Under applicable accounting standards, the Company measures a portion of its assets and liabilities at fair value. These assets and liabilities are predominantly recorded at fair value on a recurring basis. From time to time, certain assets and liabilities are measured at fair value on a nonrecurring basis; that is, they are subject to fair value adjustments only as required through the application of an accounting method such as lower of cost or fair value or write-down of individual assets. The Company categorizes its assets and liabilities into three levels based on the established fair value hierarchy and conducts a review of fair value hierarchy classifications on a quarterly basis. For more information regarding the fair value hierarchy and how the Company measures fair value, see Note 1 — Summary of Significant Accounting Policies — Significant Accounting Policies — Fair Value to the Consolidated Financial Statements in the Company’s 2023 Form 10-K.

Available-for-Sale Debt Securities — The fair value of AFS debt securities is generally determined by independent external pricing service providers who have experience in valuing these securities or by taking the average quoted market prices obtained from independent external brokers. The valuations provided by the third-party pricing service providers are based on observable market inputs, which include benchmark yields, reported trades, issuer spreads, benchmark securities, bids, offers, prepayment expectations and reference data obtained from market research publications. Inputs used by the third-party pricing service providers in valuing collateralized mortgage obligations and other securitization structures also include newly issued data, monthly payment information, whole loan collateral performance, tranche evaluation and “To Be Announced” prices. In valuing securities issued by state and political subdivisions, inputs used by third-party pricing service providers also include material event notices. The valuations provided by the brokers incorporate information from their trading desks, research and other market data.

On a monthly basis, the Company validates the valuations provided by third-party pricing service providers to ensure that the fair value determination is consistent with the applicable accounting guidance and the financial instruments are properly classified in the fair value hierarchy. To perform this validation, the Company evaluates the fair values of securities by comparing the fair values provided by the third-party pricing service providers to prices from other available independent sources for the same securities. When significant variances in prices are identified, the Company further compares inputs used by different sources to ascertain the reliability of these sources. On a quarterly basis, the Company reviews the valuation inputs and methodology furnished by third-party pricing service providers for each security category. On an annual basis, the Company assesses the reasonableness of broker pricing by reviewing the related pricing methodologies. This review includes corroborating pricing with market data, performing pricing input reviews under current market-related conditions, and investigating security pricing by instrument as needed.

When a quoted price in an active market exists for the identical security, this price is used to determine the fair value and the AFS debt security is classified as Level 1. Level 1 AFS debt securities consist of U.S. Treasury securities. When pricing is unavailable from third-party pricing service providers for certain securities, the Company requests market quotes from various independent external brokers and utilizes the average quoted market prices. In addition, the Company obtains market quotes from other official published sources. As these valuations are based on observable inputs in the current marketplace, they are classified as Level 2.

Equity Securities — Equity securities consisted of mutual funds as of both March 31, 2024 and December 31, 2023. The Company invested in these mutual funds for CRA purposes. The Company uses net asset value (“NAV”) information to determine the fair value of these equity securities. When NAV is available periodically and the equity securities can be put back to the transfer agents at the publicly available NAV, the fair value of the equity securities is classified as Level 1. When NAV is available periodically, but the equity securities may not be readily marketable at its periodic NAV in the secondary market, the fair value of these equity securities is classified as Level 2.

Interest Rate Contracts — Interest rate contracts consist of interest rate swaps and options. The fair value of the interest rate swaps is determined using the market standard methodology of netting the discounted future fixed cash payments (or receipts) and the discounted expected variable cash receipts (or payments). The fair value of the interest rate options, which consist of floors and caps, is determined using the market standard methodology of discounting the future expected cash receipts that will occur if variable interest rates fall below (rise above) the strike rate of the floors (caps). In addition, to comply with the provisions of ASC 820, Fair Value Measurement, the Company incorporates credit valuation adjustments to appropriately reflect both its own and the respective counterparty’s nonperformance risk in the fair value measurements of its derivatives. The credit valuation adjustments associated with the Company’s derivatives utilize model-derived credit spreads, which are Level 3 inputs. Considering the observable nature of all other significant inputs utilized, the Company classifies these derivative instruments as Level 2.

