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Fair Value Measurement and Fair Value of Financial Instruments (Tables)

3 Months Ended

Mar. 31, 2026

Schedule of Financial Assets (Liabilities) Measured at Fair Value on a Recurring Basis

The following tables present financial assets and liabilities that are measured at fair value on a recurring basis as of March 31, 2026 and December 31, 2025:



	Assets and Liabilities Measured at Fair Value on a Recurring Basis as of March 31, 2026
($ in thousands)	Level 1		Level 2		Level 3		Total Fair Value
AFS debt securities:
U.S. Treasury securities	$	1,237,787	$	—	$	—	$	1,237,787
U.S. government agency and U.S. government-sponsored enterprise debt securities	—		255,863		—		255,863
U.S. government agency and U.S. government-sponsored enterprise mortgage-backed securities (1):
Commercial mortgage-backed securities	—		250,662		—		250,662
Residential mortgage-backed securities	—		10,844,437		—		10,844,437
Municipal securities	—		237,959		—		237,959
Non-agency mortgage-backed securities:
Commercial mortgage-backed securities	—		174,870		—		174,870
Residential mortgage-backed securities	—		373,497		—		373,497
Corporate debt securities	—		447,583		—		447,583
Foreign government bonds	—		240,395		—		240,395
Asset-backed securities	—		30,430		—		30,430

Total AFS debt securities	$	1,237,787	$	12,855,696	$	—	$	14,093,483

Affordable housing partnership, tax credit and CRA investments, net:
Equity securities	$	22,112	$	4,294	$	—	$	26,406
Total affordable housing partnership, tax credit and CRA investments, net	$	22,112	$	4,294	$	—	$	26,406

Other assets:
Equity securities	$	543	$	—	$	—	$	543
Total other assets	$	543	$	—	$	—	$	543

Derivative assets:
Interest rate contracts	$	—	$	267,748	$	—	$	267,748
Foreign exchange contracts	—		55,603		—		55,603
Credit contracts	—		16		—		16
Equity contracts	—		—		583		583
Commodity contracts	—		146,385		—		146,385
Gross derivative assets	$	—	$	469,752	$	583	$	470,335
Netting adjustments (2)	$	—	$	(281,893)	$	—	$	(281,893)
Net derivative assets	$	—	$	187,859	$	583	$	188,442

Derivative liabilities:
Interest rate contracts	$	—	$	248,497	$	—	$	248,497
Foreign exchange contracts	—		49,991		—		49,991
Credit contracts	—		129		—		129
Equity contracts (3)	—		—		13,046		13,046
Commodity contracts	—		122,088		—		122,088
Gross derivative liabilities	$	—	$	420,705	$	13,046	$	433,751
Netting adjustments (2)	$	—	$	(129,385)	$	—	$	(129,385)
Net derivative liabilities	$	—	$	291,320	$	13,046	$	304,366

Refer to table footnotes on the following page.



	Assets and Liabilities Measured at Fair Value on a Recurring Basis as of December 31, 2025
($ in thousands)	Level 1		Level 2		Level 3		Total Fair Value
AFS debt securities:
U.S. Treasury securities	$	993,913	$	—	$	—	$	993,913
U.S. government agency and U.S. government-sponsored enterprise debt securities	—		257,654		—		257,654
U.S. government agency and U.S. government-sponsored enterprise mortgage-backed securities (1):
Commercial mortgage-backed securities	—		265,338		—		265,338
Residential mortgage-backed securities	—		10,132,653		—		10,132,653
Municipal securities	—		243,102		—		243,102
Non-agency mortgage-backed securities:
Commercial mortgage-backed securities	—		190,948		—		190,948
Residential mortgage-backed securities	—		393,787		—		393,787
Corporate debt securities	—		464,981		—		464,981
Foreign government bonds	—		238,455		—		238,455
Asset-backed securities	—		31,389		—		31,389

