How East West Bancorp has gained an edge by serving the Asian American community

Despite the heightened scrutiny around regional banks, little-known East West Bancorp has been able to pull ahead thanks to a key customer base: Asian Americans.

East West Bancorp shares have eked out a small gain in 2024, up 2%. That's a paltry advance when compared with the S&P 500, which is up 10%, but impressive considering the performance of the regional bank sector. The SPDR S&P Regional Banking ETF (KRE) has fallen 9% over the same time period. 

Since the day before Silicon Valley Bank failed in March 2023, East West has risen 10%, excluding dividends. East West currently yields 3%.

The stock is a consensus buy on the Street, per LSEG, and analysts say the Southern California bank — which recently reported record deposits — can weather a slowdown thanks to its conservative capital management. What's more, they say its leadership in the fastest-growing demographic in the U.S. bodes well for future growth. 

"East West Bancorp targets Asian Americans, so you're just less likely to switch banks if somebody literally speaks Mandarin, versus maybe another bank that doesn't," said CFRA Research analyst Alexander Yokum. "So, it's a big advantage they have just from a stickiness perspective."

"Banking is obviously very competitive. There's thousands of banks in the United States. And if you can compete off something besides price, you have an advantage," he added. In April, the analyst reiterated a strong buy rating on the stock. His 12-month price target of $105 implies more than 40% upside from Thursday's close.

Part of what's helping East West succeed with Asian Americans goes all the way back to its origins. East West Bancorp was founded in 1973 as a federal savings and loan in the Los Angeles area to service the Chinese