East West Bancorp Raises Net Interest Income Growth Outlook to 9%–10%

Key Facts

East West Bancorp, the parent of East West Bank, raised its outlook for net interest income growth in 2026 to between 9% and 10%, according to management comments on the third-quarter earnings call published by Benzinga. The new range compares with growth guidance of between 7% and 9% in the July earnings presentation filed with the U.S. Securities and Exchange Commission. The low end of the new estimate therefore matches the high end of the range the company projected in its previous full-year update. Management said on the call: "We now expect full-year net interest income growth of between 9% and 10%." The guidance increase coincided with the release of third-quarter results, which included revenue above analysts' average estimate and a wider net interest margin than in the previous quarter.

The company's net income in the third quarter of 2026 was about $382 million, while diluted earnings per share reached $2.76, according to the earnings release published via Business Wire. Revenue totaled $823 million for the period, according to Investing's coverage of the quarterly results. Analysts' average revenue forecast was $811 million, putting the actual figure above the level underpinning market estimates before the announcement. The chief financial officer said on the earnings call that net interest margin widened by 6 basis points quarter on quarter. The chief financial officer specified that the comparison was with the previous quarter, while the updated net interest income growth outlook covered full-year performance compared with the prior year.

On credit, management narrowed its net charge-off guidance for 2026 to between 15 and 20 basis points, according to the earnings call transcript published by Benzinga. The July presentation included a range of between 15 and 25 basis points, meaning the revision only lowered the upper end while leaving the lower end unchanged. Management attributed the reduction to actual charge-offs since the start of the year coming in below its expectations, according to its comments on the call. In the earnings release, the company described asset quality as resilient, but also said it had bolstered its loan loss allowance because of continued economic uncertainty. It added in the release: "We further strengthened our allowance for loan losses," alongside narrowing the expected annual charge-off range.

The July update also included an increase in guidance for the size of the loan portfolio at the end of 2026, according to the earnings presentation the company filed with the U.S. Securities and Exchange Commission. At the time, the company set its expected annual loan growth range at between 6% and 8%, up from a previous range of between 5% and 7%. That revision raised both the lower and upper ends of loan growth guidance, unlike the October net charge-off revision, which lowered only the upper end. The loan outlook concerned the size of the portfolio at year-end, while the interest income estimate covered the rate of income growth over the full year. In the same July presentation, the company had combined expectations for lending expansion with its previous interest income and charge-off estimates, before updating the latter two with its third-quarter results.

In trading, East West Bancorp shares ended the regular session on the day of the earnings announcement at $128.27, up 2.21% from the previous close, according to Investing's coverage. The regular session closed before the results were released after the market closed that day. Before the announcement, Cantor Fitzgerald had cut its price target for the stock, according to a report published by Investing on October 14, 2026. The firm set its new price target at $146, compared with a previous target of $152 per share. Cantor Fitzgerald maintained its Overweight rating on the stock despite cutting the price target ahead of the third-quarter results and the updated annual outlook.

For the final quarter of 2026, the chief financial officer said the company expects net interest margin to remain broadly stable, according to the earnings call transcript published by Investing. He explained that the estimate takes certificate of deposit repricing into account over the coming period. Describing the expected trajectory, he said: "We expect net interest margin to remain broadly stable during the quarter." This estimate for the closing period of the year follows the quarterly margin expansion the company recorded in the third quarter. The company thus enters the final quarter expecting a stable margin, alongside a higher interest income growth range and a narrower net charge-off range for 2026.