East West Bancorp shares surge on record $1.3B annual profit
California regional bank beats earnings estimates and hikes dividend 33% after delivering strongest annual performance in company history
East West Bancorp reported its strongest annual performance in company history, delivering record net income of $1.3 billion for 2025 and raising its quarterly dividend by 33% as the California-based lender continues to outperform regional banking peers.
The Pasadena-based bank posted fourth-quarter diluted earnings per share of $2.52, beating analyst estimates of $2.37, while revenue reached $758.3 million compared with projections of $725.9 million. Full-year earnings per share climbed 14% to $9.52, capping what chief executive officer Dominic Ng described as a "record year" for the institution.
The board of directors approved a dividend increase to $0.80 per share, up from $0.60 previously, marking the third consecutive year of payout growth. The increase lifts the annual dividend to $3.20 per share, representing a forward yield of approximately 2.8% at current trading levels.
Credit quality metrics showed marked improvement, with net charge-offs declining to 0.08% of average loans from 0.13% in the prior year, indicating strong loan performance amid broader economic uncertainty. The bank also reported robust deposit growth, though specific figures were not disclosed in the earnings release.
According to analyst estimates compiled ahead of the announcement, East West had been projected to report earnings per share of $2.48 to $2.49 for the fourth quarter, with revenue expectations around $748.4 million. The actual results surpassed those forecasts on both metrics.
The performance solidifies East West's position as one of the most profitable regional banks in the United States, with a market capitalization of approximately $15.4 billion. Shares of the bank, which trade on the NASDAQ under ticker EWBC, currently sit at $115.30 and have gained more than 70% over the past year.
Analysts have maintained generally positive outlooks on the stock. Deutsche Bank initiated coverage in December 2025 with a "buy" rating and $133 price target, while TD Cowen reaffirmed its buy rating earlier this month. The consensus analyst price target stands at $130.69, representing roughly 13% upside from current levels.
East West specializes in serving both U.S. and Chinese markets, leveraging its expertise in cross-border banking to capitalize on growing economic ties between the two regions. The bank operates more than 120 locations across the United States and Greater China, with particular strength in commercial lending and trade finance.
The strong earnings come at a time when regional banks face pressure from higher interest rates and increased competition from larger institutions. East West's ability to grow earnings while maintaining conservative credit standards has differentiated it from peers that have struggled with loan quality concerns in recent quarters.
Looking ahead to 2026, Zacks Research recently increased its first-quarter EPS estimate to $2.39 and projects full-year earnings of $9.91 per share, suggesting analysts expect continued growth momentum despite potential macroeconomic headwinds.
The bank's focus on the Chinese-American business community and trade relationships between the U.S. and China provides a niche that has proved resilient even during periods of geopolitical tension between the two economic powers. That specialized focus has helped East West maintain stable deposit funding and sustain net interest margins that compare favorably to regional bank averages.
Investors will be watching for management's guidance on 2026 when the company hosts its conference call to discuss the results, particularly any commentary on loan demand, deposit flows, and the impact of potential Federal Reserve rate changes throughout the year.