East West Bancorp : 1Q26 Basel III Regulatory Capital Disclosures Report

Published: 2026-05-14 23:19:04 ET EWBC

Published on 05/14/2026 at 11:19 pm EDT

Page

Disclosure Map 3

Scope of Application 5

Capital Structure 6

Capital Adequacy 7

Capital Conservation Buffer 8

Risk Management 9

Credit Risk: General Disclosures 9

General Disclosure for Counterparty Credit Risk-Related Exposures 15

Credit Risk Mitigation 17

Securitization 17

Equities Not Subject to the Market Risk Rule 18

Interest Rate Risk for Non-trading Activities 19

Appendix 1 - Forward-looking statements 21

The table below identifies where the disclosures related to topics referenced in this Pillar 3 disclosure report can be found in East West Bancorp, Inc.'s (referred to herein on an unconsolidated basis as "East West" and on a consolidated basis as the "Company," "we," "our," or "EWBC") Annual Report on Form 10-K for the year ended December 31, 2025 (the "Company's 2025 Form 10-K") and the Company's Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2026 (the "Company's First Quarter 2026 Form 10-Q").

Scope of Application Background and overview; Regulatory capital standards

Overview Item 1 - Business,

Note 16

6, no difference in the basis for consolidating entities

Basis of presentation Note 1 Note 1

Capital Structure Capital instruments - Summary information of all regulatory capital instruments.

Regulatory Capital and Ratios

Note 16

Regulatory capital N/A Note 16

Capital Adequacy Capital management - Discussion of the Bank's capital adequacy assessment.

Regulatory Capital and Ratios

Regulatory Capital

Capital Conservation

Risk-weighted assets N/A

and Ratios, Note 16

Regulatory Capital

9 Capital conservation buffer Regulatory Capital

Regulatory Capital and Ratios, Note 16

Risk Management

Risk management overview

Risk Management

Buffer 8 - 9 Required ratios and eligible retained income N/A

and Ratios

and Ratios, Note 16

Credit Risk: General

Disclosures 9-10 General credit risk disclosures

11-12

Exposure types/Impaired loans/Allowance for credit losses

12-14

Industry and geographic distribution; maturity information

General Disclosure

Credit Risk Management, Note 4 & 6

Loan Portfolio, Nonperforming Asset,

Note 6

Loan Portfolio Note 6

Credit Risk

Credit Risk Management, Note 4 & 6

Loan Portfolio, Nonperforming Asset,

Note 6

Loan Portfolio, Note 6 &12

Credit Risk

for Counterparty Credit Risk-related Exposures

15-16 Counterparty credit risk management overview

Management Derivatives Note 3 & 5

15-16 Counterparty credit risk exposure Note 3 & 5 Note 3 & 5

Credit derivatives purchased and sold Note 5 Note 5 Credit Risk Mitigation 17 Accounting Policies Note 3 & 5 Note 3 & 5

Guarantees and credit derivatives N/A N/A

Securitization Objectives, roles and securitization risk-weighted assets

N/A Note 12

Accounting policies for securitization activities N/A N/A

18 Securitization exposure N/A N/A

Equities Not Subject

Summary of current year's securitization activity

N/A N/A

to the Market Risk Rule

Summary of significant accounting policies N/A N/A

Nonmarketable equity securities, realized and unrealized gains (losses)

Note 2, 4 & 7 Note 2, 4 & 7

Interest Rate Risk for Non-trading Activities

- 20 Overview

Interest Rate Risk Management

Earnings Sensitivity Interest Rate Risk Management

Interest Rate Risk Management

The tables below provide page references to the Company's First Quarter 2026 Form 10-Q and 2025 Form 10-K for certain topics and financial information listed in the table on the previous page.

