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Derivatives
 6 Months Ended
Jun. 30, 2025
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivatives Derivatives
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, the funding needs, 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 of the Company’s 2024 Form 10-K.
The following table presents the notional amounts and fair values of the Company’s derivatives as of June 30, 2025 and December 31, 2024. 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 $26 million and $23 million, respectively, as of June 30, 2025. In comparison, applying variation margin payments as settlement to LCH- and CME-cleared derivative transactions resulted in reductions in the derivative asset and liability fair values of $17 million and $15 million, respectively, as of December 31, 2024. Total derivative asset and liability fair values are adjusted to reflect the effects of legally enforceable master netting agreements and cash collateral received or paid. The resulting net derivative asset and liability fair values are included in Other assets and Accrued expenses and other liabilities, respectively, on the Consolidated Balance Sheet.
June 30, 2025December 31, 2024
Fair ValueFair Value
($ in thousands)Notional AmountAssets Liabilities Notional AmountAssets Liabilities 
Derivatives designated as hedging instruments:
Cash flow hedges:
Interest rate contracts$4,250,000 $41,220 $3,131 $5,250,000 $5,647 $35,211 
Total derivatives designated as hedging instruments$4,250,000 $41,220 $3,131 $5,250,000 $5,647 $35,211 
Derivatives not designated as hedging instruments:
Interest rate contracts$18,059,774 $291,498 $291,011 $17,005,381 $379,664 $378,961 
Commodity contracts (1)
— 66,137 63,992 — 48,499 45,328 
Foreign exchange contracts4,821,785 68,807 63,162 5,201,460 89,083 71,254 
Credit contracts (2)
210,170 17 31 168,999 1 12 
Equity contracts— 377 (3)15,119 (4)— 239 (3)15,119 (4)
Total derivatives not designated as hedging instruments$23,091,729 $426,836 $433,315 $22,375,840 $517,486 $510,674 
Gross derivative assets/liabilities$468,056 $436,446 $523,133 $545,885 
Less: Master netting agreements(106,741)(106,741)(111,124)(111,124)
Less: Cash collateral received(206,591)(34,526)(316,168)(1,160)
Net derivative assets/liabilities$154,724 $295,179 $95,841 $433,601 
(1)The notional amount of the Company’s commodity contracts totaled 20 million barrels of crude oil and 393 million units of natural gas, measured in million British thermal units (“MMBTUs”) as of June 30, 2025. In comparison, the notional amount of the Company’s commodity contracts totaled 21 million barrels of crude oil and 407 million MMBTUs of natural gas as of December 31, 2024.
(2)The notional amount for the credit contracts reflects the Company’s pro-rata share of the notional amount in the underlying derivative instruments in RPAs.
(3)The Company held warrant equity contracts in nine and eight private companies as of June 30, 2025 and December 31, 2024, respectively.
(4)Equity contracts classified as derivative liabilities consist of 349,138 performance-based RSUs granted as part of EWBC’s consideration in an investment.
Derivatives Designated as Hedging Instruments

Cash Flow Hedges — The Company uses interest rate swaps and collars to hedge the variability in the interest amount received on certain floating-rate commercial loans due to changes in the contractually specified interest rates. As of June 30, 2025, interest rate contracts in notional amounts of $4.3 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 are recorded within the same income statement line item as the hedged cash flows. Considering the interest rates, yield curve and notional amount as of June 30, 2025, the Company expects to reclassify an estimated $3 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 three and six months ended June 30, 2025 and 2024. The after-tax impact of cash flow hedges on AOCI is shown in Note 13 — 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)2025202420252024
Gains (losses) recognized in AOCI:
Interest rate contracts$18,728 $(25,095)$56,194 $(115,471)
Losses reclassified from AOCI into earnings:
Interest and dividend income (for cash flow hedges on loans)$5,531 $24,594 $12,583 $49,199 

Net Investment Hedges — The Company entered 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 Chinese Renminbi (“RMB”). There was no active net investment hedge during the three and six months ended June 30, 2025. The following table presents the pre-tax gains recognized in AOCI on net investment hedges for the three and six months ended June 30, 2025 and 2024:
Three Months Ended June 30,Six Months Ended June 30,
($ in thousands)2025202420252024
Gains recognized in AOCI$— $— $— $586 

