Earnings call transcript: East West Bancorp tops Q3 2025 expectations

East West Bancorp Inc. (EWBC), with a market capitalization of $13.68 billion, reported its third-quarter earnings for 2025, surpassing market expectations with an EPS of $2.65, compared to the forecasted $2.36, marking a surprise of 12.29%. The company also reported a revenue of $778 million against the anticipated $724.74 million, a 7.35% beat. According to InvestingPro, 8 analysts have recently revised their earnings estimates upward for the upcoming period, signaling growing confidence in the company’s performance. Despite these positive results, the stock saw a slight decline of 0.33% in aftermarket trading, settling at $98.

Key Takeaways

• East West Bancorp achieved record quarterly revenue and net income.
• Deposit-led growth contributed over $1.5 billion in Q3.
• Net Interest Income reached $677 million, boosted by loan recoveries.
• The stock experienced a minor decline despite strong earnings.

Company Performance

East West Bancorp’s performance in Q3 2025 was marked by record-breaking revenue and earnings, driven by substantial deposit growth and robust net interest income. The bank’s strategic focus on deposit-led growth and efficient cost management has positioned it favorably within the industry. Compared to its peers, East West Bancorp continues to outperform in key financial metrics, including return on equity and assets.

Financial Highlights

• Revenue: $778 million, up from the forecast of $724.74 million.
• Earnings per share: $2.65, exceeding the expected $2.36.
• Net Interest Income: $677 million, including $32 million from loan recoveries.
• Fee Income: $92 million, a 13% increase year-over-year.

Earnings vs. Forecast

East West Bancorp’s Q3 earnings surpassed expectations with an EPS surprise of 12.29%. The revenue beat of 7.35% further underscores the company’s strong financial performance. This positive deviation from forecasts highlights the efficacy of its strategic initiatives and operational efficiencies.

Market Reaction

Despite the strong earnings report, East West Bancorp’s stock experienced a slight decline of 0.33% in aftermarket trading, closing at $98. This movement contrasts with the broader market trend and may reflect profit-taking or cautious investor sentiment amid macroeconomic uncertainties.

Outlook & Guidance

Looking ahead, East West Bancorp anticipates over 10% growth in net interest income and revenue for the full year. The company is also preparing for two additional rate cuts in Q4, which could impact loan growth and interest margins. Strategic initiatives, such as expanding its FX platform and enhancing payment solutions, are expected to drive future growth.

Executive Commentary

"We continue to grow the bank and reported record quarterly revenue, net income, and earnings per share," stated Dominic Ng, CEO. CFO Chris DelMorel Niles added, "Our customers have proved remarkably resilient throughout this period." These statements reflect the confidence in East West Bancorp’s strategic direction and customer base.

Risks and Challenges

• Potential impacts of tariff uncertainties could affect international operations.
• Market reactivation is contingent on expected rate cuts, which may not materialize as anticipated.
• Competitive pressures in the wealth management sector require continuous innovation and expansion.

Q&A

During the earnings call, analysts inquired about deposit repricing strategies and the credit quality of the non-bank financial institution portfolio. Executives also addressed potential impacts of tariff uncertainties and discussed their approach to capital management, including potential share buybacks.

Full transcript - East West Bancorp Inc (EWBC) Q3 2025:

Conference Operator: Good afternoon, and welcome to the East West Bancorp Third Quarter twenty twenty five Earnings Conference Call. All participants will be in listen only mode. Please note this event is being recorded. I would now like to turn the conference over to Adrienne Atkinson, Director of Investor Relations. Please go ahead.

Adrienne Atkinson, Director of Investor Relations, East West Bancorp: Thank you, operator. Good afternoon, and thank you, everyone, for joining us to review East West Bancorp’s third quarter twenty twenty five financial results. With me are Dominic Ng, Chairman and Chief Executive Officer Chris DelMorel Niles, Chief Financial Officer and Irene Oh, Chief Risk Officer. This call is being recorded and will be available for replay on our Investor Relations website. The slide deck referenced during this call is available on our Investor Relations site.

Management may make projections or other forward looking statements, which may differ materially from the actual results due to a number of risks and uncertainties. Management may discuss non GAAP financial measures. For a more detailed description of the risk factors and a reconciliation of GAAP to non GAAP financial measures, please refer to our filings with the Securities and Exchange Commission, including the Form eight ks filed today. I will now turn the call over to Dominic. Thank you, Adrian.

Good afternoon, and thank you for joining us for our earnings call. I’m proud to report East West’s record breaking financial results for the third quarter.

