Core Insights - East West Bancorp Inc. (EWBC) is recognized as one of the 10 Best Bank Stocks to Buy in 2026, despite a slight reduction in target price by UBS to $125 from $126, maintaining a Neutral rating on the stock [1][8] Financial Performance - EWBC reported a Q4 net income growth of 21.5% YoY to $356.3 million, up from $293.1 million, resulting in a 103-basis point improvement in return on average common equity to 16.11% from 15.08% [2] - The strong earnings performance enabled EWBC to increase its quarterly dividend by 33% to $0.80 from $0.60, alongside a 15.9% YoY growth in book value per share to $64.68 from $55.79 [2] Revenue Drivers - The earnings growth was primarily fueled by an 11.9% YoY increase in net interest income (NII) to $658 million from $588 million, supported by net interest margin (NIM) expansion and loan growth [3] - NIM improved by 17 basis points to 3.41% from 3.24%, while the cost of deposits decreased by 43 basis points to 2.16% from 2.59%, offsetting a decline in average loan yields [3] Loan Growth - The loan book expanded by 6.0% YoY to $56.9 billion from $53.7 billion, with management projecting a 5% to 7% YoY increase in both loans and net interest income for 2026 [4]

Group 1 - Regional banks have experienced strong performance in recent years, with top-tier banks like East West Bancorp, Inc. (EWBC) leading the way [1] - These banks are characterized by ample capital, a lean operating model, and opportunities for loan growth [1]

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Summary of East West Bancorp Conference Call Company Overview - **Company**: East West Bancorp (NasdaqGS:EWBC) - **Industry**: Banking - **Date of Conference**: February 10, 2026 Key Points 1. Growth Outlook for 2026 - 2026 is expected to be a constructive year for growth, with both loans and deposits meeting expectations and showing positive trends [6][7] - Loan growth guidance for 2026 is set at 5%-7%, an increase from the previous year's guidance of 4%-6% [7] 2. Commercial Real Estate (CRE) Insights - Credit quality concerns in the CRE sector have abated, with refinancing options available and a thawing market for transactions [13][14] - The bank is cautious about pursuing new CRE opportunities, focusing instead on reliable customers and maintaining a balanced portfolio [15][17] 3. Commercial and Industrial (C&I) Growth Drivers - The bank is expanding its expertise in various sectors, including charter schools, aerospace, and ESOPs, to drive C&I growth [19][20] - Growth is expected to be broad-based, complementing positive momentum from previous quarters [21] 4. Tax Incentives and Investment Trends - Clients are actively considering bonus depreciation incentives, which are accelerating their investment timelines [24] - There is a trend of reshoring and investment in U.S. supply chains, driven by tax benefits and operational flexibility [25][27] 5. Market Expansion and Acquisition Strategy - East West Bancorp is exploring growth opportunities in underpenetrated markets like New York and Boston, focusing on organic growth and potential acquisitions [28][29] - The bank is cautious about increasing CRE exposure and aims for a diversified customer deposit base [29][30] 6. Deposit Growth and Competitive Landscape - The bank expects to fund loan growth primarily through deposit growth, with a tightening competitive landscape for deposits [40][41] - The bank has launched a six-month CD at a rate of 3.73%, setting a competitive floor for deposit pricing [40] 7. Net Interest Income (NII) and Risks - NII growth is projected to align with loan growth, with expectations of 5%-7% growth in both areas [44] - Risks include potential interest rate cuts that could impact margins and backbook repricing [45] 8. Capital and Liquidity Position - The bank maintains a strong capital and liquidity position, with a focus on fixed-rate securities to manage interest rate risk [46][47] - The bank is well-positioned to meet customer needs and navigate potential challenges in 2026 [47] 9. Expense Management and Investment Focus - The bank plans to invest in people and technology, particularly in front-line sales and cybersecurity [54][55] - Despite a projected 7%-9% growth in expenses, revenue growth is expected to outpace this, maintaining positive operating leverage [61] 10. Fee Income Growth - Fee income, particularly from wealth management and foreign exchange, is expected to continue being a significant growth driver [72][73] - Disruptive market conditions tend to increase transaction activity, benefiting fee income [74] 11. Greater China Strategy - The bank plays a crucial role in facilitating transactions for U.S. consumers purchasing goods from overseas, particularly from smaller and mid-sized enterprises [66][67] - Continued investment in the U.S. is expected from clients engaged in cross-border trade, providing lending opportunities for East West [69][70] Conclusion East West Bancorp is optimistic about its growth prospects in 2026, with a focus on maintaining credit quality, expanding into new markets, and leveraging tax incentives to drive investment. The bank's strategic emphasis on expertise in various sectors and a strong capital position positions it well for future opportunities.

Company Overview - East West Bancorp (EWBC) is based in Pasadena and operates in the Finance sector, with a year-to-date share price change of 1.99% [3] - The company currently pays a dividend of $0.60 per share, resulting in a dividend yield of 2.79%, which is higher than the Banks - West industry's yield of 2.72% and the S&P 500's yield of 1.33% [3] Dividend Performance - The current annualized dividend of $3.20 represents a 33.3% increase from the previous year [4] - Over the past five years, East West Bancorp has increased its dividend five times, achieving an average annual increase of 18.17% [4] - The company's current payout ratio is 25%, indicating that it pays out 25% of its trailing 12-month earnings per share as dividends [4] Earnings Growth Expectations - For the fiscal year, East West Bancorp anticipates solid earnings growth, with the Zacks Consensus Estimate for 2026 projected at $10.28 per share, reflecting a year-over-year earnings growth rate of 8.32% [5] Investment Considerations - East West Bancorp is viewed as a compelling investment opportunity due to its strong dividend profile and current Zacks Rank of 3 (Hold) [6] - The company is positioned as a strong dividend play, particularly appealing to income investors who seek consistent cash flow from their investments [6]

