EWBC - Earnings call transcript Q3 2017

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Operator

Good morning and welcome to the East West Bancorp Third Quarter 2017 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today’s presentation there will be an opportunity to ask questions. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Julianna Balicka, Director of Strategy and Corporate Development. ahead. go Please

Julianna Balicka

on Good Greg us course Carrie. would Chief West to thank everyone, Operating and Irene With you, for Dominic and the performance today provision events meaning Thank number our Officer; our actual the call, may the Ng, Company make review morning, Officer. President during Reform the Financial or other like joining Chairman me XXXX. to regarding Safe of due may of results the that to third Executive statements East our projections Securities conference statements Litigation differ financial uncertainties. for We call the or are Act you Officer; you, Chief quarter caution materially and Harbor this Guyett, risks results Oh, of Private Bancorp of Chief of a of and and the within of of from management the forward-looking forward-looking XXXX. financial future the These

a could on results, the affect risk our Commission, the factors Form and including December Report for ended more XXXX. the XX, that our filings Exchange XX-K operating refer to Annual please of year Company's detailed For the with Securities description

measures. on addition, quarter refer non-GAAP to to of In earnings reconciliation this our release numbers of some adjusted the to referenced GAAP third pertain call numbers. Please for the

is available site. of course we Relations a part call, will deck this as During that of webcast referencing the the and be the Investors on slide

recorded As Relations formats also our be a will available and website. replay being on reminder, call in Investor is today's

questions into will over turn queue. ask after and session Thank you. then set call question-and-answer back remarks have the we will and that the Dominic. your you limit two prepared for to I now We the

Dominic Ng

joining you, in $XXX X. on our Good the you, summary I earnings prior XX% XXXX and strong West with up call. by Julianna. revenues share earned quality for quarter. with loan earnings million indeed discussion East performance $X.XX, for and results up quarter. asset great Slide will a everyone, number With and begin morning, quarter-over-quarter posted third along per of us the our a quarter earnings, steady thank growth was Thank it of also quarter, from XX% by origination third

a the asset the and operate underlying XX grew XX% income increased between geographic excellent, customers, that XX% X% we and of our in. of points to bridge a ratio basis assets quarter-over-quarter, For I quarter. net that declined record in as analyzed we X our the third was value to the reflection loans the year-after-year testament solid $XXX quarter-after-quarter, quarter by for a the charge-off growth interest in of believe third strength by And points East quarter-over-quarter our by to the analyzed million. basis is net provide the assets. market Furthermore, West quality total remains non-performing proposition

as With minor and sustained the and limited they result East foresee is rebuild. significant issues. support is disasters any are assessment on the our damage. the a to credit natural employees wildfires our as recent facility recent Bank customers Based do our and impact these from ready customers hurricanes Texas our branch we our Houston in to California, and only in not Southeast safe current very West in

go Let's number to X. Slide

XX.X%. XX.X% return been has points on Slide five has The been assets on in range equity on been return XX.X% ranges the return quarter range basis X, to points. to XXX tangible our equity XX.X% and to basis shown As has number XXX

franchise, continuous expense technology. products and a risk in development, As increase in investment we add acquisition market and and share our in growth continue Incrementally, profitably of growth expansion. we new customers, expect revenue management, Revenue to in infrastructure, ongoing philosophy supports talent of to and of Greg a operating ever an our detailed third I attractive turn building call And our are now, profitability. we for pace delivering results. more bank Irene will quarter over measured sustainable and long-term support discussion stronger the to excess