Dominic Ng, Chairman and Chief Executive Officer, East West Bancorp: We continue to grow the bank and reported record quarterly revenue, net income and earnings per share. This third quarter was also another record quarter for deposits. Our deposit led growth funded our entire loan growth, allowing us to further optimize our funding mix and contributing to improve liquidity. This deposit growth drove record levels of net interest income for the quarter. We are continuing to attract core deposits while prudently balancing our loan and investment positions to optimize returns.

On the fee revenue side, every one of our fee business, wealth management, FX, derivatives, all reported quarter over quarter and year over year growth. Our wealth management business in particular continues to expand strongly, reflecting increasing customer penetration and deepening relationships. Asset quality has remained resilient and credit is performing as expected with low absolute levels of net charge offs and non performing assets. We have significant capital levels to support our customers and the flexibility to capitalize on opportunities across market environments. With 10 tangible common equity, we continue to operate from a position of strength.

I will now turn the call over to Chris to provide more details on our third quarter financial performance.

Chris DelMorel Niles, Chief Financial Officer, East West Bancorp: Thank you, Dominic. Let me start with more details on our deposits. Looking to Slide four, East West grew deposits by over $1,500,000,000 in the third quarter. Notably, non interest bearing deposits outpaced time deposit growth on a percentage basis, reflecting our focus on diversifying our deposit mix. The mix shift was driven by our branch based consumer and business banking customers who added to their granular household and small business accounts.

Our commercial deposit customers also grew their balances with notable increases in commercial DDA as well. Given the strong deposit inflows, we seized the opportunity during the quarter to reprice our wholesale funding and to strategically reduce our treasury managed deposits, public funds and Federal Home Loan Bank borrowings throughout the quarter. We expect continued deposit growth in Q4. Moving on to loans on Slide five. East West posted another steady balanced quarter of loan growth, with over $800,000,000 of fundings in the third quarter.

Commercial real estate balances grew as we continue to support our long standing clients. Our commercial real estate book remains very granular, with an average loan size of just $3,000,000 and LTVs of less than 50% in most categories. Demand for residential mortgage also proved resilient during the quarter, and our pipelines remain full leading into Q4. We expect residential and consumer lending to be a consistent contributor to our year ahead. C and I grew more modestly this quarter as utilization remained broadly stable.

Looking to net interest income and margin, our continued low cost deposit growth strategies drove our record reported NII, as we reduced end of period deposit pricing by 10 basis points quarter over quarter. Looking back to the start of the cutting cycle, we have lowered our interest bearing deposit costs by 77 basis points against the backdrop of 125 basis points of cuts in the Fed’s target rate, achieving a down cycle beta of 0.62 even while growing our deposit base over the course of the year. I note that our reported third quarter NII included $32,000,000 of discount accretion and interest recoveries from the full payment on some purchased credit impaired and workout loans. However, even excluding this amount, our adjusted NII of $645,000,000 was still an all time quarterly record for East West. Moving on to fees on Slide seven.

Fee income was $92,000,000 marking another record quarter for East West. Year over year, our fees have grown 13%, while our wealth management fees specifically have grown 36%. As Dominic mentioned, all fee categories grew, reflecting our sustained focus on building out new products, services and capabilities for our customers. Turning to expenses on Slide eight. Total operating expenses were $261,000,000 for the quarter.

This amount included $27,000,000 of additional compensation expense relating to a one time change in our equity award recognition for retirement eligible employees. Even including these charges, East West continued to deliver industry leading efficiency while investing for our future growth. The reported Q3 efficiency ratio was 35.6%. With that, let me hand the call over to Irene for comments on credit and capital.

Irene Oh, Chief Risk Officer, East West Bancorp: Thank you, Chris, and good afternoon to all on the call. As you can see on Slide nine, our asset quality metrics continue to broadly outperform the industry. We recorded net charge offs of 13 basis points in the second quarter or $18,000,000 compared to 11 basis points in the prior quarter or $15,000,000 We recorded a lower provision for credit losses of $36,000,000 compared with $45,000,000 for the second quarter. Our non performing and criticized loan balances continue to be at low relatively stable levels. Total non performing assets were 25 basis points as of 09/30/2025.

Total criticized loans were down to 2.14% largely reflecting declines in commercial real estate and residential mortgage criticized loans. We remain vigilant and proactive in managing our credit risks. Turning to slide 10, reflecting the ongoing overall uncertainty and the economic outlook, we increased our overall allowance for credit losses this quarter to $791,000,000 or 1.42% of loans to 1.38% as of the prior quarter end. While we continue to monitor changes to the overall economy and geopolitical events, we believe we are adequately reserved for the content of our loan portfolio as of 09/30/2025. Turning to Slide 11.

