EAST WEST BANCORP INC

For the period ended Mar 31, 2025. Filed May 9, 2025.

About this filing

A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.

Mar 31, 2025 · Filed May 9, 2025

EWBC$130.74-0.2%Stored close · as of Nov 10, 2026

Extracted filing text, with the paragraph anchors used by the comparison.

See the whole filing, with its images and exhibits

Contents

— Loans Receivable and Allowance for Credit Losses

Note 6 —Loans Receivable and Allowance for Credit Losses

The following table presents the composition of the Company’s loans held-for-investment outstanding as of March 31, 2025 and December 31, 2024:

($ in thousands)	March 31, 2025	December 31, 2024
Commercial:
C&I	$17,460,744	$17,397,158
CRE:
CRE	14,868,361	14,655,340
Multifamily residential	5,007,969	4,953,442
Construction and land	653,630	666,162
Total CRE	20,529,960	20,274,944
Total commercial	37,990,704	37,672,102
Consumer:
Residential mortgage:
Single-family residential	14,383,562	14,175,446
Home equity lines of credit (“HELOCs”)	1,827,837	1,811,628
Total residential mortgage	16,211,399	15,987,074
Other consumer	50,631	67,461
Total consumer	16,262,030	16,054,535
Total loans held-for-investment (1)	$54,252,734	$53,726,637
Allowance for loan losses	(734,856)	(702,052)
Loans held-for-investment, net (1)	$53,517,878	$53,024,585

(1)Includes$36 million and $46 million of net deferred loan fees and net unamortized premiums as of March 31, 2025 and December 31, 2024, respectively.

Accrued interest receivable on loans held-for-investment was $248 million and $255 million as of March 31, 2025 and December 31, 2024, respectively, and was included in Other assets on the Consolidated Balance Sheet. The interest income reversed was insignificant for both the three months ended March 31, 2025 and 2024. For the Company’s accounting policy on accrued interest receivable related to loans held-for-investment, see Note 1 — Summary of Significant Accounting Policies — Significant Accounting Policies — Loans Held-for-Investmentto the Consolidated Financial Statements of the Company’s 2024 Form 10-K. The Company may occasionally have loans held-for-sale. For the Company’s accounting policy on loans held-for-sale, refer to Note 1 — Summary of Significant Accounting Policies — Significant Accounting Policies — Loans Held-for-Sale to the Consolidated Financial Statements in the Company’s 2024 Form 10-K.

The Company’s FRB and FHLB borrowings are primarily secured by loans held-for-investment. Loans held-for-investment totaling$40.0 billion and $38.2 billion, respectively, were pledged to secure borrowings and provide additional borrowing capacity as of March 31, 2025 and December 31, 2024.

Credit Quality Indicators

All loans are subject to the Company’s credit review and monitoring process. For the commercial loan portfolio, loans are risk rated based on an analysis of the borrower’s current payment performance or delinquency, repayment sources, financial and liquidity factors, including industry and geographic considerations. For the consumer loan portfolio, payment performance or delinquency is typically the driving indicator for risk ratings.

The Company utilizes internal credit risk ratings to assign each individual loan a risk rating of 1 through 10:

Pass — loans risk rated 1 through 5 are assigned an internal risk rating category of “Pass.” Loans risk rated 1 are typically loans fully secured by cash. Pass loans have sufficient sources of repayment to repay the loan in full, in accordance with all terms and conditions.

Special mention — loans assigned a risk rating of 6 have potential weaknesses that warrant closer attention by management; these are assigned an internal risk rating category of “Special Mention.”

Substandard — loans assigned a risk rating of 7 or 8 have well-defined weaknesses that may jeopardize the full and timely repayment of the loan; these are assigned an internal risk rating category of “Substandard.”

Doubtful — loans assigned a risk rating of 9 have insufficient sources of repayment and a high probability of loss; these are assigned an internal risk rating category of “Doubtful.”

Loss — loans assigned a risk rating of 10 are uncollectible and of such little value that they are no longer considered bankable assets; these are assigned an internal risk rating category of “Loss.”

Loan exposures categorized as criticized consist of special mention, substandard, doubtful and loss categories. The Company reviews the internal risk ratings of its loan portfolio on a regular basis, and adjusts the ratings based on changes in the borrowers’ financial status and the collectability of the loans.

The following tables summarize the Company’s loans held-for-investment and year-to-date gross write-offs by loan portfolio segments, internal risk ratings and vintage year as of the periods presented. The vintage year is the year of loan origination, renewal or major modification. Gross write-offs in the following tables are for the three months ended March 31, 2025, and year ended December 31, 2024. Revolving loans that are converted to term loans presented in the tables below are excluded from the term loans by vintage year columns.

