MeritValue

EAST WEST BANCORP INC

EWBCdata completeness 75%17 fiscal years on file
The thesis, from the filings

EAST WEST BANCORP INC earns about 78% on invested capital, and has bought back 3% of its shares over 5 years. The applicable estimate puts fair value near $86.49 a share.Whether it’s worth owning at today’s price is the last question — and yours to answer, below.

i. The business — what you’d actually own
FigureFY 2021FY 2022FY 2023FY 2024FY 2025
Revenue$1.62B1$2.32B2$3.69B3$4.19B3$4.29B3
Net income$873M4$1.13B5$1.16B6$1.17B6$1.33B6
Operating cash flow$1.17B7$2.07B8$1.42B9$1.41B9$1.5B9
Capital expenditure$6.02M10————
Free cash flow (derived)$1.16B7————
Total debt—————
Cash & equivalents$3.91B11$3.48B12$4.61B13$5.25B14$4.19B14
Diluted shares143.1M142.5M141.9M140.0M139.1M

Superscripts are receipts. Each links to the SEC filing the number came from (full list at the bottom).

ii. Your slice — ownership made literal
If you owned
shares
Net assets behind them
$639.63
your share of equity
Profit it earned you last year
$95.25
Free cash flow it threw off
—
Debt you’d be carrying
—

10 shares is a claim on $639.63 of net worth that earned you $95.25 last year.

iii. Is this a good business?
Moat signal · return on invested capital
78% avg · 5y
FY21 49%FY22 54%FY23 97%FY24 120%FY25 70%

It earned an average 78% on invested capital over 5 years. Compare that to what it costs to fund the business.

seeing a moat in the numbers →
Management signal · capital allocation
−3% shares · 5y

Share count is down 3% over 5 years — management has been buying back stock, quietly handing owners a bigger slice.

reading capital allocation →

Signals, not verdicts — read from the filings above. Numbers don’t prove a moat; they show its footprint. You decide.

iv. What it’s worth — engine v0.1.0
DCF · Growth Exit 10Y
not applicable
only 2 years of FCF (need ≥3) — model not applicable
DCF · Growth Exit 5Y
not applicable
only 2 years of FCF (need ≥3) — model not applicable
Earnings Power Value
$86.49
assumptions (8)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • normalizedEarnings$1.16B
  • growthAssumed0.0%
Graham Number
$117.05
assumptions (1)
  • grahamMultiplier2250.0%

Different models answer different questions — which to trust when →

Sources — the receipts
  1. 10-K · period ending 2021-12-31 · accession 0001069157-24-000020 (InterestAndDividendIncomeOperating)
  2. 10-K · period ending 2022-12-31 · accession 0001069157-25-000025 (InterestAndDividendIncomeOperating)
  3. 10-K · period ending 2023-12-31 · accession 0001069157-26-000009 (InterestAndDividendIncomeOperating)
  4. 10-K · period ending 2021-12-31 · accession 0001069157-24-000020 (NetIncomeLoss)
  5. 10-K · period ending 2022-12-31 · accession 0001069157-25-000025 (NetIncomeLoss)
  6. 10-K · period ending 2023-12-31 · accession 0001069157-26-000009 (NetIncomeLoss)
  7. 10-K · period ending 2021-12-31 · accession 0001069157-24-000020 (NetCashProvidedByUsedInOperatingActivities)
  8. 10-K · period ending 2022-12-31 · accession 0001069157-25-000025 (NetCashProvidedByUsedInOperatingActivities)
  9. 10-K · period ending 2023-12-31 · accession 0001069157-26-000009 (NetCashProvidedByUsedInOperatingActivities)
  10. 10-K · period ending 2021-12-31 · accession 0001069157-22-000031 (PaymentsToAcquirePropertyPlantAndEquipment)
  11. 10-K · period ending 2021-12-31 · accession 0001069157-23-000016 (CashAndCashEquivalentsAtCarryingValue)
  12. 10-K · period ending 2022-12-31 · accession 0001069157-24-000020 (CashAndCashEquivalentsAtCarryingValue)
  13. 10-K · period ending 2023-12-31 · accession 0001069157-25-000025 (CashAndCashEquivalentsAtCarryingValue)
  14. 10-K · period ending 2024-12-31 · accession 0001069157-26-000009 (CashAndCashEquivalentsAtCarryingValue)