As Dominic mentioned, our strong capital levels allow us to operate from a position of significant strength and support our customers with confidence. All of East West regulatory capital ratios remain well in excess of regulatory capital requirements for well capitalized institutions and place us amongst the best capitalized banks. In the third quarter, East West repurchased approximately 25,000,000 shares of common stock. We currently have $216,000,000 of repurchase authorization that remains available for future buybacks. East West fourth quarter twenty twenty five dividend will be payable on 11/17/2025 to shareholders of record on 11/03/2025.

I’ll now turn it back to Chris to share our outlook. Chris?

Chris DelMorel Niles, Chief Financial Officer, East West Bancorp: Thank you, Irene. We are making a few updates to our full year outlook, which are presented on Slide 12. We’ve incorporated the quarter end forward curve and assume two additional rate cuts will occur over the course of the fourth quarter. Given those rate cuts, but also given our improved deposit mix, we now see both net interest income and revenue trending to better than 10% growth for the full year. In addition, following the comments Irene just gave, given our resilient credit performance, we now expect full year net charge offs to be in the range of 10 to 20 basis points, a reduction from our prior guidance.

With that, I’ll now open the call to questions. Operator?

Conference Operator: We will now begin the question and answer session. Our first question today comes from Manon Gosalia with Morgan Stanley. Please go ahead.

Manon Gosalia, Analyst, Morgan Stanley: Hi, good afternoon.

Participant: Good afternoon, Manon. Afternoon.

Participant: Chris, at a recent conference you said that East West is liability sensitive in the very near term. So can you just walk us through how you expect loan yields and deposit costs to perform as we get a couple more rate cuts this year, which I think is embedded in your guide? And then where there might be some giveback once the Fed stops cutting rates?

Chris DelMorel Niles, Chief Financial Officer, East West Bancorp: Sure. So we have moved to a cycle where we’re now updating our deposit pricing the night of any given Fed action. So we are very nearly automated process for the vast majority of our consumer and commercial accounts where we’re immediately passing through those rate cuts on the day of. That acceleration of that rate action movement on a downward basis means that we’re repricing our deposits that same day, and our loans often reprice with some lag, whether that’s the next month’s end, the next reset date, the next repricing period, which in sometimes is specified can be a week later, can be almost six or eight weeks later. And so we’re seeing the benefit of the immediate deposit repricing hit us first, followed by the negative of the loan repricing sometimes weeks later.

And that’s resulting in a small and immediate repricing benefit with each Fed cut. That will catch up to us, of course, when the Fed stops cutting. And in addition, the Feds when there’s no more additional further Fed cuts in the forward curve, our CD pricing, which benefits from an expectation of declining rates, will also catch up with us. So as we look forward today, we expect a few cuts into Q4. This will be probably a modest positive for us in Q4 and then a perhaps lesser impact item as we move through ’twenty six until the Fed is done and starts moving in the other direction or flattens out.

Participant: Got it. So as we think about NII, your guide implies, I guess, NII of about $650,000,006 $60,000,000 in 4Q. Is that a good jumping off point for next year given the strong balance sheet growth that you are already seeing?

Chris DelMorel Niles, Chief Financial Officer, East West Bancorp: I think balance sheet growth remains to be seen. I think we’re highlighting some uncertainty in the outlook and some uncertainty in the economy, and it will clearly be a function of how those uncertainties unfold over the course of 2026. So we’re not here to provide 2026 guidance. But as I look at Q4, I think there’s a lot of reasons why we’ll be very thoughtful in making sure we’re supporting our core customers and our line stand customers, but not going out to try and hit the cover off the ball on new loan growth, trying to just deliver for our customers and be consistent in the marketplace.

Conference Operator: The next question is from Ebrahim Poonawala with Bank of America. Please go ahead.

Chris DelMorel Niles, Chief Financial Officer, East West Bancorp: Hey, good afternoon. Hey, good afternoon, Ebrahim.

Ebrahim Poonawala, Analyst, Bank of America: Hey, Chris. Maybe just following up on the balance sheet growth comment. When we look at especially like the non interest bearing deposit growth better than expected this quarter, just talk to us in terms of are there certain verticals driving that growth? Like what’s the momentum there? Or could we actually now are we at a point with the Fed probably getting close to ending QT just from a system standpoint?

Could we see NIB mix actually grew as a percentage of total deposits moving forward?

Chris DelMorel Niles, Chief Financial Officer, East West Bancorp: So as we think about it, the drivers this quarter clearly included a nice lift in household accounts, a nice lift in small business accounts and further positives from our commercial. So we really saw it in all three major categories. And so it was broad based but driven by our consumer and retail bank group. And so we continue to believe that will be a source of continued DDA growth as we move into the fourth quarter. We’re not yet guiding for 2026, but I’d like to think that, as you alluded to, our stability in DDA growth has found its footing here, and we are tracking at roughly 25% or so of new deposit growth in line with the bank’s growth coming in the form of DDA, and that feels like a comfortable level at today’s interest rate environment.

