East West Bancorp (EWBC) risk factors, FY2024 10-K

Risks Related to Geopolitical Uncertainties

1. 01Unfavorable general economic, market, political or industry conditions, either domestically or internationally, may adversely affect our business, results of operations, and financial condition
2. 02We face risks associated with international operations
3. 03Natural disasters, the effects of climate change and geopolitical events beyond our control could adversely affect our business, results of operations, and financial condition

Risks Related to Financial Matters

1. 04A significant portion of our loan portfolio is secured by real estate and at a higher degree of risk from a downturn in real estate markets
2. 05Our business is subject to interest rate risk and variations in interest rates may have a material adverse effect on our financial performance
3. 06Inflation can have an adverse impact on our business and on our customers
4. 07The monetary policies of the federal government and its agencies could have a material adverse effect on our earnings
5. 08Further downgrades of the U.S. credit rating, potential automatic spending cuts or a government shutdown could negatively impact our business, results of operation and financial condition
6. 09We are subject to fluctuations in foreign currency exchange rates

Risks Related to Our Capital Resources and Liquidity

1. 10As a regulated entity, we are subject to capital requirements, and a failure to meet these standards could adversely affect our financial condition
2. 11As a holding company, we depend on dividends and distributions from the Bank for our liquidity
3. 12We are subject to liquidity risk, which could negatively affect the level or cost of our funding
4. 13Any downgrades in our credit ratings could have a material adverse effect on our liquidity, cost of funding, cash flows, business, results of operations and financial condition
5. 14The proportion of our deposit account balances that exceed FDIC insurance limits may expose us to enhanced liquidity risk

Risks Related to Credit Matters

1. 15Our allowance for credit losses may not be adequate to cover actual losses
2. 16We may be subject to increased credit risk and higher credit losses to the extent our loans are concentrated by loan type, industry segment, borrower type, or location of the borrower or collateral

Risks Related to Our Operations

1. 17A cyber-attack, information or security breach, or failure of our operational or security systems or infrastructure, or those of third-party vendors, could disrupt our business, and adversely impact our results of operations, financial condition, cash flows, and liquidity, as well as damage our reputation
2. 18Failure to keep pace with technological change could adversely affect our business. We may face risks associated with the utilization of information technology systems to support our operations effectively
3. 19We may be impacted by the actions, soundness or creditworthiness of other financial institutions, which can cause disruption within the industry and increase expenses
4. 20Our controls and procedures could fail or be circumvented
5. 21Our enterprise risk management program may not be effective at mitigating the risks to which we are subject, based upon our size, scope, and complexity
6. 22We are dependent on key personnel and the loss of one or more of those key personnel may materially and adversely affect our prospects
7. 23We face strong competition in the financial services industry, and we could lose business or suffer margin declines as a result
8. 24We have engaged in and may continue to engage in further expansion through acquisitions, which could cause disruption to our business and may dilute existing stockholders’ interests
9. 25New products and services may subject us to additional risks
10. 26Our investments in certain tax-advantaged projects may not generate returns as anticipated, which could result in an adverse impact on our results of operations

Risks Related to Regulatory, Compliance and Legal Matters

1. 27Changes in regulation may require us to change our business practices, increase our costs, limit our ability to make investments and generate revenue, or otherwise adversely affect our business operations and/or competitiveness
2. 28Changes to fiscal policies and tax legislation may adversely affect our business
3. 29Complying with the Bank Secrecy Act and other anti-money laundering and sanctions statutes and regulations can increase our compliance costs and risks
4. 30We could face material legal and reputational harm if we fail to safeguard personal information
5. 31We are subject to significant financial and reputational risk arising from lawsuits and other legal proceedings
6. 32Changes in accounting standards or changes in how the accounting standards are interpreted or applied could materially impact our financial statements
7. 33Our consolidated financial statements are based in part on assumptions and estimates which, if incorrect, could cause unexpected losses in the future
8. 34Impairment of goodwill could result in a charge against earnings and thus a reduction in stockholders’ equity
9. 35Anti-takeover provisions could negatively impact our stockholders
10. 36Managing reputational risk is important to attracting and maintaining customers, investors, and employees
11. 37Evolving expectations relating to environmental, social and governance considerations may expose us to additional costs, reputational harm, and other adverse effects on our business
12. 38The price of our common stock may be volatile or may decline