Gregory Guyett

you, morning. Thank Dominic. Good

Slide record $X.X was billion end our Driven period the Loan of billion by the a portfolio $XX.X Turning linked-quarter of to C&I the on quarter. East reached at loan good with basis. performance or X, annualized end West growth XX% up Board, annualized an was was across reflecting XX% million linked-quarter linked-quarter by $XXX well annualized. annualized up $XXX up real or estate million verticals. by XX% as linked-quarter our as by $XXX or Commercial and from contribution SFR traditional industry specialty million or business XX%

entertainment energy in quarter second portfolio private the the was across utilization quarter. compared Our were roughly flat the and best verticals and C&I equity, performing to

during higher more a opportunities in traditional saw of the quarter. out point owner to the annualized customers, loan the originations with maintain income that increased quality, payoffs expected quarter-over-quarter we facilities, also growth towards long was would net CRE to to linked as discipline quarter. compared slower by QX. time in as particularly including our properties than quality growth was our XX% I of pricing end well Our credit reflecting clients, both high and performance occupied producing like to average as finance driven strong pace We

turning X. Slide to Now

million demand million bearing grew record and deposits XX% or Our focus annualized, in deposits reached September by or of billion by pricing market linked-quarter non-interest savings the million offset during XX% in run-off was generating X% XX, quarter. a our We on on up competitive core deposits as and This linked-quarter deposits deposits time necessary. money $XXX by reflecting annualized $XXX $XXX growth $XX.X or linked-quarter by where remaining annualized.

funding average I quarter was in increase quarter loan end XX% growth fully at would our average note Our in balances. loan-to-deposit annualized, balances linked deposit that quarter-over-quarter XX%. was ratio

technology to and product quarter to and reflected performance in this and our capabilities during Now infrastructure, new we in focus. invest gain share customers continue retail to market methodically commercial attract the

was $XX total decreased the income X% Other in insurance gains brokerage linked million, assets, and X, fixed in Slide on of down business. income or a sale commissions operating insurance quarter. for fees part the excluding due to $X.X securities to other quarter, loans, million of QX, of operating and and because Turning the decline sale fees linked net

and mark-to-market CVA performance linked now and on partially decline strong customer-related fee by of for quarter a FX the Irene our currency the our reflecting swap strong turn with hedges, offset and income by X% after interest Excluding quarter. the business, call will in associated from XX% rates to more specifics increased over outlook. year-over-year, I quarter second changes

Irene Oh

discount $X in million by the to the net total linked on for quarter summary Greg. by $XXX Thanks, million to growth, growth million million XXX-XX or ASC related result quarter. interest start Loans interest decreased income increased million, income with of $X.X net statement of Slide $XXX X. accretion to third income income $XX third X% excluding the for loan X%. to accretion also quarter equivalent a of I'll

to skip deposit expectations. expense in and quarter Greg another The by million As from losses expense by was second section statement. income of within expense to declined tax million of core second slightly linked I'll investment the fee intangibles. third X% declined non-interest amortization X.X%. Adjusted amortization non-interest detailed quarter, the Total quarter about of the down the income compared credit and for quarter $XX quarter provision the our non-interest the credit less excluding range $XX in and the for than

of was with Finally, the XX%. the the effective rate tax year XX.X% run quarter inline rate full third for

Moving the drivers. for at our closer on Slide XX to presentation of and a XX, look X, earnings

third income, interest increased in for growth period, reflected as net recent revenue increased in the The as quarter interest rates. loan largely well the increases

accretion $XXX margin recent from was lower penalties of interest the as interest $XX and XXX-XX of in third income, discount adjusted million our accretion, other fees recoveries, impacted yields prepayment the impaired the the interest income million of basis X we credit impact quarter. net September Excluding loan XX, experienced XXXX. Compared a our quarter, on which purchase loan non-accrual quarters, points during linked level quarter, remaining ASC was up in

As pace our quarter basis bookings Greg X.XX% rates, we deposits interest loan a points, rate The X by mentioned, for by of the quarter. second expanded the of average increase similar XX an quarter securities higher and early points reflecting of to XXXX. lower the payoffs than for typical cost level in basis saw of yields our yielded increased this

XX, by our the ranged points and was for of the quarter resulting XX%. combination X.XX% net was third interest pre-provision profitability pre-tax, from to quarters, XX% million, X impact below pre-tax XX.X% in amortization of pre-provision XX.X% The expansion Slide five Through tax profitability XX% quarter, efficiency and and of excluding and other our linked million to from quarter. income up growth growth in quarter of third last adjusted improved compared ratio basis third ratio efficiency in last the and ranging ratio to and quarter. intangibles, credit Turning the adjusted has investments efficiency the deposit adjusted $XXX our non-interest expenses core $XXX

