East West Bancorp raises 2026 interest income growth outlook to 9%–10%
Key Facts
East West Bancorp raised its forecast for net interest income growth in 2026 to between 9% and 10%, according to management remarks on the third-quarter earnings call, a transcript of which was published by Benzinga. The new estimate compares with projected growth of between 7% and 9% in the July earnings presentation, which the company filed with the U.S. Securities and Exchange Commission. The update came after net interest income grew 9.5% year on year in the first nine months of the year, according to figures management presented on the call. The company reported net income of $382 million for the third quarter of 2026 in its earnings release published through Business Wire. Diluted earnings per share for the same period were $2.76, according to the release.
The company posted quarterly revenue of $823 million, according to its third-quarter earnings release published through Business Wire. In its fee-generating businesses, fee income rose 11% from the corresponding period a year earlier during the first nine months of 2026. The company highlighted strong commercial deposit account fees in the third quarter in its discussion of this part of revenue in the release. On the earnings call, management said the efficiency ratio improved to 34.4% during the quarter as it presented the company's operating performance indicators. Return on average assets was 1.79% in the third quarter, according to the earnings release, which also included equity-related profitability metrics.
On the funding side, total deposits reached a record $71.5 billion at the end of September 2026, according to the company's release. Management said on the earnings call that net deposit growth exceeded $1.4 billion in the third quarter alone. Deposit movements during the period included inflows into money market accounts, according to management remarks transcribed by Benzinga. Noninterest-bearing demand deposits also grew about 15% year on year at the end of the third quarter, according to the earnings release published through Business Wire. On the other side of the balance sheet, total loans also reached a record $59.7 billion at the end of September, according to the same release.
Management said on the earnings call that loans grew 7% from a year earlier as it discussed lending performance in the third quarter of 2026. Net residential mortgage loan growth during the quarter approached $400 million, according to figures management provided on the call. In terms of equity profitability, return on average common equity was 16.3% in the third quarter, according to the company's release. Return on average tangible common equity reached 17.2%, a non-GAAP measure, according to the release. On capital, management said on the call that the common equity Tier 1 capital ratio was 15.4% at the end of the third quarter.
In its updated credit outlook, management narrowed the range for expected net charge-offs in 2026 to "15 to 20 basis points," according to the earnings call transcript published by Benzinga. The company recorded a provision for credit losses of $45 million during the third quarter, according to figures management presented on the call. The allowance for credit losses stood at $865 million at the end of September, alongside the updated annual net charge-off estimate. Management attributed the increase in the allowance balance to loan growth in its explanation of changes in credit reserves during the period. It also attributed the increase to a change in the loan portfolio mix, according to its remarks on the third-quarter earnings call.
East West Bancorp's total assets were $86.0 billion at the end of September 2026, according to background information the company provided in its earnings release. The bank's network comprises more than 110 locations, according to the company's description of its operations in the release published through Business Wire. The network spans the United States and Asia, according to the October earnings release, which outlined the scale of the bank's operations alongside its quarterly results. For the remainder of 2026, management linked its outlook to the path of short-term interest rates, according to the earnings call transcript published by Benzinga. The outlook assumes "rates remaining unchanged until December," according to the wording on the call.