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PROSPECTUS
578,791 SHARES
EAST WEST BANCORP, INC.
COMMON STOCK
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The shareholders of East West Bancorp, Inc. described below are offering and
selling up to 578,791 shares of East West Bancorp common stock under this
prospectus.
The selling shareholders of East West Bancorp obtained their shares of
common stock in two distinct and separate transactions. First, on June 12, 1998,
the Company issued a common stock purchase warrant to Friedman Billings
Ramsey & Co. ("FBR") for 475,500 shares issuable upon exercise. The warrant was
issued in connection with investment banking services performed by Friedman
Billings Ramsey & Co. Friedman Billings Ramsey & Co. has subsequently
transferred the right to purchase 100,000 of these shares of East West common
stock to Castle Creek Capital Partners, Fund I. Second, on August 23, 2000, the
Company issued 103,291 shares of common stock to the sole stockholder of Risk
Services, Inc., an insurance agency, in connection with the Company's
acquisition of Risk Services, Inc.
The selling shareholders may offer their East West stock through public
transactions executed through one or more broker-dealers at prevailing market
prices, carried out through the NASDAQ National Market or one or more stock
exchanges (if the shares are listed on an exchange at any time in the future),
or in private transactions directly with purchasers or at privately negotiated
prices.
East West Bancorp common stock is listed on the NASDAQ National Market with
the ticker symbol: "EWBC." On September 20, 2000, the closing price of one share
of East West common stock on the NASDAQ National Market was $19.00.
Our principal executive offices are located at 415 Huntington Drive, San
Marino, California, 91108, and our telephone number is (626) 799-5700.
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NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
An investment in these securities involves a high degree of risk. See "Risk
Factors" at page 2.
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THE DATE OF THIS PROSPECTUS IS OCTOBER 17, 2000.
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RISK FACTORS
IN ADDITION TO THE OTHER INFORMATION IN THIS PROSPECTUS, YOU SHOULD
CAREFULLY CONSIDER THE FOLLOWING RISK FACTORS IN DECIDING WHETHER TO INVEST IN
THE COMMON STOCK.
FUTURE CHANGES IN INTEREST RATES MAY REDUCE OUR PROFITS.
Our ability to make a profit largely depends on our net interest income,
which could be negatively affected by changes in interest rates. Net interest
income is the difference between:
- the interest income we earn on interest-earning assets, such as mortgage
loans and investment securities; and
- the interest expense we pay on our interest-bearing liabilities, such as
deposits and amounts we borrow.
A significant portion of our mortgage loans have rates of interest which are
fixed for the life of the loan and are generally originated for periods of up to
30 years, while our deposit accounts have significantly shorter periods to
maturity. Because our interest-earning assets generally have fixed rates of
interest and have longer effective maturities than our interest-bearing
liabilities, the yield on our interest-earning assets generally will adjust more
slowly to changes in interest rates than the cost of our interest-bearing
liabilities, which are primarily time deposits. As a result, our net interest
income may be reduced when interest rates increase significantly for long
periods of time. In addition, rising interest rates may reduce our earnings
because there may be a lack of customer demand for loans. Declining interest
rates may also reduce our net interest income if adjustable rate or fixed rate
mortgage loans are refinanced at reduced rates or paid off earlier than
expected, and we reinvest these funds in assets which earn us a lower rate of
interest.
Fluctuations in interest rates are not predictable or controllable. We have
attempted to structure our asset and liability management strategies to mitigate
the impact of changes in market interest rates on our net interest income.
However, there can be no assurance that we will be able to manage interest rate
risk so as to avoid significant adverse effects in our net interest income.
A DOWNTURN IN THE HEALTH OF THE ECONOMY OR CHANGES IN THE FEDERAL RESERVE'S
MONETARY POLICY COULD AFFECT OUR NET INTEREST INCOME AND REDUCE OUR
PROFITABILITY.
A downturn in the economy could affect us in the following ways, among
others:
- the amount of funds available for deposit could be reduced;
- the ability of borrowers to repay their loans could be hurt; and
- the strength of credit demands by customers could decline.
In addition, the banking business is affected not only by general economic
conditions, but also by the monetary policies of the Federal Reserve. These
monetary policies have significant effects on the operating results of banks.
Changes in monetary policies may affect the ability of the banks to attract
deposits, make loans and manage interest rate risk.
CHANGES IN LAWS OR REGULATIONS COULD HURT OUR PROFITABILITY.
We operate in a highly regulated industry and are subject to the supervision
and examination by the Board of Governors of the Federal Reserve System, the
Federal Deposit Insurance Corporation and the California Department of Financial
Institutions. The federal and state banking laws and regulations limit the
manner in which banks may conduct business and obtain financing. Changes in the
laws and regulations that govern us could restrict our operations or impose
burdensome requirements upon us. This could reduce our profitability.