Total AFS debt securities	$	993,913	$	12,218,307	$	—	$	13,212,220

Affordable housing partnership, tax credit and CRA investments, net:
Equity securities	$	22,098	$	4,298	$	—	$	26,396
Total affordable housing partnership, tax credit and CRA investments, net	$	22,098	$	4,298	$	—	$	26,396
Other assets:
Equity securities	$	630	$	—	$	—	$	630
Total other assets	$	630	$	—	$	—	$	630
Derivative assets:
Interest rate contracts	$	—	$	298,558	$	—	$	298,558
Foreign exchange contracts	—		44,340		—		44,340
Credit contracts	—		25		—		25
Equity contracts	—		—		522		522
Commodity contracts	—		66,022		—		66,022
Gross derivative assets	$	—	$	408,945	$	522	$	409,467
Netting adjustments (2)	$	—	$	(257,525)	$	—	$	(257,525)
Net derivative assets	$	—	$	151,420	$	522	$	151,942

Derivative liabilities:
Interest rate contracts	$	—	$	256,870	$	—	$	256,870
Foreign exchange contracts	—		43,160		—		43,160
Equity contracts (3)	—		—		13,734		13,734
Credit contracts	—		51		—		51
Commodity contracts	—		72,158		—		72,158
Gross derivative liabilities	$	—	$	372,239	$	13,734	$	385,973
Netting adjustments (2)	$	—	$	(101,640)	$	—	$	(101,640)
Net derivative liabilities	$	—	$	270,599	$	13,734	$	284,333

(1)Includes Government National Mortgage Association (“GNMA”) AFS debt securities totaling $10.3 billion and $9.6 billion of fair value as of March 31, 2026 and December 31, 2025, respectively.

(2)Represents the balance sheet netting of derivative assets and liabilities and related cash collateral under master netting agreements or similar agreements. See Note 5 — Derivatives to the Consolidated Financial Statements in this Form 10-Q for additional information.

(3)Equity contracts classified as derivative liabilities consist of performance-based restricted stock units (“RSUs”) granted as part of EWBC’s consideration in an investment.

Schedule of Reconciliation of the Beginning and Ending Balances of Equity Contracts Measured at Fair Value on a Recurring Basis using Significant Unobservable Inputs (Level 3)

The following table provides a reconciliation of the beginning and ending balances of these equity contracts for the three months ended March 31, 2026 and 2025:



	Three Months Ended March 31,
($ in thousands)	2026		2025
Derivative assets:
Equity contracts
Beginning balance	$	522	$	239

Total gains (losses) included in earnings (1)	61		(77)




Issuances (1)	—		256




Ending balance	$	583	$	418
Derivative liabilities:
Equity contracts (2)
Beginning balance	$	13,734	$	15,119
Total gains included in earnings (3)	(688)		—

Ending balance	$	13,046	$	15,119

(1)Included in Lending and loan servicing fees on the Consolidated Statement of Income.

(2)Equity contracts classified as derivative liabilities consist of performance-based RSUs granted as part of EWBC’s consideration in an investment.

(3)Included in Other investment income on the Consolidated Statement of Income.

Schedule of Quantitative Information About Significant Unobservable Inputs Used in the Valuation of level 3 Fair Value Measurements

The following table presents quantitative information about the significant unobservable inputs used in the valuation of Level 3 fair value measurements as of March 31, 2026 and December 31, 2025. The significant unobservable inputs presented in the table below are those that the Company considers significant to the fair value of the Level 3 assets. The Company considers unobservable inputs to be significant if, by their exclusion, the fair value of the Level 3 assets would be impacted by a predetermined percentage change.



($ in thousands)	Fair Value Measurements (Level 3)		Valuation Technique	Unobservable Inputs	Range of Inputs	Weighted-Average of Inputs
March 31, 2026
Derivative assets:
Equity contracts	$	583	Black-Scholes option pricing model	Equity volatility	41% — 62%	49	%	(1)
				Liquidity discount	47%	47	%
Derivative liabilities:
Equity contracts (2)	$	13,046	Internal model	Payout % based on operating revenue and measure of operating profit of investee	35%	35	%
December 31, 2025
Derivative assets:
Equity contracts	$	522	Black-Scholes option pricing model	Equity volatility	34% — 53%	40	%	(1)
				Liquidity discount	47%	47	%
Derivative liabilities:
Equity contracts (2)	$	13,734	Internal model	Payout % based on operating revenue and measure of operating profit of investee	35%	35	%

(1)Weighted-average of inputs is calculated based on the fair value of equity contracts as of March 31, 2026 and December 31, 2025.

