EAST WEST BANCORP INC

The Company organizes its operations into three reportable operating segments: (1) Consumer and Business Banking; (2) Commercial Banking; and (3) Treasury and Other. These segments are defined based on customer type, the channels through which customers are served, and the products and services provided. For a description of the Company’s internal management reporting process, including the segment cost allocation methodology, see Note 13 — Business Segments to the Consolidated Financial Statements in this Form 10-Q.

Segment net interest income represents the difference between actual interest earned on assets and interest incurred on liabilities of the segment, adjusted for funding charges or credits through the Company’s internal funds transfer pricing (“FTP”) process.

Consumer and Business Banking

The Consumer and Business Banking segment primarily provides financial products and services to consumer and commercial customers through the Company’s domestic branch network and digital banking platforms. This segment offers consumer and commercial deposits, mortgage and home equity loans, and other products and services. It also originates commercial loans for small- and medium-sized enterprises through the Company’s branch network. Other products and services provided by this segment include wealth management, private banking, treasury management, interest rate risk hedging and foreign exchange services.

The following table presents financial information for the Consumer and Business Banking segment for the periods indicated:

Consumer and Business Banking segment net income decreased $2 million or 2% year-over-year to $121 million for the first quarter of 2026, primarily driven by an $8 million increase in compensation and employee benefits and a $5 million increase in other noninterest expense, partially offset by an $8 million increase in noninterest income. The increase in noninterest income was mainly driven by higher wealth management fee income in the first quarter of 2026. The compensation and employee benefits increase was primarily due to higher incentive compensation, increased wealth management commissions and staffing growth. The increase in other noninterest expense was mainly driven by higher allocated corporate overhead expenses.

Commercial Banking

The Commercial Banking segment primarily generates commercial loan and deposit products. Commercial loan products include CRE lending, construction finance, commercial business lending, working capital lines of credit, trade finance, letters of credit, affordable housing lending, asset-based lending, asset-backed finance, project finance, equipment financing, and loan syndication. Commercial deposit products and other financial services include treasury management, foreign exchange services, and interest rate and commodity risk hedging.

The following table presents financial information for the Commercial Banking segment for the periods indicated:

(1)Prior period balances have been reclassified for comparability due to a change in allocation methodology.

Commercial Banking segment net income increased $14 million or 12% year-over-year to $128 million for the first quarter of 2026, primarily driven by a $14 million decrease in provision for credit losses, an $8 million increase in net interest income and a $6 million decrease in other noninterest expense, partially offset by a $14 million increase in compensation and employee benefits. The net interest income increase was primarily due to commercial loan and deposit growth, leading to higher interest earnings and internal FTP credits from deposits in the first quarter of 2026, respectively. The decrease in provision for credit losses was driven by a more stable macroeconomic environment for C&I loans in the first quarter of 2026. The increase in compensation and employee benefits was primarily driven by higher incentive compensation and staffing growth. The decrease in other noninterest expense was mainly due to lower OREO and loan related expenses in the first quarter of 2026.

Treasury and Other

Centralized functions, including the corporate treasury activities of the Company, tax credit investment activities, eliminations of inter-segment amounts, and centrally managed departments, have been aggregated and included in the Treasury and Other segment.

The following table presents financial information for the Treasury and Other segment for the periods indicated:

NM — Not meaningful.

(1)Reallocated to the Commercial Banking and Consumer and Business Banking segments effective first quarter of 2026.

(2)Prior period balances have been reclassified for comparability due to a change in allocation methodology.

The Treasury and Other segment income before income taxes increased $59 million for the first quarter of 2026, primarily driven by a $63 million increase in net interest income, partially offset by a $4 million increase in compensation and employee benefits and a $3 million increase in other noninterest expense. The net interest income increase was mainly driven by lower net internal FTP credits for deposits to other business segments, lower interest expense on FHLB advances, and higher interest income on debt securities during the first quarter of 2026. The compensation and employee benefits increase was primarily driven by higher incentive compensation and staffing growth. The other noninterest expense increase was primarily driven by higher amortization of tax credit and CRA investments.

Income tax expense is allocated to the Consumer and Business Banking and the Commercial Banking segments by applying statutory income tax rates to the respective segment income before income taxes. The income tax expense or benefit in the Treasury and Other segment consists of the remaining unallocated income tax expense or benefit after allocating income tax expense to the two core segments, and reflects the impact of tax credit investment activity.