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East West Bancorp (EWBC)
NASDAQ:EWBC
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East West Bancorp
(NASDAQ:EWBC)
71Outperform
Positive Factors
Deposit Costs
Deposit costs are coming down nicely, supporting a positive outlook for the stock.
Insurance Coverage
The company has limited exposure to wildfire-affected areas, with broad insurance coverage in place, minimizing potential financial risks.
Wealth Management Growth
Management has been consistently growing wealth management, foreign exchange, and deposit account fees at over 20% per year, indicating strong potential for sustained growth.
Negative Factors
Earnings Miss
Adjusted EPS of $2.08 missed consensus estimates due to higher provisions and expenses, causing concern for investors.
Expense Guidance
Expense guidance for the upcoming year was higher than expected, which could pressure profitability.
Impact on Small Businesses
The largest unknown risk remains the impact on small businesses in the affected areas, which could influence future financial performance.
East West Bancorp (EWBC) vs. S&P 500 (SPY)
Market Cap
$12.28B
Dividend Yield2.52%
Average Volume (3M)1.49M
Price to Earnings (P/E)10.6
Beta (1Y)1.20
Revenue Growth9.03%
EPS Growth5.81%
CountryUS
Employees3,100
SectorFinancial
Sector Strength85
IndustryBanks - Diversified
Share Statistics
EPS (TTM)2.08
Shares Outstanding137,801,450
10 Day Avg. Volume1,211,881
30 Day Avg. Volume1,487,339
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.00
Price to Cash Flow (P/CF)0.00
P/FCF Ratio0.00
Enterprise Value/Market Cap1.05
Enterprise Value/RevenueN/A
Enterprise Value/Gross Profit38.53
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$100.25Price Target Upside13.69% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering9
East West Bancorp Business Overview & Revenue Model
Company DescriptionEast West Bancorp, Inc. operates as the bank holding company for East West Bank that provides a range of personal and commercial banking services to businesses and individuals. It operates through three segments: Consumer and Business Banking, Commercial Banking, and Other. The company accepts various deposit products, such as personal and business checking and savings accounts, money market, and time deposits. Its loan products include mortgage and home equity, commercial and residential real estate, working capital lines of credit, construction, trade finance, letters of credit, commercial business, affordable housing loans, asset-based lending, asset-backed finance, project finance, and equipment financing, as well as financing services to clients needing a financial bridge to facilitate their business transactions between the United States and China. The company also provides various wealth management, treasury management, foreign exchange, and interest rate and commodity risk hedging services; and mobile and online banking services. As of January 27, 2022, it operated approximately 120 locations in the United States and China; full-service branches in Hong Kong, Shanghai, Shantou, and Shenzhen; and representative offices in Beijing, Chongqing, Guangzhou, Taipei, and Xiamen. East West Bancorp, Inc. was incorporated in 1998 and is headquartered in Pasadena, California.
How the Company Makes MoneyEast West Bancorp generates revenue primarily through the interest income from its lending operations, which include commercial loans, residential mortgage loans, and consumer loans. The company also earns money from non-interest income sources such as fees and service charges related to deposit accounts, wealth management services, and international banking transactions. Additionally, East West Bancorp benefits from its strategic positioning in cross-border banking, leveraging its expertise and network to facilitate trade and investment flows between the United States and Greater China, which significantly contributes to its earnings. Key revenue factors include net interest margin, loan portfolio growth, and fee-based income.