(2)Equity contracts classified as derivative liabilities consist of performance-based RSUs granted as part of EWBC’s consideration in an investment.

The following table presents the quantitative information about the significant unobservable inputs used in the valuation of Level 3 fair value measurements that are measured on a nonrecurring basis as of March 31, 2026 and December 31, 2025:



($ in thousands)	Fair Value Measurements (Level 3)		Valuation Techniques	Unobservable Inputs	Range of Inputs	Weighted-average of Inputs
March 31, 2026

Loans held-for-investment	$	24,123	Fair value of collateral	Discount	55% — 75%	65%	(1)

	$	3,827	Fair value of property	Selling cost	8%	8%




OREO	$	2,668	Fair value of property	Selling cost	8%	8%

December 31, 2025


Loans held-for-investment	$	4,516	Fair value of collateral	Discount	75% — 100%	75%	(1)
	$	14,735	Fair value of property	Selling cost	8%	8%

Affordable housing partnership, tax credit and CRA investments, net	$	953	Individual analysis of each investment	Expected future tax benefits and distributions	NM	NM

OREO	$	13,035	Fair value of property	Selling cost	8%	8%

NM — Not meaningful.

(1)Weighted-average of inputs is based on the relative fair value of the respective assets as of March 31, 2026 and December 31, 2025.

Schedule of Carrying Amounts of Assets That Were Still Held and Had Fair Value Changes Measured on a Nonrecurring Basis

The following tables present the carrying amounts of assets that were still held and had fair value adjustments measured on a nonrecurring basis as of March 31, 2026 and December 31, 2025:



	Assets Measured at Fair Value on a Nonrecurring Basis as of March 31, 2026
($ in thousands)	Level 1		Level 2		Level 3		Fair Value Measurements
Loans held-for-investment:
Commercial:
Commercial and industrial (“C&I”)	$	—	$	—	$	24,411	$	24,411
Commercial real estate (“CRE”):
CRE	—		—		3,539		3,539











Total loans held-for-investment	$	—	$	—	$	27,950	$	27,950
Loans held-for-sale	$	—	$	7,209	$	—	$	7,209

OREO (1)	$	—	$	—	$	2,668	$	2,668



	Assets Measured at Fair Value on a Nonrecurring Basis as of December 31, 2025
($ in thousands)	Level 1		Level 2		Level 3		Fair Value Measurements
Loans held-for-investment:
Commercial:
C&I	$	—	$	—	$	5,916	$	5,916
CRE:
CRE	—		—		13,335		13,335











Total loans held-for-investment	$	—	$	—	$	19,251	$	19,251
Affordable housing partnership, tax credit and CRA investments, net	$	—	$	—	$	953	$	953
OREO (1)	$	—	$	—	$	13,035	$	13,035

(1)Represents the carrying value of OREO property that was written down subsequent to its initial classification as OREO and included in Other assets on the Consolidated Balance Sheet.

Schedule of (Decrease) Increase in Fair Value of Assets for which a Nonrecurring Fair Value Adjustment Has Been Recognized

The following table presents the change in the fair value of certain assets held at the end of the respective reporting periods, for which a nonrecurring fair value adjustment was recognized for the three months ended March 31, 2026 and 2025:



	Three Months Ended March 31,
($ in thousands)	2026		2025
Loans held-for-investment:
Commercial:
C&I	$	(12,906)	$	(3,625)
CRE:
CRE	(1,306)		(13,839)
Multifamily residential	—		(1,181)










Total loans held-for-investment	$	(14,212)	$	(18,645)
Loans held-for-sale	$	(3,792)	$	—


OREO	(92)		(4,221)
Total nonrecurring fair value losses	$	(18,096)	$	(22,866)

