FULLTEXT DEL 4 AV 4
10-K – 2026-02-27 – ewbc-20251231.htm
(1) During 2023, the Company recognized $ 7 million in net losses on AFS securities as a component of Noninterest income in the Company’s Consolidated Statement of Income, consisting of a $ 10 million impairment write-off on a subordinated debt security, partially offset by a $ 3 million gain on the sale of the same security.
Interest Income
The following table presents the composition of interest income on debt securities for the years ended December 31, 2025, 2024 and 2023:
Year Ended December 31,
($ in thousands) 2025 2024 2023
Taxable interest $ 607,311 $ 429,003 $ 255,475
Nontaxable interest 14,626 20,062 20,715
Total interest income on debt securities $ 621,937 $ 449,065 $ 276,190
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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 December 31, 2025. 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.
($ in thousands) Within One Year After One Year through Five Years
After Five Years through Ten Years After Ten Years Total
AFS debt securities:
U.S. Treasury securities
Amortized cost $ 440,969 $ 472,570 $ 96,514 $ — $ 1,010,053
Fair value 432,148 465,270 96,495 — 993,913
Weighted-average yield (1)
1.11 % 2.75 % 3.84 % — % 2.14 %
U.S. government agency and U.S. government-sponsored enterprise debt securities
Amortized cost — 26,677 203,514 57,496 287,687
Fair value — 26,256 182,396 49,002 257,654
Weighted-average yield (1)
— % 1.58 % 2.07 % 2.16 % 2.04 %
U.S. government agency and U.S. government-sponsored enterprise mortgage-backed securities
Amortized cost — 53,961 98,540 10,391,777 10,544,278
Fair value — 52,339 91,020 10,254,632 10,397,991
Weighted-average yield (1) (2)
— % 2.82 % 2.83 % 4.79 % 4.76 %
Municipal securities
Amortized cost 7,300 19,206 22,614 228,155 277,275
Fair value 7,219 18,679 19,438 197,766 243,102
Weighted-average yield (1) (2)
1.15 % 2.50 % 2.40 % 2.26 % 2.26 %
Non-agency mortgage-backed securities
Amortized cost — 1,324 — 665,871 667,195
Fair value — 1,320 — 583,415 584,735
Weighted-average yield (1)
— % 3.35 % — % 2.28 % 2.28 %
Corporate debt securities
Amortized cost 15,158 26,500 437,500 75,000 554,158
Fair value 15,116 26,204 361,829 61,832 464,981
Weighted-average yield (1)
4.07 % 5.23 % 2.38 % 2.09 % 2.53 %
Foreign government bonds
Amortized cost 118,665 28,584 50,000 50,000 247,249
Fair value 118,935 28,751 49,904 40,865 238,455
Weighted-average yield (1)
2.31 % 1.81 % 4.34 % 1.50 % 2.50 %
Asset-backed securities
Amortized cost — — — 31,886 31,886
Fair value — — — 31,389 31,389
Weighted-average yield (1)
— % — % — % 4.65 % 4.65 %
Total AFS debt securities
Amortized cost $ 582,092 $ 628,822 $ 908,682 $ 11,500,185 $ 13,619,781
Fair value $ 573,418 $ 618,819 $ 801,082 $ 11,218,901 $ 13,212,220
Weighted-average yield (1)
1.44 % 2.76 % 2.63 % 4.55 % 4.21 %
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($ in thousands) Within One Year After One Year through Five Years
After Five Years through Ten Years After Ten Years Total
HTM debt securities:
U.S. Treasury securities
Amortized cost $ — $ 540,666 $ — $ — $ 540,666
Fair value — 524,887 — — 524,887
Weighted-average yield (1)
— % 1.05 % — % — % 1.05 %
U.S. government agency and U.S. government-sponsored enterprise debt securities
Amortized cost — 105,467 556,098 345,490 1,007,055
Fair value — 97,497 479,123 283,514 860,134
Weighted-average yield (1)
— % 1.37 % 1.91 % 2.04 % 1.90 %
U.S. government agency and U.S. government-sponsored enterprise mortgage-backed securities
Amortized cost — 48,732 178,114 910,028 1,136,874
Fair value — 45,124 153,739 744,364 943,227
Weighted-average yield (1) (2)
— % 1.48 % 1.81 % 1.67 % 1.68 %
Municipal securities
Amortized cost — — 13,958 171,505 185,463
Fair value — — 12,638 138,860 151,498
Weighted-average yield (1) (2)
— % — % 2.35 % 1.99 % 2.02 %
Total HTM debt securities
Amortized cost $ — $ 694,865 $ 748,170 $ 1,427,023 $ 2,870,058
Fair value $ — $ 667,508 $ 645,500 $ 1,166,738 $ 2,479,746
Weighted-average yield (1)
— % 1.13 % 1.89 % 1.79 % 1.66 %
(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 December 31, 2025 and 2024, AFS and HTM debt securities with carrying values of $ 4.6 billion and $ 5.4 billion, respectively, were pledged to secure borrowings and for other purposes required or permitted by law. As of December 31, 2025, $ 4.6 billion of AFS and HTM debt securities were prepositioned for the 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 December 31, 2025 and 2024:
December 31,
($ in thousands) 2025 2024
FRB of San Francisco stock
$ 66,179 $ 63,930
FHLB stock 87,305 101,329
Total restricted equity securities $ 153,484 $ 165,259
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Note 5 — Derivatives
The Company uses derivative instruments to manage exposure to market risk, primarily interest rate and foreign currency risks, as well as to assist customers with their risk management objectives. The Company’s goal is to manage interest rate sensitivity and volatility to mitigate the effect of interest rate changes on earnings or capital. The Company also uses foreign exchange contracts to manage the foreign exchange rate risk associated with certain foreign currency-denominated assets and liabilities, the funding needs, as well as the Bank’s investment in EWCN. The Company recognizes all derivatives on the Consolidated Balance Sheet at fair value. While the Company designates certain derivatives as hedging instruments in a qualifying hedge accounting relationship, other derivatives serve as economic hedges. For additional information on the Company’s derivatives and hedging activities, see Note 1 — Summary of Significant Accounting Policies — Significant Accounting Policies — Derivatives to the Consolidated Financial Statements in this Form 10-K.
The following table presents the notional amounts and fair values of the Company’s derivatives as of December 31, 2025 and 2024. Certain derivative contracts are cleared through central clearing organizations where variation margin is applied daily as settlement to the fair values of the contracts. The fair values are presented on a gross basis prior to the application of bilateral collateral and master netting agreements, but after the application of variation margin payments as settlement to fair values of contracts cleared through central clearing organizations. Applying variation margin payments as settlement to the fair values of derivative contracts cleared through the London Clearing House (“LCH”) and the Chicago Mercantile Exchange (“CME”) resulted in reductions in the derivative asset and liability fair values of $ 16 million and $ 3 million, respectively, as of December 31, 2025. In comparison, applying variation margin payments as settlement to LCH- and CME-cleared derivative transactions resulted in reductions in the derivative asset and liability fair values of $ 17 million and $ 15 million, respectively, as of December 31, 2024. Total gross derivative asset and liability fair values are then adjusted to reflect the effects of legally enforceable master netting agreements and cash collateral received or paid. The resulting net derivative asset and liability fair values are included in Other assets and Accrued expenses and other liabilities , respectively, on the Consolidated Balance Sheet.
December 31, 2025 December 31, 2024
Fair Value Fair Value
($ in thousands) Notional Amount Assets Liabilities Notional Amount Assets Liabilities
Derivatives designated as hedging instruments:
Cash flow hedges:
Interest rate contracts $ 4,250,000 $ 39,997 $ 139 $ 5,250,000 $ 5,647 $ 35,211
Derivatives not designated as hedging instruments:
Interest rate contracts $ 18,987,277 $ 258,561 $ 256,731 $ 17,005,381 $ 379,664 $ 378,961
Commodity contracts (1)
— 66,022 72,158 — 48,499 45,328
Foreign exchange contracts 4,550,101 44,340 43,160 5,201,460 89,083 71,254
Credit contracts (2)
303,421 25 51 168,999 1 12
Equity contracts — 522 (3) 13,734 (4) — 239 (3) 15,119 (4)
Total derivatives not designated as hedging instruments $ 23,840,799 $ 369,470 $ 385,834 $ 22,375,840 $ 517,486 $ 510,674
Gross derivative assets/liabilities $ 409,467 $ 385,973 $ 523,133 $ 545,885
Less: Master netting agreements ( 74,138 ) ( 74,138 ) ( 111,124 ) ( 111,124 )
Less: Cash collateral received/paid ( 183,387 ) ( 27,502 ) ( 316,168 ) ( 1,160 )
Net derivative assets/liabilities $ 151,942 $ 284,333 $ 95,841 $ 433,601
(1) The notional amount of the Company’s commodity contracts totaled 16 million barrels of crude oil and 364 million units of natural gas, measured in million British thermal units (“MMBTUs”) as of December 31, 2025. In comparison, the notional amount of the Company’s commodity contracts totaled 21 million barrels of crude oil and 407 million MMBTUs of natural gas as of December 31, 2024.
(2) The notional amount for the credit contracts reflects the Company’s pro-rata share of the notional amount in the underlying derivative instruments in RPAs.
(3) The Company held warrant equity contracts in nine and eight private companies as of December 31, 2025 and 2024, respectively.
(4) Equity contracts classified as derivative liabilities consist of 349 thousand performance-based RSUs granted as part of EWBC’s consideration in an investment.
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Derivatives Designated as Hedging Instruments
Cash Flow Hedges — The Company uses interest rate swaps and collars to hedge the variability in the interest amount received on certain floating-rate commercial loans due to changes in the contractually specified interest rates. As of December 31, 2025, interest rate contracts in notional amounts of $ 4.3 billion were designated as cash flow hedges to convert certain variable-rate loans from floating-rate payments to fixed-rate payments. Gains and losses on the hedging derivative instruments are recognized in AOCI and reclassified to earnings in the same period the hedged cash flows impact earnings and are recorded within the same income statement line item as the hedged cash flows. Considering the interest rates, yield curve and notional amount as of December 31, 2025, the Company expects to reclassify an estimated $ 8 million of after-tax net gains on derivative instruments designated as cash flow hedges from AOCI into earnings during the next 12 months.
The following table presents the pre-tax changes in AOCI from cash flow hedges for the years ended December 31, 2025, 2024 and 2023. The after-tax impact of cash flow hedges on AOCI is shown in Note 15 — Accumulated Other Comprehensive (Loss) Income to the Consolidated Financial Statements in this Form 10-K.
Year Ended December 31,
($ in thousands) 2025 2024 2023
Gains (losses) recognized in AOCI:
Interest rate contracts
$ 48,016 $ ( 124,382 ) $ ( 5,767 )
Losses (gains) reclassified from AOCI into earnings:
Interest expense (for cash flow hedges on borrowings) $ — $ — $ ( 696 )
Interest and dividend income (for cash flow hedges on loans) 20,959 91,083 82,153
Noninterest income — — ( 1,614 ) (1)
Total $ 20,959 $ 91,083 $ 79,843
(1) Represents the amounts in AOCI reclassified into earnings resulting from forecasted cash flows that were no longer probable to occur.
Net Investment Hedges — The Company entered into foreign currency forward contracts to hedge a portion of the Bank’s investment in EWCN, a non-USD functional currency subsidiary in China. The hedging instruments designated as net investment hedges were used to hedge against the risk of adverse changes in the foreign currency exchange rate of the Chinese Renminbi. There was no active net investment hedge during the year ended December 31, 2025. The following table presents the pre-tax gains recognized in AOCI on net investment hedges for the years ended December 31, 2025, 2024 and 2023:
Year Ended December 31,
($ in thousands) 2025 2024 2023
Gains recognized in AOCI
$ — $ 586 $ 2,571
Derivatives Not Designated as Hedging Instruments
Customer-Related Positions and Economic Hedge Derivatives — The Company enters into interest rate, commodity, and foreign exchange derivatives at the request of its customers and generally enters into offsetting derivative contracts with third-party financial institutions to mitigate the inherent market risk. The Company also utilizes foreign exchange contracts to mitigate the effect of currency fluctuations on certain foreign currency-denominated on-balance sheet assets and liabilities, primarily foreign currency denominated deposits that it offers to its customers, as well as to meet its funding needs in certain foreign currencies. A majority of the foreign exchange contracts had original maturities of one year or less as of both December 31, 2025 and 2024.
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The following table presents the notional amounts and the gross fair values of the interest rate and foreign exchange derivatives entered into with customers and with third-party financial institutions as economic hedges to customers’ positions as of December 31, 2025 and 2024:
December 31, 2025 December 31, 2024
Fair Value Fair Value
($ in thousands) Notional Amount Assets Liabilities Notional Amount Assets Liabilities
Customer-related positions:
Interest rate contracts:
Swaps $ 7,566,889 $ 47,448 $ 206,794 $ 6,854,372 $ 11,828 $ 361,256
Written options 1,463,110 — 1,900 1,458,428 — 4,953
Collars and corridors 444,604 311 20 181,039 80 440
Subtotal 9,474,603 47,759 208,714 8,493,839 11,908 366,649
Foreign exchange contracts:
Forwards and spot 1,156,203 23,661 2,831 996,486 11,693 24,201
Swaps 785,956 13,272 661 1,504,469 16,117 25,366
Written options 63,460 — 73 — — —
Subtotal 2,005,619 36,933 3,565 2,500,955 27,810 49,567
Total $ 11,480,222 $ 84,692 $ 212,279 $ 10,994,794 $ 39,718 $ 416,216
Economic hedges and other:
Interest rate contracts:
Swaps $ 7,604,959 $ 208,860 $ 47,682 $ 6,872,075 $ 362,323 $ 12,228
Purchased options 1,463,110 1,922 — 1,458,428 4,990 —
Collars and corridors
444,605 20 335 181,039 443 84
Subtotal 9,512,674 210,802 48,017 8,511,542 367,756 12,312
Foreign exchange contracts:
Forwards and spot 234,278 1,602 3,498 86,750 2,318 1,738
Swaps 2,246,744 5,718 36,083 2,613,755 58,955 19,949
Purchased options 63,460 87 14 — — —
Subtotal 2,544,482 7,407 39,595 2,700,505 61,273 21,687
Total $ 12,057,156 $ 218,209 $ 87,612 $ 11,212,047 $ 429,029 $ 33,999
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The Company enters into energy commodity contracts with its customers in the oil and gas sector, which allow them to hedge against the risk of fluctuation in energy commodity prices. Offsetting contracts entered with third-party financial institutions are used as economic hedges to manage the Company’s exposure on its customer-related positions. The following table presents the notional amounts in units and the gross fair values of the commodity derivatives issued for customer-related positions and economic hedges as of December 31, 2025 and 2024:
December 31, 2025 December 31, 2024
Fair Value Fair Value
($ and units in thousands) Notional Units Assets Liabilities Notional Units Assets Liabilities
Customer-related positions:
Commodity contracts:
Crude oil:
Swaps 4,255 Barrels $ 205 $ 28,533 4,830 Barrels $ 4,682 $ 6,874
Collars 3,747 Barrels 21 13,622 5,477 Barrels 1,604 3,362
Subtotal 8,002 Barrels 226 42,155 10,307 Barrels 6,286 10,236
Natural gas:
Swaps 112,599 MMBTUs 5,814 18,403 141,736 MMBTUs 13,095 17,708
Collars 71,945 MMBTUs 1,879 6,693 62,045 MMBTUs 6,061 4,556
Written options — MMBTUs — — 1,234 MMBTUs 167 —
Subtotal 184,544 MMBTUs 7,693 25,096 205,015 MMBTUs 19,323 22,264
Total $ 7,919 $ 67,251 $ 25,609 $ 32,500
Economic hedges:
Commodity contracts:
Crude oil:
Swaps 4,255 Barrels $ 25,309 $ 11 4,830 Barrels $ 4,479 $ 3,893
Collars 3,747 Barrels 8,724 21 5,477 Barrels 1,547 76
Subtotal 8,002 Barrels 34,033 32 10,307 Barrels 6,026 3,969
Natural gas:
Swaps 110,506 MMBTUs 18,258 3,963 139,136 MMBTUs 13,323 5,056
Collars 68,965 MMBTUs 5,812 912 61,341 MMBTUs 3,541 3,650
Purchased options — MMBTUs — — 1,234 MMBTUs — 153
Subtotal 179,471 MMBTUs 24,070 4,875 201,711 MMBTUs 16,864 8,859
Total $ 58,103 $ 4,907 $ 22,890 $ 12,828
Credit Contracts — The Company periodically enters into credit RPAs with institutional counterparties to manage the credit exposure of the interest rate contracts associated with syndicated loans. Under the RPAs, a portion of the credit exposure is transferred from one party (the purchaser of credit protection) to another party (the seller of credit protection). The seller of credit protection is required to make payments to the purchaser of credit protection if the underlying borrower defaults on the related interest rate contract. The Company may enter into protection sold or protection purchased RPAs. Credit risk on RPAs is managed by monitoring the credit worthiness of the borrowers and the institutional counterparties, which is a part of the Company’s normal credit review and monitoring process. Assuming the underlying borrowers referenced in the interest rate contracts defaulted, the maximum exposure in the credit protection sold RPAs would be $ 590 thousand and $ 170 thousand as of December 31, 2025 and 2024, respectively.
