Certain matters discussed in this Quarterly Report on Form 10-Q contain “forward-looking statements” that are intended to be covered by the safe harbor for such statements provided by the Private Securities Litigation Reform Act of 1995. East West Bancorp, Inc. (referred to herein on an unconsolidated basis as “East West” and on a consolidated basis as the “Company,” “we,” “us,” “our” or “EWBC”) may make forward-looking statements in other documents that it files with, or furnishes to, the United States (“U.S.”) Securities and Exchange Commission (“SEC”) and management may make forward-looking statements to analysts, investors, media members and others. Forward-looking statements are those that do not relate to historical facts and that are based on current assumptions, beliefs, estimates, expectations and projections, many of which, by their nature, are inherently uncertain and beyond the Company’s control. Forward-looking statements may relate to various matters, including the Company’s financial condition, results of operations, plans, objectives, future performance, business or industry, and usually can be identified by the use of forward-looking words such as “anticipates,” “assumes,” “believes,” “can,” “continues,” “could,” “estimates,” “expects,” “forecasts,” “goal,” “intends,” “likely,” “may,” “might,” “objective,” “plans,” “potential,” “projects,” “remains,” “should,” “target,” “trend,” “will,” “would,” or similar expressions or variations thereof, and the negative thereof, but these terms are not the exclusive means of identifying such statements. You should not place undue reliance on forward-looking statements, as they are subject to known and unknown risks and uncertainties.

Factors that might cause future results to differ materially from historical performance and any forward-looking statements include, but are not limited to:

•changes in local, regional and global business, economic and political conditions, and natural or geopolitical events;

•the soundness of other financial institutions and the impacts related to or resulting from bank failures and other industry volatility, including potential increased regulatory requirements, Federal Deposit Insurance Corporation insurance premiums and assessments, and deposit withdrawals;

•changes in laws or the regulatory environment, including trade, monetary and fiscal policies and laws and current or potential disputes between the U.S., the People’s Republic of China, Singapore and other countries;

•changes in the commercial and consumer real estate markets;

•changes in consumer or commercial spending, savings and borrowing habits, and patterns and behaviors;

•the Company’s ability to compete effectively against financial institutions and other entities, including as a result of emerging technologies;

•the success and timing of the Company’s business strategies;

•the Company’s ability to retain key officers and employees;

•changes in interest rates, competition, regulatory requirements and product mix;

•changes in the Company’s costs of operation, compliance and expansion;

•disruption, failure in, or breach of, the Company’s operational or security systems or infrastructure, or those of third-party vendors with which the Company does business, including as a result of cyber-attacks, and the disclosure or misuse of confidential information;

•the adequacy of the Company’s risk management framework;

•future credit quality and performance, including expectations regarding future credit losses and allowance levels;

•adverse changes to the Company’s credit ratings;

•legal proceedings, regulatory investigations and their resolution;

•the Company’s capital requirements and its ability to generate capital internally or raise capital on favorable terms;

•the impact on the Company’s liquidity due to changes in the Company’s ability to receive dividends from its subsidiaries; and

•any strategic acquisitions or divestitures, the introduction of new or expanded products and services or other events that may directly or indirectly result in a negative impact on the financial performance of the Company and its customers.

For a more detailed discussion of some of the factors that might cause such differences, see the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on February 28, 2025 under the heading Item 1A. Risk Factors. You should treat forward-looking statements as speaking only as of the date they are made and based only on information then actually known to the Company. The Company does not undertake, and specifically disclaims any obligation to update or revise any forward-looking statements to reflect the occurrence of events or circumstances after the date of such statements except as required by law.

PART I — FINANCIAL INFORMATION

ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS

EAST WEST BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

($ in thousands, except shares)

(Unaudited)

March 31,
2025

December 31,
2024

ASSETS

Cash and due from banks

Interest-bearing cash with banks

Cash and cash equivalents

Interest-bearing deposits with banks

Securities purchased under resale agreements (“resale agreements”)

Debt securities:

Available-for-sale (“AFS”), at fair value (amortized cost of $ and $)

Held-to-maturity (“HTM”), at amortized cost (fair value of $ and $)

Loans held-for-investment (net of allowance for loan losses of $ and $)

Affordable housing partnership, tax credit and Community Reinvestment Act (“CRA”) investments, net

Premises and equipment (net of accumulated depreciation of $ and $)

Operating lease right-of-use assets

Goodwill

Other assets

TOTAL

LIABILITIES

Deposits:

Noninterest-bearing

Interest-bearing

Total deposits

Federal Home Loan Bank (“FHLB”) advances

Securities sold under repurchase agreements (“repurchase agreements”)

Long-term debt and finance lease liabilities

Operating lease liabilities

Accrued expenses and other liabilities

Total liabilities

COMMITMENTS AND CONTINGENCIES (Note 10)

STOCKHOLDERS’ EQUITY

Common stock, $ par value, shares authorized; and shares issued

Additional paid-in capital

Retained earnings

Treasury stock, at cost and shares

()

Accumulated other comprehensive loss (“AOCI”), net of tax

()

Total stockholders’ equity

TOTAL

See accompanying Notes to Consolidated Financial Statements.

EAST WEST BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF INCOME

($ and shares in thousands, except per share data)

(Unaudited)

Three Months Ended
March 31,

2025

2024

INTEREST AND DIVIDEND INCOME

Loans receivable, including fees

Debt securities

Resale agreements

Restricted equity securities

Interest-bearing cash and deposits with banks

Total interest and dividend income

INTEREST EXPENSE

Deposits

Federal funds purchased and other short-term borrowings

FHLB advances

Repurchase agreements

Long-term debt and finance lease liabilities

Total interest expense

Net interest income before provision for credit losses

Provision for credit losses

Net interest income after provision for credit losses

NONINTEREST INCOME

Commercial and consumer deposit-related fees

Lending and loan servicing fees

Foreign exchange income

Wealth management fees

Customer derivative income

Net gains on AFS debt securities

Other investment income

Other income

Total noninterest income

NONINTEREST EXPENSE

Compensation and employee benefits

Occupancy and equipment expense

Deposit account expense

Computer and software related expenses

Deposit insurance premiums and regulatory assessments

Other operating expense

Amortization of tax credit and CRA investments

Total noninterest expense

INCOME BEFORE INCOME TAXES

Income tax expense

NET INCOME

EARNINGS PER SHARE (“EPS”)

BASIC

DILUTED

WEIGHTED-AVERAGE NUMBER OF SHARES OUTSTANDING

BASIC

DILUTED

See accompanying Notes to Consolidated Financial Statements.

EAST WEST BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

($ in thousands)

(Unaudited)



	Three Months Ended March 31,
	2025	2024
Net income	$	$
Other comprehensive income (loss), net of tax:
Net changes in unrealized gains (losses) on AFS debt securities		()

Amortization of unrealized losses on debt securities transferred from AFS to HTM
Net changes in unrealized gains (losses) on cash flow hedges		()
Foreign currency translation adjustments	()
Other comprehensive income (loss)		()
COMPREHENSIVE INCOME	$	$

See accompanying Notes to Consolidated Financial Statements.

EAST WEST BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY

($ in thousands, except shares and per share data)

(Unaudited)

Common Stock and Additional Paid-in Capital

Retained Earnings

Treasury Stock

AOCI, Net of Tax

Total Stockholders’ Equity

Amount

BALANCE, JANUARY 1, 2024

()

Cumulative-effect of a change in accounting principle (1)

—

()

—

()

Net income

—

Other comprehensive loss

—

()

Issuance of common stock pursuant to various stock compensation plans and agreements

—

Repurchase of common stock pursuant to various stock compensation plans and agreements

()

—

()

—

()

Repurchase of common stock pursuant to the stock repurchase program

()

—

()

—

()

Cash dividends on common stock ($ per share)

—

()

—

()

BALANCE, MARCH 31, 2024

()

BALANCE, JANUARY 1, 2025

()

See accompanying Notes to Consolidated Financial Statements.

EAST WEST BANCORP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1 —

wholly-owned subsidiary that is a statutory business trust (the “Trust”). In accordance with the guidance in Financial Accounting Standards Board Accounting Standards Codification (“ASC”) Topic 810, Consolidation, the Trust has not been consolidated by the Company.

The preparation of the Consolidated Financial Statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the Consolidated Financial Statements, income and expenses during the reporting periods, and the related disclosures. Although our estimates consider current conditions and how we expect them to change in the future, it is reasonably possible that actual results could be materially different from those estimates. Hence, the current period’s results of operations are not necessarily indicative of results that may be expected for any future interim period or for the year as a whole. Certain items on the Consolidated Financial Statements and notes for the prior periods have been reclassified to conform to the current presentation. Events subsequent to the Consolidated Balance Sheet date have been evaluated through the date the Consolidated Financial Statements are issued for inclusion in the accompanying Consolidated Financial Statements.

Note 2 —

% equity interest in Rayliant Global Advisors Limited (“Rayliant”) during the third quarter of 2023, the Company granted performance-based restricted stock units (“RSUs”) as part of its consideration, in addition to $ million in cash. The vesting of these equity contracts on September 1, 2028, is contingent on Rayliant meeting certain financial performance targets during the performance period. The fair value of liability-classified equity contracts varies based on the operating revenue and operating EBITDA of Rayliant to be achieved during the future performance period. These performance-based RSUs are expected to vest into a variable number of the Company’s common stock, ranging from % to % of the target performance-based RSUs granted. Due to the unobservable nature of the input assumptions, these equity contracts are classified as Level 3. For additional information on the equity contracts, refer to Note 5 — Derivatives to the Consolidated Financial Statements in this Form 10-Q.

Commodity Contracts — Commodity contracts consist of swaps and options referencing commodity products. The fair value of the commodity option contracts is determined using the Black-Scholes model and assumptions that include expectations of future commodity price and volatility. The future commodity contract price is derived from observable inputs such as the market price of the commodity. Commodity swaps are structured as an exchange of fixed cash flows for floating cash flows. The fair value of the commodity swaps is determined using the market standard methodology of netting the discounted future fixed cash payments (or receipts) and the discounted expected variable cash receipts (or payments) based on the market prices of the commodity. The fixed cash flows are predetermined based on the known volumes and fixed price as specified in the swap agreement. The floating cash flows are correlated with the change of forward commodity prices, which is derived from market corroborated futures settlement prices. As a result, the Company classifies these derivative instruments as Level 2 due to the observable nature of the significant inputs utilized.

$ $ $ U.S. government agency and U.S. government-sponsored enterprise debt securities

U.S. government agency and U.S. government-sponsored enterprise mortgage-backed securities (1):

Commercial mortgage-backed securities Residential mortgage-backed securities Municipal securities Non-agency mortgage-backed securities:Commercial mortgage-backed securities Residential mortgage-backed securities Corporate debt securities Foreign government bonds Asset-backed securities Collateralized loan obligations (“CLOs”) Total AFS debt securities$ $ $ $ Affordable housing partnership, tax credit and CRA investments, net:Equity securities$ $ $ $ Total affordable housing partnership, tax credit and CRA investments, net$ $ $ $

Other assets:

Equity securities

$ $ $ $ Total other assets$ $ $ $ Derivative assets:Interest rate contracts$ $ $ $ Foreign exchange contracts Credit contracts Equity contracts Commodity contracts Gross derivative assets$ $ $ $

Netting adjustments (2)

$ $()$ $()Net derivative assets$ $ $ $ Derivative liabilities:Interest rate contracts$ $ $ $ Foreign exchange contracts Credit contracts

Equity contracts (3)

Commodity contracts Gross derivative liabilities$ $ $ $

Netting adjustments (2)

$ $()$ $()Net derivative liabilities$ $ $ $

Refer to footnotes on the following page.

$ $ $ U.S. government agency and U.S. government-sponsored enterprise debt securities

U.S. government agency and U.S. government-sponsored enterprise mortgage-backed securities (1):

Commercial mortgage-backed securities Residential mortgage-backed securities Municipal securities Non-agency mortgage-backed securities:Commercial mortgage-backed securities Residential mortgage-backed securities Corporate debt securities Foreign government bonds Asset-backed securities CLOs Total AFS debt securities $ $ $ $ Affordable housing partnership, tax credit and CRA investments, net:Equity securities$ $ $ $

Total affordable housing partnership, tax credit and CRA investments, net

$ $ $ $

Other assets:

Equity securities

$ $ $ $ Total other assets$ $ $ $ Derivative assets:Interest rate contracts$ $ $ $ Foreign exchange contracts Credit contracts Equity contracts Commodity contracts Gross derivative assets$ $ $ $

Netting adjustments (2)

$ $()$ $()Net derivative assets$ $ $ $ Derivative liabilities:Interest rate contracts$ $ $ $ Foreign exchange contracts

Equity contracts (3)

Credit contracts Commodity contracts Gross derivative liabilities$ $ $ $

Netting adjustments (2)

$ $()$ $()Net derivative liabilities$ $ $ $

(1)Includes Government National Mortgage Association (“GNMA”) AFS debt securities totaling $ billion and $ billion of fair value as of March 31, 2025 and December 31, 2024, respectively.

(2)Represents the balance sheet netting of derivative assets and liabilities and related cash collateral under master netting agreements or similar agreements. See Note 5 — Derivatives to the Consolidated Financial Statements in this Form 10-Q for additional information.

(3)Equity contracts classified as derivative liabilities consist of performance-based RSUs granted as part of EWBC’s consideration in its investment in Rayliant.

change in the fair value of these contingently issuable shares during both the three months ended March 31, 2025 and 2024. $

Total losses included in earnings (1)

()()Issuances Ending balance$ $

(1)Includes unrealized losses recorded in Lending and loan servicing fees on the Consolidated Statement of Income.

Black-Scholes option pricing modelEquity volatility

% — %

(1)

Liquidity discount% %Derivative liabilities:

Equity contracts (2)

$ Internal modelPayout % designated based on operating revenue and operating EBITDA of investee% %December 31, 2024Derivative assets:Equity contracts$ Black-Scholes option pricing modelEquity volatility

% — %

(1)

Liquidity discount% %Derivative liabilities:

Equity contracts (2)

$ Internal modelPayout % designated based on operating revenue and operating EBITDA of investee% %

(1)Weighted-average of inputs is calculated based on the fair value of equity contracts as of March 31, 2025 and December 31, 2024.

(2)Equity contracts classified as derivative liabilities consist of performance-based RSUs granted as part of EWBC’s consideration in its investment in Rayliant.

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

Assets measured at fair value on a nonrecurring basis include certain individually evaluated loans held-for-investment, loans held-for-sale, affordable housing partnership, tax credit and CRA investments, OREO, and other nonperforming assets. Nonrecurring fair value adjustments result from the impairment on certain individually evaluated loans held-for-investment and affordable housing partnership, tax credit and CRA investments, from the write-downs of OREO and other nonperforming assets, or from the application of lower of cost or fair value on loans held-for-sale.

$ $ $ Commercial real estate (“CRE”):CRE Multifamily residential Total commercial Consumer:Residential mortgage:Single-family residential Total consumer Total loans held-for-investment$ $ $ $

OREO (1)

$ $ $ $

Assets Measured at Fair Value on a Nonrecurring Basis
as of December 31, 2024

($ in thousands)

Level 1

Level 2

Level 3

Fair Value Measurements

Loans held-for-investment:

Commercial:

C&I

CRE:

CRE

Construction and land

Total commercial

Consumer:

Residential mortgage:

Single-family residential

Total consumer

Total loans held-for-investment

Affordable housing partnership, tax credit and CRA investments, net

OREO (1)

(1)Represents the carrying value of OREO property that was written down subsequent to its initial classification as OREO and is included in Other assets on the Consolidated Balance Sheet.

)$()CRE:CRE()()Multifamily residential() Construction and land ()Total commercial()()Consumer:Residential mortgage:Single-family residential ()Total consumer ()Total loans held-for-investment$()$()OREO$()$

Fair value of collateralDiscount

% — %

(1)

$ Fair value of propertySelling cost

% — %

(1)

OREO$ Fair value of propertySelling cost%%December 31, 2024Loans held-for-investment$ Fair value of collateralDiscount

%$ Fair value of collateralContract valueNMNM$ Fair value of propertySelling cost

% — %

(1)

Affordable housing partnership, tax credit and CRA investments, net$ Individual analysis of each investmentExpected future tax benefits and distributionsNMNMOREO$ Fair value of propertySelling cost%%

NM — Not meaningful.

(1)Weighted-average of inputs is based on the relative fair value of the respective assets as of March 31, 2025 and December 31, 2024.