Foreign Exchange Contracts — The fair value of foreign exchange contracts is determined at each reporting period based on changes in the foreign exchange rates. These are over-the-counter contracts where quoted market prices are not readily available. Valuation is measured using conventional valuation methodologies with observable market data. Due to the short-term nature of the majority of these contracts, the counterparties’ credit risks are considered nominal and result in no adjustments to the valuation of the foreign exchange contracts. Due to the observable nature of the inputs used in deriving the fair value of these contracts, the valuation of foreign exchange contracts is classified as Level 2. In addition, the Bank managed its foreign currency exposure in the net investment in its China subsidiary, East West Bank (China) Limited, a non-U.S. dollar (“USD”) functional currency subsidiary, with foreign currency non-deliverable forward contracts. These foreign currency non-deliverable forward contracts were designated as net investment hedges. The fair value of foreign currency non-deliverable forward contracts is determined by comparing the contracted foreign exchange rate to the current market foreign exchange rate. Key inputs of the current market exchange rate include the spot and forward rates of the contractual currencies. Foreign exchange forward curves are used to determine which forward rate pertains to a specific maturity. Due to the observable nature of the inputs used in deriving the estimated fair value, these instruments are classified as Level 2.

Credit Contracts — Credit contracts utilized by the Company are comprised of credit risk participation agreements (“RPAs”) entered into by the Company with institutional counterparties. The fair value of the RPAs is calculated by determining the total expected asset or liability exposure of the derivatives to the borrowers and applying the borrowers’ credit spread to that exposure. Total expected exposure incorporates both the current and potential future exposure of the derivatives, derived from using observable inputs, such as yield curves and volatilities. Due to the observable nature of all other significant inputs used in deriving the estimated fair value, credit contracts are classified as Level 2.

Equity Contracts — Equity contracts consist of warrants to purchase common or preferred stock of public and private companies, and any liability-classified contingently issuable shares of the Company. The fair value of the warrants is based on the Black-Scholes option pricing model. For warrants from public companies, the model uses the underlying stock price, stated strike price, warrant expiration date, risk-free interest rate based on a duration-matched U.S. Treasury rate, and market-observable company-specific equity volatility as inputs to value the warrants. Due to the observable nature of the inputs used in deriving the estimated fair value, warrants from public companies are classified as Level 2. For warrants from private companies, the model uses inputs such as the offering price observed in the most recent round of funding, stated strike price, warrant expiration date, risk-free interest rate based on duration-matched U.S. Treasury rate and equity volatility. The Company applies proxy volatilities based on the industry sectors of the private companies. The model values are then adjusted for a general lack of liquidity due to the private nature of the underlying companies. Since both equity volatility and liquidity discount assumptions are subject to management’s judgment, measurement uncertainty is inherent in the valuation of private company warrants. Due to the unobservable nature of the equity volatility and liquidity discount assumptions used in deriving the estimated fair value, warrants from private companies are classified as Level 3. On a quarterly basis, the changes in the fair value of warrants from private companies are reviewed for reasonableness, and a measurement of uncertainty analysis on the equity volatility and liquidity discount assumptions is performed.

In connection with the Company’s acquisition of a 49.99% equity interest in Rayliant Global Advisors Limited (“Rayliant”) during the third quarter of 2023, the Company granted 349,138 shares of performance-based restricted stock units (“RSUs”) as part of its consideration, in addition to $95 million in cash. The vesting of these equity contracts on September 1, 2028, is contingent on Rayliant meeting certain financial performance targets during the performance period. The fair value of liability-classified equity contracts varies based on the operating revenue and operating EBITDA of Rayliant to be achieved during the future performance period, and these performance-based RSUs are expected to vest into a variable number of the Company’s common stock, ranging from 20% to 200% of the target performance-based RSUs granted. Due to the unobservable nature of the input assumptions, these equity contracts are classified as Level 3. For additional information on the equity contracts, refer to Note 6 — Derivatives to the Consolidated Financial Statements in this Form 10-Q.

