Financial Data and Key Metrics Changes - 2025 was a record-breaking year for the company, achieving new full-year record levels in revenue, net interest income, fees, non-interest income, earnings per share, loans, and deposits [5] - End-of-period deposits grew by 6% year-over-year, with significant traction in both non-interest-bearing and time deposits [5] - End-of-period loans also increased by 6%, driven by growth in commercial and industrial (C&I) and residential mortgage lending [5] - Tangible book value per share grew by 17%, and the company generated a 17% return on tangible common equity [6] Business Line Data and Key Metrics Changes - Fee income grew by 12% in 2025, achieving record levels driven by strong performance in wealth management, derivatives, foreign exchange, deposit fees, and lending fees [11] - C&I loan growth in Q4 was primarily driven by new relationships, with expectations for continued strength in 2026 [9] - Residential mortgage lending also performed well, with a strong pipeline expected to contribute consistently to growth [9] Market Data and Key Metrics Changes - The company reported a fourth-quarter net interest income of $658 million, benefiting from short-term liability sensitivity and favorable deposit mix shifts [10] - The cost of deposits decreased by 23 basis points quarter-over-quarter, with a total reduction of 105 basis points since the start of the cutting cycle [10] Company Strategy and Development Direction - The company remains committed to disciplined capital management and delivering top-tier returns for shareholders through prudent growth and robust risk management [7] - A focus on deposit growth through dedicated business checking campaigns is planned to continue into 2026 [8] - The company aims to maintain a balanced growth strategy across multiple loan categories, including C&I, CRE, and residential mortgages [36] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the economic outlook for 2026, anticipating stronger loan growth compared to 2025 [20] - The company is focused on maintaining high performance relative to peers, regardless of economic conditions [22] - Management expects net interest income growth to be in the range of 5%-7% for 2026, driven by balance sheet growth [11] Other Important Information - The board declared a $0.20 increase to the quarterly dividend, raising it to $0.80 per share, a 33% increase [7] - The company’s regulatory capital ratios remain well above regulatory requirements, with a Common Equity Tier 1 capital ratio of 15.1% [16] Q&A Session Summary Question: Loan growth expectations for 2026 - Management acknowledged strong loan growth in Q4 but emphasized caution in projecting future growth due to potential economic volatility [21] Question: Areas of expense growth - The company is investing in technology, hiring for wealth management, commercial banking, and risk management, with a focus on supporting future growth [25][26] Question: Fee income growth trends - Management aims to continue double-digit growth in fee income, supported by investments in various business areas [33] Question: Commercial real estate (CRE) growth opportunities - Management expects to see increased activity in CRE lending, focusing on long-term relationships with experienced operators [34][36] Question: Capital management and buyback strategy - The company will continue to be opportunistic with buybacks, focusing on creating value for shareholders [100] Question: Credit charge-off guidance for 2026 - The increase in charge-off guidance reflects potential individual credit issues, despite overall strong credit metrics [46][48] Question: Net interest margin outlook - Management expects to offset declining rates with balance sheet growth, maintaining a focus on dollar net interest income [52] Question: Deposit costs and trends - The company has been disciplined in managing deposit costs and expects to maintain a beta exceeding 0.5 [45] Question: Blockchain and cryptocurrency integration - Management is monitoring developments in blockchain technology but sees it as still early for significant integration into their services [70]

Financial Data and Key Metrics Changes - In 2025, East West Bancorp achieved record levels in multiple categories including revenue, net interest income, fees, non-interest income, earnings per share, loans, and deposits, with a 6% year-over-year growth in both deposits and loans [4][5] - The tangible book value per share grew by 17%, and the return on tangible common equity was also 17% [5] - A quarterly dividend increase of 33% was announced, raising it to $0.80 per share [5][14] Business Line Data and Key Metrics Changes - The end-of-period loans grew by 6%, driven by growth in commercial and industrial (C&I) and residential mortgage lending [4][6] - Fee income increased by 12% in 2025, achieving record levels across various fee-based businesses [10][11] - The efficiency ratio for the fourth quarter was reported at 34.5%, with total operating non-interest expenses growing by 7.5% [11][12] Market Data and Key Metrics Changes - The bank's core deposit growth was prioritized, with a 1% improvement in demand deposit accounts (DDA) to 25% of total deposits [6] - The net interest income for the fourth quarter was $658 million, benefiting from balance sheet growth and favorable deposit mix shifts [9] - The bank expects total loan growth in 2026 to be in the range of 5%-7%, driven by continued strength in C&I and residential mortgage production [16] Company Strategy and Development Direction - The company remains committed to disciplined capital management and aims to deliver top-tier returns through prudent growth and robust risk management [5][14] - Investments in technology and hiring are expected to drive future growth, with a focus on wealth management and commercial banking [24][58] - The bank is exploring inorganic growth opportunities to bolster fee income, while maintaining a strong capital position [51][53] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the economic outlook for 2026, anticipating stronger loan growth compared to 2025 [20][21] - The bank is focused on maintaining high performance relative to peers, regardless of economic conditions [21] - Credit quality remains strong, with low levels of net charge-offs projected for 2026 [13][17] Other Important Information - The allowance for credit losses was increased from $791 million to $810 million, maintaining a ratio of 1.42% [14] - The bank's Common Equity Tier 1 capital ratio stands at 15.1%, well above regulatory requirements [14] Q&A Session Summary Question: Loan growth expectations for 2026 - Management acknowledged strong loan growth in Q4 but emphasized caution in projections due to seasonal patterns and economic uncertainties [19][20] Question: Expense growth areas - The bank is focusing on technology investments, hiring for wealth management, commercial banking, and risk management as key areas driving expense growth [24] Question: Fee income growth trends - Management aspires to continue double-digit growth in fee income, supported by investments in various business segments [26][27] Question: Commercial real estate (CRE) growth opportunities - There is an expectation for increased activity in CRE lending, but the bank will remain selective in partnerships [30][31] Question: Capital management and buyback strategy - The bank will continue to manage buybacks opportunistically, focusing on creating shareholder value without urgency [73] Question: Credit charge-off guidance for 2026 - The increase in charge-off guidance reflects potential individual credit migrations, despite overall strong credit quality [36][37] Question: Net interest margin outlook - The bank expects to offset declining rates with balance sheet growth, maintaining a focus on dollar net interest income [40][41] Question: Deposit costs and beta trends - Management is confident in maintaining a deposit beta exceeding 0.5, with a current beta of 0.6 [34][35]