First Quarter 2026 Form 10-Q

Page Reference

Management's Discussion and Analysis

Overview

Loan Portfolio

71-76

Regulatory Capital and Ratios

Risk Management

80-81

Credit Risk Management

81-82

Nonperforming Assets

Interest Risk Management

87-90

Derivatives

90-91

Notes to Consolidated Financial Statements:

Note 1 - Basis of Presentation and Current Accounting Developments

Note 2 - Fair Value Measurement and Fair Value of Financial Instruments

Note 3 - Securities Purchased under Resale Agreements and Sold under Repurchase Agreements

Note 4 - Securities

Note 5 - Derivatives

27, 29-30, 32

Note 6 - Loans Receivable and Allowance for Credit Losses

39-47

Note 7 - Affordable Housing Partnership, Tax Credit and Community Reinvestment Act Investments, Net

48-49

2025 Form 10-K

Page Reference

Management's Discussion and Analysis

Item 1- Business

4-5, 7-10

Loan Portfolio

49-54

Regulatory Capital and Ratios

Risk Management

58-59

Credit Risk Management

Nonperforming Assets

Interest Rate Risk Management

66-69

Derivatives

70-71

Notes to Consolidated Financial Statements:

Note 2 - Fair Value Measurement and Fair Value of Financial Instruments 100

Note 1 - Summary of Significant Accounting Policies 86, 88-89

Note 4 - Securities 111-112

Note 3 - Securities Purchased under Resale Agreements 107

Note 6 - Loans Receivable and Allowance for Credit Losses 126-127, 134-135

Note 5 - Derivatives 115, 119-120

Note 12 - Commitments and Contingencies 144-145

Note 7 - Affordable Housing Partnership, Tax Credit and Community Reinvestment Act Investments, Net 138-139

Note 16 - Regulatory Requirements and Matters 149-150

Organization

‌East West is a registered bank holding company that offers a full range of banking services to individuals and businesses through its subsidiary bank, East West Bank and its subsidiaries ("East West Bank" or the "Bank"). The Bank is the Company's principal asset and provides a full range of consumer and commercial products and services through the Consumer and Business Banking, and Commercial Banking segments, with the remaining functions included in the Treasury and Other segment. The Company operates in the United States ("U.S.") and Asia. In the U.S., the Bank's corporate headquarters and main administrative offices are located in California, and its branches are located in California, Texas, New York, Washington, Georgia, Massachusetts and Nevada. In Asia, the Company's presence includes branches in Hong Kong and China, and representative offices in China and Singapore. The Bank has a banking subsidiary based in China - East West Bank (China) Limited. As of March 31, 2026, the Company and the Bank were classified as "well capitalized" and not subject to any capital distribution restrictions. For additional information on dividend restrictions and transfers of funds, refer to Item 1. Business - Supervision and Regulation - Dividends and Other Transfers of Funds in the Company's 2025 Form 10-K.

Regulation

As a bank holding company, East West is subject to primary regulation, supervision, and examination by the Federal Reserve under the Bank Holding Company Act of 1956, as amended. The Company is also subject to the disclosure and regulatory requirements of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and the rules and regulations adopted by the U.S. Securities and Exchange Commission ("SEC") thereunder. The Bank is regulated, supervised, and examined by the Federal Reserve, the California Department of Financial Protection and Innovation, and, with respect to consumer laws, the Consumer Financial Protection Bureau. East West Bank is a California state-chartered bank, and its deposits are insured by the Federal Deposit Insurance Corporation ("FDIC"). As the insurer of the Bank's deposits, the FDIC also has back-up examination and other regulatory authority over the Bank.

In addition, the Bank and its foreign subsidiaries and branches are regulated by the foreign regulatory agencies in the international jurisdictions where we have a presence, including the People's Bank of China, China's National Financial Regulatory Administration, the Hong Kong Monetary Authority, the Hong Kong Securities and Futures Commission, and the Monetary Authority of Singapore.

East West also has a wholly-owned nonbank subsidiary, East West Markets, LLC ("East West Markets"), which is an SEC-registered broker-dealer and a member of the Financial Industry Regulatory Authority, Inc. ("FINRA"). East West Markets is subject to regulatory requirements from several regulatory bodies, including the SEC, FINRA, and state securities regulators.

Regulatory Capital Standards and Disclosures

The federal banking agencies have imposed capital adequacy requirements, known as the Basel III Capital Rules, intended to ensure that banking organizations maintain capital that is commensurate with the degree of risk associated with their operations. The Basel III Capital Rules define the components of regulatory capital, including Common Equity Tier 1 ("CET1"), Tier 1 and Tier 2 capital, and set forth minimum capital adequacy ratios of capital to risk-weighted assets and total assets. The Basel III Capital Rules also prescribe a standardized approach for risk-weighting assets and include a number of risk-weighting categories that affect the denominator in banking institutions' regulatory capital ratios.

