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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Net Interest Income
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 2025 increased year-over-year. The $274 million or 12% year-over-year increase in 2025 net interest income is primarily due to lower interest-bearing deposit funding costs and increases in the average balances of deposits, AFS debt securities and loans, partially offset by lower loan yields. The 14 bps year-over-year increase in 2025 net interest margin primarily reflected lower interest-bearing deposit costs, partially offset by an increase in AFS securities and decreases in the yield and balances of interest-bearing cash and deposits with banks.
Average interest-earning assets increased $5.2 billion or 7% to $74.9 billion in 2025. The year-over-year increase in average interest-earning assets primarily reflected increases in AFS debt securities and loan growth. The yield on average interest-earning assets was 5.73% in 2025, a decrease of 28 bps from 2024. The year-over-year decrease in the yield on average interest-earning assets primarily reflected the impact of lower benchmark interest rates of the loan portfolio.
The average loan yield was 6.40% in 2025, a decrease of 27 bps from 2024. The year-over-year decrease in the average loan yield primarily reflected the loan portfolio’s sensitivity to lower benchmark interest rates. Excluding the $32 million discount accretion and interest recoveries from the full payment on purchased credit impaired and workout loans from the 2025 loans’ interest income, the adjusted average loan yield for 2025 was 6.34%, compared with 6.67% in 2024. Adjusted average loan yield is a non-GAAP financial ratio. For additional details, refer to Item 7. MD&A — Reconciliation of GAAP to Non-GAAP Financial Measuresin this Form 10-K. Approximately 58% of loans held-for-investment were variable-rate as of both December 31, 2025 and 2024.
Deposits are an important source of funds and impact both net interest income and net interest margin. Average deposits of $64.8 billion in 2025, increased $5.2 billion or 9% from 2024. Average noninterest-bearing deposits of $15.6 billion in 2025, increased $799 million or 5% from 2024. Average noninterest-bearing deposits made up 24% and 25% of average deposits in 2025 and 2024, respectively.
The average cost of deposits was 2.46% in 2025, a decrease of 42 bps from 2024. The average cost of interest-bearing deposits was 3.24% in 2025, a decrease of 59 bps from 2024. These year-over-year decreases primarily reflected the impacts of lower benchmark interest rates and the Company’s efforts to reduce deposit costs.
The average cost of funds calculation includes deposits, short-term borrowings, FHLB advances, assets sold under repurchase agreements (“repurchase agreements”) and long-term debt. In 2025, the average cost of funds was 2.56%, a decrease of 46 bps from 2024. The year-over-year decrease was mainly driven by the change in the average cost of deposits as discussed above.
The Company utilizes various tools to manage interest rate risk. Refer to the Interest Rate Risk Management section of Item 7. MD&A — Risk Management — Market Risk Management for details.
The following table presents the interest spread, net interest margin, average balances, interest income and expense, and the average yield/rate by asset and liability component in 2025, 2024 and 2023:
| Year Ended December 31, | ||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2025 · 2024 · 2023 | ||||||||||||||||
| ($ in thousands) · Average Balance · Interest · Average Yield/Rate · Average Balance · Interest · Average Yield/Rate · Average Balance · Interest · Average Yield/Rate | ||||||||||||||||
| ASSETS | ||||||||||||||||
| Interest-earning assets: | ||||||||||||||||
| Interest-bearing cash and deposits with banks | $4,264,056 | $159,081 | 3.73% | $4,936,550 | $231,794 | 4.70% | $4,638,630 | $220,643 | 4.76% | |||||||
