East West Bancorp Inc: Form 10-Q for the period ended Mar 31, 2026

57

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, 2025, filed with the United States (“U.S.”) Securities and Exchange Commission (“SEC”) on February 27, 2026 (the “Company’s 2025 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, 2026, the Company had $82.9 billion in total assets and approximately 3,400 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 2025 Form 10-K.

Current Developments

Economic Developments

Evolving geopolitical uncertainties, including armed conflict involving Iran or heightened tensions in other regions, as well as changes in trade policies and tariffs, continue to raise concerns about inflation, oil and energy price volatility, and supply chain disruptions. At its March and April 2026 meetings, the Federal Reserve maintained the federal funds target rate, reflecting a cautious stance as it manages persistent inflationary pressures and a gradually cooling labor market amid an increasingly uncertain global environment. These factors may create volatility that could affect both inflation and overall economic growth. 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 Geographic and Political Uncertainties and — Risks Related to Financial Matters in the Company’s 2025 Form 10-K.

Regulatory Updates

In March 2026, the federal banking agencies issued proposed revisions to the U.S. regulatory capital framework. The proposals would, among other things, modify aspects of the standardized approach to risk-based capital treatment of certain exposure categories that are material to the Company. The proposed changes address the definition of capital, the calculation of certain risk-weighted assets and future indexing of certain dollar-based thresholds. The Company has been monitoring these proposals and assessing their potential impacts on its regulatory capital position.

Financial Review

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

(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 net income for the first quarter 2026 was $358 million, a $68 million or 23% increase from the same prior year period. The year-over-year increase was primarily driven by higher net interest income before provision for credit losses, lower provision for credit losses, and increased noninterest income, partially offset by higher noninterest expense. Noteworthy aspects of the Company’s performance for the first quarter of 2026 included:

• Net interest income and net interest margin. First quarter 2026 net interest income before provision for credit losses of $671 million increased $71 million or 12% from the first quarter of 2025. First quarter 2026 net interest margin of 3.49% increased 14 bps year-over-year.
• Earnings per share growth. First quarter 2026 basic and diluted earnings per share both increased 23% to $2.59 and $2.57, respectively, from the first quarter of 2025.
• Profitability ratios. First quarter 2026 ROA, ROAE and the ROATCE of 1.79%, 16.04% and 16.92%, respectively, increased 23 bps, 108 bps and 100 bps year-over-year, respectively. ROATCE is a non-GAAP financial measure. For additional information regarding the reconciliation of non-GAAP financial measures, refer to Item 2. MD&A — Reconciliation of GAAP to Non-GAAP Financial Measures in this Form 10-Q.
• Efficiency ratios. First quarter 2026 efficiency ratio was 36.23%, compared with 36.42% for the same period in 2025. The improvement in the efficiency ratio was primarily due to higher net interest income before provision for credit losses and an increase in noninterest income.
• Asset growth. Total assets reached $82.9 billion as of March 31, 2026, an increase of $2.5 billion from December 31, 2025, primarily driven by a $1.2 billion or 2% increase in net loans held-for-investment and an $881 million or 7% increase in available-for-sale (“AFS”) debt securities.
• Deposit growth. Total deposits were $68.9 billion as of March 31, 2026, an increase of $1.8 billion or 3%, from December 31, 2025, primarily driven by growth in money market and noninterest-bearing demand deposits.
• Capital levels. Stockholders’ equity was $9.0 billion as of March 31, 2026, up $100 million or 1%, from December 31, 2025. Book value per share of $65.70 as of March 31, 2026, increased $1.02 or 2%, compared with December 31, 2025. Tangible book value per share of $62.27 as of March 31, 2026, increased $1.00 or 2%, compared with December 31, 2025. 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 2026 increased year-over-year. The $71 million or 12% year-over-year increase in net interest income, and the 14 bp year-over-year increase in net interest margin primarily reflected lower interest-bearing deposit funding costs and Federal Home Loan Bank (“FHLB”) advances, and increases in loans and AFS debt securities’ average balances, partially offset by lower yields on loans, AFS debt securities, and interest-bearing cash and deposits with banks.

Average interest-earning assets were $78.0 billion for the first quarter of 2026, an increase of $5.3 billion or 7% from the first quarter of 2025. The year-over-year increase in average interest-earning assets primarily reflected loan growth and increases in AFS debt securities, partially offset by decreases in interest-bearing cash and deposits with banks.

