We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
East West Bancorp Q4 Earnings Lag on High Provisions, Stock Falls 4.2%
Read MoreHide Full Article
Shares of East West Bancorp, Inc. (EWBC - Free Report) lost 4.2% in the after-market trading session on lower-than-expected quarterly results. Its fourth-quarter 2024 adjusted earnings per share (EPS) of $2.08 lagged the Zacks Consensus Estimate of $2.17. Nonetheless, the bottom line increased 4% from the prior-year quarter’s level.
Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
The results were primarily aided by an increase in net interest income (NII) and non-interest income, alongside lower non-interest expenses. Also, deposit and loan balances increased sequentially in the quarter. However, higher provisions were a headwind.
The quarterly results excluded certain notable items. After considering the same, net income available to common shareholders was $293.1 million or $2.10 per share, up from $239 million or $1.69 per share in the prior-year quarter.
For 2024, adjusted EPS was $8.30, which missed the Zacks Consensus Estimate of $8.38. Also, the bottom line declined 2.8% from the previous year’s level. Net income (GAAP) was $1.17 billion, up marginally from the 2023 level. Our estimate for the metric was $1.18 billion.
EWBC’s Revenues Rise, Expenses Fall
Quarterly net revenues were $675.8 million, up 3.2% year over year. Moreover, the top line beat the Zacks Consensus Estimate of $654.3 million.
Full-year revenues totaled $2.61 billion, up marginally year over year. The top line surpassed the Zacks Consensus Estimate of $2.59 billion.
NII amounted to $587.6 million, which increased 2.2% year over year. However, net interest margin (NIM) contracted 24 basis points (bps) to 3.24%. We expected NII and NIM to be $563.5 million and 3.22%, respectively.
Total non-interest income was $88.2 million, up 10.3%. The improvement was driven by an increase in all the components except customer derivative revenues, lower net gains on sales of loans, lower net gains on AFS debt securities and a fall in other income. We had estimated non-interest income to be $85.8 million.
Non-interest expenses totaled $250 million, down 14% from the prior-year quarter’s level. The decline was mainly due to a significant fall in the deposit insurance premiums and regulatory assessments cost and amortization of tax credits and CRA investments. Our estimate for the same was $234 million.
The efficiency ratio was 36.92%, down from 44.34% in the prior-year quarter. A decline in the efficiency ratio indicates an improvement in profitability.
As of Dec. 31, 2024, net loans held for investment (HFI) were $53 billion, reflecting a roughly 1% rise sequentially. Total deposits increased 2.4% to $63.2 billion.
Credit Quality Deteriorates for East West Bancorp
Annualized quarterly net charge-offs were 0.48% of average loans HFI, up 33 bps from the prior-year quarter’s level. As of Dec. 31, 2024, non-performing assets amounted to $194.1 million, up 70.2% year over year.
The provision for credit losses was $70 million, up 89.2% from the prior-year quarter’s level. Our estimate for the same was $31.7 million.
EWBC’s Capital & Profitability Ratios Improve
As of Dec. 31, 2024, the common equity Tier 1 capital ratio was 14.28%, up from 13.31% as of Dec. 31, 2023. The total risk-based capital ratio was 15.59%, up from 14.76% a year ago.
At the end of the fourth quarter, the return on average assets was 1.55%, up from 1.37% as of Dec. 31, 2023. Return on average tangible equity was 16.07%, up from 15.26%.
East West Bancorp’s Share Repurchase Update
In the reported quarter, East West Bancorp repurchased roughly 0.2 million shares for $20 million.
On Jan. 22, 2025, EWBC announced an additional authorization of up to $300 million, increasing the total authorization available to $329 million.
Our View on EWBC
East West Bancorp is well-poised for organic growth on continued improvement in loan and deposit balances, relatively higher interest rates and diversified fee income streams. However, a rise in expenses and a weak asset quality amid a tough operating backdrop are likely to hurt the bottom line.
East West Bancorp, Inc. Price, Consensus and EPS Surprise
Zions Bancorporation’s (ZION - Free Report) fourth-quarter 2024 EPS of $1.34 surpassed the Zacks Consensus Estimate of $1.26. Moreover, the bottom line surged 71.8% from the year-ago quarter’s figure.
ZION’s results were primarily aided by higher NII and non-interest income. Higher loans and deposits were other positives. However, higher provisions and a rise in adjusted non-interest expenses were major headwinds.
F.N.B. Corporation’s (FNB - Free Report) fourth-quarter 2024 adjusted EPS of 38 cents beat the Zacks Consensus Estimate of 33 cents. The bottom line was flat year over year.
