East West Bancorp, Inc. · NASDAQ:EWBC
East West Bancorp — Q2 2024 Earnings Presentation
27 slides from East West Bancorp's earnings presentation, Jul 23, 2024
Slide 1: East West Bancorp, Inc. 2Q Earnings Presentation
East West Bancorp, Inc. 2Q Earnings Presentation July 23, 2024 2Q 24
Slide 2: Forward-Looking Statements and Additional Information
Forward-Looking Statements and Additional Information 2 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
Slide 3: 2Q24 Financial Highlights
2Q24 Financial Highlights 3 (1) See reconciliation of GAAP to non-GAAP financial measures in the appendix and in the Company’s earnings press releases ▪ 1.6% ROAA ▪ 16.4% ROACE (17.5% ROTCE1) ▪ Tangible common equity ratio1 at 9.37% ▪ TBVPS1 growth: +3% Q-o-Q, +15% Y-o-Y ▪ Repurchased approximately
Slide 4: Loans
14.9 15.3 15.5 15.4 15.3 4.7 4.8 4.9 5.0 5.0 14.0 14.4 14.9 15.2 15.4 15.3 15.4 16.0 16.3 16.2 $48.9 $49.9 $51.3 $51.9 $51.9 2Q23 3Q23 4Q23 1Q24 2Q24 C&I $(57) $90 $217 $525 CRE (ex. Multifamily) Multifamily Residential mortgage & other consumer C&I Loans 4 Consistent residential mortgage production
Slide 5: Deposits
16.9 16.3 15.9 15.0 14.7 10.7 10.1 9.5 9.5 9.3 10.4 12.2 12.8 13.6 13.7 16.3 16.6 17.2 19.3 21.0 $54.3 $55.2 $55.4 $57.4 $58.7 2Q23 3Q23 4Q23 1Q24 2Q24 $(231) $95 $693 $882 Wholesale Greater China Consumer and Private Banking Commercial and Business Banking Deposits 5 Fourth consecutive quarter of $
Slide 6: Net Interest Income & Net Interest Margin
Net Interest Income & Net Interest Margin 6 NII, NIM resilient amid higher interest-bearing deposit cost, continued mix shift ▪ NII down 2%, NIM down 7bps ▪ Impact of cash flow hedges unchanged (~$25mm, or 15bps to NIM) HighlightsNet Interest Income (NII) & Net Interest Margin (NIM) Q-o-Q Impact to
Slide 7: Fees and Noninterest Income
Fees and Noninterest Income 7 Record total quarterly fee income, with solid growth in every fee business category ▪ Fee income1 of $77mm, up $6mm, or +8% from $71mm, with growth in all fee categories ▪ Total noninterest income of $85mm included net gains on debt securities of $2mm; mark- to-market d
Slide 8: Asset Quality Metrics
0.97% 1.06% 1.10% 1.25% 1.22% 0.66% 0.95% 0.77% 1.05% 0.83% 1.63% 2.01% 1.87% 2.30% 2.05% 06.30.23 09.30.23 12.31.23 03.31.24 06.30.24 Classified loans / Loans HFI Special mention loans / Loans HFI $26 $42 $37 $25 $37 $8 $18 $20 $23 $23 0.06% 0.14% 0.15% 0.17% 0.18% 2Q23 3Q23 4Q23 1Q24 2Q24 Provisio
Slide 9: Allowance for Loan Losses
$635 $656 $669 $670 $684 1.28% 1.29% 1.28% 1.29% 1.30% 06.30.23 09.30.23 12.31.23 03.31.24 06.30.24 ALLL ALLL/Loans HFI 9 Allowance for Loan Losses Grew CRE reserves by 23% year-over-year; office reserves now at 3.10% Allowance for Loan Losses (ALLL) ($ in millions) 06.30.23 03.31.24 06.30.24 Loan C
Slide 10: Capital
8.8% 9.0% 9.4% 9.3% 9.4% Tangible Common Equity Ratio 06.30.23 03.31.2412.31.23 10 Capital Healthy capital position: approximately 560,000 shares repurchased in 2Q24 Highlights ▪ Strong capital − We operate from a position of capital strength ▪ Declared 3Q24 dividend ‒ Payable on August 16, 2024 to
Slide 11: Management Outlook: Full Year 2024
Management Outlook: Full Year 2024 11 Earnings Drivers FY 2024 Expectations vs. FY 2023 Results Economic and Interest Rate Outlook ▪ Moderating economic growth in the second half ▪ Assuming June 30th forward curve with cuts beginning in September End of Period Loans ▪ Unchanged; growing in the range
Slide 12: Appendix
EASTWE ST BANK Appendix
Slide 13: East West at a Glance
East West at a Glance 13 $10B Market Cap $72B Assets $60B Deposits 18% ROTCE1 06.30.24 06.30.24 06.30.24 2Q24 4 branches in Asia to support cross-border business Branch Locations 98 U.S. branches in leading metropolitan markets (1) See reconciliation of GAAP to non-GAAP financial measures in the app
Slide 14: Commercial Loan Portfolio
Resi. Mortgage and other consumer $15.6 29% CRE $20.3 39% C&I $16.9 32% 1% 2% 1% 4% 5% 8% 8% 10% 2% 2% 2% 4% 4% 4% 6% Industries with 1% of total loans outstanding1 Commercial Loan Portfolio 14 Over 70% of EWBC’s loans support commercial customers and are well-diversified CRE $20.3bn C&I $16.9bn (as
