Derivatives (Tables)

9 Months Ended

Sep. 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 September 30, 2024 and December 31, 2023. Certain derivative contracts are cleared through 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 of $31 million and $17 million, respectively, as of September 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 of $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.

	September 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	$	63,465		$	252		$	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	$	63,465		$	252		$	5,331,480	$	53,815		$	13,124
Derivatives not designated as hedging instruments:
Interest rate contracts	$	16,999,592	$	327,945		$	326,786		$	17,387,909	$	423,486		$	420,812
Commodity contracts (1)	—		64,980			90,002			—		79,604			121,670
Foreign exchange contracts	4,327,999		33,966			33,651			5,827,149		53,678			42,564
Credit contracts (2)	158,736		—			32			118,391		1			25
Equity contracts	—		232		(3)	15,119		(4)	—		336		(3)	15,119		(4)
Total derivatives not designated as hedging instruments	$	21,486,327	$	427,123		$	465,590		$	23,333,449	$	557,105		$	600,190
Gross derivative assets/liabilities			$	490,588		$	465,842				$	610,920		$	613,314
Less: Master netting agreements			(84,214)			(84,214)					(75,534)			(75,534)
Less: Cash collateral received			(261,394)			(11,133)					(237,258)			(636)
Net derivative assets/liabilities			$	144,980		$	370,495				$	298,128		$	537,144

(1)The notional amount of the Company’s commodity contracts totaled 17,186 thousand barrels of crude oil and 447,674 thousand units of natural gas, measured in million British thermal units (“MMBTUs”) as of September 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 nine private companies and one public company as of September 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 September 30, 2024 and December 31, 2023:

	September 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	$	6,867,025	$	49,900	$	270,699	$	6,835,822	$	25,649	$	377,388
Written options	1,451,899		—		5,016		1,522,531		—		12,756
Collars and corridors	171,955		462		463		322,732		440		4,481
Subtotal	8,490,879		50,362		276,178		8,681,085		26,089		394,625
Foreign exchange contracts:
Forwards and spot	844,984		14,642		2,936		956,618		9,466		6,756
Swaps	1,213,126		9,345		5,514		1,588,491		5,801		18,118
Purchased options	20,000		31		—		136,000		1,839		—
Subtotal	2,078,110		24,018		8,450		2,681,109		17,106		24,874
Total	$	10,568,989	$	74,380	$	284,628	$	11,362,194	$	43,195	$	419,499
Economic hedges:
Interest rate contracts:
Swaps	$	6,884,859	$	272,079	$	50,132	$	6,861,561	$	380,123	$	25,731
Purchased options	1,451,899		5,039		—		1,522,531		12,783		—
Collars and corridors	171,955		465		476		322,732		4,491		456
Subtotal	8,508,713		277,583		50,608		8,706,824		397,397		26,187
Foreign exchange contracts:
Forwards and spot	21,023		128		60		148,003		292		94
Swaps	2,208,866		9,820		25,110		2,862,037		36,280		15,757
Written options	20,000		—		31		136,000		—		1,839
Subtotal	2,249,889		9,948		25,201		3,146,040		36,572		17,690
Total	$	10,758,602	$	287,531	$	75,809	$	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 September 30, 2024 and December 31, 2023:

	September 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	3,407	Barrels	$	1,680	$	15,382	3,277	Barrels	$	3,735	$	15,445
Collars	5,186	Barrels	46		9,593		5,966	Barrels	1,820		5,103
Subtotal	8,593	Barrels	1,726		24,975		9,243	Barrels	5,555		20,548
Natural gas:
Swaps	155,871	MMBTUs	3,559		45,602		118,325	MMBTUs	438		73,793
Collars	68,630	MMBTUs	755		14,565		45,854	MMBTUs	21		20,400
Written options	1,456	MMBTUs	142		—		1,874	MMBTUs	—		233
Subtotal	225,957	MMBTUs	4,456		60,167		166,053	MMBTUs	459		94,426
Total			$	6,182	$	85,142			$	6,014	$	114,974
Economic hedges:
Commodity contracts:
Crude oil:
Swaps	3,407	Barrels	$	10,630	$	1,670	3,422	Barrels	$	9,166	$	4,924
Collars	5,186	Barrels	4,417		—		5,966	Barrels	1,685		1,467
Subtotal	8,593	Barrels	15,047		1,670		9,388	Barrels	10,851		6,391
Natural gas:
Swaps	153,199	MMBTUs	35,173		2,343		116,463	MMBTUs	49,941		305
Collars	67,060	MMBTUs	8,578		722		44,454	MMBTUs	12,565		—
Purchased options	1,456	MMBTUs	—		125		1,874	MMBTUs	233		—
Subtotal	221,715	MMBTUs	43,751		3,190		162,791	MMBTUs	62,739		305
Total			$	58,798	$	4,860			$	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 nine months ended September 30, 2024 and 2023. The after-tax impact of cash flow hedges on AOCI is shown in Note 14 — Accumulated Other Comprehensive (Loss) Income to the Consolidated Financial Statements in this Form 10-Q.

	Three Months Ended September 30,				Nine Months Ended September 30,
($ in thousands)	2024		2023		2024		2023
Gains (losses) recognized in AOCI:
Interest rate contracts	$	93,842	$	(62,715)	$	(21,629)	$	(129,329)
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)	(24,272)		(24,059)		(73,471)		(57,265)
Noninterest income	—		—		—		1,614		(1)
Total	$	(24,272)	$	(24,059)	$	(73,471)	$	(54,955)

(1)Represents the amounts in AOCI reclassified into earnings where 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 recognized in AOCI on net investment hedges for the three and nine months ended September 30, 2024 and 2023:

	Three Months Ended September 30,				Nine Months Ended September 30,
($ in thousands)	2024		2023		2024		2023
Gains recognized in AOCI	$	—	$	63	$	586	$	2,886

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 nine months ended September 30, 2024 and 2023:

		Three Months Ended September 30,				Nine Months Ended September 30,
($ in thousands)	Classification on Consolidated Statement of Income	2024		2023		2024		2023
Derivatives not designated as hedging instruments:
Interest rate contracts	Customer derivative (losses) income	$	(4,577)	$	5,283	$	(2,994)	$	4,022
Foreign exchange contracts	Foreign exchange income	6,075		7,267		33,204		37,607
Credit contracts	Customer derivative (losses) income	(17)		4		(20)		11
Equity contracts - warrants	Lending fees	(8)		89		(104)		29
Commodity contracts	Customer derivative income	114		27		681		193
Net gains		$	1,587	$	12,670	$	30,767	$	41,862

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 fair values 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 September 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	$	490,588	$	(84,214)	$	(261,394)	$	144,980	$	(61,543)	$	83,437
			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	$	465,842	$	(84,214)	$	(11,133)	$	370,495	$	—	$	370,495

($ 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 $7 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 September 30, 2024 and December 31, 2023, respectively.

(2)Includes $16 million of gross fair value liabilities with counterparties that were not subject to enforceable master netting arrangements or similar agreements as of both September 30, 2024 and December 31, 2023.

(3)Gross cash collateral received under master netting arrangements or similar agreements was $269 million and $244 million as of September 30, 2024 and December 31, 2023, respectively. Of the gross cash collateral received, $261 million and $237 million were used to offset derivative assets as of September 30, 2024 and December 31, 2023, respectively.

(4)Gross cash collateral pledged under master netting arrangements or similar agreements was $13 million and $1 million as of September 30, 2024 and December 31, 2023, respectively. Of the gross cash collateral pledged, $11 million and $1 million were used to offset derivative liabilities as of September 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.