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Key Takeaways EWBC's earnings are forecast to grow 7.4% in 2026, backed by solid liquidity and loan demand.VLY earnings are expected to jump 28.1% in 2026, aided by margin expansion and fee income efforts.FNB earnings are set to rise 14.2% in 2026, supported by new branches and inorganic growth moves.This year brought a lot of twists and turns for investors. It began on an optimistic note as the new President, Donald Trump, was projected to be business-friendly. Then came the Liberation Day tariff spectacle ...

Core Insights - The article discusses the performance of East West Bancorp (EWBC) stock, which was previously recommended as a buy when trading at $88 per share in March 2025, and highlights its subsequent performance over nine months [1]. Company Analysis - East West Bancorp's stock performance is noted, with a specific reference to its trading price and the analyst's previous recommendation [1]. Analyst Background - The author has a background in Business Administration and has completed CFA level 1, indicating a solid foundation in financial analysis [1]. - The author emphasizes a preference for fundamental analysis over technical analysis, focusing on actual company performance rather than stock price movements [1].

2025 is shaping up to be a solid year for California's East West Bancorp ( EWBC ). Like many banks, balance sheet repricing dynamics have been a nice tailwind for the firm, while East West has delivered strong volume growth as well. All told, that'sI like to take a long term, buy-and-hold approach to investing, with a bias toward stocks that can sustainably post high quality earnings. Mostly found in the dividend and income section. Blog about various US/Canadian stocks at 'The Compound Investor', and predo ...

Core Viewpoint - 2025 is expected to be a strong year for East West Bancorp (EWBC), driven by favorable balance sheet repricing dynamics and robust volume growth [1] Group 1: Company Performance - East West Bancorp has experienced strong volume growth alongside positive balance sheet repricing, contributing to its overall performance [1] Group 2: Investment Strategy - The investment approach emphasizes a long-term, buy-and-hold strategy, focusing on stocks that can consistently deliver high-quality earnings, particularly in the dividend and income sectors [1]

Core Viewpoint - East West Bancorp (EWBC) shares have shown a 1.2% increase over the past four weeks, closing at $99.52, with a potential upside of 25.4% based on Wall Street analysts' mean price target of $124.81 [1] Price Targets and Analyst Estimates - The mean estimate consists of 16 short-term price targets with a standard deviation of $9.8, indicating variability among analysts; the lowest estimate is $106.00 (6.5% increase), while the highest is $145.00 (45.7% increase) [2] - Analysts' price targets can be misleading, as empirical research suggests they rarely indicate actual stock price movements, and analysts often set overly optimistic targets due to business incentives [7][8] Earnings Estimates and Analyst Agreement - Analysts are optimistic about EWBC's earnings prospects, as indicated by a positive trend in earnings estimate revisions; the Zacks Consensus Estimate for the current year has increased by 3.3% with six upward revisions and no negative revisions [11][12] - EWBC holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimates, suggesting a strong potential upside [13] Conclusion on Price Movement - While consensus price targets may not be reliable for predicting the extent of gains, the direction indicated by these targets appears to be a useful guide for potential price movement [14]

