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East West Bancorp (EWBC)
NASDAQ:EWBC
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East West Bancorp
(NASDAQ:EWBC)
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Rating:80Outperform
Price Target:
$133.00
â–²(10.96% Upside)
EWBC scores well due to strong profitability and a very positive earnings outlook (record results and >10% growth expectations), supported by reasonable valuation. The primary offset is weaker cash flow efficiency, while technicals are moderately constructive without being overheated.
Positive Factors
Revenue Growth
Consistent revenue growth indicates strong market demand and effective business strategies, supporting long-term financial stability.
Fee Income Expansion
Growing fee income diversifies revenue streams, reducing reliance on interest income and enhancing profitability.
Strong Asset Quality
Maintaining strong asset quality minimizes credit risk, ensuring financial resilience and protecting shareholder value.
Negative Factors
Cash Flow Challenges
Declining cash flow growth can strain liquidity, limiting investment capacity and operational flexibility over time.
Economic Uncertainty
Economic uncertainties pose risks to future performance, potentially impacting growth and financial stability.
Increased Credit Loss Allowance
Rising credit loss provisions indicate caution, potentially affecting profitability if economic conditions worsen.
East West Bancorp (EWBC) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$16.74B
Dividend Yield2.08%
Average Volume (3M)1.12M
Price to Earnings (P/E)12.8
Beta (1Y)1.10
Revenue Growth3.87%
EPS Growth14.61%
CountryUS
Employees3,100
SectorFinancial
Sector Strength70
IndustryBanks - Diversified
Share Statistics
EPS (TTM)2.55
Shares Outstanding137,585,600
10 Day Avg. Volume911,039
30 Day Avg. Volume1,116,661
Financial Highlights & Ratios
PEG Ratio5.87
Price to Book (P/B)1.72
Price to Sales (P/S)2.97
P/FCF Ratio9.42
Enterprise Value/Market Cap0.94
Enterprise Value/Revenue3.40
Enterprise Value/Gross Profit5.96
Enterprise Value/Ebitda8.17
Forecast
1Y Price Target
$131.45Price Target Upside9.67% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering12
EPS Forecast (FY)10.25
Revenue Forecast (FY)$3.11B
East West Bancorp Business Overview & Revenue Model
Company DescriptionEast West Bancorp, Inc. operates as the bank holding company for East West Bank that provides a range of personal and commercial banking services to businesses and individuals. It operates through three segments: Consumer and Business Banking, Commercial Banking, and Other. The company accepts various deposit products, such as personal and business checking and savings accounts, money market, and time deposits. Its loan products include mortgage and home equity, commercial and residential real estate, working capital lines of credit, construction, trade finance, letters of credit, commercial business, affordable housing loans, asset-based lending, asset-backed finance, project finance, and equipment financing, as well as financing services to clients needing a financial bridge to facilitate their business transactions between the United States and China. The company also provides various wealth management, treasury management, foreign exchange, and interest rate and commodity risk hedging services; and mobile and online banking services. As of January 27, 2022, it operated approximately 120 locations in the United States and China; full-service branches in Hong Kong, Shanghai, Shantou, and Shenzhen; and representative offices in Beijing, Chongqing, Guangzhou, Taipei, and Xiamen. East West Bancorp, Inc. was incorporated in 1998 and is headquartered in Pasadena, California.
How the Company Makes MoneyEast West Bancorp generates revenue primarily through net interest income, which is the difference between the interest earned on loans and the interest paid on deposits. The bank offers various loan products, including commercial real estate loans, small business loans, and personal loans, which contribute significantly to its earnings. Additionally, East West Bancorp earns non-interest income through fees associated with deposit accounts, service charges, treasury management services, and foreign exchange transactions. The bank's strategic partnerships and strong presence in Asian markets enhance its ability to facilitate international trade and investment, further contributing to its revenue stream. Overall, the bank's diversified financial services and emphasis on cross-border banking play a crucial role in its profitability.
East West Bancorp Earnings Call Summary
Earnings Call Date:Jan 22, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Apr 21, 2026
Earnings Call Sentiment Positive
The earnings call conveyed a largely positive operational and financial performance: the company reported record results across revenue, NII, fees, loans, and deposits, maintained strong capital ratios, raised the dividend by 33%, and emphasized disciplined growth and investment. Offsetting items include a conservative outlook on loan growth, an elevated allowance and higher net charge-off guidance for 2026 (20–30 bps versus 11 bps in 2025), expense growth of 7%–9% next year, and some compression in lending spreads. Overall, the strong record results, capital position, and fee momentum materially outweigh the manageable near-term headwinds and conservative guidance.Q4-2025 Updates
Positive Updates
Record Financial Results for 2025
East West Bancorp reported record levels in multiple categories for full-year 2025 including revenue, net interest income, fees, non-interest income, earnings per share, loans, and deposits. Tangible book value per share grew 17% and return on tangible common equity was 17% for 2025.
Deposit and Loan Growth
End-of-period deposits grew 6% year-over-year and end-of-period loans grew 6% year-over-year. Total average loans increased 4% for the year. Management expects loan growth of 5%–7% in 2026 driven by C&I and residential mortgage.
Strong Fee Income Expansion
Fee income reached a full-year record in 2025 and grew 12% year-over-year. Management reiterated an aspiration to continue double-digit fee growth and to grow fee income faster than overall balance sheet growth.
Net Interest Income and Deposit Cost Improvement
Fourth quarter net interest income was $658 million. Period-end cost of deposits fell by 23 basis points quarter-over-quarter; interest-bearing deposit costs have been lowered by 105 basis points since the start of the cutting cycle. Management reported a down-cycle deposit beta of 0.6 while growing total deposits by nearly $4 billion over the year.
Asset Quality Remains Healthy
Net charge-offs were low: 8 basis points ($12 million) in Q4 and 11 basis points ($60 million) for the full year 2025. Non-performing assets were stable at 26 basis points of total assets and criticized loans declined to 2.01% from 2.14% quarter-over-quarter.
Conservative and Strong Capital Position
Regulatory capital ratios remain well above requirements: Common Equity Tier 1 at 15.1% and tangible common equity at 10.5%. The Board approved a 33% increase in the quarterly dividend (up $0.20 to $0.80 per share). Management emphasized opportunistic buybacks and disciplined capital management.
Efficiency and Strategic Investment
Fourth quarter efficiency ratio was 34.5%. Operating non-interest expense grew 7.5% in 2025 as the bank invested in talent, systems, and technology to support growth. Management expects 2026 operating non-interest expense to grow 7%–9% to support strategic priorities.
Hedge Position Improving
Cash flow hedge headwind narrowed to $2 million in Q4 from much larger levels earlier in 2025 (more than $20 million per quarter previously). Management expects current hedges to be 'in the money' and potentially turn into tailwinds in 2026.
Negative Updates
Higher Net Charge-Off Guidance for 2026
Management raised its full-year 2026 net charge-off guidance to 20–30 basis points (versus 11 basis points for full-year 2025), signaling an expected increase in credit losses compared with 2025's very low levels.
Expense Growth Pressure
Operating non-interest expense grew 7.5% in 2025 and is expected to rise another 7%–9% in 2026 driven by headcount additions, IT and consulting, and other investments. Compensation grew about 12% year-over-year in 2025, indicating increased cost run-rate.
Compression in Lending Spreads
Lending spreads have compressed roughly a quarter of a percentage point (about 25 basis points) over the past year, with some additional incremental compression noted in the most recent 30–60 days—creating margin pressure on new originations.
Cautious Loan Growth Guidance
Management guided 2026 loan growth to 5%–7%, a conservative pace driven by seasonality and selectivity. Commentary emphasized disciplined, relationship-driven lending rather than aggressive share-seeking, which may be less ambitious than some investors expect.
