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    EWBC
    Earnings call· Mar 2026(Q1 FY26)

    EAST WEST BANCORP Q1 FY26 earnings call EWBC

    Apr 21, 2026 Source

    Executive summary

    East West Bancorp Q1 FY26 — Record Loans, Deposits, and Fee Income

    East West Bancorp delivered a strong first quarter, achieving record loans, deposits, and fee income, driven by strategic focus on retail and small business customers and C&I portfolio growth. The bank raised its full-year NII guidance due to a "higher for longer" rate outlook and maintained robust capital levels, while acknowledging persistent deposit pricing competition.

    Highlights

    5

    • Total deposits grew 9% year-over-year.

    • Noninterest-bearing deposits were up nearly $800 million quarter-over-quarter.

    • Loan growth was 7% year-over-year, with C&I loans increasing over $900 million quarter-over-quarter.

    • Fee income grew 12% year-over-year to a record $99 million.

    • Common Equity Tier 1 capital ratio stands at a robust 15.1%.

    Concerns

    2

    • Deposit pricing pressure is real and expected to continue in a flat rate environment.

    • Some capital call lines paid down in early Q2, offsetting Q1 growth.

    Guidance & targets

    5
    CategoryTargetConfidence
    Full-year 2026 Net Interest Income Growth
    6% to 8%
    high materiality
    High
    Full-year 2026 Loan Growth
    5% to 7%
    high materiality
    High
    Full-year 2026 Net Charge-offs
    15 to 25 basis points
    medium materiality
    High
    Full-year 2026 Fee Income Growth
    double-digit year-over-year growth
    medium materiality
    Medium
    Full-year 2026 Total Operating Expenses Growth
    7% to 9%
    medium materiality
    High

    Operational metrics

    26
    Deposit Growth (QoQ)
    $1.8 billion
    Q1 FY26

    End-of-period deposits.

    Average DDA Growth (YoY)
    12%up 12% YoY
    Q1 FY26

    Result of campaign to deepen connection with retail and small business customers.

    Average DDA Growth (QoQ)
    nearly $0.5 billion
    Q1 FY26

    On an average basis.

    Noninterest-Bearing Deposits Growth (QoQ)
    nearly $800 million
    Q1 FY26

    Driven by continued focus on retail and small business customers.

    Money Market Deposits Growth (YoY)
    9%up 9% YoY
    Q1 FY26

    Diversifying away from CDs and other higher-cost deposits.

    C&I Loans Growth (QoQ)
    more than $900 million
    Q1 FY26

    Driven by higher line utilization, particularly among capital call borrowers.

    C&I Loans as % of Total Loans
    34%
    Q1 FY26

    Reflecting focus and emphasis on balanced growth.

    NBFI Loans Current
    99.99%
    Q1 FY26

    NBFI portfolio is granular and diversified.

    NBFI Loans Net Charge-offs (past decades)
    virtually none
    past decades

    Reflecting strong performance of the NBFI portfolio.

    Capital Call Lines as % of NBFI Portfolio
    Approximately 30%
    Q1 FY26

    Capital call loans spread across private equity, mortgage credit, and business credit borrowers.

    Interest-Bearing Deposit Costs Reduction
    111 bps
    since start of cutting cycle

    Comfortably exceeding 50% beta guidance shared in prior periods.

    Deposit Beta Guidance (prior periods)
    50%
    prior periods

    Guidance on interest-bearing deposit costs.

    Fee Income Growth (YoY)
    12%up 12% YoY
    Q1 FY26

    To a new record of $99 million for the quarter, with significant growth in wealth management and deposit-related fees.

    Net Charge-offs (QoQ)
    9 bpscompared to 8 bps in Q4 FY25
    Q1 FY26

    Or $12 million.

    Provision for Credit Losses (QoQ)
    $36 millioncompared with $30 million for Q4 FY25
    Q1 FY26

    Reflecting vigilance in managing credit risk.

    Allowance for Credit Losses (QoQ increase)
    $26 million
    Q1 FY26

    Increased to $836 million, or 1.44% of total loans, reflecting loan growth and portfolio mix shift.

    Tangible Common Equity Ratio
    10.3%
    Q1 FY26

    Maintained this capital level while growing the balance sheet, increasing dividend, and repurchasing shares.

    Shares Repurchased (Q1)
    938,000 shares
    Q1 FY26

    Common stock repurchased during the first quarter.

    Stock Repurchase Amount (Q1)
    $98 million
    Q1 FY26

    Amount spent on stock repurchases.

    Remaining Repurchase Authorization
    $117 million
    Q1 FY26

    Available for future buybacks.

    Dividend Distributed (Q1)
    $111 million
    Q1 FY26

    Distributed to shareholders via quarterly dividend.

    Dividend Increase
    1/3
    Q1 FY26

    Most recently increased dividend by one-third.

    Basel III Endgame RWA Reduction
    roughly $7 billion
    Q1 FY26

    Estimated reduction in risk-weighted assets from Basel III Endgame proposals.

    Basel III Endgame Regulatory Capital Ratio Increase
    1.6% to 1.8%
    Q1 FY26

    Estimated increase in various regulatory capital ratios from Basel III Endgame proposals.

    CD Rollover (Q1)
    over $10 billion
    Q1 FY26

    Amount of CDs that rolled over during Q1.

    CD Special Pricing
    3.60%
    Q1 FY26

    Current pricing for CD special.

    Industry KPIs

    12
    MetricValueDetails
    Loans7%%
    Deposits9%%
    Cet1 ratio15.1%%
    Capital returns$98 millionUSD
    Fee income lines$99 millionUSD
    Allowance reserves$836 millionUSD
    Net interest income$671 millionUSD
    Net interest marginflat to positive%
    Net charge offs npls9 bpsbps
    Total operating expenses$258 millionUSD
    Provision for credit losses$36 millionUSD
    Efficiency ratio operating leverage36.2%%

    Risks & headwinds

    3
    Deposit pricing pressuregoing into the rest of 2026

    Deposit pricing pressure is real and coming upon us.

    Mitigation: Focus on non-interest-bearing DDA growth; strong capital position.

    Seasonally slower residential mortgage Q1Q1 FY26

    seasonally slower Q1 than we expected

    Mitigation: Pipelines have grown and continue to grow into Q2.

    AI as a cost in the short to medium termshort to medium term

    AI is a cost because we all have to run to figure out how we're going to combat missiles and everything else that the market is doing at.

    Mitigation: Investing in cyber defense, monitoring tools, daily operating capability.

    What to watch in Q2 FY26

    5

    Capital call line paydowns vs. new activity

    Q2 FY26
    CurrentSome Q1 capital call lines paid down in early Q2.
    TargetContinued activity in private equity and mortgage private capital offsetting paydowns to deliver additional growth in Q2.

    Why it matters

    Capital call lines were a primary driver of Q1 loan growth; their continued contribution is key to meeting full-year loan growth guidance.

    While some of these lines have already been paid down here in the second quarter, private equity markets and real estate markets remain active and we expect to continue to participate in this activity during the remainder of the year.

    Q&A highlights

    7

    Quantify the expected impact of Basel III Endgame proposals on capital ratios.

    Management estimates a $7 billion reduction in risk-weighted assets, leading to a 1.6% to 1.8% increase in regulatory capital ratios. They plan to use this capital for organic growth.

    “The risk-weighted asset adjustment from what has been put out there as Basel III Endgame is roughly a $7 billion reduction in our current risk-weighted assets relative to our current balance sheet. And that would probably translate to something on the order of magnitude of 1.6% to 1.8% increase in our various respective regulatory capital ratios.”

    asked by Ebrahim Poonawala · answered by Christopher Del Moral-Niles

    2 min read5 chapters

    Detailed Narrative

    01

    Deposit Strategy & Performance

    The bank's year-long campaign to deepen connections with retail and small business customers resulted in strong DDA growth, up nearly $800 million quarter-over-quarter and 12% year-over-year on an average basis. This allowed for more conservative pricing of the New Year CD campaign, focusing on retention and improving deposit mix. Despite a competitive landscape and flat rate outlook, the bank continues to attract non-interest-bearing deposits, benefiting from its strong capital position and profitability.

    02

    Loan Portfolio Evolution

    C&I loans were the primary driver of Q1 growth, increasing over $900 million quarter-over-quarter, largely due to capital call-related borrowings from active private equity and real estate markets. The overall loan portfolio remains well-diversified, with over 70% to commercial customers and C&I now representing 34% of total loans. Residential mortgage pipelines are growing into Q2 after a seasonally slower Q1, and commercial real estate balances also grew, with a continued focus on supporting long-standing relationship clients.

    03

    Fee Income & Expense Management

    Fee income reached a record $99 million, up 12% year-over-year, driven by significant growth in wealth management fees (structured notes and annuity sales) and deposit-related fees due to higher customer activity. The bank aspires to double-digit year-over-year fee income growth for 2026. The efficiency ratio was 36.2%, with total operating non-interest expense at $258 million, including seasonally higher payroll and incentive costs. The bank expects expenses to remain within its 7-9% guidance, balancing growth investments with efficiency.

    04

    Credit Quality & Capital Strength

    Asset quality metrics remained stable, with non-performing assets at 26 basis points and net charge-offs at 9 basis points ($12 million) for Q1. The allowance for credit losses increased to $836 million (1.44% of total loans) due to loan growth and portfolio mix shift. Regulatory capital ratios are strong, with CET1 at 15.1% and TCE at 10.3%, placing the bank among the best-capitalized in the industry. The bank repurchased $98 million of stock and increased its dividend by one-third.

    05

    Basel III Endgame Impact & Capital Allocation

    Management quantified the potential impact of Basel III Endgame proposals, estimating a roughly $7 billion reduction in risk-weighted assets, which would translate to a 1.6% to 1.8% increase in regulatory capital ratios, further strengthening the bank's already robust capital position. The bank prioritizes organic growth, followed by dividends, then opportunistic inorganic opportunities, and finally share buybacks, maintaining strong capital levels for future growth and shareholder returns.

    AI-generated summary of the company’s earnings call. Not investment advice.