We have said previously, we see the DDA mix as interest rate level dependent. So if we go down 100 basis points from here, I would assume the 25% gets a little better. But at these levels, 25% seems like the right place to think about as we move into 2026.

Ebrahim Poonawala, Analyst, Bank of America: Got it. And I guess maybe just as a follow-up for you or maybe Irene, when looking at the credit metrics, just talk to us what you’re seeing when we look at relative stability, I guess, on criticized loans you laid out or nonperforming assets. But when you

think about this both from a C and I and commercial real estate, where are the soft spots? And then again, you break down your C and I disclosure around this focus on the NDFI loans. Just your visibility around this portfolio, your comfort on sort of the credit quality of the non bank lending piece of it? Thanks.

Adrienne Atkinson, Director of Investor Relations, East West Bancorp: Sure, Eby. So first, when we talk about credit quality,

Irene Oh, Chief Risk Officer, East West Bancorp: I would say that when we look at credit quality and the loan portfolio today, you know, it’s very stable. I think that that is something we have been pleasantly surprised at, especially given really the absolute low levels of problem loans incoming that we are seeing and have continued to see and also the metrics that you see for MPA criticized classified loans, delinquency, etcetera. So that’s something we have maintained, I would say, a lot of discipline on as far as ensuring that we don’t have concentrations in one area. That’s something that we continue to do on the CRE book, single family, and then also from a C and I perspective. I think you also asked about the, I guess the topic of this earnings cycle, MBFI book, you know, we do have MBFI exposure.

It’s about 13% of our total loan portfolio as of ninethirty. Just any comment. Sure. You know, when we look at the NBFI book that we have, and I’ll just, know, maybe to make sure it’s very clear. We don’t have any direct exposure to Tricolor, First Brands, Cantor, or any of the developers or related entities behind Cantor as well.

Right? When we look at that MBDFI box, you know, much of it has been customers that we have kind of grown and industry verticals that we have grown over many years. If we look at the different subsets of that, a big component of that, you see the details on Slide 15, where we show the loan portfolio and the composition of C and I. A big component of that is capital call lending. Also other elements within that that you see are in the real estate investment and management sector, financial services, art finance, consumer finance and equipment finance.

And I would say for East West when we look at this, generally we’re comfortable. These are clients that we have been working with for a long time. We will also ensure that from a collateral perspective, our collateral is secured. This is something that we independently validate or confirm as well. So overall, when I look at this portfolio, Edie, at this point in time, I’m comfortable.

If you look at the subset of C and I loans, we only have two loans totaling 7,000,000 that are not rated pass. There are virtually no losses or charge offs and delinquency as of ninethirty was $1,000,000

Dominic Ng, Chairman and Chief Executive Officer, East West Bancorp: And I want to add even historically for the past fifteen years, we hardly had any losses in the NDVI portfolio. So this is something that we feel pretty strongly that so far so good and then historically been very good.

Chris DelMorel Niles, Chief Financial Officer, East West Bancorp: To a certain extent, EV, credit is credit, and it’s all about knowing your customer, perfecting your collateral, managing your concentration risks and monitoring the cash flows. And East West has a long standing track record of being very good at all of those things.

Ebrahim Poonawala, Analyst, Bank of America: The

Conference Operator: next question is from Dave Rochester with Cantor.

Participant: That’s a different Cantor Yes, by exactly. How are doing, appreciate the timing

Chris DelMorel Niles, Chief Financial Officer, East West Bancorp: is everything.

Participant: Exactly. On fees, your trends there have been consistently very strong. Can you just talk about some of your efforts to build out some of those fee based lines, specifically wealth management that you highlighted earlier? And then can you give an update on where you stand on the new FX platform? Sure.

Chris DelMorel Niles, Chief Financial Officer, East West Bancorp: So we continue to build out the team around our wealth management area because the reality is it continues to provide additional opportunity. And with each new set of hires, we’re finding additional growth opportunities, additional client penetration opportunities and additional, frankly, revenue opportunities. And so we continue to invest in direct hires in that line of business, and we continue to invest in some new product development alongside those new hires to get ourselves to the right place. With regard to our payments business, we continue to roll out and develop enhanced payment solutions, and we’re working through integrating that with the FX platform, Dave, that I think you’re referring to, that we are continuing to develop the APIs for so that we can be in a better position, we believe, in 2026 to have that capability launched.

Participant: That’s great. Early in ’twenty six or later in the year?

