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EW

EAST WEST BANCORP INC (EWBC)·Q3 2025 Earnings Summary

Executive Summary

  • Record quarter: total revenue $778.0M, diluted EPS $2.65, and net income $368M; deposit-led growth (EOP deposits +$1.6B q/q to $66.6B) funded loans (+$0.8B q/q to $55.8B) and improved NIM to 3.53% .
  • S&P Global consensus was materially beaten on EPS (Q3 2025: 2.62 actual vs 2.37 estimate) and modestly on revenue (726.4M actual vs 725.9M estimate), noting S&P’s revenue definition differs from management’s “total revenue” ($778.0M) due to adjustments; management’s reported revenue also included $32M of discount accretion and interest recoveries (S&P Global estimates*).
  • Guidance raised: FY 2025 net interest income (NII) and total revenue now “trending above 10%” (vs “above 7%” prior), net charge-offs outlook lowered to 10–20 bps (from 15–25 bps); loans growth 4–6%, OpEx growth 7–9%, effective tax rate ~23% maintained .
  • Strategic catalysts: continued fee growth across all categories (record fee income $92M), wealth management expansion, and payments buildout via Worldpay partnership; management highlighted immediate deposit repricing with Fed cuts and tangible common equity at 10.24% supporting opportunistic buybacks/dividend .

What Went Well and What Went Wrong

  • What Went Well

    • “We earned record levels of revenue, net income, and earnings per share” alongside record NII and fee income; deposit-led growth funded all loan growth .
    • Wealth management, customer derivatives, lending fees, and FX all grew q/q, driving record fee income of $92M (+14% q/q) .
    • Efficiency improved: reported efficiency ratio 35.6% (adjusted 33.8%), and NIM expanded 18 bps to 3.53% (3.36% adjusted), with average cost of interest-bearing deposits down to 3.26% .

  • What Went Wrong

    • Nonperforming assets rose to $201M (0.25% of assets) from $172M (0.22%) q/q; net charge-offs ticked up to $18M (0.13% ann.) from $15M (0.11% ann.) .
    • Allowance for loan losses increased to $791M (1.42% of loans HFI) as reserves were “bolstered… reflecting changes in our economic outlook,” including higher reserve levels in residential mortgage and CRE .
    • One-time $27M compensation expense from a change in equity award recognition lifted operating noninterest expense to $261M; hedge impact remained a $6M drag q/q .

Financial Results

MetricQ3 2024Q1 2025Q2 2025Q3 2025
Total Revenue ($USD Millions)$657.1 $692.3 $703.3 $778.0
Diluted EPS ($)$2.14 $2.08 $2.24 $2.65
Net Interest Income ($USD Millions)$572.7 $600.2 $617.1 $677.5
Net Interest Margin (%)3.24% 3.35% 3.35% 3.53%
Fee Income ($USD Millions)$81.3 $88.4 $80.5 $91.5
Provision for Credit Losses ($USD Millions)$42.0 $49.0 $45.0 $36.0
Efficiency Ratio (%)34.36% 36.42% 36.41% 35.59%
Fee Income Breakdown ($USD Millions)Q1 2025Q2 2025Q3 2025
Commercial & Consumer Deposit Fees$27.1 $26.9 $28.4
Lending & Loan Servicing Fees$26.2 $25.6 $27.6
Foreign Exchange Income$15.8 $13.7 $14.5
Wealth Management Fees$13.7 $10.7 $14.6
Customer Derivative Income$5.5 $3.6 $6.4
Total Fee Income$88.4 $80.5 $91.5
KPIsQ3 2024Q1 2025Q2 2025Q3 2025
Deposits (EOP, $USD Millions)$61,700 $63,052 $65,029 $66,588
Loans (EOP, $USD Millions)$53,253 $54,253 $54,973 $55,786
Noninterest-bearing Deposits (% of Total)—24% 24% 24%
NCO Ratio (annualized)0.22% 0.12% 0.11% 0.13%
NPA / Assets (%)0.26% 0.24% 0.22% 0.25%
ALLL / Loans HFI (%)1.31% 1.35% 1.38% 1.42%
CET1 Ratio (%)14.08% 14.32% 14.51% 14.83%
TCE Ratio (%)9.72% 9.85% 9.95% 10.24%
Actual vs S&P Global Consensus (Quarterly)Q2 2025 ConsensusQ2 2025 Actual*Q3 2025 ConsensusQ3 2025 Actual*
Primary EPS ($)2.24782.282.37362.62
Revenue ($USD)702,900,190632,016,000725,859,530726,354,000

* Values retrieved from S&P Global. Note: S&P’s “Revenue” may differ from EWBC’s “Total revenue” ($703.3M in Q2; $778.0M in Q3) due to reporting definitions and adjustments (e.g., discount accretion/recoveries) .

Guidance Changes

MetricPeriodPrevious Guidance (Q2 2025)Current Guidance (Q3 2025)Change
Net Interest Income (YoY)FY 2025Trending above 7% Trending above 10% Raised
Total Revenue (YoY)FY 2025Trending above 7% Trending above 10% Raised
Loans (EOP YoY)FY 20254%–6% 4%–6% Maintained
Total Operating Noninterest Expense (YoY)FY 20257%–9% 7%–9% Maintained
Net Charge-offs (annualized)FY 202515–25 bps 10–20 bps Lowered
Effective Tax RateFY 2025~23% ~23% Maintained
Tax Credit & CRA AmortizationFY 2025$70–$80M $70–$80M Maintained
DividendQ4 2025$0.60 declared for Q3 payment $0.60 declared (payable Nov 17, 2025) Maintained
Share Repurchase AuthorizationCurrent$241M remaining $216M remaining Reduced (usage)

Earnings Call Themes & Trends

TopicQ1 2025 (Previous Q-2)Q2 2025 (Previous Q-1)Q3 2025 (Current)Trend
Deposit Cost & RepricingAvg. cost of interest-bearing deposits down 29 bps q/q; NIM +11 bps Avg. cost down 3 bps; NIM flat at 3.35% Immediate same-day pass-through of Fed cuts on deposit pricing; NIM 3.53% (3.36% adj.) Positive margin momentum near term
Hedging Impact-$7M NII impact (4 bps to NIM); forward hedges to come in 2H25 -$6M NII impact; additional hedges noted -$6M NII impact in Q3 Stable modest headwind
Fee Income & WM BuildoutRecord fee income $88M; WM, derivatives, lending strength Fee income $81M; mix shifts; BOLI uplift Record fee income $92M; all categories up; continued WM hiring Broad-based growth
Payments & FX Platform——Integrating enhanced payments; FX APIs aimed for mid-to-late 2026; wire capability for subset by end-Q4 2025 Building capabilities
NBFI Exposure & C&I——NBFI ~13% of loan portfolio; capital call lending significant; minimal non-pass, negligible losses Comfort affirmed
Tariffs/Macro——Customers resilient; clarity supportive; limited concern from clients Stable
CDs Repricing & Seasonal——~$10B CDs roll in Q4 and >$8B in Q1; Lunar New Year specials planned Repricing tailwind

Management Commentary

  • Dominic Ng (CEO): “We earned record levels of revenue, net income, and earnings per share. Record net interest income was fueled by deposit-led growth, while higher fee income was driven by notable strength in wealth management, lending, and deposit account fees” .
  • Chris Del Moral-Niles (CFO): On rate cuts, “we’re immediately passing through those rate cuts on the day of,” creating a short-term repricing benefit to deposits ahead of loans . On fees: “every one of our fee business… reported quarter over quarter and year over year growth” .
  • Irene Oh (CRO): “We increased our overall allowance for credit losses this quarter to $791,000,000 or 1.42% of loans,” reflecting “ongoing overall uncertainty in the economic outlook” while credit metrics remain resilient .

Q&A Highlights

  • Deposit dynamics and NIM: Management emphasized near-instant deposit repricing on Fed cuts, providing a near-term NII/NIM tailwind; caution that benefit moderates once cuts end and CDs reprice lower on the curve .
  • CDs maturity ladder: ~$18B in CDs to reprice over Q4–Q1, with planned Lunar New Year offerings to optimize funding costs .
  • Credit quality and NBFI: NBFI is ~13% of loans; very low delinquency and losses; collateral perfected and concentrations managed; historical losses minimal .
  • Fee growth investments: Continued WM hiring and product development; payments enhancement and FX APIs rollout through 2026; wires available to subset by end-Q4 2025 .
  • Hedge impact: Consistent -$6M headwind in Q3; aligned with prior quarter’s impact .

Estimates Context

  • EPS beat: Q3 2025 actual 2.62 vs consensus 2.3736 (approx. +10%); Q2 2025 actual 2.28 vs 2.2478 (+1%) (S&P Global*).
  • Revenue: Q3 2025 actual 726.4M vs 725.9M consensus (slight beat); Q2 2025 actual 632.0M vs 702.9M consensus (miss), noting S&P’s “Revenue” differs from EWBC’s “Total revenue” ($703.3M in Q2, $778.0M in Q3) due to definitional adjustments (e.g., discount accretion/recoveries) (S&P Global*).

  • of estimates: Q3 2025 EPS (15); Revenue (10); Q2 2025 EPS (13); Revenue (9) (S&P Global*).