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EAST WEST BANCORP, INC.
East West Bancorp, Inc. is a Delaware corporation that was incorporated in
August 1998 to be the holding company for East-West Bank. The Company became the
holding company for East-West Bank as of December 30, 1998, and is subject to
the Bank Holding Company Act of 1956, as amended.
The Company has no material operations or subsidiaries other than its wholly
owned subsidiaries, Risk Services, Inc. and East-West Bank, and the bank's two
subsidiaries, East-West Services, Inc. and East-West Investments, Inc. Our bank
is a California-chartered commercial bank and its deposits are insured by the
Federal Deposit Insurance Corporation up to applicable limits. Our bank is the
fourth largest commercial bank headquartered in Los Angeles, California as of
December 31, 1999 and one of the largest banks in the United States that focuses
on the Chinese-American community.
East-West Bank was formed in June 1972 as the first federally chartered
savings institution focused primarily on the Chinese-American community, and
opened for business at its first office in the Chinatown district of Los Angeles
in January 1973. Currently, we specialize in lending for commercial,
construction, and residential real estate projects, financing international
trade for California companies, and providing business and personal deposit and
cash management services. We have emphasized commercial lending since becoming a
state-chartered commercial bank on July 31, 1995.
Through our network of 28 retail branches, we provide a wide range of
personal and commercial banking services to small and medium-sized businesses,
business executives, professionals and other individuals. We offer multilingual
services to all of our customers in English, Cantonese, Mandarin and Spanish. A
variety of deposit products are available, including the traditional range of
personal and business checking and savings accounts, time deposits and
individual retirement accounts, travelers' checks, safe deposit boxes, and
MasterCard and Visa merchant deposit services.
Our lending activities include residential and commercial real estate,
construction, commercial, trade finance, account receivables, inventory and
working capital loans. We provide commercial loans to small and medium-sized
businesses with annual revenues that generally range from several million to
$200 million. In addition, we provide short-term trade finances facilities for
terms of less than one year primarily to U.S. importers and manufacturers doing
business in the Asia Pacific region. Our commercial borrowers are engaged in a
wide variety of manufacturing, wholesale trade and service businesses.
As of August 23, 2000, we also offer on an agency basis, various insurance
products through Risk Services, Inc. such as property, casualty, and life.
We concentrate on marketing our services in the Los Angeles metropolitan
area, Orange County, the San Francisco Bay area, and the Silicon Valley area in
Santa Clara County, with a particular focus on regions with a high concentration
of ethnic Chinese. The ethnic Chinese markets within our primary market area
have experienced rapid growth in recent periods. As California continues to gain
momentum as the hub of the Pacific Rim, we provide important competitive
advantages to our customers participating in the Asia pacific marketplace. We
believe our customers benefit from our understanding of Asian markets and
cultures, our corporate and organizational ties throughout Asia, as well as our
international banking products and services. We believe that this approach,
combined with the extensive ties of our management and Board of Directors to the
growing Asian and ethnic Chinese communities, provides us with an advantage in
competing for customers in its market area.
Our principal executive office is located at 415 Huntington Drive, San
Marino, California 91108 and our telephone number is (626) 799-5700.
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DESCRIPTION OF COMMON STOCK
Our Certificate of Incorporation authorize us to issue 50,000,000 shares of
common stock, par value $.001 per share. As of August 31, 2000, there were
outstanding 22,454,323 shares of common stock.
All outstanding common stock is, and any stock issued under this prospectus
will be, fully paid and nonassessable. Subject to rights of preferred
stockholders if any preferred stock is issued and outstanding, holders of common
stock
- are entitled to any dividends validly declared;
- will share ratably in our net assets in the event of a liquidation; and
- are entitled to one vote per share.
The common stock has no conversion rights. Holders of common stock have no
preemption, subscription, redemption, or call rights related to those shares.
U.S. Stock Transfer Corporation is the transfer agent and registrar for
our common stock.
USE OF PROCEEDS
The warrants entitle some of the selling shareholders to purchase up to an
aggregate of 475,500 shares of East West Bancorp common stock. The conversion
price of the warrants is $10.00 per share. We will receive the proceeds of any
exercise of the warrants, which it will use for general corporate purposes. If
all warrants are exercised, we will receive net proceeds of $4,755,000.
However, all net proceeds from the sale of the East West Bancorp shares
being offered under this prospectus will go to the selling shareholders.
Accordingly, we will not receive any proceeds from sales of these shares. We are
paying the expenses of registration of the shares being offered under this
prospectus.