Chris DelMorel Niles, Chief Financial Officer, East West Bancorp: I think the wire payment capability will be immediately ready for a subset of our customers, frankly, here at the end of Q4 and broadening to a broader set throughout 2026. And then the foreign exchange capability will come probably mid to later in the year.

Participant: Great. Appreciate that. And then just switching to capital, the TCE ratio is at 10.2% now. I know you’ve mentioned you like that 10% level. And I was just curious if you’re going to end up liking 11% at some point or if maybe the outlook for growth and buybacks might be accelerating a little bit next year and can keep that sort of stable from here?

Any thoughts on that?

Dominic Ng, Chairman and Chief Executive Officer, East West Bancorp: Yes. We’re looking at all different scenarios. One thing for sure is that we always wanted to be one of the strongest amount of peers when it comes to capital ratio, because it really helped us to attract customers, to attract, talents to come join East West Bank. And for us to do well, we need to have strong talents to build relationship with great customers and having strong capital and make it much easier for us to attract talents and attract clients. So with that, it’s just part of the formula of us being successful.

And as you look at our return of equity and return of asset, we generate high teens in return of equity and 1.8 plus percent on return of asset. With that kind of return, we outperform most of our peers anyway, despite the fact that we have substantially higher capital. So obviously, in our perspective is that that strength of high capital ratio help us to continue generate this kind of high performance and we want to stick with that. But that doesn’t mean that we are not going to be looking for opportunistic buyback. We got board approved allocation about X dollar amount, did you buy back at the appropriate time?

So we’re always looking for opportunities. Have we not been in the quiet period, the last several days was a pretty good opportunity. So every now and then there’s always a few weeks out of the year, it’s great opportunity. And our advantage is that we always have these kind of situation that allow us to do the right thing at the right time and not having a gun on our head to do something. The other thing would be obviously from a dividend standpoint, after the fourth quarter, we’re always going to be start looking into reassessing how much dividend we want to pay.

And obviously, are always opportunity for us to possibly increase dividend. And we are always out there looking for whatever other opportunity for us to grow. And so I think we’re in a very, very advantageous position right now with a strong capital and then we’re to continue to stick with that.

Participant: Sounds good. I’d agree. Thanks.

Conference Operator: The next question is from Timur Braziler with Wells Fargo.

Timur Braziler, Analyst, Wells Fargo: Chris, going back to your deposit related commentary on ability to reprice deposits in light of Fed actions, just what’s the size of that base that gets repriced that same day?

Chris DelMorel Niles, Chief Financial Officer, East West Bancorp: It’s the vast majority of everything other than the CDs and, of course, the noninterest bearing. So substantially, all of the money markets, all of the interest bearing checking and even the savings accounts that are above 1%. So a lot. It’s on the order of magnitude $20 ish billion or so. Okay, great.

And then maybe looking at some of

Timur Braziler, Analyst, Wells Fargo: the tariff related impact, we’re hearing from some others that you’re starting to see a little bit of relief there in their third quarter loan growth as clarity increases in some cases. Is East West seeing any of that? Was that any part of the 3Q growth? Or is this really still an opportunity as maybe we get a little bit more clarity on some of the tariffs that may be more impactful to your client base?

Chris DelMorel Niles, Chief Financial Officer, East West Bancorp: Look, I think clarity is going to be good for our customers, for the economy, for everyone. And so, reduced tensions and increased transparency and clarity about what will happen is in everyone’s best interest here. That having been said, our customers have proved remarkably resilient throughout this period. They have taken steps to prepare themselves well in advance, taken steps here in the interim to do other things and seem to be looking forward to business opportunities and finding the right way to do business in whatever environment presents itself. We like to think that East West is very nimble.

Our customers have proven remarkably nimble. And we think they’ll find a way to navigate through whatever environment exists. But right now, they’re not coming to us with concerns about navigating the current waters.

Adrienne Atkinson, Director of Investor Relations, East West Bancorp: Okay, great. And then just one last one

Timur Braziler, Analyst, Wells Fargo: for me, maybe for Irene. Just looking at Slide nine, the linked quarter reduction in multifamily criticized loans and then kind of the linked quarter increase in commercial real estate nonperformers. Was there any migration from the multifamily book into MPAs there? And then just maybe talk a little bit more broadly about California multifamily. It’s been a topic that’s been getting a little bit more focused.

Irene Oh, Chief Risk Officer, East West Bancorp: I didn’t hear the last part of your question. Could you just repeat that?

Timur Braziler, Analyst, Wells Fargo: Yes. The linked quarter reduction in criticized multifamily versus the quarter on quarter step up in commercial real estate nonperformers, Was any of that related? And then just maybe speak to the broader multifamily environment in California, as that’s been getting a little bit more questions.