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The following table presents the notional amounts and the gross fair values of RPAs sold and purchased outstanding as of December 31, 2025 and 2024:
December 31, 2025 December 31, 2024
Fair Value Fair Value
($ in thousands) Notional Amount Assets Liabilities Notional Amount Assets Liabilities
RPAs — protection sold (1)
$ 133,756 $ — $ 51 $ 133,174 $ — $ 12
RPAs — protection purchased
169,665 25 — 35,825 1 —
Total RPAs $ 303,421 $ 25 $ 51 $ 168,999 $ 1 $ 12
(1) All reference entities of the protection sold RPAs were investment grade. The weighted-average remaining maturities were 2.7 years and 1.6 years as of December 31, 2025 and 2024, respectively.
Equity Contracts — As part of the loan origination process, the Company may obtain warrants to purchase the preferred and/or common stock of its borrowers’ companies, which are mainly in the technology and life sciences sectors. Warrants grant the Company the right to buy a certain class of the underlying company’s equity at a certain price before expiration. In connection with an investment the Company made during the third quarter of 2023, the Company granted performance-based RSUs as part of its consideration. The vesting of these equity contracts is contingent on the investee meeting certain financial performance targets during the future performance period. For additional information on these equity contracts, refer to Note 2 — Fair Value Measurement and Fair Value of Financial Instruments to the Consolidated Financial Statements in this Form 10-K.
The following table presents the net gains (losses) due to fair value changes that are recognized on the Company’s Consolidated Statement of Income related to derivatives not designated as hedging instruments for the years ended December 31, 2025, 2024 and 2023:
Year Ended December 31,
($ in thousands) Classification on Consolidated Statement of Income 2025 2024 2023
Derivatives not designated as hedging instruments:
Interest rate contracts Customer derivative income, net of mark-to-market adjustments $ ( 3,142 ) $ 549 $ ( 2,989 )
Foreign exchange contracts Foreign exchange income 52,295 54,073 52,817
Credit contracts Customer derivative income, net of mark-to-market adjustments ( 15 ) — ( 1 )
Equity contracts - warrants Lending and loan servicing fees 283 ( 97 ) 13
Equity contracts - performance-based RSUs
Other investment income
1,385 — —
Commodity contracts Customer derivative income, net of mark-to-market adjustments 960 929 ( 25 )
Net gains $ 51,766 $ 55,454 $ 49,815
Credit-Risk-Related Contingent Features — Certain of the Company’s over-the-counter derivative contracts contain early termination provisions that require the Company to settle any outstanding balances upon the occurrence of a specified credit-risk-related event. Such an event primarily relates to a downgrade of the credit rating of East West Bank to below investment grade. As of December 31, 2025, the aggregate fair value amounts of all derivative instruments with credit risk-related contingent features that were in a net liability position totaled $ 3 million, for which $ 3 million collateral was posted to cover these positions. In comparison, as of December 31, 2024, the aggregate fair value amounts of all derivative instruments with credit risk-related contingent features that were in a net liability position totaled $ 1 million, for which $ 1 million collateral was posted to cover these positions. In the event that the credit rating of East West Bank had been downgraded to below investment grade, the Company would have been required to post minimal additional collateral as of both December 31, 2025 and 2024.
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Offsetting of Derivatives
The following tables present the gross derivative fair values, the balance sheet netting adjustments, and the resulting net fair values recorded on the Consolidated Balance Sheet, as well as the cash and noncash collateral associated with master netting arrangements. The gross fair values of derivative assets and liabilities are presented after the application of variation margin payments as settlements to the fair values of contracts cleared through central clearing organizations, where applicable. The collateral amounts in the following tables are limited to the outstanding balances of the related asset or liability. Therefore, instances of over-collateralization are not shown:
($ in thousands) As of December 31, 2025
Gross Amounts Offset on the Consolidated Balance Sheet
Net Amounts Presented on the Consolidated Balance Sheet Gross Amounts Not Offset on the Consolidated Balance Sheet
Gross Amounts Recognized (1)
Master Netting Arrangements Cash Collateral Received (3)
Security Collateral Received (5)
Net Amount
Derivative assets $ 409,467 $ ( 74,138 ) $ ( 183,387 )
$ 151,942 $ ( 42,779 )
$ 109,163
Gross Amounts Offset on the Consolidated Balance Sheet
Net Amounts Presented on the Consolidated Balance Sheet Gross Amounts Not Offset on the Consolidated Balance Sheet
Gross Amounts Recognized (2)
Master Netting Arrangements Cash Collateral Pledged (4)
Security Collateral Pledged (5)
Net Amount
Derivative liabilities $ 385,973 $ ( 74,138 ) $ ( 27,502 )
$ 284,333 $ —
$ 284,333
($ in thousands) As of December 31, 2024
Gross Amounts Offset on the Consolidated Balance Sheet
Net Amounts Presented on the Consolidated Balance Sheet Gross Amounts Not Offset on the Consolidated Balance Sheet
Gross Amounts Recognized (1)
Master Netting Arrangements Cash Collateral Received (3)
Security Collateral Received (5)
Net Amount
Derivative assets $ 523,133 $ ( 111,124 ) $ ( 316,168 ) $ 95,841 $ ( 55,222 ) $ 40,619
Gross Amounts Offset on the Consolidated Balance Sheet
Net Amounts Presented on the Consolidated Balance Sheet Gross Amounts Not Offset on the Consolidated Balance Sheet
Gross Amounts Recognized (2)
Master Netting Arrangements Cash Collateral Pledged (4)
Security Collateral Pledged (5)
Net Amount
Derivative liabilities $ 545,885 $ ( 111,124 ) $ ( 1,160 ) $ 433,601 $ — $ 433,601
(1) Includes $ 9 million and $ 4 million of gross fair value assets with counterparties that were not subject to enforceable master netting arrangements or similar agreements as of December 31, 2025 and 2024, respectively.
(2) Includes $ 16 million and $ 27 million of gross fair value liabilities with counterparties that were not subject to enforceable master netting arrangements or similar agreements as of December 31, 2025 and 2024, respectively.
(3) Gross cash collateral received under master netting arrangements or similar agreements were $ 184 million and $ 322 million as of December 31, 2025 and 2024, respectively. Of the gross cash collateral received, $ 183 million and $ 316 million were used to offset against derivative assets as of December 31, 2025 and 2024, respectively.
(4) Gross cash collateral pledged under master netting arrangements or similar agreements were $ 29 million and $ 1 million as of December 31, 2025 and 2024, respectively. Of the gross cash collateral pledged, $ 28 million and $ 1 million were used to offset against derivative liabilities as of December 31, 2025 and 2024, respectively.
(5) Represents the fair value of security collateral received or pledged limited to derivative assets or liabilities that are subject to enforceable master netting arrangements or similar agreements. U.S. GAAP does not permit the netting of noncash collateral on the Consolidated Balance Sheet but requires the disclosure of such amounts.
In addition to the amounts included in the tables above, the Company may have balance sheet netting related to resale agreements. Refer to Note 3 — Securities Purchased under Resale Agreements to the Consolidated Financial Statements in this Form 10-K for additional information. Refer to Note 2 — Fair Value Measurement and Fair Value of Financial Instruments to the Consolidated Financial Statements in this Form 10-K for fair value measurement disclosures on derivatives.
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Note 6 — Loans Receivable and Allowance for Credit Losses
The following table presents the composition of the Company’s loans held-for-investment outstanding as of December 31, 2025 and 2024:
($ in thousands) December 31, 2025 December 31, 2024
Commercial:
C&I $ 18,650,755 $ 17,397,158
CRE:
CRE 15,407,088 14,655,340
Multifamily residential 5,112,328 4,953,442
Construction and land 742,357 666,162
Total CRE 21,261,773 20,274,944
Total commercial 39,912,528 37,672,102
Consumer:
Residential mortgage:
Single-family residential 15,002,549 14,175,446
HELOCs 1,911,897 1,811,628
Total residential mortgage 16,914,446 15,987,074
Other consumer 51,198 67,461
Total consumer 16,965,644 16,054,535
Total loans held-for-investment (1)
$ 56,878,172 $ 53,726,637
ALLL ( 809,773 ) ( 702,052 )
Loans held-for-investment, net (1)
$ 56,068,399 $ 53,024,585
(1) Includes $ 26 million and $ 46 million of net deferred loan fees and net unamortized premiums as of December 31, 2025 and 2024, respectively.
Accrued interest receivable on loans held-for-investment was $ 251 million and $ 255 million as of December 31, 2025 and 2024, respectively, and was included in Other assets on the Consolidated Balance Sheet. The interest income recognized and reversed on nonaccrual loans was $ 7 million and $ 5 million, respectively, for the year ended December 31, 2025, compared with immaterial amounts for each of the years ended December 31, 2024 and 2023. For the Company’s accounting policy on accrued interest receivable related to loans held-for-investment, see Note 1 — Summary of Significant Accounting Policies — Loans Held-for-Investment to the Consolidated Financial Statements in this Form 10-K. The Company also has loans held-for-sale. For the Company’s accounting policy on loans held-for-sale, refer to Note 1 — Summary of Significant Accounting Policies — Loans Held-for-Sale to the Consolidated Financial Statements in this Form 10-K.
The Company’s FRB and FHLB borrowings are primarily secured by loans held-for-investment. Loans held-for-investment totaling $ 41.8 billion and $ 38.2 billion, respectively, were pledged to secure borrowings and provide additional borrowing capacity as of December 31, 2025 and 2024.
Credit Quality Indicators
All loans are subject to the Company’s credit review and monitoring process. For the commercial loan portfolio, loans are risk rated based on an analysis of the borrower’s current payment performance or delinquency, repayment sources, financial and liquidity factors, including industry and geographic considerations. For the consumer loan portfolio, payment performance or delinquency is typically the driving indicator for risk ratings.
The Company utilizes internal credit risk ratings to assign each individual loan a risk rating of 1 through 10:
• Pass — loans risk rated 1 through 5 are assigned an internal risk rating category of “Pass.” Loans risk rated 1 are typically loans fully secured by cash. Pass loans have sufficient sources of repayment to repay the loan in full, in accordance with all terms and conditions.
• Special mention — loans assigned a risk rating of 6 have potential weaknesses that warrant closer attention by management; these are assigned an internal risk rating category of “Special Mention.”
• Substandard — loans assigned a risk rating of 7 or 8 have well-defined weaknesses that may jeopardize the full and timely repayment of the loan; these are assigned an internal risk rating category of “Substandard.”
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• Doubtful — loans assigned a risk rating of 9 have insufficient sources of repayment and a high probability of loss; these are assigned an internal risk rating category of “Doubtful.”
• Loss — loans assigned a risk rating of 10 are uncollectible and of such little value that they are no longer considered bankable assets; these are assigned an internal risk rating category of “Loss.”
Loan exposures categorized as criticized consist of special mention, substandard, doubtful and loss categories. The Company reviews the internal risk ratings of its loan portfolio on a regular basis, and adjusts the ratings based on changes in the borrowers’ financial status and the collectability of the loans.
The following tables summarize the Company’s loans held-for-investment and year-to-date gross write-offs by loan portfolio segments, internal risk ratings and vintage year as of December 31, 2025 and 2024. The vintage year is the year of loan origination, renewal or major modification. Revolving loans that are converted to term loans presented in the tables below are excluded from the term loans by vintage year columns.
December 31, 2025
Term Loans by Origination Year
($ in thousands) 2025 2024 2023 2022 2021 Prior Revolving Loans Revolving Loans Converted to Term Loans (1)
Total
Commercial:
C&I:
Pass $ 3,013,368 $ 1,717,361 $ 880,267 $ 536,461 $ 391,413 $ 302,893 $ 11,308,551 $ 67,968 $ 18,218,282
Criticized (accrual) 572 35,223 1,662 93,562 83,813 6,771 158,626 — 380,229
Criticized (nonaccrual)
2,922 4,733 26,810 1,640 9,525 6,526 88 — 52,244
Total C&I 3,016,862 1,757,317 908,739 631,663 484,751 316,190 11,467,265 67,968 18,650,755
Gross write-offs (2)
2,617 1,199 28,752 4,643 1,063 3,170 24 — 41,468
CRE:
Pass 2,615,789 1,562,420 2,015,433 3,188,363 1,708,927 3,607,918 78,712 47,512 14,825,074
Criticized (accrual) 30,275 29,807 116,862 134,018 48,569 183,937 — — 543,468
Criticized (nonaccrual)
3,317 — 4,172 7,439 12,330 11,288 — — 38,546
Subtotal CRE 2,649,381 1,592,227 2,136,467 3,329,820 1,769,826 3,803,143 78,712 47,512 15,407,088
Gross write-offs
8,932 — — 160 19 15,126 — — 24,237
Multifamily residential:
Pass 895,323 338,209 478,782 1,138,693 663,916 1,547,124 32,207 3,820 5,098,074
Criticized (accrual) — — — 5,175 — 8,787 — — 13,962
Criticized (nonaccrual)
— — — — — 292 — — 292
Subtotal multifamily residential 895,323 338,209 478,782 1,143,868 663,916 1,556,203 32,207 3,820 5,112,328
Gross write-offs
— — — — — 8 — — 8
Construction and land:
Pass 246,380 109,799 247,482 90,086 13,437 3,462 3,901 — 714,547
Criticized (nonaccrual)
— 8,897 — 18,913 — — — — 27,810
Subtotal construction and land 246,380 118,696 247,482 108,999 13,437 3,462 3,901 — 742,357
Total CRE 3,791,084 2,049,132 2,862,731 4,582,687 2,447,179 5,362,808 114,820 51,332 21,261,773
Total CRE gross write-offs (2)
8,932 — — 160 19 15,134 — — 24,245
Total commercial $ 6,807,946 $ 3,806,449 $ 3,771,470 $ 5,214,350 $ 2,931,930 $ 5,678,998 $ 11,582,085 $ 119,300 $ 39,912,528
Total commercial gross write-offs (2)
$ 11,549 $ 1,199 $ 28,752 $ 4,803 $ 1,082 $ 18,304 $ 24 $ — $ 65,713
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December 31, 2025
Term Loans by Origination Year
($ in thousands) 2025 2024 2023 2022 2021 Prior Revolving Loans Revolving Loans Converted to Term Loans (1)
Total
Consumer:
Residential mortgage:
Single-family residential:
Pass (3)
$ 2,861,764 $ 1,837,821 $ 2,349,242 $ 2,808,694 $ 1,860,110 $ 3,228,996 $ — $ — $ 14,946,627
Criticized (accrual) 3,157 3,646 5,589 5,427 235 9,356 — — 27,410
Criticized (nonaccrual) (3)
4,566 891 3,445 4,617 1,620 13,373 — — 28,512
Subtotal single-family residential mortgage 2,869,487 1,842,358 2,358,276 2,818,738 1,861,965 3,251,725 — — 15,002,549
Gross write-offs (2)
— 14 — — — — — — 14
HELOCs:
Pass 13,652 4,796 4,740 5,258 11,233 22,213 1,750,894 70,577 1,883,363
Criticized (accrual) 1,879 — 97 140 287 526 6,784 1,654 11,367
Criticized (nonaccrual)
1,288 13 379 2,610 1,232 7,033 — 4,612 17,167
Subtotal HELOCs 16,819 4,809 5,216 8,008 12,752 29,772 1,757,678 76,843 1,911,897
Gross write-offs
— — — — — — — 6 6