The Company applies the Basel III Capital Rules as a standardized approach banking organization and is not currently subject to the market risk rules, which apply only to banking organizations with significant trading activities. To be considered adequately capitalized, standardized approach banking organizations are required to maintain minimum capital ratios of at least 4.5% CET1 capital to risk-weighted assets, 6.0% Tier 1 capital to risk-weighted assets, 8.0% total risk-based capital (i.e., Tier 1 plus Tier 2 capital) to risk-weighted assets and a 4.0% Tier 1 leverage ratio of Tier 1 capital to average total consolidated assets.

The Company produces the Pillar 3 Regulatory Disclosures quarterly to update market participants regarding the Company's risk management practices and regulatory capital ratios as required under the U.S. Basel III rules. This report provides information on the Company's capital structure, risk exposures, risk assessment processes, risk-weighted assets and overall capital adequacy, including information on the methodologies used to calculate risk-weighted assets.

The Company's 2025 Form 10-K and First Quarter 2026 Form 10-Q contain management's discussion and analysis of the overall risk profile of the Company and related management strategies. The information presented herein should be read in conjunction with the Company's Form 10-K and First Quarter 2026 Form 10-Q, as well as the Consolidated Financial Statements for Holding Companies - FR Y-9C ("FR Y-9C") and Consolidated Reports of Condition and Income for a Bank with Domestic and Foreign Offices - FFIEC 031 ("Call Report") dated March 31, 2026. The disclosure map included in this report provides a cross-reference to the Company's 2025 Form 10-K and First Quarter 2026 Form 10-Q for the disclosures required by the Basel III Capital Rules. These Basel III regulatory capital disclosures have not been audited by our external auditors. This report may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Any statement that does not describe historical or current facts is a forward-looking statement, as discussed further in Appendix 1 of this report.

Consolidation

‌The principles of consolidation used for the Company's First Quarter 2026 Form 10-Q and for regulatory reporting conform with U.S. Generally Accepted Accounting Principles and include the accounts of East West and its subsidiaries. The Basel III Regulatory Capital Disclosures and East West's regulatory capital ratio calculations are prepared on a fully consolidated basis. All intercompany balances and transactions have been eliminated in consolidation.

‌The Company's qualifying regulatory capital instruments primarily consist of common shareholders' equity. For additional information on the Company's shareholders' equity, see the Company's Consolidated Balance Sheet in the Company's First Quarter 2026 Form 10-Q.

Regulators include other non-common forms of capital (e.g., subordinated debt and preferred stock) in their calculations of capital adequacy. The junior subordinated debt issued in connection with East West's trust preferred securities qualifies as Tier 2 capital under the Basel III Capital Rules. For additional information regarding the terms of East West's outstanding junior subordinated debt, see Note 8 - Federal Home Loan Bank Advances and Long-Term Debt in the Company's First Quarter 2026 Form 10-Q.

‌The following table presents the Company's capital composition as of March 31, 2026:

($ in thousands)

March 31, 2026

CET1 capital

Common stock and related surplus

$ 839,835

Retained earnings

8,547,820

Accumulated other comprehensive loss

(388,220)

CET1 capital before adjustments and deductions

8,999,435

Adjustments and deductions from CET1 capital

Less: Goodwill, net of related deferred taxes

465,697

Net unrealized losses on available-for-sale and held-to-maturity securities, net of deferred taxes

(383,754)

Accumulated gains on cash flow hedges, net of deferred taxes

12,034

Other CET1 capital adjustments and deductions

42,637

Total CET1 capital

8,862,821

Tier 1 capital

Total Tier 1 capital

8,862,821

Tier 2 capital

Tier 2 capital instruments and related surplus

35,000

Adjusted allowance for credit losses

733,855

Total Tier 2 capital

768,855

Total risk-based capital

$ 9,631,676

‌The Company's Board of Directors provides the ultimate oversight responsibility and accountability over capital planning. The Board and a Board-level committee, the Risk Oversight Committee ("ROC"), meet at least quarterly to review the Company's material risks and exposures and to ensure the adequacy of capital under both normal and stressed operating environments.

