EWBC Q3 Earnings Top on Higher NII & Non-Interest Income, Stock Up

Shares of East West Bancorp, Inc. EWBC rose 1.8% in yesterday’s after-market trading session on better-than-expected quarterly results. Its third-quarter 2025 adjusted earnings per share (EPS) of $2.62 beat the Zacks Consensus Estimate of $2.35. Moreover, the bottom line increased 25.4% from the prior-year quarter’s level.The results were primarily aided by an increase in net interest income (“NII”) and non-interest income alongside lower provisions. Also, loan and deposit balances increased sequentially in the quarter. However, higher non-interest expenses acted as a spoilsport.The quarterly results excluded certain notable items. After considering those, net income available to common shareholders was $368.4 million or $2.65 per share, up from $299.2 million or $2.14 in the prior-year quarter.EWBC’s Revenues & Expenses IncreaseQuarterly net revenues were $778 million, up 18.4% year over year. Moreover, the top line beat the Zacks Consensus Estimate of $723.8 million.NII amounted to $677.5 million, which increased 18.3% year over year. Further, net interest margin (“NIM”) expanded 29 basis points (bps) to 3.53%. We expected NII and NIM to be $625 million and 3.32%, respectively.Total non-interest income was $100.5 million, up 19.1%. An increase in all components, except other investment income and lower gains on available-for-sale debt securities, drove the improvement. We estimated non-interest income to be $89.6 million.Non-interest expenses totaled $276.9 million, up 22.6% from the prior-year quarter’s level. The rise was due to an increase in all components except occupancy and equipment expense, deposit account expense, deposit insurance premiums and regulatory assessments charges. Our estimate for the same was $253.1 million.The efficiency ratio was 35.51%, up from 34.34% in the prior-year quarter. A rise in the efficiency ratio indicates a deterioration in profitability.As of Sept. 30, 2025, net loans held for investment (“HFI”) were $55 billion, reflecting a 1.4% rise sequentially. Further, total deposits rose 2.4% to $66.6 billion.East West Bancorp Credit Quality: A Mixed BagAnnualized quarterly net charge-offs were 0.13% of average loans HFI, down 9 bps from the prior-year quarter’s level. The provision for credit losses was $36 million, down 14.3% from the prior-year quarter’s level. Our estimate for the same was $51.8 million.As of Sept. 30, 2025, non-performing assets amounted to $200.7 million, up 2.7% year over year.EWBC’s Capital & Profitability Ratios ImproveAs of Sept. 30, 2025, the common equity Tier 1 capital ratio was 14.83, up from 14.09 as of Sept. 30, 2024. The total risk-based capital ratio was 16.15, up from 15.39 a year ago.At the end of the third quarter, the return on average assets was 1.84%, up from 1.62% as of Sept. 30, 2024. Return on average tangible equity was 18.48%, up from 17.08%.East West Bancorp’s Share Repurchase UpdateIn the reported quarter, East West Bancorp repurchased roughly 258 thousand shares for $25 million. As of Sept. 30, 2025, $216 million of authorization remained available for repurchase.Our View on EWBCEast West Bancorp is well-poised for organic growth with decent loan improvement and solid deposit balances, relatively higher interest rates and diversified fee income streams. However, a rise in expenses and a weak asset quality amid a tough operating backdrop are likely to hurt the bottom line.East West Bancorp, Inc. Price, Consensus and EPS Surprise East West Bancorp, Inc. price-consensus-eps-surprise-chart | East West Bancorp, Inc. QuoteCurrently, EWBC carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Performance of Other BanksZions Bancorporation’s ZION third-quarter 2025 adjusted EPS of $1.54 beat the Zacks Consensus Estimate of $1.40. Moreover, the bottom line surged 12.4% from the year-ago quarter.The results were primarily aided by higher NII and non-interest income. Additionally, a higher deposit balance was a positive. However, a rise in adjusted non-interest expenses and provisions alongside a decline in loans was a major headwind for ZION.F.N.B. Corporation’s FNB third-quarter 2025 adjusted earnings of 41 cents per share outpaced the Zacks Consensus Estimate of 37 cents. Also, the bottom line compared favorably with earnings of 34 cents in the prior-year quarter.FNB’s results benefited from growth in NII and non-interest income. Higher loans and deposits were the other positives. However, higher provisions and adjusted expenses were the undermining factors.Beyond Nvidia: AI's Second Wave Is HereThe AI revolution has already minted millionaires. But the stocks everyone knows about aren't likely to keep delivering the biggest profits. Little-known AI firms tackling the world's biggest problems may be more lucrative in the coming months and years.See "2nd Wave" AI stocks now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Zions Bancorporation, N.A. (ZION): Free Stock Analysis Report F.N.B. Corporation (FNB): Free Stock Analysis Report East West Bancorp, Inc. (EWBC): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks