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1. Company Snapshot

1.a. Company Description

East West Bancorp, Inc.operates as the bank holding company for East West Bank that provides a range of personal and commercial banking services to businesses and individuals.It operates through three segments: Consumer and Business Banking, Commercial Banking, and Other.


The company accepts various deposit products, such as personal and business checking and savings accounts, money market, and time deposits.Its loan products include mortgage and home equity, commercial and residential real estate, working capital lines of credit, construction, trade finance, letters of credit, commercial business, affordable housing loans, asset-based lending, asset-backed finance, project finance, and equipment financing, as well as financing services to clients needing a financial bridge to facilitate their business transactions between the United States and China.The company also provides various wealth management, treasury management, foreign exchange, and interest rate and commodity risk hedging services; and mobile and online banking services.


As of January 27, 2022, it operated approximately 120 locations in the United States and China; full-service branches in Hong Kong, Shanghai, Shantou, and Shenzhen; and representative offices in Beijing, Chongqing, Guangzhou, Taipei, and Xiamen.East West Bancorp, Inc.was incorporated in 1998 and is headquartered in Pasadena, California.

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1.b. Last Insights on EWBC

East West Bancorp's recent performance was negatively impacted by concerns over its commercial real estate (CRE) exposure, which poses a risk to the company's asset quality. Despite reporting record quarterly net income of $368 million and diluted earnings per share of $2.65, investors are cautious about the potential impact of CRE on the company's financials. Additionally, the company's high CRE exposure and macroeconomic volatility are concerns. However, East West Bancorp's robust Q2 2025 results showcased resilience and relationship-driven growth. (Source: Barclays 23rd Annual Global Financial Services Conference)

1.c. Company Highlights

2. East West Bancorp's Q3 2025 Earnings: A Strong Performance

East West Bancorp reported a record quarterly revenue, net income, and earnings per share for the third quarter of 2025. The bank's net interest income reached a record $671 million, driven by deposit-led growth that funded its entire loan growth, optimizing its funding mix and contributing to improved liquidity. The bank's earnings per share came in at $2.62, beating estimates of $2.35. The efficiency ratio was 35.6%, indicating a strong ability to manage expenses. The bank's revenue growth was driven by a combination of net interest income and non-interest income, with the latter being fueled by a 36% year-over-year growth in wealth management fees.

Publication Date: Oct -22

📋 Highlights
  • Record Q3 2025 Performance:: Revenue, net income, and EPS reached record levels, driven by $1.5B deposit growth and $671M net interest income.
  • Efficiency and Liquidity:: Efficiency ratio improved to 35.6%, with deposit-led funding covering all loan growth and enhancing liquidity.
  • Asset Quality Strength:: Net charge-offs at 13 bps and nonperforming assets at 25 bps, with $36M provision for credit losses.
  • Wealth Management Growth:: Fees surged 36% YoY, supported by new product investments like a 2026 FX platform launch.
  • Capital Management:: $216M share repurchase authorization remaining after buying 25M shares, alongside a 10% tangible common equity ratio.

Balance Sheet Growth and Asset Quality

The bank's balance sheet growth remains uncertain, with deposits growing by over $1.5 billion, and noninterest-bearing deposits outpacing time deposit growth. The bank's asset quality metrics continue to outperform the industry, with net charge-offs of 13 basis points and a provision for credit losses of $36 million. Nonperforming assets were 25 basis points as of September 30, 2025, indicating a strong credit quality. According to Chris Del Moral-Niles, the bank's Chief Financial Officer, "the bank's balance sheet growth remains uncertain and will be a function of how economic uncertainties unfold in 2026."

Outlook and Guidance

The bank expects its net interest income for the fourth quarter to be around $650-$660 million. It also expects full-year net interest income and revenue to grow by more than 10% and net charge-offs to be in the range of 10-20 basis points. The bank's guidance suggests a continued strong performance, driven by its deposit-led growth and improving asset quality. The bank's tangible common equity stands at 10%, and it has a significant capital level to support its customers and capitalize on opportunities.

Valuation and Dividend Yield

East West Bancorp's current Price-to-Tangible Book Value (P/TBV) is around 1.59, indicating a relatively reasonable valuation. The bank's Dividend Yield is 2.38%, providing a relatively attractive return for income investors. With a Return on Equity (ROE) of 15.56%, the bank is generating strong returns for its shareholders. Analysts estimate next year's revenue growth at 4.8%, which is lower than the current year's growth rate, but still indicates a strong performance.

