EAST WEST BANCORP INC

The Company’s primary source of revenue is net interest income, which is the interest income earned on interest-earning assets less interest expense paid on interest-bearing liabilities. Net interest margin is the ratio of net interest income to average interest-earning assets. Net interest income and net interest margin are impacted by several factors, including changes in average balances and the composition of interest-earning assets and funding sources, market interest rate fluctuations and the slope of the yield curve, repricing characteristics and maturity of interest-earning assets and interest-bearing liabilities, the volume of noninterest-bearing sources of funds and asset quality.

Net interest income and net interest margin for the third quarter and first nine months of 2025 increased year-over-year. The net interest income and net interest margin increases in the third quarter of 2025, compared with the same prior year period, primarily reflected lower deposit funding costs, and increases in loans and AFS debt securities, partially offset by lower yields on loans and interest-bearing cash and deposits with banks. The net interest income and net interest margin increases in the first nine months of 2025, compared with the same prior year period, primarily reflected an increase in AFS debt securities, lower deposit funding costs, and a decrease in Bank Term Funding Program (“BTFP”) and short-term borrowings, partially offset by a decrease in the yields and balances of interest-bearing cash and deposits with banks. The increases in net interest income and net interest margin, compared with both prior year periods also reflect the impact of $32 million of discount accretion and interest recoveries from the full payment on purchased credit impaired and workout loans. Net interest income for the third quarter and first nine months of 2025 was $678 million and $1.89 billion, respectively. Excluding the impact of the aforementioned discount accretion and interest recoveries, adjusted net income for the third quarter and first nine months of 2025 was $645 million and $1.86 billion, respectively. Net interest margin for the third quarter and first nine months of 2025 was 3.53% and 3.41%, respectively. Adjusted net interest margin for the for the third quarter and first nine months of 2025 was 3.36% and 3.35%, respectively. Adjusted net income and adjusted net interest margin are non-GAAP financial measures. For additional details, refer to Item 2. MD&A — Reconciliation of GAAP to Non-GAAP Financial Measuresin this Form 10-Q.

Average interest-earning assets were $76.2 billion for the third quarter of 2025, an increase of $5.9 billion or 8% from the third quarter of 2024. For the first nine months of 2025, average interest-earning assets were $74.3 billion, an increase of $5.4 billion or 8% from the first nine months of 2024. The year-over-year increases in average interest-earning assets primarily reflected increases in AFS debt securities and loan growth, partially offset by a decrease in interest-bearing cash and deposits with banks.

The yield on average interest-earning assets for the third quarter of 2025 was 5.88%, a decrease of 21 bps from the third quarter of 2024. The yield on average interest-earning assets for the first nine months of 2025 was 5.80%, a decrease of 28 bps from the first nine months of 2024. The year-over-year decreases in the yield on average interest-earning assets for both periods, primarily reflected the impact of lower benchmark interest rates on the loan portfolio.

Average loan yields of 6.61% and 6.47% for the third quarter and first nine months of 2025, respectively, decreased 12 bps and 25 bps, respectively, compared with the prior year periods. The year-over-year decreases in the average loan yields for both periods primarily reflected the loan portfolio’s sensitivity to lower benchmark interest rates, partially offset by the impact of $32 million of discount accretion and interest recoveries from the full payment on purchased credit impaired and workout loans. Excluding the impact of the discount accretion and interest recoveries, adjusted average loan yields were 6.38% and 6.39%, for the third quarter and first nine months of 2025, respectively. Adjusted average loan yield is a non-GAAP financial ratio. For additional details, refer to Item 2. MD&A — Reconciliation of GAAP to Non-GAAP Financial Measuresin this Form 10-Q. Approximately 58% of loans held-for-investment were variable rate as of both September 30, 2025 and 2024.

Deposits are an important source of funding for the Company. Average deposits were $66.2 billion for the third quarter of 2025, a $5.6 billion or 9% increase from the third quarter of 2024. Average deposits were $64.2 billion for the first nine months of 2025, a $5.3 billion or 9% increase from the first nine months of 2024. The year-over-year increases for both periods were primarily driven by growth in average time, money market and demand deposits.

Average noninterest-bearing deposits were $15.8 billion for the third quarter of 2025, a $1.2 billion or 8% increase from the third quarter of 2024. For the first nine months of 2025, average noninterest-bearing deposits were$15.3 billion, a $590 million or 4% increase from the first nine months of 2024. Average noninterest-bearing deposits made up 24% of average deposits for both the third quarters of 2025 and 2024, and 24% and 25% for the first nine months of 2025 and 2024, respectively.

The average cost of deposits of 2.49% for the third quarter and 2.51% for the first nine months of 2025 decreased 49 bps and 42 bps, respectively, compared withthe prior year periods. The average cost of interest-bearing deposits of 3.26% for the third quarter and 3.30% for the first nine months of 2025, decreased 67 bps and 61 bps, respectively, compared with the prior year periods. These year-over-year decreases primarily reflected the impacts of lower benchmark interest rates and the Company’s efforts to reduce deposit costs.

The average cost of funds calculation includes deposits, Federal Home Loan Bank (“FHLB”) advances, securities sold under repurchase agreements (“repurchase agreements”), long-term debt, and short-term borrowings. The average cost of funds of 2.58% for the third quarter and 2.62% for the first nine months of 2025 decreased 54 bps and 45 bps, respectively, compared withthe prior year periods. The year-over-year decreases were mainly driven by the decrease in the cost of deposits as discussed above.

The Company utilizes various tools to manage interest rate risk. Refer to the Interest Rate Risk Management section of Item 2. MD&A — Risk Management — Market Risk Managementin this Form 10-Q.

The following table presents the interest spread, net interest margin, average balances, interest income and expense, and the average yield/rate by asset and liability component for the third quarters of 2025 and 2024:

(2)Yields on tax-exempt securities and loans are not presented on a tax-equivalent basis.

(3)Includes the amortization of net premiums on AFS debt securities of $6 million and $9 million for the third quarters of 2025 and 2024, respectively.

(4)Includes $32 million of additional interest income from discount accretion and interest recoveries from the full payment on purchased credit impaired and workout loans during the three months ended September 30, 2025.

(5)Average balances include nonperforming loans and loans held-for-sale.

(6)Loans include the accretion of net deferred loan fees and amortization of net premiums, which totaled $42 million and $12 million for the third quarters of 2025 and 2024, respectively.

The following table presents the interest spread, net interest margin, average balances, interest income and expense, and the average yield/rate by asset and liability component for the first nine months of 2025 and 2024:

(2)Yields on tax-exempt securities and loans are not presented on a tax-equivalent basis.

(3)Includes the amortization of net premiums of AFS debt securities of $23 million and $26 million for the first nine months of 2025 and 2024, respectively.

(4)Includes $32 million of additional interest income from discount accretion and interest recoveries from the full payment on purchased credit impaired and workout loans during the nine months ended September 30, 2025.

(5)Average balances include nonperforming loans and loans held-for-sale.

(6)Loans include the accretion of net deferred loan fees and amortization of net premiums, which totaled $67 million and $40 million for the first nine months of 2025 and 2024, respectively.

The following table summarizes the extent to which changes in (1) interest rates, and (2) volume of average interest-earning assets and average interest-bearing liabilities affected the Company’s net interest income for the periods presented. The total change for each category of interest-earning assets and interest-bearing liabilities is segmented into changes attributable to variations in volume and yield/rate. Changes that are not solely due to either volume or yield/rate are allocated proportionally based on the absolute value of the change related to average volume and average yield/rate.