The 27 bp year-over-year decrease in the yield on average interest-earning assets to 5.49% for the first quarter of 2026, primarily reflected the impact of lower benchmark interest rates on the loan portfolio.

The average loan yield of 6.11% for the first quarter of 2026, decreased 28 bps, from the first quarter of 2025. The year-over-year decrease in the average loan yield primarily reflected the loan portfolio’s sensitivity to lower benchmark interest rates. Approximately 59% and 58% of loans held-for-investment were variable-rate as of March 31, 2026 and 2025, respectively.

Deposits are an important source of funding for the Company. Average deposits were $67.5 billion for the first quarter of 2026, a $4.9 billion or 8% increase from the first quarter of 2025. The year-over-year increase was primarily driven by growth in time, demand and money market deposits. Average noninterest-bearing deposits were $16.9 billion for the first quarter of 2026, a $1.8 billion or 12% increase from the first quarter of 2025.

The average cost of deposits of 2.13% for the first quarter of 2026, decreased 41 bps from the first quarter of 2025. The average cost of interest-bearing deposits of 2.84% for the first quarter of 2026, decreased 50 bps, from the first quarter of 2025. These year-over-year decreases primarily reflected the impacts of lower benchmark interest rates and the Company’s efforts to reduce deposit costs.

The average cost of funds calculation includes deposits, FHLB advances, securities sold under repurchase agreements (“repurchase agreements”), long-term debt, and short-term borrowings. The average cost of funds of 2.21% for the first quarter of 2026 decreased 43 bps, from the first quarter of 2025. The year-over-year decrease was mainly driven by the decrease in the 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 2026 and 2025:

($ in thousands)

(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 $1 million and $8 million for the first quarters of 2026 and 2025, 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 $11 million and $12 million for the first quarters of 2026 and 2025, 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.

($ in thousands)

64

Noninterest Income

The following table presents the components of noninterest income for the first quarters of 2026 and 2025:

($ in thousands)

NM - Not meaningful.

Noninterest income for the first quarter of 2026 was $103 million, a $10 million or 11% increase compared with the first quarter of 2025. The year-over-year increase was primarily due to increases in wealth management fees, commercial and consumer deposit-related fees, and customer derivative income and derivative mark-to-market adjustments, partially offset by other losses.

Commercial and consumer deposit-related fees were $31 million for the first quarter of 2026, a $4 million or 13% increase compared with the first quarter of 2025. The year-over-year increase was primarily due to higher commercial customer activity.

Wealth management fees were $22 million for the first quarter of 2026, a $9 million or 63% increase compared with the first quarter of 2025. The year-over-year increase primarily reflected higher customer demand for wealth management products such as fixed-rate corporate bonds and fixed annuities and increased commission and fees from new customer activity.

Customer derivative income and derivative mark-to-market adjustments were $6 million for the first quarter of 2026, a $1 million increase compared with the first quarter of 2025. The year-over-year increase primarily reflected favorable credit valuation adjustments, partially offset by lower customer activity.

Other losses were $941 thousand for the first quarter of 2026, compared with other income of $3 million in the first quarter of 2025. The decrease primarily reflected $5 million in lower of cost or market adjustments on loans held-for-sale recorded during the first quarter of 2026.

Noninterest Expense

The following table presents the components of noninterest expense for the first quarters of 2026 and 2025:

($ in thousands)

NM - Not meaningful.

Noninterest expense was $280 million for the first quarter of 2026, a $28 million or 11% increase compared with the first quarter of 2025. The year-over-year increase was primarily due to increases in compensation and employee benefits and amortization of tax credit and CRA investments, partially offset by OREO income.

Compensation and employee benefits were $173 million for the first quarter of 2026, a $26 million or 18% increase compared with the first quarter of 2025. The increase was primarily driven by higher incentive compensation and staffing growth.

Occupancy and equipment expense was $18 million for the first quarter of 2026, a $3 million or 16% increase compared with the first quarter of 2025. The increase was primarily due to higher rental expense and increased depreciation related to a building purchase.

OREO income was $264 thousand for the first quarter of 2026, compared with OREO expense of $4 million for the first quarter of 2025. OREO income of $264 thousand for the first quarter of 2026 was primarily due to gains recorded on the sale of an OREO property, partially offset by OREO write-downs and operating expenses, compared with $4 million of OREO write-downs for the same prior year period.

