Summary of East West Bank Conference Call Company Overview - **Company**: East West Bank - **Industry**: Banking and Financial Services Key Points and Arguments Client Sentiment and Tariff Impact - Clients have been proactive in dealing with tariffs for nearly a decade, indicating a consistent approach to trade dynamics [4][5] - Activity levels among clients have stabilized, contrary to expectations of a decline, providing a solid base for the second quarter [5][6] - Clients are making decisions without waiting for clarity on future tariff changes, demonstrating a readiness to adapt [6][7] Supply Chain Adjustments - Many clients have diversified their supply chains, moving production to locations such as Mexico and the U.S. [10][12] - Clients are shipping inventory to mitigate risks associated with tariffs, indicating a strategic approach to inventory management [11][12] Economic Environment - The broader U.S. consumer demand remains strong, positively influencing client performance and bank operations [13][14] - Employment dynamics in Southern California are positive, contributing to a stable economic output [13] Financial Performance - Deposits and loans have increased modestly quarter over quarter, aligning with the bank's guidance [14] - The bank anticipates NII (Net Interest Income) growth above the higher end of previous guidance due to positive trends in loan and deposit growth [20][21] Loan Growth and Asset Sensitivity - Loan growth is projected at 4% to 6%, with current trends suggesting a potential for higher growth [21][24] - The bank is adjusting its asset sensitivity, moving towards a more balanced approach in response to market conditions [31][32] Commercial and Industrial (C&I) Growth - Growth is observed in sectors such as entertainment and alternative energy, with ongoing investments in these areas [34][35] - Trade finance activity has stabilized, contributing positively to the bank's balance sheet [36] Private Credit and NDFI Loans - The bank views its relationship with private credit firms as more of a partnership rather than competition, focusing on lower leverage opportunities [37][40] - NDFI (Non-Depository Financial Institution) loans are growing, particularly in sectors like solar energy, with a low default risk profile [42][44] Residential Mortgage and Commercial Real Estate (CRE) - Residential mortgage growth remains stable, with consistent new volume added to the balance sheet [46] - The bank is strategically managing its CRE exposure to reduce concentration, focusing on existing profitable relationships [47][48] Efficiency and Growth Strategy - East West Bank maintains a better efficiency ratio than peers due to a straightforward business model focused on core markets [52][53] - The bank is expanding into new markets such as Dallas, Houston, and New York, seeking to capitalize on growth opportunities [55][61] Fee Growth Opportunities - The bank is investing in core treasury deposit services and expanding payment processing capabilities, which are expected to drive fee growth [66][70] Credit Quality and Capital Management - Credit quality remains stable, with no significant deterioration observed despite macroeconomic uncertainties [71][72] - The bank's CET1 ratio stands at 14.3%, indicating a strong capital position, with a cautious approach to buybacks in the current environment [75][76] Additional Important Insights - The bank's focus on tailored solutions for core customers allows for targeted growth strategies without overextending resources [52][53] - The management emphasizes the importance of finding the right talent to drive expansion in new markets [56][58] - The bank remains vigilant and opportunistic regarding capital return strategies, adapting to market conditions as necessary [76][77]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2025 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 000-24939 EAST WEST BANCORP, INC. (Exact name of registrant as specified in its charter) Delaware (State or other jurisdiction of incorporation ...

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Financial Data and Key Metrics Changes - The company reported record revenue for the first quarter of 2025, with end-of-period loans growing 1% quarter-over-quarter to a new record level of $54 billion [6][7] - Net interest income increased to $600 million, up $12 million from Q4, and net interest margin rose by 11 basis points to 3.35% [20][21] - The return on tangible common equity was nearly 16%, and the return on average assets was 1.6% [10] Business Line Data and Key Metrics Changes - Fee income grew by 8%, driven by strong customer activity across various categories [8][21] - Residential mortgage origination remained steady, with a strong pipeline for Q2, while commercial real estate balances also grew [16] - The efficiency ratio for Q1 was 36.4%, indicating industry-leading efficiency [22] Market Data and Key Metrics Changes - The non-performing assets ratio decreased by two basis points to 24 basis points at quarter-end [9][25] - The criticized loans ratio increased to 2.3%, with classified loans rising to 1.38% [25][28] - The allowance for loan losses increased to 1.35% of total loans, reflecting a proactive approach to credit risk management [26][28] Company Strategy and Development Direction - The company aims to capitalize on opportunities arising from economic uncertainties while maintaining a strong capital position [13][28] - There is a focus on diversifying revenue streams and enhancing fee income through customer engagement and service expansion [7][21] - The management emphasized the importance of a strong balance sheet to support customers and navigate economic challenges [13][60] Management's Comments on Operating Environment and Future Outlook - Management noted that clients are adapting to economic uncertainties and diversifying supply chains, which positions the company favorably [11][12] - The company remains vigilant regarding credit risk and is prepared for potential economic downturns [26][60] - Future loan growth will depend on economic conditions, with a cautious approach to lending in uncertain times [62][66] Other Important Information - The company repurchased approximately 920,000 shares for $85 million and distributed $85 million to shareholders via dividends [29][30] - The effective tax rate for 2025 is expected to be below 23% [31] Q&A Session Summary Question: Why is the NII guide not moving higher? - The guidance remains appropriate due to anticipated rate cuts and current economic outlook [35] Question: Can the deposit beta be sustained? - The positive momentum may slow as the forward curve flattens, but the company expects to remain above the 50% guide [37] Question: What is the outlook for capital return and buybacks? - The company will continue to be opportunistic with buybacks while maintaining a strong position to support customers [45][46] Question: Are current tariff risks larger than in previous years? - Clients are better prepared now compared to 2017, and the company is actively engaging with clients to manage risks [50][52] Question: How does the company view loan growth opportunities? - The company has the capital and balance sheet to support clients, but loan growth will depend on economic conditions [60][62] Question: What is the strategy for growing fee income? - The company focuses on domestic lending fees and wealth management, with some fees tied to cross-border activity [71] Question: Can you elaborate on the allowance build rationale? - The allowance increase was driven by a higher weighting for downside scenarios due to economic uncertainties [74] Question: What are the expectations for expenses in the coming quarters? - The company remains comfortable with its expense guidance while continuing to invest in technology and infrastructure [80] Question: What is the strategy for security purchases in liquidity management? - The focus is on purchasing high-quality liquid assets, primarily Ginnie Mae securities [120]