Reserve Level Remains Elevated Relative to Credit Trends
Allowance for credit losses remained unchanged on a percentage basis quarter-over-quarter at 1.42% (increasing in absolute RMB terms from RMB791M to RMB810M). Management noted this is driven by multi-scenario modeling and serves as a conservative buffer despite strong current credit metrics.
Near-Term Liability Sensitivity and Rate Exposure
The bank remains overall asset-sensitive but noted near-term liability sensitivity that benefited Q4; however, with anticipated rate cuts and some asset sensitivity longer-term, margin dynamics could face headwinds as deposit and asset repricing evolve.
Moderate Buyback Activity
Share repurchases were described as opportunistic and were lighter this quarter compared with earlier activity. While capital is strong, management indicated no urgency for large buybacks, which may temper near-term share repurchase-driven EPS support.
Company Guidance
Management guided 2026 assuming modest economic growth and rate moves implied by the year‑end curve (they referenced about ~50 bps of cuts and also discussed a scenario of three 75‑bp cuts), and gave numeric targets: end‑of‑period loan growth of 5–7% (led by C&I and residential mortgage), net interest income growth of 5–7%, fee income to grow faster than the balance sheet (aspiring to continue double‑digit growth), total operating non‑interest expense up 7–9%, full‑year net charge‑offs of 20–30 bps (Q4 NCOs 8 bps / $12M; FY 2025 NCOs 11 bps / $60M), and an effective tax rate of 22–23%; they also declared a $0.80 quarterly dividend (33% increase). Management reiterated strong capital and balance‑sheet metrics (CET1 15.1%, tangible common equity 10.5%, TBVPS +17%, ROTCE 17%), and noted recent momentum: end‑period deposits +6% YoY, end‑period loans +6% YoY (average loans +4%), DDA 25% of deposits, period‑end cost of deposits down 23 bps QoQ, interest‑bearing deposit costs down 105 bps since the start of the cut cycle, and a down‑cycle deposit beta of ~0.6.East West Bancorp Financial Statement Overview
Summary
Strong profitability and steady revenue growth support a solid score, with improved leverage (debt-to-equity 0.38) and strong ROE (15.56%). The main drag is weak cash conversion, highlighted by sharply negative free cash flow growth (-65.34%) and a very low operating cash flow to net income ratio (0.02).Income Statement
East West Bancorp demonstrates strong profitability with a consistent increase in revenue over the years, highlighted by a TTM revenue growth rate of 2.35%. The company maintains healthy margins, with a TTM gross profit margin of 57.05% and a net profit margin of 27.14%. EBIT and EBITDA margins are also robust, indicating efficient operations. However, the slight decline in gross profit margin from previous years suggests potential cost pressures.85
Very Positive
Balance Sheet
The balance sheet reflects a solid financial position with a manageable debt-to-equity ratio of 0.38 in the TTM period, showing a decrease from previous years, which indicates improved leverage management. The return on equity is strong at 15.56%, suggesting effective use of equity capital. However, the equity ratio is not explicitly provided, which could offer additional insights into asset financing.78
Positive
Cash Flow
The cash flow statement shows a significant decline in free cash flow growth at -65.34% in the TTM period, which is a concern. The operating cash flow to net income ratio is low at 0.02, indicating potential issues in cash generation relative to net income. Despite this, the free cash flow to net income ratio remains stable at 1.0, suggesting that free cash flow is still covering net income adequately.70
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 4.65B | 4.48B | 3.95B | 2.59B | 1.89B | 1.82B |
| Gross Profit | 2.65B | 2.39B | 2.44B | 2.25B | 1.84B | 1.39B |
