East West Bancorp Q2 Earnings Top on Higher NII & Non-Interest Income

East West Bancorp, Inc.’s EWBC second-quarter 2025 adjusted earnings per share (EPS) of $2.28 beat the Zacks Consensus Estimate of $2.23. Moreover, the bottom line increased 9.1% from the prior-year quarter’s level.

The results were primarily aided by an increase in net interest income (“NII”) and non-interest income. Also, loan and deposit balances increased sequentially in the quarter. However, higher provisions and non-interest expenses were headwinds.

The quarterly results excluded certain notable items. After considering those, net income available to common shareholders was $310.3 million or $2.24 per share, up from $288.2 million or $2.06 in the prior-year quarter.

EWBC’s Revenues & Expenses Increase

Quarterly net revenues were $703.3 million, up 10.3% year over year. Moreover, the top line beat the Zacks Consensus Estimate of $699 million.

NII amounted to $617.1 million, which increased 11.5% year over year. Further, net interest margin (“NIM”) expanded 8 basis points (bps) to 3.35%. We expected NII and NIM to be $603.5 million and 3.37%, respectively.

Total non-interest income was $86.2 million, up 2.4%. An increase in all components except customer derivative income and lower gains on available-for-sale debt securities drove the improvement. We estimated non-interest income to be $89.2 million.

Non-interest expenses totaled $256 million, up 8.5% from the prior-year quarter’s level. The rise was due to an increase in all components except deposit account expense, deposit insurance premiums and regulatory assessments charges, and other operating expenses. Our estimate for the same was $261.3 million.

The efficiency ratio was 36.32, down from 36.93 in the prior-year quarter. A decline in the efficiency ratio indicates an improvement in profitability.

As of June 30, 2025, net loans held for investment (“HFI”) were $54.2 billion, reflecting a 1.3% rise sequentially. Further, total deposits rose 3.1% to $65 billion.

East West Bancorp Credit Quality: A Mixed Bag

Annualized quarterly net charge-offs were 0.11% of average loans HFI, down 7 bps from the prior-year quarter’s level. As of June 30, 2025, non-performing assets amounted to $171.7 million, down 12.5% year over year.

The provision for credit losses was $45 million, up 21.6% from the prior-year quarter’s level. Our estimate for the same was $43 million.

EWBC’s Capital Ratios Improve, Profitability Ratios Decline

As of June 30, 2025, the common equity Tier 1 capital ratio was 14.51, up from 13.74 as of June 30, 2024. The total risk-based capital ratio was 15.82, up from 15.05 a year ago.

At the end of the second quarter, the return on average assets was 1.62%, down from 1.63% as of June 30, 2024. Return on average tangible equity was 16.39%, down from 17.54%.

East West Bancorp’s Share Repurchase Update

In the reported quarter, East West Bancorp repurchased roughly 26 thousand shares for $2 million. As of June 30, 2025, $241 million of authorization remained available for repurchase.

Our View on EWBC

East West Bancorp is well-poised for organic growth with decent loan improvement and solid deposit balances, relatively higher interest rates and diversified fee income streams. However, a rise in expenses and a weak asset quality amid a tough operating backdrop are likely to hurt the bottom line.

East West Bancorp, Inc. Price, Consensus and EPS Surprise

East West Bancorp, Inc. price-consensus-eps-surprise-chart | East West Bancorp, Inc. Quote

Currently, EWBC carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Banks

Zions Bancorporation’s ZION second-quarter 2025 adjusted EPS of $1.58 beat the Zacks Consensus Estimate of $1.31. Moreover, the bottom line surged 30.6% from the year-ago quarter.

Results were primarily aided by higher NII and non-interest income alongside a provision benefit. Additionally, higher loan amounts were another positive. However, a rise in adjusted non-interest expenses was a major headwind for ZION.

F.N.B. Corporation’s FNB second-quarter 2025 earnings of 36 cents per share outpaced the Zacks Consensus Estimate of 33 cents. Also, the bottom line compared favorably with adjusted earnings of 34 cents in the prior-year quarter.

FNB’s results benefited from growth in NII and non-interest income. Higher loans and deposits are other positives. However, higher provisions and expenses were the undermining factors.

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This article originally published on Zacks Investment Research (zacks.com).

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