| Assets purchased under resale agreements (“resale agreements”) (1) | 425,000 | 6,475 | 1.52% | 519,263 | 11,254 | 2.17% | 691,223 | 20,164 | 2.92% | |||||||
| Debt securities: | ||||||||||||||||
| AFS (2)(3) | 12,516,569 | 572,959 | 4.58% | 8,811,274 | 399,280 | 4.53% | 6,105,999 | 225,592 | 3.69% | |||||||
| Held-to-maturity (“HTM”) (2) | 2,890,503 | 48,978 | 1.69% | 2,935,937 | 49,785 | 1.70% | 2,976,237 | 50,598 | 1.70% | |||||||
| Total debt securities (2) | 15,407,072 | 621,937 | 4.04% | 11,747,211 | 449,065 | 3.82% | 9,082,236 | 276,190 | 3.04% | |||||||
| Loans: | ||||||||||||||||
| Commercial and industrial (“C&I”) (2) | 17,447,333 | 1,242,165 | 7.12% | (4) | 16,492,472 | 1,294,451 | 7.85% | 15,499,899 | 1,190,940 | 7.68% | ||||||
| CRE (2) | 20,709,803 | 1,281,156 | 6.19% | 20,316,013 | 1,292,973 | 6.36% | 19,824,272 | 1,227,795 | 6.19% | |||||||
| Residential mortgage | 16,420,367 | 968,689 | 5.90% | 15,504,795 | 900,514 | 5.81% | 14,155,784 | 750,813 | 5.30% | |||||||
| Other consumer | 47,456 | 2,651 | 5.59% | 55,500 | 3,041 | 5.48% | 65,181 | 3,198 | 4.91% | |||||||
| Total loans (2)(5)(6) | 54,624,959 | 3,494,661 | 6.40% | (4) | 52,368,780 | 3,490,979 | 6.67% | 49,545,136 | 3,172,746 | 6.40% | ||||||
| Restricted equity securities | 161,400 | 11,242 | 6.97% | 147,080 | 10,104 | 6.87% | 82,177 | 4,062 | 4.94% | |||||||
| Total interest-earning assets | $74,882,487 | $4,293,396 | 5.73% | $69,718,884 | $4,193,196 | 6.01% | $64,039,402 | $3,693,805 | 5.77% | |||||||
| Noninterest-earning assets: | ||||||||||||||||
| Cash and due from banks | 386,798 | 345,056 | 555,689 | |||||||||||||
| Allowance for loan, lease, and securities’ losses | (763,105) | (688,448) | (625,785) | |||||||||||||
| Other assets | 3,393,682 | 3,446,350 | 3,788,199 | |||||||||||||
| Total assets | $77,899,862 | $72,821,842 | $67,757,505 | |||||||||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||||||||
| Interest-bearing liabilities: | ||||||||||||||||
| Checking deposits | $7,589,980 | $183,262 | 2.41% | $7,731,828 | $221,367 | 2.86% | $7,658,414 | $179,200 | 2.34% | |||||||
| Money market deposits | 15,685,199 | 488,496 | 3.11% | 13,970,375 | 525,870 | 3.76% | 11,680,540 | 399,482 | 3.42% | |||||||
| Savings deposits | 1,719,422 | 13,519 | 0.79% | 1,770,041 | 17,764 | 1.00% | 2,128,943 | 15,573 | 0.73% | |||||||
| Time deposits | 24,256,155 | 909,252 | 3.75% | 21,400,834 | 955,173 | 4.46% | 16,301,856 | 611,295 | 3.75% | |||||||
| Total interest-bearing deposits | 49,250,756 | 1,594,529 | 3.24% | 44,873,078 | 1,720,174 | 3.83% | 37,769,753 | 1,205,550 | 3.19% | |||||||
| Bank Term Funding Program (“BTFP”), short-term borrowings and federal funds purchased | 740 | 22 | 2.97% | 962,061 | 42,163 | 4.38% | 3,591,114 | 157,002 | 4.37% | |||||||
| FHLB advances | 3,181,509 | 141,472 | 4.45% | 2,752,733 | 147,269 | 5.35% | 123,288 | 6,430 | 5.22% | |||||||
| Repurchase agreements | 46,199 | 2,082 | 4.51% | 3,613 | 197 | 5.45% | 34,443 | 1,497 | 4.35% | |||||||
| Long-term debt and finance lease liabilities | 35,780 | 2,662 | 7.44% | 58,467 | 4,677 | 8.00% | 152,790 | 11,072 | 7.25% | |||||||
| Total interest-bearing liabilities | $52,514,984 | $1,740,767 | 3.31% | $48,649,952 | $1,914,480 | 3.94% | $41,671,388 | $1,381,551 | 3.32% | |||||||
| Noninterest-bearing liabilities and stockholders’ equity: | ||||||||||||||||
| Demand deposits | 15,598,605 | 14,799,961 | 17,192,978 | |||||||||||||
| Accrued expenses and other liabilities | 1,509,865 | 2,056,755 | 2,410,154 | |||||||||||||
| Stockholders’ equity | 8,276,408 | 7,315,174 | 6,482,985 | |||||||||||||
| Total liabilities and stockholders’ equity | $77,899,862 | $72,821,842 | $67,757,505 | |||||||||||||
| Interest rate spread | 2.42% | 2.07% | 2.45% | |||||||||||||
| Net interest income and net interest margin | $2,552,629 | 3.41% | $2,278,716 | 3.27% | $2,312,254 | 3.61% | ||||||||||
(1)Includes the average balances and interest income for securities and loans purchased under resale agreements for 2023. There were no loans purchased under resale agreements for both 2025 and 2024.