	Term Loans by Origination Year
($ in thousands)	2025	2024	2023	2022	2021	Prior	Revolving Loans	Revolving Loans Converted to Term Loans (1)	Total
Commercial:
C&I:
Pass	$536,257	$2,495,604	$1,284,574	$924,021	$599,028	$478,909	$10,637,412	$39,025	$16,994,830
Criticized (accrual)	653	43,822	31,427	50,138	72,115	36,503	155,677	—	390,335
Criticized (nonaccrual)	284	4,461	27,004	21,986	10,266	11,511	67	—	75,579
Total C&I	537,194	2,543,887	1,343,005	996,145	681,409	526,923	10,793,156	39,025	17,460,744
Gross write-offs (2)	—	—	—	46	418	253	—	—	717
CRE:
Pass	626,306	1,612,384	2,209,065	3,559,562	1,876,657	4,241,478	110,625	49,000	14,285,077
Criticized (accrual)	—	34,384	100,717	113,114	55,208	259,557	—	14,751	577,731
Criticized (nonaccrual)	—	—	—	465	836	4,252	—	—	5,553
Subtotal CRE	626,306	1,646,768	2,309,782	3,673,141	1,932,701	4,505,287	110,625	63,751	14,868,361
Gross write-offs	—	—	—	—	19	13,918	—	—	13,937
Multifamily residential:
Pass	226,636	390,608	504,267	1,269,597	704,413	1,803,284	17,332	1,246	4,917,383
Criticized (accrual)	—	—	—	48,930	34,194	2,907	—	—	86,031
Criticized (nonaccrual)	—	—	—	—	—	4,555	—	—	4,555
Subtotal multifamily residential	226,636	390,608	504,267	1,318,527	738,607	1,810,746	17,332	1,246	5,007,969
Gross write-offs	—	—	—	—	—	4	—	—	4
Construction and land:
Pass	19,285	100,946	329,974	178,589	21,126	3,710	—	—	653,630
Subtotal construction and land	19,285	100,946	329,974	178,589	21,126	3,710	—	—	653,630
Total CRE	872,227	2,138,322	3,144,023	5,170,257	2,692,434	6,319,743	127,957	64,997	20,529,960
Total CRE gross write-offs (2)	—	—	—	—	19	13,922	—	—	13,941
Total commercial	$1,409,421	$4,682,209	$4,487,028	$6,166,402	$3,373,843	$6,846,666	$10,921,113	$104,022	$37,990,704
Total commercial gross write-offs (2)	$—	$—	$—	$46	$437	$14,175	$—	$—	$14,658

	Term Loans by Origination Year
($ in thousands)	2025	2024	2023	2022	2021	Prior	Revolving Loans	Revolving Loans Converted to Term Loans (1)	Total
Consumer:
Residential mortgage:
Single-family residential:
Pass (3)	$704,247	$2,230,645	$2,665,707	$3,007,253	$2,030,062	$3,687,561	$—	$—	$14,325,475
Criticized (accrual)	—	2,222	2,622	3,478	1,786	6,631	—	—	16,739
Criticized (nonaccrual) (3)	—	6,616	11,705	3,308	7,457	12,262	—	—	41,348
Subtotal single-family residential mortgage	704,247	2,239,483	2,680,034	3,014,039	2,039,305	3,706,454	—	—	14,383,562
Gross write-offs	—	9	—	—	—	—	—	—	9
HELOCs:
Pass	517	6,812	3,443	3,388	2,472	11,011	1,660,563	92,591	1,780,797
Criticized (accrual)	—	742	183	1,002	1,658	11,015	6,037	1,153	21,790
Criticized (nonaccrual)	—	4,977	1,152	3,189	52	10,883	—	4,997	25,250
Subtotal HELOCs	517	12,531	4,778	7,579	4,182	32,909	1,666,600	98,741	1,827,837
Total residential mortgage	704,764	2,252,014	2,684,812	3,021,618	2,043,487	3,739,363	1,666,600	98,741	16,211,399
Total residential mortgage gross write-offs	—	9	—	—	—	—	—	—	9
Other consumer:
Pass	4,257	679	—	23,004	131	6,797	15,660	—	50,528
Criticized (accrual)	6	—	—	—	—	—	—	—	6
Criticized (nonaccrual)	—	—	—	—	—	—	97	—	97
Total other consumer	4,263	679	—	23,004	131	6,797	15,757	—	50,631
Total consumer	$709,027	$2,252,693	$2,684,812	$3,044,622	$2,043,618	$3,746,160	$1,682,357	$98,741	$16,262,030
Total consumer gross write-offs (2)	$—	$9	$—	$—	$—	$—	$—	$—	$9
Total loans held-for-investment:
Pass	$2,117,505	$6,837,678	$6,997,030	$8,965,414	$5,233,889	$10,232,750	$12,441,592	$181,862	$53,007,720
Criticized (accrual)	659	81,170	134,949	216,662	164,961	316,613	161,714	15,904	1,092,632
Criticized (nonaccrual)	284	16,054	39,861	28,948	18,611	43,463	164	4,997	152,382
Total	$2,118,448	$6,934,902	$7,171,840	$9,211,024	$5,417,461	$10,592,826	$12,603,470	$202,763	$54,252,734
Total loans held-for-investment gross write-offs (2)	$—	$9	$—	$46	$437	$14,175	$—	$—	$14,667

