East West Bancorp, Inc. · NASDAQ:EWBC
East West Bancorp — Q2 2024 Earnings Presentation
27 slides from East West Bancorp's earnings presentation, Apr 23, 2024
Slide 1: 2Q24 Earnings Presentation
East West Bancorp, Inc. 2Q 24 2Q Earnings Presentation July 23, 2024
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: 2Q24 Financial Highlights
2Q24 Financial Highlights $288 million net income available to common equity, $2.06 diluted earnings per share ▪ Grew end-of-period loans +2% Q-o-Q ▪ Solid growth in every fee business category ‒ Growth in line with guidance, driven by − Double-digit growth in foreign exchange Balancing C&I and resi
Slide 4: Loans
Loans Consistent residential mortgage production and a late quarter uptick in C&I drove end of period loans higher Average Loans End of Period Loan Growth (1Q24 to 2Q24) ($ in billions) ($ in millions) Y-o-Y +6% $51.3 $51.9 $51.9 $48.9 $49.9 C&I $525 16.0 16.3 16.2 +6% 15.3 15.4 Residential mortgage
Slide 5: Deposits
Deposits Fourth consecutive quarter of $1 billion+ customer deposit growth, with growth across all customer groups Average Deposits End of Period Deposit Growth (1Q24 to 2Q24) ($ in billions) ($ in millions) Y-o-Y +8% $58.7 $57.4 $54.3 $55.2 $55.4 Commercial and $882 Business Banking 19.3 21.0 +29%
Slide 6: Net Interest Income & Net Interest Margin
Net Interest Income & Net Interest Margin NII, NIM resilient amid higher interest-bearing deposit cost, continued mix shift Net Interest Income (NII) & Net Interest Margin (NIM) Highlights ($ in millions) $600 5.00% vs. Prior Quarter $567 $571 $575 $565 $553 4.50% ▪ NII down 2%, NIM down 7bps $550 4
Slide 7: Fees and Noninterest Income
Fees and Noninterest Income Record total quarterly fee income, with solid growth in every fee business category Fee Income1 Highlights ($ in millions) Y-o-Y vs. Prior Quarter +10% $77 ▪ Fee income1 of $77mm, up $6mm, or +8% $73 $71 from $71mm, with growth in all fee categories $69 10 +36% Wealth Man
Slide 8: Asset Quality Metrics
Asset Quality Metrics Credit trends continue to normalize Provision for Credit Losses & Net Charge-offs Non-Performing Assets ($ in millions) ($ in millions) $42 $37 $37 OREO $196 $26 $25 Resi. mortgage $165 30 $23 $23 $20 & consumer 17 $18 $116 $104 $114 52 Multifamily 47 33 11 5 5 $8 5 39 38 42 CR
Slide 9: Allowance for Loan Losses
Allowance for Loan Losses Grew CRE reserves by 23% year-over-year; office reserves now at 3.10% Allowance for Loan Losses (ALLL) ($ in millions) $669 $670 $684 $656 $635 1.28% 1.29% 1.28% 1.29% 1.30% 06.30.23 09.30.23 12.31.23 03.31.24 06.30.24 ALLL ALLL/Loans HFI Composition of ALLL by Portfolio ($
Slide 10: Capital
Capital Healthy capital position: approximately 560,000 shares repurchased in 2Q24 Tangible Common Equity Ratio1 Regulatory Capital Ratios2 Highlights 10.0% 10.2% 10.2% 10.1% 10.4% ▪ Strong capital 5.0% − We operate from a position of capital 9.4% 9.4% 9.3% strength Leverage Ratio 9.0% ▪ Declared 3Q
Slide 11: Management Outlook: Full Year 2024
Management Outlook: Full Year 2024 Earnings Drivers FY 2024 Expectations vs. FY 2023 Results FY 2024 Expectation Economic and Interest Rate ▪ Moderating economic growth in the second half Outlook ▪ Assuming June 30th forward curve with cuts beginning in September End of Period Loans ▪ Unchanged; gro
Slide 12: Appendix
EASTWEST BANK Your financial bridge Appendix
Slide 13: East West at a Glance
East West at a Glance 06.30.24 06.30.24 06.30.24 2Q24 $10B Market Cap $72B Assets $60B Deposits 18% ROTCE1 4 branches in Asia to support cross-border business 98 U.S. branches in leading metropolitan markets ▪ Headquartered in Pasadena, California ▪ Founded in 1973 - over 50 years in operation ▪ 25
Slide 14: Commercial Loan Portfolio
Commercial Loan Portfolio Over 70% of EWBC’s loans support commercial customers and are well-diversified Commercial Loans by Type (as % of Total Portfolio Loans, 06.30.24) Total Loan C&I Portfolio CRE $16.9bn $52.8bn $20.3bn General 6% C&I 10% Multifamily $16.9 32% Media & Entertainment 4% 8% Retail