East West Bancorp, Inc. 1Q Earnings Presentation April 22, 2025 Basis of Presentation The preparation of the Company's consolidated financial statements in conformity with U.S. generally accepted accounting principles ("GAAP") requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the consolidated financial statements, income and expenses during the reporting periods, and the related disclosures. Although our estimates consider curr ...

East West Bancorp, Inc. 135 N. Los Robles Ave., 7th Fl. Pasadena, CA 91101 Tel. 626.768.6000 NEWS RELEASE EAST WEST BANCORP REPORTS NET INCOME FOR FIRST QUARTER OF 2025 OF $290 MILLION AND DILUTED EARNINGS PER SHARE OF $2.08; RECORD QUARTERLY REVENUE, FEE INCOME, AND LOANS Pasadena, California – April 22, 2025 – East West Bancorp, Inc. ("East West" or the "Company") (Nasdaq: EWBC), parent company of East West Bank, reported its financial results for the first quarter of 2025. First quarter 2025 net income w ...

Wall Street analysts forecast that East West Bancorp (EWBC) will report quarterly earnings of $2.05 per share in its upcoming release, pointing to a year-over-year decline of 1.4%. It is anticipated that revenues will amount to $671.3 million, exhibiting an increase of 4.2% compared to the year-ago quarter.The consensus EPS estimate for the quarter has undergone a downward revision of 1.4% in the past 30 days, bringing it to its present level. This represents how the covering analysts, as a whole, have reas ...

Core Viewpoint - Wall Street anticipates a year-over-year decline in earnings for East West Bancorp despite higher revenues, with actual results being crucial for stock price movement [1][2]. Earnings Expectations - East West Bancorp is expected to report quarterly earnings of $2.05 per share, reflecting a -1.4% change year-over-year, while revenues are projected at $671.3 million, a 4.2% increase from the previous year [3]. - The earnings report is scheduled for April 22, 2025, and could lead to stock price increases if results exceed expectations [2]. Estimate Revisions - The consensus EPS estimate has been revised down by 1.38% over the last 30 days, indicating a reassessment by analysts [4]. - The Most Accurate Estimate for East West Bancorp is higher than the Zacks Consensus Estimate, resulting in a positive Earnings ESP of +0.17% [10][11]. Earnings Surprise Prediction - The Zacks Earnings ESP model suggests that a positive Earnings ESP reading is a strong predictor of an earnings beat, especially when combined with a Zacks Rank of 1, 2, or 3 [8]. - East West Bancorp currently holds a Zacks Rank of 3, indicating a likelihood of beating the consensus EPS estimate [11]. Historical Performance - In the last reported quarter, East West Bancorp had an expected EPS of $2.13 but delivered $2.08, resulting in a -2.35% surprise [12]. - Over the past four quarters, the company has beaten consensus EPS estimates three times [13]. Industry Context - Zions, another player in the Zacks Banks - West industry, is expected to report an EPS of $1.20 for the same quarter, showing a +16.5% year-over-year change, with revenues projected at $808.26 million, a 7.5% increase [17]. - Zions has also seen a revision of its consensus EPS estimate down by 0.8% over the last 30 days, but a higher Most Accurate Estimate has resulted in an Earnings ESP of 0.80%, indicating a likely earnings beat [18].

East West Bancorp (EWBC) shares rallied 8.6% in the last trading session to close at $77.16. This move can be attributable to notable volume with a higher number of shares being traded than in a typical session. This compares to the stock's 15.8% loss over the past four weeks.East West Bancorp shares rallied sharply, benefiting from broad market strength following President Donald Trump’s announcement of a 90-day suspension on tariffs for non-retaliating countries. The policy shift eased trade tensions and ...