$ $ $ $ Interest-bearing deposits with banks$ $ $ $ $ Resale agreements$ $ $ $ $ HTM debt securities$ $ $ $ $ Restricted equity securities, at cost$ $ $ $ $ Loans held-for-investment, net$ $ $ $ $ Mortgage servicing rights$ $ $ $ $ Accrued interest receivable$ $ $ $ $ Financial liabilities:Demand, checking, savings and money market deposits$ $ $ $ $ Time deposits$ $ $ $ $ FHLB advances$ $ $ $ $ Repurchase agreements$ $ $ $ $ Long-term debt$ $ $ $ $ Accrued interest payable$ $ $ $ $

December 31, 2024

($ in thousands)

Carrying Amount

Level 1

Level 2

Level 3

Estimated Fair Value

Financial assets:

Cash and cash equivalents

Interest-bearing deposits with banks

Resale agreements

HTM debt securities

Restricted equity securities, at cost

Loans held-for-investment, net

Mortgage servicing rights

Accrued interest receivable

Financial liabilities:

Demand, checking, savings and money market deposits

Time deposits

FHLB advances

($ in thousands)

March 31, 2025

Gross Amounts of Recognized Assets

Gross Amounts Offset on the Consolidated Balance Sheet

Net Amounts of Assets Presented on the Consolidated Balance Sheet

Gross Amounts Not Offset on the Consolidated Balance Sheet

Assets

Collateral Received (1)

Net Amount

Resale agreements

()

Gross Amounts of Recognized Liabilities

Gross Amounts Offset on the Consolidated Balance Sheet

Net Amounts of Liabilities Presented on the Consolidated Balance Sheet

Gross Amounts Not Offset on the Consolidated Balance Sheet

Net Amount

($ in thousands)

December 31, 2024

Gross Amounts of Recognized Assets

Gross Amounts Offset on the Consolidated Balance Sheet

Net Amounts of Assets Presented on the Consolidated Balance Sheet

Gross Amounts Not Offset on the Consolidated Balance Sheet

Assets

Collateral Received (1)

Net Amount

Resale agreements

()

(1)Amortized cost excludes accrued interest receivables which are presented within Other assets on the Consolidated Balance Sheet. As of March 31, 2025 and December 31, 2024, the accrued interest receivables were $ million and $ million, respectively. For the Company’s accounting policy related to debt securities’ accrued interest receivables, see Note 1 — Summary of Significant Accounting Policies — Significant Accounting Policies — Allowance for Credit Losses on Available-for-Sale Debt Securities and Allowance for Credit Losses on Held-to-Maturity Debt Securities to the Consolidated Financial Statements in the Company’s 2024 Form 10-K.

(2)Includes GNMA AFS debt securities totaling $ billion of amortized cost and $ billion of fair value as of March 31, 2025, and $ billion of amortized cost and $ billion of fair value as of December 31, 2024.

(3)Includes GNMA HTM debt securities totaling $ million of amortized cost and $ million of fair value as of March 31, 2025, and $ million of amortized cost and $ million of fair value of as of December 31, 2024.

$ $ $()$

(1)

$()U.S. government agency and U.S. government sponsored enterprise debt securities () ()U.S. government agency and U.S. government-sponsored enterprise mortgage-backed securities:Commercial mortgage-backed securities () () ()Residential mortgage-backed securities () () ()Municipal securities () () ()Non-agency mortgage-backed securities:Commercial mortgage-backed securities () () ()Residential mortgage-backed securities () ()Corporate debt securities () ()Foreign government bonds () ()Asset-backed securities () ()CLOs () ()Total AFS debt securities$ $()$ $()$ $()

(1)Excludes a short-term U.S. Treasury security of $ million which had no unrealized gains or losses.

$ $ $()$ $()U.S. government agency and U.S. government-sponsored enterprise debt securities () ()U.S. government agency and U.S. government-sponsored enterprise mortgage-backed securities:Commercial mortgage-backed securities () () ()Residential mortgage-backed securities () () ()Municipal securities () () ()Non-agency mortgage-backed securities:Commercial mortgage-backed securities () () ()Residential mortgage-backed securities () ()Corporate debt securities () ()Foreign government bonds () ()Asset-backed securities () ()CLOs () ()Total AFS debt securities$ $()$ $()$ $()

As of March 31, 2025, the Company had AFS debt securities in a gross unrealized loss position with credit impairment, primarily consisting of U.S. government agency and U.S. government-sponsored enterprise mortgage-backed securities, corporate debt securities and non-agency mortgage-backed securities. In comparison, as of December 31, 2024, the Company had AFS debt securities in a gross unrealized loss position with credit impairment, primarily consisting of U.S. government agency and U.S. government-sponsored enterprise mortgage-backed securities, corporate debt securities, and non-agency mortgage-backed securities.

Allowance for Credit Losses on Available-for-Sale Debt Securities

The Company evaluates each AFS debt security where the fair value declines below amortized cost. For a discussion of the factors and criteria the Company uses in analyzing securities for impairment related to credit losses, see Note 1 — Summary of Significant Accounting Policies — Significant Accounting Policies — Allowance for Credit Losses on Available-for-Sale Debt Securities to the Consolidated Financial Statements in the Company’s 2024 Form 10-K.

The gross unrealized losses presented in the preceding tables were primarily attributable to interest rate movement and the widening of liquidity and/or credit spreads. U.S. Treasury, U.S. government agency, U.S. government-sponsored agency, and U.S. government-sponsored enterprise debt and mortgage-backed securities are issued, guaranteed, or otherwise supported by the U.S. government and have a zero credit loss assumption. The remaining securities that were in an unrealized loss position as of March 31, 2025 were mainly comprised of the following:

•Corporate debt securities — The market value decline as of March 31, 2025 was primarily due to interest rate movement and spread widening. A portion of the corporate debt securities is comprised of subordinated debt securities issued by U.S. banks. These securities are nearly all rated investment grade by nationally recognized statistical rating organizations (“NRSROs”) and issued by well-capitalized financial institutions with strong profitability. The contractual payments from these corporate debt securities have been and are expected to be received on time. The Company will continue to monitor the market developments in the banking sector and the credit performance of these securities.

allowance for credit losses provided against these securities as of both March 31, 2025 and December 31, 2024. In addition, there was provision for credit losses recognized for the three months ended March 31, 2025 and 2024.

Allowance for Credit Losses on Held-to-Maturity Debt Securities

The Company separately evaluates its HTM debt securities for any credit losses using an expected loss model, similar to the methodology used for loans. For additional information on the Company’s credit loss methodology, refer to Note 1 — Summary of Significant Accounting Policies — Significant Accounting Policies — Allowance for Credit Losses on Held-to-Maturity Debt Securities to the Consolidated Financial Statements in the Company’s 2024 Form 10-K.

The Company monitors the credit quality of the HTM debt securities using external credit ratings. As of March 31, 2025, all HTM securities were rated investment grade by NRSROs and issued, guaranteed, or supported by U.S. government entities and agencies. Accordingly, the Company applied a zero credit loss assumption and allowance for credit losses was recorded as of both March 31, 2025 and December 31, 2024. Overall, the Company believes that the credit support levels of the debt securities are strong, and based on current assessments and macroeconomic forecasts, expects that full contractual cash flows will be received.

Realized Gains

Related tax expense

$ $

Interest Income

$ Nontaxable interest Total interest income on debt securities$ $

(1)The notional amount of the Company’s commodity contracts totaled million barrels of crude oil and million units of natural gas, measured in million British thermal units (“MMBTUs”) as of March 31, 2025. In comparison, the notional amount of the Company’s commodity contracts totaled million barrels of crude oil and million MMBTUs of natural gas as of December 31, 2024.

(2)The notional amount for the credit contracts reflects the Company’s pro-rata share of the notional amount in the underlying derivative instruments in RPAs.

(3)The Company held warrant equity contracts in and private companies as of March 31, 2025 and December 31, 2024, respectively.

(4)Equity contracts classified as derivative liabilities consist of performance-based RSUs granted as part of EWBC’s consideration in its investment in Rayliant.

billion were designated as cash flow hedges to convert certain variable-rate loans from floating-rate payments to fixed-rate payments. Gains and losses on the hedging derivative instruments are recognized in AOCI and reclassified to earnings in the same period the hedged cash flows impact earnings and within the same income statement line item as the hedged cash flows. Considering the interest rates, yield curve and notional amount as of March 31, 2025, the Company expects to reclassify an estimated $ million of after-tax net losses on derivative instruments designated as cash flow hedges from AOCI into earnings during the next 12 months.

$()

Losses reclassified from AOCI into earnings:

Interest and dividend income (for cash flow hedges on loans)$()$()

Net Investment Hedges — The Company enters into foreign currency forward contracts to hedge a portion of the Bank’s investment in East West Bank (China) Limited, a non-USD functional currency subsidiary in China. The hedging instruments designated as net investment hedges were used to hedge against the risk of adverse changes in the foreign currency exchange rate of the Chinese Renminbi (“RMB”). There was no active net investment hedge during the three months ended March 31, 2025.

Derivatives Not Designated as Hedging Instruments

Customer-Related Positions and Economic Hedge Derivatives — The Company enters into interest rate, commodity, and foreign exchange derivatives at the request of its customers and generally enters into offsetting derivative contracts with third-party financial institutions to mitigate the inherent market risk. The Company also utilizes foreign exchange contracts to mitigate the effect of currency fluctuations on certain foreign currency-denominated on-balance sheet assets and liabilities, primarily foreign currency denominated deposits that it offers to its customers. A majority of the foreign exchange contracts had original maturities of or less as of both March 31, 2025 and December 31, 2024.

$ $ $ $ $ Written options Collars and corridors Subtotal Foreign exchange contracts:Forwards and spot Swaps

Written options

Subtotal Total$ $ $ $ $ $ Economic hedges:Interest rate contracts:Swaps$ $ $ $ $ $ Purchased options Collars and corridors Subtotal Foreign exchange contracts:Forwards and spot Swaps

Purchased options

Subtotal Total$ $ $ $ $ $

Barrels$ $ Barrels$ $ Collars Barrels Barrels Subtotal Barrels Barrels Natural gas:Swaps MMBTUs MMBTUs Collars MMBTUs MMBTUs Written options MMBTUs MMBTUs Subtotal MMBTUs MMBTUs Total$ $ $ $ Economic hedges:Commodity contracts:Crude oil:Swaps Barrels$ $ Barrels$ $ Collars Barrels Barrels Subtotal Barrels Barrels Natural gas:Swaps MMBTUs MMBTUs Collars MMBTUs MMBTUs Purchased options MMBTUs MMBTUs Subtotal MMBTUs MMBTUs Total$ $ $ $

Credit Contracts — The Company periodically enters into credit RPAs with institutional counterparties to manage the credit exposure of the interest rate contracts associated with syndicated loans. Under the RPAs, a portion of the credit exposure is transferred from one party (the purchaser of credit protection) to another party (the seller of credit protection). The seller of credit protection is required to make payments to the purchaser of credit protection if the underlying borrower defaults on the related interest rate contract. The Company may enter into protection sold or protection purchased RPAs. Credit risk on RPAs is managed by monitoring the credit worthiness of the borrowers and the institutional counterparties, which is a part of the Company’s normal credit review and monitoring process. Assuming the underlying borrowers referenced in the interest rate contracts defaulted, the maximum exposure in the credit protection sold RPAs would be $ thousand and $ thousand as of March 31, 2025 and December 31, 2024, respectively.

$ $ $ $ $

RPAs — protection purchased

Total RPAs$ $ $ $ $ $

(1)All reference entities of the protection sold RPAs were investment grade. The weighted-average remaining maturities were years as of both March 31, 2025 and December 31, 2024.

Equity Contracts — As part of the loan origination process, the Company may obtain warrants to purchase the preferred and/or common stock of the borrowers’ companies, which are mainly in the technology and life sciences sectors. Warrants grant the Company the right to buy a certain class of the underlying company’s equity at a certain price before expiration. In connection with the Company’s investment in Rayliant during the third quarter of 2023, the Company granted performance-based RSUs as part of its consideration. The vesting of these equity contracts is contingent on Rayliant meeting certain financial performance targets during the future performance period. For additional information on these equity contracts, refer to Note 2 — Fair Value Measurement and Fair Value of Financial Instruments to the Consolidated Financial Statements in this Form 10-Q.

)$ Foreign exchange contractsForeign exchange income Credit contracts

Customer derivative income (losses)

()Equity contracts - warrants

Lending and loan servicing fees

()Commodity contracts

Customer derivative (losses) income

() Net gains$ $

Credit-Risk-Related Contingent Features — Certain of the Company’s over-the-counter derivative contracts contain early termination provisions that require the Company to settle any outstanding balances upon the occurrence of a specified credit-risk-related event. Such an event primarily relates to a downgrade of the credit rating of East West Bank to below investment grade. As of March 31, 2025, the aggregate fair value amounts of all derivative instruments with credit risk-related contingent features that were in a net liability position totaled $ million, for which $ million collateral was posted to cover these positions. In comparison, as of December 31, 2024, the aggregate fair value amounts of all derivative instruments with credit risk-related contingent features that were in a net liability position totaled $ million, for which $ million collateral was posted to cover these positions. In the event that the credit rating of East West Bank had been downgraded to below investment grade, the Company would have been required to post $ million and minimal additional collateral as of March 31, 2025 and December 31, 2024, respectively.

$()$()$ $()$ Gross Amounts Offset on the Consolidated Balance Sheet Net Amounts Presented on the Consolidated Balance SheetGross Amounts Not Offset on the Consolidated Balance Sheet

Gross Amounts Recognized (2)

Master Netting Arrangements

Cash Collateral Pledged (4)

Security Collateral Pledged (5)

Net AmountDerivative liabilities$ $()$()$ $()$

($ in thousands)

As of December 31, 2024

$ $ $ $ $ $ $ $ Criticized (accrual)

Criticized (nonaccrual)

Total C&I

Gross write-offs (2)

CRE:Pass Criticized (accrual) Criticized (nonaccrual) Subtotal CRE

Gross write-offs (2)

Multifamily residential:

Pass Criticized (accrual) Criticized (nonaccrual) Subtotal multifamily residential

Gross write-offs

Construction and land:Pass Criticized (nonaccrual)

Subtotal construction and land

Gross write-offs

Total CRE

Total CRE gross write-offs (2)

Total commercial$ $ $ $ $ $ $ $ $

Total commercial gross write-offs (2)

$ $ $ $ $ $ $ $ $

$ $ $ $ $ $ $ $ Criticized (accrual)

Criticized (nonaccrual) (3)

Subtotal single-family residential mortgage

Gross write-offs (2)

HELOCs:Pass Criticized (accrual) Criticized (nonaccrual) Subtotal HELOCs

Gross write-offs

Total residential mortgage

Total residential mortgage gross write-offs (2)

Other consumer:Pass Criticized (nonaccrual) Total other consumer

Gross write-offs (2)

Total consumer$ $ $ $ $ $ $ $ $

Total consumer gross write-offs (2)

$ $ $ $ $ $ $ $ $

Total loans held-for-investment:

Pass$ $ $ $ $ $ $ $ $ Criticized (accrual)

Criticized (nonaccrual)

Foreclosed Assets

The Company acquires assets from borrowers through loan restructurings, workouts, or foreclosures. Assets acquired may include real properties (e.g., real estate, land, and buildings) and commercial and personal properties. The Company recognizes foreclosed assets upon receiving assets in satisfaction of a loan (e.g., taking legal title or physical possession).

Foreclosed assets, consisting of OREO and other nonperforming assets, are included in Other assets on the Consolidated Balance Sheet. The Company had $ million of foreclosed assets as of March 31, 2025, compared with $ million as of December 31, 2024. The Company commences the foreclosure process on consumer mortgage loans after a borrower becomes more than 120 days delinquent in accordance with the Consumer Financial Protection Bureau guidelines. The carrying value of the consumer real estate loans that were in an active or suspended foreclosure process was $ million and $ million as of March 31, 2025 and December 31, 2024, respectively.

% % Consumer: % %

Modification as a % of Loan Class

Commercial:

Consumer:

Commercial:

Consumer:

$ $ $ $ $ $

As of March 31, 2025 and December 31, 2024, commitments to lend additional funds to borrowers whose loans were modified totaled $ million and $ million, respectively,

Quantitative Component — Allowance for Loan Losses for the Commercial Loan Portfolio

The Company’s C&I lifetime loss rate model estimates the loss rate expected over the life of a loan. This loss rate is applied to the amortized cost basis, excluding accrued interest receivable, to determine expected credit losses. The lifetime loss rate model’s reasonable and supportable period spans quarters, thereafter, immediately reverting to the historical average loss rate, expressed through the loan-level lifetime loss rate.

To generate estimates of expected loss at the loan level for CRE, multifamily residential, and construction and land loans, projected probabilities of default (“PDs”) and loss given defaults (“LGDs”) are applied to the estimated exposure at default, considering the term and payment structure of the loan. The forecast of future economic conditions returns to long-run historical economic trends within the reasonable and supportable period.

To estimate the life of a loan under both models, the contractual term of the loan is adjusted for estimated prepayments based on historical prepayment experience.