Amortization of tax credit and CRA investments was $22 million for the first quarter of 2026, a $6 million or 40% increase compared with the first quarter of 2025. The year-over-year increase was primarily due to the timing of tax credit investments that closed in a given period.

Income Taxes

The following table presents income before income taxes, income tax expense and the effective tax rate for the first quarters of 2026 and 2025:

($ in thousands)

First quarter 2026 income tax expense was $100 million and the effective tax rate was 21.8%, compared with first quarter 2025 income tax expense of $101 million and an effective tax rate of 25.8%. The decreases in income tax expense and effective tax rate were primarily due to the release of valuation allowance associated with foreign tax credits and favorable adjustments driven by a lower California state tax apportionment, partially offset by higher pre-tax income and a partial derecognition of a purchased tax credit.

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 based on customer type, the channels through which customers are served, and the products and services provided. For a description of the Company’s internal management reporting process, including the segment cost allocation methodology, see Note 13 — 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.

Consumer and Business Banking

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

($ in thousands)

Consumer and Business Banking segment net income decreased $2 million or 2% year-over-year to $121 million for the first quarter of 2026, primarily driven by an $8 million increase in compensation and employee benefits and a $5 million increase in other noninterest expense, partially offset by an $8 million increase in noninterest income. The increase in noninterest income was mainly driven by higher wealth management fee income in the first quarter of 2026. The compensation and employee benefits increase was primarily due to higher incentive compensation, increased wealth management commissions and staffing growth. The increase in other noninterest expense was mainly driven by higher allocated corporate overhead expenses.

Commercial Banking

The Commercial Banking segment primarily generates 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, equipment financing, and loan syndication. Commercial deposit products and other financial services include treasury management, foreign exchange services, and interest rate and commodity risk hedging.

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

($ in thousands)

(1) Prior period balances have been reclassified for comparability due to a change in allocation methodology.

Commercial Banking segment net income increased $14 million or 12% year-over-year to $128 million for the first quarter of 2026, primarily driven by a $14 million decrease in provision for credit losses, an $8 million increase in net interest income and a $6 million decrease in other noninterest expense, partially offset by a $14 million increase in compensation and employee benefits. The net interest income increase was primarily due to commercial loan and deposit growth, leading to higher interest earnings and internal FTP credits from deposits in the first quarter of 2026, respectively. The decrease in provision for credit losses was driven by a more stable macroeconomic environment for C&I loans in the first quarter of 2026. The increase in compensation and employee benefits was primarily driven by higher incentive compensation and staffing growth. The decrease in other noninterest expense was mainly due to lower OREO and loan related expenses in the first quarter of 2026.

Treasury and Other

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

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

($ in thousands)

NM — Not meaningful.

(1) Reallocated to the Commercial Banking and Consumer and Business Banking segments effective first quarter of 2026.

(2) Prior period balances have been reclassified for comparability due to a change in allocation methodology.

The Treasury and Other segment income before income taxes increased $59 million for the first quarter of 2026, primarily driven by a $63 million increase in net interest income, partially offset by a $4 million increase in compensation and employee benefits and a $3 million increase in other noninterest expense. The net interest income increase was mainly driven by lower net internal FTP credits for deposits to other business segments, lower interest expense on FHLB advances, and higher interest income on debt securities during the first quarter of 2026. The compensation and employee benefits increase was primarily driven by higher incentive compensation and staffing growth. The other noninterest expense increase was primarily driven by higher amortization of tax credit and CRA investments.

Income tax expense is allocated to the Consumer and Business Banking and the Commercial Banking segments by applying statutory income tax rates to the respective segment income before income taxes. The income tax expense or benefit in the Treasury and Other segment consists of the remaining unallocated income tax expense or benefit after allocating income tax expense to the two core segments, and reflects the impact of tax credit investment activity.

Balance Sheet Analysis

Debt Securities

The Company maintains a portfolio of high quality and liquid debt securities with a moderate duration profile. It closely manages the overall portfolio credit, interest rate and liquidity risks. The Company’s debt securities provide:

• interest income for earnings and yield enhancement;
• funding availability for needs arising during the normal course of business;
• the ability to execute interest rate risk management strategies in response to changes in economic or market conditions; and
• collateral to support pledging agreements as required and/or to enhance the Company’s borrowing capacity.