SELLING SHAREHOLDERS
The selling shareholders are composed of the following:
- Friedman, Billings & Ramsey & Co. which received a warrant to purchase
475,500 shares of common stock in connection with investment banking
services it provided to us. FBR retains a warrant to purchase 375,500
shares of common stock, as it has transferred 100,000 of its original
warrants to Castle Creek Capital Partners, Fund I. We agreed to register
the shares of Common Stock pursuant to a Registration Rights Agreement
dated as of June 12, 1998 between East West and certain selling
shareholders.
- Castle Creek Capital Partners LLP, Fund I, who received a warrant to
purchase 100,000 shares of common stock from FBR as described above.
- Alice Wong, formerly the sole stockholder of Risk Services, Inc. Ms. Wong
acquired 103,291 shares of our common stock in the transaction under which
we acquired all of the issued and outstanding shares of Risk Services on
August 23, 2000. Risk Services is now a wholly owned subsidiary of East
West Bancorp. Ms. Wong will not be able to sell her shares of common stock
if such sales would affect the corporate tax treatment of the acquisition
of Risk Services by East West Bancorp. 51,645 of the shares of our common
stock issued to Ms. Wong are being held in escrow. Release of these shares
is subject to satisfaction of certain earn-out provisions based on the
financial performance of Risk Services over the next 42 months.
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Except for certain positions as officers of the subsidiaries, no selling
shareholder has had any position, office or other material relationship with us,
other than in connection with the acquisition of the companies, within the past
three years.
One or more of the selling shareholders identified above may choose to
donate or transfer as gifts some or all of the shares that may otherwise be sold
directly by the selling shareholder or the selling shareholder may choose to
transfer some or all of these shares for no value to one or more affiliated
persons. If any of the shares are so transferred by any of the selling
shareholders listed above, then the persons who receive the shares would
constitute additional selling shareholders under this prospectus.
PLAN OF DISTRIBUTION
The selling shareholders may offer their shares at various times in one or
more of the following transactions:
- on the NASDAQ National Market
- on any United States securities exchange where our common stock may be
listed in the future
- in the over the counter market
- in privately negotiated transactions directly with purchasers
- in a combination of any of the above transactions
The selling shareholders may sell their shares at market prices prevailing
at the time of sale, at prices related to such prevailing market prices, at
negotiated prices or at fixed prices. The selling shareholders may use
broker-dealers to sell their shares. If this happens, broker-dealers will either
receive discounts or commissions from the selling shareholders, or they will
receive commissions from purchasers of shares for whom they acted as agents.
The selling shareholders may also pledge shares to broker-dealers or other
financial institutions, and, upon a default relative to any selling shareholder
who has so pledged any such shares, the broker-dealer or other financial
institution holding the pledged shares may effect sales of the pledged shares
pursuant to this prospectus or any amended prospectus, if needed. In addition,
any shares that qualify for sale pursuant to Rule 144 may be sold under
Rule 144 rather than pursuant to this prospectus.
In effecting sales, brokers, dealers or agents engaged by any selling
shareholder may arrange for other brokers or dealers to participate. Brokers,
dealers or agents may receive commissions, discounts or concessions from the
selling shareholder in amounts to be negotiated prior to the sale. Any such
selling shareholder and such brokers or dealers and any other participating
brokers or dealers may be deemed to be "underwriters" within the meaning of the
Securities Act of 1933 in connection with such sales, and any such commissions,
discounts or concessions may be deemed to be underwriting discounts or
commissions under the Securities Act of 1933. One or more of the selling
shareholders may indemnify broker-dealers that participate in transactions
involving the sale of the shares against certain liabilities, including
liabilities arising under the Securities Act of 1933.
In order to comply with the securities laws of certain states, if
applicable, the shares must be sold in such jurisdictions only through
registered or licensed brokers or dealers. In addition, in certain states the
shares may not be sold unless they have been registered or qualified for sale in
the applicable state or an exemption from the registration or qualification
requirement is available and is complied with.
We have advised the selling shareholders that the anti-manipulation rules of
Regulation M under the Exchange Act of 1934 may apply to sales of common stock
in the market and to the activities of the selling shareholders and their
affiliates. In addition, we will make copies of this prospectus available to the
selling shareholders and have informed each of them of the need for delivery of
copies of this prospectus to purchasers at or prior to the time of any sale of
the shares offered hereby.