Quantitative Component — Allowance for Loan Losses for the Consumer Loan Portfolio

For single-family residential and HELOC loans, projected PDs and LGDs are applied to the estimated exposure at default, considering the term and payment structure of the loan, to generate estimates of expected loss at the loan level. The forecast of future economic conditions returns to long-run historical economic trends after the reasonable and supportable period. To estimate the life of a loan for the single-family residential and HELOC loan portfolios, the contractual term of the loan is adjusted for estimated prepayments based on historical prepayment experience. For other consumer loans, the Company uses a loss rate approach.

Qualitative Component — The Company considers the following qualitative factors in the determination of the collectively evaluated allowance if these factors have not already been captured by the quantitative model. Such qualitative factors may include, but are not limited to:

•loan growth trends;

•the volume and severity of past due financial assets, and criticized or adversely classified financial assets;

•the Company’s lending policies and procedures, including changes in lending strategies, underwriting standards, collection, write-off and recovery practices;

•knowledge of a borrower’s operations;

•the quality of the Company’s credit review system;

•the experience, ability and depth of the Company’s management and associates;

•the effect of other external factors such as the regulatory and legal environments, or changes in technology;

As of March 31, 2025, collateral-dependent commercial and consumer loans totaled $ million and $ million, respectively. In comparison, collateral-dependent commercial and consumer loans totaled $ million and $ million, respectively, as of December 31, 2024. The Company's collateral-dependent loans were secured by real estate. As of both March 31, 2025 and December 31, 2024, the collateral value of the properties securing the collateral-dependent loans, net of selling costs, exceeded the recorded value of the majority of the loans.

$ $ $ $ $ $ $ Provision for (reversal of) credit losses on loans(a) () () Gross charge-offs()()()()() ()()Gross recoveries

Total net recoveries (charge-offs)

() () ()()Foreign currency translation adjustment Allowance for loan losses, end of period$ $ $ $ $ $ $ $

$ $ $ $ $ $ $ Provision for (reversal of) credit losses on loans(a) ()() Gross charge-offs()()()() ()()Gross recoveries Total net (charge-offs) recoveries ()() () ()()Foreign currency translation adjustment() ()Allowance for loan losses, end of period$ $ $ $ $ $ $ $

In addition to the allowance for loan losses, the Company maintains an allowance for unfunded credit commitments. The Company has three general areas for which it provides the allowance for unfunded credit commitments: (1) recourse obligations for loans sold, (2) letters of credit, and (3) unfunded lending commitments. The allowance for unfunded credit commitments is maintained at a level that management believes to be sufficient to absorb estimated expected credit losses related to unfunded credit facilities. See Note 10 — Commitments and Contingencies to the Consolidated Financial Statements in this Form 10-Q for additional information related to unfunded credit commitments.

$ Provision for credit losses on unfunded credit commitments(b) Allowance for unfunded credit commitments, end of period$ $ Provision for credit losses(a) + (b)$ $

(1)Includes write-downs of $ million and $ million to the allowance for loan losses related to loans transferred from held-for-investment to held-for-sale for the three months ended March 31, 2025, and 2024, respectively.

(2)Includes originated loans sold of $ million and $ million for the three months ended March 31, 2025 and 2024, respectively. Originated loans sold consisted primarily of CRE and construction loans for three months ended March 31, 2025 and C&I for three months ended March 31, 2024.

(3)Includes $ million and $ million of purchased loans sold in the secondary market for the three months ended March 31, 2025 and 2024, respectively.

(4)C&I loan purchases were comprised of syndicated C&I term loans.

Note 7 —

minimum compliance period. The Company also invests in small business investment companies and new markets tax credit projects that qualify for CRA consideration, as well as eligible projects that qualify for production, historic and renewable energy tax credits. Investments in new markets tax credits promote development in low-income communities; investments in production and renewable energy tax credits help promote the development of renewable energy sources; and investments in historic tax credits promote the rehabilitation of historic buildings and economic revitalization of the surrounding areas.

$ $ $ Tax credit and CRA investments Equity method of accounting and other:Tax credits and CRA investments Total$ $ $ $

(1)Included in Accrued expenses and other liabilities on the Consolidated Balance Sheet.

$ Tax credit and CRA investments Equity method of accounting and other:Tax credit and CRA investments Total tax credits and benefits$ $ Amortization:

PAM (2):

Affordable housing partnership investments$ $ Tax credit and CRA investments Equity method of accounting and other:

Tax credit and CRA investments (3)

Total amortization$ $ Maturity DatesAmountAmount%% — %% — % $

(1)As of March 31, 2025, the remaining junior subordinated debt outstanding was issued by MCBI Statutory Trust I and had a stated interest of 3-month CME Term Secured Overnight Financing Rate (“SOFR”) + %. The weighted-average contractual interest rates for junior subordinated debt were % and % as of March 31, 2025 and December 31, 2024, respectively.

(2)The weighted-average interest rates for FHLB advances were % and % as of March 31, 2025 and December 31, 2024, respectively.

(3)Floating interest rates are based on the SOFR plus the established spread.

The Bank’s available borrowing capacity from FHLB advances totaled $ billion as of March 31, 2025. The Bank’s available borrowing capacity from the FHLB is derived from its portfolio of loans that are pledged to the FHLB, reduced by any outstanding FHLB advances. As of March 31, 2025, all advances were secured by real estate loans.

Note 10 —

$ $ $ $ $

Commercial letters of credit and standby letters of credit (“SBLCs”)

Total$ $ $ $ $ $

Loan commitments are agreements to lend to customers provided there are no violations of any conditions established in the agreement. Commitments generally have fixed expiration dates or other termination clauses and may require commitment fees. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future funding requirements.

billion consisted of SBLCs of $ billion and commercial letters of credit of $ million. In comparison, as of December 31, 2024, total letters of credit of $ billion consisted of SBLCs of $ billion and commercial letters of credit of $ million. As of both March 31, 2025 and December 31, 2024, substantially all letters of credit were graded “Pass” using the Bank’s internal credit risk rating system.

The Company applies the same credit underwriting criteria to extend loans, commitments, and conditional obligations to customers. Each customer’s creditworthiness is evaluated on a case-by-case basis. Collateral and financial guarantees may be obtained based on management’s assessment of a customer’s credit risk. Collateral may include cash, accounts receivable, inventory, personal property, plant and equipment, and real estate property.

Estimated exposure to loss from these commitments is included in the allowance for unfunded credit commitments and amounted to $ million and $ million as of March 31, 2025 and December 31, 2024, respectively.

Guarantees — From time to time, the Company sells or securitizes single-family and multifamily residential loans with recourse in the ordinary course of business. The Company is obligated to repurchase up to the recourse component of the loans if the loans default.

$ $ $ $ $ $ $ $ $ $

(1)Represents the unpaid principal balance.

The Company’s recourse reserve related to these guarantees is included in the allowance for unfunded credit commitments and totaled $ thousand and $ thousand as of March 31, 2025 and December 31, 2024, respectively. The allowance for unfunded credit commitments is included in Accrued expenses and other liabilities on the Consolidated Balance Sheet. The Company continues to experience minimal losses from the single-family and multifamily residential loan portfolios sold or securitized with recourse.

Thus, the Company’s exposure and ultimate losses may be higher, and possibly significantly more, than the amounts accrued.

Note 11 —

outstanding awards other than RSUs as of both March 31, 2025 and December 31, 2024.

Related net tax benefits for stock compensation plans

$ $ $ $ )) $ $

As of March 31, 2025, there was $ million of unrecognized compensation costs related to unvested time-based RSUs expected to be recognized over a weighted-average period of years, and $ million of unrecognized compensation costs related to unvested performance-based RSUs expected to be recognized over a weighted-average period of years.

Note 12 —

$ $ Diluted: $ $

Approximately thousand and thousand weighted-average shares of anti-dilutive RSUs were excluded from the diluted EPS computations for the three months ended March 31, 2025 and 2024, respectively.

Stock Repurchase Program — On January 22, 2025, the Company’s Board of Directors authorized a stock repurchase of $ million of the Company’s common stock. The Company repurchased $ million and $ million of common stock for the three months ended March 31, 2025 and 2024, respectively.

Note 13 —

)$ $()$()

Net unrealized (losses) gains arising during the period

()() ()Amounts reclassified from AOCI Changes, net of tax () ()

Balance, March 31, 2024

$()$()$()$()

(1)Pre-tax amounts were reported in Net gains on AFS debt securities on the Consolidated Statement of Income.

(2)Represents unrealized losses amortized over the remaining lives of securities that were transferred from the AFS to HTM portfolio in 2022.

(3)Pre-tax amounts related to cash flow hedges on variable rate loans were reported in Interest and dividend income on the Consolidated Statement of Income.

Note 14 —

reportable operating segments: (1) Consumer and Business Banking; (2) Commercial Banking; and (3) Treasury and Other. These segments are defined by the type of customers served, and the related products and services provided. The chief operating decision maker (“CODM”) is the Chairman and Chief Executive Officer of the Company. The CODM regularly reviews the Company’s operating results to allocate resources and assess performance. Operating segment results are also based on the Company’s internal management reporting process, which reflects the allocations of certain balance sheet and income statement line items. The CODM uses certain performance measures such as segment net income and considers variances of actual results from forecast results on a quarterly basis when making decisions on resource allocations between segments. The segment information presented is not indicative of how the segments would perform if they operated as independent entities.

The Consumer and Business Banking segment primarily provides financial products and services to consumer and commercial customers through the Company’s domestic branch network and digital banking platforms. This segment offers consumer and commercial deposits, mortgage and home equity loans, and other products and services. It also originates commercial loans for small- and medium-sized enterprises through the Company’s branch network. Other products and services provided by this segment include wealth management, private banking, treasury management, interest rate risk hedging and foreign exchange services.

The Commercial Banking segment primarily generates domestic commercial loan and deposit products. Commercial loan products include CRE lending, construction finance, commercial business lending, working capital lines of credit, trade finance, letters of credit, affordable housing lending, asset-based lending, asset-backed finance, project finance and equipment financing. Commercial deposit products and other financial services include treasury management, foreign exchange services and interest rate and commodity risk hedging.

The remaining centralized functions, including the corporate treasury activities of the Company, eliminations of inter-segment amounts, and centrally managed departments, have been aggregated and included in the Treasury and Other segment.

operating segments within the Company. The Company’s internal reporting process consists of certain allocation methodologies for revenues and expenses, and the internal funds transfer pricing (“FTP”) process. The FTP process is formulated with the goal of encouraging loan and deposit growth that is consistent with the Company’s overall profitability objectives, as well as providing a reasonable and consistent basis for the measurement of business segment net interest margins and profitability. The FTP process charges a cost to fund loans (“FTP charges for loans”) and allocates credits for funds provided from deposits (“FTP credits for deposits”) using internal FTP rates. FTP charges for loans are determined based on a matched cost of funds, which is tied to the pricing and term characteristics of the loans. FTP credits for deposits are based on matched funding credit rates, which are tied to the implied or stated maturity of the deposits. FTP credits for deposits reflect the long-term value generated by the deposits. The net spread between the total internal FTP charges and credits is recorded as part of net interest income in the Treasury and Other segment. The corporate treasury function within the Treasury and Other segment is responsible for the Company’s liquidity and interest rate management and manages the corporate interest rate risk exposure. The Company’s internal FTP assumptions and methodologies are reviewed at least annually to ensure that the process is reflective of current market conditions.

Each segment’s net interest income represents the difference between actual interest earned on assets and interest incurred on liabilities of the segment, adjusted for funding charges or credits through the Company’s FTP process. Noninterest income and noninterest expense directly attributable to a business segment are assigned to that segment. Loan charge-offs and provision for credit losses are recorded to the segments, where the loans are recorded. Significant corporate overhead expenses incurred by centralized support areas in the Treasury and Other segment are allocated to the Consumer and Business Banking and Commercial Banking segments based on the segment’s estimated usage factors including, but not limited to, full-time equivalent employees, net interest income, and loan and deposit volume. Amortization of tax credit and CRA investments and certain types of administrative expenses are generally not allocated to segments.

During the third quarter of 2024, the Company refined its segment allocation methodology and reclassified certain deposits and their related income or expenses from the “Consumer and Business Banking” segment to the “Commercial Banking” or “Treasury and Other” segments, and certain loan balances and their related income or expenses from the “Commercial Banking” segment to the “Treasury and Other” segment. The impacted first quarter 2024 balances have been reclassified for comparability.

$ $ $ Noninterest income Total revenue before provision for credit losses

Provision for credit losses

Compensation and employee benefits

Other noninterest expense (1)

Total noninterest expense

Segment income before income taxes

Segment net income$ $ $ $ Average balances:Loans$ $ $ $ Deposits$ $ $ $ As of March 31, 2025Segment assets$ $ $ $

$ $()$ Noninterest income

Total revenue (loss) before provision for credit losses

()

Provision for (reversal of) credit losses

() Compensation and employee benefits

Other noninterest expense (1)

() Total noninterest expense Segment income (loss) before income taxes ()

Segment net income (loss)

$ $ $()$ Average balances:Loans$ $ $ $ Deposits$ $ $ $ As of March 31, 2024Segment assets$ $ $ $

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Overview

The following discussion provides information about the results of operations, financial condition, liquidity and capital resources of East West Bancorp, Inc. (referred to herein on an unconsolidated basis as “East West” and on a consolidated basis as the “Company,” “we,” “our” or “EWBC”) and its subsidiaries, including its subsidiary bank, East West Bank and its subsidiaries (referred to herein as “East West Bank” or the “Bank”). This information is intended to facilitate the understanding and assessment of significant changes and trends related to the Company’s results of operations and financial condition. This discussion and analysis should be read in conjunction with the Consolidated Financial Statements and the accompanying notes presented elsewhere in this Quarterly Report on Form 10-Q (this “Form 10-Q”), and the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, filed with the United States (“U.S.”) Securities and Exchange Commission (“SEC”) on February 28, 2025 (the “Company’s 2024 Form 10-K”).

Organization and Strategy

East West is a bank holding company incorporated in Delaware on August 26, 1998, and is registered under the Bank Holding Company Act of 1956, as amended. The Company commenced business on December 30, 1998 when, pursuant to a reorganization, it acquired all of the voting stock of the Bank, which became its principal asset. The Bank is an independent commercial bank headquartered in California that focuses on the financial service needs of individuals and businesses that operate in both the U.S. and Asia. Through over 110 locations in the U.S. and Asia, the Company provides a full range of consumer and commercial products and services through the following three business segments: (1) Consumer and Business Banking and (2) Commercial Banking, with the remaining operations recorded in (3) Treasury and Other. The Company’s principal activity is lending to and accepting deposits from businesses and individuals. We are committed to enhancing long-term shareholder value by growing loans, deposits and revenue, improving profitability, and investing for the future while managing risks, expenses and capital. Our business model is built on customer loyalty and engagement, understanding our customers’ financial goals, and meeting our customers’ financial needs through our diverse products and services. We expect our relationship-focused business model to continue generating organic growth from existing customers and to expand our targeted customer bases. As of March 31, 2025, the Company had $76.2 billion in total assets and approximately 3,200 full-time equivalent employees. For additional information on our strategy, and the products and services provided by the Bank, see Item 1. Business — Organization and Banking Services in the Company’s 2024 Form 10-K.

Current Developments

Economic Developments

In April 2025, President Donald J. Trump’s administration (“Trump administration”) announced wide-ranging tariffs targeting trade partners worldwide. This recent shift in trade policy has raised concerns about a slowdown in economic growth, elevated inflation levels, market volatility and a potential recession. The Federal Reserve is expected to move cautiously with respect to interest rate cuts, balancing potential job losses and elevated inflation levels. Meanwhile, mortgage rates and home prices remain high, creating affordability challenges for many consumers. The economic uncertainty caused by these factors could result in decreased consumer spending and curb business investments, which could affect both the demand and performance of loans. However, the Trump administration’s focus on deregulation and capital reform could promote growth for banks. Deregulation could lead to increased access to capital for businesses and consumers as fewer restrictions would encourage banks to extend credit. The Company monitors changes in economic and industry conditions and their impacts on the Company’s business, customers, employees, communities and markets.

Further discussion of the potential impacts on the Company’s business due to the economic environment has been provided in Item 1A. — Risk Factors — Risks Related to Geopolitical Uncertainties and — Risks Related to Financial Matters in the Company’s 2024 Form 10-K.

Climate Accountability

California Climate Reporting Laws

In October 2023, California Governor Gavin Newsom signed into law Senate Bill No. 253, the Climate Corporate Data Accountability Act (“SB 253”) and Senate Bill No. 261, the Climate-Related Financial Risk Act (“SB 261”). SB 253 requires companies with annual revenues exceeding $1 billion that conduct business in California to report their Scope 1 and 2 greenhouse gas (“GHG”) emissions annually starting in 2026; and Scope 3 GHG emissions starting in 2027. SB 261 applies to companies with annual revenues over $500 million that are operating in California, and mandates disclosure of climate-related financial risks and mitigation measures taken to address such risks with the first report due on January 1, 2026, and biennially thereafter.

