Company Overview - East West Bancorp (EWBC) is based in Pasadena and operates in the Finance sector, with a year-to-date share price change of 2.58% [3] - The company currently pays a dividend of $0.6 per share, resulting in a dividend yield of 2.44%, which is lower than the Banks - West industry's yield of 2.87% and higher than the S&P 500's yield of 1.52% [3] Dividend Performance - The annualized dividend of East West Bancorp is $2.40, reflecting a 9.1% increase from the previous year [4] - Over the past five years, the company has raised its dividend four times, achieving an average annual increase of 18.47% [4] - The current payout ratio is 26%, indicating that the company distributes 26% of its trailing 12-month earnings per share as dividends [4] Earnings Growth - The Zacks Consensus Estimate for East West Bancorp's earnings in 2025 is $8.85 per share, which represents a year-over-year earnings growth rate of 6.63% [5] Investment Considerations - East West Bancorp is considered a compelling investment opportunity due to its strong dividend profile and current Zacks Rank of 3 (Hold) [7]

Financial Data and Key Metrics - The company held its Q4 2024 earnings call on January 23, 2025, to review its financial results for the quarter and full year [1][2][3] - The call included participation from key executives such as Dominic Ng (Chairman and CEO), Chris Del Moral-Niles (CFO), and Irene Oh (Chief Risk Officer) [3] - Management may discuss non-GAAP financial measures, and a reconciliation of GAAP to non-GAAP measures is available in the company's SEC filings, including the Form 8-K filed on the day of the call [4] Business Lines and Market Data - No specific data or metrics related to business lines or market performance were provided in the available content Company Strategy and Industry Competition - No specific details on company strategy, industry competition, or market positioning were provided in the available content Management Commentary on Operating Environment and Future Outlook - No specific commentary from management on the operating environment or future outlook was provided in the available content Other Important Information - The earnings call was recorded and will be available for replay on the company's Investor Relations site [3] - A slide deck referenced during the call is also available on the Investor Relations site [3] Q&A Session Summary - No Q&A session details or questions from analysts were provided in the available content

East West Bancorp, Inc. Fourth Quarter and Full Year 2024 Earnings Presentation January 23, 2025 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 on the current beliefs and expectations of the management of East West Bancorp, Inc. (the "Company") and are subject ...

Group 1 - East West Bancorp reported quarterly earnings of $2.08 per share, missing the Zacks Consensus Estimate of $2.13 per share, but showing an increase from $2.02 per share a year ago, resulting in an earnings surprise of -2.35% [1] - The company posted revenues of $675.79 million for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 3.28%, compared to year-ago revenues of $654.74 million [2] - East West Bancorp shares have increased approximately 7.3% since the beginning of the year, outperforming the S&P 500's gain of 3.5% [3] Group 2 - The current consensus EPS estimate for the upcoming quarter is $2.07 on revenues of $651.43 million, and for the current fiscal year, it is $8.68 on revenues of $2.68 billion [7] - The Zacks Industry Rank for Banks - West is currently in the top 32% of over 250 Zacks industries, indicating a favorable outlook for the industry [8]

