The Company uses derivative instruments to manage exposure to market risk, primarily interest rate and foreign currency risks, as well as to assist customers with their risk management objectives. The Company’s goal is to manage interest rate sensitivity and volatility to mitigate the effect of interest rate changes on earnings or capital. The Company also uses foreign exchange contracts to manage the foreign exchange rate risk associated with certain foreign currency-denominated assets and liabilities, as well as the Bank’s investment in East West Bank (China) Limited. The Company recognizes all derivatives on the Consolidated Balance Sheet at fair value. While the Company designates certain derivatives as hedging instruments in a qualifying hedge accounting relationship, other derivatives serve as economic hedges. For additional information on the Company’s derivatives and hedging activities, see Note 1 — Summary of Significant Accounting Policies — Significant Accounting Policies — Derivatives to the Consolidated Financial Statements in this Form 10-K.

The following table presents the notional amounts and fair values of the Company’s derivatives as of December 31, 2024 and 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 of $17 million and $15 million, respectively, as of December 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 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.



	December 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	$	5,647		$	35,211		$	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	$	5,647		$	35,211		$	5,331,480	$	53,815		$	13,124

Derivatives not designated as hedging instruments:
Interest rate contracts	$	17,005,381	$	379,664		$	378,961		$	17,387,909	$	423,486		$	420,812
Commodity contracts (1)	—		48,499			45,328			—		79,604			121,670
Foreign exchange contracts	5,201,460		89,083			71,254			5,827,149		53,678			42,564
Credit contracts (2)	168,999		1			12			118,391		1			25
Equity contracts	—		239		(3)	15,119		(4)	—		336		(3)	15,119		(4)
Total derivatives not designated as hedging instruments	$	22,375,840	$	517,486		$	510,674		$	23,333,449	$	557,105		$	600,190
Gross derivative assets/liabilities			$	523,133		$	545,885				$	610,920		$	613,314
Less: Master netting agreements			(111,124)			(111,124)					(75,534)			(75,534)
Less: Cash collateral received/paid			(316,168)			(1,160)					(237,258)			(636)
Net derivative assets/liabilities			$	95,841		$	433,601				$	298,128		$	537,144

(1)The notional amount of the Company’s commodity contracts totaled 20,614 thousand barrels of crude oil and 406,726 thousand units of natural gas, measured in million British thermal units (“MMBTUs”) as of December 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.

Cash Flow Hedges — The Company uses interest rate swaps to hedge the variability in the interest amount received on certain floating-rate commercial loans, or paid on certain floating-rate borrowings due to changes in contractually specified interest rates. As of December 31, 2024, interest rate contracts with total notional amount of $5.3 billion were designated as cash flow hedges to convert certain variable-rate loans from floating-rate payments to fixed-rate payments. Gains and losses on the hedging derivative instruments are recognized in AOCI and reclassified to earnings in the same period the hedged cash flows impact earnings and within the same income statement line item as the hedged cash flows. Considering the interest rates, yield curve and notional amounts as of December 31, 2024, the Company expects to reclassify an estimated $11 million of after-tax net losses on derivative instruments designated as cash flow hedges from AOCI into earnings during the next 12 months.

The following table presents the pre-tax changes in AOCI from cash flow hedges for the years ended December 31, 2024, 2023 and 2022. The after-tax impact of cash flow hedges on AOCI is shown in Note 15 — Accumulated Other Comprehensive (Loss) Income to the Consolidated Financial Statements in this Form 10-K.



	Year Ended December 31,
($ in thousands)	2024		2023			2022
Losses recognized in AOCI:
Interest rate contracts	$	(124,382)	$	(5,767)		$	(74,069)
Gains (losses) reclassified from AOCI into earnings:
Interest expense (for cash flow hedges on borrowings)	$	—	$	696		$	3,200
Interest and dividend income (for cash flow hedges on loans)	(91,083)		(82,153)			(7,204)
Noninterest income	—		1,614		(1)	—
Total	$	(91,083)	$	(79,843)		$	(4,004)

Net Investment Hedges — The Company enters into foreign currency forward contracts to hedge a portion of the Bank’s investment in East West Bank (China) Limited, a non-USD functional currency subsidiary in China. The hedging instruments designated as net investment hedges were used to hedge against the risk of adverse changes in the foreign currency exchange rate of the RMB. The following table presents the pre-tax gains (losses) recognized in AOCI on net investment hedges for the years ended December 31, 2024, 2023 and 2022:

