Executive Summary

Solid quarter with record total revenue of $703.3M and record net interest income (NII) of $617.1M; adjusted diluted EPS of $2.28 and GAAP diluted EPS of $2.24 . Versus S&P Global consensus, adjusted EPS modestly beat ($2.28 vs $2.248*) and revenue was essentially in line ($703.3M vs $702.9M*) (see Estimates Context).
Deposit-beta management continued to work: average deposit cost fell 2 bps QoQ to 2.52% and interest-bearing deposit cost fell 3 bps to 3.31%, helping hold NIM at 3.35% despite mix shifts .
Credit quality resilient while reserves were prudently bolstered: criticized loans ratio fell to 2.15%, NPA/Assets declined to 0.22%, net charge-offs held at $15M (11 bps ann.); ALLL rose to 1.38% reflecting macro inputs .
FY25 outlook raised for NII and total revenue (“trending above 7%”); loan growth reiterated at 4–6% YoY, net charge-offs guided to 15–25 bps, tax rate ~23% . Likely stock catalysts: deposit cost trajectory/NIM durability, top-line growth above 7%, and stable credit metrics with adequate reserve.

What Went Well and What Went Wrong

What Went Well
- Record revenue ($703.3M) and record NII ($617.1M) on balanced loan/deposit growth; adjusted ROTCE reached 16.7% in Q2 . CEO: “Our balance sheet growth drove a new record level of net interest income... fueling a 16.7% adjusted return on average tangible common equity” .
- Deposit cost optimization: average deposit cost down to 2.52% and average cost of interest-bearing deposits down to 3.31%, sustaining NIM at 3.35% . CFO: “We lowered our total deposit costs a few basis points this quarter, and we remain focused and diligent on that” .
- Asset quality outperformed: criticized loans ratio decreased to 2.15%; NPA/Assets declined to 0.22% with net charge-offs steady at $15M; CET1 14.51% and TCE 9.95% underscore capital strength . CRO: “Our asset quality metrics continue to broadly outperform the industry” .
What Went Wrong
- Reserve build despite improving credit metrics: ALLL/Loans HFI increased 3 bps QoQ to 1.38% due to macro CECL factors, raising provision to $45M (still down from $49M in Q1) . CRO: reserve build “really has to do with the CECL model and the economic outlook” .
- Fee income normalized from Q1 record: total noninterest income declined to $86.2M from $92.1M QoQ, driven by softer FX and customer derivatives activity, and lower lending/servicing fees amid syndication softness .
- Taxes: CA single sales factor (SSF) added a one-time ~$6M tax expense in Q2, elevating the effective tax rate to 22.9% (adjusted 21.3%) . CFO expects ~23% for FY25 but nearer 22% in subsequent quarters .

Financial Results

Metric	Q2 2024	Q1 2025	Q2 2025
Total Revenue ($M)	637.4	692.3	703.3
Net Interest Income ($M)	553.2	600.2	617.1
Net Interest Margin (%)	3.27%	3.35%	3.35%
Provision for Credit Losses ($M)	37	49	45
Diluted EPS (GAAP) ($)	2.06	2.08	2.24
Adjusted Diluted EPS ($)	2.06	2.09	2.28
Efficiency Ratio (%)	37.01%	36.42%	36.41%

Estimate comparison (S&P Global vs Company Actual)

Adjusted EPS: $2.28 actual vs $2.248 consensus*
Revenue: $703.3M actual vs $702.9M consensus*

Segment/Balance Highlights

End-of-Period Loans HFI ($M): $52,767.9 (Q2’24) → $54,252.7 (Q1’25) → $54,961.2 (Q2’25)
End-of-Period Deposits ($M): $59,999.8 (Q2’24) → $63,052.1 (Q1’25) → $65,029.5 (Q2’25)

Loan Mix (End-of-Period, $M)

Category	Q2 2024	Q1 2025	Q2 2025
C&I	16,875.0	17,460.7	17,822.9
CRE (ex. Multifamily)	14,562.6	14,868.4	14,978.8
Multifamily	5,100.2	5,008.0	4,978.9
Construction & Land	664.8	653.6	709.7
Residential Mortgage (SFR+HELOC)	15,509.1	16,211.4	16,421.0
Total Loans HFI	52,767.9	54,252.7	54,961.2

KPIs and Capital/Credit Metrics

KPI	Q2 2024	Q1 2025	Q2 2025
Avg Cost of Deposits	2.96%	2.54%	2.52%
Avg Cost of Interest-Bearing Deposits	3.94%	3.34%	3.31%
Loan-to-Deposit Ratio	87.98%	86.04%	84.54%
CET1 Ratio	13.74%	14.32%	14.51%
TCE Ratio	9.37%	9.85%	9.95%
Criticized Loans / Loans HFI	2.05%	2.29%	2.15%
NPA / Total Assets	0.27%	0.24%	0.22%
Net Charge-offs ($M)	23	15	15

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
End-of-Period Loans Growth (YoY)	FY 2025	4%–6% (prior framework)	4%–6%	Maintained
Net Interest Income Growth	FY 2025	“6%+” (raised in June per CFO)	“Trending above 7%”	Raised
Total Revenue Growth	FY 2025	Not explicitly quantified prior	“Trending above 7%”	New/Clarified higher
Total Operating Noninterest Expense Growth	FY 2025	Not explicitly quantified prior	7%–9% YoY	Established/Confirmed
Net Charge-offs	FY 2025	Not explicit prior	15–25 bps	Updated
Effective Tax Rate	FY 2025	~23% (implied)	~23% (subsequent quarters closer to ~22%)	Maintained
Tax Credit & CRA Amortization	FY 2025	—	$70–$80M	Established
Dividend	3Q25	—	$0.60 per share declared	Declared

