Regulatory Requirements and Matters

12 Months Ended

Dec. 31, 2024

Banking and Thrift, Interest [Abstract]

Regulatory Requirements and Matters

Regulatory Requirements and Matters

The Company and the Bank are subject to regulatory capital adequacy requirements administered by the respective federal banking agencies that are based largely under the Basel III Capital Rules. As standardized approaches institutions, the Basel III Capital Rules require that banking organizations, such as the Company and the Bank, to maintain a minimum Common Equity Tier 1 (“CET1”) capital ratio of at least 4.5%, a Tier 1 capital ratio of at least 6.0%, a total capital ratio of at least 8.0%, and a Tier 1 leverage ratio of a least 4.0% to be considered adequately capitalized. Failure to meet the minimum capital requirements can result in certain mandatory actions and possibly additional discretionary actions by the regulators that, if undertaken, could have a direct material effect on the Company’s Consolidated Financial Statements. The Company and the Bank are also subject to maintaining a capital conservation buffer of 2.5% above the minimum risk-based capital ratios under the Basel III Capital Rules. Banking institutions with a ratio of CET1 to risk-weighted assets above the minimum but which does not exceed the capital conservation buffer will face constraints on dividends, share repurchases and executive compensation based on the amount of the shortfall.

The Federal Deposit Insurance Corporation Improvement Act of 1991 requires that the federal regulatory agencies adopt regulations defining capital categories for banks: well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized and critically undercapitalized. Under the agencies’ Prompt Corrective Action regulations, failure of a bank to be well capitalized results in an escalating series of adverse regulatory consequences.

As of both December 31, 2024 and 2023, the Company and the Bank were both categorized as well capitalized based on applicable U.S. regulatory capital ratio requirements in accordance with Basel III standardized approaches, as set forth in the table below. The Company believes that no changes in conditions or events have occurred since December 31, 2024, which would result in changes that would cause the Company or the Bank to fall below the well capitalized level. The following table presents the regulatory capital information of the Company and the Bank as of December 31, 2024 and 2023:

	Basel III
	December 31, 2024 (1)				December 31, 2023 (1)
($ in thousands)	Amount		Ratio		Amount		Ratio		Minimum Regulatory Requirements		Minimum Regulatory Requirements including Capital Conservation Buffer (3)		Well-Capitalized Requirement
Total capital (to risk-weighted assets)
Company	$	8,561,797	15.6	%	$	7,919,407	14.8	%	8.0	%	10.5	%	10.0	%
East West Bank	$	8,053,389	14.7	%	$	7,363,575	13.8	%	8.0	%	10.5	%	10.0	%
Tier 1 capital (to risk-weighted assets)
Company	$	7,839,816	14.3	%	$	7,140,778	13.3	%	6.0	%	8.5	%	6.0	%
East West Bank	$	7,367,996	13.4	%	$	6,732,946	12.6	%	6.0	%	8.5	%	8.0	%
CET1 capital (to risk-weighted assets)
Company (2)	$	7,839,816	14.3	%	$	7,140,778	13.3	%	4.5	%	7.0	%	N/A
East West Bank	$	7,367,996	13.4	%	$	6,732,946	12.6	%	4.5	%	7.0	%	6.5	%
Tier 1 leverage capital (to adjusted quarterly average assets)
Company (2)	$	7,839,816	10.4	%	$	7,140,778	10.2	%	4.0	%	4.0	%	N/A
East West Bank	$	7,367,996	9.8	%	$	6,732,946	9.6	%	4.0	%	4.0	%	5.0	%

N/A — Not applicable.

(1)Reflected a delay of the estimated impact of CECL on regulatory capital in accordance with regulatory capital rules.

(2)The well-capitalized requirements for CET1 capital and Tier 1 leverage capital apply only to the Bank since there is no CET1 capital ratio or Tier 1 leverage capital ratio component in the definition of a well-capitalized bank holding company.

(3)Includes a 2.5% capital conservation buffer requirement above the minimum risk-based capital ratios.