East West Bancorp(US:EWBC)2026-02-10 19:02Summary of East West Bancorp Conference Call Company Overview - Company: East West Bancorp (NasdaqGS:EWBC) - Industry: Banking - Date of Conference: February 10, 2026 Key Points 1. Growth Outlook for 2026 - 2026 is expected to be a constructive year for growth, with both loans and deposits meeting expectations and showing positive trends [6][7] - Loan growth guidance for 2026 is set at 5%-7%, an increase from the previous year's guidance of 4%-6% [7] 2. Commercial Real Estate (CRE) Insights - Credit quality concerns in the CRE sector have abated, with refinancing options available and a thawing market for transactions [13][14] - The bank is cautious about pursuing new CRE opportunities, focusing instead on reliable customers and maintaining a balanced portfolio [15][17] 3. Commercial and Industrial (C&I) Growth Drivers - The bank is expanding its expertise in various sectors, including charter schools, aerospace, and ESOPs, to drive C&I growth [19][20] - Growth is expected to be broad-based, complementing positive momentum from previous quarters [21] 4. Tax Incentives and Investment Trends - Clients are actively considering bonus depreciation incentives, which are accelerating their investment timelines [24] - There is a trend of reshoring and investment in U.S. supply chains, driven by tax benefits and operational flexibility [25][27] 5. Market Expansion and Acquisition Strategy - East West Bancorp is exploring growth opportunities in underpenetrated markets like New York and Boston, focusing on organic growth and potential acquisitions [28][29] - The bank is cautious about increasing CRE exposure and aims for a diversified customer deposit base [29][30] 6. Deposit Growth and Competitive Landscape - The bank expects to fund loan growth primarily through deposit growth, with a tightening competitive landscape for deposits [40][41] - The bank has launched a six-month CD at a rate of 3.73%, setting a competitive floor for deposit pricing [40] 7. Net Interest Income (NII) and Risks - NII growth is projected to align with loan growth, with expectations of 5%-7% growth in both areas [44] - Risks include potential interest rate cuts that could impact margins and backbook repricing [45] 8. Capital and Liquidity Position - The bank maintains a strong capital and liquidity position, with a focus on fixed-rate securities to manage interest rate risk [46][47] - The bank is well-positioned to meet customer needs and navigate potential challenges in 2026 [47] 9. Expense Management and Investment Focus - The bank plans to invest in people and technology, particularly in front-line sales and cybersecurity [54][55] - Despite a projected 7%-9% growth in expenses, revenue growth is expected to outpace this, maintaining positive operating leverage [61] 10. Fee Income Growth - Fee income, particularly from wealth management and foreign exchange, is expected to continue being a significant growth driver [72][73] - Disruptive market conditions tend to increase transaction activity, benefiting fee income [74] 11. Greater China Strategy - The bank plays a crucial role in facilitating transactions for U.S. consumers purchasing goods from overseas, particularly from smaller and mid-sized enterprises [66][67] - Continued investment in the U.S. is expected from clients engaged in cross-border trade, providing lending opportunities for East West [69][70] Conclusion East West Bancorp is optimistic about its growth prospects in 2026, with a focus on maintaining credit quality, expanding into new markets, and leveraging tax incentives to drive investment. The bank's strategic emphasis on expertise in various sectors and a strong capital position positions it well for future opportunities.