Financial Performance - The company's net income for Q3 2025 was $368 million, an increase of $69 million or 23% year-over-year, while net income for the first nine months was $969 million, up $96 million or 11% from the prior year [225]. - Basic and diluted earnings per share for Q3 2025 increased 24% to $2.68 and $2.65, respectively, while for the first nine months, both increased 12% to $7.03 and $6.97 [227]. - Noninterest income for Q3 2025 was $101 million, a 19% increase from Q3 2024, driven by higher customer derivative income, other income, and wealth management fees [251]. - For the first nine months of 2025, noninterest income reached $279 million, up 13% year-over-year, primarily due to increased wealth management fees, foreign exchange income, and lending fees [251]. - Income before income taxes for Q3 2025 was $465 million, a 19% increase from Q3 2024, with an income tax expense of $97 million and an effective tax rate of 20.8% [264]. Asset and Liability Management - Total assets reached $79.7 billion as of September 30, 2025, an increase of $3.7 billion from December 31, 2024, driven by a $2.0 billion or 4% increase in net loans and a $1.9 billion or 17% increase in available-for-sale debt securities [227]. - Total deposits were $66.6 billion as of September 30, 2025, an increase of $3.4 billion or 5% from December 31, 2024 [227]. - Stockholders' equity was $8.6 billion as of September 30, 2025, up $860 million or 11% from December 31, 2024, with book value per share increasing to $62.39, a 12% rise [227]. - The loan-to-deposit ratio was 84% as of September 30, 2025, compared to 85% as of December 31, 2024, with total deposits rising to $66.6 billion [348]. - The Company maintained $3.0 billion in FHLB advances as of September 30, 2025, down from $3.5 billion as of December 31, 2024 [350]. Interest Income and Margin - Net interest income before provision for credit losses for Q3 2025 was $678 million, an increase of $105 million or 18% from Q3 2024, and $1.9 billion for the first nine months, a $204 million or 12% increase year-over-year [227]. - The net interest margin for Q3 2025 was 3.53%, up 29 basis points year-over-year, and 3.41% for the first nine months, an increase of 13 basis points compared to the same period in 2024 [227]. - The interest rate spread increased to 2.54% for Q3 2025 compared to 2.04% for Q3 2024 [242]. - The average yield on total interest-earning assets decreased to 5.80% in 2025 from 6.08% in 2024, a decline of 0.28 percentage points [245]. - The average C&I loan yield for Q3 2025 was 7.71%, up from 7.02% in Q2 2025 and 7.93% in Q3 2024 [395]. Regulatory and Compliance - The Company is required to report Scope 1 and 2 greenhouse gas emissions starting in 2026 and Scope 3 emissions starting in 2027 under California Senate Bill No. 253 [215]. - The Bank completed and submitted its resolution plan on October 1, 2025, as required for institutions with total assets between $50 billion and $100 billion [216]. - The Company received an "Outstanding" rating in its most recent performance evaluation under the Community Reinvestment Act framework prior to the October 2023 final rule [218]. - The Company's Common Equity Tier 1 (CET1) capital ratio was 14.8% as of September 30, 2025, exceeding the minimum requirement of 4.5% [326]. - Total capital ratio stood at 16.2% as of September 30, 2025, above the regulatory requirement of 8.0% [326]. Credit Quality and Losses - The allowance for credit losses (ALLL) increased to $841.910 million as of September 30, 2025, up from $741.578 million as of December 31, 2024 [344]. - Nonaccrual loans decreased by $2 million or 1% to $156.934 million from $159.018 million as of December 31, 2024, with 20% of nonaccrual loans being less than 90 days delinquent [340]. - Criticized loans increased by $18 million or 2% to $1.2 billion during the nine months ended September 30, 2025 [337]. - Net charge-offs for the three months ended September 30, 2025, were $18.140 million, a decrease from $29.363 million for the same period in 2024 [344]. - The total nonperforming assets increased to $200.738 million, a 3% increase from $194.095 million as of December 31, 2024 [338]. Segment Performance - The company operates through three segments: Consumer and Business Banking, Commercial Banking, and Treasury and Other, focusing on various customer types and financial products [265]. - Consumer and Business Banking segment net income decreased by $18 million or 13% year-over-year to $123 million for Q3 2025, primarily due to a $15 million decrease in net interest income and an $11 million increase in provision for credit losses [269]. - Commercial Banking segment net income decreased by $7 million or 5% year-over-year to $136 million for Q3 2025, driven by a $23 million decrease in net interest income [274]. - Treasury and Other segment net income increased significantly to $108.78 million for Q3 2025, compared to $14.42 million in Q3 2024, driven by a $143 million increase in net interest income [277]. - Noninterest income in the Consumer and Business Banking segment increased by $11 million or 14% year-over-year to $91.21 million for the first nine months of 2025 [270]. Market and Economic Conditions - The Federal Reserve resumed lowering interest rates in September 2025, indicating a cautious approach to further cuts due to economic uncertainty [213]. - The One Big Beautiful Bill Act, signed into law in July 2025, introduces significant tax changes that the Company is currently evaluating [219]. - The GENIUS Act, enacted in July 2025, establishes a federal licensing framework for payment stablecoins, potentially increasing competition for banks [220]. - California Senate Bill No. 132, effective January 1, 2025, requires banks to adopt a single sales factor for income apportionment, changing the previous three-factor formula [221]. - The Company believes it has adequate liquidity resources to meet operational needs and is not aware of any events likely to materially affect its liquidity [359].