	Term Loans by Origination Year
($ in thousands)	2024	2023	2022	2021	2020	Prior	Revolving Loans	Revolving Loans Converted to Term Loans (1)	Total
Commercial:
C&I:
Pass	$2,605,928	$1,508,948	$999,586	$612,015	$243,528	$295,884	$10,574,404	$23,032	$16,863,325
Criticized (accrual)	34,412	51,415	61,041	107,355	10,538	31,160	151,747	—	447,668
Criticized (nonaccrual)	3,822	29,181	20,273	10,666	3,225	9,135	9,863	—	86,165
Total C&I	2,644,162	1,589,544	1,080,900	730,036	257,291	336,179	10,736,014	23,032	17,397,158
Gross write-offs (2)	20	47,963	14,848	11,119	1,568	3,012	27,099	—	105,629
CRE:
Pass	1,660,877	2,296,763	3,692,498	1,925,220	1,296,439	3,176,450	96,791	49,302	14,194,340
Criticized (accrual)	34,543	44,557	90,105	31,615	75,578	167,401	—	14,771	458,570
Criticized (nonaccrual)	—	—	—	—	1,756	674	—	—	2,430
Subtotal CRE	1,695,420	2,341,320	3,782,603	1,956,835	1,373,773	3,344,525	96,791	64,073	14,655,340
Gross write-offs (2)	—	—	—	—	—	3	—	—	3
Multifamily residential:
Pass	386,743	521,754	1,337,599	752,230	613,115	1,242,586	14,640	1,253	4,869,920
Criticized (accrual)	—	—	43,997	32,042	—	2,911	—	—	78,950
Criticized (nonaccrual)	—	—	—	—	—	4,572	—	—	4,572
Subtotal multifamily residential	386,743	521,754	1,381,596	784,272	613,115	1,250,069	14,640	1,253	4,953,442
Gross write-offs	—	—	—	—	—	10	—	—	10
Construction and land:
Pass	90,926	328,803	184,792	41,932	—	8,393	—	—	654,846
Criticized (nonaccrual)	—	—	11,316	—	—	—	—	—	11,316
Subtotal construction and land	90,926	328,803	196,108	41,932	—	8,393	—	—	666,162
Gross write-offs	—	—	2,289	—	—	—	—	—	2,289
Total CRE	2,173,089	3,191,877	5,360,307	2,783,039	1,986,888	4,602,987	111,431	65,326	20,274,944
Total CRE gross write-offs (2)	—	—	2,289	—	—	13	—	—	2,302
Total commercial	$4,817,251	$4,781,421	$6,441,207	$3,513,075	$2,244,179	$4,939,166	$10,847,445	$88,358	$37,672,102
Total commercial gross write-offs (2)	$20	$47,963	$17,137	$11,119	$1,568	$3,025	$27,099	$—	$107,931

	Term Loans by Origination Year
($ in thousands)	2024	2023	2022	2021	2020	Prior	Revolving Loans	Revolving Loans Converted to Term Loans (1)	Total
Consumer:
Residential mortgage:
Single-family residential:
Pass (3)	$2,360,674	$2,762,921	$3,074,668	$2,079,323	$1,407,031	$2,437,446	$—	$—	$14,122,063
Criticized (accrual)	4,175	3,409	750	5,810	1,548	6,069	—	—	21,761
Criticized (nonaccrual) (3)	2,716	9,673	1,929	2,035	2,404	12,865	—	—	31,622
Subtotal single-family residential mortgage	2,367,565	2,776,003	3,077,347	2,087,168	1,410,983	2,456,380	—	—	14,175,446
Gross write-offs (2)	9	—	—	—	—	—	—	—	9
HELOCs:
Pass	7,453	3,288	4,071	3,236	7,570	8,152	1,648,337	99,488	1,781,595
Criticized (accrual)	1,436	—	1,420	—	135	2,064	2,338	594	7,987
Criticized (nonaccrual)	3,161	3,095	2,520	39	418	7,301	—	5,512	22,046
Subtotal HELOCs	12,050	6,383	8,011	3,275	8,123	17,517	1,650,675	105,594	1,811,628
Gross write-offs	—	10	—	—	—	—	—	5	15
Total residential mortgage	2,379,615	2,782,386	3,085,358	2,090,443	1,419,106	2,473,897	1,650,675	105,594	15,987,074
Total residential mortgage gross write-offs (2)	9	10	—	—	—	—	—	5	24
Other consumer:
Pass	14,916	—	22,992	132	—	6,800	22,555	—	67,395
Criticized (nonaccrual)	—	—	—	—	—	—	66	—	66
Total other consumer	14,916	—	22,992	132	—	6,800	22,621	—	67,461
Gross write-offs (2)	—	3,000	—	—	—	—	890	—	3,890
Total consumer	$2,394,531	$2,782,386	$3,108,350	$2,090,575	$1,419,106	$2,480,697	$1,673,296	$105,594	$16,054,535
Total consumer gross write-offs (2)	$9	$3,010	$—	$—	$—	$—	$890	$5	$3,914
Total loans held-for-investment:
Pass	$7,127,517	$7,422,477	$9,316,206	$5,414,088	$3,567,683	$7,175,711	$12,356,727	$173,075	$52,553,484
Criticized (accrual)	74,566	99,381	197,313	176,822	87,799	209,605	154,085	15,365	1,014,936
Criticized (nonaccrual)	9,699	41,949	36,038	12,740	7,803	34,547	9,929	5,512	158,217
Total	$7,211,782	$7,563,807	$9,549,557	$5,603,650	$3,663,285	$7,419,863	$12,520,741	$193,952	$53,726,637
Total loans held-for-investment gross write-offs (2)	$29	$50,973	$17,137	$11,119	$1,568	$3,025	$27,989	$5	$111,845

