Overview                                                                      57
      Selected Financial Data                                                       59
      Financial Review                                                              60
      Results of Operations                                                         61
                              Net Interest Income                                   61
                              Noninterest Income                                    65
                              Noninterest Expense                                   67
                              Income Taxes                                          67
                              Operating Segment Results                             68
      Balance Sheet Analysis                                                        72
                              Debt Securities                                       72
                              Loan Portfolio                                        75
                              Foreign Outstandings                                  81
                              Capital                                               82
                              Deposits and Other Sources of Funds                   82
                              Regulatory Capital and Ratios                         83
      Other Matters                                                                 84
      Off-Balance Sheet Arrangements                                                85
      Risk Management                                                               86
                              Credit Risk Management                                86
                              Liquidity Risk Management                             96
                              Market Risk Management                                98
      Critical Accounting Policies and Estimates                                    104
      Reconciliation     of GAAP     to     Non-GAAP Financial Measures             104
      Forward-Looking Statements                                                    106


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The following discussion provides information on the results of operations, financial condition, liquidity and capital resources of East West Bancorp, Inc.
(referred to herein on an unconsolidated basis as “East West” and on a consolidated basis by the “Company”, “we” or “EWBC”), and its subsidiaries, including its banking subsidiary, East West Bank and its subsidiaries (hereinafter referred to as “East West Bank“or the” Bank “). This information is intended to facilitate an understanding and assessment of material changes and trends relating to the results of operations and the financial condition of the Company. This discussion and analysis should be read in conjunction with consolidated financial statements and accompanying notes presented elsewhere in this report, and the company’s annual report on Form 10-K for the year ended
December 31, 2020, deposited with United States (“WE”) Security and Trade Commission (“SEC”) on February 26, 2021 (the “10-K Company Form 2020”).

Company presentation

East West is a bank holding company incorporated in Delaware on Aug 26, 1998
and is registered under the Bank Holding Company Act. The Company started its activities on December 30, 1998 when, following a reorganization, it acquired all the voting shares of the Bank, which became its main asset. The Bank is an independent commercial bank headquartered in California which focuses on the financial services needs of the Asian-American community. Across more than 120 locations in the we and China, the Company provides a full range of consumer and business products and services in the following business segments: Personal and Commercial Banking and Commercial Banking, with the remainder recorded in Other. The main activity of the Company is to lend and accept deposits from businesses and individuals. The main source of income is net interest income, which comes primarily from the difference between interest earned on loans and debt securities and interest paid on deposits and other sources of finance. From June 30, 2021, the Company had $ 59.85 billion in assets and approximately 3,200 full-time equivalent employees. For more information on the products and services provided by the Bank, see Section 1. Business – Banking Services of the Company’s Form 10-K 2020.

Business strategy

We are committed to increasing long-term shareholder value by increasing loans, deposits and income, improving profitability and investing for the future, while managing risk, expense and capital. Our business model is built on customer loyalty and engagement, understanding our customers’ financial goals and meeting their financial needs through our various products and services. The Company’s approach focuses on finding and deepening client relationships that meet our risk / return parameters. This guides our decision-making in all aspects of our operations: the products we develop, the expertise we cultivate, and the infrastructure we build to help our clients do business. We expect our relationship-driven business model to continue to drive organic growth and expand our targeted customer base. We continually invest in technology to improve the customer experience, strengthen critical business infrastructure, and streamline core processes, while appropriately managing operating expenses. Our risk management activities aim to ensure that the Company identifies and manages risks in order to maintain safety and soundness while maximizing profitability.

Coronavirus disease 2019 Global pandemic

Throughout the 2019 Coronavirus Disease (“COVID-19”) pandemic, the Company has focused on serving its customers and communities and maintaining the well-being of its employees. The Company has been and may continue to be affected by the pandemic. As COVID-19 cases began to decline in the first half of 2021, the spread of new, more contagious variants has had an impact on the scale and duration of this health crisis. Ongoing efforts to contain the virus and immunization progress, along with the possibility of further government stimulus, could accelerate macroeconomic recovery. We do not know and cannot quantify all the specific impacts, and the extent to which the COVID-19 pandemic could adversely affect our business, financial condition and operating results, regulatory capital and liquidity ratios. in 2021.

On March 11, 2021, President Biden signed the American Rescue Plan Act of 2021 (“ARPA”) to provide additional relief to individuals and businesses affected by the COVID-19 pandemic, including additional funding for the Paycheck Protection Program (“PPP”). The law on the extension of PPP of 2021, promulgated on March 30, 2021, extended the PPP by May 31, 2021. The Company participated in the PPP. From June 30, 2021, the Company had approximately 6,200 PPP loans outstanding with balances totaling $ 1.43 billion, which were recorded in the commercial and industrial portfolio (“C&I”). During the second quarter and the first half of 2021, the Company financed 448 new PPP loans totaling $ 68.3 million and 5,523 new PPP loans totaling $ 896.5 million, respectively. During the first half of 2021, the Company submitted and received Small business management (“SBA”) approval for the delivery of approximately 5,000 PPP loans, totaling $ 1.00 billion.


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The Company also participated in the Board of Governors of the Federal Reserve System (the “Federal Reserve”) Main Street Lending Program (“MSLP”) and funded
$ 233.6 million in MSLP loans from December 31, 2020. The related Main Street
ad hoc vehicle purchased stakes in these loans amounting to
$ 223.7 million or 95% of the total amount of MSLP loans financed in June 30, 2021. The MSLP was terminated on January 8, 2021.

For more information on PPP and others we government loan modification facilities, programs and relief, including as established by the Coronavirus Assistance, Relief and Economic Security Act (“CARES Act”), see Overview section – Global Coronavirus Disease 2019 Pandemic in Company Form 10-K 2020.

In response to the pandemic, the Company has implemented protocols and processes to execute its business continuity plans to protect its employees and support its customers. As state and local governments relaxed restrictions on temporary business closures, we reopened more branches and actively planned our we– business associates to return to the office. For more information on our response to the COVID-19 pandemic, see the Overview – 2019 Global Coronavirus Disease Pandemic section in the Company’s 2020 Form 10-K.

For more information, see section 2. Management’s Discussion and Analysis and Analysis of Financial Position and Results of Operations (“MD&A”) – Risk Management – Credit Risk Management and – Liquidity Risk Management, and – Balance sheet analysis – Regulatory capital and the ratios in this quarterly report on Form 10-Q (“this Form 10-Q”). A more in-depth discussion of the potential impacts on our business from the COVID-19 pandemic is provided in Section 1A – Risk Factors of the Company’s 2020 Form 10-K.


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