Total residential mortgage 2,886,306 1,847,167 2,363,492 2,826,746 1,874,717 3,281,497 1,757,678 76,843 16,914,446
Total residential mortgage gross write-offs (2)
— 14 — — — — — 6 20
Other consumer:
Pass 25,146 — — 4,635 129 5,570 15,576 — 51,056
Criticized (nonaccrual)
— — 49 — — — 93 — 142
Total other consumer 25,146 — 49 4,635 129 5,570 15,669 — 51,198
Total consumer $ 2,911,452 $ 1,847,167 $ 2,363,541 $ 2,831,381 $ 1,874,846 $ 3,287,067 $ 1,773,347 $ 76,843 $ 16,965,644
Total consumer gross write-offs (2)
$ — $ 14 $ — $ — $ — $ — $ — $ 6 $ 20
Total loans held-for-investment:
Pass $ 9,671,422 $ 5,570,406 $ 5,975,946 $ 7,772,190 $ 4,649,165 $ 8,718,176 $ 13,189,841 $ 189,877 $ 55,737,023
Criticized (accrual) 35,883 68,676 124,210 238,322 132,904 209,377 165,410 1,654 976,436
Criticized (nonaccrual)
12,093 14,534 34,855 35,219 24,707 38,512 181 4,612 164,713
Total $ 9,719,398 $ 5,653,616 $ 6,135,011 $ 8,045,731 $ 4,806,776 $ 8,966,065 $ 13,355,432 $ 196,143 $ 56,878,172
Total loans held-for-investment gross write-offs (2)
$ 11,549 $ 1,213 $ 28,752 $ 4,803 $ 1,082 $ 18,304 $ 24 $ 6 $ 65,733
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December 31, 2024
Term Loans by Origination Year
($ in thousands) 2024 2023 2022 2021 2020 Prior Revolving Loans Revolving Loans Converted to Term Loans (1)
Total
Commercial:
C&I:
Pass $ 2,605,928 $ 1,508,948 $ 999,586 $ 612,015 $ 243,528 $ 295,884 $ 10,574,404 $ 23,032 $ 16,863,325
Criticized (accrual) 34,412 51,415 61,041 107,355 10,538 31,160 151,747 — 447,668
Criticized (nonaccrual)
3,822 29,181 20,273 10,666 3,225 9,135 9,863 — 86,165
Total C&I 2,644,162 1,589,544 1,080,900 730,036 257,291 336,179 10,736,014 23,032 17,397,158
Gross write-offs (2)
20 47,963 14,848 11,119 1,568 3,012 27,099 — 105,629
CRE:
Pass 1,660,877 2,296,763 3,692,498 1,925,220 1,296,439 3,176,450 96,791 49,302 14,194,340
Criticized (accrual) 34,543 44,557 90,105 31,615 75,578 167,401 — 14,771 458,570
Criticized (nonaccrual) — — — — 1,756 674 — — 2,430
Subtotal CRE 1,695,420 2,341,320 3,782,603 1,956,835 1,373,773 3,344,525 96,791 64,073 14,655,340
Gross write-offs (2)
— — — — — 3 — — 3
Multifamily residential:
Pass 386,743 521,754 1,337,599 752,230 613,115 1,242,586 14,640 1,253 4,869,920
Criticized (accrual) — — 43,997 32,042 — 2,911 — — 78,950
Criticized (nonaccrual) — — — — — 4,572 — — 4,572
Subtotal multifamily residential 386,743 521,754 1,381,596 784,272 613,115 1,250,069 14,640 1,253 4,953,442
Gross write-offs
— — — — — 10 — — 10
Construction and land:
Pass 90,926 328,803 184,792 41,932 — 8,393 — — 654,846
Criticized (nonaccrual) — — 11,316 — — — — — 11,316
Subtotal construction and land
90,926 328,803 196,108 41,932 — 8,393 — — 666,162
Gross write-offs — — 2,289 — — — — — 2,289
Total CRE 2,173,089 3,191,877 5,360,307 2,783,039 1,986,888 4,602,987 111,431 65,326 20,274,944
Total CRE gross write-offs (2)
— — 2,289 — — 13 — — 2,302
Total commercial $ 4,817,251 $ 4,781,421 $ 6,441,207 $ 3,513,075 $ 2,244,179 $ 4,939,166 $ 10,847,445 $ 88,358 $ 37,672,102
Total commercial gross write-offs (2)
$ 20 $ 47,963 $ 17,137 $ 11,119 $ 1,568 $ 3,025 $ 27,099 $ — $ 107,931
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December 31, 2024
Term Loans by Origination Year
($ in thousands) 2024 2023 2022 2021 2020 Prior Revolving Loans Revolving Loans Converted to Term Loans (1)
Total
Consumer:
Residential mortgage:
Single-family residential:
Pass (3)
$ 2,360,674 $ 2,762,921 $ 3,074,668 $ 2,079,323 $ 1,407,031 $ 2,437,446 $ — $ — $ 14,122,063
Criticized (accrual) 4,175 3,409 750 5,810 1,548 6,069 — — 21,761
Criticized (nonaccrual) (3)
2,716 9,673 1,929 2,035 2,404 12,865 — — 31,622
Subtotal single-family residential mortgage 2,367,565 2,776,003 3,077,347 2,087,168 1,410,983 2,456,380 — — 14,175,446
Gross write-offs (2)
9 — — — — — — — 9
HELOCs:
Pass 7,453 3,288 4,071 3,236 7,570 8,152 1,648,337 99,488 1,781,595
Criticized (accrual) 1,436 — 1,420 — 135 2,064 2,338 594 7,987
Criticized (nonaccrual) 3,161 3,095 2,520 39 418 7,301 — 5,512 22,046
Subtotal HELOCs 12,050 6,383 8,011 3,275 8,123 17,517 1,650,675 105,594 1,811,628
Gross write-offs (2)
— 10 — — — — — 5 15
Total residential mortgage 2,379,615 2,782,386 3,085,358 2,090,443 1,419,106 2,473,897 1,650,675 105,594 15,987,074
Total residential mortgage gross write-offs (2)
9 10 — — — — — 5 24
Other consumer:
Pass 14,916 — 22,992 132 — 6,800 22,555 — 67,395
Criticized (nonaccrual) — — — — — — 66 — 66
Total other consumer 14,916 — 22,992 132 — 6,800 22,621 — 67,461
Gross write-offs (2)
— 3,000 — — — — 890 — 3,890
Total consumer $ 2,394,531 $ 2,782,386 $ 3,108,350 $ 2,090,575 $ 1,419,106 $ 2,480,697 $ 1,673,296 $ 105,594 $ 16,054,535
Total consumer gross write-offs (2)
$ 9 $ 3,010 $ — $ — $ — $ — $ 890 $ 5 $ 3,914
Total loans held-for-investment:
Pass $ 7,127,517 $ 7,422,477 $ 9,316,206 $ 5,414,088 $ 3,567,683 $ 7,175,711 $ 12,356,727 $ 173,075 $ 52,553,484
Criticized (accrual) 74,566 99,381 197,313 176,822 87,799 209,605 154,085 15,365 1,014,936
Criticized (nonaccrual)
9,699 41,949 36,038 12,740 7,803 34,547 9,929 5,512 158,217
Total $ 7,211,782 $ 7,563,807 $ 9,549,557 $ 5,603,650 $ 3,663,285 $ 7,419,863 $ 12,520,741 $ 193,952 $ 53,726,637
Total loans held-for-investment gross write-offs (2)
$ 29 $ 50,973 $ 17,137 $ 11,119 $ 1,568 $ 3,025 $ 27,989 $ 5 $ 111,845
(1) During the year ended December 31, 2025, $ 53 million of total commercial loans, comprised of C&I revolving loans, were converted to term loans. In comparison, $ 7 million of total commercial loans, comprised of CRE and C&I revolving loans, and $ 29 million of total commercial loans, primarily comprised of CRE revolving loans, were converted to term loans during the years ended December 31, 2024 and 2023, respectively. During the years ended December 31, 2025, 2024 and 2023, respectively, $ 2 million, $ 22 million and $ 44 million of total consumer loans, comprised of HELOCs, were converted to term loans.
(2) Excludes gross write-offs associated with loans the Company sold or settled.
(3) As of each of December 31, 2025 and 2024, $ 1 million of nonaccrual loans whose payments were guaranteed by the Federal Housing Administration were classified with a “Pass” rating.
125
Nonaccrual and Past Due Loans
Loans that are 90 or more days past due are generally placed on nonaccrual status unless the loan is well-collateralized and in the process of collection. Loans that are less than 90 days past due but have identified deficiencies, such as when the full collection of principal or interest becomes uncertain, are also placed on nonaccrual status. The following tables present the aging analysis of loans held-for-investment as of December 31, 2025 and 2024:
December 31, 2025
($ in thousands) Current Accruing Loans Accruing Loans 30-59 Days Past Due Accruing Loans 60-89 Days Past Due Total Accruing Past Due Loans Total Nonaccrual Loans Total Loans
Commercial:
C&I $ 18,572,467 $ 25,962 $ 82 $ 26,044 $ 52,244 $ 18,650,755
CRE:
CRE 15,354,548 10,525 3,469 13,994 38,546 15,407,088
Multifamily residential 5,110,783 1,253 — 1,253 292 5,112,328
Construction and land 714,547 — — — 27,810 742,357
Total CRE 21,179,878 11,778 3,469 15,247 66,648 21,261,773
Total commercial 39,752,345 37,740 3,551 41,291 118,892 39,912,528
Consumer:
Residential mortgage:
Single-family residential 14,899,224 46,010 27,674 73,684 29,641 15,002,549
HELOCs 1,860,080 23,328 11,322 34,650 17,167 1,911,897
Total residential mortgage 16,759,304 69,338 38,996 108,334 46,808 16,914,446
Other consumer 50,979 56 21 77 142 51,198
Total consumer 16,810,283 69,394 39,017 108,411 46,950 16,965,644
Total $ 56,562,628 $ 107,134 $ 42,568 $ 149,702 $ 165,842 $ 56,878,172
December 31, 2024
($ in thousands) Current Accruing Loans Accruing Loans 30-59 Days Past Due Accruing Loans 60-89 Days Past Due Total Accruing Past Due Loans Total Nonaccrual Loans Total Loans
Commercial:
C&I $ 17,288,138 $ 5,690 $ 17,165 $ 22,855 $ 86,165 $ 17,397,158
CRE:
CRE 14,647,270 3,755 1,885 5,640 2,430 14,655,340
Multifamily residential 4,947,939 653 278 931 4,572 4,953,442
Construction and land 653,919 927 — 927 11,316 666,162
Total CRE 20,249,128 5,335 2,163 7,498 18,318 20,274,944
Total commercial 37,537,266 11,025 19,328 30,353 104,483 37,672,102
Consumer:
Residential mortgage:
Single-family residential 14,088,086 32,841 22,096 54,937 32,423 14,175,446
HELOCs 1,770,218 11,396 7,968 19,364 22,046 1,811,628
Total residential mortgage
15,858,304 44,237 30,064 74,301 54,469 15,987,074
Other consumer 67,288 92 15 107 66 67,461
Total consumer 15,925,592 44,329 30,079 74,408 54,535 16,054,535
Total $ 53,462,858 $ 55,354 $ 49,407 $ 104,761 $ 159,018 $ 53,726,637
126
The following table presents the amortized cost of loans on nonaccrual status for which there was no related ALLL as of December 31, 2025 and 2024. Nonaccrual loans may not have an allowance for credit losses if the loan balances are well secured by collateral values and there is no loss expectation.
($ in thousands) December 31, 2025 December 31, 2024
Commercial:
C&I $ 21,723 $ 79,591
CRE 33,705 —
Multifamily residential — 4,210
Construction and land
27,810 11,316
Total commercial 83,238 95,117
Consumer:
Single-family residential 6,095 6,279
HELOCs 4,081 15,380
Total consumer 10,176 21,659
Total nonaccrual loans with no related ALLL $ 93,414 $ 116,776
Foreclosed Assets
The Company acquires assets from borrowers through loan restructurings, workouts, or foreclosures. Assets acquired may include real properties (e.g., real estate, land, and buildings) and commercial and personal properties. The Company recognizes foreclosed assets upon receiving assets in satisfaction of a loan (e.g., taking legal title or physical possession).
Foreclosed assets, consisting of OREO and other nonperforming assets, are included in Other assets on the Consolidated Balance Sheet. The Company had $ 21 million of foreclosed assets as of December 31, 2025, compared with $ 35 million as of December 31, 2024. The Company commences the foreclosure process on consumer mortgage loans after a borrower becomes more than 120 days delinquent in accordance with the Consumer Financial Protection Bureau guidelines. The carrying value of the consumer real estate loans that were in an active or suspended foreclosure process was $ 16 million as of both December 31, 2025 and 2024.
Loan Modifications to Borrowers Experiencing Financial Difficulty
As part of the Company’s loss mitigation efforts, the Company may agree to modify the contractual terms of a loan to assist borrowers experiencing financial difficulty. The Company negotiates loan modifications on a case-by-case basis to achieve mutually agreeable terms that maximize loan collectability and meet the borrower’s financial needs. The Company considers various factors to identify borrowers experiencing financial difficulty. The primary factor for consumer loan borrowers is delinquency status. For commercial loan borrowers, these factors include credit risk ratings, the probability of loan risk rating downgrades, and overall risk profile changes. The modification may include, but is not limited to, payment delays, interest rate reductions, term extensions, principal forgiveness, or a combination of such modifications. Commercial loan borrowers that require immaterial modifications such as insignificant interest rate changes, short-term extensions (90 days or less) from the original maturity date, or temporary waivers or extensions of financial covenants which would not constitute material credit actions, are generally not considered to be experiencing financial difficulty and are not included in the disclosure. Insignificant payment deferrals (three months or less in the last 12 months) are also not included in the disclosure.
127
The following tables present the amortized cost of loans that were modified during the years ended December 31, 2025, 2024 and 2023 by loan class and modification type:
Year Ended December 31, 2025
Modification Type
Combination:
($ in thousands) Interest Rate Reduction
Term Extension Payment Delay Term Extension/ Payment Delay
Rate Reduction /Term Extension/ Payment Delay
Rate Reduction/ Payment Delay
Total Modification as a % of Loan Class
Commercial:
C&I $ 6,057 $ 77,039 $ 51,904 $ 33,450 $ — $ 19,579 $ 188,029 1.01 %
CRE — 167,286 — — — — 167,286 1.09 %
Multifamily — 275 — — — — 275 0.01 %
Land and construction — 9,451 — — — — 9,451 1.27 %
Total commercial 6,057 254,051 51,904 33,450 — 19,579 365,041 0.91 %
Consumer:
Single-family residential — — 29,545 2,402 — — 31,947 0.21 %
HELOCs — — 14,883 909 407 1,172 17,371 0.91 %
Total consumer — — 44,428 3,311 407 1,172 49,318 0.29 %
Total $ 6,057 $ 254,051 $ 96,332 $ 36,761 $ 407 $ 20,751 $ 414,359 0.73 %
Year Ended December 31, 2024
Modification Type
Combination:
($ in thousands) Term Extension Payment Delay Term Extension/ Payment Delay
Rate Reduction/ Term Extension
Rate Reduction/ Payment Delay
Total Modification as a % of Loan Class
Commercial:
C&I $ 57,102 $ 26,420 $ — $ — $ — $ 83,522 0.48 %
CRE 86,258 — — 6,052 — 92,310 0.63 %
Total commercial 143,360 26,420 — 6,052 — 175,832 0.47 %
Consumer:
Single-family residential — 15,397 222 — 140 15,759 0.11 %
HELOCs — 14,303 — — 517 14,820 0.82 %
Total consumer — 29,700 222 — 657 30,579 0.19 %
Total $ 143,360 $ 56,120 $ 222 $ 6,052 $ 657 $ 206,411 0.38 %
128
Year Ended December 31, 2023
Modification Type
Combination:
($ in thousands) Term Extension Payment Delay Term Extension/ Payment Delay
Rate Reduction/ Term Extension
Reduction/ Payment Delay
Total Modification as a % of Loan Class
Commercial:
C&I $ 62,704 $ 6,842 $ — $ — $ — $ 69,546 0.42 %
CRE 13,939 — — 32,470 — 46,409 0.31 %
Total commercial 76,643 6,842 — 32,470 — 115,955 0.31 %
Consumer:
Single-family residential — 10,202 3,967 — — 14,169 0.11 %
HELOCs — 3,148 1,170 — 815 5,133 0.30 %
Total consumer — 13,350 5,137 — 815 19,302 0.13 %
Total $ 76,643 $ 20,192 $ 5,137 $ 32,470 $ 815 $ 135,257 0.26 %
The following tables present the financial effects of the loan modifications for the years ended December 31, 2025, 2024 and 2023 by loan class and modification type:
Year Ended December 31, 2025
Financial Effects of Loan Modifications
($ in thousands) Weighted-Average Interest Rate Reduction Weighted-Average Term Extension (in years) Weighted-Average Payment Delay (in years)
Commercial:
C&I 3.38 % 1.1 0.8
CRE — % 3.2 0.0
Multifamily — % 10.0 0.0
Land and construction — % 0.8 0.0
Consumer:
Single-family residential — % 15.0 3.5
HELOCs 0.97 % 15.3 4.8
Year Ended December 31, 2024
Financial Effects of Loan Modifications
($ in thousands) Weighted-Average Interest Rate Reduction Weighted-Average Term Extension (in years) Weighted-Average Payment Delay
(in years)
Commercial:
C&I — % 2.1 1.7
CRE 1.28 % 2.7 0.0
Consumer:
Single-family residential 1.63 % 10.0 1.3
HELOCs 0.25 % 0.0 1.7
129
Year Ended December 31, 2023
Financial Effects of Loan Modifications
($ in thousands) Principal Forgiveness Weighted-Average Interest Rate Reduction Weighted-Average Term Extension (in years) Weighted-Average Payment Delay
(in years)
Commercial:
C&I $ 371 (1)
— % (1)
1.3 0.9
CRE — 3.00 % 2.1 0.0
Consumer:
Single-family residential — — % 9.3 1.8
HELOCs — 0.11 % 14.2 4.6
Total $ 371
(1) Comprised of C&I loans modified during the year ended December 31, 2023 where the interest was waived in addition to principal forgiveness. No recorded investment was outstanding as of December 31, 2023.
A modified loan may become delinquent and may result in a payment default (generally 90 days past due) subsequent to modification. The following tables present the amortized cost basis of modified loans that, within 12 months of the modification date, experienced a subsequent default during the years ended December 31, 2025, 2024 and 2023.
Loans Modified that Subsequently Defaulted During the Year Ended December 31, 2025
($ in thousands) Term Extension Payment Delay Combination: Rate Reduction/ Payment Delay Combination: Term Extension/ Payment Delay Total
Commercial:
C&I $ 206 $ 5,073 $ — $ — $ 5,279
CRE 29,991 — — — 29,991
Total commercial 30,197 5,073 — — 35,270
Consumer:
Single-family residential — 3,706 — 1,038 4,744
HELOCs — 3,869 746 483 5,098
Total consumer — 7,575 746 1,521 9,842
Total $ 30,197 $ 12,648 $ 746 $ 1,521 $ 45,112
Loans Modified that Subsequently Defaulted During the Year Ended December 31, 2024
($ in thousands) Term Extension Payment Delay Combination: Rate Reduction/ Payment Delay Combination: Term Extension/ Payment Delay Total
Commercial:
C&I $ 3,684 $ 4,937 $ — $ — $ 8,621
Total commercial 3,684 4,937 — — 8,621
Consumer:
Single-family residential — 10,223 141 2,462 12,826
HELOCs — 4,690 517 — 5,207
Total consumer — 14,913 658 2,462 18,033
Total $ 3,684 $ 19,850 $ 658 $ 2,462 $ 26,654
130
Loans Modified that Subsequently Defaulted During the Year Ended December 31, 2023
($ in thousands) Term Extension Payment Delay Combination: Rate Reduction/ Payment Delay Combination: Term Extension/ Payment Delay Total
Consumer:
Single-family residential $ — $ 267 $ — $ — $ 267
HELOCs — 749 — — 749
Total consumer — 1,016 — — 1,016
Total $ — $ 1,016 $ — $ — $ 1,016
The Company monitors the performance of modified loans to borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts. The following table presents the performance of loans that were modified during the years ended December 31, 2025, 2024 and 2023.
Payment Performance as of December 31, 2025
($ in thousands) Current 30-89 Days Past Due 90+ Days Past Due Total
Commercial:
C&I $ 185,058 $ 806 $ 2,165 $ 188,029
CRE 167,286 — — 167,286
Multifamily residential 275 — — 275
Construction and land 9,451 — — 9,451
Total commercial 362,070 806 2,165 365,041
Consumer:
Single-family residential 25,119 5,577 1,251 31,947
HELOCs 13,217 2,886 1,268 17,371
Total consumer 38,336 8,463 2,519 49,318
Total $ 400,406 $ 9,269 $ 4,684 $ 414,359
Total nonaccrual loans included above
$ 11,888 $ 206 $ 4,684 $ 16,778
Payment Performance as of December 31, 2024
($ in thousands) Current 30-89 Days Past Due 90+ Days Past Due Total
Commercial:
C&I $ 71,324 $ 12,198 $ — $ 83,522
CRE 92,310 — — 92,310
Total commercial 163,634 12,198 — 175,832
Consumer:
Single-family residential 9,082 4,218 2,459 15,759
HELOCs 8,591 3,069 3,160 14,820
Total consumer 17,673 7,287 5,619 30,579
Total $ 181,307 $ 19,485 $ 5,619 $ 206,411
Total nonaccrual loans included above $ 9,209 $ 142 $ 5,619 $ 14,970
131
Payment Performance as of December 31, 2023
($ in thousands) Current 30-89 Days Past Due 90+ Days Past Due Total
Commercial:
C&I $ 52,087 $ 8,153 $ 9,306 $ 69,546
CRE 46,409 — — 46,409
Total commercial 98,496 8,153 9,306 115,955
Consumer:
Single-family residential 11,197 2,425 547 14,169
HELOCs 4,207 177 749 5,133
Total consumer 15,404 2,602 1,296 19,302
Total $ 113,900 $ 10,755 $ 10,602 $ 135,257
Total nonaccrual loans included above $ 8,666 $ 310 $ 10,602 $ 19,578
As of December 31, 2025 and 2024, commitments to lend additional funds to borrowers whose loans were modified were $ 14 million and $ 10 million, respectively.
Allowance for Credit Losses
The Company has a current expected credit losses (“CECL”) framework for all financial assets measured at amortized cost and certain off-balance sheet credit exposures. The Company’s allowance for credit losses, which includes both the ALLL and the allowance for unfunded credit commitments, is calculated with the objective of maintaining a reserve sufficient to absorb losses inherent in our credit portfolios. The measurement of the allowance for credit losses is based on management’s best estimate of lifetime expected credit losses, periodic evaluation of the loan portfolio, lending-related commitments and other relevant factors.
The allowance for credit losses is deducted from the amortized cost basis of a financial asset or a group of financial assets so that the balance sheet reflects the net amount the Company expects to collect. Amortized cost is the principal balance outstanding, net of purchase premiums and discounts, deferred fees and costs, and escrow advances. Subsequent changes in expected credit losses are recognized in net income as a provision for, or a reversal of, credit loss expense.
The allowance for credit losses estimation involves procedures to consider the unique risk characteristics of the portfolio segments. The majority of the Company’s credit exposures that share risk characteristics with other similar exposures are collectively evaluated. The collectively evaluated loans include performing loans and unfunded credit commitments. If an exposure does not share risk characteristics with other exposures, the Company generally estimates expected credit losses on an individual basis.
ALLL for Collectively Evaluated Loans
The allowance for collectively evaluated loans consists of a quantitative component that assesses the different risk factors considered in our models and a qualitative component that considers risk factors external to the models. Each of these components are described below.
Quantitative Component — The Company applies quantitative methods to estimate ALLL by considering a variety of factors such as historical loss experience, the current credit quality of the portfolio, and an economic outlook over the life of the loan. The Company incorporates forward-looking information using macroeconomic scenarios which include variables that are considered key drivers of increases and decreases in credit losses. The Company utilizes a probability-weighted, multiple-scenario forecast approach. These scenarios may consist of a base forecast representing management's view of the most likely outcome, combined with downside or upside scenarios reflecting possible worsening or improving economic conditions. The quantitative models incorporate a probability-weighted calculation of these macroeconomic scenarios over a reasonable and supportable forecast period. If the life of the loans extends beyond the reasonable and supportable forecast period, the Company will consider historical experience or long-run macroeconomic trends over the remaining life of the loans to estimate the ALLL.
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There were no changes to the reasonable and supportable forecast period, and no changes to the reversion to the historical loss experience method in 2025 and 2024.
The following table provides key credit risk characteristics and macroeconomic variables that the Company uses to estimate the expected credit losses by portfolio segment:
Portfolio Segment Risk Characteristics Macroeconomic Variables
C&I Age percentage, size at origination, delinquency status, sector and risk rating Unemployment rate, Gross Domestic Product (“GDP”), and U.S. Treasury rates
CRE, Multifamily residential, and Construction and land Delinquency status, maturity date, collateral value, property type, and geographic location Unemployment rate, GDP, and U.S. Treasury rates
Single-family residential and HELOCs FICO score, delinquency status, maturity date, collateral value, and geographic location Unemployment rate, GDP, and Home Price Indices
Other consumer Loss rate approach Immaterial - Macroeconomic variables are included in the qualitative estimate.
Quantitative Component — ALLL for the Commercial Loan Portfolio
The Company’s C&I lifetime loss rate model estimates the loss rate expected over the life of a loan. This loss rate is applied to the amortized cost basis, excluding accrued interest receivable, to determine expected credit losses. The lifetime loss rate model’s reasonable and supportable period spans eight quarters, thereafter, immediately reverting to the historical average loss rate, expressed through the loan-level lifetime loss rate.
To generate estimates of expected loss at the loan level for CRE, multifamily residential, and construction and land loans, projected probabilities of default (“PDs”) and loss given defaults (“LGDs”) are applied to the estimated exposure at default, considering the term and payment structure of the loan. The forecast of future economic conditions returns to long-run historical economic trends within the reasonable and supportable period. To estimate the life of a loan under both models, the contractual term of the loan is adjusted for estimated prepayments based on historical prepayment experience.
Quantitative Component — ALLL for the Consumer Loan Portfolio
For single-family residential and HELOC loans, projected PDs and LGDs are applied to the estimated exposure at default, considering the term and payment structure of the loan, to generate estimates of expected loss at the loan level. The forecast of future economic conditions returns to long-run historical economic trends after the reasonable and supportable period. To estimate the life of a loan for the single-family residential and HELOC loan portfolios, the contractual term of the loan is adjusted for estimated prepayments based on historical prepayment experience. For other consumer loans, the Company uses a loss rate approach.
Qualitative Component — The Company considers the following qualitative factors in the determination of the collectively evaluated allowance if these factors have not already been captured by the quantitative model. Such qualitative factors may include, but are not limited to:
– loan growth trends;
– the volume and severity of past due financial assets, and criticized or adversely classified financial assets;
– the Company’s lending policies and procedures, including changes in lending strategies, underwriting standards, collection, write-off and recovery practices;
– knowledge of a borrower’s operations;
– the quality of the Company’s credit review system;
– the experience, ability and depth of the Company’s management and associates;
– the effect of other external factors such as the regulatory and legal environments, or changes in technology;
– actual and expected changes in international, national, regional, and local economic and business conditions in which the Company operates; and
– risk factors in certain industry sectors not captured by the quantitative models.
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The magnitude of the impact of these factors on the Company’s qualitative assessment of the allowance for credit losses changes from period to period according to changes made by management in its assessment of these factors. The extent to which these factors change may depend on whether they are already reflected in quantitative loss estimates during the current period and the extent to which changes in these factors diverge from period to period.
While the Company’s allowance methodologies strive to reflect all relevant credit risk factors, there continues to be uncertainty associated with, but not limited to, potential imprecision in the estimation process due to the inherent time lag of obtaining information and normal variations between expected and actual outcomes. The Company may hold additional qualitative reserves that are designed to provide coverage for losses attributable to such risk.
ALLL for Individually Evaluated Loans
When a loan no longer shares similar risk characteristics with other loans, such as in the case of certain nonaccrual loans, the Company estimates the ALLL on an individual loan basis. The ALLL for individually evaluated loans is measured as the difference between the recorded value of the loans and their fair value. For loans evaluated individually, the Company uses one of three different asset valuation measurement methods: (1) the fair value of collateral less costs to sell; (2) the present value of expected future cash flows; or (3) the loan's observable market price. If an individually evaluated loan is determined to be collateral dependent, the Company applies the fair value of the collateral less costs to sell method. If an individually evaluated loan is determined not to be collateral dependent, the Company uses the present value of future cash flows or the observable market value of the loan.
• Collateral-Dependent Loans — The allowance of a collateral-dependent loan is limited to the difference between the recorded value and fair value of the collateral less cost of disposal or sale. As of December 31, 2025, collateral-dependent commercial and consumer loans totaled $ 69 million and $ 10 million, respectively. In comparison, collateral-dependent commercial and consumer loans totaled $ 45 million and $ 23 million, respectively, as of December 31, 2024. The Company's collateral-dependent loans were secured by real estate. As of both December 31, 2025 and 2024, the collateral value of the properties securing the collateral-dependent loans, net of selling costs, exceeded the recorded value of the majority of the loans.
The following tables summarize the activity in the ALLL by portfolio segments for the years ended December 31, 2025, 2024 and 2023:
Year Ended December 31, 2025
Commercial Consumer
CRE Residential Mortgage
($ in thousands) C&I CRE Multifamily Residential Construction and Land Single-Family Residential HELOCs Other Consumer Total
ALLL, beginning of period $ 384,319 $ 218,677 $ 32,117 $ 17,497 $ 44,816 $ 3,132 $ 1,494 $ 702,052
ALLL recognized on PCD loans
18,175 — — — — — — 18,175
Provision for (reversal of) credit losses on loans (a) 106,941 26,825 4,386 ( 45 ) 8,398 2,656 ( 229 ) 148,932
Gross charge-offs ( 44,996 ) ( 24,237 ) ( 8 ) ( 1,996 ) ( 57 ) ( 6 ) ( 152 ) ( 71,452 )
Gross recoveries 10,721 229 60 12 306 22 263 11,613
Total net (charge-offs) recoveries ( 34,275 ) ( 24,008 ) 52 ( 1,984 ) 249 16 111 ( 59,839 )
Foreign currency translation adjustment 453 — — — — — — 453
ALLL, end of period $ 475,613 $ 221,494 $ 36,555 $ 15,468 $ 53,463 $ 5,804 $ 1,376 $ 809,773
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Year Ended December 31, 2024
Commercial Consumer
CRE Residential Mortgage
($ in thousands) C&I CRE Multifamily Residential Construction and Land Single-Family Residential HELOCs Other Consumer Total
ALLL, beginning of period $ 392,685 $ 170,592 $ 34,375 $ 10,469 $ 55,018 $ 3,947 $ 1,657 $ 668,743
Provision for (reversal of) credit losses on loans (a) 110,791 61,908 ( 2,684 ) 9,114 ( 10,176 ) ( 873 ) 4,096 172,176
Gross charge-offs ( 125,413 ) ( 14,236 ) ( 10 ) ( 2,289 ) ( 35 ) ( 15 ) ( 4,259 ) ( 146,257 )
Gross recoveries 6,505 413 436 203 9 73 — 7,639
Total net (charge-offs) recoveries ( 118,908 ) ( 13,823 ) 426 ( 2,086 ) ( 26 ) 58 ( 4,259 ) ( 138,618 )
Foreign currency translation adjustment ( 249 ) — — — — — — ( 249 )
ALLL, end of period $ 384,319 $ 218,677 $ 32,117 $ 17,497 $ 44,816 $ 3,132 $ 1,494 $ 702,052
Year Ended December 31, 2023
Commercial Consumer
CRE Residential Mortgage
($ in thousands) C&I CRE Multifamily Residential Construction and Land Single-Family Residential HELOCs Other Consumer Total
ALLL, beginning of period $ 371,700 $ 149,864 $ 23,373 $ 9,109 $ 35,564 $ 4,475 $ 1,560 $ 595,645
Impact of ASU 2022-02 adoption 5,683 337 6 — 1 1 — 6,028
Provision for (reversal of) credit losses on loans (a) 45,319 27,007 10,454 11,537 19,384 ( 424 ) 294 113,571
Gross charge-offs ( 36,573 ) ( 7,048 ) ( 3 ) ( 10,413 ) — ( 138 ) ( 197 ) ( 54,372 )
Gross recoveries 6,803 432 545 236 69 33 — 8,118
Total net (charge-offs) recoveries ( 29,770 ) ( 6,616 ) 542 ( 10,177 ) 69 ( 105 ) ( 197 ) ( 46,254 )
Foreign currency translation adjustment ( 247 ) — — — — — — ( 247 )
ALLL, end of period $ 392,685 $ 170,592 $ 34,375 $ 10,469 $ 55,018 $ 3,947 $ 1,657 $ 668,743
In addition to the ALLL, the Company maintains an allowance for unfunded credit commitments. The Company has three general areas for which it provides the allowance for unfunded credit commitments: (1) recourse obligations for loans sold, (2) letters of credit, and (3) unfunded lending commitments. The allowance for unfunded credit commitments is maintained at a level that management believes to be sufficient to absorb estimated expected credit losses related to unfunded credit facilities. See Note 12 — Commitments and Contingencies to the Consolidated Financial Statements in this Form 10-K for additional information related to unfunded credit commitments. The following table summarizes the activity in the allowance for unfunded credit commitments for the years ended December 31, 2025, 2024 and 2023:
Year Ended December 31,
($ in thousands) 2025 2024 2023
Unfunded credit facilities
Allowance for unfunded credit commitments, beginning of period $ 39,526 $ 37,699 $ 26,264
Provision for credit losses on unfunded credit commitments (b) 9,168 1,824 11,429
Foreign currency translation adjustments ( 4 ) 3 6
Allowance for unfunded credit commitments, end of period 48,690 39,526 37,699
Provision for credit losses on loans, leases and unfunded credit commitments (a) + (b) $ 158,100 $ 174,000 $ 125,000
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The allowance for credit losses on loans, leases and unfunded credit commitments was $ 858 million as of December 31, 2025, compared with $ 742 million as of December 31, 2024. The increase in the allowance for credit losses was primarily driven by the Company’s net loan growth, qualitative risk assessment, and an economic outlook that reflected continued caution regarding inflation, the high-interest rate environment and potential impacts from the escalating tariff and global trade tensions.
The Company considers multiple economic scenarios to develop the estimate of the ALLL. The scenarios may consist of a baseline forecast representing management's view of the most likely outcome, and downside or upside scenarios that reflect possible worsening or improving economic conditions. As of December 31, 2025, the Company assigned the same weightings to its baseline, while applying slightly lower and higher weightings to the upside and downside scenarios, respectively, as compared with December 31, 2024. The current baseline economic forecast continues to reflect key risks such as a weakening labor market, still-elevated interest rates, inflation, and concerns over global conflicts. Compared with December 2024, the December 2025 baseline forecast for GDP growth showed mild improvement in the near term, while the forecast for the unemployment rate showed an uptick beginning in 2026 and beyond. The downside scenario assumed the economy falls into recession in the first quarter of 2026 as a result of tariffs, rising inflation, still-elevated interest rates, political tensions, and reduced credit availability. The upside scenario assumed a more optimistic economic outlook, including stronger growth, stable financial markets, and full employment starting in the first quarter of 2026.