Commodity Contracts — Commodity contracts consist of swaps and options referencing commodity products. The fair value of the commodity option contracts is determined using the Black-Scholes model and assumptions that include expectations of future commodity price and volatility. The future commodity contract price is derived from observable inputs such as the market price of the commodity. Commodity swaps are structured as an exchange of fixed cash flows for floating cash flows. The fair value of the commodity swaps is determined using the market standard methodology of netting the discounted future fixed cash payments (or receipts) and the discounted expected variable cash receipts (or payments) based on the market prices of the commodity. The fixed cash flows are predetermined based on the known volumes and fixed price as specified in the swap agreement. The floating cash flows are correlated with the change of forward commodity prices, which is derived from market corroborated futures settlement prices. As a result, the Company classifies these derivative instruments as Level 2 due to the observable nature of the significant inputs utilized.



	Assets and Liabilities Measured at Fair Value on a Recurring Basis as of March 31, 2024
($ in thousands)	Level 1		Level 2		Level 3		Total Fair Value
AFS debt securities:
U.S. Treasury securities	$	621,094	$	—	$	—	$	621,094
U.S. government agency and U.S. government-sponsored enterprise debt securities	—		360,802		—		360,802
U.S. government agency and U.S. government-sponsored enterprise mortgage-backed securities (1):
Commercial mortgage-backed securities	—		455,619		—		455,619
Residential mortgage-backed securities	—		4,992,399		—		4,992,399
Municipal securities	—		258,495		—		258,495
Non-agency mortgage-backed securities:
Commercial mortgage-backed securities	—		333,996		—		333,996
Residential mortgage-backed securities	—		519,657		—		519,657
Corporate debt securities	—		502,647		—		502,647
Foreign government bonds	—		227,196		—		227,196
Asset-backed securities	—		40,712		—		40,712
Collateralized loan obligations (“CLOs”)	—		87,851		—		87,851
Total AFS debt securities	$	621,094	$	7,779,374	$	—	$	8,400,468

Affordable housing partnership, tax credit and CRA investments, net:
Equity securities	$	20,402	$	4,137	$	—	$	24,539
Total affordable housing partnership, tax credit and CRA investments, net	$	20,402	$	4,137	$	—	$	24,539

Derivative assets:
Interest rate contracts	$	—	$	484,794	$	—	$	484,794
Foreign exchange contracts	—		60,499		—		60,499

Equity contracts	—		—		330		330
Commodity contracts	—		76,615		—		76,615
Gross derivative assets	$	—	$	621,908	$	330	$	622,238
Netting adjustments (2)	$	—	$	(489,262)	$	—	$	(489,262)
Net derivative assets	$	—	$	132,646	$	330	$	132,976

Derivative liabilities:
Interest rate contracts	$	—	$	518,330	$	—	$	518,330
Foreign exchange contracts	—		53,153		—		53,153
Equity contracts (3)	—		—		15,119		15,119
Credit contracts	—		16		—		16
Commodity contracts	—		106,930		—		106,930
Gross derivative liabilities	$	—	$	678,429	$	15,119	$	693,548
Netting adjustments (2)	$	—	$	(134,963)	$	—	$	(134,963)
Net derivative liabilities	$	—	$	543,466	$	15,119	$	558,585



	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 (1):
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
CLOs	—		612,861		—		612,861
Total AFS debt securities	$	1,060,375	$	5,127,962	$	—	$	6,188,337

Affordable housing partnership, tax credit and CRA investments, net:
Equity securities	$	20,509	$	4,150	$	—	$	24,659
Affordable housing partnership, tax credit and CRA 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 (2)	$	—	$	(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 (3)	—		—		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 (2)	$	—	$	(76,170)	$	—	$	(76,170)
Net derivative liabilities	$	—	$	522,025	$	15,119	$	537,144

For the three months ended March 31, 2024 and 2023, Level 3 fair value measurements that were measured on a recurring basis consisted of warrant equity contracts issued by private companies and liability-classified contingently issuable shares of the Company. The following table provides a reconciliation of the beginning and ending balances of these equity contracts for the three months ended March 31, 2024 and 2023:

The following table presents quantitative information about the significant unobservable inputs used in the valuation of Level 3 fair value measurements as of March 31, 2024 and December 31, 2023. 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
March 31, 2024
Derivative assets:
Equity contracts	$	330	Black-Scholes option pricing model	Equity volatility	39% — 50%	46	%	(1)
				Liquidity discount	47%	47	%
Derivative liabilities:
Equity contracts (2)	$	15,119	Internal model	Payout % designated based on operating revenue and operating EBITDA of investee	84%	84	%
December 31, 2023
Derivative assets:
Equity contracts	$	336	Black-Scholes option pricing model	Equity volatility	37% — 48%	45	%	(1)
				Liquidity discount	47%	47	%
Derivative liabilities:
Equity contracts (2)	$	15,119	Internal model	Payout % designated based on operating revenue and operating EBITDA of investee	84%	84	%

Assets measured at fair value on a nonrecurring basis include certain individually evaluated loans held-for-investment, affordable housing partnership, tax credit and CRA investments, OREO, loans held-for-sale, and other nonperforming assets. Nonrecurring fair value adjustments result from the impairment on certain individually evaluated loans held-for-investment and affordable housing partnership, tax credit and CRA investments, from the write-downs of OREO and other nonperforming assets, or from the application of lower of cost or fair value on loans held-for-sale.

•When the repayment of an individually evaluated loan is dependent on the sale of the collateral, the fair value of the loan is determined based on the fair value of the underlying collateral, which may take the form of real estate, inventory, equipment, contracts or guarantees. The fair value of the underlying collateral is generally based on third-party appraisals, or an internal valuation if a third-party appraisal is not required by regulations, or is unavailable. An internal valuation utilizes one or more valuation techniques such as the income, market and/or cost approaches.

Affordable Housing Partnership, Tax Credit and CRA Investments, Net — The Company conducts due diligence on its affordable housing partnership, tax credit and CRA investments prior to the initial investment date and through the placed-in-service date. After these investments are either acquired or placed into service, the Company continues its periodic monitoring process to ensure book values are realizable and that there is no significant tax credit recapture risk. This monitoring process includes reviewing the investment entity’s quarterly financial statements and annual tax returns, the annual financial statements of the guarantor (if any) and a comparison of the actual performance of the investment against the financial projections prepared at the time the investment was made. The Company assesses its tax credit and other investments for possible other-than-temporary impairment on an annual basis or when events or circumstances suggest that the carrying amount of the investments may not be realizable. These circumstances can include, but are not limited to the following factors:

All available information is considered in assessing whether a decline in value is other-than-temporary. Generally, none of the aforementioned factors are individually conclusive and the relative importance placed on individual facts may vary depending on the situation. In accordance with ASC 323-10-35-32, Investments — Equity Method and Joint Ventures, an impairment charge would only be recognized in earnings for a decline in value that is determined to be other-than-temporary.

Other Real Estate Owned — The Company’s OREO represents properties acquired through foreclosure, or through full or partial satisfaction of loans held-for-investment such as an acceptance of a deed-in-lieu of foreclosure. These OREO properties are recorded at estimated fair value less the costs to sell at the time of foreclosure or at the lower of cost or estimated fair value less the costs to sell subsequent to acquisition. On a monthly basis, the current fair market value of each OREO property is reviewed to ensure that the current carrying value is appropriate. OREO properties are classified as Level 3.

Other Nonperforming Assets — Other nonperforming assets are recorded at fair value upon transfer from loans to foreclosed assets. Subsequently, foreclosed assets are recorded at the lower of carrying value or fair value. Fair value is based on independent market prices, appraised values of the collateral or management’s estimated recovery of the foreclosed asset. The Company records an impairment when the foreclosed asset’s fair value declines below its carrying value. The fair value measurement of other nonperforming assets is classified within one of the three levels in a valuation hierarchy based upon the observability of inputs to the valuation as of the measurement date.



