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Fair Value Measurement and Fair Value of Financial Instruments (Tables)
 12 Months Ended
Dec. 31, 2023
Fair Value Disclosures [Abstract]  
Schedule of Increase (Decrease) in Fair Value of Assets for which a Nonrecurring Fair Value Adjustment Has Been Recognized
The following table presents the increase (decrease) in the fair value of certain assets held at the end of the respective reporting periods, for which a nonrecurring fair value adjustment was recognized for the years ended December 31, 2023, 2022 and 2021:
Year Ended December 31,
($ in thousands)202320222021
Loans held-for-investment:
Commercial:
C&I$(6,152)$(25,996)$(9,580)
CRE:
CRE(1,183)(7,098)(10,231)
Total commercial(7,335)(33,094)(19,811)
Consumer:
Residential mortgage:
HELOCs(40)166 (4)
Total consumer$(40)$166 $(4)
Total loans held-for-investment$(7,375)$(32,928)$(19,815)
Investments in qualified affordable housing partnerships, tax credit and other investments, net
$(1,140)$469 $877 
Other nonperforming assets$— $(6,861)$(4,241)
Schedule of the Carrying and Fair Value Estimates Per the Fair Value Hierarchy of Financial Instruments Measured on a Nonrecurring Basis
The following tables present the fair value estimates for financial instruments as of December 31, 2023 and 2022, excluding financial instruments recorded at fair value on a recurring basis as they are included in the tables presented elsewhere in this Note. The carrying amounts in the following tables are recorded on the Consolidated Balance Sheet under the indicated captions, except for accrued interest receivable, restricted equity securities, at cost, and mortgage servicing rights that are included in Other assets, and accrued interest payable which is included in Accrued expenses and other liabilities. These financial instruments are measured on an amortized cost basis on the Company’s Consolidated Balance Sheet.
December 31, 2023
($ in thousands)
Carrying Amount
Level 1Level 2Level 3
Estimated Fair Value
Financial assets:
Cash and cash equivalents$4,614,984 $4,614,984 $— $— $4,614,984 
Interest-bearing deposits with banks$10,498 $— $10,498 $— $10,498 
Resale agreements$785,000 $— $699,056 $— $699,056 
HTM debt securities$2,956,040 $488,551 $1,965,420 $— $2,453,971 
Restricted equity securities, at cost$79,811 $— $79,811 $— $79,811 
Loans held-for-sale$116 $— $116 $— $116 
Loans held-for-investment, net$51,542,039 $— $— $50,256,565 $50,256,565 
Mortgage servicing rights$6,602 $— $— $9,470 $9,470 
Accrued interest receivable$331,490 $— $331,490 $— $331,490 
Financial liabilities:
Demand, checking, savings and money market deposits
$38,048,974 $— $38,048,974 $— $38,048,974 
Time deposits$18,043,464 $— $18,004,951 $— $18,004,951 
Short-term borrowings$4,500,000 $— $4,500,000 $— $4,500,000 
Long-term debt$148,249 $— $150,896 $— $150,896 
Accrued interest payable$205,430 $— $205,430 $— $205,430 
December 31, 2022
($ in thousands)
Carrying Amount
Level 1Level 2Level 3
Estimated Fair Value
Financial assets:
Cash and cash equivalents$3,481,784 $3,481,784 $— $— $3,481,784 
Interest-bearing deposits with banks$139,021 $— $139,021 $— $139,021 
Resale agreements$792,192 $— $693,656 $— $693,656 
HTM debt securities$3,001,868 $471,469 $1,983,702 $— $2,455,171 
Restricted equity securities, at cost$78,624 $— $78,624 $— $78,624 
Loans held-for-sale$25,644 $— $25,644 $— $25,644 
Loans held-for-investment, net$47,606,785 $— $— $46,670,690 $46,670,690 
Mortgage servicing rights$6,235 $— $— $10,917 $10,917 
Accrued interest receivable$263,430 $— $263,430 $— $263,430 
Financial liabilities:
Demand, checking, savings and money market deposits
$42,637,316 $— $42,637,316 $— $42,637,316 
Time deposits$13,330,533 $— $13,228,777 $— $13,228,777 
Repurchase agreements$300,000 $— $304,097 $— $304,097 
Long-term debt$147,950 $— $143,483 $— $143,483 
Accrued interest payable$37,198 $— $37,198 $— $37,198 
Schedule of Financial Assets (Liabilities) Measured at Fair Value on a Recurring Basis
The following tables present financial assets and liabilities that are measured at fair value on a recurring basis as of December 31, 2023 and 2022:
Assets and Liabilities Measured at Fair Value on a Recurring Basis
