RankingBanking 25 - Flipbook - Page 7
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nomic Analysis reported in March that Califor-
Helping Customers Weather Uncertainty
nia’s income growth outpaced the U.S. at 6.5%
East West got its start serving Asian im-
year-over-year, and the state boasted a higher
migrants in the Chinatown community in Los
per capita income, at $85,518, than the national
Angeles. It grew over the decades after CEO and
figure of $72,425.
Chairman Dominic Ng began leading the bank
There’s a lot driving that growth. Silicon Valley
in 1991, expanding into San Francisco and San
forms the state’s technology hub. Most of the
Diego, and across the U.S. in New York, Boston,
fruits and nuts enjoyed by Americans — including
Atlanta, Chicago, Houston, Dallas, Seattle and
almonds, pistachios and grapes — are grown in
Las Vegas. East West also operates offices in
the Central Valley. Tourism, entertainment and
China and Singapore.
trade are important economic pillars.
But California is home and an important con-
“Our image in the press is of a state that is in
tributor to East West’s performance. Los Angeles
complete free fall,” says Christopher Thornberg,
County accounted for 44% of the bank’s office
founding partner at Beacon Economics in Los
CRE loans at the end of 2024, and other parts of
Angeles. “This is an economy whose largest prob-
the state accounted for 27%. Two-thirds of retail
lem remains a lack of workers.” Sure, population
CRE loans are in California, and it’s the same
growth has stalled in some areas of the state, and
breakdown for multifamily. “It’s a very diverse
metros such as San Francisco and Los Angeles
economy, a combination of many small businesses
have experienced declines. But other areas are
and a lot of immigrants,” says Ng. He cites the
growing.
film industry and Silicon Valley, along with the so-
There’s “lots of income growth, lots of job
growth,” Thornberg adds. “That’s an environment
called Silicon Beach tech scene in Los Angeles.
However, the Trump administration’s tariff war
where banks succeed. It’s as simple as that.” This
has already stymied supply chains and inflated
year, seven of the top 25 banks in Bank Director’s
costs in the state, leading California to file a
RankingBanking study — more than a quarter of
lawsuit in April that challenged the president’s
the list — are based in California.
authority to enact the tariffs. But East West is no
“There’s several big metro centers [and] a large
stranger to navigating the impact of tariffs on the
concentration of wealth” in the state, says Andrew
bank and its customers. The Trump administration
Terrell, a managing director at Stephens who
first imposed a range of tariffs in 2018, many of
covers West Coast banks. Commercial real estate
which covered goods from China, according to the
deals tend to be bigger. For banks in the state, that
Peterson Institute for International Economics.
creates an environment for strong profitability and
President Joe Biden kept those tariffs in place.
efficiency. Those factors alone don’t guarantee
Following his inauguration early this year, Pres-
success; several banks headquartered in the state
ident Donald Trump added to that burden, with
underperformed in the ranking, which is based on
China retaliating — tariffs imposed by both coun-
profitability, credit quality and capital adequacy.
tries hit 125% in April, according to the World
But institutions such as $76 billion East West
Economic Forum. Trump and Chinese President
Bancorp, headquartered in Pasadena, and almost
Xi Jinping resumed negotiations in June, and CBS
$3 billion West Coast Community Bancorp, fur-
News reported the two countries had agreed to
ther north in Santa Cruz, have figured out how to
a deal. That could be good news for California —
unlock growth in the California economy.
and East West. The U.S. imported $439 billion in