And Over the our the X.XX%. profitability pre-tax pre-provision detailed quarters, Slide to metrics. past five XX asset X.XX% ranged quality critical of presentation, out has we from

as for XX allowance loan loans XX, Non-performing million compared increase XX, million XX XX, the of decreased $XXX The loans. smaller as largely to reserves to XXXX. due X.XX% was due or of The total was of to loan of by assets in points loans assets payoffs million X% June non-performing or XXXX June growth related $XX quarter. held-for-investments to totaled resolution to growth the in as during the basis of the September loans $XXX of losses Our allowance XX, million or largely XXXX general of decrease an September $XXX held-for-investment XXXX. losses points compared of in of to for basis new as loan

add remained the regarding as annualized allowance average assessment at incorporated X/XX or quarter mentioned million this conducting loans. recent impact from this the and to best low the I'd Dominic we at impact loan disasters. the portfolio $X.X points the losses also like X natural charge-offs net time. our for Our potential estimates of for ongoing basis of assumptions to that are

strong. ratios quarter X% beginning grew on XX. East since are XX.XX capital Moving West grew on Slide XXXX XX, capital Tangible by as ratios per equity share year. the September XX% linked of and of of to

XX, Current increased XX on XXXX support year-to-date. The dividend basis ratios of continued East Board November organic declared sufficient third Our capital the payable stockholders of to West in record share common to XXXX. are growth common cash Directors company's by of per November on for to levels dividend stock. view. stock capital $X.XX quarter our X, is XX XXXX has

Today, XX outlook for Slide unchanged quarter. generally outline of our the to we've last presented of what reaffirm XXXX, from full-year from our presentation Turning outlook. the we

above do full-year, third growth quarter loan we than in we fourth We a growth pace anticipate the the growth the low the the quarter. For slower digits. double continue experienced in to average of expect loan in

range, and X.XX% anticipated tightened previously. full-year our to interest X.XX% X.XX% We from net have to to margin excluding X.XX% accretion,

curve rate expect not quarter one December. expect net increase funds as That debt Our margins. interest fourth do in outlook impact we the quarter, to forward incorporates in and funds such, a rate the rate significant more the debt we however,

we the fourth expect $XX approximately On other XX% the full-year million. investments rate, quarter credit rate effective the be tax tax amortization of anticipate will tax to and and be

our We that, Call. outlook our will Dominic January back Conference call now remarks. the to Earnings next discuss I'll quarter for for With closing turn XXXX during

Dominic Ng

Thank you, Irene.

a earlier, strong had quarter. As we we all talked about third very

so we just now result, and will are And call with pleased for the questions. open very the I so

Operator

We question-and-answer will with Deer question go will Aaron The O'Neill. the Sandler Instructions] first from Please [Operator begin now ahead. session. come

Aaron Deer

morning, everyone. Good Hi.

Irene Oh

Aaron. morning, Good

Aaron Deer

infrastructure, you're bit such. making First that on the talked management, you’ve in Dominic, product risk a of capabilities expenses. the and of about maybe investments of question terms some

and guys where outlook? there you there investment kind expect As in guidance aren’t is given realized just out are the level or you anticipating be a giving terms yet, look your what another go of thinking year, metric of the I of efficiency XXXX is sense coming you that over should we but kind to of ratio you about

Dominic Ng

some for the made infrastructure, putting there. what that are long-term Well, things organization we build conscientious need last out out here as continue we’ll talent have we many to acquisition very other continue our discussed that years technology talent development, as effort area, we a two have an cybersecurity. a overall obviously sustainable upgrades actually to to build franchise, and or to There

that's So a given.

it organization As everybody efficiency in information. that actually never to since the we an put ratio good measure because we be that is else out number providing

organization, share out some as primary we specific So we But an to happy run than looking drivers. by more will at business that.

