EAST WEST BANCORP INC

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

Noninterest income comprised 13% of total revenue for both the third quarter and first nine months of 2024, compared with 12% and 11% for the third quarter and first nine months of 2023, respectively. The $8 million or 10% increase in noninterest income to $85 million for the third quarter of 2024, compared with the same prior year period, was primarily due to increases in lending, wealth management and deposit account fees, other income and foreign exchange income, partially offset by customer derivative losses. The $33 million or 15% increase in noninterest income to $248 million for the first nine months of 2024, compared with the same prior year period, was primarily due to $2 million in net gains on AFS debt securities, compared with a $10 million write-down in securities in the same prior year period, increases in lending, wealth management and deposit account fees, partially offset by lower customer derivative income.

Deposit account fees were $27 million for the third quarter of 2024, an increase of $3 million or 14%, compared with $24 million for the third quarter of 2023. For the first nine months of 2024, deposit account fees were $77 million, an increase of $7 million or 11%, compared with $70 million for the same period in 2023. The increases were primarily related to analysis service fees, which reflected fee increases and customer growth.

Lending fees were $26 million for the third quarter of 2024, an increase of $6 million or 30%, compared with $20 million for the third quarter of 2023. For the first nine months of 2024, lending fees were $74 million, an increase of $12 million or 19%, compared with $62 million for the same period in 2023. The increases were primarily due to higher trade finance and commitment fees driven by customer growth, and higher syndication loan fee income.

Foreign exchange income was $14 million for the third quarter of 2024, an increase of approximately $2 million or 19%, compared with $11 million for the third quarter of 2023. For the first nine months of 2024, foreign exchange income was $38 million, an increase of $3 million or 9%, compared with $35 million for the same period in 2023. The increases primarily reflected the favorable valuation of certain foreign currency denominated balance sheet items, partially offset by losses on foreign exchange trades.

Wealth management fees were $11 million for the third quarter of 2024, an increase of $5 million or 80%, compared with $6 million for the third quarter of 2023. For the first nine months of 2024, wealth management fees were $29 million, an increase of $10 million or 50%, compared with $19 million for the same period in 2023. The increases reflected customer demand for higher-yielding products in response to the interest rate environment.

Customer derivative losses were $1 million for the third quarter of 2024, compared with an $11 million gain for the same period in 2023. For the first nine months of 2024, customer derivative income was $9 million, a decrease of $12 million or 58%, compared with $21 million for the same period in 2023. The decreases primarily reflected unfavorable credit valuation adjustments and lower fee income due to decreased customer activity.

Net gains on AFS debt securities were $145 thousand and $2 million for the third quarter and first nine months of 2024, respectively, which primarily reflected sales of U.S. government agency residential mortgage-backed securities. In comparison, net losses on AFS debt securities were $10 million for the first nine months of 2023, due to the write-off of an impaired subordinated debt security during the first quarter of 2023.

Other income was $5 million for the third quarter of 2024, an increase of $2 million or 90%, compared with $3 million for the same period in 2023. For the first nine months of 2024, other income was $14 million, an increase of $3 million or 26%, compared with $11 million for the same period in 2023. The year-over-year increases were primarily due to higher income from bank-owned life insurance policies.