Slide 15: Commercial Real Estate Portfolio Detail
Commercial Real Estate Portfolio Detail 15 (1) Weighted average LTV is based on most recent LTV, using most recent available appraisal and current loan commitment (2) Construction & Land average size based on total commitment 50% Average LTV1 Low LTVs and granular, many loans have full recourse and
Slide 16: CRE Office – Additional Information
37% 6% 13% 7% 7% 6% 5% 2% 5% 7% CRE Office – Additional Information 16 CRE Office: Geographic Mix by Metro Area CRE Office by Size Segment Other Los Angeles County Other SoCal Other Bay Area San Francisco Other CA, 1% Houston Dallas Manhattan, 1% Other TX Washington Other Regions New Jersey, 2% Othe
Slide 17: CRE Retail – Additional Information
30% 4% 18%10% 2% 4% 5% 1% 2% 3% 6% 3% 11% CRE Retail – Additional Information 17 Other Los Angeles County Downtown Los Angeles and Adjacent Neighborhoods Other SoCal Other Bay Area San Francisco Other CA Houston Dallas Manhattan Other TX Washington Other Regions Other NY Low LTVs across different si
Slide 18: CRE Multifamily – Additional Information
30% 3% 13% 8% 6% 7% 6% 2% 3% 2% 3% 3% 4% 3% 6% CRE Multifamily – Additional Information 18 Other Los Angeles County Downtown Los Angeles and Adjacent Neighborhoods Other SoCal Other Bay Area San Francisco Other CA Houston Dallas Manhattan Other TX, 1% Washington Other Regions Other NY Low LTVs portf
Slide 19: Residential Mortgage Portfolio
<=50% 47% >50% to 55% 12% >55% to 60% 30% >60% 11% Residential Mortgage Portfolio 19 51% Average LTV1 Low LTVs and average loan size (as of 06.30.24) Resi. Mortgage Distribution by LTV1 (as of 06.30.24) $436,000 Average loan size2 (1) Combined LTV for 1st and 2nd liens; based on commitment (2) Avera
Slide 20: Loan Yields
21% 21% 29% 24% 5%Fixed rate Hybrid in fixed rate period Variable - LIBOR + SOFR Variable - Prime rate Variable - all other rates Loan Yields 20 Fixed Rate and Hybrid in Fixed Period Loans (% of Total) Loan Portfolio by Index Rate Average Loan Rate by Portfolio (as of 06.30.24) Total fixed rate and
Slide 21: Deposit and Funding Cost
Deposit and Funding Cost 21 Average Deposit and Liability Cost Average Deposit Rate by Portfolio 2.12% 2.43% 2.60% 2.84% 2.96% 3.09% 3.45% 3.64% 3.85% 3.94% 3.24% 3.56% 3.73% 3.92% 4.07% 2Q23 3Q23 4Q23 1Q24 2Q24 Average cost of deposits Average cost of interest-bearing deposits Average cost of inter
Slide 22: Securities Portfolio
($ in billions) $9.9 $9.7 $9.7 $10.2 $11.9 $5.2 $5.4 $4.4 $5.9 $4.1 $15.1 $15.1 $14.1 $16.1 $16.0 2.99% 3.06% 3.17% 3.19% 3.93% 2Q23 3Q23 4Q23 1Q24 2Q24 Total Securities & Resale Agreements Cash & Equivalent Total Securities Average Yield Securities Portfolio 22 Maintained an appropriate level of on
Slide 23: Operating Expense & Efficiency
31.8% 34.7% 34.3% 1.22% 1.25% 1.23% 2Q23 1Q24 2Q24 125 123 131 142 134 34 32 37 33 38 19 20 20 22 21 16 15 16 15 15 11 12 11 11 11 $205 $202 $215 $223 $219 2Q23 3Q23 4Q23 1Q24 2Q24 Operating Expense & Efficiency 23 Best-in-class efficiency Adjusted Noninterest Expense1 ($ in millions) ▪ Total nonint
Slide 24: Appendix: GAAP to Non-GAAP Reconciliation
Appendix: GAAP to Non-GAAP Reconciliation 24 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 r
Slide 25: Appendix: GAAP to Non-GAAP Reconciliation
Appendix: GAAP to Non-GAAP Reconciliation 25 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, tangib
Slide 26: Appendix: GAAP to Non-GAAP Reconciliation
(1) Includes core deposit intangibles and mortgage servicing assets. (2) Applied statutory tax rate of 29.56% for the three months ended June 30, 2024 and March 31, 2024. Applied statutory tax rate of 29.29% for the three months ended June 30, 2023. (3) Annualized. Appendix: GAAP to Non-GAAP Reconci
Slide 27: Appendix: GAAP to Non-GAAP Reconciliation
Appendix: GAAP to Non-GAAP Reconciliation 27 (1) Applied statutory tax rate of 29.56% for the three months ended June 30, 2024 and March 31, 2024. Applied statutory tax rate of 29.29% for the three months ended June 30, 2023. (2) Annualized. (3) Refer to Slide 26 for the calculation of the return on