UBS Still Neutral on East West Bank (EWBC)

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]