The following table presents the notional amounts and gross fair values of the Company’s derivatives, as well as the balance sheet netting adjustments on an aggregate basis as of June 30, 2022 and December 31, 2021. The derivative assets and liabilities are presented on a gross basis prior to the application of bilateral collateral and master netting agreements, but after applicable variation margin payments with central clearing organizations have been applied as settlement. Total derivative assets and liabilities are adjusted to take into consideration the effects of legally enforceable master netting agreements and cash collateral received or paid as of June 30, 2022 and December 31, 2021. The resulting net derivative asset and liability fair values are included in Other assets and Accrued expenses and other liabilities, respectively, on the Consolidated Balance Sheet.



($ in thousands)	June 30, 2022							December 31, 2021
	Notional Amount			Fair Value				Notional Amount			Fair Value
				Derivative Assets		Derivative Liabilities					Derivative Assets		Derivative Liabilities
Derivatives designated as hedging instruments:


Cash flow hedges:
Interest rate contracts	$	1,525,000		$	586	$	96	$	275,000		$	—	$	57
Net investment hedges:
Foreign exchange contracts	84,832			2,765		—		86,531			—		225
Total derivatives designated as hedging instruments	$	1,609,832		$	3,351	$	96	$	361,531		$	—	$	282
Derivatives not designated as hedging instruments:
Interest rate contracts	$	17,570,112		$	260,740	$	359,578	$	17,575,420		$	240,222	$	179,905
Foreign exchange contracts	2,654,194			39,559		29,144		1,874,681			21,033		15,276
Credit contracts	121,784			—		76		72,560			—		141
Equity contracts	—		(1)	359		—		—		(1)	220		—
Commodity contracts	—		(2)	404,275		373,675		—		(2)	222,709		194,567
Total derivatives not designated as hedging instruments	$	20,346,090		$	704,933	$	762,473	$	19,522,661		$	484,184	$	389,889
Gross derivative assets/liabilities				$	708,284	$	762,569				$	484,184	$	390,171
Less: Master netting agreements				(126,414)		(126,414)					(58,679)		(58,679)
Less: Cash collateral received/paid				(125,304)		—					(42,274)		(174,048)
Net derivative assets/liabilities				$	456,566	$	636,155				$	383,231	$	157,444

(2)The notional amount of the Company’s commodity contracts entered with its customers totaled 8,211 thousand barrels of crude oil and 83,113 thousand units of natural gas, measured in million British thermal units (“MMBTUs”) as of June 30, 2022. In comparison, the notional amount of the Company’s commodity contracts entered with its customers totaled 7,519 thousand barrels of crude oil and 83,274 thousand MMBTUs of natural gas as of December 31, 2021. The Company simultaneously entered into the offsetting commodity contracts with mirrored terms with third-party financial institutions.

Cash Flow Hedges — In 2020, the Company entered into $275.0 million in total notional amounts of interest rate swaps that were designated as cash flow hedges to limit the exposure to the variability in interest payments on certain floating rate borrowings. During the six months ended June 30, 2022, the Company entered into $1.00 billion in notional amounts of interest rate swaps and $250.0 million in notional amounts of interest rate collars. These derivative instruments were designated as cash flow hedges to limit the exposure to the variability in interest receipts on certain variable-rate CRE loans. Changes in the fair values of cash flow hedges are recognized in AOCI and reclassified to earnings in the same period when the hedged cash flows impact earnings. Reclassified gains and losses on these interest rate contracts are recorded either in the same line item as the interest payments of the hedged long-term borrowings within Interest expense, or in the same line items as the interest receipts of the hedged variable-rate CRE loans within Interest and dividend income in the Consolidated Statements of Income. Considering the interest rates, yield curve and notional amounts as of June 30, 2022, the Company expected to reclassify an estimated $11.3 million of after-tax net losses on derivative instruments designated as cash flow hedges from AOCI into earnings during the next 12 months.

The following table presents the pre-tax changes in AOCI from cash flow hedges for the three and six months ended June 30, 2022 and 2021. The after-tax impact of cash flow hedges on AOCI is discussed in Note 13 — Accumulated Other Comprehensive Income (Loss) to the Consolidated Financial Statements in this Form-10-Q.



($ in thousands)	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
(Losses) gains recognized in AOCI:
Interest rate contracts	$	(7,837)	$	(106)	$	(40,446)	$	320


Gains (losses) reclassified from AOCI into earnings:
Interest expense	$	308	$	(201)	$	135	$	(378)
Interest income	812		—		3,085		—
Total	$	1,120	$	(201)	$	3,220	$	(378)

Net Investment Hedges — ASC 830-20, Foreign Currency Matters — Foreign Currency Transactions and ASC 815, Derivatives and Hedging, allow hedging of the foreign currency risk of a net investment in a foreign operation. The Company enters into foreign currency forward contracts to hedge a portion of the Bank’s investment in East West Bank (China) Limited, a non-USD functional currency subsidiary in China. The hedging instruments designated as net investment hedges involve hedging the risk of changes in the USD equivalent value of a designated monetary amount of the Bank’s net investment in East West Bank (China) Limited, against the risk of adverse changes in the foreign currency exchange rate of the Chinese Renminbi (“RMB”). The Company may de-designate the net investment hedges when the Company expects the hedge will cease to be highly effective.

Interest Rate Contracts — The Company enters into interest rate contracts, which include interest rate swaps and options with its customers to allow the customers to hedge against the risk of rising interest rates on their variable-rate loans. To economically hedge against the interest rate risks in the products offered to its customers, the Company enters into mirrored offsetting interest rate contracts with third-party financial institutions, including central clearing organizations.



($ in thousands)	June 30, 2022
	Customer Counterparty						($ in thousands)	Financial Counterparty
	Notional Amount		Fair Value					Notional Amount		Fair Value
			Assets		Liabilities					Assets		Liabilities
Purchased options	$	—	$	—	$	—	Purchased options	$	1,513,842	$	20,933	$	—
Written options	1,481,552		—		19,760		Written options	32,290		—		1,076
Sold collars and corridors	187,168		9		5,040		Collars and corridors	187,168		5,071		9
Swaps	7,069,901		8,482		326,853		Swaps	7,098,191		226,245		6,840
Total	$	8,738,621	$	8,491	$	351,653	Total	$	8,831,491	$	252,249	$	7,925



($ in thousands)	December 31, 2021
	Customer Counterparty						($ in thousands)	Financial Counterparty
	Notional Amount		Fair Value					Notional Amount		Fair Value
			Assets		Liabilities					Assets		Liabilities
Written options	$	1,118,074	$	—	$	2,148	Purchased options	$	1,118,074	$	2,159	$	—
Sold collars and corridors	194,181		1,272		642		Collars and corridors	194,181		646		1,275
Swaps	7,460,836		211,727		39,650		Swaps	7,490,074		24,418		136,190
Total	$	8,773,091	$	212,999	$	42,440	Total	$	8,802,329	$	27,223	$	137,465

Included in the total notional amount of $8.83 billion of interest rate contracts entered into with financial counterparties as of June 30, 2022, was a notional amount of $2.24 billion of interest rate swaps that cleared through London Clearing House (“LCH”). Applying variation margin payments as settlement to LCH cleared derivative transactions resulted in a reduction in derivative asset fair value of $113.2 million and a reduction in liability fair value of $2.2 million as of June 30, 2022. In comparison, included in the total notional amount of $8.80 billion of interest rate contracts entered into with financial counterparties as of December 31, 2021, was a notional amount of $2.79 billion of interest rate swaps that cleared through LCH. Applying variation margin payments as settlement to LCH cleared derivative transactions resulted in a reduction in derivative asset fair values of $18.1 million and a reduction in liability fair values of $79.9 million as of December 31, 2021.