On September 27, 2024, California Governor Gavin Newsom signed Senate Bill No. 219 (“SB 219”) into law, making some updates to SB 253 and SB 261, one of which extended the deadline for the California Air Resources Board (“CARB”) to adopt the regulations for SB 253 from January 1, 2025 to July 1, 2025. Other SB 219 changes included clarifying that companies subject to SB 253 can submit consolidated reporting at the parent- level, allowing CARB to set more specific timing for Scope 3 emission disclosures within 2027, and providing CARB the option to receive disclosures either directly or through an emissions reporting organization it contracts with.

Scope 1 emissions are direct emissions from sources owned or controlled by the Company. Scope 2 emissions are indirect emissions from purchased energy; and Scope 3 emissions encompass all other indirect emissions throughout a company’s supply chain. On December 5, 2024, CARB issued an Enforcement Notice for SB 253. CARB announced that it will exercise enforcement discretion for the first reporting cycle in 2026 relating to Scope 1 and Scope 2 GHG emissions disclosures. CARB stated that companies making a good-faith effort to comply with SB 253 will not face penalties for incomplete Scope 1 and Scope 2 GHG emissions disclosures, and may submit initial disclosures in 2026 based on data they currently possess, or were in the process of collecting at the time the notice was issued.

The Company is a reporting entity under both SB 253 and SB 261 and has been monitoring the development of CARB’s implementing regulations. The Company has engaged a third-party firm to facilitate the implementation of CARB’s regulations.

Climate Disclosure Rules

On March 6, 2024, the SEC adopted final rules requiring disclosure of climate-related risks and risk management as well as the board and management’s governance of such risks. The SEC voluntarily stayed the rules on April 4, 2024 pending the completion of judicial review of consolidated legal challenges to the rules by the United States Circuit Court of Appeals for the Eighth Circuit (the “Court”). On March 27, 2025, the SEC announced that it had voted to withdraw its defense of the rules, although the rules continue to be defended by several intervening states and the District of Columbia. On April 24, 2025, the Court issued an order to hold the cases in abeyance and directed the SEC to file a status report within 90 days to inform the Court whether it intends to review or reconsider the rules. In addition, the order provides that if the SEC has determined that it will not take action, the report should address whether the SEC will adhere to the rules if they are upheld and, if not, why the SEC will not review or reconsider the rules at this time.

Resolution Planning

On June 20, 2024, the Federal Deposit Insurance Corporation (“FDIC”) released a final rule that requires covered insured depository institutions (“IDIs”) to develop and submit detailed plans demonstrating how they could be resolved in an orderly and timely manner in the event of receivership. IDIs with total assets of $100 billion or more are required to submit full resolution plans, and IDIs with total assets between $50 billion and $100 billion, including the Bank, are required to submit more limited informational filings. Under the final rule, if the FDIC deemed a resolution plan or informational filing not credible and the IDI failed to resubmit a credible plan, the IDI could become subject to an enforcement action. The Company has established a management-level working group to meet the requirements under the final rule for timely submission on or before October 1, 2025. Going forward, the Bank will be required to submit informational filings every three years and interim supplements annually.

Regulatory Updates

On August 23, 2024, the FDIC published a proposed rule that would revise the FDIC’s regulations governing the classification and treatment of brokered deposits. On March 14, 2025, the FDIC withdrew the proposed rule.

On October 24, 2023, the federal banking agencies issued a final rule revising their framework for evaluating banks’ records of community reinvestment under the Community Reinvestment Act (“CRA”). On March 28, 2025, the agencies announced their intent to issue a proposal to rescind the October 2023 final rule and to reinstate the CRA framework that existed prior to the October 2023 final rule. The Bank received a rating of “Outstanding” in its most recent performance evaluation, which was conducted using the CRA framework that existed prior to the October 2023 final rule.

Financial Review



						Three Months Ended March 31,

Summary of operations:
565,139









285,075

Per share:
2.04
2.03

0.55



Weighted-average number of shares outstanding:




Performance metrics:
%
%
%

%
%
%


At period end:	March 31, 2025		December 31, 2024
Total assets	$	76,165,013	$	75,976,475
Total loans	$	54,252,734	$	53,726,637
Total deposits	$	63,052,105	$	63,175,023
Common shares outstanding at period-end	137,802		138,437
Book value per share	$	57.54	$	55.79
Tangible book value per share (1)	$	54.13	$	52.39

(1)For additional information regarding the reconciliation of these non-U.S. Generally Accepted Accounting Principles (“GAAP”) financial measures, refer to Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) — Reconciliation of GAAP to Non-GAAP Financial Measures in this Form 10-Q.

(2)Efficiency ratio is calculated as noninterest expense divided by total revenue.

The Company’s first quarter 2025 net income was $290 million, an increase of $5 million or 2%, from the first quarter of 2024. The increase was primarily due to higher net interest income before provision for credit losses and noninterest income, partially offset by an increase in provision for credit losses, higher income tax and noninterest expenses. Noteworthy aspects of the Company’s performance for the first quarter of 2025 included:

•Net interest income and net interest margin. First quarter 2025 net interest income before provision for credit losses was $600 million, an increase of $35 million or 6% from the first quarter of 2024. First quarter 2025 net interest margin of 3.35% increased one basis point (“bp”) year-over-year.

•Noninterest income. First quarter 2025 noninterest income increased $14 million or 17% year-over-year to $92 million, primarily due to an increase in fee-related income.

•Earnings per share growth. First quarter 2025 basic and diluted EPS expanded 3% to $2.10 and $2.08, respectively, from the first quarter of 2024.

•Efficiency ratio improvement. First quarter 2025 efficiency ratio of 36.42% improved 186 bps from 38.28% for the same period in 2024. The improvement in the efficiency ratio primarily reflected a year-over-year increase in total revenue.

•Asset growth. Total assets reached $76.2 billion as of March 31, 2025, an increase of $189 million, from December 31, 2024, primarily driven by a $1.5 billion or 14% increase in available-for-sale (“AFS”) debt securities and a $493 million or 1% increase in net loans held-for-investment, partially offset by a $1.8 billion or 38% decrease in interest-bearing cash and deposits with banks.

•Strong capital levels. Stockholders’ equity was $7.9 billion as of March 31, 2025, up $206 million or 3%, from December 31, 2024. Book value per share of $57.54 as of March 31, 2025, increased $1.75 or 3%, compared with December 31, 2024. Tangible book value per share of $54.13 as of March 31, 2025, increased $1.74 or 3%, compared with December 31, 2024. Tangible book value per share is a non-GAAP financial measure. For additional details, see the reconciliation of non-GAAP financial measures presented under Item 2. MD&A — Reconciliation of GAAP to non-GAAP Financial Measures in this Form 10-Q.

Results of Operations

Net Interest Income

The Company’s primary source of revenue is net interest income, which is the interest income earned on interest-earning assets less interest expense paid on interest-bearing liabilities. Net interest margin is the ratio of net interest income to average interest-earning assets. Net interest income and net interest margin are impacted by several factors, including changes in average balances and the composition of interest-earning assets and funding sources, market interest rate fluctuations and the slope of the yield curve, repricing characteristics and maturity of interest-earning assets and interest-bearing liabilities, the volume of noninterest-bearing sources of funds and asset quality.

Net interest income and net interest margin for the first quarter of 2025 increased $35 million and one bp, respectively, year-over-year. These year-over-year increases primarily reflected an increase in AFS debt securities and yield increases, decreases in Bank Term Funding Program (“BTFP”) and short-term borrowings, and lower deposit funding costs. However, these year-over-year increases were partially offset by decreases in interest-bearing cash and deposits with banks and the related yields, a decrease in loan yields that outpaced loan growth, in addition to an increase in Federal Home Loan Bank (“FHLB”) advances during the first quarter of 2025.

Average interest-earning assets were $72.7 billion for the first quarter of 2025, an increase of $4.6 billion or 7% from the first quarter of 2024. The year-over-year increase in average interest-earning assets primarily reflected increases in $5.2 billion or 79% in AFS debt securities and $1.4 billion or 3% of loan growth, partially offset by a $1.8 billion or 30% decrease in interest-bearing cash and deposits with banks.

The yield on average interest-earning assets for the first quarter of 2025 was 5.76%, a decrease of 28 bps from the first quarter of 2024. The year-over-year decrease in the yield on average interest-earning assets primarily reflected the impact of lower interest rates on the loan portfolio.

The average loan yield for the first quarter of 2025 was 6.39%, a decrease of 32 bps from the first quarter of 2024. The year-over-year decrease in the average loan yield reflected the loan portfolio’s sensitivity to lower benchmark interest rates, compared with the first quarter of 2024. Approximately 58% and 57% of loans held-for-investment were variable rate as of March 31, 2025 and 2024, respectively.

Deposits are an important source of funding for the Company. Average deposits were $62.6 billion for the first quarter of 2025, which increased $5.2 billion or 9% from the first quarter of 2024. Average noninterest-bearing deposits were $15.1 billion for the first quarter of 2025, an increase of $149 million or 1% from the first quarter of 2024. Average noninterest-bearing deposits made up 24% and 26% of average deposits for the first quarters of 2025 and 2024, respectively.

During the first quarter of 2025, the average cost of deposits decreased 30 bps, compared with the first quarter of 2024; while the average cost of interest-bearing deposits decreased 51 bps over the same period. These year-over-year decreases primarily reflected lower benchmark interest rates and the Company’s efforts to reduce deposit costs.

The average cost of funds calculation includes deposits, short-term borrowings, FHLB advances, securities sold under repurchase agreements (“repurchase agreements”), and long-term debt. For the first quarter of 2025, the average cost of funds was 2.64%, a 33 bp decrease from the first quarter of 2024. The year-over-year decrease was mainly driven by the decreased cost of deposits as discussed above.

The Company utilizes various tools to manage interest rate risk. Refer to the Interest Rate Risk Management section of Item 2. MD&A — Risk Management — Market Risk Management in this Form 10-Q.

The following table presents the interest spread, net interest margin, average balances, interest income and expense, and the average yield/rate by asset and liability component for the first quarters of 2025 and 2024:



	Three Months Ended March 31,
	2025						2024
($ in thousands)	Average Balance		Interest		Average Yield/Rate (1)		Average Balance		Interest		Average Yield/Rate (1)
ASSETS
Interest-earning assets:
Interest-bearing cash and deposits with banks	$	4,087,664	$	39,137	3.88	%	$	5,861,517	$	74,382	5.10	%
Securities purchased under resale agreements (“resale agreements”)	425,000		1,610		1.54	%	725,659		6,115		3.39	%
Debt securities:
AFS (2) (3)	11,766,446		135,519		4.67	%	6,566,368		62,858		3.85	%
Held-to-maturity (“HTM”) (2)	2,908,402		12,265		1.71	%	2,950,686		12,534		1.71	%
Total debt securities (2)	14,674,848		147,784		4.08	%	9,517,054		75,392		3.19	%
Loans:
Commercial and industrial (“C&I”) (2)	16,865,399		293,414		7.06	%	16,251,622		325,810		8.06	%
Commercial real estate (“CRE”) (2)	20,373,015		311,386		6.20	%	20,413,584		324,087		6.39	%
Residential mortgage	16,049,719		234,891		5.94	%	15,202,345		215,674		5.71	%
Other consumer	49,578		721		5.90	%	57,289		818		5.74	%
Total loans (2)(4)(5)	53,337,711		840,412		6.39	%	51,924,840		866,389		6.71	%







Restricted equity securities	165,363		2,859		7.01	%	92,975		1,339		5.79	%
Total interest-earning assets	$	72,690,586	$	1,031,802	5.76	%	$	68,122,045	$	1,023,617	6.04	%

Noninterest-earning assets:
Cash and due from banks	373,827						445,767
Allowance for loan losses	(716,255)						(679,116)
Other assets	3,276,794						3,789,700
Total assets	$	75,624,952					$	71,678,396

LIABILITIES AND STOCKHOLDERS’ EQUITY
Interest-bearing liabilities:
Checking deposits	$	7,749,665	$	47,911	2.51	%	$	7,695,429	$	53,821	2.81	%
Money market deposits	14,833,615		116,018		3.17	%	13,636,210		134,661		3.97	%
Savings deposits	1,752,946		3,447		0.80	%	1,809,568		4,120		0.92	%
Time deposits	23,197,328		224,605		3.93	%	19,346,243		213,597		4.44	%
Total interest-bearing deposits	47,533,554		391,981		3.34	%	42,487,450		406,199		3.85	%
BTFP, short-term borrowings and federal funds purchased	428		6		5.69	%	3,864,525		42,106		4.38	%
FHLB advances	3,500,001		38,866		4.50	%	554,946		7,739		5.61	%
Repurchase agreements	6,684		77		4.67	%	2,549		35		5.52	%
Long-term debt and finance lease liabilities	35,919		671		7.58	%	125,818		2,399		7.67	%
Total interest-bearing liabilities	$	51,076,586	$	431,601	3.43	%	$	47,035,288	$	458,478	3.92	%

Noninterest-bearing liabilities and stockholders’ equity:
Demand deposits	15,104,028						14,954,953
Accrued expenses and other liabilities	1,575,264						2,695,597
Stockholders’ equity	7,869,074						6,992,558
Total liabilities and stockholders’ equity	$	75,624,952					$	71,678,396



Interest rate spread					2.33	%					2.12	%
Net interest income and net interest margin			$	600,201	3.35	%			$	565,139	3.34	%

(1)Annualized.

(2)Yields on tax-exempt securities and loans are not presented on a tax-equivalent basis.

(3)Includes the amortization of net premiums on AFS debt securities of $8 million and $7 million for the first quarters of 2025 and 2024, respectively.

(4)Average balances include nonperforming loans and loans held-for-sale.

(5)Loans include the accretion of net deferred loan fees and amortization of net premiums, which totaled $12 million and $14 million for the first quarters of 2025 and 2024, respectively.

The following table summarizes the extent to which changes in (1) interest rates, and (2) volume of average interest-earning assets and average interest-bearing liabilities affected the Company’s net interest income for the periods presented. The total change for each category of interest-earning assets and interest-bearing liabilities is segmented into changes attributable to variations in volume and yield/rate. Changes that are not solely due to either volume or yield/rate are allocated proportionally based on the absolute value of the change related to average volume and average yield/rate.



	Three Months Ended March 31,
	2025 vs. 2024
			Changes Due to
($ in thousands)	Total Change		Volume		Yield/Rate
Interest-earning assets:
Interest-bearing cash and deposits with banks	$	(35,245)	$	(19,685)	$	(15,560)
Resale agreements	(4,505)		(1,942)		(2,563)
Debt securities:
AFS	72,661		57,249		15,412
HTM	(269)		(275)		6
Total debt securities	72,392		56,974		15,418
Loans:
C&I	(32,396)		11,223		(43,619)
CRE	(12,701)		(808)		(11,893)
Residential mortgage	19,217		11,163		8,054
Other consumer	(97)		(117)		20
Total loans	(25,977)		21,461		(47,438)
Restricted equity securities	1,520		1,196		324
Total interest and dividend income	$	8,185	$	58,004	$	(49,819)
Interest-bearing liabilities:
Checking deposits	$	(5,910)	$	347	$	(6,257)
Money market deposits	(18,643)		10,671		(29,314)
Savings deposits	(673)		(131)		(542)
Time deposits	11,008		37,963		(26,955)
Total interest-bearing deposits	(14,218)		48,850		(63,068)
BTFP, short-term borrowings and federal funds purchased	(42,100)		(42,117)		17
FHLB advances	31,127		24,838		6,289
Repurchase agreements	42		48		(6)
Long-term debt and finance lease liabilities	(1,728)		(1,699)		(29)
Total interest expense	$	(26,877)	$	29,920	$	(56,797)
Change in net interest income	$	35,062	$	28,084	$	6,978

Noninterest Income

The following table presents the components of noninterest income for the first quarters of 2025 and 2024:

Three Months Ended March 31,

Noninterest income comprised 13% and 12% of total revenue for the first quarters of 2025 and 2024, respectively. Noninterest income for the first quarter of 2025 was $92 million, an increase of $14 million or 17%, compared with the same prior year period. The increase was primarily due to higher wealth management fees, foreign exchange income, lending and loan servicing, and commercial and consumer deposit-related fees.

Commercial and consumer deposit-related fees were $27 million for the first quarter of 2025, an increase of $2 million or 9%, compared with the first quarter of 2024. The year-over-year increase was primarily due to increase in analysis service fees due to increased commercial customer activity.

Lending and loan servicing fees were $26 million for the first quarter of 2025, an increase of $3 million or 14%, compared with the first quarter of 2024. The increase was primarily due to higher trade finance and credit enhancement fees driven by increased customer activity.

Foreign exchange income was $16 million for the first quarter of 2025, an increase of approximately $4 million or 38%, compared with the first quarter of 2024. The increase primarily reflected higher fees and the favorable valuation of certain foreign currency denominated balance sheet items, partially offset by losses on foreign exchange trades.

