East West Bancorp (NASDAQ:EWBC) executives highlighted record levels of loans, deposits, and fee income during the bank’s first-quarter 2026 earnings call, while also pointing to stable credit performance and a capital position management described as a competitive advantage.
Chairman and CEO Dominic Ng said the company delivered “another record quarter for loans, deposits, and fee income,” supported by continued momentum in both consumer and commercial relationships. Total deposits grew 9% year-over-year, with non-interest-bearing deposits up nearly $800 million during the quarter. Loan growth was 7% year-over-year, and fee income reached a quarterly record, up 12% from the prior year.
Deposit growth led by non-interest-bearing balances
“This checking account growth led us to price our Lunar New Year CD campaign more conservatively this year, allowing us to focus on CD balance retention and drive a better mix of deposit costs,” Del Moral-Niles said. He added that money market deposits rose 9% year-over-year as the bank worked to diversify away from CDs and other higher-cost categories.
Management acknowledged the competitive landscape for deposits remains challenging. Ng said deposit pricing pressure has increased as expectations for rate cuts shifted. “The landscape for deposits, however, is not easy. It is a very competitive landscape,” he said, adding that the bank’s ability to add non-interest-bearing balances has been notable given the “higher for longer” outlook.
On deposit costs, Del Moral-Niles said deposit remixing and liability sensitivity supported continued improvement in pricing during the quarter. Period-end deposit costs fell 6 basis points quarter-over-quarter, and he said that since the start of the cutting cycle the bank has reduced interest-bearing deposit costs by 111 basis points, “comfortably exceeding” prior 50% beta guidance. However, Ng cautioned that the bank has reached a point where the benefit from rolling down CDs has largely run its course, describing the trajectory as having “flattened out.”
Loan growth driven by C&I and capital call utilization
Del Moral-Niles said commercial and industrial lending was the primary driver of first-quarter loan growth, largely stemming from net line draws by existing borrowers. He said utilization increased across a range of industries, but “capital call-related borrowing made up the lion’s share” of net growth in the quarter, reflecting “broad-based increases in M&A and real estate property acquisitions.”
Management also noted some of these balances were temporary. Del Moral-Niles said that while certain lines have already been paid down in the second quarter, private equity and real estate markets remain active and the bank expects to continue participating during the remainder of the year. In response to analyst questions, executives emphasized the drawdowns were not stress-related. “None of the drawdowns that we saw in the quarter were for anything distressed,” Ng said, describing the activity as “opportunistic” and tied to timing.
Beyond capital call activity, Ng said there were additional signs of C&I momentum, pointing to “well over $300 million” of growth outside of capital call lines and activity across areas such as food distribution, cross-border business, and commercial real estate.
Residential mortgage performance was slower than management expected in the first quarter, but Del Moral-Niles said pipelines are building into the second quarter and the segment is expected to be “a consistent contributor” to loan growth. Commercial real estate balances also increased, with management emphasizing support for long-standing relationship clients.
Given first-quarter results and pipelines entering the second quarter, Del Moral-Niles reiterated full-year loan growth guidance of 5% to 7%.
Net interest income rises; fee income hits record
Del Moral-Niles reported quarterly net interest income of $671 million, citing balance sheet growth that offset the effects of prior rate cuts and a shorter quarter. He said the company’s updated outlook assumes the forward curve as of March 31, which “models no rate cuts.” As a result, the bank raised full-year 2026 managed income guidance to 6% to 8% growth, up from 5% to 7%.
When asked what drove the increase, Del Moral-Niles said the change was “exclusively” due to the updated rate outlook, and not loan guidance changes. Management also characterized the bank as asset sensitive. Ng said that while deposit pricing pressure is building, “higher for longer is net better for East West Bank.” Del Moral-Niles later added that both net interest income and net interest margin should be “at least flat to positive” from current levels, and said to adjust for the first quarter’s fewer day count when comparing trends.
Fee income increased 12% year-over-year to a record $99 million. Del Moral-Niles attributed the growth to wealth management and deposit-related fees. Ng said wealth management benefited from first-quarter volatility, noting structured note volume and increased annuity sales as some clients shifted out of equities “at record highs.” Management said it remains focused on diversifying revenue and continues to “aspire to deliver double-digit year-over-year growth in fee income in 2026.”
Credit performance stable; capital returns continue
Chief Risk Officer Irene Oh said asset quality metrics “held stable and continued to broadly outperform the industry.” Non-performing assets remained stable at 26 basis points as of March 31, 2026. Net charge-offs were 9 basis points, or $12 million, compared with 8 basis points in the fourth quarter. Provision for credit losses increased to $36 million from $30 million in the prior quarter.
The allowance for credit losses rose $26 million to $836 million, or 1.44% of total loans, reflecting loan growth and mix changes. Oh said the bank believes it is “adequately reserved” given the current economic outlook. Del Moral-Niles noted the company uses a multi-scenario model and said the downside scenario changed “quite substantially” from year-end, contributing to the allowance calculation.
For full-year 2026, management updated its net charge-off outlook, now projecting 15 to 25 basis points. In response to a question about the change, Del Moral-Niles said it reflected management’s current view of the portfolio and what it is seeing in performance trends.
Oh also underscored the bank’s capital position. East West reported a common equity Tier 1 ratio of 15.1% and a tangible common equity ratio of 10.3%. During the first quarter, the company repurchased about 938,000 shares for $98 million, with $117 million remaining under its repurchase authorization. The bank also returned approximately $111 million through dividends, with the second-quarter 2026 dividend payable May 18, 2026, to shareholders of record on May 4.
Executives addressed proposed regulatory capital changes. In response to a question on Basel III endgame proposals, management said the risk-weighted asset adjustment would represent roughly a $7 billion reduction in current risk-weighted assets if applied to the existing balance sheet, translating to an estimated 1.6% to 1.8% increase in regulatory capital ratios. Management said its capital priorities remain focused on organic growth, along with dividends, opportunistic buybacks, and selective acquisitions at the right price.
Technology, crypto monitoring, and operating investments
On expenses, Del Moral-Niles said the first-quarter efficiency ratio was 36.2%, and total operating non-interest expense was $258 million, reflecting seasonally higher payroll-related costs, increased stock-based compensation, and higher incentive compensation tied to wealth management commissions. He said expenses are still expected to align with full-year guidance.
Management also discussed spending priorities tied to technology and security. Ng said that in the “short to medium term,” AI-related efforts can be “a cost” as the bank invests in cyber defense, monitoring tools, and resilience, describing those as strategic investments rather than regulatory requirements.
On digital assets, Ng said most customers continue to transact in fiat currencies, though the bank has clients who hold crypto and stablecoins. He said East West is monitoring developments and has projects in progress, including work with “one or two clients” in select back-office support opportunities, but has not yet rolled out broader solutions. He added the bank has explored tokenized deposits and is evaluating vendor proposals and potential paths forward.
Ng closed the call by thanking employees and noting the company’s focus on disciplined growth and stewardship of customer trust and shareholder capital.
About East West Bancorp (NASDAQ:EWBC)
East West Bancorp, Inc is a bank holding company and the parent of East West Bank, one of the largest independent banks headquartered in Southern California. As a full-service commercial bank, it provides a broad range of financial products and services to business and individual customers, including commercial and residential real estate lending, working capital lines of credit, trade finance, and deposit and treasury management services. The company caters to both large and middle-market businesses, leveraging its expertise to serve clients engaged in cross-border trade and investment between the United States and Greater China.
Founded in Los Angeles in the early 1970s, East West Bank has grown steadily through organic expansion and strategic branch openings.
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