Financial Performance - Full year 2024 net income reached a record $1.2 billion, or $8.33 per diluted share, reflecting a 0.4% increase year-over-year[1] - Net income for the year ended December 31, 2024, was $1.17 billion, reflecting a 0.4% increase from $1.16 billion in 2023[40] - In Q4 2024, the Company reported a net income of $293.1 million, compared to $299.2 million in Q3 2024 and $239.0 million in Q4 2023, with a total net income of $1.1656 billion for the year 2024[72] - Adjusted net income for Q4 2024 was $290.5 million, slightly down from $291.3 million in Q3 2024 and up from $283.5 million in Q4 2023[72] - The diluted EPS for Q4 2024 was $2.10, compared to $2.14 in Q3 2024 and $1.69 in Q4 2023, with an adjusted diluted EPS of $2.08 for Q4 2024[72] Revenue and Income Sources - Total revenue for 2024 was $2.619 billion, an increase of $10 million, or 0% year-over-year[4] - Interest and dividend income for the year increased by 13.5% to $4.19 billion, up from $3.69 billion in 2023[40] - Noninterest income for the year was $335.22 million, a 13.5% increase from $295.26 million in 2023[40] - Noninterest income grew by 4% quarter-over-quarter to $88 million in Q4 2024[13] Assets and Liabilities - Total assets increased by $6.4 billion, or 9%, year-over-year, reaching $76.0 billion as of December 31, 2024[5] - Total assets as of December 31, 2024, were $75.976 billion, an increase from $74.484 billion in Q3 2024 and $69.613 billion in Q4 2023[75] - The company reported a total liabilities increase of 8.9% year-over-year, reaching $68.3 billion[30] - Stockholders' equity increased to $7.73 billion as of December 31, 2024, compared to $6.70 billion in the previous year, reflecting a growth of 15.4%[52] Deposits and Loans - Deposits grew by over $7 billion year-over-year, totaling $63.2 billion as of December 31, 2024, a 12.6% increase from $56.1 billion[2][5] - Total deposits increased to $63.2 billion, representing a 12.6% year-over-year growth[30] - Total loans held for investment (HFI) increased to $53.73 billion, up 2.9% year-over-year from $52.21 billion[32] - Total loans reached $53.20 billion for the three months ended December 31, 2024, compared to $51.25 billion in the prior year, marking a growth of 3.8%[49] Efficiency and Ratios - The efficiency ratio for Q4 2024 was 36.9%, compared to 34.3% in Q3 2024[15] - The efficiency ratio improved to 36.92% in Q4 2024, a decrease of 258 basis points quarter-over-quarter and 742 basis points year-over-year[55] - The net interest margin for the year ended December 31, 2024, was 3.27%, down from 3.61% in 2023, indicating a decline in profitability from interest-earning assets[52] - Return on average assets for Q4 2024 was 1.55%, a decrease of 7 basis points quarter-over-quarter and an increase of 18 basis points year-over-year[55] Credit Quality - Net charge-offs for Q4 2024 were $64 million, or an annualized 0.48% of average loans held-for-investment[20] - The allowance for loan losses increased to $702 million, or 1.31% of loans held-for-investment, as of December 31, 2024[20] - Total criticized loans reached $1,173,153,000 as of December 31, 2024, up from $978,210,000 as of December 31, 2023, indicating an increase of about 20.0%[62] - Nonperforming assets totaled $194,095,000 as of December 31, 2024, compared to $114,015,000 as of December 31, 2023, representing a significant increase of approximately 70.4%[63] Stockholder Actions - The company announced a 9% increase in its common stock dividend, raising it to $0.60 per share[18] - Share repurchase authorization was increased by $300 million, bringing total authorization to $329 million[19] Market Presence - The company has over 110 locations in the United States and Asia, focusing on expanding its market presence[22]