Wealth management fees were $14 million for the first quarter of 2025, an increase of $5 million or 58%, compared with the first quarter of 2024. The increase reflected higher customer demand for wealth management products such as fixed-rate bonds and fixed income annuities.

Noninterest Expense

The following table presents the components of noninterest expense for the first quarters of 2025 and 2024:

Three Months Ended March 31,

First quarter 2025 noninterest expense of $252 million increased $6 million or 2%, compared with the first quarter of 2024. The increase was primarily due to increases in other operating expense, compensation and employee benefits, amortization of tax credit and CRA investments, and computer software and data processing expenses, partially offset by decreases in deposit insurance premiums and regulatory assessments and deposit account expense.

Compensation and employee benefits were $146 million for the first quarter of 2025, an increase of $5 million or 3%, compared with the first quarter of 2024. The increase was primarily driven by annual merit increases and staffing growth.

Deposit account expense was $9 million for the first quarter of 2025, a decrease of $3 million or 26%, compared with the first quarter of 2024, driven primarily by lower balances and referral rates paid on certain deposit accounts.

Computer and software related expenses were $13 million for the first quarter of 2025, an increase of $2 million or 17%, compared with the first quarter of 2024. The increase primarily reflected increased software licensing costs and higher data processing fees.

Deposit insurance premiums and regulatory assessments was $10 million for the first quarter of 2025, a decrease of $9 million or 47%, compared with the first quarter of 2024. The decrease was primarily due to a $1 million FDIC special assessment charge (“FDIC charge”) recorded in the first quarter of 2025, compared with a $10 million FDIC charge recorded in the first quarter of 2024. Adjustments to the FDIC charge pertain primarily to changes in the FDIC’s estimated losses to the Deposit Insurance Fund. For additional information on the FDIC charge, refer to Item 1. Business — Supervision and Regulation — FDIC Deposit Insurance Assessments in the Company’s 2024 Form 10-K.

Other operating expense was $42 million for the first quarter of 2025, an increase of $9 million or 28%, compared with the first quarter of 2024. The increase was primarily due to $4 million in other real estate owned (“OREO”) write-downs, and $4 million increase in expenses related to problem loans and foreclosure.

Amortization of tax credit and CRA investments was $16 million for the first quarter of 2025, an increase of $3 million or 19%, compared with the first quarter of 2024. The variance was primarily due to the timing of tax credit investments that closed in a given period.

Income Taxes



	Three Months Ended March 31,
($ in thousands)	2025			2024			% Change
Income before income taxes	$	391,155		$	372,252		5	%
Income tax expense	$	100,885		$	87,177		16	%
Effective tax rate	25.8		%	23.4		%

First quarter 2025 income tax expense was $101 million and the effective tax rate was 25.8%, compared with first quarter 2024 income tax expense of $87 million and an effective tax rate of 23.4%. The increase in income tax expense was primarily due to higher pre-tax income.

Operating Segment Results

The Company organizes its operations into three reportable operating segments: (1) Consumer and Business Banking; (2) Commercial Banking; and (3) Treasury and Other. These segments are defined by the type of customers served and the related products and services provided. For a description of the Company’s internal management reporting process, including the segment cost allocation methodology, see Note 14 — Business Segments to the Consolidated Financial Statements in this Form 10-Q.

Segment net interest income represents the difference between actual interest earned on assets and interest incurred on liabilities of the segment, adjusted for funding charges or credits through the Company’s internal funds transfer pricing (“FTP”) process.

During the third quarter of 2024, the Company refined its segment allocation methodology and reclassified certain deposits and their related income or expenses from the “Consumer and Business Banking” segment to the “Commercial Banking” or “Treasury and Other” segments, and certain loan balances and their related income or expenses from the “Commercial Banking” segment to the “Treasury and Other” segment. The first quarter 2024 balances have been reclassified for comparability.

Consumer and Business Banking

The following table presents financial information for the Consumer and Business Banking segment for the periods indicated:



	Three Months Ended March 31,
					Change from 2024
($ in thousands)	2025		2024		$		%


Total revenue before provision for credit losses	$	302,018	$	322,261	$	(20,243)	(6)	%
Provision for credit losses	7,685		2,564		5,121		200	%
Compensation and employee benefits	61,964		53,949		8,015		15	%
Other noninterest expense	57,192		63,171		(5,979)		(9)	%
Total noninterest expense	119,156		117,120		2,036		2	%
Segment income before income taxes	175,177		202,577		(27,400)		(14)	%
Income tax expense	52,089		59,877		(7,788)		(13)	%
Segment net income	$	123,088	$	142,700	$	(19,612)	(14)	%
Average loans	$	19,762,287	$	18,615,350	$	1,146,937	6	%
Average deposits	$	32,326,906	$	29,306,788	$	3,020,118	10	%

Consumer and Business Banking segment net income decreased $20 million or 14% year-over-year to $123 million for the first quarter of 2025, primarily driven by a $27 million decrease in net interest income and an $8 million increase in compensation and employee benefits, partially offset by a $7 million increase in noninterest income and a $6 million decrease in other noninterest expense. The decrease in net interest income was primarily due to the year-over-year decrease in interest rates. The noninterest income increase was primarily due to increases in wealth management and foreign exchange fees earned. The compensation and employee benefits increase was primarily due to staffing growth and increased wealth management commissions. The decrease in other noninterest expense was primarily driven by decreased deposit insurance premiums and regulatory assessments, from lower FDIC charges, and decreased corporate overhead allocated expenses.

Commercial Banking

The following table presents financial information for the Commercial Banking segment for the periods indicated:



	Three Months Ended March 31,
					Change from 2024
($ in thousands)	2025		2024		$		%


Total revenue before provision for credit losses	$	306,580	$	333,855	$	(27,275)	(8)	%
Provision for credit losses	40,779		22,907		17,872		78	%
Compensation and employee benefits	61,187		61,459		(272)		0	%
Other noninterest expense	42,318		44,354		(2,036)		(5)	%
Total noninterest expense	103,505		105,813		(2,308)		(2)	%
Segment income before income taxes	162,296		205,135		(42,839)		(21)	%
Income tax expense	48,271		60,492		(12,221)		(20)	%
Segment net income	$	114,025	$	144,643	$	(30,618)	(21)	%
Average loans	$	33,211,037	$	32,881,346	$	329,691	1	%
Average deposits	$	26,131,654	$	25,163,151	$	968,503	4	%

Commercial Banking segment net income decreased $31 million or 21% year-over-year to $114 million for the first quarter of 2025, primarily driven by a $36 million decrease in net interest income and an $18 million increase in provision for credit losses, partially offset by an $8 million increase in noninterest income. The net interest income decrease was primarily driven by a decrease in interest income on loans due to the year-over-year decline in interest rates, while the noninterest income increase was primarily due to increases in lending and loan servicing, foreign exchange and deposit-related fees earned. The increase in provision for credit losses was primarily driven by C&I loan growth and the worsening macro-economic outlook.

Treasury and Other

Centralized functions, including the corporate treasury activities of the Company, eliminations of inter-segment amounts, and centrally managed departments, have been aggregated and included in the Treasury and Other segment. Tax credit investment amortization is recorded in the Treasury and Other segment.

The following table presents financial information for the Treasury and Other segment for the periods indicated:



	Three Months Ended March 31,
			Change from 2024
($ in thousands)	2025	2024	$	%

(1)Credit ratings express opinions about the credit quality of a debt security. The Company determines the credit rating of a security according to the lowest credit rating made available by nationally recognized statistical rating organizations (“NRSROs”). Investment grade debt securities are those with ratings similar to BBB- or above (as defined by NRSROs), and are generally considered by the rating agencies and market participants to be low credit risk. Ratings percentages are allocated based on fair value.

(2)For debt securities not rated by NRSROs, the Company uses other factors which include but are not limited to the priority in collections within the securitization structure, and whether the contractual payments have historically been on time.

(3)Includes Government National Mortgage Association (“GNMA”) AFS debt securities totaling $8.6 billion of amortized cost and $8.5 billion of fair value as of March 31, 2025, and $7.3 billion of amortized cost and $7.2 billion of fair value as of December 31, 2024.

(4)Includes GNMA HTM debt securities totaling $84 million of amortized cost and $68 million of fair value as of March 31, 2025, and $86 million of amortized cost and $68 million of fair value as of December 31, 2024.

As of March 31, 2025, the Company’s AFS and HTM debt securities portfolios had an effective duration (defined as the sensitivity of the value of the portfolio to interest rate changes) of 2.3 and 6.8, respectively, compared with 2.4 and 7.0, respectively, as of December 31, 2024. The decrease in the AFS debt securities’ effective duration was primarily due to a downward shift in the yield curve. The decrease in the HTM debt securities’ effective duration was due to the downward shift in the yield curve and portfolio seasoning. The Company estimated that the effective duration of its AFS debt securities was 2.9 for an instantaneous 100 bp parallel increase and 1.9 for an instantaneous 100 bp parallel decrease as of March 31, 2025.

Available-for-Sale Debt Securities

AFS debt securities increased $1.5 billion or 14% from December 31, 2024 to $12.4 billion primarily due to the purchases of GNMA securities. The Company’s AFS debt securities are carried at fair value with non-credit related unrealized gains and losses, net of tax, reported in Other comprehensive income (loss) on the Consolidated Statement of Comprehensive Income. Pre-tax net unrealized losses on AFS debt securities were $578 million as of March 31, 2025, compared with $659 million as of December 31, 2024.

Of the AFS debt securities with gross unrealized losses, substantially all were rated investment grade as of both March 31, 2025 and December 31, 2024. There was no allowance for credit losses provided against the AFS debt securities as of both March 31, 2025 and December 31, 2024. Additionally, there were no credit losses recognized in earnings for the three months ended March 31, 2025 and 2024.

Held-to-Maturity Debt Securities

All HTM debt securities were issued, guaranteed, or supported by the U.S. government or government-sponsored enterprises. Accordingly, the Company applied a zero credit loss assumption for these securities and no allowance for credit loss was recorded as of both March 31, 2025 and December 31, 2024.

For additional information on AFS and HTM securities, see Note 1 — Summary of Significant Accounting Policies to the Consolidated Financial Statements in the Company’s 2024 Form 10-K and Note 2 — Fair Value Measurement and Fair Value of Financial Instruments and Note 4 — Securities to the Consolidated Financial Statements in this Form 10-Q.

Loan Portfolio

The Company offers a broad range of financial products designed to meet the credit needs of its borrowers. The Company’s loan portfolio segments include commercial loans, which consist of C&I, CRE, multifamily residential, and construction and land loans, as well as consumer loans, which consist of single-family residential, home equity lines of credit (“HELOCs”) and other consumer loans. The composition of the loan portfolio as of March 31, 2025 was similar to the composition as of December 31, 2024.

The following table presents the composition of the Company’s total loan portfolio by loan type as of March 31, 2025 and December 31, 2024:


($ in thousands)	Amount		%		Amount		%
Commercial:
C&I	$	17,460,744	32	%	$	17,397,158	32	%
CRE:
CRE	14,868,361		28	%	14,655,340		28	%
Multifamily residential	5,007,969		9	%	4,953,442		9	%
Construction and land	653,630		1	%	666,162		1	%
Total CRE	20,529,960		38	%	20,274,944		38	%
Total commercial	37,990,704		70	%	37,672,102		70	%
Consumer:
Residential mortgage:
Single-family residential	14,383,562		27	%	14,175,446		27	%
HELOCs	1,827,837		3	%	1,811,628		3	%
Total residential mortgage	16,211,399		30	%	15,987,074		30	%
Other consumer	50,631		0	%	67,461		0	%
Total consumer	16,262,030		30	%	16,054,535		30	%
Total loans held-for-investment (1)	54,252,734		100	%	53,726,637		100	%
Allowance for loan losses	(734,856)				(702,052)

Total loans, net	$	53,517,878			$	53,024,585

Commercial — Total Commercial Real Estate Loans. The total CRE portfolio consists of CRE, multifamily residential, and construction and land loans, and affordable housing lending. The Company’s underwriting parameters for CRE loans are established in compliance with supervisory guidance, including property type, geography and loan-to-value (“LTV”).

The Company’s total CRE loan portfolio is well-diversified by property type with an average CRE loan size of $3 million as of both March 31, 2025 and December 31, 2024. The following table summarizes the Company’s total CRE loans by property type as of March 31, 2025 and December 31, 2024:



	March 31, 2025				December 31, 2024
($ in thousands)	Amount		%		Amount		%
Property types:
Multifamily	$	5,007,969	24	%	$	4,953,442	24	%
Retail	4,396,265		21	%	4,347,032		21	%
Industrial	4,063,749		20	%	3,972,389		20	%
Hotel	2,373,667		12	%	2,404,385		12	%
Office	2,144,715		11	%	2,125,210		11	%
Healthcare	813,862		4	%	788,806		4	%
Construction and land	653,630		3	%	666,162		3	%
Other	1,076,103		5	%	1,017,518		5	%
Total CRE loans	$	20,529,960	100	%	$	20,274,944	100	%

The weighted-average LTV ratio of the total CRE loan portfolio was 49% and 50% as of March 31, 2025 and December 31, 2024, respectively. Weighted-average LTV is based on the most recent LTV, which considers the latest available appraisal and current loan commitment. Approximately 92% and 91% of total CRE loan commitments had an LTV ratio of 65% or lower as of March 31, 2025 and December 31, 2024, respectively.

The following tables provide a summary of the Company’s CRE, multifamily residential, and construction and land loans by geography as of March 31, 2025 and December 31, 2024. The distribution of the total CRE loan portfolio largely reflects the Company’s geographical branch footprint, which is primarily concentrated in California.



	March 31, 2025
($ in thousands)	CRE		%		Multifamily Residential		%		Construction and Land		%		Total CRE		%
Geographic markets:
Southern California	$	7,585,911	51	%	$	2,298,354	46	%	$	247,853	38	%	$	10,132,118	49	%
Northern California	2,778,981		19	%	982,179		20	%	166,987		25	%	3,928,147		19	%
California	10,364,892		70	%	3,280,533		66	%	414,840		63	%	14,060,265		68	%
Texas	1,181,561		8	%	475,942		10	%	112,836		17	%	1,770,339		9	%
New York	732,097		5	%	266,939		5	%	25,107		4	%	1,024,143		5	%
Washington	493,559		3	%	157,989		3	%	10,336		2	%	661,884		3	%
Arizona	339,187		2	%	191,774		4	%	27,584		4	%	558,545		3	%
Nevada	297,445		2	%	169,334		3	%	—		—	%	466,779		2	%
Other markets	1,459,620		10	%	465,458		9	%	62,927		10	%	1,988,005		10	%
Total loans	$	14,868,361	100	%	$	5,007,969	100	%	$	653,630	100	%	$	20,529,960	100	%



	December 31, 2024
($ in thousands)	CRE		%		Multifamily Residential		%		Construction and Land		%		Total CRE		%
Geographic markets:
Southern California	$	7,516,638	51	%	$	2,316,404	47	%	$	230,297	35	%	$	10,063,339	50	%
Northern California	2,693,768		19	%	992,406		20	%	163,633		24	%	3,849,807		19	%
California	10,210,406		70	%	3,308,810		67	%	393,930		59	%	13,913,146		69	%
Texas	1,091,626		8	%	467,796		9	%	131,963		20	%	1,691,385		8	%
New York	732,694		5	%	249,357		5	%	44,597		7	%	1,026,648		5	%
Washington	493,972		3	%	155,022		3	%	10,401		1	%	659,395		3	%
Arizona	348,877		2	%	182,955		4	%	23,903		4	%	555,735		3	%
Nevada	293,927		2	%	139,292		3	%	—		—	%	433,219		2	%
Other markets	1,483,838		10	%	450,210		9	%	61,368		9	%	1,995,416		10	%
Total loans	$	14,655,340	100	%	$	4,953,442	100	%	$	666,162	100	%	$	20,274,944	100	%

The percentage of total CRE loans located in California was 68% and 69%, as of March 31, 2025 and December 31, 2024, respectively. Changes in California’s economy and real estate values could have a significant impact on the collectability of these loans and the required level of allowance for loan losses. For additional information related to the higher degree of risk from a downturn in the California economic and real estate markets, see Item 1A. Risk Factors — Risks Related to Geopolitical Uncertainties and Risks Related to Financial Matters to the Company’s 2024 Form 10-K.

Commercial — Commercial Real Estate Loans. The Company focuses on providing financing to experienced real estate investors and developers who have moderate levels of leverage, many of whom are long-time customers of the Bank. The Company seeks to underwrite loans with conservative standards for cash flows, debt service coverage and LTV. Owner-occupied properties comprised 20% of the CRE loans as of both March 31, 2025 and December 31, 2024. The remainder were non-owner-occupied properties, where 50% or more of the debt service for the loan is typically provided by rental income from an unaffiliated third party.

