Cross-border banking company East West Bancorp (NASDAQ: EWBC) met Wall Street’s revenue expectations in Q2 CY2025, with sales up 10.2% year on year to $703 million. Its non-GAAP profit of $2.28 per share was 1.4% above analysts’ consensus estimates.
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East West Bank (EWBC) Q2 CY2025 Highlights:
- Net Interest Income: $617.1 million vs analyst estimates of $613.8 million (11.5% year-on-year growth, 0.5% beat)
- Net Interest Margin: 3.4% vs analyst estimates of 3.3% (8 basis point year-on-year increase, in line)
- Revenue: $703 million vs analyst estimates of $702.8 million (10.2% year-on-year growth, in line)
- Efficiency Ratio: 36.4% vs analyst estimates of 37.1% (0.7 percentage point beat)
- Adjusted EPS: $2.28 vs analyst estimates of $2.25 (1.4% beat)
- Market Capitalization: $14.94 billion
Company Overview
As the largest independent bank in the U.S. focused on bridging financial services between America and Asia, East West Bancorp (NASDAQ: EWBC) operates a commercial bank that provides personal and business banking services with a unique focus on facilitating U.S.-Asia cross-border transactions.
Sales Growth
Two primary revenue streams drive bank earnings. While net interest income, which is earned by charging higher rates on loans than paid on deposits, forms the foundation, fee-based services across banking, credit, wealth management, and trading operations provide additional income.
Over the last five years, East West Bank grew its revenue at an impressive 10.2% compounded annual growth rate. Its growth beat the average bank company and shows its offerings resonate with customers, a helpful starting point for our analysis.
We at StockStory place the most emphasis on long-term growth, but within financials, a half-decade historical view may miss recent interest rate changes, market returns, and industry trends. East West Bank’s recent performance shows its demand has slowed significantly as its annualized revenue growth of 2.4% over the last two years was well below its five-year trend. 
Note: Quarters not shown were determined to be outliers, impacted by outsized investment gains/losses that are not indicative of the recurring fundamentals of the business.
This quarter, East West Bank’s year-on-year revenue growth was 10.2%, and its $703 million of revenue was in line with Wall Street’s estimates.
Net interest income made up 86.2% of the company’s total revenue during the last five years, meaning East West Bank barely relies on non-interest income to drive its overall growth.
While banks generate revenue from multiple sources, investors view net interest income as the cornerstone - its predictable, recurring characteristics stand in sharp contrast to the volatility of non-interest income.
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Tangible Book Value Per Share (TBVPS)
The balance sheet drives banking profitability since earnings flow from the spread between borrowing and lending rates. As such, valuations for these companies concentrate on capital strength and sustainable equity accumulation potential.
This is why we consider tangible book value per share (TBVPS) the most important metric to track for banks. TBVPS represents the real, liquid net worth per share of a bank, excluding intangible assets that have debatable value upon liquidation. EPS can become murky due to acquisition impacts or accounting flexibility around loan provisions, and TBVPS resists financial engineering manipulation.
East West Bank’s TBVPS grew at an incredible 12% annual clip over the last five years. TBVPS growth has also accelerated recently, growing by 15.1% annually over the last two years from $42.38 to $56.10 per share.
Over the next 12 months, Consensus estimates call for East West Bank’s TBVPS to grow by 11.1% to $62.32, solid growth rate.
Key Takeaways from East West Bank’s Q2 Results
It was good to see East West Bank narrowly top analysts’ tangible book value per share and net interest income expectations this quarter. Overall, this was a decent quarter. The stock remained flat at $108.88 immediately after reporting.
Is East West Bank an attractive investment opportunity right now? We think that the latest quarter is only one piece of the longer-term business quality puzzle. Quality, when combined with valuation, can help determine if the stock is a buy. We cover that in our actionable full research report which you can read here, it’s free.