Core Viewpoint - East West Bancorp (EWBC) is expected to report quarterly earnings of $2.13 per share, a 5.5% increase year-over-year, with revenues projected at $654.31 million, reflecting a slight decrease of 0.1% compared to the previous year [1]. Earnings Estimates - The consensus EPS estimate has been revised 0.3% higher in the last 30 days, indicating a collective reevaluation by analysts [2]. - Changes in earnings estimates are crucial for predicting investor reactions, as empirical research shows a strong correlation between earnings estimate revisions and short-term stock performance [3]. Key Financial Metrics - Analysts predict a 'Net interest margin' of 3.2%, down from 3.5% in the same quarter last year [5]. - The 'Average Balance - Total interest-earning assets' is expected to reach $71.31 billion, up from $65.51 billion year-over-year [5]. - The estimated 'Efficiency ratio' is 35.5%, significantly improved from 44.4% a year ago [5]. - The 'Leverage ratio' is projected at 10.6%, compared to 10.2% last year [6]. - The 'Total capital ratio' is expected to be 15.4%, up from 14.8% year-over-year [6]. - The 'Adjusted efficiency ratio' is estimated at 33.4%, slightly up from 33.1% in the same quarter last year [6]. - The 'Tier 1 capital ratio' is anticipated to reach 14.1%, compared to 13.3% last year [7]. - 'Total nonaccrual loans' are expected to be $161.74 million, up from $102.87 million year-over-year [7]. - 'Total nonperforming assets' are projected at $204.54 million, compared to $114.02 million last year [8]. - 'Total Noninterest Income' is expected to be $84.03 million, up from $79.90 million year-over-year [8]. - 'Net Interest Income' is projected at $571.36 million, slightly down from $574.83 million last year [8]. - 'Deposit account fees' are expected to reach $26.30 million, compared to $23 million in the same quarter last year [9]. Stock Performance - Shares of East West Bancorp have increased by 4.9% over the past month, contrasting with a -2.1% change in the Zacks S&P 500 composite [9]. - The company holds a Zacks Rank 3 (Hold), indicating it is expected to perform in line with the overall market in the near future [10].

Core Viewpoint - The market anticipates East West Bancorp (EWBC) will report a year-over-year earnings increase despite a slight decline in revenues when it releases its quarterly results for December 2024 [1][3]. Earnings Expectations - The upcoming earnings report is expected on January 23, 2025, with a consensus EPS estimate of $2.13, reflecting a +5.5% year-over-year change [3]. - Revenues are projected to be $654.31 million, a decrease of 0.1% from the previous year [3]. Estimate Revisions - The consensus EPS estimate has been revised 0.29% higher in the last 30 days, indicating a positive reassessment by analysts [4]. - The Most Accurate Estimate for East West Bancorp is higher than the Zacks Consensus Estimate, resulting in an Earnings ESP of +0.47% [10][11]. Earnings Surprise Prediction - The Zacks Earnings ESP model suggests that a positive Earnings ESP reading is a strong indicator of an earnings beat, especially when combined with a Zacks Rank of 1, 2, or 3 [8]. - East West Bancorp currently holds a Zacks Rank of 3, indicating a likelihood of beating the consensus EPS estimate [11]. Historical Performance - In the last reported quarter, East West Bancorp exceeded the expected EPS of $2.05 by delivering $2.09, resulting in a surprise of +1.95% [12]. - The company has successfully beaten consensus EPS estimates in each of the last four quarters [13]. Industry Context - Another player in the Zacks Banks - West industry, Zions (ZION), is expected to report earnings of $1.26 per share for the same quarter, indicating a year-over-year decline of -2.3% [17]. - Zions' revenues are expected to be $791.67 million, reflecting a 6.8% increase from the previous year [17]. - Zions has also seen a 0.1% upward revision in its EPS estimate over the last 30 days, with an Earnings ESP of 2.13% and a Zacks Rank of 3, suggesting a likely earnings beat [18].