East West Bancorp Financial Statement Overview
Summary
East West Bancorp demonstrates strong profitability and financial stability, supported by effective cost management and prudent leverage. However, recent operational and cash flow fluctuations pose some risks.Income Statement
East West Bancorp's income statement reveals mixed results. The gross profit margin remains high consistently with strong net income figures, reflecting effective cost control and profitability. However, the EBIT margin for 2024 is negative due to a significant drop in EBIT, indicating potential operational challenges. Revenue growth has been volatile, with a decline observed in 2024. Overall, profitability is strong, but operational issues are a concern.70
Positive
Balance Sheet
The balance sheet exhibits a solid equity base with a healthy return on equity. The debt-to-equity ratio is favorable, reflecting prudent leverage management. The equity ratio shows a stable position, though slight fluctuations are noted. Strong stockholders' equity and manageable debt levels highlight financial stability, though attention should be paid to recent asset trends.75
Positive
Cash Flow
East West Bancorp's cash flow statements show robustness in operating cash flow relative to net income, indicating strong cash generation capabilities. However, free cash flow growth has been inconsistent, with a notable decline in 2024. The company's ability to convert earnings into cash flows is generally positive, but recent fluctuations suggest potential cash management concerns.65
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 335.22M | 2.36B | 2.32B | 1.80B | 1.60B | Gross Profit |
| 335.22M | 3.97B | 2.32B | 1.80B | 1.60B | EBIT |
| -568.61M | 1.75B | 1.69B | 1.06B | 685.76M | EBITDA |
| 0.00 | 1.62B | 1.57B | 1.21B | 805.67M | Net Income Common Stockholders |
| 1.17B | 1.16B | 1.13B | 872.98M | 567.80M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 360.73M | 4.61B | 9.66B | 14.61B | 10.37B | Total Assets |
| 75.98B | 69.61B | 64.11B | 60.87B | 52.16B | Total Debt |
| 125.24M | 4.76B | 264.33M | 506.86M | 928.19M | Net Debt |
| -235.50M | 140.38M | -3.36B | -4.14B | -3.90B | Total Liabilities |
| 68.25B | 62.66B | 58.13B | 55.03B | 46.89B | Stockholders Equity |
| 7.72B | 6.95B | 5.98B | 5.84B | 5.27B |
| Cash Flow | Free Cash Flow | |||
| 1.41B | 1.42B | 2.07B | 1.16B | 690.67M | Operating Cash Flow |
| 1.41B | 1.42B | 2.07B | 1.17B | 693.33M | Investing Cash Flow |
| 3.06M | -4.25B | -4.58B | -9.12B | -6.85B | Financing Cash Flow |
| -579.97M | 3.96B | 2.11B | 7.84B | 6.91B |
East West Bancorp Technical Analysis
Positive
88.18
Price Trends
85.52
Positive
92.18
Negative
90.27
Negative
Market Momentum
0.95
Negative
58.96
Neutral
71.59
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For EWBC, the sentiment is Positive. The current price of 88.18 is above the 20-day moving average (MA) of 80.04, above the 50-day MA of 85.52, and below the 200-day MA of 90.27, indicating a neutral trend. The MACD of 0.95 indicates Negative momentum. The RSI at 58.96 is Neutral, neither overbought nor oversold. The STOCH value of 71.59 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for EWBC.
East West Bancorp Risk Analysis
East West Bancorp disclosed 38 risk factors in its most recent earnings report. East West Bancorp reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
East West Bancorp Peers Comparison
Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
83 Outperform | $1.77B | 8.38 | 21.11% | 4.27% | 5.36% | 9.07% | |
78 Outperform | $60.40B | 30.19 | 28.07% | ― | 47.34% | 89.96% | |
77 Outperform | $51.61B | 8.69 | 13.70% | 4.12% | 18.85% | 14.85% | |
75 Outperform | $64.32B | 9.64 | 11.92% | 4.87% | 4.07% | 9.97% | |
74 Outperform | $57.05B | 8.24 | 9.36% | 2.62% | 11.33% | 47.74% | |
71 Outperform | $12.28B | 10.63 | 15.66% | 2.52% | 9.03% | 5.81% | |
64 Neutral | $12.61B | 9.79 | 7.95% | 16985.69% | 12.77% | -3.98% |
* Financial Sector Average
Performance Comparison
EWBC
East West Bancorp
88.18
12.08
15.87%
BCS
Barclays
16.38
6.30
62.50%
ING
ING Groep
20.51
4.27
26.29%
NWG
NatWest Group
13.07
5.59
74.73%
NTB
Bank of NT Butterfield & Son
41.02
7.04
20.72%
NU
Nu Holdings
12.47
0.47
3.92%
East West Bancorp Earnings Call Summary
Earnings Call Date:Apr 22, 2025
(Q1-2025)
| % Change Since: 11.32%|
Next Earnings Date:Jul 22, 2025
Earnings Call Sentiment Positive
The earnings call reflected strong financial performance with record revenue, solid loan growth, and robust capital and efficiency metrics. However, the bank is cautious due to economic uncertainties, especially regarding potential impacts from tariffs and increased criticized loans.Q1-2025 Updates
Positive Updates
Record Revenue and Loan Growth
East West Bancorp reported another quarter of record revenue. Loan growth was solid, with end of period loans up 1% quarter-over-quarter to a new record level of $54 billion.
