EWBC Stock Dips Despite Q4 Earnings Beat, Revenues & Costs Rise Y/Y

East West Bancorp, Inc.’s EWBC fourth-quarter 2025 adjusted earnings per share (EPS) of $2.52 beat the Zacks Consensus Estimate of $2.48. Moreover, the bottom line increased 21.2% from the prior-year quarter’s level.

The results were primarily aided by an increase in net interest income (“NII”) and non-interest income alongside lower provisions. Also, loan and deposit balances increased sequentially in the quarter. However, higher non-interest expenses acted as a spoilsport. Probably due to this, shares of the company lost 1.6% in after-market trading following the results. 

The reported quarter’s results excluded notable items. After considering those, net income available to common shareholders was $356.3 million or $2.55 per share, up from $293.1 million or $2.10 in the prior-year quarter.

Adjusted EPS for 2025 of $9.49 beat the Zacks Consensus Estimate of $9.46. Moreover, the bottom line increased 14.3% from the previous year. Net income available to common shareholders (GAAP basis) was $1.33 billion or $9.52 per share, up from $1.17 billion or $8.33 in 2024.

EWBC’s Revenues & Expenses Increase

Quarterly net revenues were $758.3 million, up 12.2% year over year. Moreover, the top line beat the Zacks Consensus Estimate of $748.4 million.

Net revenues in 2025 were $2.93 billion, up 12.2% year over year. Moreover, the top line beat the Zacks Consensus Estimate of $2.92 billion.

Quarterly NII amounted to $657.8 million, which increased 11.9% year over year. Further, net interest margin (“NIM”) expanded 17 basis points (bps) to 3.41%. We expected NII and NIM to be $646.8 million and 3.40%, respectively.

Total non-interest income was $100.4 million, up 13.9% year over year. An increase in all components, except foreign exchange income, customer derivative income, net gains on AFS debt securities and derivative mark-to-market and credit valuation adjustments, drove the improvement. We estimated non-interest income to be $87.6 million.

Non-interest expenses totaled $261.3 million, up 4.5% 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 amortization of tax credit and CRA investments. Our estimate for the same was $273.9 million.

The efficiency ratio was 34.46%, down from 36.99% in the prior-year quarter. A fall in the efficiency ratio indicates an improvement in profitability.

As of Dec. 31, 2025, net loans held for investment (“HFI”) were $56.1 billion, reflecting a 2% rise sequentially. Further, total deposits rose 0.7% to $67.1 billion.

East West Bancorp Credit Quality: A Mixed Bag

Annualized quarterly net charge-offs were 0.08% of average loans HFI, down 40 bps from the prior-year quarter’s level. The provision for credit losses was $30 million, down 57.1% from the prior-year quarter’s level. Our estimate for the same was $24.4 million.

As of Dec. 31, 2025, non-performing assets amounted to $208 million, up 7.2% year over year.

EWBC’s Capital & Profitability Ratios Improve

As of Dec. 31, 2025, the common equity Tier 1 capital ratio was 15.10%, up from 14.27% as of Dec. 31, 2024. The total risk-based capital ratio was 16.42%, up from 15.48% a year ago.

At the end of the fourth quarter, the return on average assets was 1.77%, up from 1.55% as of Dec. 31, 2024. Return on average tangible equity was 17.03%, up from 16.07%.

East West Bancorp’s Share Repurchase Update

In the reported quarter, East West Bancorp repurchased 10,000 shares for $1 million. As of Dec. 31, 2025, $215 million of authorization remained available for repurchase.

Dividend Hike

Concurrent with the earnings release, the company’s board of directors declared a common stock dividend of 80 cents per share, representing a hike of 33% from the prior payout. The dividend will be paid out on Feb. 17 to shareholders of record as of Feb. 2.

Our View on EWBC

East West Bancorp is well-poised for organic growth with decent loan improvement and solid deposit balances, 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

BOK Financial Corporation's BOKF fourth-quarter 2025 adjusted net income per share of $2.48 surpassed the Zacks Consensus Estimate of $2.13. The bottom line increased 16.9% from the prior-year quarter.

BOKF’s results benefited from higher NII and total fees and commissions. An increase in loans and deposit balances was another positive. However, the increase in operating expenses was a major undermining factor.

WaFd, Inc.’s WAFD first-quarter fiscal 2026 (ended Dec. 31) earnings of 79 cents per share beat the Zacks Consensus Estimate of 76 cents. The bottom line also jumped 46% year over year. 

WAFD’s results reflected higher NII, a surge in non-interest income and lower expenses. However, credit costs remained elevated, with provisions for credit losses recorded in the quarter.

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

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