Finance

East West Sets Record Net Interest Income of $719 Million

The Tip Desk · October 27, 2026 · 3 min read

East West Bancorp posted record revenue of $823 million and net income of $382 million, or $2.76 a share, as the net interest margin widened 6 basis points to 3.49%.

East West Bancorp (EWBC), parent of East West Bank, the largest independent bank headquartered in Southern California, reported record quarterly net interest income of $719 million in the third quarter of 2026, up 5% from $685 million in the second quarter.

The net interest margin expanded 6 basis points to 3.49%. The average loan yield rose 3 basis points to 6.05% and the average interest-earning asset yield rose 4 basis points to 5.45%. The average cost of interest-bearing deposits was unchanged at 2.81%, and the average cost of funds fell 2 basis points to 2.17%.

Average interest-earning assets were $81.8 billion, up $1.7 billion from $80.1 billion in the second quarter, reflecting $1.0 billion of average securities growth and a $0.7 billion increase in average total loans. Average total loans were $58.9 billion, a slower sequential increase than the $1.2 billion average-loan rise in the second quarter.

Total revenue was a record $823 million, up 4% from $791 million. Pre-tax, pre-provision income totaled a record $540 million, up 8% from $501 million. Net income was a record $382 million, or $2.76 a share, up 5% from $364 million, or $2.63 a share, in the second quarter.

Total loans held for investment reached a record $59.7 billion as of September 30, 2026, up 1.3% from $59.0 billion at June 30. Multifamily residential commercial real estate rose 5.3% to $5.53 billion and single-family residential rose 2.4% to $15.71 billion. Commercial and industrial loans declined 0.4% to $19.79 billion and construction and land fell 9.3% to $0.75 billion.

Total deposits reached a record $71.5 billion, up 2.0% from $70.1 billion. Average deposits rose $1.6 billion, or 2.3%, to $70.3 billion. Noninterest-bearing demand deposits were $18.54 billion, or 26% of total deposits, and increased 14.9% year-over-year. Chairman and Chief Executive Officer Dominic Ng said the deposit growth underscored the small business checking strategy.

Fee income of $93 million decreased 2% from $96 million in the second quarter. Wealth management fees fell $4 million to $15.5 million and lending and loan servicing fees fell $2 million to $25.8 million. Commercial and consumer deposit-related fees rose $1 million to $32.6 million and foreign exchange income rose $3 million to $17.8 million.

Total operating noninterest expense was $259 million, down 3% from $268 million, and the efficiency ratio improved to 34.4% from 36.7%. Other operating expense fell $6 million to $33 million on problem-loan recoveries, and OREO expense turned to a $0.2 million gain.

The provision for credit losses rose to $45 million from $33 million. The allowance for loan losses increased to $865 million, or 1.45% of loans held for investment, from $842 million, or 1.43%. Ng said the company further bolstered the allowance given continued uncertainty in the economic outlook. Net charge-offs were $22 million, or 0.15% annualized of average loans held for investment, compared with $27 million, or 0.19%, in the second quarter. Nonperforming assets rose $9 million to $256 million, or 0.30% of total assets, driven primarily by OREO.

The preliminary CET1 capital ratio was 15.41% as of September 30, 2026, essentially unchanged from 15.44% at June 30. The tangible common equity ratio declined 39 basis points to 10.02%. The board declared a $0.80 per share fourth-quarter dividend. East West did not repurchase shares in the third quarter, leaving $117 million of authorization available.

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