EWBC Q3 Earnings Top on Higher NII & Non-Interest Income, Stock Up

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]