While the Company does not intend to sell or trade its debt securities, it may sell AFS debt securities in response to changes in the balance sheet and related interest rate risk to meet liquidity, regulatory and strategic requirements.

The following table presents the distribution of the Company’s AFS and HTM debt securities portfolio by amortized cost and fair value as of March 31, 2026 and December 31, 2025, and by credit ratings as of March 31, 2026:

($ in thousands)

(1) Credit ratings represent independent assessments of the credit quality of debt securities. The Company determines the credit rating of a debt security based on the lowest rating assigned by any of the nationally recognized statistical rating organizations (“NRSROs”) that have rated the security. 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) Includes Government National Mortgage Association (“GNMA”) AFS debt securities with amortized cost and fair value both totaling $10.3 billion and $9.6 billion as of March 31, 2026 and December 31, 2025, respectively.

(3) Includes GNMA HTM debt securities totaling $77 million of amortized cost and $63 million of fair value as of March 31, 2026, and $79 million of amortized cost and $65 million of fair value as of December 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 3.5 and 5.7, respectively, as of March 31, 2026, compared with 3.0 and 5.9, respectively, as of December 31, 2025. The AFS debt securities’ effective duration increased primarily due to the purchase of new fixed‑rate AFS securities, coupled with the sale of floating‑rate AFS securities, while the decline in the HTM debt securities’ effective duration is mainly due to the portfolio run-off.

Available-for-Sale Debt Securities

AFS debt securities increased $881 million or 7% from December 31, 2025 to $14.1 billion as of March 31, 2026, 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 $453 million as of March 31, 2026, compared with $406 million as of December 31, 2025.

Of the AFS debt securities with gross unrealized losses, substantially all were rated investment grade as of both March 31, 2026 and December 31, 2025. For additional information on the policies, methodologies and judgments used to determine the allowance for credit losses on AFS debt securities, see Item 8. Financial Statements — Note 1 — Summary of Significant Accounting Policies to the Consolidated Financial Statements in the Company’s 2025 Form 10-K and Note 4 — Securities to the Consolidated Financial Statements in this Form 10-Q.

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, 2026 and December 31, 2025.

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 2025 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 (“SFR”), home equity lines of credit (“HELOCs”) and other consumer loans.

The composition of the loan portfolio as of March 31, 2026 was similar to the composition as of December 31, 2025, as presented in the charts below.

Total loans held-for-investment of $58.1 billion as of March 31, 2026 increased $1.2 billion or 2% from December 31, 2025, primarily driven by growth in the C&I portfolio. For additional information on the Company’s loans held-for-investment outstanding balances, see Note 6 — Loans Receivable and Allowance for Credit Losses to the Consolidated Financial Statements in this Form 10-Q.

Commercial

The commercial loan portfolio, which includes C&I and total CRE loans, comprised 71% and 70% of total loans held-for-investment as of March 31, 2026 and December 31, 2025, respectively. The Company actively monitors the commercial lending portfolio for credit risk and reviews credit exposures for sensitivity to changing economic conditions.

Commercial — Commercial and Industrial Loans. Total C&I loan commitments were $28.0 billion and $27.7 billion as of March 31, 2026 and December 31, 2025, respectively, with a utilization rate of 70% and 67% as of March 31, 2026 and December 31, 2025, respectively. Total C&I loans of $19.6 billion as of March 31, 2026 increased $900 million or 5% from December 31, 2025. The C&I loan portfolio includes loans and financing for businesses across a wide spectrum of industries. The Company offers a variety of C&I products, including but not limited to commercial business lending, working capital lines of credit, trade finance, letters of credit, asset-based lending, asset-backed finance, project finance and equipment financing. Additionally, the Company has a portfolio of broadly syndicated C&I loans, which represent revolving or term loan facilities that are marketed and sold primarily to institutional investors. This portfolio totaled $1.1 billion and $1.0 billion as of March 31, 2026 and December 31, 2025, respectively. The Company also has a portfolio of loans to non-depository financial institutions (“NDFI”), which totaled $8.3 billion and $7.6 billion as of March 31, 2026 and December 31, 2025, respectively. The NDFI portfolio is primarily included in the capital call, general & other, and financial services industries, and is diversified across business credit, private equity, and mortgage credit facilities. The majority of the C&I loans had variable interest rates as of both March 31, 2026 and December 31, 2025.