Foreign Exchange Contracts — The Company enters into foreign exchange contracts with its customers, consisting of forward, spot, swap and option contracts to accommodate the business needs of its customers. The Company enters into offsetting foreign exchange contracts with third-party financial institutions to manage its foreign exchange exposure with its customers, or enters into bilateral collateral and master netting agreements with certain customer counterparties to manage its credit exposure. The Company also utilizes foreign exchange contracts, which are not designated as hedging instruments, to mitigate the economic effect of currency fluctuations on certain foreign currency-denominated on-balance sheet assets and liabilities, primarily foreign currency-denominated deposits offered to its customers. A majority of the foreign exchange contracts had original maturities of one year or less as of both June 30, 2022 and December 31, 2021.



($ in thousands)	June 30, 2022
	Customer Counterparty						($ in thousands)	Financial Counterparty
	Notional Amount		Fair Value					Notional Amount		Fair Value
			Assets		Liabilities					Assets		Liabilities
Forwards and spots	$	954,101	$	13,188	$	19,119	Forwards and spots	$	310,784	$	10,139	$	2,014
Swaps	175,373		648		864		Swaps	1,163,410		15,061		6,624
Written options	20,000		170		312		Purchased options	20,000		312		170
Collars	5,263		—		41		Collars	5,263		41		—
Total	$	1,154,737	$	14,006	$	20,336	Total	$	1,499,457	$	25,553	$	8,808



($ in thousands)	December 31, 2021
	Customer Counterparty						($ in thousands)	Financial Counterparty
	Notional Amount		Fair Value					Notional Amount		Fair Value
			Assets		Liabilities					Assets		Liabilities
Forwards and spots	$	900,290	$	13,688	$	9,446	Forwards and spots	$	267,689	$	1,564	$	2,695
Swaps	66,474		1,034		17		Swaps	599,654		4,745		3,116
Written options	20,287		1		—		Purchased options	20,287		1		2

Total	$	987,051	$	14,723	$	9,463	Total	$	887,630	$	6,310	$	5,813

Credit Contracts — The Company may periodically enter into credit RPAs with institutional counterparties to manage the credit exposure of the interest rate contracts associated with the syndicated loans. The Company may enter into protection sold or protection purchased RPAs. The purchaser of credit protection that enters into an interest rate contract with the borrower, may in turn enter into an RPA with a seller of protection, under which the seller of protection receives a fee to accept a portion of the credit risk. A seller of credit protection is required to make payments to the buyer if a borrower defaults on the related interest rate contract. Credit risk on RPAs is managed by monitoring the credit worthiness of the borrowers and institutional counterparties, which is part of the normal credit review and monitoring process. The majority of the reference entities of the protection sold RPAs were investment grade as of both June 30, 2022 and December 31, 2021. Assuming the underlying borrowers referenced in the interest rate contracts defaulted as of June 30, 2022 and December 31, 2021, the maximum exposure of protection sold RPAs would be $38 thousand and $3.2 million, respectively. As of June 30, 2022 and December 31, 2021, the weighted-average remaining maturities of the outstanding protection sold RPAs were 2.6 years and 3.2 years, respectively.

Equity Contracts — From time to time, as part of the Company’s loan origination process, the Company obtains warrants to purchase preferred and/or common stock of technology and life science companies to which it provides loans. Warrants grant the Company the right to buy a certain class of the underlying company’s equity at a certain price before expiration. The Company held warrants in one public company and 13 private companies as of June 30, 2022, and held warrants in one public company and 12 private companies as of December 31, 2021. The total fair value of the warrants held was $359 thousand and $220 thousand as of June 30, 2022 and December 31, 2021, respectively.

Commodity Contracts — The Company enters into energy commodity contracts in the form of swaps and options with its commercial loan customers to allow them to hedge against the risk of energy commodity price fluctuation. To economically hedge against the risk and exposure of commodity price fluctuation in the products offered to its customers, the Company enters into offsetting commodity contracts with third-party financial institutions.