Derivatives Not Designated as Hedging Instruments

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, as well as to meet its funding needs in certain foreign currencies. A majority of the foreign exchange contracts had original maturities of one year or less as of both June 30, 2025 and December 31, 2024.
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, 2025 and December 31, 2024:
June 30, 2025December 31, 2024
Fair ValueFair Value
($ in thousands)Notional AmountAssetsLiabilitiesNotional AmountAssetsLiabilities
Customer-related positions:
Interest rate contracts:
Swaps$7,198,709 $44,091 $242,575 $6,854,372 $11,828 $361,256 
Written options1,588,665 — 3,215 1,458,428 — 4,953 
Collars and corridors242,513 251 204 181,039 80 440 
Subtotal9,029,887 44,342 245,994 8,493,839 11,908 366,649 
Foreign exchange contracts:
Forwards and spot940,567 26,530 8,208 996,486 11,693 24,201 
Swaps1,132,229 31,015 875 1,504,469 16,117 25,366 
Written options
165,356 — 171 — — — 
Subtotal2,238,152 57,545 9,254 2,500,955 27,810 49,567 
Total$11,268,039 $101,887 $255,248 $10,994,794 $39,718 $416,216 
Economic hedges and other:
Interest rate contracts:
Swaps$7,198,709 $243,716 $44,759 $6,872,075 $362,323 $12,228 
Purchased options1,588,665 3,236 — 1,458,428 4,990 — 
Collars and corridors242,513 204 258 181,039 443 84 
Subtotal9,029,887 247,156 45,017 8,511,542 367,756 12,312 
Foreign exchange contracts:
Forwards and spot171,019 1,759 3,306 86,750 2,318 1,738 
Swaps2,247,258 9,324 50,594 2,613,755 58,955 19,949 
Purchased options
165,356 179 8 — — — 
Subtotal2,583,633 11,262 53,908 2,700,505 61,273 21,687 
Total$11,613,520 $258,418 $98,925 $11,212,047 $429,029 $33,999 
The Company enters into energy commodity contracts with its customers in the oil and gas sector, which allow them to hedge against the risk of fluctuation in energy commodity prices. Offsetting contracts entered with third-party financial institutions are used as economic hedges to manage the Company’s exposure on its customer-related positions. The following table presents the notional amounts in units and the gross fair values of the commodity derivatives issued for customer-related positions and economic hedges as of June 30, 2025 and December 31, 2024:
June 30, 2025December 31, 2024
Fair ValueFair Value
($ and unit in thousands)Notional UnitsAssetsLiabilitiesNotional UnitsAssetsLiabilities
Customer-related positions:
Commodity contracts:
Crude oil:
Swaps5,230 Barrels$396 $23,508 4,830 Barrels$4,682 $6,874 
Collars4,766 Barrels283 13,946 5,477 Barrels1,604 3,362 
Subtotal9,996 Barrels679 37,454 10,307 Barrels6,286 10,236 
Natural gas:
Swaps117,990 MMBTUs23,227 5,712 141,736 MMBTUs13,095 17,708 
Collars80,566 MMBTUs16,877 2,972 62,045 MMBTUs6,061 4,556 
Written options1,234 MMBTUs217 — 1,234 MMBTUs167 — 
Subtotal199,790 MMBTUs40,321 8,684 205,015 MMBTUs19,323 22,264 
Total$41,000 $46,138 $25,609 $32,500 
Economic hedges:
Commodity contracts:
Crude oil:
Swaps5,230 Barrels$15,459 $265 4,830 Barrels$4,479 $3,893 
Collars4,766 Barrels3,027 — 5,477 Barrels1,547 76 
Subtotal9,996 Barrels18,486 265 10,307 Barrels6,026 3,969 
Natural gas:
Swaps113,333 MMBTUs4,432 7,419 139,136 MMBTUs13,323 5,056 
Collars78,816 MMBTUs2,219 9,968 61,341 MMBTUs3,541 3,650 
Purchased options1,234 MMBTUs— 202 1,234 MMBTUs— 153 
Subtotal193,383 MMBTUs6,651 17,589 201,711 MMBTUs16,864 8,859 
Total$25,137 $17,854 $22,890 $12,828 

