EAST WEST BANCORP INC
For the period ended Dec 31, 2025. Filed Feb 27, 2026.
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FY2025 · Filed Feb 27, 2026
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3 — Securities Purchased under Resale Agreements
Note 3 —Securities Purchased under Resale Agreements
The Company’s resale agreements expose it to credit risk from both the counterparties and the underlying collateral. The Company manages credit exposure from certain transactions by entering into master netting agreements and collateral arrangements with the counterparties. The relevant agreements allow for an efficient closeout of the transaction, liquidation and set-off of collateral against the net amount owed by the counterparty following a default. It is the Company’s policy to take possession, where possible, of the collateral underlying resale agreements. As a result of the Company’s credit risk mitigation practices with respect to resale agreements as described above, the Company did not hold any reserves for credit impairment with respect to these agreements as of both December 31, 2025 and 2024. Gross securities purchased under resale agreements were $425 million as of both December 31, 2025 and 2024.
Balance Sheet Offsetting
The Company’s resale and repurchase agreements are transacted under legally enforceable master netting agreements that, in the event of default by the counterparty, provide the Company the right to liquidate securities held and to offset receivables and payables with the same counterparty. The Company nets resale and repurchase transactions with the same counterparty on the Consolidated Balance Sheet when it has a legally enforceable master netting agreement and the transactions are eligible for netting under ASC 210-20-45-11, Balance Sheet Offsetting: Repurchase and Reverse Repurchase Agreements. Collateral received includes securities and loans that are not recognized on the Consolidated Balance Sheet. Collateral pledged consists of securities that are not netted on the Consolidated Balance Sheet against the related collateralized liability. Securities received or pledged as collateral in resale and repurchase agreements with other financial institutions may also be sold or re-pledged by the secured party, and are usually delivered to and held by third-party trustees.
The following table presents the resale agreements included on the Consolidated Balance Sheet as of December 31, 2025 and 2024:
| Gross Amounts Not Offset on the Consolidated Balance Sheet | |||||
|---|---|---|---|---|---|
| ($ in thousands) | Gross Amounts of Recognized Assets | Gross Amounts Offset on the Consolidated Balance Sheet | Net Amounts of Assets Presented on the Consolidated Balance Sheet | Collateral Received (1) | Net Amount |
| Resale agreements as of December 31, 2025 | $425,000 | $— | $425,000 | $(350,953) | $74,047 |
| Resale agreements as of December 31, 2024 | $425,000 | $— | $425,000 | $(329,603) | $95,397 |
(1)Represents the fair value of collateral the Company has received under resale agreements, limited for table presentation purposes to the amount of the recognized asset due from each counterparty. The application of collateral cannot reduce the net position below zero. Therefore, excess collateral, if any, is not reflected above.
In addition to the amounts included in the table above, the Company also has balance sheet netting related to derivatives. Refer to Note 5— Derivatives to the Consolidated Financial Statements in this Form 10-K for additional information.
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