Derivatives (Tables)

3 Months Ended

Mar. 31, 2024

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule Of Notional And Gross Fair Values Of Derivatives

The following table presents the notional amounts and fair values of the Company’s derivatives as of March 31, 2024 and December 31, 2023. Certain derivative contracts are cleared though central clearing organizations where variation margin is applied daily as settlement to the fair values of the contracts. The fair values are presented on a gross basis prior to the application of bilateral collateral and master netting agreements, but after the application of variation margin payments as settlement to fair values of contracts cleared through central clearing organizations. Applying variation margin payments as settlement to the fair values of derivative contracts cleared through the London Clearing House (“LCH”) and the Chicago Mercantile Exchange (“CME”) resulted in reductions in the derivative asset and liability fair values by $41 million and $47 million, respectively, as of March 31, 2024. In comparison, applying variation margin payments as settlement to LCH- and CME-cleared derivative transactions resulted in reductions in both the derivative asset and liability fair values by $43 million as of December 31, 2023. Total derivative asset and liability fair values are adjusted to reflect the effects of legally enforceable master netting agreements and cash collateral received or paid. 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.

	March 31, 2024								December 31, 2023
			Fair Value								Fair Value
($ in thousands)	Notional Amount		Assets			Liabilities			Notional Amount		Assets			Liabilities
Derivatives designated as hedging instruments:
Cash flow hedges:
Interest rate contracts	$	5,250,000	$	15,707		$	49,616		$	5,250,000	$	50,421		$	13,124
Net investment hedges:
Foreign exchange contracts	—		—			—			81,480		3,394			—
Total derivatives designated as hedging instruments	$	5,250,000	$	15,707		$	49,616		$	5,331,480	$	53,815		$	13,124
Derivatives not designated as hedging instruments:
Interest rate contracts	$	16,910,462	$	469,087		$	468,714		$	17,387,909	$	423,486		$	420,812
Commodity contracts (1)	—		76,615			106,930			—		79,604			121,670
Foreign exchange contracts	4,898,429		60,499			53,153			5,827,149		53,678			42,564
Credit contracts (2)	118,144		—			16			118,391		1			25
Equity contracts	—		330		(3)	15,119		(4)	—		336		(3)	15,119		(4)
Total derivatives not designated as hedging instruments	$	21,927,035	$	606,531		$	643,932		$	23,333,449	$	557,105		$	600,190
Gross derivative assets/liabilities			$	622,238		$	693,548				$	610,920		$	613,314
Less: Master netting agreements			(132,555)			(132,555)					(75,534)			(75,534)
Less: Cash collateral received			(356,707)			(2,408)					(237,258)			(636)
Net derivative assets/liabilities			$	132,976		$	558,585				$	298,128		$	537,144

(1)The notional amount of the Company’s commodity contracts totaled 18,468 thousand barrels of crude oil and 350,942 thousand units of natural gas, measured in million British thermal units (“MMBTUs”) as of March 31, 2024. In comparison, the notional amount of the Company’s commodity contracts totaled 18,631 thousand barrels of crude oil and 328,844 thousand MMBTUs of natural gas as of December 31, 2023.

(2)The notional amount of the credit contracts reflects the Company’s pro-rata share of the underlying derivative instruments in RPAs.

(3)The Company held warrant equity contracts in 11 private companies and one public company as of both March 31, 2024 and December 31, 2023.

(4)Equity contracts classified as derivative liabilities consist of 349,138 performance-based RSUs granted as part of EWBC’s consideration in its investment in Rayliant.