Interest rates on CRE loans may be fixed, variable or hybrid. The Company offers hedging products to our customers to manage their interest rate risks. As of both March 31, 2025 and December 31, 2024, of the 57% of our CRE portfolio that had variable rates, 54% had customer-level interest rate derivative contracts in place.

Commercial — Multifamily Residential Loans. The multifamily residential loan portfolio is largely comprised of loans secured by residential properties with five or more units. The Company offers a variety of first lien mortgages, including fixed- and variable-rate loans, as well as hybrid loans with interest rates that adjust annually after an initial fixed rate period of three to ten years. The Company also offers hedging products to our customers to manage their interest rate risks. As of March 31, 2025, of the 49% of our multifamily residential portfolio that had variable rates, 50% had customer-level interest rate derivative contracts in place. As of December 31, 2024, of the 50% of our multifamily residential portfolio that had variable rates, 44% had customer-level interest rate derivative contracts in place.

Commercial — Construction and Land Loans. Construction and land loans provide financing for a portfolio of projects diversified by real estate property type. Construction loan exposure was comprised of $502 million in loans outstanding, and $345 million in unfunded commitments as of March 31, 2025, compared with $506 million in loans outstanding, and $391 million in unfunded commitments as of December 31, 2024. Land loans totaled $152 million and $160 million as of March 31, 2025 and December 31, 2024, respectively.

Consumer

Residential mortgage loans are primarily originated through the Bank’s branch network. The average total residential mortgage loan size was $438 thousand and $437 thousand as of March 31, 2025 and December 31, 2024, respectively. The following tables summarize the Company’s single-family residential and HELOC loan portfolios by geography as of March 31, 2025 and December 31, 2024:



	March 31, 2025
($ in thousands)	Single-Family Residential		%		HELOCs		%		Total Residential Mortgage		%
Geographic markets:
Southern California	$	5,659,170	39	%	$	857,714	47	%	$	6,516,884	40	%
Northern California	1,859,603		13	%	382,754		21	%	2,242,357		14	%
California	7,518,773		52	%	1,240,468		68	%	8,759,241		54	%
New York	4,244,034		30	%	279,381		15	%	4,523,415		28	%
Washington	732,111		5	%	182,000		10	%	914,111		6	%
Massachusetts	463,383		3	%	62,664		4	%	526,047		3	%
Georgia	473,904		3	%	21,400		1	%	495,304		3	%
Nevada	457,706		3	%	36,390		2	%	494,096		3	%
Texas	479,479		4	%	—		—	%	479,479		3	%
Other markets	14,172		0	%	5,534		0	%	19,706		0	%
Total	$	14,383,562	100	%	$	1,827,837	100	%	$	16,211,399	100	%
Lien priority:
First mortgage	$	14,383,562	100	%	$	1,329,824	73	%	$	15,713,386	97	%
Junior lien mortgage	—		—	%	498,013		27	%	498,013		3	%
Total	$	14,383,562	100	%	$	1,827,837	100	%	$	16,211,399	100	%



	December 31, 2024
($ in thousands)	Single-Family Residential		%		HELOCs		%		Total Residential Mortgage		%
Geographic markets:
Southern California	$	5,475,929	39	%	$	853,858	47	%	$	6,329,787	39	%
Northern California	1,825,462		13	%	379,692		21	%	2,205,154		14	%
California	7,301,391		52	%	1,233,550		68	%	8,534,941		53	%
New York	4,303,815		31	%	266,529		15	%	4,570,344		29	%
Washington	715,968		5	%	187,220		10	%	903,188		6	%
Massachusetts	457,147		3	%	66,181		4	%	523,328		3	%
Georgia	466,790		3	%	20,040		1	%	486,830		3	%
Nevada	447,097		3	%	32,578		2	%	479,675		3	%
Texas	468,461		3	%	—		—	%	468,461		3	%
Other markets	14,777		0	%	5,530		0	%	20,307		0	%
Total	$	14,175,446	100	%	$	1,811,628	100	%	$	15,987,074	100	%
Lien priority:
First mortgage	$	14,175,446	100	%	$	1,322,957	73	%	$	15,498,403	97	%
Junior lien mortgage	—		—	%	488,671		27	%	488,671		3	%
Total	$	14,175,446	100	%	$	1,811,628	100	%	$	15,987,074	100	%

Consumer — Single-Family Residential Loans. The Company offers a variety of single-family residential first lien mortgage loan programs, including fixed- and variable-rate loans, as well as hybrid loans with interest rates that adjust on a regular basis, typically annually, after an initial fixed rate period. The Company was in a first lien position in all of its single-family residential loans as of both March 31, 2025 and December 31, 2024. Many of these loans are reduced documentation loans, for which a substantial down payment is required, resulting in a low LTV ratio at origination, typically 65% or less. The weighted-average LTV ratio was 52% as of both March 31, 2025 and December 31, 2024. These loans have historically experienced low delinquency and loss rates.

Consumer — Home Equity Lines of Credit. Total HELOC commitments were $5.3 billion with a utilization rate of 34% as of both March 31, 2025 and December 31, 2024. Substantially all of the Company’s unfunded HELOC commitments are unconditionally cancellable. The Company was in a first lien position for 73% of total outstanding HELOCs as of both March 31, 2025 and December 31, 2024. Many of these loans are reduced documentation loans, which have a low LTV ratio at origination, typically 65% or less. The weighted-average LTV ratio was 46% as of both March 31, 2025 and December 31, 2024. As a result, these loans have historically experienced low delinquency and loss rates. Substantially all of the Company’s HELOCs were variable-rate loans as of both March 31, 2025 and December 31, 2024.

All originated commercial and consumer loans are subject to the Company’s conservative underwriting guidelines and loan origination standards. Management believes that the Company’s underwriting criteria and procedures adequately consider the unique risks associated with these products. The Company conducts quality control procedures and periodic audits, including the review of lending and legal requirements, to ensure that the Company is in compliance with these requirements.

Foreign Outstandings

The Company’s international branches, which include the branch in Hong Kong and the subsidiary bank’s branches in China, are subject to the general risks inherent in conducting business in foreign countries, such as regulatory, economic and political uncertainties, and foreign currency exchange rate risks. The following table presents the major financial assets held in the Company’s international branches as of March 31, 2025 and December 31, 2024:



	March 31, 2025				December 31, 2024
($ in thousands)	Amount		% of Total Consolidated Assets		Amount		% of Total Consolidated Assets
Hong Kong branch:
Cash and cash equivalents	$	752,879	1	%	$	730,227	1	%

AFS debt securities (1)	$	741,528	1	%	$	752,840	1	%
Loans held-for-investment (2)	$	964,130	1	%	$	968,973	1	%
Total assets	$	2,465,208	3	%	$	2,474,447	3	%
China Subsidiary Bank Branches:
Cash and cash equivalents	$	652,847	1	%	$	656,971	1	%

AFS debt securities (3)	$	126,572	0	%	$	127,582	0	%
Loans held-for-investment (2)	$	1,172,225	2	%	$	1,141,444	2	%
Total assets	$	1,977,880	3	%	$	1,971,922	3	%

(1)Comprised of U.S. government agency and U.S. government-sponsored enterprise mortgage-backed securities, U.S. Treasury securities, and foreign government bonds as of March 31, 2025 and December 31, 2024.

(2)Primarily comprised of C&I loans as of both March 31, 2025 and December 31, 2024.

(3)Comprised of foreign government bonds as of both March 31, 2025 and December 31, 2024.

The following table presents the total revenue generated by the Company’s international branches for the first quarters of 2025 and 2024:


	2025				2024
($ in thousands)	Amount		% of Total Consolidated Revenue		Amount		% of Total Consolidated Revenue
Hong Kong Branch:
Total revenue	$	17,813	3	%	$	18,093	3	%
China Subsidiary Bank Branches:
Total revenue	$	7,752	1	%	$	7,444	1	%

Capital

The Company maintains a strong capital base to support its anticipated asset growth, operating needs, and credit risks, and to ensure that the Company and the Bank are in compliance with all regulatory capital guidelines. The Company engages in regular capital planning processes on at least an annual basis to optimize the use of available capital and to appropriately plan for future capital needs, allocating capital to existing and future business activities. Furthermore, the Company conducts capital stress tests as part of its capital planning process. The stress tests enable the Company to assess the impact of adverse changes in the economy and interest rates on its capital base.

The Company’s stockholders’ equity as of March 31, 2025 increased $206 million or 3% to $7.9 billion from December 31, 2024. The increase was primarily due to $290 million of net income and $90 million of other comprehensive income, partially offset by $85 million of common stock repurchases and $84 million of cash dividends declared. For other factors that contributed to the changes in stockholders’ equity, refer to Item 1. Consolidated Financial Statements — Consolidated Statement of Changes in Stockholders’ Equity in this Form 10-Q.

On March 3, 2020, the Company’s Board of Directors authorized the repurchase of $500 million of East West common stock. On January 22, 2025, the Company’s Board of Directors authorized the repurchase of up to an additional $300 million of East West common stock, which will remain valid until December 31, 2026. The Company repurchased $85 million and $82 million of East West common stock in the first quarters of 2025 and 2024, respectively.

The Company paid a quarterly common stock cash dividend of $0.60 and $0.55 per share during the first quarters of 2025 and 2024, respectively. In April 2025, the Company’s Board of Directors declared a second quarter 2025 cash dividend of $0.60 per share. The dividend is payable on May 16, 2025, to stockholders of record as of May 2, 2025.

Deposits

Deposits are the Company’s primary source of funding, the cost of which has a significant impact on the Company’s net interest income and net interest margin. The following table summarizes the Company’s deposits by product type as of March 31, 2025 and December 31, 2024:



	March 31, 2025				December 31, 2024				Change
($ in thousands)	Amount		%		Amount		%		$		%
Deposits by product:

Noninterest-bearing demand	$	15,169,775	24	%	$	15,450,428	24	%	$	(280,653)	(2)	%
Interest-bearing checking	7,591,847		12	%	7,940,692		13	%	(348,845)		(4)	%
Money market	14,885,732		24	%	14,816,511		23	%	69,221		0	%
Savings	1,740,044		3	%	1,751,620		3	%	(11,576)		(1)	%




Time deposits	23,664,707		37	%	23,215,772		37	%	448,935		2	%
Total deposits	$	63,052,105	100	%	$	63,175,023	100	%	$	(122,918)	0	%

(1)CET1 capital and Tier 1 leverage well-capitalized requirements apply to the Bank only. There are no well-capitalized requirements on CET1 capital ratio or Tier 1 leverage ratio for bank holding companies.

(2)Well-capitalized Tier 1 capital ratio requirements for the Company and the Bank are 6.0% and 8.0%, respectively.

The Company is committed to maintaining strong capital levels to assure its investors, customers and regulators that the Company and the Bank are financially sound. As of both March 31, 2025 and December 31, 2024, the Company and the Bank continued to exceed all “well-capitalized” capital requirements and the minimum capital requirements under the Basel III Capital Rules. Total risk-weighted assets increased $424 million to $55.4 billion from December 31, 2024. The increase in the risk-weighted assets was mainly due to loan growth.

Risk Management

Overview

In the normal course of business, the Company is exposed to a variety of risks, some of which are inherent to the financial services industry and others, which are more specific to the Company’s business. The Company operates under a Board-approved enterprise risk management (“ERM”) program. The Company’s ERM program outlines the company-wide approach to risk management and oversight, and describes the structures and practices employed to manage current and emerging risks inherent to the Company. The Company’s ERM program incorporates risk management throughout the organization in identifying, managing, monitoring, and reporting risks. It identifies the Company’s major risk categories as: credit, liquidity, market, operational, reputational, legal, compliance, BSA/AML & OFAC, strategic, and technology risk.

The Risk Oversight Committee (“ROC”) of the Board of Directors monitors the ERM program through such identified enterprise risk categories and provides oversight of the Company’s risk appetite and control environment. The ROC provides focused oversight of the Company’s identified enterprise risk categories on behalf of the full Board of Directors. Under the authority of the ROC, management committees apply targeted strategies to manage the risks to which the Company’s operations are exposed.

The Company’s ERM program is executed along the three lines of defense model, which provides for a consistent and standardized risk management control environment across the enterprise. The first line of defense is comprised of revenue generating, operational and support units. The second line of defense is comprised of risk management and control functions that provide independent risk oversight of first line activities and report to the Chief Risk Officer. The Chief Risk Officer reports to both the ROC and the Chief Executive Officer. The third line of defense is comprised of the Internal Audit and Independent Asset Review (“IAR”) functions. Internal Audit reports to the Chief Audit Executive (“CAE”) who reports to the Board’s Audit Committee. Internal Audit provides assurance and evaluates the effectiveness of risk management, control, and governance processes as established by the Company. IAR serves as an internal loan review and independent credit risk monitoring function within the Bank that works under the direction of the CAE and reports to the Audit Committee. IAR provides management and the Audit Committee with an objective and independent assessment of the Bank’s credit profile and credit risk management processes. Further discussion and analysis of selected primary risk areas are discussed in the following subsections of Risk Management.

Credit Risk Management

Credit risk is the risk that a borrower or a counterparty will fail to perform according to the terms and conditions of a loan, investment or derivative and expose the Company to loss. Credit risk exists with many of the Company’s assets and exposures such as loans, debt securities and certain derivatives. The majority of the Company’s credit risk is associated with lending activities.

The ROC has primary oversight responsibility for the identified enterprise risk categories including credit risk. The ROC monitors management’s assessment of asset quality, credit risk trends, credit quality administration, underwriting standards, and portfolio credit risk management strategies and processes, such as diversification and liquidity, all of which enable management to control credit risk. At the management level, the Credit Risk Management Committee has primary oversight responsibility for credit risk. The Senior Credit Supervision function manages credit policy for the line of business transactional credit risk, assuring that all exposure is risk-rated according to the requirements of the credit risk rating policy. The Senior Credit Supervision function in connection with the ERM function, also evaluates and reports the overall credit risk exposure to senior management and the ROC, including concentration limits and key risk indicators. Reporting directly to the Board’s Audit Committee, the IAR function provides additional validation support to the Company’s robust credit risk management culture by performing an independent and objective assessment of underwriting and documentation quality, and serves as an assurance function for the risk rating of the Company’s loan portfolios. A key focus of our credit risk management is adherence to a well-controlled underwriting and loan monitoring process.

The Company assesses the overall performance and credit quality of the loans held-for-investment portfolio through an integrated analysis of specific performance ratios. This approach forms the basis of the discussion in the sections immediately following: Credit Quality, Nonperforming Assets and Allowance for Credit Losses.

Credit Quality

The Company utilizes a credit risk rating system to assist in monitoring credit quality. Loans are evaluated using the Company’s internal credit risk rating of 1 through 10. For more information on the Company’s credit quality indicators and internal credit risk ratings, refer to Note 6 — Loans Receivable and Allowance for Credit Losses to the Consolidated Financial Statements in this Form 10-Q.

The following table presents the Company’s criticized loans as of March 31, 2025 and December 31, 2024:



							Change
($ in thousands)	March 31, 2025			December 31, 2024			$		%
Criticized loans:
Special mention loans	$	494,444		$	447,290		$	47,154	11	%
Classified loans (1)	750,570			725,863			24,707		3	%
Total criticized loans	$	1,245,014		$	1,173,153		$	71,861	6	%

Special mention loans to loans held-for-investment	0.91		%	0.83		%
Classified loans to loans held-for-investment	1.38		%	1.35		%
Criticized loans to loans held-for-investment	2.29		%	2.18		%

(1)Consists of substandard, doubtful and loss categories.

Criticized loans increased $72 million or 6%, to $1.2 billion during the first quarter of 2025, primarily driven by higher criticized CRE loans, partially offset by lower criticized C&I loans.

Nonperforming Assets

Nonperforming assets are comprised of nonaccrual loans, OREO and other nonperforming assets. Other nonperforming assets and OREO are repossessed assets and properties, respectively, acquired through foreclosure, or through full or partial satisfaction of loans held-for-investment.

The following table presents nonperforming assets information as of March 31, 2025 and December 31, 2024:



										Change
($ in thousands)		March 31, 2025				December 31, 2024				$			%
Commercial:
C&I		$	75,579			$	86,165			$	(10,586)		(12)		%
CRE:
CRE		5,554				2,430				3,124			129		%
Multifamily residential		4,554				4,572				(18)			0		%
Construction and land		—				11,316				(11,316)			(100)		%
Total CRE		10,108				18,318				(8,210)			(45)		%
Consumer:
Residential mortgage:
Single-family residential		42,166				32,423				9,743			30		%
HELOCs		25,250				22,046				3,204			15		%
Total residential mortgage		67,416				54,469				12,947			24		%
Other consumer		97				66				31			47		%
Total nonaccrual loans		153,200				159,018				(5,818)			(4)		%
OREO, net		29,003				35,077				(6,074)			(17)		%


Total nonperforming assets		$	182,203			$	194,095			$	(11,892)		(6)		%
Nonperforming assets to total assets		0.24		%		0.26		%
Nonaccrual loans to loans held-for-investment		0.28		%		0.30		%
Allowance for loan losses to nonaccrual loans		479.67		%		441.49		%


123,851	$	104,761			$	19,090			18		%	0.23		%		0.19	%

NM — Not meaningful.

