EAST WEST BANCORP INC

The following table presents the components of noninterest expense for the third quarters and first nine months of 2024 and 2023:

Third quarter 2024 noninterest expense of $226 million decreased $26 million or 10%, compared with $252 million for the third quarter of 2023. The decrease was primarily due to a decrease in amortization of tax credit and CRA investments, partially offset by increases in compensation and employee benefits and other operating expense. For the first nine months of 2024, noninterest expense of $709 million decreased $23 million or 3%, compared with $732 million for the same period in 2023, primarily due to a decrease in amortization of tax credit and CRA investments, partially offset by increases in compensation and employee benefits, deposit insurance premiums and regulatory assessments, other operating and deposit account expense.

Compensation and employee benefits were $135 million for the third quarter of 2024, an increase of $12 million or 10%, compared with $123 million for the third quarter of 2023. For the first nine months of 2024, compensation and employee benefits were $411 million, an increase of $33 million or 9%, compared with $378 million for the same period in 2023. The increases were primarily driven by annual merit increases and staffing growth.

Deposit account expense was $12 million for the third quarter of 2024, an increase of $1 million or 6%, compared with the third quarter of 2023, primarily due to increased commercial vendor service and processing charges, primarily driven by higher commercial deposit balances. For the first nine months of 2024, deposit account expense was $36 million, an increase of $5 million or 15%, compared with the same period in 2023, primarily due to higher deposit referral fees, insured cash sweep product fees and commercial vendor service and processing charges, primarily driven by higher deposit balances.

For the third quarter of 2024, deposit insurance premiums and regulatory assessments were $9 million, an increase of approximately $1 million or 7%, compared with the same period in 2023. This increase was primarily due to a higher assessment base from growth in the Company’s total average assets. For the first nine months of 2024, deposit insurance premiums and regulatory assessments were $40 million, an increase of $15 million or 60%, compared with $25 million for the same period in 2023. This increase was primarily due to an additional FDIC charge of $12 million recorded during the first nine months of 2024. For additional information about the FDIC special assessment, refer to Item 2. MD&A — Overview — Current Developmentsin this Form 10-Q.

Other operating expense was $36 million for the third quarter of 2024, an increase of $4 million or 13%, compared with $32 million for the third quarter of 2023, primarily due to increased legal and consulting expenses. For the first nine months of 2024, other operating expense was $107 million, an increase of $5 million or 5%, compared with $102 million for the same period in 2023, primarily due to increased other real estate owned (“OREO”) and legal expenses.

Amortization of tax credit and CRA investments was $6 million for the third quarter of 2024, a decrease of $44 million or 89%, compared with $50 million for the third quarter of 2023. For the first nine months of 2024, amortization of tax credit and CRA investments was $35 million, a decrease of $81 million or 70%, compared with $116 million for the same period in 2023. The decreases were primarily due to the impacts related to the expanded application of proportional amortization method (“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, Netto the Consolidated Financial Statements in this Form 10-Q.