portfolios, can you update where you think the current average LTV stand for the residential land and construction portfolios, either relative to last quarter or at origination? Thanks.

Dominic Ng

Let me answer the first question on the value of the sales of REO and notes. I think we won some and we lost some, but overall, it was a 9% discount from the carrying values for all the REO and note sales taken place. We have taken the path that we worked on these loans one at a time rather than doing a bulk sale, and currently I think the book sale value is quite depressed. Obviously if you looked at what major banks were doing, like Merrill Lynch and some of the other big out there are selling at a huge discounts.

So if we go out there and do a big book sale, I think that we are probably not doing our service appropriately in terms of fiduciary responsibility. But, on the other hand, what we worked on these loans and REO one at a time, we are making some pretty good progress, and there are some of which we actually sold above the new appraised value and then there are some of them actually we did it below.

All in all what we are doing is that we just work on one at a tame and making good progress, and as of, I think that September 30, it was a 9% discount from our carrying value. So that was the first question.

Now I do not remember the second question.

Joe Morford - RBC Capital Markets

It was just any read on current average LTVs for the residential land and construction portfolios?

Tom Tolda

Joe, this is Tom Tolda. With regard to the loan-to-values, on the residential construction we still are around that 80% level with land just short of 70% loan-to-value at this point.

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