(1)There were no accruing loans past due 90 days or more as of both March 31, 2025 and December 31, 2024.

Allowance for Credit Losses

The Company maintains its allowance for credit losses at a level it believes is sufficient to provide appropriate reserves to absorb estimated future credit losses in accordance with GAAP. For additional information on the policies, methodologies and judgments used to determine the allowance for credit losses, see Item 7. MD&A — Critical Accounting Estimates and Item 8. Financial Statements — Note 1 — Summary of Significant Accounting Policies to the Consolidated Financial Statements in the Company’s 2024 Form 10-K, and Note 6 — Loans Receivable and Allowance for Credit Losses to the Consolidated Financial Statements in this Form 10-Q.

The following table presents an allocation of the allowance for loan losses by loan portfolio segments and unfunded credit commitments as of March 31, 2025 and December 31, 2024:



	March 31, 2025					December 31, 2024
($ in thousands)	Allowance Allocation			% of Loan Type to Total Loans		Allowance Allocation			% of Loan Type to Total Loans
Allowance for loan losses
Commercial:
C&I	$	421,288		32	%	$	384,319		32	%
CRE:
CRE	212,899			28	%	218,677			28	%
Multifamily residential	32,324			9	%	32,117			9	%
Construction and land	15,199			1	%	17,497			1	%
Total CRE	260,422			38	%	268,291			38	%
Total commercial	681,710			70	%	652,610			70	%
Consumer:
Residential mortgage:
Single-family residential	46,929			27	%	44,816			27	%
HELOCs	4,879			3	%	3,132			3	%
Total residential mortgage	51,808			30	%	47,948			30	%
Other consumer	1,338			0	%	1,494			0	%
Total consumer	53,146			30	%	49,442			30	%
Total allowance for loan losses	$	734,856		100	%	$	702,052		100	%
Allowance for unfunded credit commitments	$	40,464				$	39,526
Total allowance for credit losses	$	775,320				$	741,578

Loans held-for-investment	$	54,252,734				$	53,726,637
Allowance for loan losses to loans held-for-investment	1.35		%			1.31		%

	Three Months Ended March 31,
	2025					2024
Average loans held-for-investment	$	53,337,711				$	51,924,317
Net charge-offs	$	15,281				$	22,577
Annualized net charge-offs to average loans held-for-investment	0.12				%	0.17				%

Liquidity Risk Management

Liquidity. Liquidity risk arises from the Company’s inability to meet its customer deposit withdrawals and obligations to other counterparties as they come due, or to obtain adequate funding at a reasonable cost to meet those obligations. Liquidity risk also considers the stability of deposits. The objective of liquidity management is to manage the potential mismatch of asset and liability cash flows. Maintaining an adequate level of liquidity depends on the institution’s ability to efficiently meet both expected and unexpected cash flow and collateral needs without adversely affecting daily operations or the financial condition of the institution. To achieve this objective, the Company analyzes its liquidity risk, maintains readily available liquid assets, and utilizes diverse funding sources including its stable core deposit base.

The ROC has primary oversight responsibility over liquidity risk management. At the management level, the Company’s Asset/Liability Committee (“ALCO”) establishes the liquidity guidelines that govern the day-to-day active management of the Company’s liquidity position by requiring sufficient asset-based liquidity to cover potential funding requirements and avoid over-dependence on volatile, less reliable funding markets. These guidelines are established and monitored for both the Bank and East West on a stand-alone basis to ensure that East West can serve as a source of strength for its subsidiaries. The ALCO regularly monitors the Company’s liquidity status and related management processes, and provides regular reports on the Company’s liquidity position relative to policy limits and guidelines to the Board of Directors. The Company believes its liquidity management practices have been effective under normal operating and stressed market conditions.

The Company also maintains a Contingency Funding Plan that utilizes early-warning indicators that will be monitored to provide timely detection of adverse liquidity situations and enable management to promptly respond. The Contingency Funding Plan describes the procedures, roles and responsibilities, and communication protocols for managing any identified emerging liquidity problem. Management monitors the early-warning indicators defined in the Contingency Funding Plan, which include metrics for measuring the Company’s internal liquidity status as well as company-specific and market-wide external factors. When early warning indicators are triggered, management will evaluate the severity of the emerging liquidity problem and exercise appropriate management actions to address any liquidity and funding shortfalls.

Liquidity Sources — Deposits. The Company’s primary source of funding is from deposits, generated by its banking business, which we believe is a relatively stable and low-cost source of funding. Our loans are funded by deposits, which amounted to $63.1 billion as of March 31, 2025, compared with $63.2 billion as of December 31, 2024. The Company’s loan-to-deposit ratio was 86% as of March 31, 2025, compared with 85% as of December 31, 2024. See Item 2 — MD&A — Balance Sheet Analysis — Deposits in this Form 10-Q for further details related to the Company’s deposits.

Other Liquidity Sources. In addition to deposits, the Company has access to various sources of wholesale financing, including borrowing capacity with the FHLB and Federal Reserve Bank (“FRB”), and several master repurchase agreements with major brokerage companies to sustain an adequate liquid asset portfolio, meet daily cash demands and allow management flexibility to execute its business strategy. However, general financial market and economic conditions could impact our access and cost of external funding. Additionally, the Company’s access to capital markets is affected by the ratings received from various credit rating agencies.

Sources of funding included $3.5 billion of FHLB advances as of both March 31, 2025 and December 31, 2024. FHLB advances as of March 31, 2025 had fixed and floating interest rates ranging from 3.87% to 4.58% with remaining maturities between one month and 1.8 years. In addition, the Company had $270 million in overnight gross repurchase agreements with unrelated counterparties as of March 31, 2025. The Company did not have any repurchase agreements as of December 31, 2024. For additional details, refer to Note 3 — Securities Purchased under Resale Agreements and Sold under Repurchase Agreements to the Consolidated Financial Statements in this Form 10-Q. The Company also held long-term debt of $32 million in the form of junior subordinated debt as of both March 31, 2025 and December 31, 2024, which qualifies as Tier 2 capital for regulatory capital purposes. Refer to Note 9 — Federal Home Loan Bank Advances and Long-Term Debt to the Consolidated Financial Statements in this Form 10-Q for additional information on the junior subordinated debt.

Unencumbered loans and/or debt securities are pledged to the FHLB and the FRB discount window as collateral. The Company has established operational procedures to enable borrowing against these assets, including regular monitoring of the total pool of loans and debt securities eligible as collateral. Eligibility of collateral is defined in guidelines from the FHLB and FRB and is subject to change at their discretion. The Company operated below its established risk limits for liquidity measures as of March 31, 2025. Accordingly, the Company believes the cash and cash equivalents, and available collateralized borrowing capacity described below provide sufficient liquidity above its expected cash needs.

The Company maintains its liquidity in the form of cash and cash equivalents and borrowing capacity with eligible loans and debt securities pledged as collateral. The following table presents the Company’s total available liquidity as of March 31, 2025 and December 31, 2024:



					Change
($ in thousands)	March 31, 2025		December 31, 2024		$		%
Cash and cash equivalents	$	3,448,284	$	5,250,742	$	(1,802,458)	(34)	%
Interest-bearing deposits with banks	32,788		48,198		(15,410)		(32)	%
Unused secured borrowing capacity from:
FHLB	10,337,616		9,928,152		409,464		4	%
FRB (1)	13,226,882		12,383,005		843,877		7	%
Unpledged securities	9,018,423		7,819,531		1,198,892		15	%
Total available liquidity	$	36,063,993	$	35,429,628	$	634,365	2	%

(1)The Company had no outstanding borrowings with the FRB as of March 31, 2025 and December 31, 2024.

The Company’s total available liquidity increased to $36.1 billion as of March 31, 2025, compared with $35.4 billion as of December 31, 2024. The increase in borrowing capacity was primarily due to an increase in securities available to be pledged and loans pledged.

Cash Requirements. In the ordinary course of business, the Company enters into contractual obligations that require future cash payments, including funding for customer deposit withdrawals, repayments for short- and long-term borrowings, and other cash commitments. For additional information on these obligations, see Note 9 — Deposits to the Consolidated Financial Statements in the Company’s 2024 Form 10-K, and Note 7 — Affordable Housing Partnership, Tax Credit and Community Reinvestment Act Investments, Net and Note 9 — Federal Home Loan Bank Advances and Long-Term Debt to the Consolidated Financial Statements in this Form 10-Q.

The Company also has off-balance sheet arrangements which represent transactions that are not recorded on the Consolidated Balance Sheet. The Company’s off-balance sheet arrangements include (1) commitments to extend credit, such as loan commitments, commercial letters of credit for foreign and domestic trade, standby letters of credit (“SBLCs”), and financial guarantees, to meet the financing needs of its customers, (2) future interest obligations related to customer deposits and the Company’s borrowings, and (3) transactions with unconsolidated entities that provide financing, liquidity, market risk or credit risk support to the Company, or engage in leasing, hedging or research and development services with the Company. A portion of these commitments are expected to expire unused or only partially used, therefore the total commitment amounts do not necessarily represent future cash requirements. The Company does not expect the total commitment amounts as of March 31, 2025 to have a material current or future impact on the Company’s financial conditions or results of operations. Additional information about the Company’s loan commitments, commercial letters of credit and SBLCs is provided in Note 10 — Commitments and Contingencies to the Consolidated Financial Statements in this Form 10-Q.

The Consolidated Statement of Cash Flows summarizes the Company’s sources and uses of cash by type of activity for the three months ended March 31, 2025 and 2024. Excess cash generated by operating and investing activities may be used to repay outstanding debt or invest in liquid assets.

Liquidity for East West. In addition to bank level liquidity management, the Company manages liquidity at the parent company level for various operating needs including payment of dividends, repurchases of common stock, principal and interest payments on its borrowings, acquisitions and additional investments in its subsidiaries. East West’s primary source of liquidity is from cash dividends distributed by its subsidiary, East West Bank. The Bank is subject to various statutory and regulatory restrictions on its ability to pay dividends as discussed in Item 1. Business — Supervision and Regulation — Dividends and Other Transfers of Funds in the Company’s 2024 Form 10-K. East West held $359 million and $395 million in on-hand liquidity as of March 31, 2025 and December 31, 2024, respectively. On-hand liquidity generally comprises cash and cash equivalents due from banks, and short-term AFS securities that mature within 30 days. Management believes that East West has sufficient liquidity to meet the projected cash obligations for the coming year.

Liquidity Stress Testing. The Company utilizes liquidity stress analysis to determine the appropriate amounts of liquidity to maintain at the Company, foreign subsidiary and foreign branch to meet contractual and contingent cash outflows under a range of scenarios. Scenario analyses include assumptions about significant changes in key funding sources, market triggers, potential uses of funding and economic conditions in certain countries. In addition, Company specific events are incorporated into the stress testing. Liquidity stress tests are conducted to ascertain potential mismatches between liquidity sources and uses over various time horizons and under a variety of stressed conditions. Given the range of potential stresses, the Company maintains contingency funding plans on a consolidated basis and for individual entities.

As of March 31, 2025, the Company believes it has adequate liquidity resources to conduct operations and meet other needs in the ordinary course of business, and is not aware of any events that are reasonably likely to have a material adverse effect on its liquidity, capital resources or operations. Given the changing market and economic conditions, the Company will continue to actively evaluate the impact on its business and financial position. For more details on how economic conditions may impact our liquidity, see Item 1A. Risk Factors in the Company’s 2024 Form 10-K.

Market Risk Management

Market risk refers to the risk of potential loss due to adverse movements in market risk factors, including interest rates, foreign exchange rates, commodity prices, and credit spreads. The Company is primarily exposed to interest rate risk through its core business activities of extending loans and acquiring deposits. There have been no significant changes in our risk management practices as described in Item 7. MD&A — Market Risk Management in the Company’s 2024 Form 10-K.

Interest Rate Risk Management

Interest rate risk is the risk that market fluctuations in interest rates can have a negative impact on the Company’s earnings and capital stemming from mismatches in the Company’s asset and liability cash flows primarily arising from customer-related activities such as lending and deposit-taking. The Company is subject to interest rate risk because:

•Assets and liabilities may mature or reprice at different times. If assets reprice faster than liabilities and interest rates are generally rising, earnings will initially increase;

•Assets and liabilities may reprice at the same time but by different amounts;

•Short- and long-term market interest rates may change by different amounts. For example, the shape of the yield curve may affect the yield of new loans and funding costs differently;

•The remaining maturity of various assets or liabilities may shorten or lengthen as interest rates change. For example, if long-term mortgage interest rates increase sharply, mortgage-related products may pay down at a slower rate than anticipated, which could impact portfolio income and valuation; or

•Interest rates may have a direct or indirect effect on loan demand, collateral values, mortgage origination volume, and the fair value of other financial instruments.

The ALCO coordinates the overall management of the Company’s interest rate risk, meets regularly to review the Company’s open market positions and establishes policies to monitor and limit exposure to market risk. Interest rate risk management is carried out primarily through strategies involving the Company’s loan portfolio, debt securities portfolio, available funding channels and capital market activities. In addition, the Company’s policies permit the use of derivative instruments to assist in managing interest rate risk.

We measure and monitor interest rate risk exposure through various risk management tools, which include a simulation model that performs interest rate sensitivity analyses under multiple interest rate scenarios against a baseline. The simulation model incorporates the market’s forward rate expectations and the Company’s earning assets and liabilities. The Company uses a dynamic balance sheet, incorporating expected forward growth and/or deposit product mix shift to perform the interest rate sensitivity analyses. The simulated interest rate scenarios include an instantaneous parallel shift in the yield curve and a gradual parallel shift in the yield curve (“linear rate ramp”). In addition, the Company also performs simulations using other alternative interest rate scenarios, including various permutations of the yield curve flattening, steepening or inverting. The Company uses the results of these simulations to formulate and gauge strategies to achieve a desired risk profile within its capital and liquidity guidelines.

The Company transitioned its net interest income volatility simulations from a static to a dynamic balance sheet approach and adopted market forward rates instead of flat forward rates. This change better reflects the interest rate risk on the Company’s financial statements. Furthermore, the Company standardized its simulation scenarios by shifting from non-parallel to parallel shocks for both instantaneous and gradual net interest income simulations, as well as for economic value of equity (“EVE”) simulations. This alignment with industry-standard scenario definitions is intended to enhance interpretability and comparability.

The net interest income simulation model is based on the maturity and repricing characteristics of the Company’s interest rate sensitive assets, liabilities, and related derivative contracts. This model also incorporates various assumptions, which management believes to be reasonable but may have a significant impact on the results. These key assumptions include the timing and magnitude of changes in interest rates, the yield curve evolution and shape, the correlation between various interest rate indices, financial instruments’ future repricing characteristics and spread relative to benchmark rates, and the effect of interest rate floors and caps. The modeled results are highly sensitive to deposit mix and deposit beta assumptions, which are derived from a regression analysis of the Company’s historical deposit data.

Simulation results are highly dependent on modeled behaviors and input assumptions. To the extent that actual behaviors are different from the assumptions used in the models, there could be material changes to the interest rate sensitivity results. The key behavioral models impacting interest rate sensitivity simulations include deposit repricing, deposit balance forecasts, and mortgage prepayments. These models and assumptions are documented, supported, and periodically back-tested to assess the reasonableness and effectiveness. The Company also regularly monitors the sensitivity of the other important modeling assumptions, such as loan and security prepayments and early withdrawal on fixed-rate customer liabilities. The Company makes appropriate calibrations to the model as needed and continually validates the model, methodology and results. Changes to key model assumptions are reviewed by the Technical ALCO, a subcommittee of ALCO. Scenario results do not reflect strategies that the management could employ to limit the impact of changing interest rate expectations. The simulation does not represent a forecast of the Company’s net interest income but is a tool utilized to assess the risk of the impact of changing market interest rates across a range of interest rate environments.

The Company employs a variety of quantitative and qualitative approaches to capture historical deposit repricing and balance behaviors. These historical observations are performed at a granular level based on key product characteristics, including distinctions for brokered, public, and large commercial deposits, which are then combined with forward-looking market expectations and the competitive landscape to generate the deposit repricing and balance forecasting models. The Company uses these deposit repricing models to forecast deposit interest expense. The repricing models provide sufficient granularity to reflect key behavioral differences across product and customer types. The deposit beta, which defines the sensitivity of deposit rates to changes in the effective federal funds rate, is a key parameter of the deposit rate forecast. The Company assumed a weighted-average beta of 55% for total deposits for both March 31, 2025 and December 31, 2024.