(1)$16 million of total commercial loans, comprised of C&I revolving loans, were converted to term loans during thethree months ended March 31, 2025. In comparison, $7 million of total commercial loans, comprised of C&I and CRE revolving loans and $15 million of total consumer loans, comprised of HELOCs, converted to term loans during the three months ended March 31, 2024.

(2)Excludes gross write-offs associated with loans the Company sold or settled.

(3)$1 million of nonaccrual loans whose payments were guaranteed by the Federal Housing Administration were classified with a “Pass” rating as of both March 31, 2025 and December 31, 2024.

Nonaccrual and Past Due Loans

Loans that are 90 or more days past due are generally placed on nonaccrual status unless the loan is well-collateralized and in the process of collection. Loans that are less than 90 days past due but have identified deficiencies, such as when the full collection of principal or interest becomes uncertain, are also placed on nonaccrual status. The following tables present the aging analysis of loans held-for-investment as of March 31, 2025 and December 31, 2024:

($ in thousands)	Current Accruing Loans	Accruing Loans 30-59 Days Past Due	Accruing Loans 60-89 Days Past Due	Total Accruing Past Due Loans	Total Nonaccrual Loans	Total Loans
Commercial:
C&I	$17,359,512	$25,254	$399	$25,653	$75,579	$17,460,744
CRE:
CRE	14,862,806	—	1	1	5,554	14,868,361
Multifamily residential	5,002,008	1,407	—	1,407	4,554	5,007,969
Construction and land	653,630	—	—	—	—	653,630
Total CRE	20,518,444	1,407	1	1,408	10,108	20,529,960
Total commercial	37,877,956	26,661	400	27,061	85,687	37,990,704
Consumer:
Residential mortgage:
Single-family residential	14,276,842	47,184	17,370	64,554	42,166	14,383,562
HELOCs	1,772,312	8,500	21,775	30,275	25,250	1,827,837
Total residential mortgage	16,049,154	55,684	39,145	94,829	67,416	16,211,399
Other consumer	48,573	1,883	78	1,961	97	50,631
Total consumer	16,097,727	57,567	39,223	96,790	67,513	16,262,030
Total	$53,975,683	$84,228	$39,623	$123,851	$153,200	$54,252,734

($ in thousands)	Current Accruing Loans	Accruing Loans 30-59 Days Past Due	Accruing Loans 60-89 Days Past Due	Total Accruing Past Due Loans	Total Nonaccrual Loans	Total Loans
Commercial:
C&I	$17,288,138	$5,690	$17,165	$22,855	$86,165	$17,397,158
CRE:
CRE	14,647,270	3,755	1,885	5,640	2,430	14,655,340
Multifamily residential	4,947,939	653	278	931	4,572	4,953,442
Construction and land	653,919	927	—	927	11,316	666,162
Total CRE	20,249,128	5,335	2,163	7,498	18,318	20,274,944
Total commercial	37,537,266	11,025	19,328	30,353	104,483	37,672,102
Consumer:
Residential mortgage:
Single-family residential	14,088,086	32,841	22,096	54,937	32,423	14,175,446
HELOCs	1,770,218	11,396	7,968	19,364	22,046	1,811,628
Total residential mortgage	15,858,304	44,237	30,064	74,301	54,469	15,987,074
Other consumer	67,288	92	15	107	66	67,461
Total consumer	15,925,592	44,329	30,079	74,408	54,535	16,054,535
Total	$53,462,858	$55,354	$49,407	$104,761	$159,018	$53,726,637

The following table presents the amortized cost of loans on nonaccrual status for which there was no related allowance for loan losses as of both March 31, 2025 and December 31, 2024. Nonaccrual loans may not have an allowance for credit losses if the loan balances are well secured by collateral values and there is no loss expectation.

($ in thousands)	March 31, 2025	December 31, 2024
Commercial:
C&I	$56,115	$79,591
CRE	3,848	—
Multifamily residential	—	4,210
Construction and land	—	11,316
Total commercial	59,963	95,117
Consumer:
Single-family residential	10,879	6,279
HELOCs	8,204	15,380
Total consumer	19,083	21,659
Total nonaccrual loans with no related allowance for loan losses	$79,046	$116,776

Foreclosed Assets

The Company acquires assets from borrowers through loan restructurings, workouts, or foreclosures. Assets acquired may include real properties (e.g., real estate, land, and buildings) and commercial and personal properties. The Company recognizes foreclosed assets upon receiving assets in satisfaction of a loan (e.g., taking legal title or physical possession).