The following table presents the notional amounts and the gross fair values of the interest rate and foreign exchange derivatives entered into with customers and with third-party financial institutions as economic hedges to customers’ positions as of March 31, 2024 and December 31, 2023:

	March 31, 2024						December 31, 2023
			Fair Value						Fair Value
($ in thousands)	Notional Amount		Assets		Liabilities		Notional Amount		Assets		Liabilities
Customer-related positions:
Interest rate contracts:
Swaps	$	6,874,132	$	9,521	$	442,960	$	6,835,822	$	25,649	$	377,388
Written options	1,287,121		—		11,909		1,522,531		—		12,756
Collars and corridors	281,117		130		3,371		322,732		440		4,481
Subtotal	8,442,370		9,651		458,240		8,681,085		26,089		394,625
Foreign exchange contracts:
Forwards and spot	643,298		4,124		7,548		956,618		9,466		6,756
Swaps	1,577,082		19,020		24,839		1,588,491		5,801		18,118
Purchased options	129,000		2,580		—		136,000		1,839		—
Subtotal	2,349,380		25,724		32,387		2,681,109		17,106		24,874
Total	$	10,791,750	$	35,375	$	490,627	$	11,362,194	$	43,195	$	419,499
Economic hedges:
Interest rate contracts:
Swaps	$	6,899,692	$	444,094	$	10,337	$	6,861,561	$	380,123	$	25,731
Purchased options	1,287,283		11,962		—		1,522,531		12,783		—
Collars and corridors	281,117		3,380		137		322,732		4,491		456
Subtotal	8,468,092		459,436		10,474		8,706,824		397,397		26,187
Foreign exchange contracts:
Forwards and spot	33,003		42		18		148,003		292		94
Swaps	2,387,046		34,733		18,168		2,862,037		36,280		15,757
Written options	129,000		—		2,580		136,000		—		1,839
Subtotal	2,549,049		34,775		20,766		3,146,040		36,572		17,690
Total	$	11,017,141	$	494,211	$	31,240	$	11,852,864	$	433,969	$	43,877

The Company enters into energy commodity contracts with its customers in the oil and gas sector, which allow them to hedge against the risk of fluctuation in energy commodity prices. Offsetting contracts entered with third-party financial institutions are used as economic hedges to manage the Company’s exposure on its customer-related positions. The following table presents the notional amounts in units and the gross fair values of the commodity derivatives issued for customer-related positions and economic hedges as of March 31, 2024 and December 31, 2023:

	March 31, 2024						December 31, 2023
			Fair Value						Fair Value
($ and unit in thousands)	Notional Units		Assets		Liabilities		Notional Units		Assets		Liabilities
Customer-related positions:
Commodity contracts:
Crude oil:
Swaps	3,608	Barrels	$	15,370	$	685	3,277	Barrels	$	3,735	$	15,445
Collars	5,576	Barrels	11,901		115		5,966	Barrels	1,820		5,103
Subtotal	9,184	Barrels	27,271		800		9,243	Barrels	5,555		20,548
Natural gas:
Swaps	127,102	MMBTUs	1,420		70,028		118,325	MMBTUs	438		73,793
Collars	47,953	MMBTUs	672		17,107		45,854	MMBTUs	21		20,400
Written options	1,976	MMBTUs	132		33		1,874	MMBTUs	—		233
Subtotal	177,031	MMBTUs	2,224		87,168		166,053	MMBTUs	459		94,426
Total			$	29,495	$	87,968			$	6,014	$	114,974
Economic hedges:
Commodity contracts:
Crude oil:
Swaps	3,708	Barrels	$	1,788	$	12,997	3,422	Barrels	$	9,166	$	4,924
Collars	5,576	Barrels	1		4,902		5,966	Barrels	1,685		1,467
Subtotal	9,284	Barrels	1,789		17,899		9,388	Barrels	10,851		6,391
Natural gas:
Swaps	124,582	MMBTUs	37,170		629		116,463	MMBTUs	49,941		305
Collars	47,353	MMBTUs	8,120		318		44,454	MMBTUs	12,565		—
Purchased options	1,976	MMBTUs	41		116		1,874	MMBTUs	233		—
Subtotal	173,911	MMBTUs	45,331		1,063		162,791	MMBTUs	62,739		305
Total			$	47,120	$	18,962			$	73,590	$	6,696

Schedule Of Pre-Tax Changes In AOCI From Cash Flows Hedges

The following table presents the pre-tax changes in AOCI from cash flow hedges for the three months ended March 31, 2024 and 2023. The after-tax impact of cash flow hedges on AOCI is shown in Note 14 — Accumulated Other Comprehensive Income (Loss) to the Consolidated Financial Statements in this Form-10-Q.