The C&I portfolio is well-diversified by industry. The Company monitors concentrations within the C&I loan portfolio by industry and customer exposure, and maintains exposure limits by industry and loan product. The following table presents the industry mix within the Company’s C&I loan portfolio as of March 31, 2026 and December 31, 2025:

($ in thousands)

(1) Prior period balances have been reclassified for comparability.

Commercial — Total Commercial Real Estate Loans. The total CRE portfolio consists of CRE, multifamily residential, and construction and land loans. The Company’s underwriting parameters for CRE loans are established in compliance with supervisory guidance, and include 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, 2026 and December 31, 2025. The following table summarizes the Company’s total CRE loans by property type as of March 31, 2026 and December 31, 2025:

($ in thousands)

(1) Weighted-average LTV is based on most recent LTV, using the most recent available appraisal and current loan commitment.

The following tables provide a summary of the Company’s CRE, multifamily residential, and construction and land loans by geography as of March 31, 2026 and December 31, 2025. The distribution of the total CRE loan portfolio largely reflects the Company’s geographical branch footprint, which is primarily concentrated in California.

($ in thousands)

($ in thousands)

73

The percentage of total CRE loans located in California was 68% as of both March 31, 2026 and December 31, 2025. 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 California’s economic and real estate markets, see Item 1A. Risk Factors — Risks Related to Geographic and Political Uncertainties and Risks Related to Financial Matters in the Company’s 2025 Form 10-K.

Commercial — Commercial Real Estate Loans. The Company focuses on providing financing to experienced real estate investors and developers with 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, 2026 and December 31, 2025. 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 derivative hedging products to our customers to manage their interest rate risks. As of March 31, 2026, of the 58% of our CRE portfolio that had variable rates, 51% had customer-level interest rate derivative contracts in place. In comparison, as of December 31, 2025, of the 58% of our CRE portfolio that had variable rates, 52% 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, 2026, of the 52% of our multifamily residential loan portfolio that had variable rates, 50% had customer-level interest rate derivative contracts in place. In comparison, as of December 31, 2025, of the 51% of our multifamily residential portfolio that had variable rates, 50% 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 $590 million in loans outstanding, and $439 million in unfunded commitments as of March 31, 2026, compared with $544 million in loans outstanding, and $419 million in unfunded commitments as of December 31, 2025. Land loans totaled $222 million and $198 million as of March 31, 2026 and December 31, 2025, respectively.

Consumer

Residential mortgage loans are primarily originated through the Bank’s branch network. The average residential mortgage loan size was $439 thousand as of both March 31, 2026 and December 31, 2025. The following tables summarize the Company’s SFR and HELOC loan portfolios by geography and lien priority as of March 31, 2026 and December 31, 2025:

($ in thousands)

75

($ in thousands)

Consumer — SFR Loans — Traditional Portfolio. The Company offers a variety of SFR 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 SFR loans as of both March 31, 2026 and December 31, 2025. 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 60% or less. The weighted-average LTV ratio was 48% and 49% as of March 31, 2026 and December 31, 2025, respectively. These loans have historically experienced very low delinquency and loss rates.

Consumer — SFR Loans — BTHO Portfolio. The Company also underwrites a BTHO program aimed at expanding home ownership access across creditworthy low-to-moderate income borrowers. The Company is in a first lien positions in all of its BTHO loans and the weighted average LTV was 87% and 88%, as of March 31, 2026 and December 31, 2025, respectively.

Consumer — Home Equity Lines of Credit. Total HELOC commitments were $5.6 billion and $5.5 billion as of March 31, 2026 and December 31, 2025, respectively, with a utilization rate of 35% as of both dates. Substantially all of the Company’s unfunded HELOC commitments are unconditionally cancellable. The Company was in a first lien position for 69% and 70% of total outstanding HELOCs as of March 31, 2026 and December 31, 2025, respectively. 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 45% and 46% as of March 31, 2026 and December 31, 2025, respectively. 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, 2026 and December 31, 2025.

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 reviews of lending and legal requirements, to ensure 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, 2026 and December 31, 2025:

($ in thousands)

(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 both March 31, 2026 and December 31, 2025.

(2) Primarily comprised of C&I loans as of both March 31, 2026 and December 31, 2025.

(3) Comprised of foreign government bonds as of both March 31, 2026 and December 31, 2025.

