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Derivatives
 3 Months Ended
Mar. 31, 2026
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 may also use foreign exchange contracts to manage the foreign exchange rate risk associated with certain foreign currency-denominated assets and liabilities, the funding needs of, 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 2025 Form 10-K.

The following table presents the notional amounts and fair values of the Company’s derivatives as of March 31, 2026 and December 31, 2025. 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 $14 million and $34 million, respectively, as of March 31, 2026. 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 $16 million and $3 million, respectively, as of December 31, 2025. Total gross derivative asset and liability fair values are then adjusted to reflect the effects of legally enforceable master netting agreements and cash collateral received or paid. The resulting net derivative asset and liability fair values are included in Other assets and Accrued expenses and other liabilities, respectively, on the Consolidated Balance Sheet.
March 31, 2026December 31, 2025
Fair ValueFair Value
($ in thousands)Notional AmountAssets Liabilities Notional AmountAssets Liabilities 
Derivatives designated as hedging instruments:
Cash flow hedges:
Interest rate contracts$4,250,000 $22,611 $5,319 $4,250,000 $39,997 $139 
Derivatives not designated as hedging instruments:
Interest rate contracts$18,386,728 $245,137 $243,178 $18,987,277 $258,561 $256,731 
Commodity contracts (1)
— 146,385 122,088 — 66,022 72,158 
Foreign exchange contracts4,869,406 55,603 49,991 4,550,101 44,340 43,160 
Credit contracts (2)
348,244 16 129 303,421 25 51 
Equity contracts— 583 (3)13,046 (4)— 522 (3)13,734 (4)
Total derivatives not designated as hedging instruments$23,604,378 $447,724 $428,432 $23,840,799 $369,470 $385,834 
Gross derivative assets/liabilities$470,335 $433,751 $409,467 $385,973 
Less: Master netting agreements(111,845)(111,845)(74,138)(74,138)
Less: Cash collateral received(170,048)(17,540)(183,387)(27,502)
Net derivative assets/liabilities$188,442 $304,366 $151,942 $284,333 
(1)The notional amount of the Company’s commodity contracts totaled 19 million barrels of crude oil and 280 million units of natural gas, measured in million British thermal units (“MMBTUs”) as of March 31, 2026. In comparison, the notional amount of the Company’s commodity contracts totaled 16 million barrels of crude oil and 364 million MMBTUs of natural gas as of December 31, 2025.
(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 credit risk participation agreements (“RPAs”).
(3)The Company held warrant equity contracts in nine private companies as of both March 31, 2026 and December 31, 2025.
(4)Equity contracts classified as derivative liabilities consist of 349 thousand 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 March 31, 2026, 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 March 31, 2026, the Company expects to reclassify an estimated $2 million of after-tax net gains 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 months ended March 31, 2026 and 2025. The after-tax impact of cash flow hedges on AOCI is shown in Note 12 — Accumulated Other Comprehensive Income (Loss) to the Consolidated Financial Statements in this Form 10-Q.
Three Months Ended March 31,
($ in thousands)20262025
(Losses) gains recognized in AOCI:
Interest rate contracts$(22,382)$37,466 
(Gains) losses reclassified from AOCI into earnings:
Interest and dividend income (for cash flow hedges on loans)$(583)$7,052 

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 March 31, 2026 and December 31, 2025.
The following table presents the notional amounts and the gross fair values of interest rate and foreign exchange derivatives entered into with customers and with third-party financial institutions, which serve as economic hedges to customers’ positions, as of March 31, 2026 and December 31, 2025:
March 31, 2026December 31, 2025
Fair ValueFair Value
($ in thousands)Notional AmountAssetsLiabilitiesNotional AmountAssetsLiabilities
Customer-related positions:
Interest rate contracts:
Swaps$7,535,710 $29,626 $209,641 $7,566,889 $47,448 $206,794 
Written options1,298,056 — 3,093 1,463,110 — 1,900 
Collars and corridors340,632 53 312 444,604 311 20 
Subtotal9,174,398 29,679 213,046 9,474,603 47,759 208,714 
Foreign exchange contracts:
Forwards and spot1,322,892 21,382 9,419 1,156,203 23,661 2,831 
Swaps831,485 9,187 5,435 785,956 13,272 661 
Written options
64,561 — 2,276 63,460 — 73 
Subtotal2,218,938 30,569 17,130 2,005,619 36,933 3,565 
Total$11,393,336 $60,248 $230,176 $11,480,222 $84,692 $212,279 
Economic hedges and other:
Interest rate contracts:
Swaps$7,573,642 $212,016 $30,074 $7,604,959 $208,860 $47,682 
Purchased options1,298,056 3,130 — 1,463,110 1,922 — 
Collars and corridors340,632 312 58 444,605 20 335 
Subtotal9,212,330 215,458 30,132 9,512,674 210,802 48,017 
Foreign exchange contracts:
Forwards and spot236,106 3,863 4,712 234,278 1,602 3,498 
Swaps2,637,352 18,893 28,147 2,246,744 5,718 36,083 
Purchased options
64,561 2,278 2 63,460 87 14 
Subtotal2,938,019 25,034 32,861 2,544,482 7,407 39,595 
Total$12,150,349 $240,492 $62,993 $12,057,156 $218,209 $87,612 
The Company enters into energy commodity contracts with its customers in the oil and gas sector, which allow them to hedge against the risk of fluctuation in energy commodity prices. Offsetting contracts entered with third-party financial institutions are used as economic hedges to manage the Company’s exposure on its customer-related positions. The following table presents the notional amounts in units and the gross fair values of the commodity derivatives issued for customer-related positions and economic hedges as of March 31, 2026 and December 31, 2025:
March 31, 2026December 31, 2025
Fair ValueFair Value
($ and unit in thousands)Notional UnitsAssetsLiabilitiesNotional UnitsAssetsLiabilities
Customer-related positions:
Commodity contracts:
Crude oil:
Swaps6,244 Barrels$66,760 $2,410 4,255 Barrels$205 $28,533 
Collars3,035 Barrels49,575 — 3,747 Barrels21 13,622 
Subtotal9,279 Barrels116,335 2,410 8,002 Barrels226 42,155 
Natural gas:
Swaps89,873 MMBTUs5,014 24,534 112,599 MMBTUs5,814 18,403 
Collars51,497 MMBTUs1,078 7,068 71,945 MMBTUs1,879 6,693 
Subtotal141,370 MMBTUs6,092 31,602 184,544 MMBTUs7,693 25,096 
Total$122,427 $34,012 $7,919 $67,251 
Economic hedges:
Commodity contracts:
Crude oil:
Swaps6,244 Barrels$1,523 $53,380 4,255 Barrels$25,309 $11 
Collars3,035 Barrels— 29,529 3,747 Barrels8,724 21 
Subtotal9,279 Barrels1,523 82,909 8,002 Barrels34,033 32 
Natural gas:
Swaps88,528 MMBTUs18,314 4,325 110,506 MMBTUs18,258 3,963 
Collars50,287 MMBTUs4,121 842 68,965 MMBTUs5,812 912 
Subtotal138,815 MMBTUs22,435 5,167 179,471 MMBTUs24,070 4,875 
Total$23,958 $88,076 $58,103 $4,907 