	Assets Measured at Fair Value on a Nonrecurring Basis as of March 31, 2024
($ in thousands)	Level 1		Level 2		Level 3		Fair Value Measurements
Loans held-for-investment:
Commercial:
Commercial and industrial (“C&I”)	$	—	$	—	$	25,914	$	25,914
Commercial real estate (“CRE”):
CRE	—		—		10,028		10,028

Construction and land	—		—		12,236		12,236

Total commercial	—		—		48,178		48,178
Consumer:
Residential mortgage:
Single-family residential	—		—		116		116



Total consumer	—		—		116		116
Total loans held-for-investment	$	—	$	—	$	48,294	$	48,294



	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:

Home equity lines of credit (“HELOCs”)	—		—		1,204		1,204


Total consumer	—		—		1,204		1,204
Total loans held-for-investment	$	—	$	—	$	45,892	$	45,892
Affordable housing partnership, tax credit and CRA investments, net	$	—	$	—	$	868	$	868



	Three Months Ended March 31,
($ in thousands)	2024		2023
Loans held-for-investment:
Commercial:
C&I	$	(12,843)	$	(1,255)
CRE:
CRE	(2,006)		—

Construction and land	(1,224)		—

Total commercial	(16,073)		(1,255)
Consumer:
Residential mortgage:
Single-family residential	(1,384)		—



Total consumer	(1,384)		—
Total loans held-for-investment	$	(17,457)	$	(1,255)

Affordable housing partnership, tax credit and CRA investments, net	$	—	$	174



($ in thousands)	Fair Value Measurements (Level 3)		Valuation Techniques	Unobservable Inputs	Range of Inputs	Weighted-Average of Inputs
March 31, 2024

Loans held-for-investment	$	6,917	Fair value of collateral	Discount	20%	20%
	$	8,471	Fair value of collateral	Contract value	NM	NM
	$	32,906	Fair value of property	Selling cost	8%	8%




December 31, 2023


Loans held-for-investment	$	16,328	Fair value of collateral	Discount	15% — 75%	45%	(1)
	$	3,009	Fair value of collateral	Contract value	NM	NM
	$	26,555	Fair value of property	Selling cost	8%	8%
Affordable housing partnership, tax credit and CRA investments, net	$	868	Individual analysis of each investment	Expected future tax benefits and distributions	NM	NM

The following tables present the fair value estimates for financial instruments as of March 31, 2024 and December 31, 2023, 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.



	March 31, 2024
($ in thousands)	Carrying Amount		Level 1		Level 2		Level 3		Estimated Fair Value
Financial assets:
Cash and cash equivalents	$	4,210,801	$	4,210,801	$	—	$	—	$	4,210,801
Interest-bearing deposits with banks	$	24,593	$	—	$	24,593	$	—	$	24,593
Resale agreements	$	485,000	$	—	$	391,403	$	—	$	391,403
HTM debt securities	$	2,948,642	$	485,400	$	1,929,078	$	—	$	2,414,478
Restricted equity securities, at cost	$	164,402	$	—	$	164,402	$	—	$	164,402
Loans held-for-sale	$	13,280	$	—	$	13,280	$	—	$	13,280
Loans held-for-investment, net	$	51,322,224	$	—	$	—	$	49,849,727	$	49,849,727
Mortgage servicing rights	$	6,234	$	—	$	—	$	10,787	$	10,787
Accrued interest receivable	$	336,428	$	—	$	336,428	$	—	$	336,428
Financial liabilities:
Demand, checking, savings and money market deposits	$	37,789,344	$	—	$	37,789,344	$	—	$	37,789,344
Time deposits	$	20,771,280	$	—	$	20,715,628	$	—	$	20,715,628
Short-term borrowings	$	19,173	$	—	$	19,173	$	—	$	19,173

FHLB advances	$	3,500,000	$	—	$	3,500,000	$	—	$	3,500,000

Long-term debt	$	31,768	$	—	$	30,201	$	—	$	30,201
Accrued interest payable	$	63,470	$	—	$	63,470	$	—	$	63,470



	December 31, 2023
($ in thousands)	Carrying Amount		Level 1		Level 2		Level 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


BTFP 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