Foreclosed assets, consisting of OREO and other nonperforming assets, are included in Other assets on the Consolidated Balance Sheet. The Company had $29 million of foreclosed assets as of March 31, 2025, compared with $35 million as of December 31, 2024. The Company commences the foreclosure process on consumer mortgage loans after a borrower becomes more than 120 days delinquent in accordance with the Consumer Financial Protection Bureau guidelines. The carrying value of the consumer real estate loans that were in an active or suspended foreclosure process was $23 million and $16 million as of March 31, 2025 and December 31, 2024, respectively.

Loan Modifications to Borrowers Experiencing Financial Difficulty

As part of the Company’s loss mitigation efforts, the Company may agree to modify the contractual terms of a loan to assist borrowers experiencing financial difficulty. The Company negotiates loan modifications on a case-by-case basis to achieve mutually agreeable terms that maximize loan collectability and meet the borrower’s financial needs. The Company considers various factors to identify borrowers experiencing financial difficulty. The primary factor for consumer borrowers is delinquency status. For commercial loan borrowers, these factors include credit risk ratings, the probability of loan risk rating downgrades, and overall risk profile changes. The modification may include, but is not limited to, payment delays, interest rate reductions, term extensions, principal forgiveness, or a combination of such modifications. Commercial loan borrowers that require immaterial modifications such as insignificant interest rate changes, short-term extensions (90 days or less) from the original maturity date, or temporary waivers or extensions of financial covenants which would not constitute material credit actions, are generally not considered to be experiencing financial difficulty and are not included in the disclosure. Insignificant payment deferrals (three months or less in the last 12 months) are also not included in the disclosure.

The following tables present the amortized cost of loans that were modified during the three months ended March 31, 2025 and 2024 by loan class and modification type:

	Modification Type
($ in thousands)	Term Extension	Payment Delay	Combination: Term Extension/ Payment Delay	Total	Modification as a % of Loan Class
Commercial:
C&I	$15,651	$—	$23,749	$39,400	0.23%
CRE	18,362	—	—	18,362	0.09%
Total commercial	34,013	—	23,749	57,762
Consumer:
Single-family residential	—	4,061	88	4,149	0.03%
HELOCs	—	975	911	1,886	0.10%
Total consumer	—	5,036	999	6,035
Total	$34,013	$5,036	$24,748	$63,797

	Modification Type
($ in thousands)	Term Extension	Payment Delay	Combination: Term Extension/ Payment Delay	Total	Modification as a % of Loan Class
Commercial:
C&I	$4,013	$22,155	$—	$26,168	0.16%
CRE	24,488	—	19,325	43,813	0.22%
Total commercial	28,501	22,155	19,325	69,981
Consumer:
Single-family residential	—	3,996	—	3,996	0.03%
HELOCs	—	5,501	517	6,018	0.35%
Total consumer	—	9,497	517	10,014
Total	$28,501	$31,652	$19,842	$79,995

The following table presents the financial effects of the loan modifications for the three months ended March 31, 2025 and 2024 by loan class and modification type:

	Financial Effects of Loan Modifications for the Three Months Ended March 31,
	2025			2024
($ in thousands)	Weighted-Average Interest Rate Reduction	Weighted-Average Term Extension (in years)	Weighted-Average Payment Delay (in years)	Weighted-Average Interest Rate Reduction	Weighted-Average Term Extension (in years)	Weighted-Average Payment Delay (in years)
Commercial:
C&I	—%	1.1	1.0	—%	1.8	1.7
CRE	—%	5.0	0.0	2.75%	1.5	1.7
Consumer:
Single-family residential	—%	10.0	1.0	—%	0.0	0.7
HELOCs	—%	17.6	15.4	0.25%	0.0	3.2

A modified loan may become delinquent and may result in a payment default (generally 90 days past due) subsequent to modification. The following tables present information on loans that defaulted during the three months ended March 31, 2025 and 2024 that received modifications during the 12 months preceding payment default.

($ in thousands)	Term Extension	Payment Delay	Combination: Rate Reduction/ Payment Delay	Total
Commercial:
C&I	$—	$2,193	$—	$2,193
CRE	22,631	—	—	22,631
Total commercial	22,631	2,193	—	24,824
Consumer:
Single-family residential	—	3,455	—	3,455
HELOCs	—	2,121	—	2,121
Total consumer	—	5,576	—	5,576
Total	$22,631	$7,769	$—	$30,400

($ in thousands)	Term Extension	Payment Delay	Combination: Rate Reduction/ Payment Delay	Total
Commercial:
C&I	$7,828	$—	$—	$7,828
Total commercial	7,828	—	—	7,828
Consumer:
Single-family residential	—	3,972	383	4,355
Total consumer	—	3,972	383	4,355
Total	$7,828	$3,972	$383	$12,183

The Company monitors the performance of modified loans to borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts. The following tables present the performance of loans that were modified during the three months ended March 31, 2025 and 2024, that received modifications during the 12 months preceding payment default:

