East West Bancorp(EWBC) - 2025 Q2 - Quarterly Results

Executive Summary & Financial Highlights This section provides an overview of East West Bancorp's strong Q2 2025 financial performance, highlighting record revenue, net interest income, and key financial metrics Second Quarter 2025 Overview East West Bancorp reported strong financial results for Q2 2025, achieving record quarterly revenue and net interest income, with net income reaching $310 million, or $2.24 per diluted share, alongside record growth in total loans and deposits and resilient credit trends - East West Bancorp achieved record quarterly revenue and net interest income in Q2 2025[1] - Total loans and deposits reached new records of $55.0 billion and $65.0 billion, respectively, as of June 30, 2025[1] - Credit trends were resilient, with criticized loans and nonperforming assets declining quarter-over-quarter, and the tangible common equity ratio grew to 10%[1] Q2 2025 Key Financial Metrics | Metric | Value ($) | | :----------------------------------- | :---------- | | Net Income | $310 million | | Diluted EPS | $2.24 | | Return on Average Common Equity | 15.4% | | Total Stockholders' Equity to Assets Ratio | 10.5% | | Book Value per Share (QoQ growth) | $1.97 | | Tangible Book Value per Share (QoQ growth) | $1.97 | Key Financial Highlights (Table) The financial highlights table provides a comparative overview of key performance indicators for the three months ended June 30, 2025, versus March 31, 2025, showing quarter-over-quarter changes in dollar amounts and percentages Financial Highlights (QoQ Change) | ($ in millions, except per share data) | June 30, 2025 | March 31, 2025 | $ Change | % Change | | :----------------------------------- | :------------ | :------------- | :------- | :------- | | Total Revenue | $703 | $692 | $11 | 2 % | | Net Income | 310 | 290 | 20 | 7 | | Diluted Earnings per Share | $2.24 | $2.08 | $0.16 | 8 | | Book Value per Share | $59.51 | $57.54 | $1.97 | 3 | | Tangible Book Value per Share | $56.10 | $54.13 | $1.97 | 4 % | | Return on Average Assets | 1.62% | 1.56% | — | 6 bps | | Return on Average Common Equity | 15.42% | 14.96% | — | 46 bps | | Total Assets | $78,158 | $76,165 | $1,993 | 3 % | Balance Sheet Analysis This section analyzes East West Bancorp's balance sheet, detailing robust growth in assets, loans, and deposits, alongside sustained capital strength Assets, Loans, and Deposits East West Bancorp's balance sheet demonstrated robust growth in Q2 2025, with total assets increasing by $2.0 billion quarter-over-quarter and $5.7 billion year-over-year, as both total loans and deposits reached new record highs driven by broad-based growth Balance Sheet Growth (QoQ & YoY) | Metric | June 30, 2025 | March 31, 2025 | Qtr-o-Qtr Change | June 30, 2024 | Yr-o-Yr Change | | :-------------------- | :------------ | :------------- | :--------------- | :------------ | :--------------- | | Total Assets | $78.2 billion | $76.2 billion | +$2.0 billion (3%) | $72.5 billion | +$5.7 billion (8%) | | Total Loans | $55.0 billion | $54.3 billion | +$0.7 billion | $52.8 billion | +$2.2 billion (4%) | | Total Deposits | $65.0 billion | $63.1 billion | +$2.0 billion | $60.0 billion | +$5.0 billion (8%) | - Average interest-earning assets increased by $1.2 billion (2%) quarter-over-quarter, primarily due to a $0.9 billion increase in average total loans and a $0.7 billion increase in average AFS debt securities[3] - Noninterest-bearing deposits constituted 24% of total deposits as of June 30, 2025[3] Capital Strength East West maintained strong capital levels, exceeding regulatory requirements for well-capitalized institutions and regional bank averages, with stockholders' equity growing 3% quarter-over-quarter and key capital ratios improving Capital Metrics (QoQ & YoY) | EWBC Capital | June 30, 2025 | March 31, 2025 | June 30, 2024 | | :-------------------------------- | :------------ | :------------- | :------------ | | Total capital ratio | 15.82% | 15.63% | 15.05% | | CET1 capital ratio | 14.51% | 14.32% | 13.74% | | Tier 1 capital ratio | 14.51% | 14.32% | 13.74% | | Leverage ratio | 10.60% | 10.46% | 10.36% | | Total stockholders' equity to assets ratio | 10.49% | 10.41% | 9.96% | | Tangible common equity ratio | 9.95% | 9.85% | 9.37% | - Stockholders' equity increased to $8.2 billion, up 3% quarter-over-quarter[3] - Book value per share was $59.51, up $1.97 (3%) quarter-over-quarter, and tangible book value per share was $56.10, up $1.97 (4%) quarter-over-quarter[3] Condensed Consolidated Balance Sheet (Table 1) Table 1 presents the condensed consolidated balance sheet, detailing assets, liabilities, and stockholders' equity as of June 30, 2025, March 31, 2025, and June 30, 2024, along with quarter-over-quarter and year-over-year percentage changes Condensed Consolidated Balance Sheet Highlights | Metric | June 30, 2025 | March 31, 2025 | Qtr-o-Qtr % Change | June 30, 2024 | Yr-o-Yr % Change | | :----------------------------------- | :------------ | :------------- | :----------------- | :------------ | :----------------- | | Total assets | $78,158,067 | $76,165,013 | 2.6 % | $72,468,272 | 7.9 % | | Loans held-for-investment ("HFI") | 54,200,768 | 53,517,878 | 1.3 | 52,084,115 | 4.1 | | Deposits | 65,029,493 | 63,052,105 | 3.1 | 59,999,785 | 8.4 | | Total liabilities | 69,956,300 | 68,235,548 | 2.5 | 65,253,158 | 7.2 | | Stockholders' equity | 8,201,767 | 7,929,465 | 3.4 | 7,215,114 | 13.7 | | Book value per share | $59.51 | $57.54 | 3.4 % | $52.06 | 14.3 % | | Tangible book value per share | $56.10 | $54.13 | 3.6 | $48.65 | 15.3 | Total Loans and Deposits Detail (Table 2) Table 2 provides a detailed breakdown of total loans and deposits by category and segment, illustrating the composition and growth trends across different loan types and deposit products/regions Loans HFI by Category (QoQ & YoY) | Loans HFI | June 30, 2025 | March 31, 2025 | Qtr-o-Qtr % Change | June 30, 2024 | Yr-o-Yr % Change | | :-------------------------- | :------------ | :------------- | :----------------- | :------------ | :----------------- | | Commercial and industrial ("C&I") | $17,822,881 | $17,460,744 | 2.1 % | $16,875,009 | 5.6 % | | Total CRE | 20,667,403 | 20,529,960 | 0.7 | 20,327,598 | 1.7 | | Total residential mortgage | 16,420,962 | 16,211,399 | 1.3 | 15,509,148 | 5.9 | | Total loans HFI | 54,961,184 | 54,252,734 | 1.3 | 52,767,909 | 4.2 | Deposits by Product (QoQ & YoY) | Deposits by product | June 30, 2025 | March 31, 2025 | Qtr-o-Qtr % Change | June 30, 2024 | Yr-o-Yr % Change | | :-------------------------- | :------------ | :------------- | :----------------- | :------------ | :----------------- | | Noninterest-bearing demand | $15,470,239 | $15,169,775 | 2.0 % | $14,922,741 | 3.7 % | | Interest-bearing checking | 8,143,893 | 7,591,847 | 7.3 | 7,758,081 | 5.0 | | Money market | 15,420,318 | 14,885,732 | 3.6 | 13,775,908 | 11.9 | | Time deposits | 24,311,340 | 23,664,707 | 2.7 | 21,770,687 | 11.7 | | Total deposits | $65,029,493 | $63,052,105 | 3.1 % | $59,999,785 | 8.4 % | Deposits by Segment/Region (QoQ & YoY) | Deposits by segment/region | June 30, 2025 | March 31, 2025 | Qtr-o-Qtr % Change | June 30, 2024 | Yr-o-Yr % Change | | :------------------------- | :------------ | :------------- | :----------------- | :------------ | :----------------- | | Consumer and Business Banking - U.S. | $33,407,064 | $33,023,739 | 1.2 % | $31,108,589 | 7.4 % | | Commercial Banking - U.S. | 23,595,005 | 22,571,582 | 4.5 | 23,064,569 | 2.3 | | International Branches | 3,579,005 | 3,524,223 | 1.6 | 3,376,971 | 6.0 | | Treasury and Other - U.S. | 4,448,419 | 3,932,561 | 13.1 | 2,449,656 | 81.6 | | Total deposits | $65,029,493 | $63,052,105 | 3.1 % | $59,999,785 | 8.4 % | Operating Results This section reviews East West Bancorp's Q2 2025 operating results, including record revenue, net interest income, noninterest income and expense trends, and tax-related items Second Quarter Earnings Overview East West reported record revenue of $703 million in Q2 2025, a 2% increase quarter-over-quarter, primarily driven by record net interest income, with pre-tax, pre-provision income also growing by 2% to $449 million, contributing to a net income of $310 million Q2 2025 Earnings Overview | Metric | Q2 2025 | Q1 2025 | Qtr-o-Qtr Change | | :-------------------------- | :------ | :------ | :--------------- | | Total Revenue | $703 million | $692 million | +$11 million (2%) | | Pre-tax, Pre-provision Income | $449 million | $441 million | +$8 million (2%) | | Net Income | $310 million | $290 million | +$20 million (7%) | | Diluted EPS | $2.24 | $2.08 | +$0.16 (8%) | Net Interest Income and Net Interest Margin Net interest income reached a record $617 million in Q2 2025, increasing by 3% quarter-over-quarter, while the net interest margin remained stable at 3.35% Net Interest Income and Margin | Metric | Q2 2025 | Q1 2025 | Qtr-o-Qtr Change | | :-------------------- | :------ | :------ | :--------------- | | Net Interest Income | $617 million | $600 million | +$17 million (3%) | | Net Interest Margin | 3.35% | 3.35% | Unchanged | | Average Loan Yield | 6.40% | 6.39% | +1 bps | | Average Cost of Funds | 2.63% | 2.64% | -1 bps | | Average Cost of Interest-Bearing Deposits | 3.31% | 3.34% | -3 bps | Noninterest Income Total noninterest income was $86 million in Q2 2025, with fee income at $81 million, as other income increased significantly while foreign exchange, customer derivative, and wealth management income decreased from prior quarter's record levels Noninterest Income Breakdown (QoQ) | Noninterest Income Category | Q2 2025 | Q1 2025 | Qtr-o-Qtr Change | | :-------------------------------- | :------ | :------ | :--------------- | | Total Noninterest Income | $86 million | $92 million | -$6 million (-6.4%) | | Total Fee Income | $81 million | $88 million | -$7 million (-8.9%) | | Other Income | $5.662 million | $2.819 million | +$2.843 million (100.9%) | | Foreign Exchange Income | $13.715 million | $15.837 million | -$2.122 million (-13.4%) | | Customer Derivative Income | $3.645 million | $5.539 million | -$1.894 million (-34.2%) | | Wealth Management Fees | $10.725 million | $13.679 million | -$2.954 million (-21.6%) | - Other income increased primarily due to greater returns from bank-owned life insurance holdings[11] - Lending and loan servicing fees were down $1 million, reflecting lower syndication activity[11] Noninterest Expense Total noninterest expense was $256 million in Q2 2025, including $26 million for amortization of tax credit and CRA investments, while operating noninterest expense decreased by $7 million quarter-over-quarter Noninterest Expense Breakdown (QoQ) | Noninterest Expense Category | Q2 2025 | Q1 2025 | Qtr-o-Qtr Change | | :----------------------------------- | :------ | :------ | :--------------- | | Total Noninterest Expense | $256 million | $252 million | +$4 million (1.5%) | | Total Operating Noninterest Expense | $230 million | $236 million | -$7 million (-2.8%) | | Compensation and Employee Benefits | $145 million | $146 million | -$2 million (-1.1%) | | Deposit Insurance Premiums and Regulatory Assessments | $9 million | $10 million | -$1 million (-12.1%) | | Other Operating Expense | $37 million | $42 million | -$5 million (-11.6%) | | Amortization of Tax Credit and CRA Investments | $26 million | $16 million | +$10 million (66.7%) | - Compensation and employee benefits decreased primarily due to higher seasonal costs in the first quarter[11] - Deposit insurance premiums decreased due to a $1 million reversal of FDIC Special Assessment-related expense[11] - The