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At the time a particular offer of shares is made, if required, a prospectus
supplement will be distributed that will set forth the number of shares being
offered and the terms of the offering including the name of any underwriter,
dealer or agent, the purchase price paid by any underwriter, and discount,
commission and other item constituting compensation, any discount, commission or
concession allowed or re-allowed or paid to any dealer, and the proposed selling
price to the public.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the SEC. You may read and copy any document we file at the
SEC's public reference rooms in Washington, D.C., New York, New York and
Chicago, Illinois. Please call the SEC at 1-800-SEC-0330 for further information
on the public reference rooms. Copies of these materials can be obtained at
prescribed rates from the Public Reference Section of the SEC at its principal
office at 450 Fifth Street, N.W., Washington, D.C. 20549. Our SEC filings are
also available to the public from the SEC's Website at "http://www.sec.gov."
The SEC allows us to "incorporate by reference" the information we file with
them, which means that we can disclose important information to you by referring
you to those documents. The information incorporated by reference is considered
to be part of this prospectus, and information that we file later with the SEC
will automatically update and supersede this information. We incorporate by
reference the documents listed below and any future filings we will make with
the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act
of 1934:
1. Annual Report on Form 10-K for the fiscal year ended December 31, 1999;
2. Quarterly Report on Form 10-Q for the quarter ended March 31, 2000; and
3. Quarterly Report on Form 10-Q for the quarter ended June 30, 2000; and
4. the definitive Proxy Statement filed with the SEC on April 3, 2000 provided
to stockholders in connection with the Annual Meeting of Stockholders held
on May 10, 2000.
You may request a copy of these filings, at no cost, by writing or
telephoning us at the following address:
East West Bancorp, Inc.
415 Huntington Drive
San Marino, California 91108
Attention: Douglas Krause, Executive Vice President
Phone: (626) 799-5700
This prospectus is part of a registration statement we filed with the SEC.
You should rely only on the information or representations provided in this
prospectus. We have authorized no one to provide you with different information.
We are not making an offer of these securities in any state where the offer is
not permitted. You should not assume that the information in this prospectus is
accurate as of any date other than the date on the front of this prospectus.
LEGAL MATTERS
Manatt, Phelps & Phillips L.L.P., Los Angeles, California, will pass upon
the validity of our securities and certain other legal matters in connection
with our offering of our securities, unless we indicate otherwise in a
prospectus supplement.
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EXPERTS
The financial statements incorporated in this prospectus by reference from
our Annual Report on Form 10-K have been audited by Deloitte & Touche LLP,
independent auditors, as stated in their report, which is incorporated herein by
reference, and have been so incorporated in reliance upon the report of such
firm given upon their authority as experts in accounting and auditing.
CAUTIONARY STATEMENT CONCERNING FORWARD
LOOKING STATEMENTS
We do not provide forecasts of the future of our financial performance.
However, this prospectus and the documents incorporated by reference into this
prospectus may contain forward looking information that involves risks and
uncertainties. In particular, statements contained in this prospectus or any of
the documents incorporated by reference into this prospectus which are not
historical facts constitute forward looking statements. Some of these statements
concerning international revenues, anticipated operating expense levels and such
expense levels relative to the Company's total revenues. In addition, any of the
words "believes," "expects," "anticipates" or similar expressions indicate
forward-looking statements. Our actual results of operations and financial
condition have varied and may in the future vary significantly from those stated
in any forward-looking statements. Factors that may cause such differences
include, for example: the availability of capital to fund our future cash needs;
reliance on major customers; history of operating losses; technological
obsolescence; competition; component supply problems; protection of proprietary
information; and accuracy of our internal estimates of revenue and operating
expense levels.
DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION
FOR SECURITIES ACT LIABILITIES
The Delaware General Corporation Law and East West Bancorp's certificate of
incorporation and by-laws provide for indemnification of the company's directors
and officers for liabilities and expenses that they may incur in such
capacities. Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the company pursuant to the foregoing provisions, or otherwise, the
company has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act of 1933 and is, therefore, unenforceable.
You should rely only on the information incorporated by reference or
contained in this prospectus or any supplement. We have not authorized anyone
else to provide you with different or additional information. You should not
assume that the information in this prospectus or any supplement is accurate as
of any date other than the date on the front of this prospectus or any
supplement that may have a later date. The selling shareholders are not making
an offer of the common stock in any state where the offer is not permitted.
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TABLE OF CONTENTS
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PAGE
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Risk Factors.......................... 2
East West Bancorp..................... 3
Description of Common Stock........... 4
Use of Proceeds....................... 4
Selling Shareholders.................. 4
Plan of Distribution.................. 5
Where You Can Find More Information... 6
Legal Matters......................... 6
Experts............................... 7
Cautionary Statement Concerning
Forward Looking Statements.......... 7
Disclosure of Commission Position on
Indemnification for Securities Act
Liabilities......................... 7
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EAST WEST BANCORP, INC.
578,791 SHARES
OF COMMON STOCK
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PROSPECTUS
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October 17, 2000
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