EAST WEST BANCORP INC

The following discussion provides information about the results of operations, financial condition, liquidity and capital resources of the Company, including its subsidiary bank, East West 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 Form 10-K. For information on our business, see Item 1. Businessin this Form 10-K.

Current Developments

Economic Developments

Although recent external data indicates that inflation remains above the Federal Reserve’s 2% target, the steadily slowing pace of inflation could point to receding fears of a recession in 2024. The likelihood of a “soft landing” scenario appears more likely given the Federal Reserve’s commitment to this outcome. The Federal Reserve has held interest rates steady over the latter half of 2023 and recently indicated the potential for rate cuts in 2024 and beyond. However, the higher interest rate environment continues to negatively impact the market value of bank-held securities, and the CRE industry has slowed due to tighter credit conditions and decreased demand. Other factors such as the economic impacts of unrest, wars, and acts of terrorism could lead to higher oil prices and increased inflationary pressures, along with the possibility that the Federal Reserve could maintain high interest rates longer than anticipated. While a U.S. government shutdown was averted in 2023, a future shutdown is possible and could negatively impact the economy. The Company monitors changes in economic and industry conditions and their impacts on the Company’s business, customers, employees, communities, and markets.

For additional discussion of the potential impacts on the Company’s business due to interest rate hikes, see Item 1A. — Risk Factors — Risks Related to Financial Mattersin this Form 10-K.