efficiency ratio remained stable at 36.4% in Q2 2025[11] Tax Related Items Q2 2025 income tax expense was $92 million, with an effective tax rate of 22.9%, including a one-time $6 million incremental tax expense from the California single sales factor apportionment method (CA SSF), resulting in an adjusted effective tax rate of 21.3% Tax Expense and Effective Tax Rate (QoQ) | Metric | Q2 2025 | Q1 2025 | Qtr-o-Qtr Change | | :-------------------------- | :------ | :------ | :--------------- | | Income Tax Expense | $92 million | $101 million | -$9 million (-8.8%) | | Effective Tax Rate | 22.9% | 25.8% | -292 bps | | Adjusted Income Tax Expense (excl. CA SSF) | $86 million | $101 million | -$15 million | | Adjusted Effective Tax Rate (excl. CA SSF) | 21.3% | 25.8% | -451 bps | - The decrease in adjusted effective tax rate reflects the timing of certain renewable energy tax credit investments that closed in the second quarter[10] Condensed Consolidated Statement of Income (QoQ - Table 3) Table 3 presents the condensed consolidated statement of income for the three months ended June 30, 2025, March 31, 2025, and June 30, 2024, highlighting quarter-over-quarter and year-over-year changes in key income and expense categories Condensed Consolidated Statement of Income (QoQ) | Metric | June 30, 2025 | March 31, 2025 | Qtr-o-Qtr % Change | | :----------------------------------- | :------------ | :------------- | :----------------- | | Interest and dividend income | $1,058,999 | $1,031,802 | 2.6% | | Interest expense | 441,925 | 431,601 | 2.4 | | Net interest income before provision for credit losses | 617,074 | 600,201 | 2.8 | | Provision for credit losses | 45,000 | 49,000 | (8.2) | | Total noninterest income | 86,178 | 92,102 | (6.4)% | | Total noninterest expense | 256,020 | 252,148 | 1.5 | | Income before income taxes | 402,232 | 391,155 | 2.8 | | Net income | $310,253 | $290,270 | 6.9% | | Diluted EPS | $2.24 | $2.08 | 7.3 | Condensed Consolidated Statement of Income (YoY - Table 4) Table 4 provides the condensed consolidated statement of income for the six months ended June 30, 2025, compared to June 30, 2024, detailing year-over-year changes in revenue, expenses, and net income Condensed Consolidated Statement of Income (YoY) | Metric | June 30, 2025 (Six Months) | June 30, 2024 (Six Months) | Yr-o-Yr % Change | | :----------------------------------- | :------------------------- | :------------------------- | :----------------- | | Interest and dividend income | $2,090,801 | $2,058,031 | 1.6% | | Interest expense | 873,526 | 939,663 | (7.0) | | Net interest income before provision for credit losses | 1,217,275 | 1,118,368 | 8.8 | | Provision for credit losses | 94,000 | 62,000 | 51.6 | | Total noninterest income | 178,280 | 162,658 | 9.6% | | Total noninterest expense | 508,168 | 482,306 | 5.4 | | Income before income taxes | 793,387 | 736,720 | 7.7 | | Net income | $600,523 | $573,305 | 4.7% | | Diluted EPS | $4.32 | $4.09 | 5.5 | Asset Quality This section assesses East West Bancorp's asset quality, focusing on credit quality trends, allowance for loan losses, and off-balance sheet credit exposures Credit Quality Overview East West's loan portfolio maintained resilient credit quality as of June 30, 2025, with criticized loans and nonperforming assets both decreasing quarter-over-quarter, while the allowance for loan losses increased due to changes in the economic outlook Credit Quality Metrics (QoQ) | Metric | June 30, 2025 | March 31, 2025 | Qtr-o-Qtr Change | | :----------------------------------- | :------------ | :------------- | :--------------- | | Criticized Loans Ratio (of loans HFI) | 2.15% | 2.29% | -14 bps | | Criticized Loans | $1.2 billion | $1.245 billion | -$62 million | | Nonperforming Assets | $172 million | $182 million | -$11 million | | Nonperforming Assets Ratio (of total assets) | 0.22% | 