East West Bancorp reported a solid QQ2 2024, underpinned by a diversified business mix, resilient asset quality, and record fee income. Net income was $288.2 million ($2.06 per diluted share) on revenue of $1.107 billion, with end-of-period loans and deposits each rising 2% quarter-over-quarter. NII totaled $553 million and the net interest margin (NIM) stood at 3.27%, reflecting a modest NIM compression driven by funding costs even as fixed-rate asset yields improved. The firm generated record quarterly fee income of $77 million, up 8% QoQ, driven by foreign exchange and wealth management activities. Management reaffirmed a disciplined balance-sheet strategy, a strong capital position, and a constructive full-year outlook, while acknowledging CRE headwinds and the potential impact of rate moves on deposit dynamics.
Key takeaways include: (1) growth was broad-based on the balance sheet with loan growth led by C&I and residential mortgage, and deposits advancing to a fresh record of $60 billion; (2) asset quality remains well-contained, with NCOs at 18 bps annualized, NPA at 27 bps, and loan-loss reserves at 1.30% coverage; and (3) management maintained a prudent outlook for 2024, guiding loan growth of 3-5% and NII down 2-4%, with non-interest expense up 6-8% and a lower tax rate profile (21-23%). These dynamics, paired with a robust capital base (CET1 13.7%, TCE 9.4%), position EWBC to benefit from ongoing deposit competition, cross-border opportunities, and wealth-management gains, even as rate cuts and CRE cycle challenges loom in the near term.