East West Bank’s second quarter results were shaped by steady loan and deposit growth, balanced by margin pressures that drew a negative market reaction. Management attributed revenue expansion to solid commercial and consumer banking activity, noting that average loan and deposit balances both increased 2% sequentially. CEO Dominic Ng highlighted that the bank’s relationship-driven approach continued to support “consumer and commercial growth on both sides of the balance sheet.” Operating efficiency remained strong, yet adjusted operating income fell short of analyst expectations, partly due to higher operating expenses and a one-time tax expense. Asset quality metrics improved, with criticized and nonperforming loans decreasing from the prior quarter, which management cited as evidence of disciplined risk controls.

Is now the time to buy EWBC? Find out in our full research report (it’s free).

While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.

Our Top 5 Analyst Questions East West Bank’s Q2 Earnings Call

• Casey Haire (Autonomous) asked about the bank’s ability to sustain both loan yields and deposit costs. CFO Chris Del Moral-Niles emphasized ongoing deposit cost optimization and asset repricing opportunities, expecting to maintain margins within a target range barring significant rate changes.
• Manan Gosalia (Morgan Stanley) questioned the impact of legislative changes on renewable energy tax credits. Del Moral-Niles said current investments are unaffected but future strategies are being reconsidered, with potential offsets under review.
• Ebrahim Poonawala (Bank of America) probed whether net interest income would track loan growth if rate cuts are delayed. Del Moral-Niles confirmed that slower or fewer cuts would benefit NII and that strong deposit growth supports profitable loan expansion.
• Jared Shaw (Barclays) inquired about trends in deposit costs and the consistency of cost reductions. Del Moral-Niles explained that deposit cost reductions are expected as rate cuts arrive, but the pace will mirror the timing of Federal Reserve actions.
• Matthew Clark (Piper Sandler) asked about changes in the credit loss model and commercial real estate risk. Del Moral-Niles and Chief Risk Officer Irene Oh noted that model changes were macro-driven, and that CRE risk is broadly diversified with no concentrated signs of deterioration.

Catalysts in Upcoming Quarters

In the coming quarters, the StockStory team will be monitoring (1) the pace and sustainability of loan and deposit growth, (2) progress in expense management as investments in technology and compliance accelerate, and (3) the stability of asset quality metrics amid an evolving economic and regulatory landscape. Additional focus will be placed on fee income diversification and the bank’s ability to optimize capital deployment.

East West Bank currently trades at $102.06, down from $109.09 just before the earnings. In the wake of this quarter, is it a buy or sell? Find out in our full research report (it’s free).

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