0.24% | -2 bps | | Net Charge-offs (annualized of average loans HFI) | 0.11% | 0.12% | -0.01% | | Allowance for Loan Losses | $760 million | $735 million | +$25 million | | Allowance for Loan Losses (of loans HFI) | 1.38% | 1.35% | +3 bps | | Provision for Credit Losses | $45 million | $49 million | -$4 million | - The decrease in criticized loans primarily reflects decreases related to C&I, multifamily, and residential mortgage loans[16] - Special mention loans ratio decreased 10 basis points to 0.81% of loans HFI, and classified loans ratio decreased 4 basis points to 1.34%[16] Allowance for Loan Losses & Off-Balance Sheet Credit Exposures (Table 10) Table 10 details the changes in the allowance for loan losses and allowance for unfunded credit commitments by loan category for the three and six months ended June 30, 2025, March 31, 2025, and June 30, 2024, showing provisions, charge-offs, and recoveries Allowance for Loan Losses Activity (Q2 2025) | Loan Category | ALLL, March 31, 2025 | Provision for Credit Losses | Net (Charge-offs) Recoveries | ALLL, June 30, 2025 | | :-------------------- | :------------------- | :-------------------------- | :--------------------------- | :------------------ | | C&I | $421,288 | $27,595 | ($6,647) | $442,291 | | CRE | $212,899 | $8,007 | ($8,288) | $212,618 | | Multifamily Residential | $32,324 | ($3,274) | $23 | $29,073 | | Construction and Land | $15,199 | $2,654 | $3 | $17,856 | | Single Family Residential | $46,929 | $5,064 | $4 | $51,997 | | HELOCs | $4,879 | $369 | $8 | $5,256 | | Other Consumer | $1,338 | ($259) | $246 | $1,325 | | Total | $734,856 | $40,156 | ($14,651) | $760,416 | Allowance for Unfunded Credit Commitments (QoQ) | Metric | June 30, 2025 | March 31, 2025 | June 30, 2024 | | :------------------------------------------------ | :------------ | :------------- | :------------ | | Allowance for unfunded credit commitments, end of period | $45,307 | $40,464 | $38,783 | | Provision for credit losses on unfunded credit commitments | $4,844 | $938 | $238 | Criticized Loans, Nonperforming Assets, Credit Quality Ratios (Table 11) Table 11 provides a detailed breakdown of criticized loans, nonperforming assets, and various credit quality ratios, along with the composition of the allowance for loan losses by portfolio, as of June 30, 2025, March 31, 2025, and June 30, 2024 Criticized Loans and Nonperforming Assets | Metric | June 30, 2025 | March 31, 2025 | June 30, 2024 | | :-------------------- | :------------ | :------------- | :------------ | | Special mention loans | $446,665 | $494,444 | $435,679 | | Classified loans | 736,228 | 750,570 | 644,564 | | Total criticized loans | $1,182,893 | $1,245,014 | $1,080,243 | | Total nonperforming assets | $171,678 | $182,203 | $196,282 | Credit Quality Ratios | Ratio | June 30, 2025 | March 31, 2025 | June 30, 2024 | | :---------------------------------------- | :------------ | :------------- | :------------ | | Annualized quarterly net charge-offs to average loans HFI | 0.11 % | 0.12 % | 0.18 % | | Criticized loans to loans HFI | 2.15 % | 2.29 % | 2.05 % | | Nonperforming assets to total assets | 0.22 % | 0.24 % | 0.27 % | | Allowance for loan losses to loans HFI | 1.38 % | 1.35 % | 1.30 % | Composition of ALLL by Portfolio (June 30, 2025) | Loan Category | ALLL | ALLL/Loans HFI | | :-------------------------- | :------- | :------------- | | C&I | $442,291 | 2.48 % | | Total CRE | $259,547 | 1.26 | | Residential mortgage & consumer | $58,578 | 0.36 | | Total loans | $760,416 | 1.38 % | Capital Actions & Shareholder Returns This section outlines East West Bancorp's capital management strategies, including dividend declarations and share repurchase activities, demonstrating commitment to shareholder returns Dividend Payout and Capital Actions East West's Board of Directors declared a third-quarter 2025 common stock cash