East West Bancorp, Inc. · NASDAQ:EWBC
East West Bancorp — Q4 2024 Earnings Presentation
28 slides from East West Bancorp's earnings presentation, Jan 23, 2025
Slide 1: Fourth Quarter and Full Year 2024 Earnings Presentation
East West Bancorp, Inc. Fourth Quarter and Full Year 2024 Earnings Presentation January 23, 2025
Slide 2: Forward-Looking Statements and Additional Information
Forward-Looking Statements and Additional Information Forward-Looking Statements This presentation contains forward-looking statements that are intended to be covered by the safe harbor for such statements provided by the Private Securities Litigation Reform Act of 1995. These statements are based o
Slide 3: Fire Update
Fire Update Amid the ongoing crisis of the L.A. fires, we are living our values of absolute integrity, customer alignment, professionalism, and selflessness to serve our community in this time of need Supporting our Customers and our Community Supporting our Colleagues ▪ Standing ready to assist con
Slide 4: Full Year and 4Q 2024 Highlights
Full Year and 4Q 2024 Highlights $1.166 billion net income available to common equity in 2024, $8.33 diluted earnings per share $293 million net income available to common equity in 4Q24, $2.10 diluted earnings per share ▪ Grew average deposits +9% Y-o-Y ▪ NII down 1% Y-o-Y, up 3% Q-o-Q − End-of-per
Slide 5: Deposits
Deposits Sixth consecutive quarter of $1 billion+ customer deposit growth; noninterest-bearing demand deposits growing again Average Deposits End of Period Deposit Growth by Category (3Q24 to 4Q24) ($ in billions) ($ in millions) Deposit Mix Period-End 4 Year CAGR Cost +10% $59.7 Money Market $795 3
Slide 6: Loans
Loans Prudent growth in our focus categories is bolstering diversification and supporting interest income Average Loans End of Period Loan Growth (3Q24 to 4Q24) ($ in billions) ($ in millions) Loan Period-End Mix Yield 4 Year CAGR C&I $329 7.00% $52.4 +9% $49.5 $45.3 16.5 31% $39.7 15.5 $36.8 Reside
Slide 7: Net Interest Income & Net Interest Margin
Net Interest Income & Net Interest Margin Growing dollar NII with continued disciplined reduction in deposit cost Net Interest Income (NII) & Net Interest Margin (NIM) End of Period Deposit Cost (2Q24 to 4Q24) ($ in millions) 49bp decrease in 2H NII NIM IB deposit cost $588 3.92% 3.73% $575 3.43% $5
Slide 8: Fee Income
Fee Income Consistent sales execution has supported strong performance Fee Income1 Highlights ($ in millions) ▪ Record full-year fee income1 of $310mm, 4 Year $310 CAGRs up $34mm, or +12% Y-o-Y +11% $276 − Wealth Management Fee growth $258 104 +20% Deposit Account Fees (+$12mm) reflects higher custo
Slide 9: Operating Expense & Efficiency
Operating Expense & Efficiency Maintaining best-in-class efficiency while investing for future growth Total Operating Noninterest Expense1 Highlights ($ in millions) FDIC Special Assessment ▪ Full-year total operating noninterest 4 Year CAGRs2 CAGRs expense of $904mm, up $1mm Y-o-Y $902 $904 +11% +8
Slide 10: Asset Quality Metrics
Asset Quality Metrics Our prudent approach to credit management has delivered relatively low and stable credit outcomes Provision for Credit Losses & Net Charge-offs Non-Performing Assets ($ in millions) ($ in millions) $196 $195 $194 $80 Multifamily 5 5 5 $70 $165 30 $70 $64 49 35 5 Provision for $
Slide 11: Allowance for Loan Losses
Allowance for Loan Losses We continue to bolster our CRE allowance levels Allowance for Loan Losses (ALLL) ($ in millions) $669 $670 $684 $696 $702 1.29% 1.30% 1.31% 1.31% 1.28% 12.31.23 03.31.24 06.30.24 09.30.24 12.31.24 ALLL ALLL/Loans HFI Composition of ALLL by Portfolio ($ in millions) 12.31.23
Slide 12: Capital
Capital Healthy capital position: 200 thousand shares repurchased in 4Q24, 9% increase to 1Q25 dividend Tangible Common Equity Ratio1 Regulatory Capital Ratios2 Highlights 10.2% 10.1% 10.4% 10.4% 10.4% ▪ 9% dividend increase 9.7% 9.6% 5.0% ‒ Declared 1Q25 dividend of 9.4% 9.4% 9.3% $0.60/share, up $
Slide 13: Management Outlook: Full Year 2025
Management Outlook: Full Year 2025 Earnings Drivers FY 2025 Expectations vs. FY 2024 Results FY 2025 Expectation ▪ Assumes December 31st forward curve, with 50bps of expected Interest Rate Outlook cuts in the Federal Funds rate and a steepening yield curve End of Period Loans ▪ Growing in the range
Slide 14: Appendix
EASTWEST BANK Your financial bridge Appendix
Slide 15: East West at a Glance
East West at a Glance 12.31.24 12.31.24 12.31.24 2024 $13B Market Cap $76B Assets $63B Deposits 17% ROTCE1 A Leading Regional Bank with Cross-Border Capabilities... …Producing Consistent Top-Tier Shareholder Returns… ▪ Headquartered in Pasadena, California ROTCE1 21.3% 19.4% 16.7% 17.2% 17.1% 17.0%