Core Insights - East West Bancorp, Inc. has a new price target set by Truist Financial at $121, indicating a potential upside of 8.67% from the current stock price of $111.35 [1][6] Financial Performance - The company reported a record net income of $1.3 billion for 2025, translating to $9.52 per diluted share, with a fourth-quarter net income of $356 million or $2.55 per diluted share [2][6] - Returns on average assets were 1.70%, and returns on average common equity were 16.0% for the year, showcasing strong financial performance [3][6] - The book value per share increased by 15.9%, indicating robust growth metrics [3] Shareholder Returns - East West Bancorp increased its dividend by 33%, which may attract more investors and reward existing shareholders [4][6] Market Position - The stock has a 52-week trading range between $68.27 and $119.73, with a market capitalization of approximately $15.32 billion and a trading volume of 2,010,527 shares [5]

Core Insights - East West Bancorp, Inc. (EWBC) reported fourth-quarter 2025 adjusted earnings per share (EPS) of $2.52, exceeding the Zacks Consensus Estimate of $2.48, and reflecting a 21.2% increase year-over-year [1][10] Financial Performance - The increase in net interest income (NII) and non-interest income, along with lower provisions, contributed to the positive earnings performance, although higher non-interest expenses negatively impacted the results [2][10] - Quarterly net revenues reached $758.3 million, a 12.2% year-over-year increase, surpassing the Zacks Consensus Estimate of $748.4 million [4] - For the full year 2025, net revenues totaled $2.93 billion, also up 12.2% year-over-year, beating the Zacks Consensus Estimate of $2.92 billion [4] Income and Expenses - Quarterly NII was $657.8 million, an 11.9% increase year-over-year, with the net interest margin (NIM) expanding by 17 basis points to 3.41% [5] - Total non-interest income was $100.4 million, up 13.9% year-over-year, driven by increases in most components except for a few specific areas [6] - Non-interest expenses totaled $261.3 million, a 4.5% increase from the prior-year quarter, with the efficiency ratio improving to 34.46% from 36.99% [7] Loan and Deposit Growth - As of December 31, 2025, net loans held for investment (HFI) were $56.1 billion, reflecting a 2% sequential rise, while total deposits increased by 0.7% to $67.1 billion [8] Credit Quality - Annualized quarterly net charge-offs were 0.08% of average loans HFI, down 40 basis points year-over-year, with provisions for credit losses decreasing by 57.1% to $30 million [9] Capital and Profitability Ratios - The common equity Tier 1 capital ratio improved to 15.10% from 14.27% year-over-year, and the total risk-based capital ratio rose to 16.42% from 15.48% [12] - Return on average assets was 1.77%, up from 1.55%, and return on average tangible equity increased to 17.03% from 16.07% [12] Share Repurchase and Dividend - In the reported quarter, the company repurchased 10,000 shares for $1 million, with $215 million remaining available for repurchase as of December 31, 2025 [13] - The board declared a common stock dividend of 80 cents per share, a 33% increase from the previous payout, to be paid on February 17 [14] Overall Outlook - The company is positioned for organic growth with improvements in loans and solid deposit balances, although rising expenses and mixed asset quality may pose challenges [15]

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Core Insights - East West Bancorp reported a record-breaking year in 2025, achieving new highs in revenue, net interest income, fees, non-interest income, earnings per share, loans, and deposits, with expectations for continued growth in 2026 despite economic uncertainties [5][4][7] Lending and Deposit Growth - End-of-period loans grew by 6% year over year, with average loans increasing by 4%, primarily driven by commercial and industrial (C&I) growth, which is expected to continue leading lending growth into 2026 [1][7] - The bank's deposit growth was prioritized through a business checking campaign, resulting in a 6% year-over-year increase in end-of-period deposits, with non-interest-bearing deposits and time deposits showing traction [2][7] Dividend and Shareholder Metrics - The board approved a quarterly dividend increase of $0.20 to $0.80 per share, representing a 33% increase, payable on February 17 to stockholders of record on February 2 [3][4] Financial Performance and Projections - The bank's core deposit growth supported loan growth and improved liquidity, with management guiding for loan growth of 5-7% in 2026, led by C&I and residential mortgages, alongside net interest income growth of 5-7% [2][11][7] - Fourth-quarter net interest income was reported at $658 million, benefiting from balance sheet growth and favorable deposit mix shifts, with a reduction in deposit costs [9][10] Fee Income and Expense Management - Fee income grew by 12% in 2025, driven by strong performance in wealth management, derivatives, foreign exchange, and lending fees, with aspirations to grow fee income faster than balance sheet growth in 2026 [12][13] - Total operating non-interest expense rose by 7.5% in 2025, with expectations for a 7-9% increase in 2026 due to headcount additions and IT-related expenditures [13] Asset Quality and Capital Position - The bank maintained strong asset quality, with net charge-offs of 8 basis points in Q4 and a provision for credit losses of $30 million, while projecting net charge-offs of 20-30 basis points for 2026 [6][15] - Regulatory capital ratios remain robust, with a Common Equity Tier 1 ratio of 15.1%, supporting the bank's client service model and resilience amid potential volatility [16] Hedging and Securities Strategy - Cash hedge headwinds narrowed significantly, with expectations for hedges to become tailwinds in 2026 as rate cuts continue, and a shift towards fixed-rate purchases in securities based on relative value [17]