Earnings Call Themes & Trends

Topic	Previous Mentions (Q4’24, Q1’25)	Current Period (Q2’25)	Trend
Deposit cost optimization/NIM	Q1: NIM expanded 11 bps QoQ on deposit cost optimization	Avg deposit cost down to 2.52%, NIM steady at 3.35%	Positive, ongoing
Fee income diversification	Q4: Fee income +12% YoY to record level	Fee income $81M, third-highest quarter; some normalization from Q1 record	Stable at high level
Loan growth mix	Q1: Record loans; balanced growth	C&I +2.1% QoQ; SFR +1.3% QoQ; multifamily slightly down	Balanced; C&I/SFR-led
Credit quality/reserves	Q1: NCOs 12 bps; ALLL 1.35%	NCOs 11 bps; ALLL 1.38% (macro-driven)	Quality resilient; prudent reserve build
Capital & buybacks	Q4: Dividend up; added $300M to buyback auth	CET1 14.51%; $241M buyback capacity; $2M repurchased Q2	Strong capital; opportunistic buybacks
Tariffs/macro	Ongoing backdrop in disclosures	Customers more comfortable; many products exempt; diversified portfolio reduces impact	Macro risk manageable
Tax items	—	CA SSF adds $6M one-time tax expense; FY ETR ~23%	One-time item absorbed

Management Commentary

Strategic and operating strength: “Record quarterly revenue and net interest income... balanced growth... 16.7% adjusted ROTCE” — Dominic Ng, CEO .
Deposit costs and NIM: “We lowered our total deposit costs a few basis points... we remain focused and diligent on that... optimistic we’ll maintain the margin” — CFO .
Credit and reserves: “Allowance... increased to $760 million, or 1.38%... primarily reflecting changes in our economic outlook” — 8-K . CRO: “We remain vigilant and proactive in managing our credit risk” .
Outlook: “End-of-period loan growth 4%–6%... Net interest income and revenue trending above 7%... Net charge-offs 15–25 bps... ETR ~23%” — CFO and slides .

Q&A Highlights

Deposit costs trajectory: Management expects continued optimization, with CDs and slower-paced Fed cuts driving step-downs; NIM expected to hold within a reasonable range through Q3 .
Credit outlook/reserve build: Reserve increase driven by CECL macro inputs (Moody’s scenarios) and ongoing portfolio risk-rating; not tied to specific C&I issues .
Tariffs/macro: Clients better positioned; many exemptions; diversified loan book limits P&L impact; East West customers are adept due to experience since 2017 .
Buybacks: Activity was light due to blackout/timing; $241M authorization remains; repurchases to be opportunistic .
Renewable energy tax credits: Existing investments/commitments unimpacted by recent legislative changes; evaluating future strategies .

Estimates Context

Q2 2025 vs consensus: Adjusted EPS $2.28 vs $2.248*; Total Revenue $703.3M vs $702.9M* — slight EPS beat, revenue in line .
Note: S&P Global “Primary EPS” aligns with adjusted EPS, while revenue definitions can vary for banks; company-reported total revenue is used for actuals .

Analyst consensus (S&P Global) and actuals

Metric	Q1 2025	Q2 2025	Q3 2025
Primary EPS Consensus Mean	2.061* (Actual 2.09)	2.248* (Actual 2.28)	2.374* (Actual 2.62)
Revenue Consensus Mean ($)	671,987,080* (Actual 692,303,000)	702,900,190* (Actual 703,252,000)	725,859,530* (Actual 726,354,000)
Values marked with * retrieved from S&P Global.

Where estimates may adjust

Management raised FY25 outlook for NII and total revenue to “trending above 7%,” which may bias Street models higher on revenue/NII and near-term EPS, pending deposit cost progression and loan growth pacing .

Key Takeaways for Investors

Top-line momentum intact: record NII and revenue, with guidance now “>7%” growth for both in FY25 .
Deposit costs continue to grind lower; NIM holding at 3.35% provides earnings durability into H2’25 .
Credit normalizing at healthy levels; criticized/NPA ratios declined while reserves were prudently built to 1.38% .
Capital strength (CET1 14.51%, TCE 9.95%) supports opportunistic buybacks ($241M remaining) and a steady dividend ($0.60 3Q25) .
Modest beat on adjusted EPS and in-line revenue vs S&P consensus*; Street likely to focus on NII trajectory and deposit beta path. Values retrieved from S&P Global.
Watch items: fee income normalization from Q1 record; CECL sensitivity to macro inputs; funding mix as growth continues .
Near-term trading setup: positive bias on raised revenue/NII outlook and benign credit; sensitivity to rate-path changes and deposit betas remains the swing factor .

Notes on non-GAAP and tax

Adjusted EPS of $2.28 excludes one-time ~$6M CA SSF tax impact in Q2; efficiency ratio remains best-in-class at ~36% .

S&P Global estimates disclaimer: Values marked with * retrieved from S&P Global.

EAST WEST BANCORP INC (EWBC)·Q2 2025 Earnings Summary