Employee Compensation and Development - The Bank's compensation and employee benefits expense was $551 million in 2024, comprising 57% of total noninterest expense, compared to $509 million and 50% in 2023[29]. - In 2024, the Bank achieved 16% of employees advancing their careers through over 510 internal promotions, highlighting its commitment to employee development[27]. - The Bank granted over 650 thousand restricted stock units (RSUs) as part of its stock compensation programs in 2024[30]. - The Bank's employee compensation packages include a competitive base salary and may include annual cash and/or stock incentive bonuses based on performance[29]. Regulatory Compliance and Capital Requirements - The Bank's operations are subject to regulation and supervision by the Federal Reserve, California DFPI, and other regulatory bodies, ensuring compliance and stability[35]. - As of December 31, 2024, the Company and the Bank's capital ratios exceeded the minimum capital adequacy requirements, including the capital conservation buffer, and were classified as "well capitalized"[42]. - The Company is required to maintain a minimum CET1 capital ratio of at least 4.5% to risk-weighted assets, with additional capital conservation buffer of 2.5%[42]. - The proposed "Basel III Endgame" rule could lead to increased capital requirements for large banking organizations, but the Company, with total consolidated assets under $100 billion, would not be subject to these changes[45]. - The Company conducts annual capital and quarterly liquidity stress tests as part of its risk management processes, despite not being required to do so under current regulations[49]. - The Bank is subject to additional capital requirements under the Prompt Corrective Action regulations, which classify institutions into five capital tiers based on their capital levels[46]. Community Engagement and Social Responsibility - The Bank is committed to community engagement through programs that promote homeownership, affordable housing, and access to banking services[32]. - The Bank was rated "outstanding" in its most recent Community Reinvestment Act examination as of March 8, 2021, indicating strong performance in serving community credit needs[58]. Financial Performance and Metrics - Total assets increased to $75.98 billion in 2024, up from $69.61 billion in 2023, representing an increase of approximately 9.4%[360]. - Net interest income after provision for credit losses was $2.10 billion in 2024, compared to $2.19 billion in 2023, a decrease of about 4.0%[362]. - Total deposits rose to $63.18 billion in 2024, up from $56.09 billion in 2023, reflecting an increase of approximately 12.4%[360]. - Net income for 2024 was $1.17 billion, slightly up from $1.16 billion in 2023, indicating a growth of about 0.4%[362]. - Earnings per share (EPS) increased to $8.39 in 2024 from $8.23 in 2023, a rise of approximately 1.9%[362]. - Noninterest income totaled $335.22 million in 2024, compared to $295.26 million in 2023, marking an increase of about 13.5%[362]. Risk Factors - A significant portion of the loan portfolio is secured by real estate, which is at higher risk due to potential downturns in real estate markets[88]. - The company is exposed to interest rate risk, with net interest income being significantly affected by changes in interest rates[89]. - Inflation poses a risk to the company's profitability and may negatively impact customers' ability to repay loans[90]. - The Federal Reserve's monetary policies could materially affect the company's earnings and asset values[91]. - The company is subject to fluctuations in foreign currency exchange rates, particularly from its operations in China[93]. - Geopolitical uncertainties and trade tensions, especially between the U.S. and China, may adversely impact the company's business[84]. - Natural disasters and climate change could lead to increased nonperforming assets and credit losses[86]. - The company may experience a decrease in demand for loans and financial products due to adverse economic conditions[84]. Legal and Compliance Risks - The Consumer Financial Protection Bureau (CFPB) has implemented a final rule requiring financial institutions to provide certain consumer data upon request, which the Bank must comply with by April 1, 2027[51]. - Federal law limits the Bank's ability to pay dividends, requiring regulatory approval if total dividends exceed the sum of net income for the year and retained earnings for the preceding two years[55]. - The Federal Reserve's policy discourages bank holding companies from maintaining dividend levels that undermine their ability to support their banking subsidiaries[55]. - The Company is subject to various federal and state regulations regarding privacy and cybersecurity, which may impact operational costs and compliance efforts[66][68]. - The company faces significant financial and reputational risks from lawsuits and legal proceedings, which could adversely affect its operations[124]. Technological and Competitive Challenges - The company faces intense competition in the financial services industry, which may lead to margin declines and loss of business[112]. - The company may face challenges in keeping pace with technological changes, which could adversely affect its competitive position[106]. - Cybersecurity risks have increased, potentially impacting the company's operations and financial condition[105]. Accounting and Financial Reporting - The Company adheres to U.S. GAAP for its financial reporting, requiring management to make estimates that could materially affect reported amounts[378]. - Changes in accounting standards could materially impact the company's financial statements and reporting[125]. - The Company’s financial statements have been audited and present fairly its financial position as of December 31, 2024, in conformity with U.S. generally accepted accounting principles[347]. Environmental and Regulatory Changes - California's Climate Corporate Data Accountability Act requires entities with annual revenue over $1 billion to disclose greenhouse gas emissions starting in 2026[72]. - The Company may incur compliance costs related to the Climate-Related Financial Risk Act, which mandates biennial climate risk disclosures for entities with revenues over $500 million, starting January 1, 2026[72]. - Evolving expectations regarding environmental, social, and governance (ESG) considerations may expose the Company to additional costs and reputational harm[132].