3. NewsRoom

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East West Bancorp: Still Offering Growth At A Reasonable Price

Dec -05

Source: seekingalpha.com

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East West Bancorp, Inc. $EWBC Shares Bought by Creative Planning

Nov -25

Source: defenseworld.net

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Wall Street Analysts Believe East West Bancorp (EWBC) Could Rally 25.41%: Here's is How to Trade

Nov -18

Source: zacks.com

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Angel Oak Capital Advisors LLC Decreases Stock Position in East West Bancorp, Inc. $EWBC

Nov -14

Source: defenseworld.net

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ABN Amro Investment Solutions Makes New $4.08 Million Investment in East West Bancorp, Inc. $EWBC

Nov -14

Source: defenseworld.net

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Envestnet Asset Management Inc. Raises Holdings in East West Bancorp, Inc. $EWBC

Nov -03

Source: defenseworld.net

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Sequoia Financial Advisors LLC Acquires New Stake in East West Bancorp, Inc. $EWBC

Oct -23

Source: defenseworld.net

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East West Bancorp (NASDAQ:EWBC) Trading Up 4.5% on Strong Earnings

Oct -23

Source: defenseworld.net

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (6.93%)

6. Segments

Consumer and Business Banking

Expected Growth: 6.5%

East West Bancorp's 6.5% growth in Consumer and Business Banking is driven by strong loan growth, fueled by a robust California economy, increasing demand for commercial and industrial loans, and a growing presence in the mortgage market. Additionally, the bank's focus on digital transformation, customer acquisition, and relationship-based banking has contributed to the segment's growth.

Commercial Banking

Expected Growth: 7.5%

East West Bancorp, Inc.'s 7.5% commercial banking growth is driven by strong loan demand, particularly in commercial real estate and C&I lending. Additionally, the bank's strategic expansion into new markets, improved operating efficiency, and a favorable interest rate environment have contributed to its growth. Furthermore, the bank's focus on relationship-based banking and customer acquisition has also supported its growth momentum.

Other

Expected Growth: 6.0%

East West Bancorp's 6.0% growth is driven by strong loan growth, particularly in commercial and industrial loans, as well as solid deposit growth. The bank's focus on the California market, where economic growth is robust, also contributes to its growth. Additionally, the bank's efficient operations and solid credit quality support its profitability and growth.

7. Detailed Products

Consumer Banking

East West Bancorp, Inc. offers a range of consumer banking products and services, including checking and savings accounts, credit cards, personal loans, and mortgages.

Commercial Banking

The company provides commercial banking services, including cash management, commercial lending, and trade finance, to small and medium-sized businesses.

Wealth Management

East West Bancorp, Inc. offers wealth management services, including investment management, trust services, and financial planning, to individuals and families.

Treasury Management

The company provides treasury management services, including cash management, foreign exchange, and risk management, to corporate clients.

International Banking

East West Bancorp, Inc. offers international banking services, including trade finance, foreign exchange, and correspondent banking, to clients with international business needs.

8. East West Bancorp, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

East West Bancorp, Inc. operates in a highly competitive banking industry, where customers have various alternatives for their banking needs. However, the company's strong brand reputation and extensive branch network help to mitigate the threat of substitutes.

Bargaining Power Of Customers

East West Bancorp, Inc.'s customers have limited bargaining power due to the company's large customer base and diversified product offerings. Additionally, the company's strong relationships with its customers help to reduce the bargaining power of customers.

Bargaining Power Of Suppliers

East West Bancorp, Inc. has a diversified supplier base, which reduces the bargaining power of suppliers. The company's strong financial position and long-term relationships with suppliers also help to mitigate the bargaining power of suppliers.

Threat Of New Entrants

The banking industry has high barriers to entry, including regulatory hurdles and significant capital requirements. This makes it difficult for new entrants to enter the market, reducing the threat of new entrants for East West Bancorp, Inc.

Intensity Of Rivalry

The banking industry is highly competitive, with many established players competing for market share. East West Bancorp, Inc. faces intense competition from other banks and financial institutions, which can lead to pricing pressures and reduced market share.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 40.10%
Debt Cost 4.61%
Equity Weight 59.90%
Equity Cost 10.86%
WACC 8.36%
Leverage 66.94%

11. Quality Control: East West Bancorp, Inc. passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Main Street Capital

A-Score: 7.5/10

Value: 4.8

Growth: 6.0

Quality: 7.6

Yield: 9.0

Momentum: 8.0

Volatility: 9.3

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Enact Holdings

A-Score: 7.2/10

Value: 7.0

Growth: 4.6

Quality: 8.8

Yield: 7.0

Momentum: 6.0

Volatility: 10.0

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Golub Capital BDC

A-Score: 7.1/10

Value: 6.7

Growth: 5.8

Quality: 7.9

Yield: 10.0

Momentum: 2.5

Volatility: 10.0

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Hercules Capital

A-Score: 6.7/10

Value: 6.0

Growth: 3.6

Quality: 6.8

Yield: 10.0

Momentum: 4.0

Volatility: 9.7

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East West Bank

A-Score: 6.6/10

Value: 5.8

Growth: 7.7

Quality: 8.1

Yield: 4.0

Momentum: 7.0

Volatility: 7.0

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Corebridge Financial

A-Score: 5.6/10

Value: 6.0

Growth: 3.3

Quality: 3.2

Yield: 8.0

Momentum: 6.0

Volatility: 7.0

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

110.33$

Current Price

110.33$

Potential

-0.00%

Expected Cash-Flows