The Company's senior management and the Board are committed to achieving its capital targets in order to reach its capital goals, which include meeting or exceeding regulatory requirements. To achieve these capital goals, the Company has established policies and procedures to continuously monitor its capital levels and to maintain contingency plans. Monitoring activities include the evaluation of the Company's on-going capital needs, stress testing, and the assessment of the impact of stressed conditions under multiple scenarios; these activities also include the maintenance of capital buffers in consideration of other factors, such as the current credit and interest rate environment. The combination of these policies and procedures, and monitoring activities enables the Company to maintain adequate capital composition and levels to absorb losses, promote public confidence, provide protection to depositors, and meet regulatory requirements. The Company continued to exceed the "Well Capitalized" thresholds under Prompt Corrective Action regulations.

‌The following table presents the Company's standardized approach risk-weighted assets as of March 31, 2026. For more information on the Company's risk-weighted assets, see Schedule HC-R, Regulatory Capital, in the Company's FR Y-9C dated March 31, 2026:

Exposures to depository institutions, foreign banks, and credit unions

$ 586,942

Exposures to sovereign entities

810,029

Exposures to public-sector entities

87,450

Corporate exposures

37,726,700

Residential mortgage exposures

10,215,377

Statutory multifamily mortgages

420,575

High volatility commercial real estate

12,337

Past due loans

186,567

Other assets

1,443,505

Securitization exposures

144,788

Equity exposures

1,120,941

Total on-balance sheet exposures

52,755,211

Off-balance sheet

Unused commitments with an original maturity of one year or less

49,555

Unused commitments with an original maturity of more than one year

4,347,287

Derivatives

205,338

Letters of credit

1,325,663

All other off-balance sheet liabilities

25,336

Total off-balance sheet

5,953,179

Excess allowance for credit losses

(149,024)

Total risk-weighted assets

$ 58,559,366

‌The Basel III Capital Rules require the Company to maintain a minimum 2.5% "capital conservation buffer" on top of each of the minimum risk-based capital ratios for the purpose of absorbing losses during periods of economic stress. This effectively results in minimum ratios of (1) CET1 to risk-weighted assets of at least 7.0%, (2) Tier 1 capital to risk-weighted assets of at least 8.5%, and (3) Total capital to risk-weighted assets of at least 10.5%. Banking organizations with risk-based capital ratios that meet or exceed the minimum requirements but do not exceed the capital conservation buffer will face constraints on dividends, equity repurchases, and discretionary bonus payments. The severity of the constraint depends on the amount of the shortfall and the institution's "eligible retained income," which is defined as the greater of (1) the reporting institution's net income for the four preceding calendar quarters, net of any distributions and associated tax effects not already reflected in net income or (2) the average of the reporting institution's net income over the four preceding calendar quarters. As of March 31, 2026, the Company's eligible retained income was $1.0 billion. The Company and Bank have capital ratios exceeding the 2.5% minimum capital conservation buffer and are not subject to any such limitations as of March 31, 2026. For additional discussion and disclosure, see the Company's March 31, 2026 FR Y-9C Schedule HC-R, the Bank's March 31, 2026 Call Report Schedule RC-R, and Item 2. MD&A - Balance Sheet Analysis - Regulatory Capital and Ratios in the Company's First Quarter 2026 Form 10-Q.

‌The following table summarizes capital conservation buffer-related information for both the Company and the Bank as of March 31, 2026:

East West Bancorp

CET1 capital ratio

15.1 %

4.5 %

2.5 %

8.1 %

Tier 1 risk-based capital ratio

15.1 %

6.0 %

2.5 %

6.6 %

Total risk-based capital ratio

16.4 %

8.0 %

2.5 %

5.9 %

East West Bank

CET1 capital ratio

13.8 %

4.5 %

2.5 %

6.8 %

Tier 1 risk-based capital ratio

13.8 %

6.0 %

2.5 %

5.3 %

Total risk-based capital ratio

15.1 %

8.0 %

2.5 %

4.6 %

In the normal course of business, the Company is exposed to a variety of risks, including risks inherent to the financial services industry and risks specific to the Company's business. The Company operates under a Board-approved enterprise risk management ("ERM") program. The Company's ERM program outlines the company-wide approach to risk management and oversight, and describes the structures and practices employed to manage current and emerging risks inherent to the Company. The Company's ERM program incorporates risk management throughout the organization in identifying, managing, monitoring, and reporting risks. It identifies the Company's major risk categories as: credit, liquidity, market, operational, reputational, legal, compliance, Bank Secrecy Act/Anti-Money Laundering & Office of Foreign Assets Control, strategic, and technology risk.

