EWBC Q1 Deep Dive: Loan Growth, Deposit Optimization, and Tariff Readiness Highlight Results

June 24, 2025 at 02:08 AM EDT

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Cross-border banking company East West Bancorp (NASDAQ: EWBC) reported Q1 CY2025 results beating Wall Street’s revenue expectations, with sales up 7.5% year on year to $692.3 million. Its non-GAAP profit of $2.09 per share was 1.4% above analysts’ consensus estimates.

Is now the time to buy EWBC? Find out in our full research report (it’s free).

East West Bank (EWBC) Q1 CY2025 Highlights:

Revenue: $692.3 million vs analyst estimates of $672.2 million (7.5% year-on-year growth, 3% beat)
Adjusted EPS: $2.09 vs analyst estimates of $2.06 (1.4% beat)
Market Capitalization: $13.44 billion

StockStory’s Take

East West Bank’s first quarter saw both revenue and adjusted earnings per share surpass Wall Street expectations, reflecting solid loan growth and robust fee income. Management attributed these results to continued expansion in residential mortgage and commercial real estate lending, as well as effective deposit pricing strategies. CEO Dominic Ng noted, “Our relationship driven business model helped support continued residential mortgage and commercial real estate lending,” while also highlighting the success of the Lunar New Year CD campaign and the diversification of fee income streams. Asset quality remained stable, with low net charge-offs and a slight decrease in non-performing assets.

Looking forward, management’s guidance centers on steady loan growth, disciplined deposit gathering, and vigilance around evolving economic risks, particularly potential impacts from tariffs and rate changes. CFO Chris Del Moral-Niles emphasized, “We continue to expect net interest income expansion as we go through the balance of the year,” citing a strong loan pipeline and ongoing deposit optimization. However, management remains cautious due to macroeconomic uncertainty, with a focus on maintaining high capital levels and flexibility to support customers amid shifting conditions.

Key Insights from Management’s Remarks

Management identified rising loan balances, strategic deposit repricing, and a diversified fee base as the main contributors to first quarter performance, while addressing preparedness for ongoing tariff and economic uncertainties.

Loan growth momentum: Lending activity increased with end-of-period loans reaching $54 billion, driven by both residential mortgages and select commercial real estate projects. Management highlighted a durable demand for new mortgage originations, even as rates remained elevated.
Deposit optimization: The bank executed a successful Lunar New Year certificate of deposit (CD) campaign and adjusted pricing to lower funding costs. Average balances across demand deposits, money markets, and time deposits all grew, with management expecting deposit growth to fund further loan expansion.
Fee income diversification: Fee revenue grew 8% quarter-over-quarter, marking another record. Growth spanned across most major fee categories, including wealth management, which benefited from increased customer activity amid market volatility. Management pointed to cross-selling and expanded service offerings as key initiatives.
Expense management and efficiency: Operating non-interest expense included seasonally higher payroll costs, but the efficiency ratio remained strong at 36.4%. Investments in technology and risk management continued, with expectations that expenses will stay within annual guidance.
Proactive credit risk approach: Asset quality metrics outperformed industry averages, with low net charge-offs and a declining non-performing asset ratio. The allowance for loan losses was increased to reflect higher downside scenario weightings due to macro uncertainty, especially around tariffs and trade-related risks.

Drivers of Future Performance

East West Bank’s outlook focuses on sustaining loan and deposit growth while navigating uncertainty from interest rate movements and global trade tensions.

Interest rate environment impact: Management expects net interest income to expand, but acknowledges that future Federal Reserve rate cuts could temper growth. Each rate cut is projected to reduce net interest income by $2 million per month, partially offsetting gains from loan and deposit volume increases.
Tariff and trade risks: Ongoing U.S.-China trade tensions and potential new tariffs remain a source of uncertainty. CEO Dominic Ng explained that while clients are more prepared than in past cycles, the bank continues to monitor credit exposure to industries most affected by tariffs and is working closely with impacted customers.
Technology and operational investments: Investments in technology, cybersecurity, and enterprise risk management are slated to continue, with some expenditures expected to materialize in the second and third quarters. These are intended to bolster operational resilience but may add to expense levels in the near term.

Catalysts in Upcoming Quarters

In the quarters ahead, our analysts will be watching (1) whether loan growth persists amid economic volatility, (2) how effectively deposit growth and pricing initiatives offset funding cost pressures, and (3) the impact of tariff developments and U.S.-China relations on client activity. Progress in fee income diversification and expense management will also serve as key markers of execution.

East West Bank currently trades at $97.51, up from $95.50 just before the earnings. Is the company at an inflection point that warrants a buy or sell? Find out in our full research report (it’s free).

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