Irene Oh, Chief Risk Officer, East West Bancorp: Oh, great. Okay. So when we look at the linked quarter reduction in multifamily, albeit at a very low base, You know, the reduction was really kind of the ability to kind of upgrade loans. Right? So really, the cash flows were there, we were able to upgrade them for multifamily.

For CRE, the, you know, the changes that we’ve seen as far as the criticized level there, excluding multifamily as well, overall, I would say that there are inflows and outflows that happen there generally speaking. It is something where we find it very manageable at this point. For multifamily in the markets that we are in, which is largely California, we’re finding that the markets continue to be holding up. When we look at kind of the cash flows and information that we are receiving from our customers, their ability to debt service, you know, continues to be very resilient.

Timur Braziler, Analyst, Wells Fargo: Great. Thank you.

Conference Operator: The next question is from Jared Shaw with Barclays. Please go ahead.

Adrienne Atkinson, Director of Investor Relations, East West Bancorp0: Hey, good afternoon.

Chris DelMorel Niles, Chief Financial Officer, East West Bancorp: Hey,

Adrienne Atkinson, Director of Investor Relations, East West Bancorp0: Hey, maybe sticking with credit. Irene, could you just talk through the thought process behind the sale of non performers? And it looks like, I guess, you must have got some good pricing on that, assuming if the NII benefit is mostly interest recoveries. Is there opportunity to do more NPL sales?

Chris DelMorel Niles, Chief Financial Officer, East West Bancorp: It wasn’t a sale, it was a full payoff from an existing set of customers where the loans, at least one of them was have been on accrual for years. So it was the full payoff, the recovery of the principal recovery of our prior charge offs and the recovery of years and years of accrued interest that had compounded. So it wasn’t a sale. It was just we worked with the customers long enough and well enough that collectively, we were able to recover in full.

Timur Braziler, Analyst, Wells Fargo: Okay. You just have to

Adrienne Atkinson, Director of Investor Relations, East West Bancorp0: do that now with everyone else, right? It will be that sounds easy.

Chris DelMorel Niles, Chief Financial Officer, East West Bancorp: Dominic expects that on pretty much everything. So yes, that’s the mandate around here.

Adrienne Atkinson, Director of Investor Relations, East West Bancorp0: Okay. All right. Well, that’s good color. And then I guess just looking at expenses, with all this growth in PEs, especially on the wealth management side, how should we think about a correlating growth on the expense side? I guess I was a little surprised to see such good expense control with that fee income growth.

Chris DelMorel Niles, Chief Financial Officer, East West Bancorp: Look, I think if you look over the last several years, we’ve been growing at a steady clip in the upper single digits. We continue to grow in aggregate at that level here even into this year. And so the reality is, as we continue to grow the bank, we’re always looking to obviously grow on an accretive basis. But if we’re growing revenue double digits, then I certainly have no problem with expenses growing in the high single digits and creating operating leverage as we continue to grow.

Adrienne Atkinson, Director of Investor Relations, East West Bancorp0: Yes. But I guess, should we is there any sort of pay for performance component to the wealth management growth? And any of the other stuff, or is it really just more salary and bonus, and we shouldn’t tie them directly to that growth?

Chris DelMorel Niles, Chief Financial Officer, East West Bancorp: No. When we think about our fee revenue businesses, for sure, our wealth management businesses, they have a higher efficiency ratio to their business model. And I think as Dominic alluded to on our last call, we’ll be happy to see our expenses grow a little bit faster if we’re growing our fee businesses faster because those obviously are good, long, sustainable revenue streams that we think the market value is at a premium, that we value at a premium internally and that we’ll be happy to pay people for to generate over time. So if our efficiency ratio goes up a little bit because we’re developing a steadier, more recurring fee stream, I don’t think anyone will be too upset about that.

Irene Oh, Chief Risk Officer, East West Bancorp: Maybe I could just also clarify, because maybe this is the nature of your question. With that increased fee income, there is increased kind of compensation for those individuals, and that’s reflected in the same period, revenue recognition.

Adrienne Atkinson, Director of Investor Relations, East West Bancorp0: Okay, all right. Thanks. And then just finally for me, do you have the impact, the hedge impact this quarter, think it was $6,000,000 last quarter?

Chris DelMorel Niles, Chief Financial Officer, East West Bancorp: It was also negative $6,000,000 for Q3.

Adrienne Atkinson, Director of Investor Relations, East West Bancorp0: Thanks.

Conference Operator: The next question is from Chris McGratty with KBW. Please go ahead.

Chris DelMorel Niles, Chief Financial Officer, East West Bancorp: Great. Thanks for the question. Maybe to start with you, just

Timur Braziler, Analyst, Wells Fargo: to follow-up on the revenue growth, leverage conversation. Does the operating leverage outlook get any easier with deregulation and the momentum there in terms of what you’re spending on perhaps currently that you might be able to either cut or divert next year?