($ and units in thousands)	June 30, 2022
	Customer Counterparty						($ and units in thousands)	Financial Counterparty
	Notional Unit		Fair Value					Notional Unit		Fair Value
			Assets		Liabilities					Assets		Liabilities
Crude oil:							Crude oil:
Written options	1,205	Barrels	$	1,330	$	—	Purchased options	1,205	Barrels	$	—	$	1,154
Collars	3,218	Barrels	70,802		817		Collars	3,223	Barrels	288		65,988
Swaps	3,788	Barrels	105,189		2,658		Swaps	5,935	Barrels	43,075		133,723
Total	8,211		$	177,321	$	3,475	Total	10,363		$	43,363	$	200,865

Natural gas:							Natural gas:

Collars	28,206	MMBTUs	29,062		3,815		Collars	30,122	MMBTUs	2,999		28,390
Swaps	54,907	MMBTUs	98,480		6,478		Swaps	91,869	MMBTUs	53,050		130,652
Total	83,113		$	127,542	$	10,293	Total	121,991		$	56,049	$	159,042

Total			$	304,863	$	13,768	Total			$	99,412	$	359,907



($ and units in thousands)	December 31, 2021
	Customer Counterparty						($ and units in thousands)	Financial Counterparty
	Notional Unit		Fair Value					Notional Unit		Fair Value
			Assets		Liabilities					Assets		Liabilities
Crude oil:							Crude oil:
Written options	—	Barrels	$	87	$	—	Purchased options	—	Barrels	$	—	$	81
Collars	2,837	Barrels	33,826		106		Collars	2,888	Barrels	—		33,399
Swaps	4,682	Barrels	71,242		60		Swaps	7,517	Barrels	27,524		82,723
Total	7,519		$	105,155	$	166	Total	10,405		$	27,524	$	116,203

Natural gas:							Natural gas:

Collars	24,315	MMBTUs	$	10,903	$	458	Collars	25,929	MMBTUs	$	1,136	$	10,936
Swaps	58,959	MMBTUs	49,188		3,775		Swaps	109,567	MMBTUs	28,803		63,029
Total	83,274		$	60,091	$	4,233	Total	135,496		$	29,939	$	73,965

Total			$	165,246	$	4,399	Total			$	57,463	$	190,168

As of June 30, 2022, the notional amounts that cleared through the Chicago Mercantile Exchange (“CME”) totaled 1,100 thousand barrels of crude oil and 14,625 thousand MMBTUs of natural gas. Applying the variation margin payments as settlement to CME-cleared derivative transactions resulted in a reduction to the gross derivative asset fair value of $2.1 million and a reduction to the liability fair value of $28.9 million, respectively, as of June 30, 2022. In comparison, the notional amounts that cleared through CME totaled 1,036 thousand barrels of crude oil and 11,490 thousand MMBTUs of natural gas as of December 31, 2021. Applying the variation margin payments as settlement to CME-cleared derivative transactions resulted in a reduction to the gross derivative asset fair value of $2.2 million and a reduction to the liability fair value of $25.8 million, respectively, as of December 31, 2021.



($ in thousands)	Classification on Consolidated Statement of Income	Three Months Ended June 30,				Six Months Ended June 30,
		2022		2021		2022		2021
Derivatives not designated as hedging instruments:
Interest rate contracts	Interest rate contracts and other derivative income (loss)	$	5,984	$	(5,338)	$	13,569	$	8,563
Foreign exchange contracts	Foreign exchange income	(4,557)		11,972		2,765		22,215
Credit contracts	Interest rate contracts and other derivative income (loss)	(9)		150		65		195
Equity contracts	Lending fees	93		74		187		385
Commodity contracts	Interest rate contracts and other derivative income (loss)	344		(188)		295		(19)
Net gains		$	1,855	$	6,670	$	16,881	$	31,339

Credit Risk-Related Contingent Features — Certain of the Company’s over-the-counter derivative contracts contain early termination provisions that may require the Company to settle any outstanding balances upon the occurrence of a specified credit risk-related event. Such event primarily relates to a downgrade in the credit rating of East West Bank to below investment grade. As of June 30, 2022, the aggregate fair value amounts of all derivative instruments with credit risk-related contingent features that were in a net liability position totaled $31.6 million, in which $28.3 million of collateral was posted to cover these positions. In comparison, as of December 31, 2021, the aggregate fair value amounts of all derivative instruments with credit risk-related contingent features that were in a net liability position totaled $66.8 million, in which $66.6 million of collateral was posted to cover these positions. In the event that the credit rating of East West Bank had been downgraded to below investment grade, minimal additional collateral would have been required to be posted as of June 30, 2022 and December 31, 2021.

