East West Bancorp, Inc. (EWBC) Earnings Call Transcript & Summary

Hello, and welcome to the Annual Shareholders Meeting of East West Bancorp. Please note that today's meeting is being recorded. [Operator Instructions] It is now my pleasure to turn today's meeting over to Louisa Wang, Associate General Counsel of East West Bancorp. Ms. Wang, the floor is yours.

Thank you, operator. Good afternoon. Welcome to the Annual Shareholders Meeting of East West Bancorp. I am Louisa Wang, Associate General Counsel of East West Bancorp. And today, I'm also the Inspector of Elections. We will first conduct the formal agenda items for the annual meeting, which I anticipate will be brief. Following these items, Dominic Ng, Chairman and CEO of East West Bancorp will give a presentation on our company. We will then answer any questions from shareholders. If any shareholders have questions of general interest relating to the business before this meeting, please submit them now via the virtual meeting website before voting begins. So that they can be compiled and answered I would like to thank you in advance for your attendance today. A quorum is present, and so I will now officially call the meeting to order. I would now like to introduce our directors who are in attendance at this virtual meeting: Manuel Alvarez, Molly Campbell, Archana Deskus, Serge Dumont, Mark Hutchins, Paul Irving, Sabrina Kay, Jack Liu, Lester Sussman; and Dominic Ng, Chairman. Members of East West's management team and representatives of KPMG, our independent auditors, are also in attendance. The first order of business is the Notice of Annual Meeting of Shareholders. The Notice of Annual Meeting of Shareholders indicates that the Annual Meeting of Shareholders of East West Bancorp will be held for the following purposes: one, election of directors; two, to approve on an advisory basis, our executive compensation for 2024; and three, to ratify KPMG as the company's independent registered public accounting firm for this year. The notice of meeting has been mailed to all shareholders. The polls are now open and the proposals in the proxy statement mailed to each shareholder of record. I would like to express my appreciation to all of the shareholders attending the meeting today and to all of the shareholders who returned their proxies. If anyone in virtual attendance did not return their proxy, please submit your vote now via the virtual meeting website. Additionally, any shareholder attending the meeting today who has previously returned a proxy and would like to revoke that proxy for any reason, please resubmit your vote now via the virtual meeting website. Thank you, everyone. I now declare the polls closed. The results of the votes submitted by valid proxy were tabulated prior to this meeting. The holders of more than a majority of our shares have voted for all of the director nominees set forth in the proxy. The nominees accordingly have now been duly elected as directors of East West Bancorp to serve until their respective successors have been elected and qualified. For the advisory vote regarding the compensation of the company's named executive officers for 2024. For the ratification of KPMG as the company's independent registered public accounting firm for the year ending December 31, 2025. There being no further business, the formal portion of the meeting is now adjourned. I would now like to welcome Dominic Ng, our Chairman and CEO, to provide a brief business update and answer any questions that may have been submitted.

Thank you, Louisa. I would like to thank everyone for joining us in our virtual annual meeting, including our auditors and directors. And now I will provide a brief update of our company's performance beginning with Slide 10 of the presentation. 2024 was another record-breaking year for East West. We set new record levels for revenue, fee income, net income, earnings per share and loans and deposits. I'm particularly proud of last year's over $7 billion of deposit growth, while our asset quality remained strong. We continued to produce consistent top-tier returns for shareholders in 2024. East West generated a 17% return on average tangible common equity and a 1.6% return on average assets with an efficiency level that is best in class. We also increased our quarterly dividend in the first quarter of 2024 by 9% to $0.60 per share and announced Board approval of an incremental share repurchase authorization of $300 million. Overall, East West's 2024 results speak to the durability of our business model and the strength of our brand. Moving on to Slide 11. We have been and will continue to be prudent stewards of shareholder capital. We have grown tangible book value per share by 12% and dividends per share by 19% annualized over the past 4 years. On the bottom left of the slide, East West total shareholders' return over the past 1, 3 and 5 years were all well above our peer median. Total shareholder return is the price appreciation of shares assuming reinvestment of dividends. And on the bottom right of the slide is a summary of capital return to shareholders since 2020. On Slide 12, a few highlights from our first quarter financial results. We continue to grow the bank and reported another quarter of record revenue. We grew end-of-period loans 1% quarter-over-quarter to a new record level of $54 billion. We also delivered another record quarter of fee income. Asset quality has remained solid and credit is performing as expected. Given the recent increase in economic uncertainty, we bolstered our allowance levels bringing our total allowance for loan losses to 1.35%. Turning to Slide 13 for a quick look at East West Bank today. East West now stands at over $76 billion in assets with an increasingly diversified and granular balance sheet. Our performance has earned us top-performing rankings from bank director and S&P Global Market Intelligence. We have been recognized for our outstanding efforts to meet the expectations of the Community and Reinvestment Act (sic) [ Community Reinvestment Act ]. Although the current economic environment is increasingly uncertain, our experience has taught us to confront challenges from a position of strength. We are proceeding with a diversified balance sheet, a granular and strong consumer banking network, top-tier profitability, best-in-class operating efficiency and announced the highest levels of capital in the banking industry. We have the capital and balance sheet flexibility to take care of our customers in any environment and are well positioned to capitalize on any opportunities in the year ahead. We will now respond to any questions that were submitted to our moderator and Associate General Counsel, Louisa Wang. Louisa?

Thank you, Mr. Chairman. I show no questions from shareholders via the web.

Thank you, Louisa. This concludes our annual meeting. Thank you, everyone, for attending and participating in our 2025 Annual Shareholder Meeting. We thank you for your support as shareholders, and we hope as happy customers. Operator?

This concludes the meeting. You may now disconnect.