EAST WEST BANCORP INC

The following table presents the components of noninterest expense for the second quarters and first halves of 2024 and 2023:

Second quarter 2024 noninterest expense of $236 million decreased $26 million or 10%, compared with $262 million for the second quarter of 2023. The decrease was primarily due to a decrease in amortization of tax credit and CRA investments, partially offset by an increase in compensation and employee benefits. For the first half of 2024, noninterest expense of $483 million increased $3 million or 1%, compared with $480 million for the same period in 2023, primarily due to increases in compensation and employee benefits, deposit insurance premiums and regulatory assessments and deposit account expense, partially offset by a decrease in amortization of tax credit and CRA investments.

Compensation and employee benefits were $134 million for the second quarter of 2024, an increase of $9 million or 7%, compared with $125 million for the second quarter of 2023. For the first half of 2024, compensation and employee benefits were $275 million, an increase of $20 million or 8%, compared with $255 million for the same period in 2023. The increases were primarily driven by annual merit increases and staffing growth.

Deposit insurance premiums and regulatory assessments were $11 million for the second quarter of 2024, an increase of $3 million or 30%, compared with $8 million for the same period in 2023. Deposit insurance premiums and regulatory assessments were $30 million for the first half of 2024, an increase of $14 million or 88%, compared with $16 million for the same period in 2023. The increases were primarily due to additional FDIC charges of $2 million and $12 million recorded during the second quarter and first half of 2024, respectively. For additional information about the FDIC special assessment, refer to Item 2. MD&A — Overview — Current Developmentsin this Form 10-Q.

Deposit account expense was $12 million for the second quarter of 2024, an increase of $1 million or 14%, compared with $11 million for the same period in 2023. The increase was primarily due to higher commercial vendor payments, which were driven by an increase in program participants; and deposit referral fees, which were driven by higher deposit balances. For the first half of 2024, deposit account expense was $24 million, an increase of $4 million or 20%, compared with $20 million for the same period in 2023. The increases were primarily due to higher deposit referral fees driven by higher deposit balances, and higher commercial vendor payments due to an increase in program participants. The increase in the first half of 2024 was further impacted by higher insured cash sweep product fees driven by higher deposit balances.

Amortization of tax credit and CRA investments was $16 million for the second quarter of 2024, a decrease of $40 million or 71%, compared with $56 million for the second quarter of 2023. For the first half of 2024, amortization of tax credit and CRA investments was $29 million, a decrease of $37 million or 56%, compared with $66 million for the same period in 2023. The decreases were primarily due to the impacts related to the expanded application of PAM since the adoption of Accounting Standards Update (“ASU”) 2023-02, Investments — Equity Method and Joint Ventures on January 1, 2024, and the timing of tax credit investments that closed in a given period. For additional information on the PAM, see Note 2 — Current Accounting Developments and Summary of Significant Accounting Policiesand Note 8 — Affordable Housing Partnership, Tax Credit and Community Reinvestment Act Investments, Net.