East West Bancorp, Inc.
Thesis
East West Bank (EWBC) is positioned as a relationship bank with a strong track record of financial performance and a diversified loan portfolio. The bank's expertise in facilitating business between Chinese and American markets, along with its asset sensitivity to rising interest rates, makes it an attractive investment. Despite facing regulatory challenges, these issues are viewed as transitory, and the bank's long-term growth potential remains strong.
Did it work?
The long thesis on EWBC has clearly played out: over ~9.7 years (well beyond the 'long-term' horizon the thesis implied), the stock returned +158.8% (~10% annualized price appreciation, before dividends). The thesis dynamics also held — the bank sustained strong financial performance, the regulatory issues proved transitory as argued, and its asset-sensitive balance sheet benefited as rates rose. With most of the stated horizon elapsed and a strongly positive return in the stated direction, this is a decisive success.