(2)Yields on tax-exempt debt securities and loans are not presented on a tax-equivalent basis.
(3)Includes the amortization of net premiums on AFS debt securities of $26 million, $35 million and $31 million for 2025, 2024 and 2023, 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 twelve months ended December 31, 2025. Refer to Item 7. MD&A — Reconciliation of GAAP to Non-GAAP Financial Measuresin this Form 10-K.
(5)Average balances include nonperforming loans and loans held-for-sale.
(6)Includes the accretion of net deferred loan fees and amortization of net premiums, which totaled $81 million for 2025 and $53 million for each of 2024 and 2023.
The following table summarizes the extent to which changes in (1) interest rates, and (2) volume of average interest-earning assets and average interest-bearing liabilities affected the Company’s net interest income for the periods presented. The total change for each category of interest-earning assets and interest-bearing liabilities is segmented into changes attributable to variations in volume and yield/rate. Changes that are not solely due to either volume or yield/rate are allocated proportionally based on the absolute value of the change related to average volume and average yield/rate.
| Year Ended December 31, | ||||||
|---|---|---|---|---|---|---|
| 2025 vs. 2024 · 2024 vs. 2023 | ||||||
| Changes Due to | Changes Due to | |||||
| ($ in thousands) | Total Change | Volume | Yield/Rate | Total Change | Volume | Yield/Rate |
| Interest-earning assets: | ||||||
| Interest-bearing cash and deposits with banks | $(72,713) | $(28,990) | $(43,723) | $11,151 | $14,019 | $(2,868) |
| Resale agreements (1) | (4,779) | (1,813) | (2,966) | (8,910) | (4,382) | (4,528) |
| Debt securities: | ||||||
| AFS | 173,679 | 169,573 | 4,106 | 173,688 | 114,930 | 58,758 |
| HTM | (807) | (770) | (37) | (813) | (684) | (129) |
| Total debt securities | 172,872 | 168,803 | 4,069 | 172,875 | 114,246 | 58,629 |
| Loans: | ||||||
| C&I | (52,286) | 72,271 | (124,557) | 103,511 | 77,492 | 26,019 |
| CRE | (11,817) | 24,775 | (36,592) | 65,178 | 30,853 | 34,325 |
| Residential mortgage | 68,175 | 53,837 | 14,338 | 149,701 | 74,955 | 74,746 |
| Other consumer | (390) | (448) | 58 | (157) | (506) | 349 |
| Total loans | 3,682 | 150,435 | (146,753) | 318,233 | 182,794 | 135,439 |
| Restricted equity securities | 1,138 | 996 | 142 | 6,042 | 4,045 | 1,997 |
| Total interest and dividend income | $100,200 | $289,431 | $(189,231) | $499,391 | $310,722 | $188,669 |
| Interest-bearing liabilities: | ||||||
| Checking deposits | $(38,105) | $(3,994) | $(34,111) | $42,167 | $1,734 | $40,433 |
| Money market deposits | (37,374) | 59,918 | (97,292) | 126,388 | 83,521 | 42,867 |
| Savings deposits | (4,245) | (495) | (3,750) | 2,191 | (2,930) | 5,121 |
| Time deposits | (45,921) | 118,165 | (164,086) | 343,878 | 213,823 | 130,055 |
| Total interest-bearing deposits | (125,645) | 173,594 | (299,239) | 514,624 | 296,148 | 218,476 |
| BTFP, short-term borrowings and federal funds purchased | (42,141) | (42,104) | (37) | (114,839) | (115,219) | 380 |
| FHLB advances | (5,797) | 21,081 | (26,878) | 140,839 | 140,669 | 170 |
| Repurchase agreements | 1,885 | 1,925 | (40) | (1,300) | (1,606) | 306 |
| Long-term debt and finance lease liabilities | (2,015) | (1,707) | (308) | (6,395) | (7,443) | 1,048 |
| Total interest expense | $(173,713) | $152,789 | $(326,502) | $532,929 | $312,549 | $220,380 |
| Changes in net interest income | $273,913 | $136,642 | $137,271 | $(33,538) | $(1,827) | $(31,711) |
(1)Includes the average balances and interest income for securities and loans purchased under resale agreements for 2023. There were no loans purchased under resale agreements for both 2025 and 2024.
The text of this filing, as the company filed it with the SEC, without its images or exhibits. This is not investment advice.