EAST WEST BANCORP INC

Note 4 —Securities

The following tables present the amortized cost, gross unrealized gains and losses, allowance for credit losses, and fair value by major categories of AFS and HTM debt securities as of March 31, 2026 and December 31, 2025:

Refer to table footnotes on the following page.

(1)Amortized cost excludes accrued interest receivables which are presented within Other assets on the Consolidated Balance Sheet. As of both March 31, 2026 and December 31, 2025, the accrued interest receivables were $54 million. For the Company’s accounting policy related to debt securities’ accrued interest receivables, see Note 1 — Summary of Significant Accounting Policies — Significant Accounting Policies — Allowance for Credit Losses on Available-for-Sale Debt Securitiesand Allowance for Credit Losses on Held-to-Maturity Debt Securities to the Consolidated Financial Statements in the Company’s 2025 Form 10-K.

(2)Includes GNMA AFS debt securities with amortized cost and fair value both totaling $10.3 billion and $9.6 billion as of March 31, 2026 and December 31, 2025, respectively.

(3)Includes GNMA HTM debt securities totaling $77 million of amortized cost and $63 million of fair value as of March 31, 2026, and $79 million of amortized cost and $65 million of fair value as of December 31, 2025.

Unrealized Losses of Available-for-Sale Debt Securities

The following tables present the fair value and the associated gross unrealized losses of the Company’s AFS debt securities in a continuous unrealized loss position, aggregated by investment category and loss duration as of March 31, 2026 and December 31, 2025.

As of March 31, 2026, the Company had 467 AFS debt securities in a gross unrealized loss position, primarily consisting of 261 U.S. government agency and U.S. government-sponsored enterprise mortgage-backed securities,45 corporate debt securities and 61 non-agency mortgage-backed securities. In comparison, as of December 31, 2025, the Company had 429 AFS debt securities in a gross unrealized loss position, primarily consisting of 222 U.S. government agency and U.S. government-sponsored enterprise mortgage-backed securities,47 corporate debt securities and 66 non-agency mortgage-backed securities.

Allowance for Credit Losses on Available-for-Sale Debt Securities

The Company evaluates each AFS debt security where the fair value declines below amortized cost. For a discussion of the factors and criteria the Company uses in analyzing securities for impairment related to credit losses, see Note 1 — Summary of Significant Accounting Policies — Significant Accounting Policies — Allowance for Credit Losses on Available-for-Sale Debt Securities to the Consolidated Financial Statements in the Company’s 2025 Form 10-K.

The gross unrealized losses presented in the preceding tables were primarily attributable to interest rate movement and the widening of liquidity and/or credit spreads. U.S. Treasury, U.S. government agency, U.S. government-sponsored agency, and U.S. government-sponsored enterprise debt and mortgage-backed securities are issued, guaranteed, or otherwise supported by the U.S. government and have a zero credit loss assumption. The remaining securities that were in an unrealized loss position as of March 31, 2026 were mainly comprised of the following:

•Corporate debt securities — The market value movement as of March 31, 2026 was primarily due to interest rate movement and spread change. A portion of the corporate debt securities is comprised of subordinated debt securities issued by U.S. banks. These securities are nearly all rated investment grade by nationally recognized statistical rating organizations (“NRSROs”) and issued by well-capitalized financial institutions with strong profitability. The contractual payments from these corporate debt securities have been and are expected to be received on time. The Company will continue to monitor the market developments in the banking sector and the credit performance of these securities.

•Non-agency mortgage-backed securities— The market value movement for the majority of these securities as of March 31, 2026 was primarily due to interest rate movement and spread change. A substantial majority of the non-agency mortgage-backed securities are rated investment grade by NRSROs or have high priority in the cash flow waterfall within the securitization structure, and the contractual payments have historically been on time. Accordingly, the Company believes the risk of credit losses on these securities is low.

As of both March 31, 2026 and December 31, 2025, the Company intended to hold the AFS debt securities with unrealized losses through the anticipated recovery period and it was more-likely-than-not that the Company would not have to sell these securities before the recovery of their amortized cost. The issuers of these securities have not, to the Company’s knowledge, established any cause for default on these securities. As a result, the Company expects to recover the entire amortized cost basis of these securities.

There wasno allowance for credit losses recorded against these securities as of March 31, 2026, compared with an allowance for credit losses of $2 million as of December 31, 2025, related to a non-agency commercial mortgage-backed security that experienced a deterioration in both its credit rating and expected cash flows, resulting in its fair value falling below amortized cost. A $192 thousand reversal of credit losses was recognized for the three months ended March 31, 2026, as a result of the sale of this security, compared withno provision for credit losses for the three months ended March 31, 2025

Allowance for Credit Losses on Held-to-Maturity Debt Securities

The Company separately evaluates its HTM debt securities for any credit losses using an expected loss model, similar to the methodology used for loans. For additional information on the Company’s credit loss methodology, refer to Note 1 — Summary of Significant Accounting Policies — Significant Accounting Policies — Allowance for Credit Losses on Held-to-Maturity Debt Securities to the Consolidated Financial Statements in the Company’s 2025 Form 10-K.

The Company monitors the credit quality of the HTM debt securities using external credit ratings. As of March 31, 2026, all HTM securities were rated investment grade by NRSROs and issued, guaranteed, or supported by U.S. government entities and agencies. Accordingly, the Company applied a zero credit loss assumption andno allowance for credit losses was recorded as of both March 31, 2026 and December 31, 2025. Overall, the Company believes that the credit support levels of the debt securities are strong and based on current assessments and macroeconomic forecasts, expects that full contractual cash flows will be received.

Realized Gains and Reversal of Credit Losses

The following table presents the gross realized gains from the sales of AFS debt securities (pre-tax), the reversal of credit losses, and the related tax expense included in earnings for the three months ended March 31, 2026 and 2025:

Interest Income

The following table presents the composition of interest income on debt securities for the three months ended March 31, 2026 and 2025:

Contractual Maturities of Available-for-Sale and Held-to-Maturity Debt Securities

The following tables present the contractual maturities, amortized cost, fair value and weighted-average yields of AFS and HTM debt securities as of March 31, 2026. Expected maturities will differ from contractual maturities on certain securities as the issuers and borrowers of the underlying collateral may have the right to call or prepay obligations with or without prepayment penalties.

(1)Weighted-average yields are computed based on amortized cost balances.

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

As of March 31, 2026 and December 31, 2025, AFS and HTM debt securities with carrying values of $4.9 billion and $4.6 billion, respectively, were pledged to secure borrowings and for other purposes required or permitted by law. As of March 31, 2026 and December 31, 2025, AFS and HTM debt securities with fair values of $6.9 billion and $4.8 billion, respectively, were prepositioned for the Federal Reserve Bank (“FRB”) Standing Repurchase Agreement Facility.

Restricted Equity Securities

The following table presents the restricted equity securities included in Other assets on the Consolidated Balance Sheet as of March 31, 2026 and December 31, 2025: