East West Bancorp Reports $1.166 Billion Net Income for 2024, 0.4% Increase Year-Over-Year

East West Bancorp, Inc. (EWBC) reported a net income of $1.166 billion for 2024, a slight 0.4% increase compared to $1.161 billion in 2023. This increase stemmed from a decrease in noninterest expense and an increase in noninterest income, partially offset by higher provision for credit losses, lower net interest income before provision for credit losses, and higher income tax expense. Total assets grew by 9% year-over-year to $76.0 billion, driven by a 75% increase in available-for-sale (AFS) debt securities and a 3% increase in loans. Total deposits increased by 13% to $63.2 billion. Basic and diluted earnings per share increased by 2% to $8.39 and $8.33, respectively.

The efficiency ratio improved to 36.65% in 2024, a 2.57 percentage point improvement from 2023. This improvement was primarily due to a decrease in the amortization of tax credit and CRA investments, resulting from the expanded application of the proportional amortization method (PAM) since the adoption of ASU 2023-02, and a decrease in the FDIC charge. Net interest income before provision for credit losses decreased by 1% to $2.3 billion, while the net interest margin decreased by 34 basis points to 3.27%. Noninterest income increased by 14% to $335 million, primarily due to higher lending, wealth management, and deposit account fees, and foreign exchange income.

As of December 31, 2024, EWBC had approximately 3,100 full-time equivalent employees, including 230 in China, Hong Kong, and Singapore. The company reported nearly 500 external new hires in 2024 and 510 internal promotions, representing a 16% increase in employee career advancement. EWBC's compensation and employee benefits expense totaled $551 million in 2024, representing 57% of total noninterest expense. The company also granted over 650,000 restricted stock units (RSUs) in 2024 as part of its stock compensation programs.

EWBC operates in over 110 locations across the U.S. and Asia, including full-service branches in Hong Kong and China. The company highlighted its unique commercial banking license in China, allowing it to operate branches, make loans, and collect deposits. The company's competitive advantage is attributed to its understanding of the Asian market, its physical presence in Asia, and its senior management's ties to Asian business opportunities and Asian American communities. EWBC also noted its ongoing investment in integrating digital and brick-and-mortar channels for both commercial and consumer banking.

EWBC's outlook acknowledges various risks, including changes in economic and political conditions, competition, interest rate fluctuations, credit quality, cybersecurity threats, and regulatory changes. The company specifically mentioned the potential impact of the "Basel III Endgame" proposal, although it would not be directly affected given its asset size as of December 31, 2024. The company also discussed the impact of new regulations related to the Consumer Financial Protection Bureau, the California Consumer Privacy Act, and climate-related financial risk disclosures. The company stated that it is monitoring these developments and evaluating their impact.