Loan Transfers, Sales and Purchases
The Company’s primary business focus is on directly originated loans. The Company also purchases loans from and participates in loan financing with other banks. In the normal course of business, the Company also provides other financial institutions with the ability to participate in commercial loans that it originates, by selling loans to such institutions. Purchased loans may be transferred from held-for-investment to held-for-sale, and write-downs to ALLL are recorded, when appropriate. The following tables provide information on the carrying value of loans transferred, sold and purchased during the years ended December 31, 2025, 2024 and 2023:
Year Ended December 31, 2025
Commercial Consumer
CRE Residential Mortgage
($ in thousands) C&I CRE Construction and Land Single-Family Residential Total
Loans transferred from held-for-investment to held-for-sale (1)
$ 282,252 $ 39,475 $ 9,500 $ — $ 331,227
Sales (2)(3)
$ 264,445 $ 39,475 $ 11,316 $ 1,232 $ 316,468
Purchases (4)
$ 450,314 $ — $ — $ 515,390 $ 965,704
Year Ended December 31, 2024
Commercial Consumer
CRE Residential Mortgage
($ in thousands) C&I CRE Construction and Land Single-Family Residential Total
Loans transferred from held-for-investment to held-for-sale (1)
$ 649,187 $ 9,417 $ 718 $ — $ 659,322
Sales (2)(3)
$ 650,256 $ 9,417 $ 718 $ 2,997 $ 663,388
Purchases (4)
$ 612,364 $ — $ — $ 387,629 $ 999,993
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Year Ended December 31, 2023
Commercial Consumer
CRE Residential Mortgage
($ in thousands) C&I CRE Construction and Land Single-Family Residential Total
Loans transferred from held-for-investment to held-for-sale (1)
$ 647,943 $ 83,282 $ 8,154 $ — $ 739,379
Sales (2)(3)
$ 674,919 $ 86,749 $ 8,154 $ — $ 769,822
Purchases (4)
$ 106,493 $ — $ — $ 493,282 $ 599,775
(1) Includes write-downs to the ALLL related to loans transferred from held-for-investment to held-for-sale of $ 2 million for each of the years ended December 31, 2025 and 2024, and $ 5 million for the year ended December 31, 2023.
(2) Includes originated loans sold of $ 219 million, $ 508 million and $ 513 million for the years ended December 31, 2025, 2024 and 2023, respectively. Originated loans sold consisted primarily of C&I and CRE loans for the years ended December 31, 2025 and 2023, and consisted primarily of C&I loans for the year ended December 31, 2024.
(3) Includes $ 97 million, $ 156 million and $ 256 million of purchased loans sold in the secondary market for the years ended December 31, 2025, 2024 and 2023, respectively.
(4) C&I loan purchases were comprised of syndicated C&I term loans.
Note 7 — Affordable Housing Partnership, Tax Credit and Community Reinvestment Act Investments, Net
The CRA encourages banks to meet the credit needs of their communities, particularly low- and moderate-income individuals and neighborhoods. The Company invests in certain affordable housing projects in the form of ownership interests in limited partnerships or limited liability companies that qualify for CRA consideration and tax credits. These entities are formed to develop and operate apartment complexes designed as high-quality affordable housing for lower income tenants throughout the U.S. To fully utilize the available tax credits, each of these entities must meet the affordable housing regulatory requirements for a 15 -year minimum compliance period. The Company also invests in small business investment companies and new markets tax credit projects that qualify for CRA consideration, as well as eligible projects that qualify for production, historic and renewable energy tax credits. Investments in new markets tax credits promote development in low-income communities; investments in production and renewable energy tax credits help promote the development of renewable energy sources; and investments in historic tax credits promote the rehabilitation of historic buildings and economic revitalization of the surrounding areas.
The majority of the affordable housing partnership, tax credit and CRA investments discussed above are VIEs, where the Company is a limited partner in these investments, and an unrelated third party is typically the general partner or managing member who has control over the significant activities of these investments. While the Company’s interest in some of the investments may exceed 50% of the outstanding equity interests, the Company does not consolidate these investments due to the general partner’s or managing member’s ability to manage the entity, which is indicative of the general partner’s or managing member’s power over the entity. The Company’s maximum exposure to loss in connection with these partnerships consists of the unamortized investment balance and any tax credits claimed that may become subject to recapture.
The Company elects to account for its tax credit investments using the PAM on a program-by-program basis if certain conditions are met. For the Company’s accounting policies on PAM, see Note 1 — Summary of Significant Accounting Policies — Significant Accounting Policies — Income Taxes in this Form 10-K. For discussion on the Company’s impairment evaluation and monitoring process of tax credit investments, refer to Note 2 — Fair Value Measurement and Fair Value of Financial Instruments — Affordable Housing Partnership, Tax Credit and CRA Investments, Net to the Consolidated Financial Statements in this Form 10-K.
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The following table presents the investments and unfunded commitments of the Company’s affordable housing partnership, tax credit, and CRA investments, net as of December 31, 2025 and 2024:
December 31,
2025 2024
($ in thousands) Assets Liabilities - Unfunded Commitments (1)
Assets Liabilities - Unfunded Commitments (1)
PAM:
Affordable housing partnership investments $ 483,021 $ 172,343 $ 500,217 $ 280,919
Tax credit and CRA investments 140,723 43,878 160,429 21,202
Equity method of accounting and other:
Tax credits and CRA investments 345,748 (2)
121,275 265,994 (2)
105,743
Total $ 969,492 $ 337,496 $ 926,640 $ 407,864
(1) Included in Accrued expenses and other liabilities on the Consolidated Balance Sheet.
(2) Includes $ 37 million and $ 29 million of equity securities without readily determinable fair values as of December 31, 2025 and 2024, respectively.
The following table presents additional information related to the investments in affordable housing partnership, tax credit and CRA investments for the years ended December 31, 2025, 2024 and 2023:
Year Ended December 31,
($ in thousands) 2025 2024 2023
Tax credits and benefits (1) :
PAM:
Affordable housing partnership investments $ 87,214 $ 70,335 $ 60,939
Tax credit and CRA investments 111,906 110,260 —
Equity method of accounting and other:
Tax credit and CRA investments 119,098 64,720 124,433
Total tax credits and benefits $ 318,218 $ 245,315 $ 185,372
Amortization (2) :
PAM:
Affordable housing partnership investments (3)
$ 60,078 $ 46,113 $ 43,041
Tax credit and CRA investments (4)
88,883 90,113 —
Equity method of accounting and other:
Tax credit and CRA investments (5) (6)
74,795 54,242 120,299
Total amortization $ 223,756 $ 190,468 $ 163,340
(1) Include s purchased tax credits and was recorded in Income tax expense on the Consolidated Statement of Income for the years ended December 31, 2025, 2024 and 2023.
(2) Amortization of investments in affordable housing partnership, tax credit and CRA investments is included in Depreciation, amortization, and accretion, net on the Consolidated Statement of Cash Flows.
(3) Amortization related to investments in qualified affordable housing partnerships under PAM was recorded in Income tax expense on the Consolidated Statement of Income for the years ended December 31, 2025, 2024 and 2023.
(4) Following the adoption of ASU 2023-02 on January 1, 2024, amortization related to qualifying tax credit investments under PAM was recorded in Income tax expense on the Consolidated Statement of Income for the years ended December 31, 2025 and 2024.
(5) Amortization related to tax credit and CRA investments was recognized in Amortization of tax credit and CRA investments as part of noninterest expense on the Consolidated Statement Income for the years ended December 31, 2025, 2024 and 2023.
(6) Includes impairment charges of $ 1 million for the year ended December 31, 2024, and net impairment recoveries of $ 1 million for the year ended December 31, 2023. The activity was primarily related to historic tax credits.
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As of December 31, 2025, the Company’s unfunded commitments related to investments in affordable housing partnership, tax credit and CRA investments, net are estimated to be funded as follows:
($ in thousands) Amount
2026 $ 279,856
2027 43,982
2028 6,034
2029 1,440
2030 1,931
Thereafter 4,253
Total $ 337,496
The Company also held equity securities without readily determinable fair values totaling $ 117 million and $ 118 million as of December 31, 2025 and 2024, respectively. These equity securities without readily determinable fair values are included in Other Assets on the Consolidated Balance Sheet.
Note 8 — Goodwill
Total goodwill was $ 466 million as of both December 31, 2025 and 2024. The Company’s goodwill impairment test is performed annually, as of December 31, or more frequently if events occur or circumstances change that would more-likely-than-not reduce the fair value of a reporting unit below its carrying value. The Company completed its annual goodwill impairment test as of December 31, 2025 by using a qualitative assessment, and concluded goodwill was not impaired. Additional information pertaining to the Company’s accounting policy for goodwill is summarized in Note 1 — Summary of Significant Accounting Policies — Significant Accounting Policies — Goodwill to the Consolidated Financial Statements in this Form 10-K.
As of December 31, 2025, the Company held an equity method investment totaling $ 108 million of which $ 101 million was comprised of equity method goodwill.
Note 9 — Deposits
The following table presents the composition of the Company’s deposits as of December 31, 2025 and 2024:
December 31,
($ in thousands) 2025 2024
Deposits:
Noninterest-bearing demand $ 16,697,099 $ 15,450,428
Interest-bearing checking 7,989,255 7,940,692
Money market 15,439,729 14,816,511
Savings:
Domestic office 1,503,006 1,583,657
Foreign office 168,798 167,963
Time deposits (1) :
Domestic office 22,694,862 21,128,657
Foreign office 2,589,952 2,087,115
Total deposits $ 67,082,701 $ 63,175,023
(1) The aggregate amount of time deposits that met or exceeded the deposit insurance limit was $ 18.3 billion and $ 16.5 billion as of December 31, 2025 and 2024, respectively.
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The following table presents the scheduled maturities of time deposits for the five years succeeding December 31, 2025:
($ in thousands) Amount
2026 $ 24,796,653
2027 415,251
2028 68,605
2029 2,908
2030 1,397
Total $ 25,284,814
Note 10 — Federal Home Loan Bank Advances and Long-Term Debt
The following table presents details of the Company’s FHLB advances and long-term debt as of December 31, 2025 and 2024:
December 31,
2025 2024
($ in thousands) Interest Rate Maturity Dates Amount Amount
Parent company
Junior subordinated debt (1) — floating
5.53 % 12/15/2035 $ 32,320 $ 32,001
Bank
FHLB advances (2) :
Floating (3)
3.87 % — 3.96 %
2026 $ 2,000,000 $ 3,000,000
Fixed 3.87 % — 4.01 %
2026 750,000 500,000
Overnight (4)
4.02 % 1/2/2026 250,000 —
Total FHLB advances $ 3,000,000 $ 3,500,000
(1) As of December 31, 2025, the outstanding junior subordinated debt was issued by MCBI Statutory Trust I and had a stated interest rate of 3-month CME Term Secured Overnight Financing Rate ("SOFR") + 1.81 %. The contractual interest rates for junior subordinated debt were 5.53 % and 6.17 % as of December 31, 2025 and 2024, respectively.
(2) The weighted-average interest rate for FHLB advances was 3.94 % as of December 31, 2025.
(3) Floating interest rates are based on the SOFR plus the established spread.
(4) Overnight interest rates are based on the Standard Credit Program’s Advance Rate, as published by the FHLB.
FHLB Advances
The Bank’s available borrowing capacity from FHLB advances totaled $ 11.8 billion as of December 31, 2025. The Bank’s available borrowing capacity from the FHLB is derived from its portfolio of loans that are pledged to the FHLB, reduced by any outstanding FHLB advances. As of December 31, 2025, all advances were secured by real estate loans.
Long-Term Debt — Junior Subordinated Debt
As of December 31, 2025, East West had one statutory business trust for the purpose of holding junior subordinated debt issued to third party investors. The proceeds from these issuances represent liabilities of East West to the Trust and are reported as a component of L o ng-term debt on the Consolidated Balance Sheet. Interest payments on these securities are disbursed quarterly and are deductible for tax purposes. Outstanding principal amounts included $ 35 million of junior subordinated debt and $ 1 million of t rust preferred securities as of December 31, 2025.
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Note 11 — Income Taxes
The following table presents the components of income before income taxes and income tax expense (benefit) for the years ended December 31, 2025, 2024 and 2023:
Year Ended December 31,
($ in thousands) 2025 2024 2023
Income before income taxes:
U.S. $ 1,686,561 $ 1,429,104 $ 1,425,756
Foreign 38,899 52,757 34,014
Total income before income taxes 1,725,460 1,481,861 1,459,770
Current income tax expense:
Federal 250,521 166,268 172,428
State 149,291 153,891 173,080
Foreign 8,235 10,399 2,240
Total current income tax expense 408,047 330,558 347,748
Deferred income tax (benefit) expense:
Federal ( 20,242 ) ( 6,467 ) ( 24,319 )
State 12,897 ( 5,582 ) ( 23,415 )
Foreign ( 430 ) ( 2,234 ) ( 1,405 )
Total deferred income tax benefit ( 7,775 ) ( 14,283 ) ( 49,139 )
Total income tax expense:
Federal 230,279 159,801 148,109
State 162,188 148,309 149,665
Foreign 7,805 8,165 835
Total income tax expense $ 400,272 $ 316,275 $ 298,609
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The following table presents the reconciliation of the federal statutory rate to the Company’s effective tax rate for the years ended December 31, 2025, 2024 and 2023:
Year Ended December 31,
2025 2024 2023
($ in thousands) Amount Percent Amount Percent Amount Percent
Statutory U.S. federal tax rate $ 362,347 21.0 % $ 311,191 21.0 % $ 306,552 21.0 %
U.S. federal
Tax credits (1)
Tax credits and benefits under the PAM, net of amortization ( 29,268 ) ( 1.7 ) ( 26,147 ) ( 1.8 ) ( 4,299 ) ( 0.3 )
Energy tax credit — solar
( 42,406 ) ( 2.5 ) ( 52,722 ) ( 3.5 ) ( 70,364 ) ( 4.8 )
Energy tax credit — energy storage
( 34,408 ) ( 2.0 ) ( 11,143 ) ( 0.7 ) — —
New markets tax credit — — — — ( 21,378 ) ( 1.5 )
Other tax credits ( 23,802 ) ( 1.4 ) ( 18,906 ) ( 1.3 ) ( 34,076 ) ( 2.3 )
Changes in valuation allowance 13,353 0.8 — — — —
Nontaxable or nondeductible items
Nondeductible FDIC insurance premiums 8,474 0.5 7,719 0.5 7,007 0.5
Other nontaxable or nondeductible items 4,899 0.3 ( 15,041 ) ( 1.0 ) 217 0.0
Other, net 7,549 0.4 ( 3,879 ) ( 0.3 ) ( 4,544 ) ( 0.3 )
U.S. state and local income taxes, net of U.S. federal income tax effect (2)
125,638 7.3 116,091 7.8 118,236 8.1
Foreign tax effects 7,805 0.5 8,165 0.5 835 0.1
Changes in unrecognized tax benefits 91 0.0 947 0.1 423 0.0
Effective tax rate $ 400,272 23.2 % $ 316,275 21.3 % $ 298,609 20.5 %
(1) Following the adoption of ASU 2023-02 on January 1, 2024, the Company expanded the PAM to include qualifying investments in new markets, historic, production and energy tax credit programs, in addition to affordable housing partnerships.
(2) California state taxes made up the majority (greater than 50 percent) of state and local taxes.
The following table presents the income taxes paid (net of refunds received) by the Company for the years ended December 31, 2025, 2024 and 2023:
Year Ended December 31,
($ in thousands) 2025 2024 2023
Federal $ 65,981 $ 68,371 $ 140,000
State
California 120,000 102,061 100,000
New York 67,001 59,049 36,732
Other states
12,080 11,278 14,953
Foreign 13,120 6,186 —
Total $ 278,182 $ 246,945 $ 291,685
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The following table summarizes the tax effects of temporary differences that give rise to a significant portion of deferred tax assets and liabilities as of December 31, 2025 and 2024:
December 31,
($ in thousands) 2025 2024
Deferred tax assets:
Allowance for credit losses and nonperforming assets valuation allowance $ 251,494 $ 233,879
Net unrealized losses on AFS debt and transferred securities
142,141 223,814
Stock compensation and other accrued compensation 46,825 41,118
Lease liabilities 40,714 27,644
Tax credit and capital loss carryforwards
51,193 11,122
Basis difference in investments
16,430 17,708
Nonaccrual loans’ interest income
8,306 8,809
State taxes 6,548 5,808
FDIC special assessment charge 2,615 16,843
Other 13,435 14,665
Total deferred tax assets $ 579,701 $ 601,410
Valuation allowance ( 13,353 ) —
Total deferred tax assets, net of valuation allowance $ 566,348 $ 601,410
Deferred tax liabilities:
Operating lease right-of-use assets $ 37,225 $ 25,647
Basis difference in investments
26,203 25,587
Net unrealized gains on derivative hedges
14,704 —
Equipment lease financing 7,206 10,395
Other 7,006 26,437
Total deferred tax liabilities $ 92,344 $ 88,066
Net deferred tax assets $ 474,004 $ 513,344
The Company has not repatriated and does not intend to repatriate earnings from its foreign subsidiary. The Company determined such earnings are to be indefinitely reinvested in the local jurisdiction. The related unrecognized deferred tax liability on these earnings is immaterial.