Chris DelMorel Niles, Chief Financial Officer, East West Bancorp: I think the things that are in flight are largely things that we recognize as appropriate to have a better controlled, better managed, better monitored bank in the long run. We are, of course, developing plans for what might come a few years down the road. But I would say, we are generally today doing things that make sense for our business, make sense for our customers and make sense for the shareholders. And that continues to be what we focus on.

Timur Braziler, Analyst, Wells Fargo: Okay, great. And then second question would be

Chris DelMorel Niles, Chief Financial Officer, East West Bancorp: on just loan demand from clients. I know you touched upon it a

Participant: little bit before, but what do

Chris DelMorel Niles, Chief Financial Officer, East West Bancorp: you think it will take to get the loan book growing at a quicker rate in 2026? Look, I think our residential mortgage demand is fairly steady and consistent. The American dream is alive and well. And for the niche that we focus in on, it’s a very steady, consistent contributor to our business. On the real estate side, it’s been interesting.

Think you’ve heard me say on these calls and Dominic say, and other forums, that it felt like for a while, of our best customers were sitting on the sidelines. We’ve seen some of them come back and look at things and some of them even start to do things. So I think real estate is at the edge of additional interest. Lower rates will probably create more opportunities for things to happen in that space. Dominic said a few cuts ago that he thought 100 basis points would probably be enough to bring the market back into alignment.

I think we’re still 50 basis points away from that. A few more cuts maybe into next year, and real estate could have some more traction. We’ll see how that plays out. And then on the C and I side, I think Irene alluded to the fact that we’ve got a lot of private equity capital call lines have activity. That portfolio has been relatively quiet.

Lower rates probably means they come back in more, but it still remains relatively quiet, as we sit here today.

Timur Braziler, Analyst, Wells Fargo: And then Chris, just on the full cycle beta, can you just remind us the assumptions for deposits?

Chris DelMorel Niles, Chief Financial Officer, East West Bancorp: Sorry, think you cut out there, but the question was deposit beta. And I think we’re our observed deposit beta on interest bearing deposits was 0.62, and we continue to expect it’ll be better than 0.5 going forward. The

Conference Operator: next question is from Ben Gerlinger with Citi.

Manon Gosalia, Analyst, Morgan Stanley: Chris, you’ve laid out a lot of information on kind of moving deposits being almost instantaneously cut outside of the time deposits. On time deposits, I’ve noticed you guys keep cutting the term from basically six months to four to three. It seems like you’re kind of trying to time everything into the first quarter. And also at the same time, you also have the Lunar New Year every year, which is so it’s a big quarter for repricing in general. I was just kind of curious, do you have anything in front of you?

Like how much time deposit dollars are supposed to be repriced in 1Q next year?

Chris DelMorel Niles, Chief Financial Officer, East West Bancorp: Yes. Very perceptive question. And yes, very observant of you. And yes, we do have a fair amount that we have structured so that we have the ability to do something meaningful in Q1 around our Lunar New Year special. And we have been shortening those maturities, as you stated, to both keep the balances today, but in recognition and anticipation that there’ll be

Dominic Ng, Chairman and Chief Executive Officer, East West Bancorp: a few Fed cuts coming here at the October

Chris DelMorel Niles, Chief Financial Officer, East West Bancorp: and December that would allow us, therefore, to roll over. And so to specifically address your question, we have about $10,000,000,000 a little over $10,000,000,000 that’s rolling over in Q4 and a little over $8,000,000,000 before any rollover that happened from Q4 that would otherwise come due in Q1. So that’s $18 plus billion rolling over in the next six months. And we assume the vast majority of that will benefit from the embedded 50 basis points of rate cuts that’s already out there. So our current six month CD rate that’s out there today is a three fifty five rate.

Manon Gosalia, Analyst, Morgan Stanley: Got it. Yeah. So Citi’s patent pending CD trackers doing pretty good. Anyway, so when you think about the I mean, you’re not gonna give NII guidance next year, but it seems like it’s gonna be another really big year. Are there any investments down the road that I might think about?

Otherwise, I would imagine this year’s guide is probably similar to next year’s guide.

Chris DelMorel Niles, Chief Financial Officer, East West Bancorp: We haven’t given guidance yet for 2026, but I appreciate your enthusiasm.

Manon Gosalia, Analyst, Morgan Stanley: The

Conference Operator: next question is from David Smith with Truist. Go ahead.

