East West Bancorp (EWBC) Q2 2024 earnings summary

Executive summary

• Net income for Q2 2024 was $288 million, or $2.06 per diluted share, with 2% sequential growth in both loans and deposits and a return on average assets of 1.63%.

• Record quarterly fee income reached $77 million, up 8% sequentially, driven by strong foreign exchange and wealth management fees.

• Asset quality remained strong, with annualized net charge-offs stable at $23 million (0.18% of average loans), and a non-performing asset ratio of 0.27%.

• Book value per share rose 3% quarter-over-quarter and 14%-15% year-over-year; tangible book value per share increased 3% and 15%, respectively.

• Recognized as the top-performing bank above $50 billion in assets by Bank Director magazine for the second consecutive year.

Financial highlights

• Net interest income for Q2 was $553 million, with a net interest margin of 3.27%, down 7 bps sequentially and 28 bps year-over-year.

• End-of-period deposits reached $60 billion, up 2% quarter-over-quarter and 7% year-over-year, with non-interest-bearing deposits stable at 25%.

• Provision for credit losses increased to $37 million in Q2 2024.

• Allowance for loan losses coverage ratio stood at 1.30% of loans.

• Efficiency ratio improved to 37.1% from 38.3% in Q1; adjusted efficiency ratio was 34.3%.

Outlook and guidance

• Full-year end-of-period loan growth expected in the 3%-5% range.

• Full-year net interest income projected to decline 2%-4%.

• Adjusted non-interest expense expected to rise 6%-8% for the year, mainly due to compensation and technology investments.

• Effective tax rate guidance lowered to 21%-23%.

• Net charge-offs anticipated in the range of 15-25 bps for subsequent quarters.