as of December 31, 2023
($ in thousands)
Level 1
Level 2
Level 3
Total Fair Value
AFS debt securities:
U.S. Treasury securities$1,060,375 $— $— $1,060,375 
U.S. government agency and U.S. government sponsored enterprise debt securities
— 364,446 — 364,446 
U.S. government agency and U.S. government sponsored enterprise mortgage-backed securities:
Commercial mortgage-backed securities— 468,259 — 468,259 
Residential mortgage-backed securities— 1,727,594 — 1,727,594 
Municipal securities— 261,016 — 261,016 
Non-agency mortgage-backed securities:
Commercial mortgage-backed securities— 367,516 — 367,516 
Residential mortgage-backed securities— 553,671 — 553,671 
Corporate debt securities— 502,425 — 502,425 
Foreign government bonds— 227,874 — 227,874 
Asset-backed securities— 42,300 — 42,300 
Collateralized loan obligations (“CLOs”)— 612,861 — 612,861 
Total AFS debt securities$1,060,375 $5,127,962 $— $6,188,337 
Investments in qualified affordable housing partnerships, tax credit and other investments, net:
Equity securities$20,509 $4,150 $— $24,659 
Total investments in qualified affordable housing partnerships, tax credit and other investments, net
$20,509 $4,150 $— $24,659 
Derivative assets:
Interest rate contracts$— $473,907 $— $473,907 
Foreign exchange contracts— 57,072 — 57,072 
Credit contracts— 1 — 1 
Equity contracts— — 336 336 
Commodity contracts— 79,604 — 79,604 
Gross derivative assets$— $610,584 $336 $610,920 
Netting adjustments (1)
$— $(312,792)$— $(312,792)
Net derivative assets$— $297,792 $336 $298,128 
Derivative liabilities:
Interest rate contracts$— $433,936 $— $433,936 
Foreign exchange contracts— 42,564 — 42,564 
Equity contracts (2)
— — 15,119 15,119 
Credit contracts— 25 — 25 
Commodity contracts— 121,670 — 121,670 
Gross derivative liabilities$— $598,195 $15,119 $613,314 
Netting adjustments (1)
$— $(76,170)$— $(76,170)
Net derivative liabilities$— $522,025 $15,119 $537,144 
Assets and Liabilities Measured at Fair Value on a Recurring Basis
as of December 31, 2022
($ in thousands)
Level 1
Level 2
Level 3
Total Fair Value
AFS debt securities:
U.S. Treasury securities$606,203 $— $— $606,203 
U.S. government agency and U.S. government sponsored enterprise debt securities
— 461,607 — 461,607 
U.S. government agency and U.S. government sponsored enterprise mortgage-backed securities:
Commercial mortgage-backed securities— 500,269 — 500,269 
Residential mortgage-backed securities— 1,762,195 — 1,762,195 
Municipal securities— 257,099 — 257,099 
Non-agency mortgage-backed securities:
Commercial mortgage-backed securities— 398,329 — 398,329 
Residential mortgage-backed securities— 649,224 — 649,224 
Corporate debt securities— 526,274 — 526,274 
Foreign government bonds— 227,053 — 227,053 
Asset-backed securities— 49,076 — 49,076 
CLOs— 597,664 — 597,664 
Total AFS debt securities$606,203 $5,428,790 $— $6,034,993 
Investments in qualified affordable housing partnerships, tax credit and other investments, net:
Equity securities$19,777 $4,177 $— $23,954 
Total investments in qualified affordable housing partnerships, tax credit and other investments, net
$19,777 $4,177 $— $23,954 
Derivative assets:
Interest rate contracts$— $440,283 $— $440,283 
Foreign exchange contracts— 53,109 — 53,109 
Equity contracts— — 323 323 
Commodity contracts— 261,613 — 261,613 
Gross derivative assets$— $755,005 $323 $755,328 
Netting adjustments (1)
$— $(614,783)$— $(614,783)
Net derivative assets$— $140,222 $323 $140,545 
Derivative liabilities:
Interest rate contracts$— $584,516 $— $584,516 
Foreign exchange contracts— 44,117 — 44,117 
Credit contracts— 23 — 23 
Commodity contracts— 258,608 — 258,608 
Gross derivative liabilities$— $887,264 $— $887,264 
Netting adjustments (1)
$— $(242,745)$— $(242,745)
Net derivative liabilities$— $644,519 $— $644,519 
(1)Represents balance sheet netting of derivative assets and liabilities and related cash collateral under master netting agreements or similar agreements. See Note 5 — Derivatives to the Consolidated Financial Statements in this Form 10-K for additional information.
(2)Equity contracts classified as derivative liabilities consist of performance-based RSUs granted as part of EWBC’s consideration in its investment in Rayliant.
