XML 28 R10.htm IDEA: XBRL DOCUMENT v3.26.1
Fair Value Measurement and Fair Value of Financial Instruments
 6 Months Ended
Jun. 30, 2026
Fair Value Disclosures [Abstract]  
Fair Value Measurement and Fair Value of Financial Instruments Fair Value Measurement and Fair Value of Financial Instruments
Under applicable accounting standards, the Company measures a portion of its assets and liabilities at fair value. These assets and liabilities are predominantly recorded at fair value on a recurring basis. At times, certain assets and liabilities are measured at fair value on a nonrecurring basis; that is, they are subject to fair value adjustments only as required through the application of an accounting method such as lower of cost or fair value or write-down of individual assets. The Company categorizes its assets and liabilities into three levels based on the established fair value hierarchy and conducts a review of fair value hierarchy classifications on a quarterly basis. For more information regarding the fair value hierarchy and how the Company measures fair value, see Note 1 — Summary of Significant Accounting Policies — Significant Accounting Policies — Fair Value to the Consolidated Financial Statements in the Company’s 2025 Form 10-K.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

For additional information regarding the valuation methodologies used for the Company’s assets and liabilities measured at fair value on a recurring basis, as well as their general classification within the fair value hierarchy, see Note 2 — Fair Value Measurement and Fair Value of Financial Instruments to the Consolidated Financial Statements in the Company’s 2025 Form 10-K.
The following tables present financial assets and liabilities that are measured at fair value on a recurring basis as of June 30, 2026 and December 31, 2025:
Assets and Liabilities Measured at Fair Value on a Recurring Basis
as of June 30, 2026
($ in thousands)Level 1Level 2Level 3Total
Fair Value
AFS debt securities:
U.S. Treasury securities$1,431,341 $— $— $1,431,341 
U.S. government agency and U.S. government-sponsored enterprise debt securities— 254,400 — 254,400 
U.S. government agency and U.S. government-sponsored enterprise mortgage-backed securities (1):
Commercial mortgage-backed securities— 224,397 — 224,397 
Residential mortgage-backed securities— 11,230,828 — 11,230,828 
Municipal securities— 240,688 — 240,688 
Non-agency mortgage-backed securities:
Commercial mortgage-backed securities— 174,606 — 174,606 
Residential mortgage-backed securities— 361,635 — 361,635 
Corporate debt securities— 421,302 — 421,302 
Foreign government bonds— 242,349 — 242,349 
Total AFS debt securities$1,431,341 $13,150,205 $— $14,581,546 
Affordable housing partnership, tax credit and CRA investments, net:
Equity securities$22,174 $4,262 $— $26,436 
Total affordable housing partnership, tax credit and CRA investments, net$22,174 $4,262 $— $26,436 
Other assets:
Equity securities
$195 $— $— $195 
Total other assets$195 $— $— $195 
Derivative assets:
Interest rate contracts$— $261,527 $— $261,527 
Foreign exchange contracts— 60,269 — 60,269 
Credit contracts— 6 — 6 
Equity contracts— — 524 524 
Commodity contracts— 65,094 — 65,094 
Gross derivative assets$— $386,896 $524 $387,420 
Netting adjustments (2)
$— $(307,350)$— $(307,350)
Net derivative assets$— $79,546 $524 $80,070 
Derivative liabilities:
Interest rate contracts$— $268,367 $— $268,367 
Foreign exchange contracts— 56,384 — 56,384 
Credit contracts— 130 — 130 
Equity contracts (3)
— — 15,775 15,775 
Commodity contracts— 66,873 — 66,873 
Gross derivative liabilities$— $391,754 $15,775 $407,529 
Netting adjustments (2)
$— $(106,664)$— $(106,664)
Net derivative liabilities$— $285,090 $15,775 $300,865 
Refer to table footnotes on the following page.
Assets and Liabilities Measured at Fair Value on a Recurring Basis
as of December 31, 2025
($ in thousands)Level 1Level 2Level 3Total
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 $9.9 billion and $9.6 billion of fair value as of June 30, 2026 and December 31, 2025, respectively.
(2)Represents the balance sheet netting of derivative assets and liabilities and related cash collateral under master netting agreements or similar agreements. See Note 5 — Derivatives to the Consolidated Financial Statements in this Form 10-Q for additional information.
(3)Equity contracts classified as derivative liabilities consist of performance-based restricted stock units (“RSUs”) granted as part of EWBC’s consideration in an investment.
For the three and six months ended June 30, 2026 and 2025, Level 3 fair value measurements that were measured on a recurring basis consisted of warrant equity contracts issued by private companies and liability-classified contingently issuable shares of the Company. The following table provides a reconciliation of the beginning and ending balances of these equity contracts for the three and six months ended June 30, 2026 and 2025:
Three Months Ended June 30,Six Months Ended June 30,
($ in thousands)2026202520262025
Derivative assets:
Equity contracts
Beginning balance$583 $418 $522 $239 
Total (losses) gains included in earnings (1)
(59)(41)2 (118)
Issuances (1)
— — — 256 
Ending balance$524 $377 $524 $377 
Derivative liabilities:
Equity contracts (2)
Beginning balance$13,046 $15,119 $13,734 $15,119 
Total losses included in earnings (3)
2,729 — 2,041 — 
Ending balance$15,775 $15,119 $15,775 $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 (loss) income on the Consolidated Statement of Income.

The following table presents quantitative information about the significant unobservable inputs used in the valuation of Level 3 fair value measurements that are measured on a recurring basis as of June 30, 2026 and December 31, 2025:
($ in thousands)Fair Value Measurements (Level 3)Valuation TechniqueUnobservable InputsRange of InputsWeighted-Average of Inputs
June 30, 2026
Derivative assets:
Equity contracts$524 Black-Scholes option pricing modelEquity volatility
36% — 68%
44%
 (1)
Liquidity discount47%47%
Derivative liabilities:
Equity contracts (2)
$15,775 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 modelEquity volatility
34% — 53%
40%
 (1)
Liquidity discount47%47%
Derivative liabilities:
Equity contracts (2)
$13,734 Internal modelPayout % based on operating revenue and measure of operating profit of investee35%35%
(1)Weighted-average of inputs is calculated based on the fair value of equity contracts as of June 30, 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.
Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

Assets measured at fair value on a nonrecurring basis may include certain individually evaluated loans held-for-investment, loans held-for-sale, affordable housing partnership, tax credit and CRA investments, OREO, and other nonperforming assets. Nonrecurring fair value adjustments may result from the impairment of certain individually evaluated loans held-for-investment and affordable housing partnership, tax credit and CRA investments, from the write-downs of OREO and other nonperforming assets, or from the application of lower of cost or fair value on loans held-for-sale.

Loans Held-for-Sale — Loans held-for-investment subsequently transferred to held-for-sale are recorded at the lower of cost or fair value upon transfer. Loans held-for-sale may be measured at fair value on a nonrecurring basis when fair value is less than cost. Fair value is generally determined based on available market data for similar loans and therefore, loans held-for-sale are classified as Level 2.

For additional information regarding the valuation methodologies used for the Company’s assets and liabilities measured at fair value on a nonrecurring basis, as well as their general classification within the fair value hierarchy, see Note 2 — Fair Value Measurement and Fair Value of Financial Instruments to the Consolidated Financial Statements in the Company’s 2025 Form 10-K.

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 June 30, 2026 and December 31, 2025:
Assets Measured at Fair Value on a Nonrecurring Basis
as of June 30, 2026
($ in thousands)Level 1Level 2Level 3Fair Value Measurements
Loans held-for-investment:
Commercial:
Commercial and industrial (“C&I”)
$— $— $12,162 $12,162 
Commercial real estate (“CRE”):
CRE— — 30,740 30,740 
Total loans held-for-investment$— $— $42,902 $42,902 
Loans held-for-sale
$— $6,304 $— $6,304 
OREO (1)
$— $— $4,508 $4,508 
Assets Measured at Fair Value on a Nonrecurring Basis
as of December 31, 2025
($ in thousands)Level 1Level 2Level 3Fair 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 $13,035 
(1)Represents the carrying value of OREO property that was written down subsequent to its initial classification as OREO and included in Other assets on the Consolidated Balance Sheet.
The following table presents the change in the fair value of certain assets held at the end of the respective reporting periods, for which a nonrecurring fair value adjustment was recognized for the three and six months ended June 30, 2026 and 2025:
Three Months Ended June 30,Six Months Ended June 30,
($ in thousands)2026202520262025
Loans held-for-investment:
Commercial:
C&I$(15,834)$(11,327)$(28,740)$(13,560)
CRE:
CRE(12,094)(6,046)(13,400)(19,885)
Total loans held-for-investment$(27,928)$(17,373)$(42,140)$(33,445)
Loans held-for-sale$(905)$— $(4,697)$— 
OREO$(1,840)$— $(1,932)$— 
Total nonrecurring fair value losses
$(30,673)$(17,373)$(48,769)$(33,445)

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 June 30, 2026 and December 31, 2025:
($ in thousands)Fair Value Measurements (Level 3)Valuation TechniquesUnobservable InputsRange of Inputs
Weighted-average of Inputs
June 30, 2026
Loans held-for-investment$9,518 Fair value of collateralDiscount
65% — 93%
80%
(1)
$33,384 Fair value of propertySelling cost
8%
8%
OREO$4,508 Fair value of propertySelling cost8%8%
December 31, 2025
Loans held-for-investment$4,516 Fair value of collateralDiscount
75% — 100%
75%
(1)
$14,735 Fair value of propertySelling cost8%8%
Affordable housing partnership, tax credit and CRA investments, net$953 Individual analysis of each investmentExpected future tax benefits and distributionsNMNM
OREO$13,035 Fair value of propertySelling cost8%8%
NM — Not meaningful.
(1)Weighted-average of inputs is based on the relative fair value of the respective assets as of June 30, 2026 and December 31, 2025.
Disclosures about the Fair Value of Financial Instruments

The following tables present the fair value estimates for financial instruments as of June 30, 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.
June 30, 2026
($ in thousands)Carrying AmountLevel 1Level 2Level 3Estimated Fair Value
Financial assets:
Cash and cash equivalents$5,088,923 $5,088,923 $— $— $5,088,923 
Interest-bearing deposits with banks$12,426 $— $12,426 $— $12,426 
Resale agreements$425,000 $— $349,960 $— $349,960 
HTM debt securities$2,845,364 $528,435 $1,915,059 $— $2,443,494 
Restricted equity securities, at cost$159,013 $— $159,013 $— $159,013 
Loans held-for-sale$17,425 $— $17,425 $— $17,425 
Loans held-for-investment, net$58,121,884 $— $— $56,556,874 $56,556,874 
Mortgage servicing rights$3,736 $— $— $6,736 $6,736 
Accrued interest receivable$329,681 $— $329,681 $— $329,681 
Financial liabilities:
Demand, checking, savings and money market deposits$44,553,844 $— $44,553,844 $— $44,553,844 
Time deposits$25,538,849 $— $25,494,748 $— $25,494,748 
FHLB advances$3,000,000 $— $3,001,692 $— $3,001,692 
Repurchase agreements$956,894 $— $956,895 $— $956,895 
Long-term debt$32,482 $— $30,822 $— $30,822 
Accrued interest payable$48,042 $— $45,889 $— $45,889 
December 31, 2025
($ in thousands)Carrying AmountLevel 1Level 2Level 3Estimated 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