the we efficiency obviously, You us, new just other revenues, XXXX, bring a loan look look deposit divided of yield, from customer loan and we to our core origination, denominator, we've expenses a important by manage numerators fee Loan that ever same bring run of we I core at of expenses, related even we we went a and and we being in that's non-interest public customers. to had matter very And much denominator actually income. how of how And and and much business. that we at right? at went responsibly, is how we private should look our kind we since in we that These deposits, drivers of ratio what are we philosophy public So standpoint, cost cetera. the at say getting. core funds course, the company, been numerator as the in are then origination a before look doing our then very

And So continue all those the things and the to same. that we our these in business direction. disciplines run same remain of

is. it what is it out, spell that whatever So

XX, quarter that range. would notice so that mid-XX usually below of Now would kind we kind low-XX, drop is of like around a hang one this

and This to the the with still have a deposit has we loan combination that do below et of the fee strong lot cetera. a think the expansion, quarter origination dropped and have and we XX, loan income, strong I growth, growth that margin to obviously

our are and But as drive ration. actually actually is having not while to but our we're But continue loans, fee efficiency management. the in the have continued to are to and we're a little income, bit I quality to we're of strategy; income, loan going But customers, investment, is, out quality in overall say look growth's strategic expenses both have for fee technology risk to and customers in to growth sake. And of like they're And the build these sort that. support grow do so to order long position as and dip fact we the these make continue to also out and to quality core build that to talents these going as just right at more relevant to long investment, going are the are as continue our loans. that we'll

in investments. that, just in that we are to to we our to do step-by-step, can XXXX us and terms appropriate So I more and Keep stronger in little move business, going the the investment. make mind continue the of take the grow continue revenues, more were to opportunity stronger give we stronger will expect a making they a

affect macro However, XXXX start XXXX reason, [indiscernible] in slowdown expenses industry, the we if economy banking for entire and accordingly. managing obviously some that beyond dramatically, which

right work to sorts we watching every single everyday, So that and we're day doing sure make these of like the indicators we're thing. key

get So in I just pleased. say efficiency somewhere on right we're primary ratio, you that managing drivers in to put on would don't place keep the everybody to have to general focus that going it make in the much respect, too

way If if next of So can your my not? long I don't guess putting know or it's I try Greg question time. to Irene and answered not, answer question. your maybe I

Aaron Deer

the tax curious was I Irene, front. then on And Dominic. Thanks,

your the As the of some market. sure for tax you can planning I've be that the of credits availability XXXX, are to tax changes year not or Or lower? you to dropdown out over something you kind strategy in in or of is heard look kind expect confirm there that if solar I'm out not. the similar likely would making to But to two? investments making last

Irene Oh

have the the while and transaction, carefully the tax been evaluating the very with we're been has energy Certainly, particularly that is thought renewable years. over well, Yes. reduced reduced, one, this for for a credit

we're that including one. that, say And the time, administration, will tax have could happen would I I we'll in changes also do at with energy with the So utilization something that renewable current that is the with think be that the that credit the reduced, carefully. over looking and potentially

investments For XXXX, of we of we we think the are evaluating are kind assembling making going what and be that. timing to and

those down. So do think I'll get come January you more I we when give will share probably speaking, guidance, that generally that in our But updates. can investments

Aaron Deer

for that’s question. Okay, great. Thanks my taking

Operator

will Zerbe question Ken ahead. go from of Stanley. come next Morgan The Please

Kenneth Zerbe

your lower talk’s tax Great, number? Did figure XX%, thanks. is for and obviously, see rate, guidance trying exclude account on Real you I’m your quarter, just I also how the but just quick, to for the you much there first year-to-date fourth just guess there, to you are be option well quarter the first should such full-year the these as XX% tax that, rate. get in quarter XX%

Irene Oh

items in items. as Yes, have first impacted quarter so also the you rate we each effective the tax quarter XX% discrete are some with year. discrete mentioned some stock, the There for the quarter that is full third

So XX% in including a looking we're at total, those

Kenneth Zerbe

understood. Gotcha,

about follow-up could quarters, quarter? year I full four considerably given offline, makes XX%, that I all think maybe first it's in of less the to because than sense? put average Is Okay, XX% XX%