Slide 15: Commercial Real Estate Portfolio Detail
Commercial Real Estate Portfolio Detail Low LTVs and granular, many loans have full recourse and personal guarantees Distribution by LTV1 Size and LTV by Property Type (as of 06.30.24) (as of 06.30.24) >70% 3% Total Portfolio Weighted Average >65% to 70% 6% Size Avg. LTV1 Loan Size ($bn) (%) ($mm) M
Slide 16: CRE Office – Additional Information
CRE Office – Additional Information Low LTVs across different size segments, low average loan size CRE Office: Geographic Mix by Metro Area CRE Office by Size Segment (as of 06.30.24) Other (as of 06.30.24) Regions Avg. Washington 7% Balance No. of Loan Size Loan Size LTV ($ in mm) Loans Other NY, 1
Slide 17: CRE Retail – Additional Information
CRE Retail – Additional Information Low LTVs across different size segments, low average loan size CRE Retail: Geographic Mix by Metro Area CRE Retail by Size Segment (as of 06.30.24) (as of 06.30.24) Other Regions Avg. Balance No. of 11% Loan Size Loan Size LTV ($ in mm) Loans ($ in mm) Washington
Slide 18: CRE Multifamily – Additional Information
CRE Multifamily – Additional Information Low LTVs portfolio, low average loan size CRE Multifamily : Geographic Mix by Metro Area CRE Multifamily by Size Segment (as of 06.30.24) (as of 06.30.24) Other Regions Nevada Avg. 6% Balance No. of Loan Size Loan Size LTV 3% ($ in mm) Loans Arizona ($ in mm)
Slide 19: Residential Mortgage Portfolio
Residential Mortgage Portfolio Low LTVs and average loan size Resi. Mortgage Distribution by LTV1 Portfolio Highlights as of 06.30.24 (as of 06.30.24) Outstandings >60% 11% ▪ $15.5bn loans outstanding ▪ +1% Q-o-Q and +9% Y-o-Y 51% <=50% $436,000 >55% to 60% 47% Average 30% Average Originations LTV1
Slide 20: Loan Yields
Loan Yields Fixed Rate and Hybrid in Fixed Period Loans (% of Total) Loan Portfolio by Index Rate (as of 06.30.24) 42% 41% Fixed rate 5% 38% 21% Total fixed Hybrid in fixed rate period 24% rate and hybrid in fixed Variable - LIBOR + SOFR period: 42% 21% Variable - Prime rate 29% Variable - all other
Slide 21: Deposit and Funding Cost
Deposit and Funding Cost Average Deposit and Liability Cost 3.92% 3.94% 4.07% 3.73% 3.85% 3.56% 3.64% 3.45% 3.09% 3.24% 2.84% 2.96% 2.60% 2.43% 2.12% 2Q23 3Q23 4Q23 1Q24 2Q24 Average cost of deposits Average cost of interest-bearing deposits Average cost of interest-bearing liabilities Average Depos
Slide 22: Securities Portfolio
Securities Portfolio Maintained an appropriate level of on balance sheet liquidity while enhancing earnings Average Total Investment Securities and Cash Highlights ($ in billions) Total Securities & Resale Agreements Cash & Equivalent Total Securities Average Yield ▪ Securities portfolio well-positi
Slide 23: Operating Expense & Efficiency
Operating Expense & Efficiency Best-in-class efficiency Adjusted Noninterest Expense1 Highlights ($ in millions) vs. Prior Quarter $223 $215 $219 Computer Software 11 ▪ Total noninterest expense of $236mm $205 11 & Data Processing $202 11 15 Occupancy & 11 15 ▪ Adjusted noninterest expense1 of $219m
Slide 24: Appendix: GAAP to Non-GAAP Reconciliation
Appendix: GAAP to Non-GAAP Reconciliation EAST WEST BANCORP, INC. AND SUBSIDIARIES GAAP TO NON-GAAP RECONCILIATION ($ in thousands) (unaudited) The Company uses certain non-GAAP financial measures to provide supplemental information regarding the Company’s performance. Adjusted efficiency ratio repr
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) The Company uses certain non-GAAP financial measures to provide supplemental information regarding the Company’s performance. Tangible book value, tangible
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) Return on average TCE represents tangible net income divided by average tangible book value. Adjusted return on average TCE represents adjusted tangible net
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) During the second and first quarters of 2024, the Company recorded $2 million and $10 million, respectively, in pre-tax FDIC special assessment charges (inc