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 $584 thousand and $590 thousand as of March 31, 2026 and December 31, 2025, respectively.
The following table presents the notional amounts and the gross fair values of RPAs sold and purchased outstanding as of March 31, 2026 and December 31, 2025:
March 31, 2026December 31, 2025
Notional Amount
Fair Value
Notional Amount
Fair Value
($ in thousands)
AssetsLiabilitiesAssetsLiabilities
RPAs — protection sold (1)
$178,620 $— $129 $133,756 $— $51 
RPAs — protection purchased
169,624 16 — 169,665 25 — 
Total RPAs$348,244 $16 $129 $303,421 $25 $51 
(1)All reference entities of the protection sold RPAs were investment grade. The weighted-average remaining maturities were 3.5 years and 2.7 years as of March 31, 2026 and December 31, 2025, respectively.

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 an investment the Company made 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 months ended March 31, 2026 and 2025:
Three Months Ended March 31,
($ in thousands)Classification on Consolidated Statement of Income20262025
Derivatives not designated as hedging instruments:
Interest rate contracts
Customer derivative income and derivative mark-to-market adjustments
$1,247 $(1,402)
Credit contracts
Customer derivative income and derivative mark-to-market adjustments
(87)10 
Commodity contracts
Customer derivative income and derivative mark-to-market adjustments
(226)(78)
Total derivative mark-to-market and credit valuation adjustments
Customer derivative income and derivative mark-to-market adjustments
934 (1,470)
Foreign exchange contractsForeign exchange income14,338 13,238 
Equity contracts - warrants
Lending and loan servicing fees
61 179 
Equity contracts - performance-based RSUOther investment income688 — 
Net derivative gains
$16,021 $11,947 

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 March 31, 2026, the aggregate fair value amounts of all derivative instruments with credit risk-related contingent features that were in a net liability position totaled $4 million, for which $4 million collateral was posted to cover these positions. In comparison, as of December 31, 2025, the aggregate fair value amounts of all derivative instruments with credit risk-related contingent features that were in a net liability position totaled $3 million, for which $3 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 minimal additional collateral as of both March 31, 2026 and December 31, 2025.
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 March 31, 2026
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$470,335 $(111,845)$(170,048)$188,442 $(30,186)$158,256 
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$433,751 $(111,845)$(17,540)$304,366 $(26,882)$277,484 
($ in thousands)As of December 31, 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$409,467 $(74,138)$(183,387)$151,942 $(42,779)$109,163 
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$385,973 $(74,138)$(27,502)$284,333 $— $284,333 
(1)Includes $6 million and $9 million of gross fair value assets with counterparties that were not subject to enforceable master netting arrangements or similar agreements as of March 31, 2026 and December 31, 2025, respectively.
(2)Includes $19 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 March 31, 2026 and December 31, 2025, respectively.
(3)Gross cash collateral received under master netting arrangements or similar agreements were $175 million and $184 million as of March 31, 2026 and December 31, 2025, respectively. Of the gross cash collateral received, $170 million and $183 million were used to offset against derivative assets as of March 31, 2026 and December 31, 2025, respectively.
(4)Gross cash collateral pledged under master netting arrangements or similar agreements were $24 million and $29 million as of March 31, 2026 and December 31, 2025, respectively. Of the gross cash collateral pledged, $18 million and $28 million were used to offset against derivative liabilities as of March 31, 2026 and December 31, 2025, 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 may have balance sheet netting related to resale agreements. Refer to Note 3 — Securities Purchased under Resale Agreements and Sold Under Repurchase 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.