EAST WEST BANCORP INC

Note 4 —Securities

The following tables present the amortized cost, allowance for credit losses, gross unrealized gains and losses, and fair values of the Company’s AFS and HTM debt securities by major security type as of September 30, 2026 and December 31, 2025:

(1)Amortized cost excludes accrued interest receivable, which is reported within Other assets on the Consolidated Balance Sheet. Accrued interest receivable on debt securities was $69 million as of September 30, 2026 and $54 million as of December 31, 2025. For additional information regarding the Company’s accounting policy for accrued interest receivable on debt securities, 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 of $10.5 billion and fair value of $10.0 billion as of September 30, 2026, compared with amortized cost and fair value of $9.6 billion as of December 31, 2025.

(3)Includes GNMA HTM debt securities with amortized cost of $74 million and fair value of $57 million as of September 30, 2026, compared with amortized cost of $79 million and fair value of $65 million as of December 31, 2025.

Unrealized Losses of Available-for-Sale Debt Securities

The following tables present the fair value and the 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 September 30, 2026 and December 31, 2025. As of September 30, 2026 and December 31, 2025,655 and 429 AFS debt securities, respectively, were in a gross unrealized loss position.

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

The Company evaluates AFS debt securities in unrealized loss positions on a quarterly basis to determine whether any decline in fair value below amortized cost is attributable to credit-related factors. For additional information regarding the Company’s methodology for evaluating credit losses on AFS debt securities, 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.

Gross unrealized losses presented in the preceding tables were primarily attributable to changes in interest rates and the widening of liquidity and credit spreads, and were not indicative of credit deterioration of the issuers or the underlying collateral. The majority of unrealized losses were associated with U.S. Treasury, U.S. government agency, U.S. government-sponsored agency, and U.S. government-sponsored enterprise debt and mortgage-backed securities. Given the high credit quality of these securities, including explicit or implicit support from the U.S. government, the Company does not expect to incur credit losses on these investments.

The remaining securities in an unrealized loss position as of September 30, 2026 consisted primarily of corporate debt securities and non-agency mortgage-backed securities. Substantially all corporate debt securities and a substantial majority of non-agency mortgage-backed securities were investment grade or otherwise demonstrated strong credit characteristics. The unrealized losses on these securities were primarily attributable to changes in market interest rates and credit spreads rather than deterioration in credit quality. Contractual principal and interest payments have been received as scheduled and are expected to continue. Based on its evaluation of credit quality, payment performance, and expected cash flows, the Company determined that no allowance for credit losses was required as of September 30, 2026.

As of September 30, 2026 and December 31, 2025, the Company intended to hold AFS debt securities in unrealized loss positions until recovery of their amortized cost basis and concluded that it was more likely than not it would not be required to sell these securities before such recovery. Accordingly, the Company expects to recover the entire amortized cost basis of these securities.

No allowance for credit losses was recorded against these securities as of September 30, 2026, compared with $2 million as of December 31, 2025 related to a non-agency commercial mortgage-backed security with deteriorated credit quality and expected cash flows. No provision for credit losses was recognized during the three months ended September 30, 2026. During the nine months ended September 30, 2026, the Company recognized a $192 thousand reversal of previously recorded credit losses upon the sale of the security. During the three and nine months ended September 30, 2025, the Company recognized a $3 million provision for credit losses on the same security.

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

The Company evaluates HTM debt securities for expected credit losses using a methodology that incorporates security-specific credit characteristics, historical loss experience, current conditions and other relevant qualitative and quantitative factors. For additional information regarding the Company’s methodology for evaluating credit losses on HTM debt securities, see 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 September 30, 2026, all HTM securities were rated investment grade by nationally recognized statistical rating organizations and were issued, guaranteed, or supported by U.S. government entities, agencies, or government-sponsored enterprises. Accordingly, a zero credit loss assumption was applied. Based on the high credit quality of these securities, their credit support, and the Company’s assessment of expected cash flows, no allowance for credit losses was recorded as of September 30, 2026 or December 31, 2025. The Company expects to collect all contractual principal and interest payments.

Realized Gains and Credit (Losses) Reversals

The following table presents the gross realized gains from the sales of AFS debt securities (pre-tax), credit (losses) reversals, and the related tax expense (benefit) recognized in earnings during the three and nine months ended September 30, 2026 and 2025:

Interest Income

The following table presents the interest income on debt securities, disaggregated between taxable and nontaxable interest, for the three and nine months ended September 30, 2026 and 2025:

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

The following tables present the amortized cost, fair value and weighted-average yields of AFS and HTM debt securities by contractual maturities as of September 30, 2026. Actual maturities may differ from contractual maturities because issuers and borrowers 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 September 30, 2026 and December 31, 2025, AFS and HTM debt securities with carrying values of $4.4 billion and $4.6 billion, respectively, were pledged to secure borrowings and for other purposes as required or permitted by law. Additionally, debt securities with fair values of $8.9 billion and $4.8 billion were prepositioned for the Federal Reserve Bank (“FRB”) Standing Repurchase Agreement Facility as of September 30, 2026 and December 31, 2025, respectively.

Restricted Equity Securities

The following table presents the carrying amounts of restricted equity securities included in Other assets on the Consolidated Balance Sheet as of September 30, 2026 and December 31, 2025: