East West Bancorp Reports Strong Q1 2024 Results, Surpassing Expectations

East West Bancorp posts strong Q1 2024 results, exceeding analysts' expectations. Robust deposit growth, solid asset quality, and a diversified business model position the bank for industry outperformance.

Sakchi Khandelwal
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East West Bancorp Reports Strong Q1 2024 Results, Surpassing Expectations

East West Bancorp Reports Strong Q1 2024 Results, Surpassing Expectations

East West Bancorp, Inc. reported impressive financial results for the first quarter of 2024, exceeding analysts' expectations. The Pasadena, California-based bank posted adjusted earnings per share (EPS) of $2.08, surpassing the consensus estimate of $2.00. Revenue for the quarter reached $644 million, also topping the projected $638.8 million.

The bank's net income totaled $285 million, or $2.03 per diluted share, compared to $322.44 million, or $2.27 per share, in the same quarter last year. Excluding a one-time $10 million FDIC charge, adjusted diluted EPS was $2.08, marking a 3% increase from the previous quarter.

East West Bancorp's strong performance was driven by a significant $2.5 billion increase in deposits, reaching a record level of $58.6 billion as of March 31, 2024. The bank's total assets grew by 5% year-over-year to $70.9 billion, while total loans increased by 6% to $52.0 billion.

Why this matters: East West Bancorp's robust financial results demonstrate the bank's resilience and ability to navigate economic uncertainties effectively. The record deposit growth and strong profitability metrics position the bank well for future industry outperformance.

Despite a slight decline in revenue and a 14 basis point decrease in net interest margin, the bank's average loan yield improved by 10 basis points. Noninterest income saw a minor 1% decrease from the previous quarter, while noninterest expense dropped by 15%, primarily due to a lower FDIC charge.

The bank's asset quality remained solid, with annualized net charge-offs of 17 basis points and a non-performing assets ratio of 23 basis points. East West Bancorp added $10 million to its commercial real estate loan allowances, bringing the total allowance for loan losses to 1.29%.

Dominic Ng, East West Bancorp's Chairman and CEO, attributed the strong performance to the bank's diversified business model and conservatively managed balance sheet. "East West's first quarter results demonstrated the strength of our diversified business model and conservatively managed balance sheet, with an 18% return on tangible common equity and a 1.6% return on average assets," Ng stated.

East West Bancorp remains focused on serving its customers and growing relationships, positioning it to outperform the industry in 2024 and beyond. The bank's capital ratios remained well above regulatory requirements and regional bank averages, with a common equity tier 1 (CET1) capital ratio of 13.53%. The company also repurchased 1.2 million shares of common stock, demonstrating confidence in its earnings generation, stable credit quality, and capital strength.

Key Takeaways

  • East West Bancorp reported Q1 2024 earnings exceeding analyst estimates
  • Deposits grew $2.5B to a record $58.6B, assets grew 5% to $70.9B
  • Loan yield improved 10bps, noninterest expense dropped 15% due to lower FDIC charge
  • Asset quality remained solid with 17bps net charge-offs and 1.29% loan loss allowance
  • CEO cited diversified business model and conservative balance sheet for strong performance