In This Article:
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Revenue Growth: Record levels achieved in 2024.
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Deposit Growth: $7 billion increase, 13% growth to $63.2 billion.
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Loan Growth: Average loans grew by 6% for the year.
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Net Interest Margin: Stable at 3.24%.
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Fee Income Growth: 12% increase in 2024.
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Efficiency Ratio: 36.9% in the fourth quarter.
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Net Charge-Offs: $64 million in the fourth quarter.
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Allowance for Credit Losses: $702 million, 1.31% of total loans.
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Common Equity Tier 1 Capital Ratio: 14.3%.
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Share Repurchase: 200,000 shares repurchased at $98 per share.
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Dividend Increase: 9% increase to $0.60 per share.
Release Date: January 23, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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East West Bancorp Inc (NASDAQ:EWBC) achieved record levels for revenue, fee income, net income, earnings per share, and loans and deposits in 2024.
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The company reported a 9% year-over-year growth in average deposits and a 6% growth in average loans, emphasizing residential and C&I lending.
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East West Bancorp Inc (NASDAQ:EWBC) maintained a stable asset quality with net charge-offs and nonperforming assets both at 26 basis points.
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The company delivered a 13% growth in tangible book value per share and a 17% return on tangible common equity in 2024.
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East West Bancorp Inc (NASDAQ:EWBC) announced a $300 million share repurchase authorization and a 9% increase in the quarterly dividend to $0.60 per share.
Negative Points
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East West Bancorp Inc (NASDAQ:EWBC) faced challenges with two problem credits in the technology sector, leading to increased net charge-offs in the fourth quarter.
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The company expects full-year 2025 net charge-offs to be in the range of 25 to 35 basis points, indicating potential credit risk concerns.
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Operating expenses are expected to increase by 7% to 9% year over year, driven by investments in personnel and technology.
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The company is dealing with the impact of wildfires in Southern California, although direct exposure is expected to be minimal.
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East West Bancorp Inc (NASDAQ:EWBC) anticipates modest economic growth and potential interest rate cuts, which could impact net interest income and margin levels.
Q & A Highlights
Q: How should we think about the investments in people and technology being layered in during the course of the year? A: Christopher Del Moral-Niles, CFO, explained that the investments are intended to prepare the bank for future growth. While expenses may appear high relative to others, they are off a smaller base, and revenue growth is expected to outstrip expense growth, resulting in positive operating leverage.