Slide 16: Diversified Loan Portfolio
Diversified Loan Portfolio 70% of loans support commercial customers, with broad diversification across industry and asset types Commercial Loans by Type (as % of Portfolio Loans, 12.31.24) Total Loan C&I Portfolio CRE $17.4bn $53.7bn $20.3bn General 6% C&I 9% Multifamily $17.4 32% Real Estate Inves
Slide 17: Commercial Real Estate Portfolio Detail
Commercial Real Estate Portfolio Detail Our CRE portfolio is granular and many loans have full recourse and personal guarantees Distribution by LTV1 Size and LTV by Property Type (as of 12.31.24) (as of 12.31.24) >70% 3% Total Portfolio Weighted Average >65% to 70% Size Avg. LTV1 Loan Size 6% ($bn)
Slide 18: CRE Office – Additional Information
CRE Office – Additional Information Our office portfolio has low LTVs across most segments and low average loan sizes CRE Office: Geographic Mix by Metro Area CRE Office by Size Segment (as of 12.31.24) Other (as of 12.31.24) Regions Avg. Weighted Washington Balance No. of 7% Loan Size Loan Size Avg
Slide 19: CRE Retail – Additional Information
CRE Retail – Additional Information Our retail portfolio has a weighted average LTV profile of 48% CRE Retail: Geographic Mix by Metro Area CRE Retail by Size Segment (as of 12.31.24) (as of 12.31.24) Other Regions Avg. Weighted Balance No. of Loan Size Loan Size Avg. LTV 12% ($ in mm) Loans ($ in m
Slide 20: CRE Multifamily – Additional Information
CRE Multifamily – Additional Information Our multifamily portfolio is amongst our most granular CRE Multifamily : Geographic Mix by Metro Area CRE Multifamily by Size Segment (as of 12.31.24) (as of 12.31.24) Other Regions Nevada Avg. Weighted Balance No. of 6% Loan Size Loan Size Avg. LTV ($ in mm)
Slide 21: Residential Mortgage Portfolio
Residential Mortgage Portfolio Our residential mortgage portfolio benefits from both low LTVs and smaller average loan size Resi. Mortgage Distribution by LTV1 Portfolio Highlights as of 12.31.24 (as of 12.31.24) >60% Outstandings 11% ▪ $16.0bn loans outstanding ▪ +2% Q-o-Q and +6% Y-o-Y 51% >55% to
Slide 22: Cash and Securities
Cash and Securities Enhanced liquidity while supporting earnings with high-quality liquid assets Average Total Securities Portfolio and Cash Highlights ($ in billions) Total Securities & Resale Agreements Cash & Equivalent Total Securities Average Yield ▪ Securities portfolio well-positioned as a $1
Slide 23: Loan Yields
Loan Yields Hedge Impact and Outlook Loan Portfolio by Index Rate (as of 12.31.24) ▪ $18mm negative impact to 4Q24 NII from cash flow hedges (10bps to NIM) ‒ $500mm of negative carry swaps rolled off in January Fixed rate ‒ $500mm of negative carry swaps to roll off in February 29% 21% Hybrid in fix
Slide 24: Deposit and Funding Cost
Deposit and Funding Cost Average Deposit and Liability Cost 3.92% 3.94% 4.07% 3.93% 4.05% 3.64% 3.73% 3.85% 3.71% 3.63% 2.84% 2.96% 2.98% 2.60% 2.75% 4Q23 1Q24 2Q24 3Q24 4Q24 Average cost of deposits Average cost of interest-bearing deposits Average cost of interest-bearing liabilities Average Depos
Slide 25: Appendix: GAAP to Non-GAAP Reconciliation
Appendix: GAAP to Non-GAAP Reconciliation EAST WEST BANCORP, INC. AND SUBSIDIARIES GAAP TO NON-GAAP RECONCILIATION ($ in thousands) (unaudited) Three Months Ended Year Ended December 31, September 30, December 31, December 31, December 31, 2024 2024 2023 2024 2023 Net interest income before provisio
Slide 26: Appendix: GAAP to Non-GAAP Reconciliation
Appendix: GAAP to Non-GAAP Reconciliation EAST WEST BANCORP, INC. AND SUBSIDIARIES GAAP TO NON-GAAP RECONCILIATION ($ in thousands) (unaudited) The Company uses certain non-GAAP financial measures to provide supplemental information regarding the Company’s performance. During the second, third and f
Slide 27: Appendix: GAAP to Non-GAAP Reconciliation
Appendix: GAAP to Non-GAAP Reconciliation EAST WEST BANCORP, INC. AND SUBSIDIARIES GAAP TO NON-GAAP RECONCILIATION ($ in thousands) (unaudited) The Company uses certain non-GAAP financial measures to provide supplemental information regarding the Company’s performance. Tangible book value, tangible
Slide 28: Appendix: GAAP to Non-GAAP Reconciliation
Appendix: GAAP to Non-GAAP Reconciliation EAST WEST BANCORP, INC. AND SUBSIDIARIES GAAP TO NON-GAAP RECONCILIATION ($ in thousands) (unaudited) Return on average TCE represents tangible net income divided by average tangible book value. Tangible net income excludes the after-tax impacts of the amort