The following table presents the total revenue generated by the Company’s international branches for the first quarters of 2026 and 2025:

($ in thousands)

77

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. Additional funding is provided by short- and long-term borrowings, and long-term debt. See Item 2. MD&A — Risk Management — Liquidity Risk Management in this Form 10-Q for a discussion of the Company’s liquidity management. The following table summarizes the Company’s deposits by product type as of March 31, 2026 and December 31, 2025:

($ in thousands)

The Company’s strategy is to grow and retain relationship-based deposits to provide a stable and low-cost source of funding and liquidity. The Company offers a wide variety of deposit products to meet the needs of its consumer and commercial customers. As a result, we believe our deposit base is seasoned, stable and well-diversified. Total deposits of $68.9 billion as of March 31, 2026 increased $1.8 billion or 3% from December 31, 2025, primarily due to growth in money market and noninterest-bearing demand deposits.

The following table provides a breakdown of the Company’s deposits by segment and region as of March 31, 2026 and December 31, 2025:

($ in thousands)

(1) Excludes deposits presented under International Branches.

(2) Prior period balances have been reclassified for comparability due to a change in allocation methodology.

(3) Deposits of our Hong Kong branch and China subsidiary bank branches are a subset of Commercial Banking segment deposits.

(4) Treasury and Other segment deposits reflect wholesale, public funds, and brokered deposits, primarily managed by the Company’s Treasury department.

Customer deposit accounts in the U.S. offices are insured by the Federal Deposit Insurance Corporation (“FDIC”) for up to $250,000 per depositor, per ownership category. Management believes that presenting uninsured domestic deposits with an adjustment to exclude collateralized and affiliate deposits provides a more accurate view of the deposits at risk, given that collateralized deposits are secured, and affiliate deposits are not customer-facing and are eliminated in consolidation. The following table summarizes the Company’s uninsured domestic deposit balances reported on Schedule RC-O Memo, Item 2 of the Bank’s Call Report as of March 31, 2026 and December 31, 2025, after certain adjustments:

($ in thousands)

(1) Uninsured deposits, per regulatory requirements, represent the portion of deposit accounts in U.S. branches that exceed the FDIC insurance limit as reported on Schedule RC-O Memo, Item 2 of the Bank’s Call Report.

Additional information regarding the impact of deposits on net interest income, with a comparison of average deposit balances and rates, is provided in Item 2. MD&A — Results of Operations — Net Interest Income in this Form 10-Q. See also the discussion of the impact of deposits on liquidity in Item 2. MD&A — Liquidity Risk Management in this Form 10-Q.

Capital

The Company maintains a strong capital base to support its anticipated asset growth, operating needs, and credit risk exposures, 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 increased $100 million or 1% from $8.9 billion as of December 31, 2025 to $9.0 billion as of March 31, 2026. The increase was primarily due to $358 million of net income, partially offset by $123 million from open-market common stock repurchases and tax withheld in the form of stock repurchases on vested restricted stock units, $111 million of cash dividends declared and $43 million of other comprehensive loss. 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 January 22, 2025, the Company’s Board of Directors authorized the repurchase of up to $300 million of East West common stock, which will remain valid through December 31, 2026. The Company repurchased $99 million and $85 million of its common stock during the first quarters of 2026 and 2025, respectively. As of March 31, 2026, $117 million of the share repurchase authorization remained available.

The Company paid a cash dividend of $0.80 and $0.60 per share during the first quarters of 2026 and 2025, respectively. In April 2026, the Company’s Board of Directors declared a second quarter 2026 cash dividend of $0.80 per share. The dividend is payable on May 18, 2026, to stockholders of record as of May 4, 2026.

Regulatory Capital and Ratios

The federal banking agencies have risk-based capital adequacy requirements intended to ensure that banking organizations maintain capital that is commensurate with the degree of risk associated with their operations. The Company and the Bank are each subject to these regulatory capital adequacy requirements. See Item 1. Business — Supervision and Regulation — Regulatory Capital Requirements in the Company’s 2025 Form 10-K for additional details.

The following table presents the Company’s and the Bank’s capital ratios as of March 31, 2026 and December 31, 2025 under the Basel III Capital Rules, and those required by regulatory agencies for capital adequacy and well-capitalized classification purposes:

(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, 2026 and December 31, 2025, 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 $799 million from December 31, 2025 to $58.6 billion as of March 31, 2026, primarily due to loan growth.