($ in thousands)	Current	30 - 89 Days Past Due	90+ Days Past Due	Total
Commercial:
C&I	$80,147	$3,608	$1,515	$85,270
CRE	66,320	—	—	66,320
Total commercial	146,467	3,608	1,515	151,590
Consumer:
Single-family residential	8,122	3,469	3,597	15,188
HELOCs	5,137	2,369	3,796	11,302
Total consumer	13,259	5,838	7,393	26,490
Total	$159,726	$9,446	$8,908	$178,080

($ in thousands)	Current	30 - 89 Days Past Due	90+ Days Past Due	Total
Commercial:
C&I	$75,193	$—	$7,829	$83,022
CRE	76,028	—	—	76,028
Total commercial	151,221	—	7,829	159,050
Consumer:
Single-family residential	8,455	4,239	5,075	17,769
HELOCs	6,994	2,536	—	9,530
Total consumer	15,449	6,775	5,075	27,299
Total	$166,670	$6,775	$12,904	$186,349

As of March 31, 2025 and December 31, 2024, commitments to lend additional funds to borrowers whose loans were modified totaled $8 million and $10 million, respectively,

Allowance for Credit Losses

The Company has a current expected credit losses framework for all financial assets measured at amortized cost and certain off-balance sheet credit exposures. The Company’s allowance for credit losses, which includes both the allowance for loan losses and the allowance for unfunded credit commitments, is calculated with the objective of maintaining a reserve sufficient to absorb losses inherent in our credit portfolios. The measurement of the allowance for credit losses is based on management’s best estimate of lifetime expected credit losses, periodic evaluation of the loan portfolio, lending-related commitments and other relevant factors.

The allowance for credit losses is deducted from the amortized cost basis of a financial asset or a group of financial assets so that the balance sheet reflects the net amount the Company expects to collect. Amortized cost is the principal balance outstanding, net of purchase premiums and discounts, deferred fees and costs, and escrow advances. Subsequent changes in expected credit losses are recognized in net income as a provision for, or a reversal of, credit loss expense.

The allowance for credit losses estimation involves procedures to consider the unique risk characteristics of the portfolio segments. The majority of the Company’s credit exposures that share risk characteristics with other similar exposures are collectively evaluated. The collectively evaluated loans include performing loans and unfunded credit commitments. If an exposure does not share risk characteristics with other exposures, the Company generally estimates expected credit losses on an individual basis.

Allowance for Collectively Evaluated Loans

The allowance for collectively evaluated loans consists of a quantitative component that assesses the different risk factors considered in our models and a qualitative component that considers risk factors external to the models. Each of these components are described below.

Quantitative Component— The Company applies quantitative methods to estimate loan losses by considering a variety of factors such as historical loss experience, the current credit quality of the portfolio, and an economic outlook over the life of the loan. The Company incorporates forward-looking information using macroeconomic scenarios which include variables that are considered key drivers of increases and decreases in credit losses. The Company utilizes a probability-weighted, multiple-scenario forecast approach. These scenarios may consist of a base forecast representing management's view of the most likely outcome, combined with downside or upside scenarios reflecting possible worsening or improving economic conditions. The quantitative models incorporate a probability-weighted calculation of these macroeconomic scenarios over a reasonable and supportable forecast period. If the life of the loans extends beyond the reasonable and supportable forecast period, the Company will consider historical experience or long-run macroeconomic trends over the remaining life of the loans to estimate the allowance for loan losses.

There were no changes to the reasonable and supportable forecast period and reversion to the historical loss experience method for the three months ended March 31, 2025 and 2024.

The following table provides key credit risk characteristics and macroeconomic variables that the Company uses to estimate the expected credit losses by portfolio segment:

Portfolio Segment	Risk Characteristics	Macroeconomic Variables
C&I	Age percentage, size at origination, delinquency status, sector and risk rating	Unemployment rate, Gross Domestic Product (“GDP”), and U.S. Treasury rates
CRE, Multifamily residential, and Construction and land	Delinquency status, maturity date, collateral value, property type, and geographic location	Unemployment rate, GDP, and U.S. Treasury rates
Single-family residential and HELOCs	FICO score, delinquency status, maturity date, collateral value, and geographic location	Unemployment rate, GDP, and Home Price Indices
Other consumer	Loss rate approach	Immaterial - Macroeconomic variables are included in the qualitative estimate.

Quantitative Component—Allowance for Loan Losses for the Commercial Loan Portfolio

The Company’s C&I lifetime loss rate model estimates the loss rate expected over the life of a loan. This loss rate is applied to the amortized cost basis, excluding accrued interest receivable, to determine expected credit losses. The lifetime loss rate model’s reasonable and supportable period spans eight quarters, thereafter, immediately reverting to the historical average loss rate, expressed through the loan-level lifetime loss rate.

To generate estimates of expected loss at the loan level for CRE, multifamily residential, and construction and land loans, projected probabilities of default (“PDs”) and loss given defaults (“LGDs”) are applied to the estimated exposure at default, considering the term and payment structure of the loan. The forecast of future economic conditions returns to long-run historical economic trends within the reasonable and supportable period.