Core Insights - East West Bancorp (EWBC) is a financial services company focused on the Asian-American community, operating primarily in the U.S. market [1] - Truist Financial has set a price target of $116 for EWBC, indicating a potential increase of approximately 13.49% from its current stock price [2][6] - Institutional investors, including Sequoia Financial Advisors LLC and Xponance Inc., have shown growing interest in EWBC, signaling confidence in its potential growth [3][4][6] Stock Performance - EWBC's current stock price is $102.09, reflecting a slight decrease of 0.26% or $0.27 [5][6] - The stock has fluctuated between $101.11 and $102.57 during the trading day, with a one-year high of $113.95 and a low of $68.27 [5] - The company's market capitalization is approximately $14.07 billion, with a trading volume of 213,700 shares today [5][6]

Core Insights - East West Bancorp, Inc. (EWBC) reported better-than-expected quarterly results, with a 1.8% increase in shares during after-market trading [1] - The third-quarter 2025 adjusted earnings per share (EPS) of $2.62 surpassed the Zacks Consensus Estimate of $2.35, marking a 25.4% increase from the prior-year quarter [1][9] Financial Performance - Quarterly net revenues reached $778 million, an 18.4% year-over-year increase, exceeding the Zacks Consensus Estimate of $723.8 million [3] - Net interest income (NII) was $677.5 million, up 18.3% year over year, with a net interest margin (NIM) expansion of 29 basis points to 3.53% [3] - Total non-interest income increased to $100.5 million, a 19.1% rise, driven by growth in most components [4] - Non-interest expenses totaled $276.9 million, up 22.6% from the prior-year quarter, leading to an efficiency ratio of 35.51%, indicating a decline in profitability [5] Loan and Deposit Growth - As of September 30, 2025, net loans held for investment (HFI) were $55 billion, reflecting a 1.4% sequential rise [6] - Total deposits increased by 2.4% to $66.6 billion [6] Credit Quality - Annualized quarterly net charge-offs were 0.13% of average loans HFI, down 9 basis points from the prior-year quarter [7] - The provision for credit losses was $36 million, a 14.3% decrease from the prior-year quarter [7] - Non-performing assets amounted to $200.7 million, up 2.7% year over year [7] Capital and Profitability Ratios - The common equity Tier 1 capital ratio improved to 14.83 from 14.09 a year ago [8] - The total risk-based capital ratio increased to 16.15 from 15.39 year over year [8] - Return on average assets rose to 1.84% from 1.62% as of September 30, 2024 [8] - Return on average tangible equity improved to 18.48% from 17.08% [8] Share Repurchase Activity - In the reported quarter, East West Bancorp repurchased approximately 258 thousand shares for $25 million, with $216 million remaining available for repurchase as of September 30, 2025 [10] Overall Outlook - The company is positioned for organic growth due to improved loan performance, solid deposit balances, and diversified fee income streams, despite rising expenses and mixed asset quality [11]

Core Insights - East West Bancorp (EWBC) reported revenue of $778.05 million for the quarter ended September 2025, marking an 18.3% increase year-over-year and exceeding the Zacks Consensus Estimate of $723.78 million by 7.5% [1] - The company's EPS for the quarter was $2.62, up from $2.09 in the same quarter last year, and also surpassed the consensus EPS estimate of $2.35 by 11.49% [1] Financial Performance Metrics - Annualized quarterly net charge-offs to average loans HFI were 0.1%, better than the five-analyst average estimate of 0.2% [4] - Net interest margin stood at 3.5%, slightly above the five-analyst average estimate of 3.4% [4] - The efficiency ratio was reported at 35.6%, compared to the four-analyst average estimate of 36% [4] - Leverage ratio was 10.7%, matching the average estimate from four analysts [4] - Total capital ratio was 16.2%, exceeding the three-analyst average estimate of 15.8% [4] - Average balance of total interest-earning assets was $76.21 billion, higher than the $75.34 billion estimated by three analysts [4] - Adjusted efficiency ratio was 33.8%, compared to the 34.3% average estimate based on three analysts [4] - Tier 1 capital ratio was 14.8%, above the three-analyst average estimate of 14.6% [4] - Total nonaccrual loans were $156.93 million, slightly below the $159.75 million average estimate based on two analysts [4] - Total nonperforming assets were $200.74 million, compared to the $197.96 million average estimate based on two analysts [4] - Total noninterest income was $100.52 million, exceeding the five-analyst average estimate of $90.04 million [4] - Net interest income was reported at $677.53 million, surpassing the five-analyst average estimate of $633.62 million [4] Stock Performance - Shares of East West Bancorp have returned -7.9% over the past month, while the Zacks S&P 500 composite has changed by +1.2% [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]