Customer-Related Positions and Economic Hedge Derivatives — The Company enters into interest rate, commodity, and foreign exchange derivatives at the request of its customers and generally enters into offsetting derivative contracts with third-party financial institutions to mitigate the inherent market risk. The Company also utilizes foreign exchange contracts to mitigate the effect of currency fluctuations on certain foreign currency-denominated on-balance sheet assets and liabilities, primarily foreign currency denominated deposits that it offers to its customers. A majority of the foreign exchange contracts had original maturities of one year or less as of both December 31, 2024 and 2023.



	December 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	$	6,854,372	$	11,828	$	361,256	$	6,835,822	$	25,649	$	377,388
Written options	1,458,428		—		4,953		1,522,531		—		12,756
Collars and corridors	181,039		80		440		322,732		440		4,481
Subtotal	8,493,839		11,908		366,649		8,681,085		26,089		394,625
Foreign exchange contracts:
Forwards and spot	996,486		11,693		24,201		956,618		9,466		6,756
Swaps	1,504,469		16,117		25,366		1,588,491		5,801		18,118
Purchased options	—		—		—		136,000		1,839		—
Subtotal	2,500,955		27,810		49,567		2,681,109		17,106		24,874
Total	$	10,994,794	$	39,718	$	416,216	$	11,362,194	$	43,195	$	419,499
Economic hedges:
Interest rate contracts:
Swaps	$	6,872,075	$	362,323	$	12,228	$	6,861,561	$	380,123	$	25,731
Purchased options	1,458,428		4,990		—		1,522,531		12,783		—

Collars and corridors	181,039		443		84		322,732		4,491		456
Subtotal	8,511,542		367,756		12,312		8,706,824		397,397		26,187
Foreign exchange contracts:
Forwards and spot	86,750		2,318		1,738		148,003		292		94
Swaps	2,613,755		58,955		19,949		2,862,037		36,280		15,757
Written options	—		—		—		136,000		—		1,839
Subtotal	2,700,505		61,273		21,687		3,146,040		36,572		17,690
Total	$	11,212,047	$	429,029	$	33,999	$	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 its customers and entered for economic hedges as of December 31, 2024 and 2023:



	December 31, 2024						December 31, 2023
			Fair Value						Fair Value
(Amounts in thousands)	Notional Units		Assets		Liabilities		Notional Units		Assets		Liabilities
Customer-related positions:
Commodity contracts:
Crude oil:
Swaps	4,830	Barrels	$	4,682	$	6,874	3,277	Barrels	$	3,735	$	15,445
Collars	5,477	Barrels	1,604		3,362		5,966	Barrels	1,820		5,103

Subtotal	10,307	Barrels	6,286		10,236		9,243	Barrels	5,555		20,548
Natural gas:
Swaps	141,736	MMBTUs	13,095		17,708		118,325	MMBTUs	438		73,793
Collars	62,045	MMBTUs	6,061		4,556		45,854	MMBTUs	21		20,400
Written options	1,234	MMBTUs	167		—		1,874	MMBTUs	—		233
Subtotal	205,015	MMBTUs	19,323		22,264		166,053	MMBTUs	459		94,426
Total			$	25,609	$	32,500			$	6,014	$	114,974
Economic hedges:
Commodity contracts:
Crude oil:
Swaps	4,830	Barrels	$	4,479	$	3,893	3,422	Barrels	$	9,166	$	4,924
Collars	5,477	Barrels	1,547		76		5,966	Barrels	1,685		1,467

Subtotal	10,307	Barrels	6,026		3,969		9,388	Barrels	10,851		6,391
Natural gas:
Swaps	139,136	MMBTUs	13,323		5,056		116,463	MMBTUs	49,941		305
Collars	61,341	MMBTUs	3,541		3,650		44,454	MMBTUs	12,565		—
Purchased options	1,234	MMBTUs	—		153		1,874	MMBTUs	233		—
Subtotal	201,711	MMBTUs	16,864		8,859		162,791	MMBTUs	62,739		305
Total			$	22,890	$	12,828			$	73,590	$	6,696