Financial Performance - Net income for Q3 2024 was $299 million, up $11 million or 4% from Q3 2023, while net income for the first nine months of 2024 decreased by $50 million or 5% year-over-year to $872 million [246]. - Net interest income for Q3 2024 was $572,722 thousand, compared to $570,813 thousand in Q3 2023, reflecting a slight increase of 0.3% [263]. - Total revenue for Q3 2024 was $657,483 thousand, an increase from $647,565 thousand in Q3 2023, while total revenue for the nine months ended September 30, 2024, was $1,939,512 thousand, down from $1,952,781 thousand in the same period last year [427]. - Adjusted diluted EPS for Q3 2024 was $2.09, compared to $2.02 in Q3 2023, and for the nine months ended September 30, 2024, it was $6.22, down from $6.53 in the same period last year [424]. - The return on average tangible common equity (TCE) for Q3 2024 was 17.08%, down from 18.65% in Q3 2023 [425]. Asset and Loan Growth - As of September 30, 2024, total assets increased to $74.5 billion from $69.6 billion at the end of 2023, representing a growth of approximately 4% [243]. - Total loans increased to $53.3 billion as of September 30, 2024, compared to $52.2 billion at the end of 2023, marking a growth of approximately 2% [243]. - Average loans grew by $1.8 billion or 6% year-over-year to $32.9 billion for the first nine months of 2024 [298]. - Total loans reached $52,420,516 thousand in Q3 2024, up from $49,888,862 thousand in Q3 2023, marking an increase of approximately 5.1% [263]. - Total residential mortgage loans amounted to $15.72 billion as of September 30, 2024, compared to $15.11 billion as of December 31, 2023 [331]. Deposits and Funding - Total deposits increased to $61.7 billion as of September 30, 2024, up $5.6 billion or 10% from December 31, 2023 [250]. - The Company experienced a 29% increase in time deposits, which rose to $23.2 billion as of September 30, 2024, from $18.0 billion as of December 31, 2023 [343]. - Uninsured domestic deposits, excluding collateralized and affiliate deposits, totaled $25.9 billion as of September 30, 2024, representing 44% of total domestic deposits [348]. - FHLB advances amounted to $3.5 billion as of September 30, 2024, compared to no advances as of December 31, 2023, indicating a shift in funding strategy [349]. Noninterest Income - Noninterest income for Q3 2024 was $84.8 million, a 10% increase from $76.8 million in Q3 2023, driven by higher lending, wealth management, and deposit account fees [2]. - Noninterest income for the first nine months of 2024 was $248 million, up from $215 million in the same period of 2023, indicating a year-over-year increase of about 15% [244]. - Deposit account fees increased by $3 million or 14% to $26.8 million in Q3 2024 compared to Q3 2023 [3]. - Lending fees rose by $6 million or 30% to $26.5 million in Q3 2024 compared to Q3 2023 [4]. - Wealth management fees surged by $5 million or 80% to $10.7 million in Q3 2024 compared to Q3 2023 [5]. Expenses and Efficiency - Total noninterest expense for Q3 2024 was $226.2 million, a decrease of $26 million or 10% from $252 million in Q3 2023 [6]. - The efficiency ratio improved to 34.40% in Q3 2024 from 38.92% in Q3 2023, indicating better cost management [427]. - Compensation and employee benefits increased by $12 million or 10% to $135.5 million in Q3 2024 compared to Q3 2023 [7]. - Noninterest expense increased by $40.5 million or 16% year-over-year to $296.3 million for the first nine months of 2024, mainly due to higher compensation and employee benefits [298]. Credit Quality and Risk Management - The allowance for loan losses increased to $696.5 million as of September 30, 2024, compared to $668.7 million as of December 31, 2023 [317]. - Nonperforming assets were $195 million, representing 0.26% of total assets as of September 30, 2024, an increase of $81 million or 71% compared to $114 million or 0.16% of total assets as of December 31, 2023 [365]. - The net charge-offs for the three months ended September 30, 2024, were $29,363 thousand, compared to $18,146 thousand for the same period in 2023, indicating a significant increase of 62% [374]. - The Company’s credit risk management focuses on adherence to a well-controlled underwriting and loan monitoring process [360]. - The Credit Risk Management Committee oversees credit risk and evaluates overall credit risk exposure to senior management and the Risk Oversight Committee (ROC) [360]. Capital and Shareholder Returns - Stockholders' equity rose to $7.7 billion as of September 30, 2024, a 10% increase from $7.0 billion as of December 31, 2023 [251]. - The Company declared a fourth quarter 2024 cash dividend of $0.55 per share, consistent with the third quarter 2024 dividend [342]. - The Company maintains a strong capital base to support anticipated asset growth and ensure compliance with regulatory capital guidelines [337]. - The Company's stockholders' equity increased to $7.7 billion as of September 30, 2024, up by $714 million or 10% from $7.0 billion as of December 31, 2023, primarily driven by $872 million of net income [340]. Interest Rate Sensitivity - The net interest income sensitivity to a +200 bps change in interest rates is projected to be 6.4% as of September 30, 2024, compared to 4.6% on December 31, 2023 [402]. - The Company’s net interest income profile indicates an asset-sensitive position, with variable rate loans expected to increase net interest income when interest rates rise [406]. - The Company utilizes interest rate swaps to hedge variability in interest received on floating-rate loans and interest paid on floating-rate borrowings [412]. - The economic value of equity (EVE) sensitivity shows a decrease of (10.2)% for a +200 bps change in interest rates as of September 30, 2024, compared to (10.3)% on December 31, 2023 [410].