As of December 31, 2025, the Company had deferred tax assets of $ 46 million related to tax credit carryforwards and $ 5 million related to state capital loss carryforwards. The Company’s tax credit carryforwards included $ 13 million of foreign tax credits as of December 31, 2025, which may not be fully utilized before they expire in 2034. The Company’s remaining carryforwards are expected to be fully utilized before they start to expire in 2028. The Company concluded that a valuation allowance was necessary to reduce the deferred tax assets associated with the foreign tax credits and recorded a $ 13 million valuation allowance as of December 31, 2025. For the remaining deferred tax assets it is more likely than not that there will be sufficient taxable income of appropriate nature in future years to realize these assets. For further information on the Company’s valuation policy on deferred taxes, see Note 1 — Summary of Significant Accounting Policies — Significant Accounting Policies — Income Taxes to the Consolidated Financial Statements in this Form 10-K.
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The following table presents a reconciliation of the beginning and ending balances of unrecognized tax benefits for the years ended December 31, 2025, 2024 and 2023:
Year Ended December 31,
($ in thousands) 2025 2024 2023
Beginning balance $ 4,670 $ 1,193 $ 477
Additions for tax positions related to prior years — 2,698 (1)
459
Deductions for tax positions related to prior years ( 446 ) — —
Additions for tax positions related to current year 547 779 257
Settlements with taxing authorities ( 2,019 ) (2)
— —
Ending balance $ 2,752 $ 4,670 $ 1,193
(1) In 2024, the increase in positions related to prior years primarily related to proposed adjustments resulting from examination of the Company’s state tax returns.
(2) In 2025, the Company settled an issue related to the examination of the Company’s prior years’ state tax returns.
The Company recognizes interest and penalties, as applicable, related to the underpayment of income taxes as a component of Income tax expense on the Consolidated Statement of Income. The Company recorded net interest expense of $ 1 million for each of the years ended December 31, 2025 and 2024. In comparison, net interest and penalties expense was immaterial for the year ended 2023. Total accrued interest included in Accrued expenses and other liabilitie s on the Consolidated Balance Sheet was $ 232 thousand and $ 1 million as of December 31, 2025 and 2024, respectively.
The Company files federal income tax returns, as well as returns in various state and foreign jurisdictions. We are routinely examined by tax authorities in these various jurisdictions. The Company is subject to federal income tax examination for the tax years 2022 and forward. With few exceptions, the Company is also subject to tax examination in various state and local jurisdictions for the tax years 2021 and forward. The Company does not believe that the outcome of unresolved issues or claims in any of the tax jurisdictions is likely to have a material impact on the Company’s Consolidated Financial Statements. The Company believes that adequate provisions have been recorded for all income tax uncertainties consistent with ASC 740, Income Taxes as of December 31, 2025.
Note 12 — Commitments and Contingencies
Commitments to Extend Credit — In the normal course of business, the Company provides loan commitments and letters of credit to customers on predetermined terms. These outstanding commitments to extend credit are not reflected in the accompanying Consolidated Financial Statements.
The following table presents the Company’s credit-related commitments as of December 31, 2025 and 2024:
December 31,
2025 2024
($ in thousands) Expire in One Year or Less Expire After One Year Through Three Years Expire After Three Years Through Five Years Expire After Five Years Total Total
Loan commitments $ 4,927,242 $ 3,887,543 $ 716,718 $ 92,460 $ 9,623,963 $ 9,128,040
Commercial letters of credit and SBLCs 1,265,040 560,517 153,113 977,620 2,956,290 2,917,029
Total $ 6,192,282 $ 4,448,060 $ 869,831 $ 1,070,080 $ 12,580,253 $ 12,045,069
Loan commitments are agreements to lend to customers provided there are no violations of any conditions established in the agreement. Commitments generally have fixed expiration dates or other termination clauses and may require commitment fees. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future funding requirements.
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Commercial letters of credit are issued to facilitate domestic and foreign trade transactions, while SBLCs are generally contingent upon the failure of the customers to perform according to the terms of the underlying contract with the third party. As a result, the total contractual amounts do not necessarily represent future funding requirements. The Company’s historical experience is that SBLCs typically expire without being funded. Additionally, in many cases, the Company holds collateral in various forms against these SBLCs. As part of its risk management activities, the Company monitors the creditworthiness of customers in conjunction with its SBLC exposure. Customers are obligated to reimburse the Company for any payment made on the customers’ behalf. If the customers fail to pay, the Company would, as applicable, liquidate the collateral and/or offset existing accounts. As of December 31, 2025, total letters of credit of $ 3.0 billion consisted of SBLCs of $ 2.9 billion and commercial letters of credit of $ 31 million. In comparison, as of December 31, 2024, total letters of credit of $ 2.9 billion consisted of SBLCs of $ 2.9 billion and commercial letters of credit of $ 29 million. As of both December 31, 2025 and 2024, substantially all letters of credit were graded “Pass” using the Bank’s internal credit risk rating system.
The Company applies the same credit underwriting criteria to extend loans, commitments, and conditional obligations to customers. Each customer’s creditworthiness is evaluated on a case-by-case basis. Collateral and financial guarantees may be obtained based on management’s assessment of a customer’s credit risk. Collateral may include cash, accounts receivable, inventory, personal property, plant and equipment, and real estate property.
Estimated exposure to loss from these commitments is included in the allowance for unfunded credit commitments, and amounted to $ 49 million and $ 39 million as of December 31, 2025 and 2024, respectively. For further information on the allowance for unfunded credit commitments, refer to Note 6 — Loans Receivable and Allowance for Credit Losses to the Consolidated Financial Statements in this Form 10-K
Guarantees — The Company occasionally sells or securitizes single-family and multifamily residential loans with recourse in the ordinary course of business. The Company is obligated to repurchase up to the recourse component of the loans if the loans default. The following table presents the maximum potential future payments and carrying value of loans sold or securitized with recourse as of December 31, 2025 and 2024:
Maximum Potential Future Payments Carrying Value (1)
December 31, December 31,
2025 2024 2025 2024
($ in thousands) Expire After One Year Through Three Years Expire After Three Years Through Five Years Expire After Five Years Total Total Total Total
Single-family residential loans sold or securitized with recourse $ 15 $ 323 $ 2,799 $ 3,137 $ 4,375 $ 3,137 $ 4,375
Multifamily residential loans sold or securitized with recourse 124 40 14,832 14,996 14,996 15,895 17,770
Total $ 139 $ 363 $ 17,631 $ 18,133 $ 19,371 $ 19,032 $ 22,145
(1) Represents the unpaid principal balance.
The Company continues to experience minimal losses from the single-family and multifamily residential loan portfolios sold or securitized with recourse and recorded an immaterial recourse reserve as of December 31, 2025 and 2024.
Litigation — The Company is a party to various legal actions arising in the ordinary course of its business. In accordance with ASC 450, Contingencies , the Company accrues reserves for outstanding lawsuits, claims and proceedings when a loss contingency is probable and can be reasonably estimated. The Company estimates the amount of loss contingencies using current available information from legal proceedings, advice from legal counsel and available insurance coverage. Due to the inherent subjectivity of the assessments and unpredictability of the outcomes of the legal proceedings, any amounts accrued or included in this aggregate amount may not represent the ultimate loss to the Company from the legal proceedings in question. Thus, the Company’s exposure and ultimate losses may be higher, and possibly significantly more than the amounts accrued.
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While it is impossible to ascertain the ultimate resolution or range of financial liability, based on information known to the Company as of December 31, 2025, the Company does not believe there are any pending legal proceedings to which the Company is a party that, individually or in the aggregate, would reasonably be expected to have a material adverse effect on the Company’s financial condition. In light of the inherent uncertainty in legal proceedings, however, there can be no assurance that the ultimate resolution will not exceed established reserves and it is possible that the outcome of a particular matter, or a combination of matters, may be material to the Company’s financial condition for a particular period, depending upon the size of the loss and the Company’s income for that particular period.
Note 13 — Stock Compensation Plans
Pursuant to the Company’s 2021 Stock Incentive Plan, as amended, the Company may issue stock, stock options, restricted stock, RSUs including performance-based RSUs, stock purchase warrants, stock appreciation rights, phantom stock and dividend equivalents to eligible employees, non-employee directors, consultants, and other service providers of East West and its subsidiaries. The Company has granted RSUs as its primary incentive awards. There were no outstanding awards other than RSUs as of December 31, 2025, 2024 and 2023. The total number of shares available for grant under the 2021 Stock Incentive Plan was approximately 3 million as of December 31, 2025.
The following table presents a summary of the total share-based compensation expense and the related net tax benefits associated with the Company’s various employee share-based compensation plans for the years ended December 31, 2025, 2024 and 2023:
Year Ended December 31,
($ in thousands) 2025 2024 2023
Stock compensation costs $ 76,189 $ 45,535 $ 39,867
Related net tax benefits for stock compensation plans $ 3,041 $ 997 $ 8,959
Restricted Stock Units — RSUs are granted under the Company’s long-term incentive plan at no cost to the recipient. RSUs generally cliff vest after three years of continued employment from the date of the grant, and are authorized to settle in shares of the Company’s common stock. Dividends are accrued during the vesting period and paid at the time of vesting. While a portion of RSU grants are time-based vesting awards, other RSUs vest subject to the attainment of additional specified performance goals, referred to as “performance-based RSUs.” Performance-based RSUs are granted annually upon approval by the Company’s Compensation and Management Development Committee based on the performance in the year prior to the grant date of the award. The number of awards that vest can range from 0 % to a maximum of 200 % of the target number of awards based on the Company’s achievement of specified performance criteria over a performance period of three years . For information on accounting on stock-based compensation plans, see Note 1 — Summary of Significant Accounting Policies — Significant Accounting Policies — Stock-Based Compensation to the Consolidated Financial Statements in this Form 10-K.
The following table presents a summary of the activities for the Company’s time- and performance-based RSUs that were settled in shares for the year ended December 31, 2025. The number of performance-based RSUs stated below reflects the number of awards granted on the grant date:
Time-Based RSUs Performance-Based RSUs
Shares Weighted-Average Grant Date Fair Value Shares Weighted-Average Grant Date Fair Value
Outstanding, January 1, 2025
1,348,612 $ 75.70 282,061 $ 79.48
Granted 473,818 $ 95.20 88,660 $ 95.34
Vested ( 359,890 ) $ 78.17 ( 87,992 ) $ 81.35
Forfeited ( 110,516 ) $ 80.18 — $ —
Outstanding, December 31, 2025
1,352,024 $ 81.51 282,729 $ 83.87
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The weighted-average grant date fair value of the time-based RSUs granted during the years ended December 31, 2025, 2024, and 2023 was $ 95.20 , $ 76.44 , and $ 73.13 , respectively. The weighted-average grant date fair value of the performance-based RSUs granted during the years ended December 31, 2025, 2024 and 2023 was $ 95.34 , $ 80.28 and $ 79.93 , respectively. The total fair value of time-based RSUs that vested during the years ended December 31, 2025, 2024 and 2023 was $ 34 million, $ 25 million and $ 39 million, respectively. The total fair value of performance-based RSUs that vested during the years ended December 31, 2025, 2024, and 2023 was $ 14 million, $ 12 million and $ 21 million, respectively.
As of December 31, 2025, there was $ 35 million of unrecognized compensation costs related to unvested time-based RSUs expected to be recognized over a weighted-average period of 1.8 years, and $ 5 million of unrecognized compensation costs related to unvested performance-based RSUs expected to be recognized over a weighted-average period of 1.8 years.
Employee Stock Purchase Plan — The 1998 Employee Stock Purchase Plan (the “Purchase Plan”) provides eligible employees of the Company the right to purchase shares of its common stock at a discount. Employees can purchase shares at 90 % of the fair market price subject to an annual purchase limitation of $ 22,500 per employee. As of December 31, 2025, the Purchase Plan qualifies as a non-compensatory plan under Section 423 of the Internal Revenue Code and, accordingly, no compensation expense has been recognized. 2,000,000 shares of the Company’s common stock were authorized for sale under the Purchase Plan. During the years ended December 31, 2025 and 2024, 36,863 shares totaling $ 3 million and 41,563 shares totaling $ 3 million, respectively, were sold to employees under the Purchase Plan. As of December 31, 2025, there were 73,388 shares available under the Purchase Plan.
Note 14 — Stockholders’ Equity and Earnings Per Share
The following table presents the basic and diluted EPS calculations for the years ended December 31, 2025, 2024 and 2023. For more information on the calculation of EPS, see Note 1 — Summary of Significant Accounting Policies — Significant Accounting Policies — Earnings Per Share to the Consolidated Financial Statements in this Form 10-K.
Year Ended December 31,
($ and shares in thousands, except per share data) 2025 2024 2023
Basic:
Net income $ 1,325,188 $ 1,165,586 $ 1,161,161
Basic weighted-average number of shares outstanding
138,342 (1)
138,898 141,164
Basic EPS $ 9.58 $ 8.39 $ 8.23
Diluted:
Net income $ 1,325,188 $ 1,165,586 $ 1,161,161
Less: Fair value changes of liability-classified equity contracts, net of tax (2)
( 996 ) — —
Net income, diluted
$ 1,324,192 $ 1,165,586 $ 1,161,161
Basic weighted-average number of shares outstanding
138,342 (1)
138,898 141,164
Add: Dilutive impact of unvested RSUs and liability-classified equity contracts that are share-settled 788 1,060 738
Diluted weighted-average number of shares outstanding 139,130 139,958 141,902
Diluted EPS $ 9.52 $ 8.33 $ 8.18
(1) Includes retirement-eligible employees’ awards.
(2) Applied blended statutory tax rate of 28.02 % for the year ended December 31, 2025.
Approximately nine thousand, six thousand and 283 thousand weighted-average shares of anti-dilutive RSUs were excluded from the diluted EPS computation for the years ended December 31, 2025, 2024 and 2023, respectively.
Stock Repurchase Program — On January 22, 2025, the Company’s Board of Directors authorized the repurchase of up to $ 300 million of its common stock. The Company repurchased $ 115 million and $ 144 million of its common stock in the years ended December 31, 2025 and 2024, respectively. All repurchases were made on the open market at currently prevailing prices.
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Note 15 — Accumulated Other Comprehensive (Loss) Income
The following table presents the changes in the components of AOCI balances for the years ended December 31, 2025, 2024 and 2023:
($ in thousands) Debt Securities (1)
Cash Flow Hedges Foreign Currency Translation Adjustments (2)
Total
Balance, December 31, 2022 $ ( 694,815 ) $ ( 49,531 ) $ ( 21,283 ) $ ( 765,629 )
Net unrealized gains (losses) arising during the period
76,930 ( 4,277 ) ( 56 ) 72,597
Amounts reclassified from AOCI 16,004 56,432 — 72,436
Changes, net of tax 92,934 52,155 ( 56 ) 145,033
Balance, December 31, 2023 $ ( 601,881 ) $ 2,624 $ ( 21,339 ) $ ( 620,596 )
Net unrealized gains (losses) arising during the period 50,302 ( 87,447 ) ( 982 ) ( 38,127 )
Amounts reclassified from AOCI 9,427 64,036 — 73,463
Changes, net of tax 59,729 ( 23,411 ) ( 982 ) 35,336
Balance, December 31, 2024 $ ( 542,152 ) $ ( 20,787 ) $ ( 22,321 ) $ ( 585,260 )
Net unrealized gains arising during the period
177,668 34,108 1,734 213,510
Amounts reclassified from AOCI 11,252 14,888 — 26,140
Changes, net of tax 188,920 48,996 1,734 239,650
Balance, December 31, 2025 $ ( 353,232 ) $ 28,209 $ ( 20,587 ) $ ( 345,610 )
(1) Includes after-tax unamortized losses related to AFS debt securities that were transferred to HTM in 2022.
(2) Represents foreign currency translation adjustments related to the Company’s net investments in non-U.S. operations, including related hedges.
