Oct 20, 2026 earnings call — Raised NII guidance after record quarter
Company raised full-year net interest income growth outlook to 9% to 10% after record net interest income and record revenue.
Revenue $0.8B (est $0.8B) · EPS $2.76 (est $2.72)
Key quotes
"Average non interest bearing deposits increased 16% year-over-year and our focus on small business checking accounts also continue to bear fruit."
"Given September's rate hike and our strong third quarter performance, we now expect full year NII growth of 9% to 10%,"
"Given our performance through the first 9 months of the year, our current visibility, we have narrowed our prior guidance for net charge offs and now expect full year charge offs to be 15 to 20 basis points."
Analyst Q&A 13
deposit beta and loan yields
Q (Casey Haire · Autonomous): The analyst asked if the shoe-leather deposit strategy could lower deposit beta this cycle with Fed hikes. He also asked where new loan yields sit across products versus third quarter.
A: Management said higher rates make customers more aware of opportunity cost and they have made progress growing DDA, but they have not changed the underlying deposit math. They said if rates go materially higher they would still see some bleed off, yet DDA has been improving. On new loan yields they said commercial loans are generally SOFR based and sit between SOFR 25 and 52.
"I think what we have said before, would stand by, which is higher rates overall will beget more customer attention to how much their opportunity costs actually cost them." — Christopher J. Del Moral-Niles (CFO)
impact of a hike and criticized loans rise
Q (Ryan Kenny · Morgan Stanley): Would a hike push the company toward the high end of guidance, and what caused criticized loans and NPAs to pick up?
A: Management confirmed a hike would push results toward the high end and quantified the sensitivity of a 25-basis-point hike. They said that a 25-basis-point hike is worth $2.5 million per month with about a 45-day lag. On credit, they said the increases covered C&I and both special mention and substandard ticked up a little.
"And I think what we have quantified before is that we believe a 25-basis-point hike is worth $2.5 million per month with a bit of a lag." — Christopher J. Del Moral-Niles (CFO)
Q4 NIM outlook and Asia payments rollout
Q (Dave Rochester · Cantor): What are the offsets that could affect Q4 NIM given potential hikes, and was FX fee growth tied to Asia payments and Mainland China rollout?
A: Management said deposit costs could chip into NIM, though they had not seen that in early October; the bank is asset sensitive and higher rates would likely grow NII and could expand margin. On Asia payments they said the Hong Kong program is live and driving upticks in wires and volumes, and the Mainland China program is now live but transaction volumes are still modest with expected pickup into Q4 and Q1 next year.
"With regard to our Mainland China, program, that is now live, but transaction volumes are still modest." — Christopher J. Del Moral-Niles (CFO)
wealth fees drop and NIM beat reasons
Q (Bernard von Gizycki · Deutsche Bank): Why did wealth management fees fall $4 million sequentially and what drove the better-than-expected NIM this quarter?
A: Management said structured product sales, predominantly structured notes, were strong earlier in the year but stepped down in Q2 and stepped down a little more in Q3, which reduced wealth fees. They said they have continued hiring to rebuild volumes. On NIM, they said they contained deposit costs better than expected and net inflows of DDA and money markets let them avoid adding higher-cost wholesale funding.
"I think the reality is we were able to contain deposit costs much more effectively than we anticipated." — Christopher J. Del Moral-Niles (CFO)
DDA growth drivers and CD renewals
Q (David Chiaverini · Jefferies): Will DDA growth momentum continue and what is driving it? Also, when Lunar New Year CDs renewed in August, did they roll to 6-months or longer?
A: Management described a "shoe-leather" strategy where branch and commercial teams visit customers in person, knocking on doors and calling, which has driven DDA inflows and account growth. They said more than $1 out of $4 of net deposits on average came as incremental DDA and that those accounts opened last year are growing year over year. On CDs, they said they offered a mix and specifically offered special 9- and 12-month terms and saw a blend across the options.
"Actually, offered both a special 9- and 12-month term." — Christopher J. Del Moral-Niles (CFO)
Lunar CD aggressiveness and capital priorities
Q (Timur Braziler · Wells Fargo): Will East West be aggressive on Lunar CD specials this time, and how does excess capital affect M&A appetite?
A: Management said they will provide guidance for 2027 but current CD specials are at appropriate levels to retain balances today. On capital they said organic growth is priority one and that at 10% tangible common equity they are comfortable and have flexibility to fund organic growth, pay a competitive dividend, and consider disciplined inorganic opportunities and opportunistic buybacks.
"At 10% tangible common equity, which is a level Dominic has previously commented on, the level that we are very comfortable with." — Christopher J. Del Moral-Niles (CFO)
C&I loan growth and criticized loans drivers
Q (Janet Lee · TD Cowen): Can you give puts and takes on C&I growth and explain the rise in criticized loans and the allowance for C&I?
A: Management said the decline in other categories (consumer and mortgage) meant core bilateral C&I was positive by over $200 million and that core bilateral C&I growth is broad based; they expect more core C&I to land in Q4. On criticized loans, they said both special mention and substandard for C&I increased a little, with no single sector concentration, and that upgrades offset some downgrades so they are comfortable working with clients.
"Both of the special mentioned and the substandard loans for C&I increased a little bit." — Irene H. Oh
fee income build-out and AI spend
Q (Chris McGratty · KBW): Where are you in building fee-income capabilities and can you accelerate organically or inorganically? Also, what are the AI and tech spend impacts on expenses and any early wins?
A: Management said they are still in the early innings of building payment, investment, and FX services and that double-digit fee growth shows progress but much more opportunity exists. On tech and AI, they said computer and software expenses are up and pilot AI initiatives focus on efficiency and speed of evaluation to save costs, with no clear revenue-boosting use case yet; they will pilot further and follow proven solutions rather than pioneer.
"Where we have seen pilot initiatives in our AI development efforts internally, They have been focused on efficiency and speed of evaluation of things, so more on cost saving oriented activities." — Christopher J. Del Moral-Niles (CFO)
credit risk if rates stay higher and cross-border trends
Q (Ebrahim Poonawala · BofA): If rates stay higher for longer, how does that affect credit risk across CRE and C&I? And what's the latest on cross-border flows and client sentiment amid geopolitics?
A: Management said higher rates for longer do increase credit risk for all banks, but noted their loan book benefits from disciplined underwriting and low loan-to-values which helps. On cross-border, management said businesses have adapted to tariffs and geopolitical noise, East West remains focused on supporting clients, running a prudent balance sheet, prioritizing organic growth, and that cross-border opportunity set remains large and steady over time.
"Higher for longer does increase credit risk, not only for East West Bank, for every bank." — Irene H. Oh
tariff refunds and rise in OREO
Q (Jared Shaw · Barclays): Was there any measurable impact from tariff refunds on deposit or DDA growth, and what drove the increase in OREO and expected disposition timing or losses?
A: Management said tariff refunds were a small positive: over a billion flowed through the bank, most in the second quarter, and on-balance-sheet amounts related to same customer/accounts were less than $200 million at quarter end, with a similar amount migrating to money markets. On OREO they said some foreclosures produced REO but volumes are not concerning, the assets are geographically and asset-type dispersed, some have LOIs, and the team is working toward sales.
"On balance sheet portion that we would say is related to sort of same customer, same account is less than $200 million in the quarter end number." — Christopher J. Del Moral-Niles (CFO)
wealth M&A and HQLA readiness
Q (Benjamin Gerlinger · Citi): Are you seeking inorganic options to add wealth or other fee offerings, and would tailoring rules at $100 billion change your HQLA or securities approach?
A: Management said they looked for bolt-on wealth opportunities but did not find the right deal and instead launched a registered investment advisory in Q3 and are building the team organically. They also said they have built an HQLA-oriented investment portfolio suitable for expected tailoring rules and expect to be appropriately positioned whether rules are finalized as expected in the next 3 to 6 months or if rules change, which would provide more flexibility.
"And so we did during the third quarter formally launch our registered investment advisory entity and we are in the process of building organically out the team to further those efforts." — Christopher J. Del Moral-Niles (CFO)
NII math and loan growth question
Q (David Smith · Truist): With flat margin guidance and loan growth expected, why wouldn’t NII be toward the upper end of the range?
A: Management acknowledged the analyst's math and essentially agreed with the point.
"I like your math. Fair enough." — Christopher J. Del Moral-Niles (CFO)
CD roll rates, deposit costs, dividend policy
Q (Matthew Clark · Piper Sandler): What are current CD special rates and how will the $15 billion of maturing CDs roll, and what is the bank's targeted dividend payout ratio?
A: Management said most of the $15 billion was priced about 6 months ago and that current month specials are the 6-month at $3.65, 9-month at $3.78, and 12-month at $3.88; they noted not all balances will roll at special rates and the blended 6-month offering is in line with Q2. They said quarter-end interest-bearing deposit cost was $2.83 versus a $2.81 average for Q3, and that they did not target a specific dividend payout ratio but raised the dividend by 1/3 last year to $0.80 and reiterated a $0.80 dividend for the fourth quarter, to be reviewed at least annually.
"So the first 1 is right now the current month 6-month CD special is at $3.65 the 9-month is at $3.78, and the 12-month is at $3.88" — Christopher J. Del Moral-Niles (CFO)