Financial Data and Key Metrics Changes - In Q3 2024, net income was $299 million, or $2.14 per diluted share, with a 1% quarter-over-quarter growth in average loans and a 3% growth in average deposits [4][6] - Net interest income increased by $20 million, or 4%, from the previous quarter, primarily due to higher loan income, while the cost of average interest-bearing deposits decreased [4][8] - Tangible book value per share grew by 7%, and the return on average tangible common equity was over 17% [5] Business Line Data and Key Metrics Changes - Average and period-end loans grew by 1% quarter-over-quarter, with consistent residential mortgage production and strong C&I growth driven by entertainment and private equity sectors [6] - Average and end-of-period deposits reached a record $61.7 billion, with a non-interest-bearing deposit mix of 24% of total deposits [6][7] - Fee income reached a record level of $81 million, up 6% quarter-over-quarter, driven by strong syndications activity and commercial cash management solutions [9] Market Data and Key Metrics Changes - The securities portfolio increased to $13.1 billion, with a significant portion in Ginnie Mae floating rate securities, and average cash and equivalents rose to $5 billion [7] - The net interest margin was 3.24%, a decline of 3 basis points from the prior quarter, reflecting Fed rate cuts [8] Company Strategy and Development Direction - The company aims to optimize its liability profile by managing deposit pricing and leveraging organic net inflows to enhance liquidity [14] - There are no current plans to open additional branches or deepen the network in China, focusing instead on optimizing existing operations [32] Management's Comments on Operating Environment and Future Outlook - Management remains cautious about credit risk and expects net charge-offs to be in the range of 15 to 25 basis points for Q4 and the full year [11] - The company anticipates full-year end-of-period loan growth in the range of 2% to 4%, with net interest income expected to decline by 2% to 4% [12][13] Other Important Information - The allowance for credit losses at the end of Q3 was $696 million, or 1.31% of total loans, indicating a stable credit quality [11] - The common equity tier one capital ratio stands at 14.1%, well above regulatory requirements [12] Q&A Session Summary Question: Deposit growth rate and loan-to-deposit ratio - Management indicated that the faster deposit growth provides more flexibility for funding loan growth, with a deliberate strategy to lower deposit pricing [14] Question: Capital management and buybacks - Management expressed a patient approach to capital management, focusing on optimizing the balance sheet before considering buybacks [19][22] Question: Loan growth expectations post-elections - Management noted that loan growth could return to high single digits if economic conditions improve post-elections, but current customer loan utilization is lower than historical averages [28][30] Question: Fee income sustainability - Management believes that the strong fee income results are driven by focused sales efforts and are optimistic about maintaining growth in this area [36][38]

For the quarter ended September 2024, East West Bancorp (EWBC) reported revenue of $657.48 million, up 1.5% over the same period last year. EPS came in at $2.09, compared to $2.02 in the year-ago quarter.The reported revenue represents a surprise of +2.44% over the Zacks Consensus Estimate of $641.8 million. With the consensus EPS estimate being $2.05, the EPS surprise was +1.95%.While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and how they compare to Wall ...