East West Bancorp Stock

East West Bancorp, Inc. (East West) operates as the bank holding company for East West Bank (bank) that provides a wide range of personal and commercial banking services to individuals and businesses.

The company operates in over 120 locations in the U.S. and Asia. In the U.S., the bank’s corporate headquarters and main administrative offices are located in California; its U.S. branches and offices are located in California, Texas, New York, Washington, Georgia, Massachusetts, Illinois and Nevada. In Asia, the bank has full-service branches in Hong Kong, Shanghai, Shantou and Shenzhen; representative offices in Beijing, Chongqing, Guangzhou, Xiamen and Singapore; and administrative support offices in Beijing and Shanghai.

Strategy

The company’s strategy focuses on seeking out and deepening client relationships that meet the company’s risk/return parameters. This guides the company’s decision-making across every aspect of its operations: the products and services the company develops, the expertise the company cultivates, and the infrastructure the company builds to help its customers conduct their businesses. The company constantly invests in technology to improve the customer user experience, strengthen critical business infrastructure, and streamline core processes.

East West Bank has a commercial business operating license in China through its subsidiary, East West Bank (China) Limited, which makes it unique among U.S.-based regional banks. This license allows the bank to open branches, make loans, and collect deposits in the country. The bank continues to develop its international banking presence in Asia with its network of overseas branches and representative offices. In addition to facilitating traditional letters of credit and trade financing to businesses, these representative offices allow the bank to assist existing clients and develop new business relationships. Through its branches and offices, the bank focuses on growing its cross-border client base between the U.S. and Asia, helping the U.S.-based businesses expand in Asia, and assisting companies based in Asia pursue business opportunities in the U.S.

Banking Services

As of December 31, 2023, East West Bank was the largest independent commercial bank headquartered in Southern California based on total assets. The bank is the largest independent bank in the U.S. focused on the financial service needs of individuals and businesses that operate both in the U.S. and Asia, and has a strong focus on the Asian American community.

The bank provides services to its customers in English and in over 10 other languages. In addition to offering traditional deposit products that include personal and business checking and savings accounts, money market, and time deposits, the bank offers foreign exchange, treasury management and wealth management services. The bank’s lending activities include commercial and residential real estate 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. The bank also provides financing services to clients to facilitate their business transactions between the U.S. and Asia. Additionally, to support the business needs of its customers, the bank offers hedging advisory and various derivative contracts, such as interest rate, energy commodity and foreign exchange contracts.

The integration of digital with brick-and-mortar channels has been an area of investment for the bank, for both commercial and consumer banking. The company’s strategic priorities include the use of technology to innovate and expand commercial payments, treasury management products and services, and consumer banking. The company have developed mobile and online banking platforms, which are continually enhanced to enrich the company’s customer user experience, and which offer a full suite of banking services tailored to the company’s customers’ unique needs. In the company’s view, the omnichannel banking service approach increases efficiency and deepens customer relationships.

Operating Segments

The bank’s three operating segments, Consumer and Business Banking, Commercial Banking, and Other, are based on the bank’s core strategy.

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. The Commercial Banking segment primarily generates commercial loans and deposits. The remaining centralized functions, including the corporate treasury activities of the company and eliminations of inter-segment amounts, are aggregated and included in the Other segment.

Loan Portfolio

The company offers a broad range of financial products designed to meet the credit needs of its borrowers. The company’s loan portfolio segments include commercial loans, which consist of C&I, CRE, multifamily residential, and construction and land loans, as well as consumer loans, which consist of single-family residential, home equity lines of credit (‘HELOCs’) and other consumer loans.

Securities

As of December 31, 2022, the company’s securities included U.S. Treasury securities; U.S. government agency and U.S. government-sponsored enterprise debt securities; U.S. government agency and U.S. government-sponsored enterprise mortgage-backed securities, such as commercial mortgage-backed securities and residential mortgage-backed securities; municipal securities, including non-agency mortgage-backed securities, such as commercial mortgage-backed securities and residential mortgage-backed securities; corporate debt securities; foreign government bonds; asset-backed securities; and CLOs.

Supervision and Regulation

The company is registered under the Bank Holding Company Act of 1956, as amended (‘BHC Act’).

East West and the bank are subject to extensive and comprehensive regulations under the U.S. federal and state laws. Regulation and supervision by the federal and state banking agencies are intended primarily for the protection of depositors, the Deposit Insurance Fund (‘DIF’) administered by the FDIC, consumers, and the banking system as a whole, and not for the protection of the company’s investors.

As a bank holding company, East West is subject to primary regulation, supervision, and examination by the Federal Reserve under the BHC Act. The bank is regulated, supervised, and examined by the Federal Reserve, the DFPI, and, with respect to consumer laws, the CFPB. As the insurer of the bank’s deposits, the FDIC has back-up examination authority of the bank as well. In addition, the bank and its wholly-owned subsidiary, East West Bank (China) Limited, are regulated by foreign regulatory agencies in international jurisdictions where the company has a presence, including China, Hong Kong and 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.

The company is also subject to the disclosure and regulatory requirements under the Securities Act of 1933, as amended (the ‘Securities Act’), and Section 21E of the Securities Exchange Act of 1934, as amended (the ‘Exchange Act’), and the rules and regulations adopted by the SEC thereunder.

As a bank holding company and pursuant to its election of financial holding company status, East West is subject to regulation, supervision, and examination by the Federal Reserve under the BHC Act.

East West has elected to be a financial holding company as permitted under the Gramm-Leach-Bliley Act of 1999 (‘GLBA’).

East West Bank is a California state-chartered bank and a member of the Federal Reserve System, and its deposits are insured by the FDIC. The bank’s operations in the U.S. are primarily regulated and supervised by the Federal Reserve and the DFPI, and its activities outside the U.S. are regulated and supervised by its U.S. regulators and the applicable regulatory authority in the host country in which each overseas office is located.

The bank’s foreign subsidiary, East West Bank (China) Limited, is subject to applicable foreign laws and regulations, such as those implemented by the PBOC and the NAFR. East West Bank’s Hong Kong branch is subject to applicable foreign laws and regulations, such as those implemented by the HKMA and the HKSFC. The Bank’s Singapore representative office is subject to applicable foreign laws and regulations, such as those implemented by the MAS.

The bank is also subject to additional capital requirements under the Prompt Corrective Action (‘PCA’) regulations that implement Section 38 of the Federal Deposit Insurance Act (‘FDIA’).

The Dodd-Frank Act established the CFPB, which has the authority to implement, examine and enforce compliance with federal consumer financial laws that apply to banking institutions with total consolidated assets exceeding $10 billion (such as the bank) and their affiliates.

The bank is a member of the Federal Home Loan Bank (‘FHLB’) of San Francisco. Based on the most recent CRA examination as of March 8, 2021, the bank was rated ‘outstanding’.

The FDIC insures the bank’s customer deposits through the DIF up to $250,000 for each depositor, per FDIC-insured bank, for each account ownership category.

The company regularly evaluates and continues to enhance its program to comply with the Bank Secrecy Act (‘BSA’), Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT) Act of 2001 (‘PATRIOT Act’), and other anti-money laundering (‘AML’) laws, regulations and initiatives.

The bank’s privacy practices and the effectiveness of its systems to protect consumer privacy are subjects covered in the Federal Reserve’s periodic compliance examinations.

The bank is subject to the California Consumer Privacy Act (‘CCPA’).

History

East West Bancorp, Inc. was founded in 1973. The company was incorporated in Delaware in 1998.