EAST WEST BANCORP INC
For the period ended Jun 30, 2024. Filed Aug 8, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2024 · Filed Aug 8, 2024
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Noninterest Income
The following table presents the components of noninterest income for the second quarters and first halves of 2024 and 2023:
| Three Months Ended June 30, | Six Months Ended June 30, | |||||
|---|---|---|---|---|---|---|
| ($ in thousands) | 2024 | 2023 | % Change | 2024 | 2023 | % Change |
| Deposit account fees | $25,649 | $23,369 | 10% | $50,597 | $46,423 | 9% |
| Lending fees | 24,340 | 20,901 | 16% | 47,265 | 41,487 | 14% |
| Foreign exchange income | 12,924 | 12,167 | 6% | 24,393 | 23,476 | 4% |
| Wealth management fees | 9,478 | 6,944 | 36% | 18,115 | 13,291 | 36% |
| Customer derivative income | 5,764 | 7,373 | (22)% | 9,514 | 9,937 | (4)% |
| Net gains (losses) on sales of loans | 56 | (7) | NM | 15 | (29) | NM |
| Net gains (losses) on AFS debt securities | 1,785 | — | 100% | 1,834 | (10,000) | NM |
| Other investment income | 586 | 4,003 | (85)% | 3,401 | 5,924 | (43)% |
| Other income | 4,091 | 3,881 | 5% | 8,527 | 8,100 | 5% |
| Total noninterest income | $84,673 | $78,631 | 8% | $163,661 | $138,609 | 18% |
Noninterest income comprised 13% of total revenue for both the second quarter and first half of 2024, compared with 12% and 11% for the second quarter and first half of 2023, respectively. Noninterest income for the second quarter of 2024 was $85 million, an increase of $6 million or 8%, compared with $79 million for the second quarter of 2023. The increase was primarily due to increases in lending, wealth management and deposit account fees, partially offset by lower other investment income. Noninterest income for the first half of 2024 was $164 million, an increase of $25 million or 18%, compared with $139 million for the same period in 2023. The increase was primarily due to net gains on AFS debt securities, and increases in lending, wealth management and deposit account fees.
Deposit account fees were $26 million for the second quarter of 2024, an increase of $3 million or 10%, compared with $23 million for the second quarter of 2023. For the first half of 2024, deposit account fees were $51 million, an increase of $5 million or 9%, compared with $46 million for the same period in 2023. The increases were primarily related to analysis service fees, which reflected customer growth and fee increases.
Lending fees were $24 million for the second quarter of 2024, an increase of $3 million or 16%, compared with $21 million for the second quarter of 2023. For the first half of 2024, lending fees were $47 million, an increase of $6 million or 14%, compared with $41 million for the same period in 2023. The increases were primarily due to higher trade finance and unused commitment fees driven by customer growth.
Wealth management fees were $9 million for the second quarter of 2024, an increase of $2 million or 36%, compared with $7 million for the second quarter of 2023. For the first half of 2024, wealth management fees were $18 million, an increase of $5 million or 36%, compared with $13 million for the same period in 2023. The increases reflected customer demand for higher-yielding products in response to the interest rate environment.
Net gains on AFS debt securities were $2 million for both the second quarter and first half of 2024, which primarily reflected the sale of mortgage-backed securities. In comparison, net losses on AFS debt securities were $10 million for the first half of 2023, due to the write-off of an impaired subordinated debt security during the first quarter of 2023.
Other investment income was $1 million for the second quarter of 2024, a decrease of $3 million or 85%, compared with $4 million for the same period in 2023. For the first half of 2024, other investment income was $3 million, a decrease of $3 million or 43%, compared with $6 million for the same period in 2023. The decreases primarily reflected reduced earnings from the Company’s equity method CRA investments in 2024, compared with the same year-ago periods.
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