As loan and debt security prepayment assumptions are key components of the Company’s model, the Company incorporates third-party vendor models to forecast prepayment behavior on mortgage loans and securities, which have mortgage loans as underlying collateral. These third-party vendor models have access to more comprehensive industry-level data that captures specific borrower and collateral characteristics over a variety of interest rate cycles. The Company will periodically assess and adjust the vendor models when appropriate to include its own available observations and expectations.

Twelve-Month Net Interest Income Simulation

Net interest income simulation modeling measures interest rate risk through earnings volatility. The simulation projects the cash flow changes in interest rate sensitive assets and liabilities, expressed in terms of net interest income, over a specified time horizon for defined interest rate scenarios. Net interest income simulations provide insight into the impact of market rate changes on earnings, which help guide risk management decisions. The Company assesses interest rate risk by comparing the changes of net interest income in different interest rate scenarios.

The following table presents the Company’s net interest income sensitivity related to an instantaneous and sustained parallel shift in market interest rates by 100 and 200 bps as of March 31, 2025 and December 31, 2024, on a balance sheet assuming market implied forward rates and a dynamic balance sheet with forecasted loan and deposit growth on the date of analysis.


Change in Interest Rates (in bps)	March 31, 2025		December 31, 2024
+200	4.2	%	4.7	%
+100	3.2	%	3.5	%
-100	(3.7)	%	(4.0)	%
-200	(6.5)	%	(7.4)	%

(1)The percentage change represents net interest income change over a 12-month period under market implied forward rates and expected balance sheet growth as of the analysis date versus various interest rate scenarios.

The composition of the Company’s loan portfolio creates sensitivity to interest rate movements due to a mismatch of repricing behavior between the floating-rate loan portfolio and deposit products. In the table above, the net interest income volatility expressed in relation to base-case net interest income decreased in both rising and decreasing rate scenarios as of March 31, 2025. This change reflects deposit product mix assumptions, which assume noninterest-bearing deposits decrease in higher interest rate environments and are replaced with term deposit products.

The Company also models scenarios based on gradual shifts in interest rates and assesses the corresponding impacts. These interest rate scenarios provide additional information to estimate the Company’s underlying interest rate risk. The rate ramp table below shows the net interest income volatility under a gradual parallel shift of the market implied forward rates, in even monthly increments over the first 12 months, with the full shift passed through to the forward rates thereafter. The results are based on a dynamic balance sheet with expected loan and deposit growth as of the date of the analysis.



	Net Interest Income Volatility
Change in Interest Rates (in bps)	March 31, 2025		December 31, 2024
+200 Rate ramp	3.4	%	4.3	%
+100 Rate ramp	1.9	%	2.3	%
-100 Rate ramp	(1.9)	%	(2.4)	%
-200 Rate ramp	(3.3)	%	(4.6)	%

As of March 31, 2025, the Company’s net interest income profile reflects an asset sensitive position, where assets reprice faster or more significantly than liabilities. Net interest income is expected to increase when interest rates rise as the Company has a large population of variable rate loans, primarily tied to Prime and Term Secured Overnight Financing Rate (“SOFR”) indices. The Company’s interest income is sensitive to changes in short-term interest rates. As of March 31, 2025, the Company designated interest rate contracts with a notional amount of $4.3 billion as cash flow hedges, which reduced net interest income volatility by approximately 1.41% of the base net interest income for every 100 bp change in interest rate.

A portion of the Company’s interest-bearing deposit portfolio is composed of non-maturity deposits, which are not directly tied to short-term interest rate indices, but are, nevertheless, sensitive to changes in short-term interest rates. The modeled results are highly sensitive to modeled behavior and assumptions. Actual net interest income results may deviate from the model’s net interest income due to earning asset growth variation and deposit mix changes based on customer preferences relative to the interest rate environment. During a period of declining interest rates, balance sheet growth could offset headwinds to net interest income from yield compression.

Economic Value of Equity at Risk

EVE is a cash flow calculation that takes the present value of all asset cash flows and subtracts the present value of all liability cash flows. This calculation is used for asset/liability management and measures changes in the present value of the bank’s assets and liabilities due to changes in interest rates.

The economic value approach provides a comparatively broader scope than the net interest income volatility approach since it represents the discounted present value of cash flows over the expected life of the instruments. Due to this longer horizon, EVE is useful to identify risks arising from repricing, prepayment and maturity gaps between assets and liabilities on the balance sheet, as well as from off-balance sheet derivative exposures, over their lifetime. This long-term economic perspective into the Company’s interest rate risk profile allows the Company to identify anticipated negative effects of interest rate fluctuations. However, the difference in time horizons can cause the EVE analysis to diverge from the shorter-term net interest income analysis presented above. Given the uncertainty of the magnitude, timing and direction of future interest rate movements, the shape of the yield curve, and potential changes to the balance sheet, actual results may vary from those predicted by the Company’s model.

The following table presents the Company’s EVE sensitivity related to an instantaneous parallel shift in market interest rates by 100 and 200 bps as of March 31, 2025 and December 31, 2024.



	Economic Value of Equity Volatility (1)
Change in Interest Rates (in bps)	March 31, 2025		December 31, 2024
+200	(12.4)	%	(12.5)	%
+100	(5.4)	%	(5.2)	%
-100	4.9	%	4.6	%
-200	10.0	%	9.5	%

(1)The percentage change represents net present value change of the balance sheet as of the analysis date versus various interest rate scenarios.

As of March 31, 2025, the Company’s EVE is expected to decrease when interest rates rise. The EVE sensitivity represents a duration mismatch between fixed-rate assets versus fixed-rate liabilities where more fixed-rate assets are expected to produce more stable net interest income in the short term but may lead to decreases in net present value of future cash flows.

Derivatives

It is the Company’s policy not to speculate on the future direction of interest rates, foreign currency exchange rates and commodity prices. However, the Company periodically enters into derivative transactions in order to manage its exposure to market risk, primarily interest rate risk and foreign currency risk. The Company believes these derivative transactions, when properly structured and managed, provide a hedge against inherent risk in certain assets and liabilities or against risk in specific transactions. Hedging transactions may be implemented using a variety of derivative instruments such as swaps, forwards, options, and collars. The Company uses interest rate contracts to hedge the variability in interest received on certain floating-rate commercial loans. Foreign exchange derivatives are used in net investment hedging strategies to mitigate the risk of changes in the U.S. dollar equivalent value of a designated monetary amount of the Company’s net investment in East West Bank (China) Limited. Prior to entering any hedge accounting activity, the Company analyzes the costs and benefits of the hedge in comparison to alternative strategies. The Company also repositions its hedging derivatives portfolio based on the current assessment of economic and financial conditions, including the interest rate and foreign currency environments, balance sheet composition and trends, and the relative mix of its cash and derivative positions.

In addition, the Company enters into derivative transactions in order to accommodate its customers with their business needs or to assist customers with their risk management objectives, such as managing exposure to fluctuations in interest rates, foreign currencies and commodity prices. To economically hedge against the derivative contracts entered into with the Company’s customers, the Company enters into offsetting derivative contracts with third-party financial institutions, some of which are cleared through central clearing organizations. The exposures from derivative transactions are collateralized by cash and/or eligible securities based on limits as set forth in the respective agreements between the Company and counterparty financial institutions. The fair value changes of the derivative contracts traded with third-party financial institutions are expected to be largely comparable to the fair value changes of the derivative transactions executed with customers throughout the terms of these contracts, except for the credit valuation adjustment component of the contracts and the spread variances between the customer derivatives and the offsetting financial counterparty positions. The Company also utilizes foreign exchange contracts that are not designated as hedging instruments to mitigate the economic effect of fluctuations in certain foreign currency on-balance sheet assets and liabilities.

The Company is subject to credit risk associated with the counterparties to the derivative contracts. This counterparty credit risk is a multi-dimensional form of risk, affected by both the exposure and credit quality of the counterparty, both of which are sensitive to market-induced changes. The Company’s Credit Risk Management Committee provides oversight of credit risk, and the Company has guidelines in place to manage counterparty concentration, tenor limits, and collateral. The Company manages the credit risk of its derivative positions by diversifying its positions among various counterparties, by entering into legally enforceable master netting agreements, and by requiring collateral arrangements, where possible. The Company may also transfer counterparty credit risk related to interest rate swaps to third-party financial institutions through the use of credit risk participation agreements. Certain derivative contracts are required to be cleared through central clearing organizations to further mitigate counterparty credit risk, where variation margin is applied daily as settlement to the fair value of the derivative contracts. In addition, the Company incorporates credit valuation adjustments and other market standard methodologies to appropriately reflect the counterparty’s and the Company’s own nonperformance risk in the fair value measurement of its derivatives. As of March 31, 2025, the Company anticipates performance by all of its counterparties and has not incurred any related credit losses.

The following table summarizes certain information on derivative instruments designated as accounting hedges and utilized by the Company in its management of interest rate risk as of March 31, 2025 and December 31, 2024:


							Weighted Average
($ in thousands)	Notional Amount		Fair Value Assets		Fair Value Liabilities		Fixed Rate		Floating Rate		(1)	Remaining Term (In months)
Cash flow hedges
Derivative Contracts Hedging Loans:
Interest rate swaps - Receive fixed pay floating	$	3,000,000	$	10,254	$	11,201	6.24	%	6.97	%		28.6
Interest rate swaps - Receive fixed pay floating - Forward starting	1,000,000		15,711		952		3.90	%	N/A		(2)	64.8
Interest rate collars - Buy floor sell cap	250,000		17		—		Cap: 4.58% Floor: 1.50%		4.32	%		14.0
Total cash flow hedges	$	4,250,000	$	25,982	$	12,153


















	December 31, 2024
							Weighted Average
($ in thousands)	Notional Amount		Fair Value Assets		Fair Value Liabilities		Fixed Rate		Floating Rate		(1)	Remaining Term (In months)
Cash flow hedges
Derivative Contracts Hedging Loans:
Interest rate swaps - Receive fixed pay floating	$	4,000,000	$	1,808	$	29,102	4.95	%	6.47	%		23.8
Interest rate swaps - Receive fixed pay floating - Forward starting	1,000,000		3,839		5,893		3.90	%	N/A		(2)	67.8
Interest rate collars - Buy floor sell cap	250,000		—		216		Cap: 4.58% Floor: 1.50%		4.55	%		17.0

Total cash flow hedges	$	5,250,000	$	5,647	$	35,211

(1)Floating rates are indexed to SOFR or Prime.

(2)The swaps are forward starting and not effective as of both March 31, 2025 and December 31, 2024.

Additional information on the Company’s derivatives is presented in Note 1 — Summary of Significant Accounting Policies — Significant Accounting Policies — Derivatives to the Consolidated Financial Statements in the Company’s 2024 Form 10-K, Note 2 — Fair Value Measurement and Fair Value of Financial Instruments, and Note 5 — Derivatives to the Consolidated Financial Statements in this Form 10-Q.

Critical Accounting Policies and Estimates

The Company’s significant accounting policies are described in Note 1 — Summary of Significant Accounting Policies to the Consolidated Financial Statements in the Company’s 2024 Form 10-K. Certain of these policies include critical accounting estimates, which are subject to valuation assumptions, subjective or complex judgments about matters that are inherently uncertain, and it is likely that materially different amounts could be reported under different assumptions and conditions. The Company has procedures and processes in place to facilitate making these judgments. The following accounting policies are critical to the Company’s Consolidated Financial Statements:

•allowance for credit losses;

•fair value estimates;

•goodwill impairment; and

•income taxes.

For additional information on the Company’s critical accounting estimates involving significant judgments, see Item 7. MD&A — Critical Accounting Estimates in the Company’s 2024 Form 10-K.

Reconciliation of GAAP to Non-GAAP Financial Measures

To supplement the Company’s unaudited interim Consolidated Financial Statements presented in accordance with U.S. GAAP, the Company uses certain non-GAAP measures of financial performance. Non-GAAP financial measures are not prepared in accordance with, or as an alternative to U.S. GAAP. Generally, a non-GAAP financial measure is a numerical measure of a company’s performance that either excludes or includes amounts, or is subject to adjustments that have such an effect, that are not normally excluded or included in the most directly comparable financial measure that is calculated and presented in accordance with U.S. GAAP. The non-GAAP financial measures discussed in this Form 10-Q are ROATCE and tangible book value per share. Certain additional non-GAAP financial measures that are components of the foregoing non-GAAP financial measures are also set forth and reconciled in the table below. The Company believes these non-GAAP financial measures, when taken together with the corresponding U.S. GAAP financial measures, provide meaningful supplemental information regarding its performance, and allow comparability to prior periods. These non-GAAP financial measures may be different from non-GAAP financial measures used by other companies, limiting their usefulness for comparison purposes.

The following tables present the reconciliations of U.S. GAAP to non-GAAP financial measures for the periods presented:



		Three Months Ended March 31,
($ in thousands)		2025			2024
Net income	(a)	$	290,270		$	285,075

Add: Amortization of mortgage servicing assets		293			308
Tax effect of amortization adjustment (1)		(87)			(91)
Tangible net income (non-GAAP)	(b)	$	290,476		$	285,292

Average stockholders’ equity	(c)	$	7,869,074		$	6,992,558
Less: Average goodwill		(465,697)			(465,697)
Average mortgage servicing assets		(5,120)			(6,473)
Average tangible book value (non-GAAP)	(d)	$	7,398,257		$	6,520,388

ROAE (2)	(a)/(c)	14.96		%	16.40		%
ROATCE (2) (non-GAAP)	(b)/(d)	15.92		%	17.60		%

31.1

Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. Filed herewith.

31.2

Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. Filed herewith.

32.1

Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. Furnished herewith.

32.2

Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. Furnished herewith.

101.INSThe instance document does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document.101.SCHInline XBRL Taxonomy Extension Schema Document. Filed herewith.101.CALInline XBRL Taxonomy Extension Calculation Linkbase Document. Filed herewith.101.DEFInline XBRL Taxonomy Extension Definition Linkbase Document. Filed herewith.101.LABInline XBRL Taxonomy Extension Label Linkbase Document. Filed herewith.101.PREInline XBRL Taxonomy Extension Presentation Linkbase Document. Filed herewith.104Cover Page Interactive Data (formatted as Inline XBRL and contained in Exhibit 101 filed herewith). Filed herewith.

101

GLOSSARY OF ACRONYMS


AFS	Available-for-sale	HELOC	Home equity lines of credit
ALCO	Asset/Liability Committee	HTM	Held-to-maturity
AOCI	Accumulated other comprehensive (loss) income	IAR	Independent Asset Review
ASC	Accounting Standards Codification	IDI	Insured deposit institution
ASU	Accounting Standards Update	LCH	London Clearing House
BTFP	Bank Term Funding Program	LGD	Loss given default
C&I	Commercial and industrial	LTV	Loan-to-value
CARB	California Air Resources Board	MD&A	Management’s Discussion and Analysis of Financial Condition and Results of Operations
CECL	Current expected credit Losses	MMBTU	Million British thermal unit
CET1	Common Equity Tier 1	NAV	Net asset value
CLO	Collateralized loan obligation	NRSRO	Nationally recognized statistical rating organizations
CME	Chicago Mercantile Exchange	OREO	Other real estate owned
CODM	Chief operating decision maker	PAM	Proportional amortization method
CRA	Community Reinvestment Act	PD	Probability of default
CRE	Commercial real estate	RMB	Chinese Renminbi
EPS	Earnings per share	ROAE	Return on average common equity
ERM	Enterprise risk management	ROATCE	Return on average tangible common equity
EVE	Economic value of equity	ROC	Risk Oversight Committee
FDIC	Federal Deposit Insurance Corporation	RPA	Credit risk participation agreement
FHLB	Federal Home Loan Bank	RSU	Restricted stock unit
FRB	Federal Reserve Bank	SBLC	Standby letter of credit
FTP	Funds transfer pricing	SEC	U.S. Securities and Exchange Commission
GAAP	Generally accepted accounting principles	SOFR	Secured Overnight Financing Rate
GDP	Gross Domestic Product	U.S.	United States
GHG	Greenhouse gas	USD	U.S. dollar
GNMA	Government National Mortgage Association

102

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Dated:

May 9, 2025

EAST WEST BANCORP, INC.
(Registrant)

/s/ Christopher J. Del Moral-Niles

Christopher J. Del Moral-Niles

Executive Vice President and
Chief Financial Officer

103


		Page
Overview		61
Financial Review		63
Results of Operations		64
	Net Interest Income	64
	Noninterest Income	69
	Noninterest Expense	69
	Income Taxes	70
	Operating Segment Results	70
Balance Sheet Analysis		73
	Debt Securities	73
	Loan Portfolio	75
	Foreign Outstandings	81
	Capital	81
	Deposits	82
	Regulatory Capital and Ratios	83
Risk Management		84
	Credit Risk Management	85
	Liquidity Risk Management	88
	Market Risk Management	91
Critical Accounting Policies and Estimates		96
Reconciliation of GAAP to Non-GAAP Financial Measures		96

EAST WEST BANCORP INC - Quarter Report: 2025 March (Form 10-Q)

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