Risk Management

Overview

In the normal course of business, the Company is exposed to a variety of risks, including risks inherent to the financial services industry and risks 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, Bank Secrecy Act/Anti-Money Laundering & Office of Foreign Assets Control, 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 counterparty will fail to perform in accordance with 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, 2026 and December 31, 2025:

($ in thousands)

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

(2) Excludes loans held-for-sale.

Criticized loans increased $88 million or 8%, to $1.2 billion during the first quarter of 2026, primarily driven by increases in classified C&I and CRE loans, and special mention C&I loans, partially offset by a decrease in special mention CRE 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. Nonperforming assets may also include nonperforming loans held-for-sale.

The following table presents nonperforming assets information as of March 31, 2026 and December 31, 2025:

($ in thousands)

82

Loans are generally placed on nonaccrual status at the earlier of when they become 90 days past due or when the full collection of principal or interest becomes uncertain, regardless of the length of time past due. Collectability is generally assessed based on economic and business conditions, the borrower’s financial condition, and the adequacy of collateral, if any. For additional details regarding the Company’s nonaccrual loan policy, see Note 1 — Summary of Significant Accounting Policies — Significant Accounting Policies — Loans Held-for-Investment to the Consolidated Financial Statements in the Company’s 2025 Form 10-K.

Nonaccrual loans of $181 million as of March 31, 2026 increased $15 million or 9% from December 31, 2025, primarily due to higher residential mortgage and C&I nonaccrual loans, partially offset by C&I charge-offs, and transfers to OREO. As of March 31, 2026, $22 million or 12% of nonaccrual loans were less than 90 days delinquent. In comparison, $27 million or 16% of nonaccrual loans were less than 90 days delinquent as of December 31, 2025.

The following table presents the accruing loans past due by portfolio segment as of March 31, 2026 and December 31, 2025:

($ in thousands)

(1) There were no accruing loans past due 90 days or more as of both March 31, 2026 and December 31, 2025.

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 2025 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 the allowance for credit losses allocated by loan portfolio segments, debt securities and unfunded credit commitments as of March 31, 2026 and December 31, 2025:

($ in thousands)

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 are 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 $68.9 billion as of March 31, 2026, compared with $67.1 billion as of December 31, 2025. The Company’s loan-to-deposit ratio was 84% and 85% as of March 31, 2026 and December 31, 2025, respectively. 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”) discount window, FRB Standing Repurchase Agreement Facility (“SRF”), 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 to and cost of external funding. Additionally, the Company’s access to capital markets is affected by the Company’s own ratings received from various credit rating agencies.

Sources of funding included $3.0 billion of FHLB advances as of both March 31, 2026 and December 31, 2025. As of March 31, 2026, the FHLB advances were comprised of $3.0 billion of term advances that had fixed and floating interest rates ranging from 3.78% to 3.95% with remaining maturities between 10 days and 1.3 years. As of March 31, 2026, the Company had $494 million in gross repurchase agreements, which matured on April 23, 2026. The Company did not have any repurchase agreements as of December 31, 2025. The Company also held long-term debt of $32 million in the form of junior subordinated debt as of both March 31, 2026 and December 31, 2025, which qualifies as Tier 2 capital for regulatory capital purposes.

The Company has pledged loans and/or debt securities to the FHLB and the FRB discount window as collateral, as well as prepositioned unpledged debt securities as collateral for overnight repurchase agreements at the FRB SRF. 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 within its established risk limits for liquidity measures as of March 31, 2026. 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 sources of liquidity in the form of cash and cash equivalents, prepositioned and unpledged debt securities, and secured 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, 2026 and December 31, 2025:

($ in thousands)

The Company’s total available liquidity increased to $42.1 billion as of March 31, 2026, compared with $40.8 billion as of December 31, 2025. The increase in available liquidity was primarily due to an increase in loans pledged and growth of the securities portfolio.

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 2025 Form 10-K, and Note 7 — Affordable Housing Partnership, Tax Credit and Community Reinvestment Act Investments, Net and Note 8 — 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, 2026 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 9 — Commitments and Contingencies to the Consolidated Financial Statements in this Form 10-Q.