Schedule of the Carrying and Fair Value Estimates Per the Fair Value Hierarchy of Financial Instruments Measured on a Nonrecurring Basis

The following tables present the fair value estimates for financial instruments as of March 31, 2026 and December 31, 2025, excluding financial instruments recorded at fair value on a recurring basis as they are included in the tables presented elsewhere in this Note. The carrying amounts in the following tables are recorded on the Consolidated Balance Sheet under the indicated captions, except for accrued interest receivable, restricted equity securities, at cost, and mortgage servicing rights that are included in Other assets, and accrued interest payable which is included in Accrued expenses and other liabilities. These financial instruments are measured on an amortized cost basis on the Company’s Consolidated Balance Sheet.



	March 31, 2026
($ in thousands)	Carrying Amount		Level 1		Level 2		Level 3		Estimated Fair Value
Financial assets:
Cash and cash equivalents	$	4,438,870	$	4,438,870	$	—	$	—	$	4,438,870
Interest-bearing deposits with banks	$	10,498	$	—	$	10,498	$	—	$	10,498
Resale agreements	$	425,000	$	—	$	351,104	$	—	$	351,104
HTM debt securities	$	2,858,978	$	526,048	$	1,926,955	$	—	$	2,453,003
Restricted equity securities, at cost	$	153,697	$	—	$	153,697	$	—	$	153,697
Loans held-for-sale	$	27,585	$	—	$	27,585	$	—	$	27,585
Loans held-for-investment, net	$	57,264,875	$	—	$	—	$	55,875,553	$	55,875,553
Mortgage servicing rights	$	3,978	$	—	$	—	$	6,981	$	6,981
Accrued interest receivable	$	316,124	$	—	$	316,124	$	—	$	316,124
Financial liabilities:
Demand, checking, savings and money market deposits	$	43,508,071	$	—	$	43,508,071	$	—	$	43,508,071
Time deposits	$	25,411,484	$	—	$	25,384,802	$	—	$	25,384,802


FHLB advances	$	3,000,000	$	—	$	2,995,604	$	—	$	2,995,604
Repurchase agreements	$	494,027	$	—	$	494,004	$	—	$	494,004
Long-term debt	$	32,400	$	—	$	30,690	$	—	$	30,690
Accrued interest payable	$	54,474	$	—	$	54,009	$	—	$	54,009



	December 31, 2025
($ in thousands)	Carrying Amount		Level 1		Level 2		Level 3		Estimated Fair Value
Financial assets:
Cash and cash equivalents	$	4,188,139	$	4,188,139	$	—	$	—	$	4,188,139
Interest-bearing deposits with banks	$	16,189	$	—	$	16,189	$	—	$	16,189
Resale agreements	$	425,000	$	—	$	351,065	$	—	$	351,065
HTM debt securities	$	2,870,058	$	524,887	$	1,954,859	$	—	$	2,479,746
Restricted equity securities, at cost	$	153,484	$	—	$	153,484	$	—	$	153,484
Loans held-for-sale	$	20,976	$	—	$	20,976	$	—	$	20,976
Loans held-for-investment, net	$	56,068,399	$	—	$	—	$	54,665,865	$	54,665,865

Mortgage servicing rights	$	4,119	$	—	$	—	$	7,114	$	7,114
Accrued interest receivable	$	315,669	$	—	$	315,669	$	—	$	315,669
Financial liabilities:

Demand, checking, savings and money market deposits	$	41,797,887	$	—	$	41,797,887	$	—	$	41,797,887
Time deposits	$	25,284,814	$	—	$	25,285,076	$	—	$	25,285,076

FHLB advances	$	3,000,000	$	—	$	3,001,878	$	—	$	3,001,878

Long-term debt	$	32,320	$	—	$	32,070	$	—	$	32,070
Accrued interest payable	$	60,513	$	—	$	60,513	$	—	$	60,513

- Definition

Tabular disclosure of the fair value measurement of assets using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets) and gains or losses recognized in other comprehensive income (loss), and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issues, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs), by class of asset.

+ References + Details