* Values retrieved from S&P Global.

Key Takeaways for Investors

  • Momentum intact: Deposit-led growth, NIM expansion (3.53%) and record NII/fees underpin FY 2025 guidance raises for NII and revenue (>10% YoY), a positive estimate-revision and sentiment driver .
  • Near-term NII support from immediate deposit repricing on Fed cuts and sizable CD maturities (~$18B over Q4–Q1) should provide funding cost tailwinds; monitor magnitude as curve evolves .
  • Credit resilient but conservatively reserved: NPA up to 0.25% and ALLL to 1.42% reflecting macro uncertainty; watch CRE office/multifamily trends though metrics remain low on an absolute basis .
  • Capital strength enables returns: CET1 14.83%, TCE 10.24%; $0.60 dividend and $216M remaining repurchase authorization provide flexibility for capital deployment .
  • Fee growth vector: Wealth management and FX/payment capabilities are expanding, supporting diversified revenue streams and potential valuation premium for recurring fees .
  • Estimate framework: Anchor EPS comparisons to S&P Global (beat in Q3 2025); note S&P’s revenue definition vs company “total revenue” when benchmarking (S&P Global*).
  • Trading lens: Guidance raise, margin expansion, and fee momentum are positive stock catalysts; near-term watch items include macro path for rates (impact on repricing tailwinds), reserve trajectory, and continued deposit mix improvements .
Sources: EWBC Q3 2025 8-K and press release **[1069157_0001069157-25-000112_ewbc9918k9302025.htm:0]** **[1069157_0001069157-25-000112_ewbc9918k9302025.htm:11]** **[1069157_0001069157-25-000112_ewbc9918k9302025.htm:10]** **[1069157_0001069157-25-000112_ewbc9918k9302025.htm:1]** **[1069157_0001069157-25-000112_ewbc9918k9302025.htm:9]** **[1069157_0001069157-25-000112_ewbc9918k9302025.htm:14]** **[1069157_0001069157-25-000112_ewbc3q25er.htm:7]** **[1069157_0001069157-25-000112_ewbc3q25er.htm:3]** **[1069157_0001069157-25-000112_ewbc9918k9302025.htm:3]** **[1069157_0001069157-25-000112_ewbc9918k9302025.htm:24]** **[1069157_0001069157-25-000112_ewbc3q25er.htm:4]** **[1069157_0001069157-25-000112_ewbc9918k9302025.htm:2]** **[1069157_0001069157-25-000112_ewbc9918k9302025.htm:4]** **[1069157_0001069157-25-000112_ewbc9918k9302025.htm:20]**; Q2 2025 8-K and press release **[1069157_0001069157-25-000090_ewbc2q25earningspresenta.htm:9]** **[1069157_0001069157-25-000090_ewbc9918k6302025.htm:10]** **[1069157_0001069157-25-000090_ewbc9918k6302025.htm:13]** **[1069157_0001069157-25-000090_ewbc9918k6302025.htm:7]** **[1069157_0001069157-25-000090_ewbc9918k6302025.htm:9]** **[1069157_0001069157-25-000090_ewbc9918k6302025.htm:21]** **[1069157_0001069157-25-000090_ewbc9918k6302025.htm:2]** **[1069157_0001069157-25-000090_ewbc2q25earningspresenta.htm:10]** **[1069157_0001069157-25-000090_ewbc2q25earningspresenta.htm:4]** **[1069157_0001069157-25-000090_ewbc9918k6302025.htm:4]**; Q1 2025 8-K and press release **[1069157_0001628280-25-018848_ewbc9918k3312025.htm:10]** **[1069157_0001628280-25-018848_ewbc9918k3312025.htm:12]** **[1069157_0001628280-25-018848_ewbc9918k3312025.htm:9]** **[1069157_0001628280-25-018848_ewbc9918k3312025.htm:4]** **[1069157_0001628280-25-018848_ewbc9918k3312025.htm:19]** **[1069157_0001628280-25-018848_ewbc9918k3312025.htm:2]** **[1069157_0001628280-25-018848_ewbc1q25earningspresenta.htm:9]** **[1069157_0001628280-25-018848_ewbc1q25earningspresenta.htm:4]** **[1069157_0001628280-25-018848_ewbc1q25earningspresenta.htm:7]**; Q3 2025 earnings call transcript **[0001069157_2194258_0]** **[0001069157_2194258_3]** **[0001069157_2194258_2]** **[0001069157_2194258_4]** **[0001069157_2194258_5]** **[0001069157_2194258_6]** **[0001069157_2194258_7]** **[0001069157_2194258_8]**; Worldpay partnership press release **[1069157_c0a8557b5ed440d683c2e35604ace076_0]**.