dividend of $0.60 per share, and the company repurchased approximately 26 thousand shares for $2 million during Q2 2025, with $241 million remaining under its share repurchase authorization - Third quarter 2025 common stock cash dividend declared at $0.60 per share, payable on August 15, 2025, to shareholders of record as of August 4, 2025[14] - East West repurchased approximately 26 thousand shares of common stock for $2 million during Q2 2025[14] - $241 million of the share repurchase authorization remains available[14] Selected Financial Data & Ratios This section presents selected financial data and ratios, including average balances, yields, rates, and key performance indicators, for comprehensive financial analysis Selected Average Balances (Table 5) Table 5 presents selected average balances for loans, interest-earning assets, total assets, and deposits for the three and six months ended June 30, 2025, and comparative periods, illustrating growth trends in average portfolio sizes Selected Average Balances (QoQ & YoY) | Metric | June 30, 2025 (3 Months) | March 31, 2025 (3 Months) | Qtr-o-Qtr % Change | June 30, 2024 (3 Months) | Yr-o-Yr % Change | | :-------------------------- | :----------------------- | :------------------------ | :----------------- | :----------------------- | :----------------- | | Total loans | $54,281,432 | $53,337,711 | 1.8% | $51,918,788 | 4.6% | | Interest-earning assets | $73,903,125 | $72,690,586 | 1.7% | $68,050,050 | 8.6% | | Total assets | $76,862,028 | $75,624,952 | 1.6% | $71,189,200 | 8.0% | | Total deposits | $63,677,832 | $62,637,582 | 1.7% | $58,680,799 | 8.5% | Selected Average Balances (Six Months YoY) | Metric | June 30, 2025 (6 Months) | June 30, 2024 (6 Months) | Yr-o-Yr % Change | | :-------------------------- | :----------------------- | :----------------------- | :----------------- | | Total loans | $53,812,179 | $51,921,814 | 3.6% | | Interest-earning assets | $73,314,428 | $68,086,048 | 7.7% | | Total assets | $76,246,907 | $71,433,798 | 6.7% | | Total deposits | $63,160,581 | $58,061,601 | 8.8% | Quarter-to-Date Average Balances, Yields and Rates (Table 6 & 7) Tables 6 and 7 provide detailed quarter-to-date average balances, interest income/expense, and average yields/rates for interest-earning assets and interest-bearing liabilities, comparing Q2 2025 with Q1 2025 and Q2 2024, respectively, illustrating the dynamics of net interest income and net interest margin Average Yields and Rates (QoQ - Q2 2025 vs Q1 2025) | Metric | June 30, 2025 | March 31, 2025 | | :----------------------------------- | :------------ | :------------- | | Average interest-earning asset yield | 5.75 % | 5.76 % | | Average loan yield | 6.40 % | 6.39 % | | Average cost of interest-bearing deposits | 3.31 % | 3.34 % | | Average cost of funds | 3.39 % | 3.43 % | | Net interest margin | 3.35 % | 3.35 % | Average Yields and Rates (YoY - Q2 2025 vs Q2 2024) | Metric | June 30, 2025 | June 30, 2024 | | :----------------------------------- | :------------ | :------------ | | Average interest-earning asset yield | 5.75 % | 6.11 % | | Average loan yield | 6.40 % | 6.73 % | | Average cost of interest-bearing deposits | 3.31 % | 3.94 % | | Average cost of funds | 3.39 % | 4.07 % | | Net interest margin | 3.35 % | 3.27 % | Year-to-Date Average Balances, Yields and Rates (Table 8) Table 8 presents year-to-date average balances, interest income/expense, and average yields/rates for interest-earning assets and interest-bearing liabilities for the six months ended June 30, 2025, compared to June 30, 2024, providing a broader view of performance trends Year-to-Date Average Yields and Rates (YoY) | Metric | June 30, 2025 (Six Months) | June 30, 2024 (Six Months) | | :----------------------------------- | :------------------------- | :------------------------- | | Average interest-earning asset yield | 5.75 % | 