Credit Contracts — The Company periodically enters into credit RPAs with institutional counterparties to manage the credit exposure of the interest rate contracts associated with syndication loans. Under the RPAs, a portion of the credit exposure is transferred from one party (the purchaser of credit protection) to another party (the seller of credit protection). The seller of credit protection is required to make payments to the purchaser of credit protection if the underlying borrower defaults on the related interest rate contract. The Company may enter into protection sold or protection purchased RPAs. Credit risk on RPAs is managed by monitoring the credit worthiness of the borrowers and the institutional counterparties, and is a part of the Company’s normal credit review and monitoring process. Assuming the underlying borrowers referenced in the interest rate contracts defaulted, the maximum exposure of protection sold RPAs would be $170 thousand and $177 thousand as of December 31, 2024 and 2023, respectively.



($ in thousands)	December 31, 2024						December 31, 2023
	Notional Amount		Fair Value				Notional Amount		Fair Value
			Assets		Liabilities				Assets		Liabilities
RPAs — protection sold (1)	$	133,174	$	—	$	12	$	93,393	$	—	$	25
RPAs — protection purchased	35,825		1		—		24,998		1		—
Total RPAs	$	168,999	$	1	$	12	$	118,391	$	1	$	25

Equity Contracts — As part of the loan origination process, the Company may obtain warrants to purchase the preferred and/or common stock of the borrowers’ companies, which are mainly in the technology and life sciences sectors. Warrants grant the Company the right to buy a certain class of the underlying company’s equity at a certain price before expiration. In connection with the Company’s investment in Rayliant during the third quarter of 2023, the Company granted performance-based RSUs as part of its consideration. The vesting of these equity contracts is contingent on Rayliant meeting certain financial performance targets during the future performance period. For additional information on these equity contracts, refer to Note 2 — Fair Value Measurement and Fair Value of Financial Instruments and Note 7 — Affordable Housing Partnership, Tax Credit and Community Reinvestment Act Investments, Net to the Consolidated Financial Statements in this Form 10-K.



		Year Ended December 31,
($ in thousands)	Classification on Consolidated Statement of Income	2024		2023		2022
Derivatives not designated as hedging instruments:
Interest rate contracts	Customer derivative income	$	549	$	(2,989)	$	13,905
Foreign exchange contracts	Foreign exchange income	54,073		52,817		13,799
Credit contracts	Customer derivative income	—		(1)		118
Equity contracts - warrants	Lending fees	(97)		13		151
Commodity contracts	Customer derivative income	929		(25)		48
Net gains		$	55,454	$	49,815	$	28,021

Credit-Risk-Related Contingent Features — Certain of the Company’s over-the-counter derivative contracts contain early termination provisions that require the Company to settle any outstanding balances upon the occurrence of a specified credit-risk-related event. Such an event primarily relates to a downgrade in the credit rating of East West Bank to below investment grade. As of December 31, 2024, the aggregate fair value amounts of all derivative instruments with credit risk-related contingent features that were in a net liability position totaled $1 million, for which $1 million collateral was posted to cover these positions. In comparison, as of December 31, 2023, the aggregate fair value amounts of all derivative instruments with credit risk-related contingent features that were in a net liability position totaled $9 thousand, for which no collateral was posted to cover these positions. In the event that the credit rating of East West Bank had been downgraded to below investment grade, minimal additional collateral would have been required to be posted as of both December 31, 2024 and 2023.

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 counterparty clearing houses, 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 December 31, 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	$	523,133	$	(111,124)	$	(316,168)	$	95,841	$	(55,222)	$	40,619

			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	$	545,885	$	(111,124)	$	(1,160)	$	433,601	$	—	$	433,601



($ 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

(3)Gross cash collateral received under master netting arrangements or similar agreements were $322 million and $244 million as of December 31, 2024 and 2023, respectively. Of the gross cash collateral received, $316 million and $237 million were used to offset against derivative assets as of December 31, 2024 and 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 disclosure of such amounts.

In addition to the amounts included in the tables above, the Company has balance sheet netting related to the resale and repurchase agreements. Refer to Note 3 — Securities Purchased under Resale Agreements to the Consolidated Financial Statements in this Form 10-K for additional information. Refer to Note 2 — Fair Value Measurement and Fair Value of Financial Instruments to the Consolidated Financial Statements in this Form 10-K for fair value measurement disclosures on derivatives.