Strong Fee Income
A record quarter of fee income was delivered, with fees up 8%, driven by strong customer activity across various sectors.
Improved Asset Quality
Asset quality remained solid with annualized net charge-offs totaling 12 basis points, a decrease in non-performing assets ratio by two basis points to 24 basis points, and a strengthened allowance for loan losses to 1.35%.
Robust Capital Ratios
East West's CET1 capital ratio stands at a robust 14.3%, while the tangible common equity ratio rose to 9.9%.
Efficiency and Profitability
The Q1 efficiency ratio was 36.4%, with a near 16% return on tangible common equity and a 1.6% return on average assets.
Negative Updates
Economic Uncertainty
The bank has increased downside scenario weightings in its allowance for credit losses due to recent economic uncertainty and potential impacts of tariffs.
Criticized Loan Ratio Increase
The criticized loans ratio increased during the quarter due to 2.3% of loans, with special mentioned loans ratio increasing eight basis points and classified loans ratio increasing three basis points.
Company Guidance
During the East West Bancorp First Quarter 2025 Earnings Conference Call, management provided guidance reflecting a strong financial performance with several key metrics highlighted. The bank achieved record revenue with solid loan growth, seeing a 1% increase quarter-over-quarter to a record $54 billion in loans. Fee income grew by 8% driven by robust customer activity. Asset quality remained strong with annualized net charge-offs of 12 basis points, totaling $15 million, and a decrease in the non-performing assets ratio to 24 basis points. The allowance for loan losses was increased to 1.35% due to recent economic uncertainties. On the capital front, the bank reported a near 16% return on tangible common equity and a 1.6% return on average assets, while tangible book value per share grew 3% quarter-over-quarter and 15% year-over-year. Additionally, the bank continues to maintain strong capital ratios, with a CET1 capital ratio of 14.3% and a tangible common equity ratio of 9.9%. Management reaffirmed their full-year guidance, expecting continued growth in net interest income and fee revenue, while strategically managing expenses and capital.East West Bancorp Corporate Events
Financial Disclosures
East West Bancorp Reports Strong Q1 2025 Results
Positive
Apr 22, 2025
On April 22, 2025, East West Bancorp, Inc. announced its financial results for the first quarter of 2025, reporting a net income of $290 million and diluted earnings per share of $2.08. The company achieved record levels in loans, revenue, and fee income, with a notable 16% return on average tangible common equity. The net interest margin expanded by 11 basis points due to a focus on deposit cost optimization, resulting in over $600 million of net interest income. Credit performance improved with decreased nonaccrual loans and nonperforming assets, and the allowance for loan losses was increased to 1.35% of loans. East West Bancorp continues to leverage its strong financial position to capitalize on opportunities and support its customers.
Spark’s Take on EWBC Stock
According to Spark, TipRanks’ AI Analyst, EWBC is a Outperform.
East West Bancorp’s strong financial performance and positive earnings guidance are significant strengths, contributing to a robust outlook. The stock’s undervaluation offers potential upside, but bearish technical indicators and risks in operational performance and the technology sector credit issues provide reasons for caution.
To see Spark’s full report on EWBC stock, click here.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.