6.08 % | | Average loan yield | 6.39 % | 6.72 % | | Average cost of interest-bearing deposits | 3.33 % | 3.89 % | | Average cost of funds | 3.41 % | 4.00 % | | Net interest margin | 3.35 % | 3.30 % | Selected Ratios (Table 9) Table 9 compiles selected financial ratios, including profitability, interest rate, efficiency, and credit quality ratios, for the three and six months ended June 30, 2025, with comparative periods, offering a comprehensive view of the company's financial health and operational efficiency Selected Ratios (QoQ - Q2 2025 vs Q1 2025) | Ratio | June 30, 2025 | March 31, 2025 | Qtr-o-Qtr Change | | :----------------------------------- | :------------ | :------------- | :--------------- | | Return on average assets | 1.62 % | 1.56 % | 6 bps | | Return on average common equity | 15.42 % | 14.96 % | 46 | | Net interest margin | 3.35 % | 3.35 % | — | | Efficiency ratio | 36.41 % | 36.42 % | (1) | | Effective tax rate | 22.87 % | 25.79 % | (292) | | Loan-to-deposit ratio | 84.54 % | 86.04 % | (150) | Selected Ratios (YoY - Q2 2025 vs Q2 2024) | Ratio | June 30, 2025 | June 30, 2024 | Yr-o-Yr Change | | :----------------------------------- | :------------ | :------------ | :--------------- | | Return on average assets | 1.62 % | 1.63 % | (1) bps | | Return on average common equity | 15.42 % | 16.36 % | (94) | | Net interest margin | 3.35 % | 3.27 % | 8 | | Efficiency ratio | 36.41 % | 37.01 % | (60) | | Effective tax rate | 22.87 % | 20.92 % | 195 | | Loan-to-deposit ratio | 84.54 % | 87.98 % | (344) | Non-GAAP Reconciliations This section provides reconciliations of GAAP to non-GAAP financial measures, including adjusted effective tax rate, net income, fully taxable equivalent (FTE) metrics, and tangible book value Adjusted Effective Tax Rate and Adjusted Net Income (Table 12) Table 12 reconciles GAAP effective tax rate and net income to adjusted non-GAAP measures, primarily by excluding the one-time impact of the California single sales factor apportionment method (CA SSF) and certain FDIC special assessment/DC Solar adjustments, to provide better comparability to prior periods Effective Tax Rate Reconciliation (QoQ & YoY) | Metric | June 30, 2025 | March 31, 2025 | June 30, 2024 | | :-------------------------- | :------------ | :------------- | :------------ | | Effective tax rate | 22.87 % | 25.79 % | 20.92 % | | Adjusted effective tax rate | 21.28 % | 25.79 % | 20.92 % | Adjusted Net Income Reconciliation (QoQ & YoY) | Metric | June 30, 2025 | March 31, 2025 | June 30, 2024 | | :-------------------------- | :------------ | :------------- | :------------ | | Net income | $310,253 | $290,270 | $288,230 | | Adjusted net income | $316,046 | $290,855 | $287,338 | | Adjusted return on average assets | 1.65 % | 1.56 % | 1.62 % | | Adjusted return on average common equity | 15.71 % | 14.99 % | 16.31 % | - The CA SSF adoption on June 30, 2025, resulted in $6 million of additional income tax expense in Q2 2025[58][62] FTE and Pre-tax, Pre-provision Income (Table 13) Table 13 reconciles GAAP net interest income and total revenue to their fully taxable equivalent (FTE) counterparts, and calculates pre-tax, pre-provision income and efficiency ratios (GAAP and FTE), providing a standardized view of core operating performance FTE and Pre-tax, Pre-provision Income (QoQ & YoY) | Metric | June 30, 2025 | March 31, 2025 | June 30, 2024 | | :----------------------------------- | :------------ | :------------- | :------------ | | Net interest income before provision for credit losses | $617,074 | $600,201 | $553,229 | | FTE net interest income before provision for credit losses | $618,677 | $601,347 | $554,733 | | Total revenue | $703,252 | $692,303 | $637,400 | | Total revenue (FTE) | $704,855 | $693,449 | $638,904 | | Pre-tax, pre-provision income | $448,835 | $441,301 | $402,972 | | Efficiency ratio (FTE) | 36.32 % | 