| EBITDA | 1.93B | 1.68B | 1.62B | 1.57B | 1.21B | 805.67M |
| Net Income | 1.26B | 1.17B | 1.16B | 1.13B | 872.98M | 567.80M |
Balance Sheet | ||||||
| Total Assets | 79.67B | 75.98B | 69.61B | 64.11B | 60.87B | 52.16B |
| Cash, Cash Equivalents and Short-Term Investments | 5.27B | 5.48B | 10.81B | 9.66B | 14.61B | 10.37B |
| Total Debt | 3.18B | 3.75B | 4.76B | 564.33M | 806.86M | 1.23B |
| Total Liabilities | 71.09B | 68.25B | 62.66B | 58.13B | 55.03B | 46.89B |
| Stockholders Equity | 8.58B | 7.72B | 6.95B | 5.98B | 5.84B | 5.27B |
Cash Flow | ||||||
| Free Cash Flow | 1.29B | 1.41B | 1.42B | 2.07B | 1.16B | 690.67M |
| Operating Cash Flow | 1.29B | 1.41B | 1.42B | 2.07B | 1.17B | 693.33M |
| Investing Cash Flow | -5.44B | -6.30B | -4.25B | -4.58B | -9.12B | -6.87B |
| Financing Cash Flow | 4.01B | 5.53B | 3.96B | 2.11B | 7.84B | 6.91B |
East West Bancorp Technical Analysis
Positive
119.86
Price Trends
115.12
Positive
108.79
Positive
103.89
Positive
Market Momentum
1.79
Negative
57.70
Neutral
63.45
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For EWBC, the sentiment is Positive. The current price of 119.86 is above the 20-day moving average (MA) of 116.86, above the 50-day MA of 115.12, and above the 200-day MA of 103.89, indicating a bullish trend. The MACD of 1.79 indicates Negative momentum. The RSI at 57.70 is Neutral, neither overbought nor oversold. The STOCH value of 63.45 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for EWBC.
East West Bancorp Risk Analysis
East West Bancorp disclosed 38 risk factors in its most recent earnings report. East West Bancorp reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
East West Bancorp Peers Comparison
UnderperformOutperform
Sector (68)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $16.74B | 12.78 | 15.94% | 2.08% | 3.87% | 14.61% | |
79 Outperform | $2.17B | 9.39 | 21.45% | 3.70% | -0.09% | 18.47% | |
72 Outperform | $133.91B | 11.83 | 18.99% | 3.27% | 7.52% | 10.40% | |
71 Outperform | $82.64B | 12.27 | 12.79% | 4.14% | 2.20% | -0.17% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% | |
60 Neutral | $90.09B | 11.45 | 10.00% | 1.71% | 17.50% | 49.25% | |
58 Neutral | $67.48B | 9.57 | 15.42% | 3.67% | 7.43% | 30.31% |
* Financial Sector Average
EWBC
East West Bancorp
119.86
28.83
31.68%
BBVA
Banco Bilbao
23.20
10.87
88.14%
BCS
Barclays
25.91
11.19
75.96%
ING
ING Groep
29.03
12.81
78.94%
NWG
NatWest Group
16.83
6.08
56.56%
NTB
Bank of NT Butterfield & Son
52.87
15.59
41.83%
East West Bancorp Corporate Events
DividendsFinancial Disclosures
East West Bancorp Posts Record 2025 Results, Hikes Dividend
Positive
Jan 22, 2026
On January 22, 2026, East West Bancorp reported record results for the full year and fourth quarter of 2025, with full-year net income rising to $1.3 billion, or $9.52 per diluted share, and fourth-quarter net income reaching $356 million, or $2.55 per diluted share. The bank posted 12% year-over-year revenue growth to $2.93 billion, a 14% increase in net income, and double-digit gains in book value and tangible book value per share, supported by a 1.70% return on average assets and a 16.0% return on average common equity. Management highlighted strong growth in business checking relationships and noninterest-bearing deposits, resilient credit quality with declining net charge-offs and criticized loans, and a 17% return on average tangible common equity, and the board approved a 33% increase in the quarterly common dividend to $0.80 per share, underscoring confidence in the company’s capital strength and commitment to delivering top-tier shareholder returns.
The most recent analyst rating on (EWBC) stock is a Buy with a $132.00 price target. To see the full list of analyst forecasts on East West Bancorp stock, see the EWBC Stock Forecast page.
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.