To estimate the life of a loan under both models, the contractual term of the loan is adjusted for estimated prepayments based on historical prepayment experience.

Quantitative Component—Allowance for Loan Losses for the Consumer Loan Portfolio

For single-family residential and HELOC loans, projected PDs and LGDs are applied to the estimated exposure at default, considering the term and payment structure of the loan, to generate estimates of expected loss at the loan level. The forecast of future economic conditions returns to long-run historical economic trends after the reasonable and supportable period. To estimate the life of a loan for the single-family residential and HELOC loan portfolios, the contractual term of the loan is adjusted for estimated prepayments based on historical prepayment experience. For other consumer loans, the Company uses a loss rate approach.

Qualitative Component— The Company considers the following qualitative factors in the determination of the collectively evaluated allowance if these factors have not already been captured by the quantitative model. Such qualitative factors may include, but are not limited to:

loan growth trends;

the volume and severity of past due financial assets, and criticized or adversely classified financial assets;

the Company’s lending policies and procedures, including changes in lending strategies, underwriting standards, collection, write-off and recovery practices;

knowledge of a borrower’s operations;

the quality of the Company’s credit review system;

the experience, ability and depth of the Company’s management and associates;

the effect of other external factors such as the regulatory and legal environments, or changes in technology;

actual and expected changes in international, national, regional, and local economic and business conditions in which the Company operates; and

risk factors in certain industry sectors not captured by the quantitative models.

The magnitude of the impact of these factors on the Company’s qualitative assessment of the allowance for credit losses changes from period to period according to changes made by management in its assessment of these factors. The extent to which these factors change may be dependent on whether they are already reflected in quantitative loss estimates during the current period and the extent to which changes in these factors diverge from period to period.

While the Company’s allowance methodologies strive to reflect all relevant credit risk factors, there continues to be uncertainty associated with, but not limited to, potential imprecision in the estimation process due to the inherent time lag of obtaining information and normal variations between expected and actual outcomes. The Company may hold additional qualitative reserves that are designed to provide coverage for losses attributable to such risk.

Allowance for Individually Evaluated Loans

When a loan no longer shares similar risk characteristics with other loans, such as in the case of certain nonaccrual loans, the Company estimates the allowance for loan losses on an individual loan basis. The allowance for loan losses for individually evaluated loans is measured as the difference between the recorded value of the loans and their fair value. For loans evaluated individually, the Company uses one of three different asset valuation measurement methods: (1) the fair value of collateral less costs to sell; (2) the present value of expected future cash flows; or (3) the loan's observable market price. If an individually evaluated loan is determined to be collateral dependent, the Company applies the fair value of the collateral less costs to sell method. If an individually evaluated loan is determined not to be collateral dependent, the Company uses the present value of future cash flows or the observable market value of the loan.

Collateral-Dependent Loans —The allowance of a collateral-dependent loan is limited to the difference between the recorded value and fair value of the collateral less cost of disposal or sale. As of March 31, 2025, collateral-dependent commercial and consumer loans totaled $36 million and $21 million, respectively. In comparison, collateral-dependent commercial and consumer loans totaled $45 million and $23 million, respectively, as of December 31, 2024. The Company's collateral-dependent loans were secured by real estate. As of both March 31, 2025 and December 31, 2024, the collateral value of the properties securing the collateral-dependent loans, net of selling costs, exceeded the recorded value of the majority of the loans.

The following tables summarize the activity in the allowance for loan losses by portfolio segments for the three months ended March 31, 2025 and 2024:

Commercial · Consumer
CRE · Residential Mortgage
($ in thousands) · C&I · CRE · Multifamily Residential · Construction and Land · Single-Family Residential · HELOCs · Other Consumer · Total
Allowance for loan losses, beginning of period		$384,319	$218,677	$32,117	$17,497	$44,816	$3,132	$1,494	$702,052
Provision for (reversal of) credit losses on loans	(a)	36,370	8,105	201	(305)	2,072	1,739	(120)	48,062
Gross charge-offs		(988)	(13,937)	(4)	(1,996)	(9)	—	(49)	(16,983)
Gross recoveries		1,564	54	10	3	50	8	13	1,702
Total net recoveries (charge-offs)		576	(13,883)	6	(1,993)	41	8	(36)	(15,281)
Foreign currency translation adjustment		23	—	—	—	—	—	—	23
Allowance for loan losses, end of period		$421,288	$212,899	$32,324	$15,199	$46,929	$4,879	$1,338	$734,856

Commercial · Consumer
CRE · Residential Mortgage
($ in thousands) · C&I · CRE · Multifamily Residential · Construction and Land · Single-Family Residential · HELOCs · Other Consumer · Total
Allowance for loan losses, beginning of period		$392,685	$170,592	$34,375	$10,469	$55,018	$3,947	$1,657	$668,743
Provision for (reversal of) credit losses on loans	(a)	274	19,132	3,032	1,381	899	(432)	(132)	24,154
Gross charge-offs		(20,998)	(2,398)	(6)	(1,224)	—	—	(58)	(24,684)
Gross recoveries		1,710	134	17	193	5	48	—	2,107
Total net (charge-offs) recoveries		(19,288)	(2,264)	11	(1,031)	5	48	(58)	(22,577)
Foreign currency translation adjustment		(40)	—	—	—	—	—	—	(40)
Allowance for loan losses, end of period		$373,631	$187,460	$37,418	$10,819	$55,922	$3,563	$1,467	$670,280

In addition to the allowance for loan losses, the Company maintains an allowance for unfunded credit commitments. The Company has three general areas for which it provides the allowance for unfunded credit commitments: (1) recourse obligations for loans sold, (2) letters of credit, and (3) unfunded lending commitments. The allowance for unfunded credit commitments is maintained at a level that management believes to be sufficient to absorb estimated expected credit losses related to unfunded credit facilities. See Note 10 — Commitments and Contingenciesto the Consolidated Financial Statements in this Form 10-Q for additional information related to unfunded credit commitments. The following table summarizes the activity in the allowance for unfunded credit commitments for the three months ended March 31, 2025 and 2024:

	Three Months Ended March 31,
($ in thousands) · 2025 · 2024
Unfunded credit facilities
Allowance for unfunded credit commitments, beginning of period		$39,526	$37,699
Provision for credit losses on unfunded credit commitments	(b)	938	846
Allowance for unfunded credit commitments, end of period		$40,464	$38,545
Provision for credit losses	(a) + (b)	$49,000	$25,000

The allowance for credit losses was$775 million as of March 31, 2025, an increase of $33 million, compared with $742 million as of December 31, 2024. The increase in the allowance for credit losses was primarily driven by the Company’s net loan growth, qualitative risk assessment, and economic outlook that reflected continued caution regarding inflation, the high-interest rate environment and potential impacts from the escalating tariff and trade tensions.

The Company considers multiple economic scenarios to develop the estimate of the allowance for loan losses. The scenarios may consist of a baseline forecast representing management's view of the most likely outcome, and downside or upside scenarios that reflect possible worsening or improving economic conditions. As of March 31, 2025, the Company assigned a slightly lower weighting to its baseline scenario, while applying a slightly higher weighting to the downside scenario, as compared with December 31, 2024. The current baseline economic forecast continues to reflect key risks such as still-elevated interest rates, inflation, concerns over global conflicts and oil prices. Compared to December 2024, the March 2025 baseline forecast for GDP growth showed deterioration in the near-term (full year 2025) and beginning to recover mid-2026 and beyond. The unemployment rate has remained low with the March 2025 forecast showing an uptick starting in late 2025, compared with the December 2024 forecast for the same periods. The downside scenario assumed the economy falls into recession in the second quarter of 2025 as a result of tariffs, rising inflation, still-elevated interest rates, global and domestic political tensions, and reduced credit availability. The upside scenario assumed a more optimistic economic outlook, including stronger growth, stable financial market, and full employment starting in the second quarter of 2025.

Loan Transfers, Sales and Purchases

The Company’s primary business focus is on directly originated loans. The Company also purchases loans from and participates in loan financing with other banks. In the normal course of business, the Company also provides other financial institutions with the ability to participate in commercial loans that it originates, by selling loans to such institutions. Purchased loans may be transferred from held-for-investment to held-for-sale, and write-downs to allowance for loan losses are recorded, when appropriate. The following tables provide information on the carrying value of loans transferred, sold and purchased for the held-for-investment portfolio, during the three months ended March 31, 2025 and 2024:

Commercial · Consumer
CRE · Residential Mortgage
($ in thousands) · C&I · CRE · Construction and Land · Single-Family Residential · Total
Loans transferred from held-for-investment to held-for-sale (1)	$6,356		$20,338	$9,500	$—	$36,194
Sales (2) (3)	$6,356		$20,338	$11,316	$—	$38,010
Purchases	$136,943	(4)	$—	$—	$87,364	$224,307

Commercial · Consumer
Residential Mortgage
($ in thousands) · C&I · Single-Family Residential · Total
Loans transferred from held-for-investment to held-for-sale (1)	$199,974		$—	$199,974
Sales (2) (3)	$187,202		$965	$188,167
Purchases	$33,344	(4)	$74,736	$108,080

(1)Includes write-downs of $2 million and $1 million to the allowance for loan losses related to loans transferred from held-for-investment to held-for-sale for the three months ended March 31, 2025, and 2024, respectively.

(2)Includes originated loans sold of $34 million and $92 million for the three months ended March 31, 2025 and 2024, respectively. Originated loans sold consisted primarily of CRE and construction loans for three months ended March 31, 2025 and C&I for three months ended March 31, 2024.

(3)Includes $4 million and $96 million of purchased loans sold in the secondary market for the three months ended March 31, 2025 and 2024, respectively.

(4)C&I loan purchases were comprised of syndicated C&I term loans.

ContentsView on SEC.gov

The text of this filing, as the company filed it with the SEC, without its images or exhibits. This is not investment advice.