36.36 % | 36.93 % | Adjusted Diluted EPS Reconciliation (QoQ & YoY) | Metric | June 30, 2025 | March 31, 2025 | June 30, 2024 | | :-------------------------- | :------------ | :------------- | :------------ | | Diluted EPS | $2.24 | $2.08 | $2.06 | | Adjusted diluted EPS | $2.28 | $2.09 | $2.06 | Tangible Book Value and TCE Ratio (Table 14) Table 14 reconciles GAAP stockholders' equity and total assets to tangible book value and tangible assets, respectively, by adjusting for goodwill and mortgage servicing assets, and presents return on average tangible common equity (TCE) and adjusted return on average TCE, which are key non-GAAP measures for banking industry analysis Tangible Book Value and TCE Ratio (QoQ & YoY) | Metric | June 30, 2025 | March 31, 2025 | June 30, 2024 | | :----------------------------------- | :------------ | :------------- | :------------ | | Stockholders' equity | $8,201,767 | $7,929,465 | $7,215,114 | | Tangible book value | $7,731,442 | $7,458,828 | $6,743,514 | | Book value per share | $59.51 | $57.54 | $52.06 | | Tangible book value per share | $56.10 | $54.13 | $48.65 | | Total assets | $78,158,067 | $76,165,013 | $72,468,272 | | Tangible assets | $77,687,742 | $75,694,376 | $71,996,672 | | TCE ratio | 9.95 % | 9.85 % | 9.37 % | Return on Average TCE (QoQ & YoY) | Metric | June 30, 2025 | March 31, 2025 | June 30, 2024 | | :-------------------------- | :------------ | :------------- | :------------ | | Return on average TCE | 16.39 % | 15.92 % | 17.54 % | | Adjusted return on average TCE | 16.69 % | 15.96 % | 17.48 % | Company Information This section provides essential company information, including conference call details, an overview of East West Bancorp, and important disclosures regarding forward-looking statements Conference Call Information East West Bancorp hosted a conference call on July 22, 2025, to discuss its second quarter 2025 earnings, with details for public and investment community access, including dial-in numbers and website resources, provided - Conference call held on Tuesday, July 22, 2025, at 2:00 p.m. PT/5:00 p.m. ET[15] - Dial-in information: U.S. - (877) 506-6399; Canada – (855) 669-9657; International – (412) 902-6699[17] - Presentation, live broadcast, and replay access available on the Investor Relations page of **www.eastwestbank.com/investors**[17](index=17&type=chunk) About East West East West Bancorp, Inc. (Nasdaq: EWBC) is the parent company of East West Bank, the largest independent bank headquartered in Southern California, with $78.2 billion in total assets as of June 30, 2025, operating over 110 locations across the United States and Asia - East West Bancorp, Inc. (Nasdaq: EWBC) had total assets of $78.2 billion as of June 30, 2025[18] - Its wholly-owned subsidiary, East West Bank, is the largest independent bank headquartered in Southern California[18] - The bank operates over 110 locations in the United States (California, Georgia, Illinois, Massachusetts, Nevada, New York, Texas, Washington) and Asia[18] Forward-Looking Statements The report includes forward-looking statements, which are based on current assumptions and projections and are subject to known and unknown risks and uncertainties, cautioning readers that actual results may differ materially due to various factors - Forward-looking statements are based on current assumptions, beliefs, estimates, expectations, and projections, many of which are inherently uncertain and beyond the Company's control[19] - Factors that might cause future results to differ materially include changes in economic and political conditions, regulatory environment, real estate markets, consumer behavior, competition, operational/security systems, credit quality, and capital requirements[20] - The Company does not undertake any obligation to update or revise any forward-looking statements except as required by law[21]