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The following table presents the components of other comprehensive (loss) income, reclassifications to net income and the related tax effects for the years ended December 31, 2025, 2024 and 2023:
Year Ended December 31,
2025 2024 2023
($ in thousands) Before-Tax Tax Effect Net-of-Tax Before-Tax Tax Effect Net-of-Tax Before-Tax Tax Effect Net-of-Tax
Debt securities:
Net unrealized gains on AFS debt securities arising during the period
$ 252,366 $ ( 74,698 ) $ 177,668 $ 71,259 $ ( 20,957 ) $ 50,302 $ 109,216 $ ( 32,286 ) $ 76,930
Reclassification adjustments:
Net realized losses (gains) on AFS debt securities reclassified into net income (1)
937 ( 277 ) 660 ( 2,069 ) 612 ( 1,457 ) 6,862 (2)
( 2,029 ) 4,833
Amortization of unrealized losses on transferred securities (3)
15,038 ( 4,446 ) 10,592 15,452 ( 4,568 ) 10,884 15,860 ( 4,689 ) 11,171
Net change 268,341 ( 79,421 ) 188,920 84,642 ( 24,913 ) 59,729 131,938 ( 39,004 ) 92,934
Cash flow hedges:
Net unrealized gains (losses) arising during the period
48,016 ( 13,908 ) 34,108 ( 124,382 ) 36,935 ( 87,447 ) ( 5,767 ) 1,490 ( 4,277 )
Net realized losses reclassified into net income (4)
20,959 ( 6,071 ) 14,888 91,083 ( 27,047 ) 64,036 79,843 ( 23,411 ) 56,432
Net change 68,975 ( 19,979 ) 48,996 ( 33,299 ) 9,888 ( 23,411 ) 74,076 ( 21,921 ) 52,155
Foreign currency translation adjustments, net of hedges:
Net unrealized gains (losses) arising during the period
1,641 93 1,734 ( 809 ) ( 173 ) ( 982 ) 698 ( 754 ) ( 56 )
Net change 1,641 93 1,734 ( 809 ) ( 173 ) ( 982 ) 698 ( 754 ) ( 56 )
Other comprehensive income
$ 338,957 $ ( 99,307 ) $ 239,650 $ 50,534 $ ( 15,198 ) $ 35,336 $ 206,712 $ ( 61,679 ) $ 145,033
(1) Pre-tax amounts were reported in Net gains (losses) on AFS debt securities and Provision for Credit Losses on the Consolidated Statement of Income Refer to Note 4 — Securities — Realized Gains and Credit Losses for further details.
(2) Represents the net loss related to an AFS debt security that was written-off in the first quarter of 2023 and subsequently sold during the fourth quarter of 2023.
(3) Represents unrealized losses amortized over the remaining useful lives of securities that were transferred from the AFS to HTM portfolio in 2022.
(4) Pre-tax amounts related to cash flow hedges on variable rate loans and long-term borrowings, where applicable, were reported in Interest and dividend income and in Interest expense, respectively , on the Consolidated Statement of Income. In 2023, pre-tax amount also includes the terminated cash flow hedge where the forecasted cash flows were no longer probable to occur and was reported in Noninterest income on the Consolidated Statement of Income.
Note 16 — Regulatory Requirements and Matters
The Company and the Bank are subject to regulatory capital adequacy requirements administered by the respective federal banking agencies that are based largely under the Basel III Capital Rules. As standardized approaches institutions, the Basel III Capital Rules require that banking organizations, such as the Company and the Bank, to maintain a minimum Common Equity Tier 1 (“CET1”) capital ratio of at least 4.5 %, a Tier 1 capital ratio of at least 6.0 %, a total capital ratio of at least 8.0 %, and a Tier 1 leverage ratio of a least 4.0 % to be considered adequately capitalized. Failure to meet the minimum capital requirements can result in certain mandatory actions and possibly additional discretionary actions by the regulators that, if undertaken, could have a direct material effect on the Company’s Consolidated Financial Statements. The Company and the Bank are also subject to maintaining a capital conservation buffer of 2.5 % above the minimum risk-based capital ratios under the Basel III Capital Rules. Banking institutions with a ratio of CET1 to risk-weighted assets above the minimum but which does not exceed the capital conservation buffer will face constraints on dividends, share repurchases and executive compensation based on the amount of the shortfall.
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The Federal Deposit Insurance Corporation Improvement Act of 1991 requires that the federal regulatory agencies adopt regulations defining capital categories for banks: well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized and critically undercapitalized. Under the agencies’ Prompt Corrective Action regulations, failure of a bank to be well capitalized results in an escalating series of adverse regulatory consequences.
As of both December 31, 2025 and 2024, the Company and the Bank were both categorized as well capitalized based on applicable U.S. regulatory capital ratio requirements in accordance with Basel III standardized approaches, as set forth in the table below. The Company believes that no changes in conditions or events have occurred since December 31, 2025, which would result in changes that would cause the Company or the Bank to fall below the well capitalized level. The following table presents the regulatory capital information of the Company and the Bank as of December 31, 2025 and 2024:
Basel III
December 31, 2025 December 31, 2024 (1)
($ in thousands) Amount Ratio Amount Ratio Minimum Regulatory Requirements Minimum Regulatory Requirements including Capital Conservation Buffer (3)
Well-Capitalized Requirement
Total capital (to risk-weighted assets)
Company $ 9,480,208 16.4 % $ 8,561,797 15.6 % 8.0 % 10.5 % 10.0 %
East West Bank $ 8,694,701 15.1 % $ 8,053,389 14.7 % 8.0 % 10.5 % 10.0 %
Tier 1 capital (to risk-weighted assets)
Company $ 8,721,523 15.1 % $ 7,839,816 14.3 % 6.0 % 8.5 % 6.0 %
East West Bank $ 7,973,536 13.9 % $ 7,367,996 13.4 % 6.0 % 8.5 % 8.0 %
CET1 capital (to risk-weighted assets)
Company (2)
$ 8,721,523 15.1 % $ 7,839,816 14.3 % 4.5 % 7.0 % N/A
East West Bank $ 7,973,536 13.9 % $ 7,367,996 13.4 % 4.5 % 7.0 % 6.5 %
Tier 1 leverage capital (to adjusted quarterly average assets)
Company (2)
$ 8,721,523 10.9 % $ 7,839,816 10.4 % 4.0 % 4.0 % N/A
East West Bank $ 7,973,536 10.0 % $ 7,367,996 9.8 % 4.0 % 4.0 % 5.0 %
N/A — Not applicable.
(1) Reflected a delay of the estimated impact of CECL on regulatory capital in accordance with regulatory capital rules.
(2) The well-capitalized requirements for CET1 capital and Tier 1 leverage capital apply only to the Bank since there is no CET1 capital ratio or Tier 1 leverage capital ratio component in the definition of a well-capitalized bank holding company.
(3) Includes a 2.5 % capital conservation buffer requirement above the minimum risk-based capital ratios, where applicable.
Note 17 — Business Segments
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 where customers are served, and the products and services provided. The chief operating decision maker (“CODM”) is the Chairman and Chief Executive Officer of the Company. The CODM regularly reviews the Company’s operating results to allocate resources and assess performance. Operating segment results are also based on the Company’s internal management reporting process, which reflects the allocations of certain balance sheet and income statement line items. The CODM uses certain performance measures such as segment net income and considers variances of actual results from forecast results on a quarterly basis when making decisions on resource allocations between segments. The segment information presented is not indicative of how the segments would perform if they operated as independent entities.
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.
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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 remaining centralized functions, including the corporate treasury activities of the Company, tax credit investment activity, eliminations of inter-segment amounts, and centrally managed departments, have been aggregated and included in the Treasury and Other segment.
The Company utilizes an internal reporting process to measure the performance of the three operating segments within the Company. The Company’s internal reporting process consists of certain allocation methodologies for revenues and expenses, and the internal funds transfer pricing (“FTP”) process. The FTP process is formulated with the goal of encouraging loan and deposit growth that is consistent with the Company’s overall profitability objectives, as well as providing a reasonable and consistent basis for the measurement of business segment net interest margins and profitability. The FTP process charges a cost to fund loans (“FTP charges for loans”) and allocates credits for funds provided from deposits (“FTP credits for deposits”) using internal FTP rates. FTP charges for loans are determined based on a matched cost of funds, which is tied to the pricing and term characteristics of the loans. FTP credits for deposits are based on matched funding credit rates, which are tied to the implied or stated maturity of the deposits. FTP credits for deposits reflect the long-term value generated by the deposits. The net spread between the total internal FTP charges and credits is recorded as part of net interest income in the Treasury and Other segment. The corporate treasury function within the Treasury and Other segment is responsible for the Company’s liquidity and interest rate management and manages the corporate interest rate risk exposure. The Company’s internal FTP assumptions and methodologies are reviewed at least annually to ensure that the process is reflective of current market conditions.
Each segment’s 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 FTP process. Noninterest income and noninterest expense directly attributable to a business segment are assigned to that segment. Loan charge-offs and provision for credit losses are recorded to the segments, where the loans are recorded. Significant corporate overhead expenses incurred by centralized support areas in the Treasury and Other segment are allocated to the Consumer and Business Banking and Commercial Banking segments based on the segment’s estimated usage factors including, but not limited to, full-time equivalent employees, net interest income, and loan and deposit volume. Amortization of tax credit and CRA investments and certain types of administrative expenses are generally not allocated to segments.
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The following tables present the operating results and other key financial measures for the individual operating segments as of and for the years ended December 31, 2025, 2024 and 2023:
($ in thousands) Consumer and Business Banking Commercial Banking Treasury and Other Total
Year Ended December 31, 2025
Net interest income before provision for (reversal of) credit losses
$ 1,079,288 $ 1,028,314 $ 445,027 $ 2,552,629
Noninterest income 120,779 218,177 40,271 379,227
Total revenue before provision for (reversal of) credit losses
1,200,067 1,246,491 485,298 2,931,856
Provision for (reversal of) credit losses
26,044 152,085 ( 18,129 ) 160,000
Compensation and employee benefits 240,500 246,303 131,950 618,753
Other noninterest expense (1)
229,833 157,616 40,194 427,643
Total noninterest expense 470,333 403,919 172,144 1,046,396
Segment income before income taxes
703,690 690,487 331,283 1,725,460
Segment net income $ 502,687 $ 493,508 $ 328,993 $ 1,325,188
Average balances:
Loans $ 20,313,671 $ 34,000,936 $ 310,352 $ 54,624,959
Deposits $ 33,384,458 $ 27,137,950 $ 4,326,953 $ 64,849,361
As of December 31, 2025
Segment assets $ 21,384,121 $ 37,393,886 $ 21,656,990 $ 80,434,997
($ in thousands) Consumer and Business Banking Commercial Banking Treasury and Other Total
Year Ended December 31, 2024
Net interest income before provision for (reversal of) credit losses
$ 1,152,033 $ 1,125,931 $ 752 $ 2,278,716
Noninterest income 108,773 197,780 28,665 335,218
Total revenue before provision for (reversal of) credit losses
1,260,806 1,323,711 29,417 2,613,934
Provision for (reversal of) credit losses
8,691 166,953 ( 1,644 ) 174,000
Compensation and employee benefits 217,612 234,240 98,882 550,734
Other noninterest expense (1)
234,494 161,969 10,876 407,339
Total noninterest expense 452,106 396,209 109,758 958,073
Segment income (loss) before income taxes 800,009 760,549 ( 78,697 ) 1,481,861
Segment net income $ 563,218 $ 535,652 $ 66,716 $ 1,165,586
Average balances:
Loans $ 18,966,662 $ 32,996,221 $ 405,897 $ 52,368,780
Deposits $ 30,815,912 $ 25,820,956 $ 3,036,171 $ 59,673,039
As of December 31, 2024
Segment assets $ 20,084,814 $ 35,646,939 $ 20,244,722 $ 75,976,475
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($ in thousands) Consumer and Business Banking Commercial Banking Treasury and Other Total
Year Ended December 31, 2023
Net interest income (loss) before provision for credit losses $ 1,225,954 $ 1,116,013 $ ( 29,713 ) $ 2,312,254
Noninterest income 103,210 168,502 21,400 293,112
Total revenue (loss) before provision for credit losses 1,329,164 1,284,515 ( 8,313 ) 2,605,366
Provision for credit losses 21,454 100,391 3,155 125,000
Compensation and employee benefits 203,387 217,663 87,488 508,538
Other noninterest expense (1)
261,406 158,949 91,703 512,058
Total noninterest expense 464,793 376,612 179,191 1,020,596
Segment income (loss) before income taxes 842,917 807,512 ( 190,659 ) 1,459,770
Segment net income (loss) $ 594,965 $ 570,153 $ ( 3,957 ) $ 1,161,161
Average balances:
Loans $ 17,739,984 $ 31,365,547 $ 439,605 $ 49,545,136
Deposits $ 28,174,781 $ 23,304,066 $ 3,483,884 $ 54,962,731
As of December 31, 2023
Segment assets $ 19,165,172 $ 35,020,106 $ 15,427,606 $ 69,612,884
(1) The Consumer and Business Banking segment's other noninterest expense is primarily comprised of corporate overhead allocated expenses, occupancy and equipment expense, and other operating expenses. The Commercial Banking segment’s other noninterest expense is primarily comprised of corporate overhead allocated expenses, deposit account expense, and other operating expenses. The Treasury and Other segment's other noninterest expense is primarily comprised of amortization of tax credit and CRA investments, and other operating expenses, net of any corporate overhead expenses allocated to other segments.
Note 18 — Parent Company Condensed Financial Statements
The following tables present the Parent Company-only condensed financial statements:
CONDENSED BALANCE SHEET
December 31,
($ in thousands) 2025 2024
ASSETS
Cash and cash equivalents
$ 664,002 $ 394,919
Investments in subsidiaries:
Bank 8,151,065 7,251,084
Nonbank 11,003 10,423
Other assets 130,535 125,552
TOTAL $ 8,956,605 $ 7,781,978
LIABILITIES AND STOCKHOLDERS’ EQUITY
Long-term debt $ 32,320 $ 32,001
Other liabilities 25,083 26,923
Stockholders’ equity 8,899,202 7,723,054
TOTAL $ 8,956,605 $ 7,781,978
153
CONDENSED STATEMENT OF INCOME
Year Ended December 31,
($ in thousands) 2025 2024 2023
Dividends from subsidiaries:
Bank $ 750,000 $ 540,000 $ 704,000
Nonbank 66 127 322
Other investment income (losses) (1)
2,115 ( 954 ) ( 2,738 )
Other income 714 31 —
Total income 752,895 539,204 701,584
Interest expense on long-term debt 2,527 4,507 10,889
Compensation and employee benefits 11,132 7,283 7,204
Other expense (income) (2)
1,850 1,839 ( 1,086 )
Total expense 15,509 13,629 17,007
Income before income tax benefit and equity in undistributed income of subsidiaries
737,386 525,575 684,577
Income tax benefit 3,510 4,143 5,844
Undistributed earnings of subsidiaries, primarily bank 584,292 635,868 470,740
Net income $ 1,325,188 $ 1,165,586 $ 1,161,161
(1) Includes $ 1 million in DC Solar recoveries for the year ended December 31, 2025.
(2) Includes $ 307 thousand and $ 3 million in DC Solar recoveries for the years ended December 31, 2025 and 2023, respectively.
CONDENSED STATEMENT OF CASH FLOWS
Year Ended December 31,
($ in thousands) 2025 2024 2023
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 1,325,188 $ 1,165,586 $ 1,161,161
Adjustments to reconcile net income to net cash provided by operating activities:
Undistributed earnings of subsidiaries, principally bank ( 584,292 ) ( 635,868 ) ( 470,740 )
Deferred income tax expense 62 2,788 948
Net change in other assets ( 5,549 ) ( 6,912 ) ( 4,160 )
Net change in other liabilities ( 1,686 ) ( 802 ) ( 47 )
Other operating activities, net 1,083 1,265 2,443
Net cash provided by operating activities 734,806 526,057 689,605
CASH FLOWS FROM INVESTING ACTIVITIES
AFS debt securities:
Proceeds from maturities
1,945,000 — —
Purchases
( 1,944,333 ) — —
Redemption of trust preferred securities — 3,558 —
Other investing activities, net ( 732 ) ( 494 ) ( 95,095 )
Net cash (used in) provided by investing activities ( 65 ) 3,064 ( 95,095 )
CASH FLOWS FROM FINANCING ACTIVITIES
Long-term debt:
Repayment of junior subordinated debt
— ( 116,558 ) —
Common stock:
Proceeds from issuance pursuant to various stock compensation plans and agreements 3,212 3,023 3,208
Stock tendered for payment of withholding taxes ( 19,239 ) ( 14,877 ) ( 23,751 )
Repurchase of common stock pursuant to the stock repurchase program ( 115,590 ) ( 143,082 ) ( 82,174 )
Cash dividends paid ( 334,041 ) ( 308,478 ) ( 274,554 )
Net cash used in financing activities ( 465,658 ) ( 579,972 ) ( 377,271 )
Net increase (decrease) in cash and cash equivalents
269,083 ( 50,851 ) 217,239
Cash and cash equivalents, beginning of year 394,919 445,770 228,531
Cash and cash equivalents, end of year $ 664,002 $ 394,919 $ 445,770
154
Note 19 — Subsequent Events
On January 22, 2026, the Company’s Board of Directors declared first quarter 2026 cash dividends for the Company’s common stock. The common stock cash dividend of $ 0.80 per share was paid on February 17, 2026 to stockholders of record as of February 2, 2026.
155
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
ITEM 9A. CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
As of December 31, 2025, pursuant to Rule 13a-15(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), the Company conducted an evaluation, under the supervision and with the participation of the Company’s management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) of the Exchange Act). Based upon that evaluation, the Company’s Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective as of December 31, 2025.
The Company’s disclosure controls and procedures are designed to ensure that information required to be disclosed by the Company in the reports that the Company files or submits under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the rules and forms of the U.S. Securities and Exchange Commission (“SEC”). The Company’s disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by the Company in the reports that the Company files under the Exchange Act is accumulated and communicated to the Company’s management, including the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.
Management’s Annual Report on Internal Control over Financial Reporting
The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) of the Exchange Act). The Company’s internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the Company’s financial statements for external purposes in accordance with U.S. GAAP.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. In addition, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions or that the degree of compliance with policies or procedures may deteriorate.
