East West Bank (NASDAQ: EWBC) reported that return on tangible common equity has held near 17% over the past three years, with management reiterating its double-digit target for the metric.
The bank also outlined progress on its deposit mix. Non-interest-bearing checking accounts have improved for six straight quarters and now represent roughly 24% to 25% of total deposits, with the company expecting the figure to move into the mid- to high-20s range under current rate conditions.
On the liability side, about $12 billion to $13 billion in certificates of deposit reprice each quarter. Six-month CDs are priced at 3.65%, nine-month CDs at 3.75%, and 12-month CDs at 3.80%. Chief Financial Officer Chris Del Moral-Niles noted these rates sit at least 25 basis points below the broader market, where competitors are closer to the four percent level, effectively locking in funding costs in the 3.75% to 3.80% range.
Tariff-related flows generated approximately $1 billion in deposit activity, with several hundred million dollars still on deposit at the end of the second quarter and a similar amount expected through the third quarter, the bank said.
Commercial real estate remains a focal point. Yields on the asset class are now above 6.25%, up from roughly 5% previously, offering what management characterized as more attractive entry points. Office CRE exposure for credits above $30 million includes 10 office credits totaling $387 million, the bank disclosed.
Loan distribution remains balanced across three primary categories, with roughly one-third of the balance sheet allocated to single-family mortgages, commercial real estate, and commercial & industrial lending. No single C&I subset exceeds 5% of the balance sheet, according to the bank.
Geographically, 94% of loans are originated in the United States, and 92% to 97% of deposits and dollar balances are denominated in U.S. dollars, reinforcing the bank’s domestic orientation despite its international footprint.
East West Bank also highlighted its fee-income strategy. After failing to acquire a wealth management partner, the bank launched its own registered investment adviser platform. It expanded online FX trading capabilities and added straight-through processing for multi-currency accounts covering euros, U.S. dollars, Hong Kong dollars, and Singapore dollars.
The bank positions itself as a “too strong to fail” alternative to the four largest U.S. banks, targeting clients below the Fortune 1000. Its geographic footprint centers on Southern California, particularly along Valley Boulevard and Rosemead Boulevard, alongside branches in San Francisco, Seattle, Houston, Dallas, Boston, Atlanta, and New York, with rep offices in Hong Kong, Shanghai, and Singapore.
Management said any future acquisition would likely target a firm equal to 5% to 10% of the balance sheet. The bank has completed no M&A deals in the past 12 years.
Shares traded at a P/E ratio of 12.5, and the stock was listed at $129.17 as of the most recent market close. The company raised its dividend 33% earlier this year, extending an eight-year streak of increases to a 2.5% yield.