The Consolidated Statement of Cash Flows in this Form 10-Q summarizes the Company’s sources and uses of cash by type of activity for the first quarters of 2026 and 2025. 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 2025 Form 10-K. East West held $675 million in cash and cash equivalents and balances due from the Bank as of March 31, 2026, and $664 million in cash and cash equivalents as of December 31, 2025. Management believes that East West has sufficient sources of 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 identify 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, 2026, 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. For more details on how economic conditions may impact our liquidity, see Item 1A. Risk Factors in the Company’s 2025 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 2025 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, which primarily arise 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.

The Company measures and monitors interest rate risk exposure through various risk management tools, which include a simulation model that performs monthly 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’s net interest income volatility simulations are based on a dynamic balance sheet approach and market forward rates to better reflect the interest rate risk on the Company’s financial statements. The Company’s simulation scenarios use parallel shocks for both instantaneous and gradual net interest income simulations, as well as economic value of equity (“EVE”) simulations. These simulations conform with industry-standard scenario definitions and 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 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. As of March 31, 2026, the Company assumed a weighted-average beta of approximately 50%.

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 Company models various interest rate scenarios, including scenarios based on gradual ramped shifts in interest rates, and assesses the corresponding impacts. These interest rate scenarios provide insight to the Company’s underlying interest rate risk. The gradual 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.

As of March 31, 2026, the Company’s net interest income profile remains modestly asset-sensitive under gradual ramped shifts in interest rates, with a higher proportion of interest-earning assets repricing in the near term, compared to interest-bearing liabilities. This position is primarily driven by a significant volume of variable-rate loans indexed to Prime and Term Secured Overnight Financing Rate (“SOFR”). A declining rate environment could negatively impact the net interest income. However, this potential impact could be partially mitigated by several structural factors, including balance sheet growth and mix evolution, ongoing reinvestment of cash flows into assets at rates above legacy lower yielding instruments, and prevailing yield‑curve conditions.

To reduce net interest income volatility, the Company has designated $4.3 billion in notional value of interest rate contracts as cash flow hedges, which are estimated to mitigate net interest income variability by approximately 1.19% of base net interest income for every 100 basis point change in interest rates. A portion of the Company’s interest-bearing deposit portfolio consists of non-maturity deposits that are not directly indexed to short-term rates but remain sensitive to rate changes. The Company actively manages deposit pricing and employs quantitative models to evaluate and forecast deposit behavior under various interest rate scenarios.

Actual results may differ from modeled projections due to variations in earning asset growth and changes in deposit composition driven by customer preferences. Modeled outcomes are highly dependent on behavioral assumptions, including deposit mix shifts and customer rate sensitivity.

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, 2026 and December 31, 2025.

(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, 2026, 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. 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 offset by 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 and to meet funding needs in certain foreign currencies.

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, 2026, the Company anticipates performance by all of its counterparties and has not incurred any related credit losses.

The following tables summarize 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, 2026 and December 31, 2025:

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

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 2025 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 2025 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 2025 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 that may be discussed in this Form 10-Q include but are not limited to 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:

($ in thousands)

92

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

(1) Applied statutory tax rate of 28.02% and 29.73% for the three months ended March 31, 2026 and 2025, respectively.

(2) Annualized.

For quantitative and qualitative disclosures regarding market risk in the Company’s portfolio, see Note 5 — Derivatives to the Consolidated Financial Statements in this Form 10-Q and Item 2. MD&A — Risk Management — Market Risk Management in this Form 10-Q.

Disclosure Controls and Procedures

As of March 31, 2026, pursuant to Rule 13a-15(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), the Company conducted an evaluation, under the supervision and with the participation of the Company’s management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) of the Exchange Act). Based upon that evaluation, the Company’s Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective as of March 31, 2026.

The Company’s disclosure controls and procedures are designed to ensure that information required to be disclosed by the Company in the reports that the Company files or submits under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the rules and forms of the SEC. The Company’s disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by the Company in the reports that the Company files under the Exchange Act is accumulated and communicated to the Company’s management, including the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

Change in Internal Control over Financial Reporting

There were no changes in the Company’s internal control over financial reporting (as defined in Rule 13a-15(f) of the Exchange Act) during the quarter ended March 31, 2026, that have materially affected or are reasonably likely to materially affect the Company’s internal control over financial reporting.

The Company’s 2025 Form 10-K contains disclosure regarding the risks and uncertainties related to the Company’s business under the heading Item 1A. Risk Factors. There have been no material changes to the Company’s risk factors as presented in the Company’s 2025 Form 10-K.