Management evaluated the effectiveness of the Company’s internal control over financial reporting as of December 31, 2025 using the criteria set forth in Internal Control — Integrated Framework 2013 issued by the Committee of Sponsoring Organization of the Treadway Commission. Based on this evaluation, management concluded that the Company’s internal control over financial reporting was effective as of December 31, 2025.
Changes in Internal Control over Financial Reporting
There were no changes in the Company’s internal control over financial reporting during the quarter ended December 31, 2025, that have materially affected or are reasonably likely to materially affect the Company’s internal control over financial reporting.
Report of Independent Registered Public Accounting Firm
KPMG LLP, the independent registered public accounting firm that audited the Company’s Consolidated Financial Statements, issued an audit report on the effectiveness of internal control over financial reporting as of December 31, 2025. The audit report is presented on the following page.
156
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Stockholders and Board of Directors
East West Bancorp, Inc.:
Opinion on Internal Control Over Financial Reporting
We have audited East West Bancorp, Inc. and subsidiaries’ (the Company) internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2025 and 2024, the related consolidated statements of income, comprehensive income, changes in stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2025, and the related notes (collectively, the consolidated financial statements), and our report dated February 27, 2026 expressed an unqualified opinion on those consolidated financial statements.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/s/ KPMG LLP
Los Angeles, California
February 27, 2026
157
ITEM 9B. OTHER INFORMATION
During the three months ended December 31, 2025, none of the Company’s directors or Section 16 reporting officers adopted or terminated any Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement (as such terms are defined in Item 408 of the SEC’s Regulation S-K).
ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
Not applicable.
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
The names of the Company’s executive officers, and biographical information for each, is set forth in Item 1. Business — Information about our Executive Officers in this Form 10-K.
The other information required by this item will be set forth in the following sections of the Company’s definitive proxy statement for its 2026 Annual Meeting of Stockholders (the “2026 Proxy Statement”), which will be filed with the SEC pursuant to Regulation 14A within 120 days of the Company’s fiscal year ended December 31, 2025, and this information is incorporated herein by reference:
• Summary Information about Director Nominees
• Board of Directors and Nominees
• Director Nominee Qualifications and Experience
• Director Independence, Financial Experts and Risk Management Experience
• Board Leadership Structure
• Board Meetings
• Board Committees
The Company has adopted a Code of Conduct that applies to its principal executive officer, principal financial and accounting officer, controller, and persons performing similar functions. The Code of Conduct is posted on the Company’s website at www.eastwestbank.com/govdocs . Any amendments to, or waivers from, the Company’s Code of Conduct will be disclosed on the Company’s website at http://investor.eastwestbank.com .
ITEM 11. EXECUTIVE COMPENSATION
Information regarding the Company’s executive compensation will be set forth in the following sections of the 2026 Proxy Statement and this information is incorporated herein by reference:
• Director Compensation
• Compensation Discussion and Analysis
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
Information concerning security ownership of certain beneficial owners and management not otherwise included herein will be set forth in the 2026 Proxy Statement under the heading “ Stock Ownership of Principal Stockholders, Directors and Management ” and this information is incorporated herein by reference.
158
Securities Authorized for Issuance under Equity Compensation Plans
The following table sets forth the total number of shares available for issuance under the Company’s employee equity compensation plans as of December 31, 2025:
Plan Category Number of Securities to be Issued upon Exercise of Outstanding Options Weighted-Average Exercise Price of Outstanding Options Number of Securities Remaining Available for Future Issuance under Equity Compensation Plans
Equity compensation plans approved by security holders — $ — 3,097,839 (1)
Equity compensation plans not approved by security holders — — —
Total — $ — 3,097,839
(1) Represents future shares available under the stockholder-approved 2021 Stock Incentive Plan effective March 4, 2021.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE
Information regarding certain relationships and related transactions will be set forth in the following sections of the 2026 Proxy Statement and this information is incorporated herein by reference:
• Director Independence, Financial Experts and Risk Management Experience
• Certain Relationships and Related Transactions
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
Our independent registered public accounting firm is KPMG LLP , Los Angeles, CA , PCAOB ID: 185 .
Information regarding principal accountant fees and services will be set forth in the 2026 Proxy Statement under the heading “Ratification of Auditors” and this information is incorporated herein by reference.
159
PART IV
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(1) Financial Statements
The following financial statements of East West Bancorp, Inc. and its subsidiaries, and the auditor’s report thereon, are filed as part of this report under Item 8. Financial Statements :
Page
Report of Independent Registered Public Accounting Firm
77
Consolidated Balance Sheet as of December 31, 202 5 and 20 24
80
Consolidated Statement of Income for the Years Ended December 31, 202 5 , 202 4 and 2 024
81
Consolidated Statement of Comprehensive Income for the Years Ended December 31, 202 5 , 202 4 and 20 23
82
Consolidated Statement of Changes in Stockholders’ Equity for the Years Ended December 31, 202 5 , 202 4 and 20 23
83
Consolidated Statement of Cash Flows for the Years Ended December 31, 202 5 , 202 4 and 20 23
84
Notes to Consolidated Financial Statements
86
(2) Financial Statement Schedules
All financial statement schedules for East West Bancorp, Inc. and its subsidiaries have been included in this Form 10-K in the Consolidated Financial Statements or the related notes thereto, or they are either inapplicable or not required.
(3) Exhibits
A list of exhibits to this Form 10-K is set forth below.
Exhibit No. Exhibit Description
3.1 Certificate of Incorporation of the Registrant [Incorporated by reference to Exhibit 3(i) from Registrant’s Registration Statement on Form S-4/A filed with the Commission on September 17, 1998 (File No. 333-63605).]
3.1.1 Certificate of Amendment to Certificate of Incorporation of the Registrant [Incorporated by reference to Exhibit 3(i).1 from Registrant’s Annual Report on Form 10-K for the year ended December 31, 2002 filed with the Commission on March 28, 2003 (File No. 000-24939).]
3.1.2 Amendment to Certificate of Incorporation to Increase Authorized Shares of the Registrant [Incorporated by reference from Registrant’s Definitive Proxy Statement on Schedule 14A filed with the Commission on April 15, 2005 (File No. 000-24939).]
3.1.3 Certificate of Amendment to Certificate of Incorporation of the Registrant [Incorporated by reference to Exhibit A from Registrant’s Definitive Proxy Statement on Schedule 14A filed with the Commission on April 23, 2008 (File No. 000-24939).]
3.1.4 Certificate of Designations of 8.00% Non-Cumulative Perpetual Convertible Preferred Stock, Series A of the Registrant [Incorporated by reference to Exhibit 3.1 from Registrant’s Current Report on Form 8-K, filed with the Commission on April 30, 2008 (File No. 000-24939).]
3.1.5 Certificate of Designations of Fixed Rate Cumulative Perpetual Preferred Stock, Series B of the Registrant [Incorporated by reference to Exhibit 3.1, 4.1 from Registrant’s Current Report on Form 8-K filed with the Commission on December 9, 2008 (File No. 000-24939).]
3.1.6 Certificate of Designations of Mandatorily Convertible Cumulative Non-Voting Perpetual Preferred Stock, Series C of the Registrant [Incorporated by reference to Exhibit 3.1, 4.1 from Registrant’s Current Report on Form 8-K filed with the Commission on November 12, 2009 (File No. 000-24939).]
3.2 Amended and Restated Bylaws of the Registrant dated March 14, 2023 [Incorporated by reference to Exhibit 3.1 from Registrant’s Current Report on Form 8-K filed with the Commission on March 17, 2023 (File No. 000-24939).]
4.1 Specimen Common Stock Certificate of Registrant [Incorporated by reference to Exhibit 4.1 from Registrant’s Registration Statement on Form S-4/A filed with the Commission on November 5, 1998 (File No. 333-63605).]
4.2 Form of Certificate of the Registrant’s 8.00% Non-Cumulative Perpetual Convertible Preferred Stock, Series A [Incorporated by reference to Exhibit 4.1 from Registrant’s Current Report on Form 8-K, filed with the Commission on April 30, 2008 (File No. 000-24939).]
4.3 Description of Securities [Incorporated by reference to Exhibit 4.3 from Registrant’s Annual Report on Form 10-K for the year ended December 31, 2019 filed with the Commission on February 27, 2020 (File No. 000-24939).]
160
10.1.1 Employment Agreement – Dominic Ng* [Incorporated by reference to Exhibit 10.1 from Registrant’s Registration Statement on Form S-4 filed with the Commission on September 17, 1998 (File No. 333-63605).]
10.1.2 Amendment to Employment Agreement – Dominic Ng* [Incorporated by reference to Exhibit 10.1 from Registrant’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 202 5 filed with the Commission on May 9, 202 5 (File No. 000-24939).]
10.2.1 Employment Agreement – Douglas P. Krause* [Incorporated by reference to Exhibit 10.5 from Registrant’s Registration Statement on Form S-4 filed with the Commission on September 17, 1998 (File No. 333-63605).]
10.2.2 Amendment to Employment Agreement – Douglas P. Krause* [Incorporated by reference to Exhibit 10.2 from Registrant’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 202 5 filed with the Commission on May 9, 202 5 (File No. 000-24939).]
10.3.1 Employment Agreement – Irene H. Oh* [Incorporated by reference to Exhibit 10.1 from Registrant’s Current Report on Form 8-K filed with the Commission on December 22, 2016 (File No. 000-24939).]
10.3.2 Amendment to Employment Agreement – Irene H. Oh* Filed herewith.
10.4.1 Employment Agreement – Parker Shi* [Incorporated by reference to Exhibit 10.1 from Registrant’s Current Report on Form 8-K filed with the Commission on December 6, 2021 (File No. 000-24939).]
10.4.2 Amendment to Employment Agreement - Parker Shi* Filed herewith.
10.5 Employment Agreement – Christopher Del Moral-Niles.* [Incorporated by reference to Exhibit 10.3 from Registrant’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2025 filed with the Commission on May 9, 2025 (File No. 000-24939).]
10.6.1 East West Bancorp, Inc. 2016 Stock Incentive Plan, as amended and restated* [Incorporated by reference to Exhibit A from Registrant’s Definitive Proxy Statement on Schedule 14A filed with the Commission on April 21, 2016 (File No. 000-24939).]
10.6.2 East West Bancorp, Inc. 2021 Stock Incentive Plan, as amended and restated* [Incorporated by reference to Appendix A from Registrant’s Definitive Proxy Statement on Schedule 14A filed with the Commission on April 15, 2021 (File No. 000-24939).]
10.6.3 East West Bancorp, Inc. 2017 Performance-Based Bonus Plan, as amended* [Incorporated by reference to Exhibit A from Registrant’s Definitive Proxy Statement on Schedule 14A filed with the Commission on April 19, 2017 (File No. 000-24939).]
10.6.4 East West Bancorp, Inc. 1999 Spirit of Ownership Restricted Stock Program* [Incorporated by reference to Exhibit 10.4 from Registrant’s Current Report on Form 8-K filed with the Commission on March 9, 2005 (File No. 000-24939).]
10.6.5 East West Bank Amended and Restated Deferred Compensation Plan * . Filed herewith .
10.7 East West Bancorp, Inc. 1998 Employee Stock Purchase Plan* [Incorporated by reference to Exhibit 10.7 from Registrant’s Registration Statement on Form S-4 filed with the Commission on September 17, 1998 (File No. 333-63605).]
19 East West Bancorp, Inc. Insider Trading Policy. Filed herewith.
21.1 Subsidiaries of the Registrant. Filed herewith.
23.1 Consent of Independent Registered Public Accounting Firm KPMG LLP. Filed herewith.
24 Power of Attorney. Filed herewith.
31.1 Chief Executive Officer Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. Filed herewith.
31.2 Chief Financial Officer Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. Filed herewith.
32.1 Chief Executive Officer Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. Furnished herewith.
32.2 Chief Financial Officer Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. Furnished herewith.
97 East West Bancorp, Inc. Executive Compensation Clawback Policy [Incorporated by reference to Exhibit 97 from Registrant’s Annual Report on Form 10-K for the year ended December 31, 2023, filed with the Commission on February 29, 2024 (File No. 000-24939).]
101.INS The instance document does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document.
101.SCH XBRL Taxonomy Extension Schema Document. Filed herewith.
101.CAL XBRL Taxonomy Extension Calculation Linkbase Document. Filed herewith.
101.DEF XBRL Taxonomy Extension Definition Linkbase Document. Filed herewith.
101.LAB XBRL Taxonomy Extension Label Linkbase Document. Filed herewith.
101.PRE XBRL Taxonomy Extension Presentation Linkbase Document. Filed herewith.
104 Cover Page Interactive Data (formatted as Inline XBRL and contained in Exhibit 101 filed herewith). Filed herewith.
* Denotes management contract or compensatory plan or arrangement.
161
ITEM 16. FORM 10-K SUMMARY
Not applicable.
162
GLOSSARY OF ACRONYMS
AFS Available-for-sale GHG Greenhouse gas
ALCO Asset/Liability Committee GLBA Gramm-Leach-Bliley Act of 1999
ALLL Allowance for loan and lease losses GNMA Government National Mortgage Association
AML Anti-money laundering HELOC Home equity line of credit
AOCI Accumulated other comprehensive (loss) income HTM Held-to-maturity
ASC Accounting Standards Codification IAR Independent Asset Review
ASU Accounting Standards Update IDI Insured depository institution
BHC Act Bank Holding Company Act of 1956, as amended LCH London Clearing House
BKX Index
Keefe, Bruyette & Woods Nasdaq Bank Index
LGD Loss given default
BSA Bank Secrecy Act LTV Loan-to-value
BTFP Bank Term Funding Program MD&A Management’s Discussion and Analysis of Financial Condition and Results of Operations
C&I Commercial and industrial MMBTU Million British thermal unit
CECL Current expected credit losses NAV Net asset value
CET1 Common Equity Tier 1 NRSROs
Nationally recognized statistical rating organizations
CFPB Consumer Financial Protection Bureau OBBBA The One Big Beautiful Bill Act
CLO Collateralized loan obligation OFAC Office of Foreign Assets Control
CME Chicago Mercantile Exchange OREO Other real estate owned
CODM Chief operating decision maker OTTI Other-than-temporary impairment
CRA Community Reinvestment Act PAM Proportionate amortization method
CRE Commercial real estate PATRIOT Act Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT) Act of 2001
DFPI California Department of Financial Protection and Innovation PCA Prompt Corrective Action
DIF Deposit Insurance Fund PCD Purchased credit deteriorated
DOJ The U.S. Department of Justice PD Probability of default
EPS Earnings per share RMB Chinese Renminbi
ERM Enterprise risk management ROA Return on average assets
EVE Economic value of equity ROAE Return on average common equity
EWCN
East West Bank (China) Limited
ROATCE Return on average tangible common equity
FASB Financial Accounting Standards Board ROC Risk Oversight Committee
FDIA Federal Deposit Insurance Act RPA Credit risk participation agreement
FDIC Federal Deposit Insurance Corporation RSU Restricted stock unit
FFIEC Federal Financial Institutions Examination Council S&P Standard & Poor's
FHLB Federal Home Loan Bank SBLC Standby letter of credit
FINRA Financial Industry Regulatory Authority, Inc. SEC U.S. Securities and Exchange Commission
FRB Federal Reserve Bank SOFR Secured Overnight Financing Rate
FTP Funds transfer pricing SRF Standing Repurchase Agreement Facility
GAAP Generally accepted accounting principles U.S. United States
GDP Gross Domestic Product USD U.S. dollar
GENIUS Act The Guiding and Establishing National Innovation for U.S. Stablecoins Act VIE Variable interest entity
163
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
EAST WEST BANCORP, INC.
(Registrant)
By /s/ DOMINIC NG
Dominic Ng
Chairman and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
Signature Title Date
/s/ DOMINIC NG Chairman, Chief Executive Officer and Director
(Principal Executive Officer) February 27, 2026
Dominic Ng
/s/ CHRISTOPHER J. DEL MORAL-NILES Executive Vice President and
Chief Financial Officer
(Principal Financial and Accounting Officer) February 27, 2026
Christopher J. Del Moral-Niles
MANUEL P. ALVAREZ* Director February 27, 2026
Manuel P. Alvarez
PETER BABEJ*
Director
February 27, 2026
Peter Babej
MOLLY CAMPBELL* Director February 27, 2026
Molly Campbell
ARCHANA DESKUS* Director February 27, 2026
Archana Deskus
SERGE DUMONT* Director February 27, 2026
Serge Dumont
MARK HUTCHINS*
Director February 27, 2026
Mark Hutchins
PAUL H. IRVING* Director February 27, 2026
Paul H. Irving
SABRINA KAY* Director February 27, 2026
Sabrina Kay
JACK C. LIU* Director February 27, 2026
Jack C. Liu
LESTER M. SUSSMAN* Lead Director
February 27, 2026
Lester M. Sussman
* Dominic Ng, by signing his name hereto, does hereby sign this document on behalf of each of the above named directors of the registrant pursuant to powers of attorney duly executed by such persons.
Dated: February 27, 2026
By /s/ DOMINIC NG
Dominic Ng
Attorney-In-Fact
Chairman and Chief Executive Officer
164