The ROC of the Board of Directors monitors the ERM program through such identified enterprise risk categories and provides oversight of the Company's risk appetite and control environment. The ROC provides focused oversight of the Company's identified enterprise risk categories on behalf of the full Board of Directors. Under the authority of the ROC, management committees apply targeted strategies to manage the risks to which the Company's operations are exposed.

The Company's ERM program is executed along the three lines of defense model, which provides for a consistent and standardized risk management control environment across the enterprise. The first line of defense is comprised of revenue generating, operational and support units. The second line of defense is comprised of risk management and control functions that provide independent risk oversight of first line activities and report to the Chief Risk Officer. The Chief Risk Officer reports to both the ROC and the Chief Executive Officer. The third line of defense is comprised of the Internal Audit and Independent Asset Review ("IAR") functions. Internal Audit reports to the Chief Audit Executive ("CAE") who reports to the Board's Audit Committee. Internal Audit provides assurance and evaluates the effectiveness of risk management, control and governance processes as established by the Company. IAR serves as an internal loan review and independent credit risk monitoring function within the Bank that works under the direction of the CAE and reports to the Audit Committee. IAR provides management and the Audit Committee with an objective and independent assessment of the Bank's credit profile and credit risk management processes.

Credit risk is the risk that a borrower or a counterparty will fail to perform according to the terms and conditions of a loan, investment or derivative and expose the Company to loss. Credit risk exists with many of the Company's assets and exposures such as loans, debt securities and certain derivatives. The majority of the Company's credit risk is associated with lending activities.

The ROC has primary oversight responsibility for the identified enterprise risk categories including credit risk. The ROC monitors management's assessment of asset quality, credit risk trends, credit quality administration, underwriting standards, and portfolio credit risk management strategies and processes, such as diversification and liquidity, all of which enable management to control credit risk. At the management level, the Credit Risk Management Committee ("CRMC") has primary oversight responsibility for credit risk. The Senior Credit Supervision function manages credit policy for the line of business transactional credit risk, assuring that all exposure is risk-rated according to the requirements of the credit risk rating policy. The Senior Credit Supervision function, in connection with the ERM function, also evaluates and reports the overall credit risk exposure to senior management and the ROC, including concentration limits and key risk indicators. Reporting directly to the Board's Audit Committee, the IAR function provides additional validation support to the Company's robust credit risk management culture by performing an independent and objective assessment of underwriting and documentation quality, and serves as an assurance function for the risk rating of the Company's loan portfolios. A key focus of our credit risk management is adherence to a well-controlled underwriting and loan monitoring process.

‌For information on the Company's credit risk policies for nonaccrual loans and the allowance for loan losses, refer to "Loans Held-for-Investment" and "Allowance for Loan Losses" in Note 1 - Summary of Significant Accounting Policies in the Company 2025 Form 10-K and Note 6 - Loans Receivable and Allowance for Credit Losses in the Company's First Quarter 2026 Form 10-Q.

The Company's debt securities portfolio includes U.S. Treasury, U.S. government agency, U.S. government-sponsored agency, and U.S. government-sponsored enterprise debt and mortgage-backed securities that are issued, guaranteed, or otherwise supported by the U.S. government, for which a zero credit loss assumption is applied when determining any allowance for credit losses. For additional information on the Company's allowance for credit losses on debt securities, refer to "Allowance for Credit Losses on Available-for-Sale Debt Securities" and "Allowance for Credit Losses on Held-to-Maturity Debt Securities" in Note 4 - Securities in the Company's First Quarter 2026 Form 10-Q. For additional information on debt securities, refer to Note 4 - Securities and Item 2. MD&A - Balance Sheet Analysis - Debt Securities in the Company's First Quarter 2026 Form 10-Q.

For the Company's credit risk policies on derivatives, refer to the "General Disclosure for Counterparty Credit Risk-Related Exposures" section of this report. For additional information on the derivatives portfolio, refer to Note 5 - Derivatives and Item 2. MD&A - Market Risk Management - Derivatives in the Company's First Quarter 2026 Form 10-Q.

Disclaimer

East West Bancorp Inc. published this content on May 15, 2026, and is solely responsible for the information contained herein. Distributed via Public Technologies (PUBT), unedited and unaltered, on May 15, 2026 at 03:18 UTC.