East West Bancorp (EWBC) Q3 2024 earnings summary

Executive summary

• Net income for Q3 2024 was $299 million ($2.14 per diluted share), up 4% year-over-year and quarter-over-quarter, with book value per share rising to $55.30 and tangible book value per share to $51.90.

• Average loans grew 1% and average deposits increased 3% quarter-over-quarter, with total deposits reaching $61.7 billion, up 10% year-to-date.

• Record fee income reached $81 million, up 6% sequentially, driven by lending, wealth management, and deposit fees.

• Asset quality remained strong with nonperforming assets at 0.26% of total assets and net charge-offs at 0.22% annualized.

• Return on average assets was 1.62% and return on average tangible common equity exceeded 17%.

Financial highlights

• Net interest income was $573 million, up 4% quarter-over-quarter, with net interest margin at 3.24%, down 3 bps sequentially.

• Noninterest income for Q3 2024 was $85 million, up 10% year-over-year, led by lending, wealth management, and deposit account fees.

• Noninterest expense was $221 million, flat sequentially; efficiency ratio improved to 34.4%.

• Book value per share rose 11% year-to-date to $55.30; tangible book value per share increased 12% to $51.90.

• Total assets reached $74.5 billion, up 7% from year-end 2023.

Outlook and guidance

• Full-year 2024 loan growth expected in the 2%-4% range; net interest income projected to decline 2%-4% year-over-year.

• Net charge-offs for Q4 and full year anticipated in the 15-25 basis points range; effective tax rate forecasted at 21%-23%.

• Management expects to maintain strong capital and liquidity positions, focusing on organic growth and risk management.

• The CRE market remains pressured by decreased office demand, potentially extending into 2025.

• Risks remain from inflation, economic slowdown, and regulatory changes.