Derivatives (Tables)

6 Months Ended

Jun. 30, 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 June 30, 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 $28 million and $37 million, respectively, as of June 30, 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.

	June 30, 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	$	11,484		$	54,557		$	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	$	11,484		$	54,557		$	5,331,480	$	53,815		$	13,124
Derivatives not designated as hedging instruments:
Interest rate contracts	$	16,927,202	$	448,106		$	446,957		$	17,387,909	$	423,486		$	420,812
Commodity contracts (1)	—		60,946			70,900			—		79,604			121,670
Foreign exchange contracts	3,865,583		33,684			25,598			5,827,149		53,678			42,564
Credit contracts (2)	117,751		—			14			118,391		1			25
Equity contracts	—		240		(3)	15,119		(4)	—		336		(3)	15,119		(4)
Total derivatives not designated as hedging instruments	$	20,910,536	$	542,976		$	558,588		$	23,333,449	$	557,105		$	600,190
Gross derivative assets/liabilities			$	554,460		$	613,145				$	610,920		$	613,314
Less: Master netting agreements			(106,525)			(106,525)					(75,534)			(75,534)
Less: Cash collateral received			(335,285)			(2,665)					(237,258)			(636)
Net derivative assets/liabilities			$	112,650		$	503,955				$	298,128		$	537,144

(1)The notional amount of the Company’s commodity contracts totaled 18,230 thousand barrels of crude oil and 421,525 thousand units of natural gas, measured in million British thermal units (“MMBTUs”) as of June 30, 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’ notional amount in RPAs.

(3)The Company held warrant equity contracts in 10 private companies and one public company as of June 30, 2024, and 11 private companies and one public company as of 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 June 30, 2024 and December 31, 2023:

	June 30, 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	$	6,826,308	$	9,729	$	423,880	$	6,835,822	$	25,649	$	377,388
Written options	1,369,229		—		9,929		1,522,531		—		12,756
Collars and corridors	259,081		96		2,496		322,732		440		4,481
Subtotal	8,454,618		9,825		436,305		8,681,085		26,089		394,625
Foreign exchange contracts:
Forwards and spot	535,153		5,897		3,428		956,618		9,466		6,756
Swaps	1,197,938		7,515		10,558		1,588,491		5,801		18,118
Purchased options	88,000		2,051		—		136,000		1,839		—
Subtotal	1,821,091		15,463		13,986		2,681,109		17,106		24,874
Total	$	10,275,709	$	25,288	$	450,291	$	11,362,194	$	43,195	$	419,499
Economic hedges:
Interest rate contracts:
Swaps	$	6,844,274	$	425,796	$	10,552	$	6,861,561	$	380,123	$	25,731
Purchased options	1,369,229		9,981		—		1,522,531		12,783		—
Collars and corridors	259,081		2,504		100		322,732		4,491		456
Subtotal	8,472,584		438,281		10,652		8,706,824		397,397		26,187
Foreign exchange contracts:
Forwards and spot	66,546		52		128		148,003		292		94
Swaps	1,889,946		18,169		9,433		2,862,037		36,280		15,757
Written options	88,000		—		2,051		136,000		—		1,839
Subtotal	2,044,492		18,221		11,612		3,146,040		36,572		17,690
Total	$	10,517,076	$	456,502	$	22,264	$	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 June 30, 2024 and December 31, 2023:

	June 30, 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	3,907	Barrels	$	13,897	$	857	3,277	Barrels	$	3,735	$	15,445
Collars	5,180	Barrels	8,366		43		5,966	Barrels	1,820		5,103
Subtotal	9,087	Barrels	22,263		900		9,243	Barrels	5,555		20,548
Natural gas:
Swaps	148,337	MMBTUs	1,796		43,998		118,325	MMBTUs	438		73,793
Collars	62,277	MMBTUs	1,297		12,005		45,854	MMBTUs	21		20,400
Written options	1,710	MMBTUs	124		—		1,874	MMBTUs	—		233
Subtotal	212,324	MMBTUs	3,217		56,003		166,053	MMBTUs	459		94,426
Total			$	25,480	$	56,903			$	6,014	$	114,974
Economic hedges:
Commodity contracts:
Crude oil:
Swaps	3,963	Barrels	$	1,308	$	10,871	3,422	Barrels	$	9,166	$	4,924
Collars	5,180	Barrels	3		1,983		5,966	Barrels	1,685		1,467
Subtotal	9,143	Barrels	1,311		12,854		9,388	Barrels	10,851		6,391
Natural gas:
Swaps	145,824	MMBTUs	28,395		391		116,463	MMBTUs	49,941		305
Collars	61,667	MMBTUs	5,760		648		44,454	MMBTUs	12,565		—
Purchased options	1,710	MMBTUs	—		104		1,874	MMBTUs	233		—
Subtotal	209,201	MMBTUs	34,155		1,143		162,791	MMBTUs	62,739		305
Total			$	35,466	$	13,997			$	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 and six months ended June 30, 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 June 30,				Six Months Ended June 30,
($ in thousands)	2024		2023		2024		2023
Gains (losses) recognized in AOCI:
Interest rate contracts	$	25,095	$	(96,457)	$	115,471	$	(66,614)
Gains (losses) reclassified from AOCI into earnings:
Interest expense (for cash flow hedges on borrowings)	$	—	$	—	$	—	$	696
Interest and dividend income (for cash flow hedges on loans)	(24,594)		(20,252)		(49,199)		(33,206)
Noninterest income	—		—		—		1,614		(1)
Total	$	(24,594)	$	(20,252)	$	(49,199)	$	(30,896)

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

Schedule 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 and six months ended June 30, 2024 and 2023:

	Three Months Ended June 30,				Six Months Ended June 30,
($ in thousands)	2024		2023		2024		2023
Gains recognized in AOCI	$	—	$	3,899	$	586	$	2,823

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 and six months ended June 30, 2024 and 2023:

		Three Months Ended June 30,				Six Months Ended June 30,
($ in thousands)	Classification on Consolidated Statement of Income	2024		2023		2024		2023
Derivatives not designated as hedging instruments:
Interest rate contracts	Customer derivative income	$	1,099	$	1,222	$	1,583	$	(1,261)
Foreign exchange contracts	Foreign exchange income	14,349		19,898		27,129		30,340
Credit contracts	Customer derivative income	2		12		(3)		7
Equity contracts - warrants	Lending fees	(90)		(14)		(96)		(60)
Commodity contracts	Customer derivative income	433		160		567		166
Net gains		$	15,793	$	21,278	$	29,180	$	29,192

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 June 30, 2024
			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
	Gross Amounts Recognized (1)		Master Netting Arrangements		Cash Collateral Received (3)				Security Collateral Received (5)		Net Amount
Derivative assets	$	554,460	$	(106,525)	$	(335,285)	$	112,650	$	(78,411)	$	34,239
			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
	Gross Amounts Recognized (2)		Master Netting Arrangements		Cash Collateral Pledged (4)				Security Collateral Pledged (5)		Net Amount
Derivative liabilities	$	613,145	$	(106,525)	$	(2,665)	$	503,955	$	—	$	503,955

($ in thousands)	As of December 31, 2023
			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
	Gross Amounts Recognized (1)		Master Netting Arrangements		Cash Collateral Received (3)				Security Collateral Received (5)		Net Amount
Derivative assets	$	610,920	$	(75,534)	$	(237,258)	$	298,128	$	(246,259)	$	51,869
			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
	Gross Amounts Recognized (2)		Master Netting Arrangements		Cash Collateral Pledged (4)				Security Collateral Pledged (5)		Net Amount
Derivative liabilities	$	613,314	$	(75,534)	$	(636)	$	537,144	$	—	$	537,144

(1)Includes $3 million of gross fair value assets with counterparties that were not subject to enforceable master netting arrangements or similar agreements as of both June 30, 2024 and December 31, 2023.

(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 June 30, 2024 and December 31, 2023, respectively.

(3)Gross cash collateral received under master netting arrangements or similar agreements was $356 million and $244 million as of June 30, 2024 and December 31, 2023, respectively. Of the gross cash collateral received, $335 million and $237 million were used to offset derivative assets as of June 30, 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 June 30, 2024 and December 31, 2023, respectively. Of the gross cash collateral pledged, $3 million and $1 million were used to offset derivative liabilities as of June 30, 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.