The following tables present the gross derivative fair values, the balance sheet netting adjustments and the resulting net fair values recorded on the consolidated balance sheet, as well as the cash and noncash collateral associated with master netting arrangements. The gross amounts of derivative assets and liabilities are presented after the application of variation margin payments as settlements with central counterparties, where applicable. The collateral amounts in the following tables are limited to the outstanding balances of the related asset or liability, after the application of netting; therefore, instances of overcollateralization are not shown:



($ in thousands)	As of June 30, 2022

	Gross Amounts Recognized (1)		Gross Amounts Offset on the Consolidated Balance Sheet				Net Amounts Presented on the Consolidated Balance Sheet		Gross Amounts Not Offset on the Consolidated Balance Sheet		Net Amount
			Master Netting Arrangements		Cash Collateral Received (3)				Security Collateral Received (5)
Derivative assets	$	708,284	$	(126,414)	$	(125,304)	$	456,566	$	—	$	456,566
	Gross Amounts Recognized (2)		Gross Amounts Offset on the Consolidated Balance Sheet				Net Amounts Presented on the Consolidated Balance Sheet		Gross Amounts Not Offset on the Consolidated Balance Sheet		Net Amount
			Master Netting Arrangements		Cash Collateral Pledged (4)				Security Collateral Pledged (5)
Derivative liabilities	$	762,569	$	(126,414)	$	—	$	636,155	$	(118,694)	$	517,461



($ in thousands)	As of December 31, 2021

	Gross Amounts Recognized (1)		Gross Amounts Offset on the Consolidated Balance Sheet				Net Amounts Presented on the Consolidated Balance Sheet		Gross Amounts Not Offset on the Consolidated Balance Sheet		Net Amount
			Master Netting Arrangements		Cash Collateral Received (3)				Security Collateral Received (5)
Derivative assets	$	484,184	$	(58,679)	$	(42,274)	$	383,231	$	—	$	383,231
	Gross Amounts Recognized (2)		Gross Amounts Offset on the Consolidated Balance Sheet				Net Amounts Presented on the Consolidated Balance Sheet		Gross Amounts Not Offset on the Consolidated Balance Sheet		Net Amount
			Master Netting Arrangements		Cash Collateral Pledged (4)				Security Collateral Pledged (5)
Derivative liabilities	$	390,171	$	(58,679)	$	(174,048)	$	157,444	$	(106,598)	$	50,846

(3)Gross cash collateral received under master netting arrangements or similar agreements were $141.9 million and $47.0 million as of June 30, 2022 and December 31, 2021, respectively. Of the gross cash collateral received, $125.3 million and $42.3 million were used to offset against derivative assets as of June 30, 2022 and December 31, 2021, respectively.

(4)No cash collateral was pledged under master netting arrangements or similar agreements as of June 30, 2022. In comparison, cash collateral pledged under master netting arrangements or similar agreements was $176.5 million as of December 31, 2021, of which $174.0 million were used to offset against derivative liabilities as of December 31, 2021.

(5)Represents the fair value of security collateral received and pledged limited to derivative assets and liabilities that are subject to enforceable master netting arrangements or similar agreements. GAAP does not permit the netting of noncash collateral on the consolidated balance sheet but requires the disclosure of such amounts.

In addition to the amounts included in the tables above, the Company also has balance sheet netting related to the resale and repurchase agreements. Refer to Note 4 — Assets Purchased under Resale Agreements and Sold under Repurchase Agreements to the Consolidated Financial Statements in this Form 10-Q for additional information. Refer to Note 3 — Fair Value Measurement and Fair Value of Financial Instruments to the Consolidated Financial Statements in this Form 10-Q for fair value measurement disclosures on derivatives.