Reconciliation of the Beginning and Ending Balances of Equity Contracts Measured at Fair Value on a Recurring Basis using Significant Unobservable Inputs (Level 3) The following table provides a reconciliation of the beginning and ending balances of these equity contracts for the years ended December 31, 2023, 2022 and 2021:
Year Ended December 31,
($ in thousands)202320222021
Derivative assets:
Equity contracts
Beginning balance$323 $215 $273 
Total (losses) gains included in earnings (1)
(79)17 32 
Issuances92 91 12 
Settlements— — (96)
Transfers out of Level 3 (2)
— — (6)
Ending balance$336 $323 $215 
Derivative liabilities:
Equity contracts (3)
Beginning balance$— $— $— 
Issuances15,119 — — 
Ending balance$15,119 $— $— 
(1)Includes both realized and unrealized (losses) gains recorded in Lending fees on the Consolidated Statement of Income. The unrealized (losses) gains were $(79) thousand, $17 thousand, and $(44) thousand for the years ended December 31, 2023, 2022 and 2021, respectively.
(2)During the year ending December 31, 2021, the Company transferred $6 thousand of equity contracts measured on a recurring basis out of Level 3 to Level 2 after the corresponding issuer of the equity warrant, which was previously a private company, completed its initial public offering and became a public company.
(3)Equity contracts classified as derivative liabilities consist of performance-based RSUs granted as part of EWBC’s consideration in its investment in Rayliant.
Schedule of Quantitative Information About Significant Unobservable Inputs Used in the Valuation of level 3 Fair Value Measurements
The following table presents quantitative information about the significant unobservable inputs used in the valuation of Level 3 fair value measurements as of December 31, 2023 and 2022. The significant unobservable inputs presented in the table below are those that the Company considers significant to the fair value of the Level 3 assets. The Company considers unobservable inputs to be significant if, by their exclusion, the fair value of the Level 3 assets would be impacted by a predetermined percentage change.
($ in thousands)
Fair Value Measurements (Level 3)
Valuation Technique
Unobservable Inputs
Range of Inputs
Weighted- Average of Inputs
December 31, 2023
Derivative assets:
Equity contracts$336 
Black-Scholes option pricing model
Equity volatility
37% — 48%
45%
(1)
Liquidity discount47%47%
Derivative liabilities:
Equity contracts (2)
$15,119 Internal modelPayout % designated based on operating revenue and operating EBITDA of investee84%84%
December 31, 2022
Derivative assets:
Equity contracts$323 
Black-Scholes option pricing model
Equity volatility
42% — 60%
54%
(1)
Liquidity discount47%47%
(1)Weighted-average of inputs is calculated based on the fair value of equity contracts as of December 31, 2023 and 2022.
(2)Equity contracts classified as derivative liabilities consist of performance-based RSUs granted as part of EWBC’s consideration in its investment in Rayliant.
The following table presents the quantitative information about the significant unobservable inputs used in the valuation of Level 3 fair value measurements that are measured on a nonrecurring basis as of December 31, 2023 and 2022:
($ in thousands)
Fair Value Measurements (Level 3)
Valuation Techniques
Unobservable Inputs
Range of Inputs
Weighted-Average of Inputs
December 31, 2023
Loans held-for-investment
$16,328 Fair value of collateralDiscount
15% — 75%
45%
(1)
$3,009 Fair value of collateralContract valueNMNM
$26,555 Fair value of propertySelling cost
8%
8%
Investments in qualified affordable housing partnerships, tax credit and other investments, net
$868 Individual analysis of each investmentExpected future tax
benefits and distributions		NMNM
December 31, 2022
Loans held-for-investment$23,322 Discounted cash flowsDiscount
4% — 6%
4%
(1)
$17,912 Fair value of collateralDiscount
15% — 75%
37%
(1)
$31,380 Fair value of propertySelling cost
8%
8%
NM - Not meaningful
(1)Weighted-average of inputs is based on the relative fair value of the respective assets as of December 31, 2023 and 2022.
Schedule of Carrying Amounts of Assets That Were Still Held and Had Fair Value Changes Measured on a Nonrecurring Basis
The following tables present the carrying amounts of assets that were still held and had fair value adjustments measured on a nonrecurring basis as of December 31, 2023 and 2022:
Assets Measured at Fair Value on a Nonrecurring Basis
as of December 31, 2023
($ in thousands)
Level 1
Level 2
Level 3
Fair Value Measurements
Loans held-for-investment:
Commercial:
C&I$— $— $22,035 $22,035 
CRE:
CRE— — 22,653 22,653 
Total commercial— — 44,688 44,688 
Consumer:
Residential mortgage:
HELOCs— — 1,204 1,204 
Total consumer— — 1,204 1,204 
Total loans held-for-investment$— $— $45,892 $45,892 
Investments in qualified affordable housing partnerships, tax credit and other investments, net
$— $— $868 $868 
Assets Measured at Fair Value on a Nonrecurring Basis
as of December 31, 2022
($ in thousands)
Level 1
Level 2
Level 3
Fair Value Measurements
Loans held-for-investment:
Commercial:
C&I$— $— $40,011 $40,011 
CRE:
CRE— — 31,380 31,380 
Total commercial— — 71,391 71,391 
Consumer:
Residential mortgage:
HELOCs— — 1,223 1,223 
Total consumer— — 1,223 1,223 
Total loans held-for-investment$— $— $72,614 $72,614