East West Bancorp, Inc. delivered a solid Q3 2024, underscoring a balanced growth profile and a material shift toward fee-driven revenue alongside steady balance-sheet expansion. Net income of $299 million or $2.14 per diluted share marked a 3.97% YoY improvement in net income and a 3.79% QoQ uptick, supported by a 1% QoQ rise in average loans and a 3% QoQ increase in average deposits to a record $61.7 billion. Net interest income rose by $20 million (4%) to $573 million, with a modest 3 basis point contraction in net interest margin (NIM) to 3.24% amid a still-supportive rate backdrop and ongoing liability optimization. Inflation-adjusted fee generation was notably robust, with record fee income of $81 million in the quarter, up 6% QoQ, driven by syndicated activity, commercial cash management, and wealth-management contributions.
Management stressed credit discipline and resilient asset quality, noting continued favorable trends in classifications, nonaccruals, and NPLs, while highlighting CRE maturities as aιηΉ risk area. The allowance for loan losses stood at $696 million (1.31% of total loans), with net charge-offs of $29 million (22 bps annualized). The bank also emphasized capital strength and liquidity, reporting a CET1 ratio of 14.1% and a tangible common equity ratio of 9.7%, alongside roughly $49 million of repurchase authorization remaining. Liquidity remained ample, with total cash and short-term investments at about $15.1 billion and cash/equivalents plus securities representing ~24% of total assets.
Looking forward, EWBC maintained its full-year guidance: loan growth expected to be 2%β4% and net interest income expected to decline 2%β4% for the full year, with Q4 NII dynamics anticipated to be within the stated range. The company highlighted deposit-cost normalization and a beta around 50% as critical variables, noting that several Fed rate cuts priced into the forward curve could support NII progression in early 2025, aided by around $10 million of run-rate exposure from maturing swaps. Management also signaled opportunistic capital deployment and potential non-organic opportunities, while maintaining a disciplined approach to buybacks. Investors should monitor rate-path developments, CRE exposure and maturities, deposit behavior, and the pace of loan growth as the 2025 environment unfolds.