Results were aided by growth in NII and non-interest income. Higher loans and deposits were other positives. However, higher provisions and adjusted expenses were the undermining factors for FNB.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
East West Bancorp Q4 Earnings Lag on High Provisions, Stock Falls 4.2%
Shares of East West Bancorp, Inc. (EWBC - Free Report) lost 4.2% in the after-market trading session on lower-than-expected quarterly results. Its fourth-quarter 2024 adjusted earnings per share (EPS) of $2.08 lagged the Zacks Consensus Estimate of $2.17. Nonetheless, the bottom line increased 4% from the prior-year quarter’s level.
Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
The results were primarily aided by an increase in net interest income (NII) and non-interest income, alongside lower non-interest expenses. Also, deposit and loan balances increased sequentially in the quarter. However, higher provisions were a headwind.
The quarterly results excluded certain notable items. After considering the same, net income available to common shareholders was $293.1 million or $2.10 per share, up from $239 million or $1.69 per share in the prior-year quarter.
For 2024, adjusted EPS was $8.30, which missed the Zacks Consensus Estimate of $8.38. Also, the bottom line declined 2.8% from the previous year’s level. Net income (GAAP) was $1.17 billion, up marginally from the 2023 level. Our estimate for the metric was $1.18 billion.
EWBC’s Revenues Rise, Expenses Fall
Quarterly net revenues were $675.8 million, up 3.2% year over year. Moreover, the top line beat the Zacks Consensus Estimate of $654.3 million.
Full-year revenues totaled $2.61 billion, up marginally year over year. The top line surpassed the Zacks Consensus Estimate of $2.59 billion.
NII amounted to $587.6 million, which increased 2.2% year over year. However, net interest margin (NIM) contracted 24 basis points (bps) to 3.24%. We expected NII and NIM to be $563.5 million and 3.22%, respectively.
Total non-interest income was $88.2 million, up 10.3%. The improvement was driven by an increase in all the components except customer derivative revenues, lower net gains on sales of loans, lower net gains on AFS debt securities and a fall in other income. We had estimated non-interest income to be $85.8 million.
Non-interest expenses totaled $250 million, down 14% from the prior-year quarter’s level. The decline was mainly due to a significant fall in the deposit insurance premiums and regulatory assessments cost and amortization of tax credits and CRA investments. Our estimate for the same was $234 million.
The efficiency ratio was 36.92%, down from 44.34% in the prior-year quarter. A decline in the efficiency ratio indicates an improvement in profitability.
As of Dec. 31, 2024, net loans held for investment (HFI) were $53 billion, reflecting a roughly 1% rise sequentially. Total deposits increased 2.4% to $63.2 billion.
Credit Quality Deteriorates for East West Bancorp
Annualized quarterly net charge-offs were 0.48% of average loans HFI, up 33 bps from the prior-year quarter’s level. As of Dec. 31, 2024, non-performing assets amounted to $194.1 million, up 70.2% year over year.
The provision for credit losses was $70 million, up 89.2% from the prior-year quarter’s level. Our estimate for the same was $31.7 million.
EWBC’s Capital & Profitability Ratios Improve
As of Dec. 31, 2024, the common equity Tier 1 capital ratio was 14.28%, up from 13.31% as of Dec. 31, 2023. The total risk-based capital ratio was 15.59%, up from 14.76% a year ago.
At the end of the fourth quarter, the return on average assets was 1.55%, up from 1.37% as of Dec. 31, 2023. Return on average tangible equity was 16.07%, up from 15.26%.
East West Bancorp’s Share Repurchase Update
In the reported quarter, East West Bancorp repurchased roughly 0.2 million shares for $20 million.
On Jan. 22, 2025, EWBC announced an additional authorization of up to $300 million, increasing the total authorization available to $329 million.
Our View on EWBC
East West Bancorp is well-poised for organic growth on continued improvement in loan and deposit balances, relatively higher interest rates and diversified fee income streams. However, a rise in expenses and a weak asset quality amid a tough operating backdrop are likely to hurt the bottom line.
East West Bancorp, Inc. Price, Consensus and EPS Surprise
East West Bancorp, Inc. price-consensus-eps-surprise-chart | East West Bancorp, Inc. Quote
Currently, EWBC carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Banks
Zions Bancorporation’s (ZION - Free Report) fourth-quarter 2024 EPS of $1.34 surpassed the Zacks Consensus Estimate of $1.26. Moreover, the bottom line surged 71.8% from the year-ago quarter’s figure.
ZION’s results were primarily aided by higher NII and non-interest income. Higher loans and deposits were other positives. However, higher provisions and a rise in adjusted non-interest expenses were major headwinds.
F.N.B. Corporation’s (FNB - Free Report) fourth-quarter 2024 adjusted EPS of 38 cents beat the Zacks Consensus Estimate of 33 cents. The bottom line was flat year over year.
Results were aided by growth in NII and non-interest income. Higher loans and deposits were other positives. However, higher provisions and adjusted expenses were the undermining factors for FNB.