	Three Months Ended March 31,
($ in thousands)	2024		2023
(Losses) gains recognized in AOCI:
Interest rate contracts	$	(90,376)	$	29,843
(Losses) gains reclassified from AOCI into earnings:
Interest expense (for cash flow hedges on borrowings)	$	—	$	696
Interest and dividend income (for cash flow hedges on loans)	(24,605)		(12,954)
Noninterest income	—		1,614		(1)
Total	$	(24,605)	$	(10,644)

(1)Represents the amounts in AOCI reclassified into earnings as a result that the forecasted cash flows were no longer probable to occur.

Tabular Disclosure Of Gains and Losses On Derivative Instruments Qualified And Designated In Net Investment Hedges

The following table presents the pre-tax gains or losses recognized in AOCI on net investment hedges for the three months ended March 31, 2024 and 2023:

	Three Months Ended March 31,
($ in thousands)	2024		2023
Gains (losses) recognized in AOCI	$	586	$	(1,076)

Schedule Of The Net (Losses) Gains Recognized On The Company’s Consolidated Statement of Income Related To Derivatives Not Designated as Hedging Instruments

The following table presents the net gains (losses) recognized on the Company’s Consolidated Statement of Income related to derivatives not designated as hedging instruments for the three months ended March 31, 2024 and 2023:

		Three Months Ended March 31,
($ in thousands)	Classification on Consolidated Statement of Income	2024		2023
Derivatives not designated as hedging instruments:
Interest rate contracts	Customer derivative income	$	484	$	(2,484)
Foreign exchange contracts	Foreign exchange income	12,780		10,442
Credit contracts	Customer derivative income	(5)		(5)
Equity contracts - warrants	Lending fees	(6)		(45)
Commodity contracts	Customer derivative income	134		6
Net gains		$	13,387	$	7,914

Schedule Of 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 Non-Cash Collateral Associated With Master Netting Arrangements

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 to the fair values of contracts cleared through central clearing organizations, where applicable. The collateral amounts in the following tables are limited to the outstanding balances of the related asset or liability. Therefore, instances of over-collateralization are not shown:

($ in thousands)	As of March 31, 2024
	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	$	622,238	$	(132,555)	$	(356,707)	$	132,976	$	(99,877)	$	33,099
	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	$	693,548	$	(132,555)	$	(2,408)	$	558,585	$	—	$	558,585

($ in thousands)	As of December 31, 2023
	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	$	610,920	$	(75,534)	$	(237,258)	$	298,128	$	(246,259)	$	51,869
	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	$	613,314	$	(75,534)	$	(636)	$	537,144	$	—	$	537,144

(1)Includes $2 million and $3 million of gross fair value assets with counterparties that were not subject to enforceable master netting arrangements or similar agreements as of March 31, 2024 and December 31, 2023, respectively.

(2)Includes $17 million and $16 million of gross fair value liabilities with counterparties that were not subject to enforceable master netting arrangements or similar agreements as of March 31, 2024 and December 31, 2023, respectively.

(3)Gross cash collateral received under master netting arrangements or similar agreements was $362 million and $244 million as of March 31, 2024 and December 31, 2023, respectively. Of the gross cash collateral received, $357 million and $237 million were used to offset derivative assets as of March 31, 2024 and December 31, 2023, respectively.

(4)Gross cash collateral pledged under master netting arrangements or similar agreements was $3 million and $1 million as of March 31, 2024 and December 31, 2023, respectively. Of the gross cash collateral pledged, $2 million and $1 million were used to offset derivative liabilities as of March 31, 2024 and December 31, 2023, respectively.

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