Credit Contracts — The Company periodically enters into credit RPAs with institutional counterparties to manage the credit exposure of the interest rate contracts associated with syndicated 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, which 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 in the credit protection sold RPAs would be $534 thousand and $170 thousand as of June 30, 2025 and December 31, 2024, respectively.
The following table presents the notional amounts and the gross fair values of RPAs sold and purchased outstanding as of June 30, 2025 and December 31, 2024:
June 30, 2025December 31, 2024
Notional Amount
Fair Value
Notional Amount
Fair Value
($ in thousands)
AssetsLiabilitiesAssetsLiabilities
RPAs — protection sold (1)
$133,634 $— $31 $133,174 $— $12 
RPAs — protection purchased
76,536 17 — 35,825 1 — 
Total RPAs$210,170 $17 $31 $168,999 $1 $12 
(1)All reference entities of the protection sold RPAs were investment grade. The weighted-average remaining maturities were 1.6 years as of both June 30, 2025 and December 31, 2024.

Equity Contracts — As part of the loan origination process, the Company may obtain warrants to purchase the preferred and/or common stock of its 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 an investee 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 the investee 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 to the Consolidated Financial Statements in this Form 10-Q.

The following table presents the net gains (losses) due to fair value changes that are 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, 2025 and 2024:
Three Months Ended June 30,Six Months Ended June 30,
($ in thousands)Classification on Consolidated Statement of Income2025202420252024
Derivatives not designated as hedging instruments:
Interest rate contracts
Customer derivative (losses) income
$(1,907)$1,099 $(3,309)$1,583 
Foreign exchange contractsForeign exchange income13,787 14,349 27,025 27,129 
Credit contracts
Customer derivative (losses) income
(13)2 (3)(3)
Equity contracts - warrants
Lending and loan servicing fees
(41)(90)138 (96)
Commodity contracts
Customer derivative income
476 433 398 567 
Net gains$12,302 $15,793 $24,249 $29,180 

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 of the credit rating of East West Bank to below investment grade. As of June 30, 2025, the aggregate fair value amounts of all derivative instruments with credit risk-related contingent features that were in a net liability position totaled $9 million, for which $7 million collateral was posted to cover these positions. In comparison, 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 the event that the credit rating of East West Bank had been downgraded to below investment grade, the Company would have been required to post $2 million and minimal additional collateral as of June 30, 2025 and December 31, 2024, respectively.
Offsetting of Derivatives

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 June 30, 2025
Gross Amounts Offset on the Consolidated Balance Sheet Net Amounts Presented on the Consolidated Balance SheetGross 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$468,056 $(106,741)$(206,591)$154,724 $(32,161)$122,563 
Gross Amounts Offset on the Consolidated Balance Sheet Net Amounts Presented on the Consolidated Balance SheetGross 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$436,446 $(106,741)$(34,526)$295,179 $— $295,179 
($ in thousands)As of December 31, 2024
Gross Amounts Offset on the Consolidated Balance Sheet Net Amounts Presented on the Consolidated Balance SheetGross 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 SheetNet Amounts Presented on the Consolidated Balance SheetGross 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 
(1)Includes $20 million and $4 million of gross fair value assets with counterparties that were not subject to enforceable master netting arrangements or similar agreements as of June 30, 2025 and December 31, 2024, respectively.
(2)Includes $19 million and $27 million of gross fair value liabilities with counterparties that were not subject to enforceable master netting arrangements or similar agreements as of June 30, 2025 and December 31, 2024, respectively.
(3)Gross cash collateral received under master netting arrangements or similar agreements was $213 million and $322 million as of June 30, 2025 and December 31, 2024, respectively. Of the gross cash collateral received, $207 million and $316 million were used to offset derivative assets as of June 30, 2025 and December 31, 2024, respectively.
(4)Gross cash collateral pledged under master netting arrangements or similar agreements was $38 million and $1 million as of June 30, 2025 and December 31, 2024, respectively. Of the gross cash collateral pledged, $35 million and $1 million were used to offset derivative liabilities as of June 30, 2025 and December 31, 2024, 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.

In addition to the amounts included in the tables above, the Company has balance sheet netting related to resale agreements. Refer to Note 3 — Securities Purchased under Resale Agreements to the Consolidated Financial Statements in this Form 10-Q 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-Q for fair value measurement disclosures on derivatives.