Adrienne Atkinson, Director of Investor Relations, East West Bancorp1: Hi, there. Good Afternoon. I just wanted to confirm on the guidance, is the NII guide inclusive of the accretion and recovery this quarter? And does the expense outlook include the equity plan adjustment? And can you also just help us give us some color on when the timing on those became clear to you, like with NII item already contemplated with the guidance update last month?

And have you had the equity comp item already planned when you gave the guidance earlier this year? I know some folks have been surprised. Last quarter, the expense guide staying where it was seemed to imply such a step up in the second half of the year. Yes.

Chris DelMorel Niles, Chief Financial Officer, East West Bancorp: So I think we’ve been thinking about our employee retirement eligibility over the last six months and hadn’t taken any definitive actions until this quarter. So that was, I’ll say, in the back of our minds, but we hadn’t concretely defined it. We hadn’t gone through the appropriate approvals, hadn’t updated our board, etcetera. So that came together in Q4. And the revenue side came together because the clients paid off and no, we didn’t control that.

They controlled that and they paid it off. With regard to our guide, I would say, look, we’re guiding to over 10% today because we’re clear that that’s the trajectory we’re on. And I don’t know that we had a clarity of vision around all the pieces when we last spoke. But clearly, we have that clarity now. And clearly, it looks like it’s not just trending towards 10%, but obviously trending well above 10%.

Adrienne Atkinson, Director of Investor Relations, East West Bancorp1: Okay. And on expenses that had, I guess, been contemplated in the guidance from earlier this year then, you weren’t sure on the exact timing within the year. Is that the right way to understand that?

Chris DelMorel Niles, Chief Financial Officer, East West Bancorp: That’s the right way to think about it. Yes.

Adrienne Atkinson, Director of Investor Relations, East West Bancorp1: Thank you.

Conference Operator: The next question is from Janet Lee with TD Cowen. Please go ahead.

Adrienne Atkinson, Director of Investor Relations, East West Bancorp: Hello. Going back on NIM, so am I interpreting your commentary correct to assume that there will be a bigger increase in NIM and then the NIM expansion after the first quarter will be moderating or flattish? Is that the right way to think about this NIM trajectory comment?

Chris DelMorel Niles, Chief Financial Officer, East West Bancorp: So if I look at the core run rate of NIM, excluding the interest recoveries, and I’m focused on page six, that’s the adjusted number at around $6.45. That’s a good run rate number. And we’re moving obviously to continue to grow the balance sheet modestly. And hopefully, we’ll have some benefit from the repricing dynamics in the short run that could make that a little bit better. But that’s a good run rate starting point.

And the question will be is what happens to both the long term rates, which impacts the back book refinancing and repricing that’ll drive sort of the long end of our loans and securities investments in 2026 versus the short end effects and how that plays out over the course of 2026. And if the answer is we get a steepening yield curve, that’s generally a positive for us. If the answer is, for some reason, the yield curve flattens because of the dynamics, well, that won’t be as good for us. So I think those are the things that are at play and the things that we’re looking for is looking to better understand as we also move in towards 2026.

Adrienne Atkinson, Director of Investor Relations, East West Bancorp: Okay. And just going back to credit, I know you guys gave a lot of color on credit and tariff, but I still want to just understand this direction of allowance for loan losses. Because when I look at other banks, reserve ratios tended to be more so stable. Is your reserve increase tied to resi mortgage and CRE to capture potential effects of business cycle? Is this really just referring to the potential tariff related uncertainty?

Chris DelMorel Niles, Chief Financial Officer, East West Bancorp: More than just the tariffs. Yes, I would look, I think the reality is across the board. And I’ll let Irene jump in here. But it wasn’t just in our resi mortgage book. You know, we were thoughtful about different positions in different portfolios.

Irene?

Irene Oh, Chief Risk Officer, East West Bancorp: Yeah. And look, the resi book with the kind of incredible credit quality we’ve had over thirty years for much of that portfolio, you know, we increased the reserve level from 36 basis points to 41. So, ultimately, when you look at those levels, I think they’re appropriate given the credit quality. But in a situation where the economy is more uncertain, certainly, when we look at consumer credit, even consumer that is well secured by a low loan to value real estate mortgage, know, that’s impacted when we do the modeling. So it really less so on the tariffs, more so on kind of the economic uncertainty and what could happen there.

Does that make sense? Know that kind of metrics and drivers for that unemployment GDP, etcetera.

Adrienne Atkinson, Director of Investor Relations, East West Bancorp: Got it. Thank you.

Conference Operator: This concludes our question and answer session. I would like to turn the conference back over to Dominic Ng for any closing remarks.

Dominic Ng, Chairman and Chief Executive Officer, East West Bancorp: Well, thank you all for joining our earnings call this afternoon. And we’re looking forward to speaking with you in January. Make sure.

Conference Operator: The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.

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