Irene Oh

We can account. follow-up with the

Kenneth Zerbe

you you Okay, levels real quarter, the a the made bank the might other why this talking are continues, banks? seeing comments fine. and portfolio expectation on And so comments talk trends saw higher bit much totally morning lower other quarter just the of the you in that different estate, then from payoffs commercial just another from heard it’s we be third Thanks. about you're CRE that guys about can payouts they little enough in

Dominic Ng

September Yes, bit hard that idiosyncratic is XX and October lot in of sense first is probably or I it it all think XX the to what mean a of a fluctuates happens I predict. on little

the remarks, activity these back second. when of about commercial small have said as estate I bank quarter a only prepared first you low our more we bank lot that quarter. with and I or again to went related inline tend with real at was talked broadly to has owner-occupied, in first I where that we said and are really was The business payoffs payoffs second third the may may when lower continues if mean, say be our think I other quarter, the be the owners is you higher we size. that typically to thing business look we the more or to likely I would think

or generally the not real not towards We’re the properties. of oriented is oriented investor portfolio our owned large bulk estate

of those quarter. potentially different continue some to saw could banks differences our So the

Kenneth Zerbe

much. Thank great. helpful. very All right, you That’s

Operator

the Shaw Wells Jared And head. Please of from go next comes Securities. Fargo question

Jared Shaw

Thanks. morning. good Hi,

hires, network different incrementally infrastructure should into be will investment up or coming out a as you little highlighted to Following XXXX? that management, that risk the new new going on side, is of and also that go investments but that some expense something that process already maybe way, and we started expect is fourth quarter we

Gregory Guyett

Well, no said, we've West East that I are the of philosophy it's been investing mean Bank make been Dominic consistent all to along. as a investments necessary.

in so there invest fall teams, easy down ongoing we’ve better new back, full BSA/AML investments think allocated program the in to stronger there's but we an categories. you investment into think but the of invest investments build not over finishing office, approach a the right. expenses would our depending of on activity. is And infrastructure, and We of I investing, to time program, set to where to noted, are and in hiring and of two I other one areas so say, elevated as for it technology, moving investment to these broad priorities, had in strengthen ongoing it's around think technology thing as keep some relative some we said I are future. the already buckets some The and were shift of bank both another in about an we go the located. revenue, reinvesting BSA/AML, to dial some up other the where And further then geographies will had it's those the for and probably thing There's spend. do into to stuff all expanding our to and we of those of that new infrastructure, Dominic into front only

to that We've in it's to think other make we have I to other low number. we to to note we income not that's And this single-digit, go relative where noted, we're And be been business. go about. going is loans to we to it's and going feel particularly guidance the revenue. investments of the able like that's need year important calibrate based is fund on a but as where fortunate for just managing thing think to the our in I those allowed ability find growing us the Dominic talking ways growing the to the to investments expense

Jared Shaw

then And in classify on owner-occupied C&I? maybe like or the first the do the CRE bucket. Okay, is great. It side, CRE, it loan CRE sounds that still you CRE, as Thanks. point

Dominic Ng

CRE the in source real is if It’s Yes. bucket, our estate repayment. of

Jared Shaw

a you seeing like slower Where growth, then Okay. when of on fourth into it little are sounds you strong – the weakness otherwise you you're year-to-date look than end loan maybe at talked seems growth you at incremental overall? that and the And about because maybe as pretty XX.X% quarter it third quarter. being go year the

Dominic Ng

Yes.

we were the in XX% low quarters. first And think is number. – so at look think it’s didn’t through I I I the digits double for if the guidance we year, year-over-year consistent. our the three the get

CRE, say the at C&I but as the in as in I would based stand you again, on better than where we think probably we change today we just could sit quarter, through that’s if go that we’ll the fourth see quarter. growth pipeline look here

Jared Shaw

a Thanks Okay. lot.

Operator

question next of Ebrahim Lynch. go comes Please The ahead. from America Bank Merrill of Poonawala

Ebrahim Poonawala

morning, Good guys.

Irene Oh

Good morning.

Ebrahim Poonawala

we're just you get sort go and off the why your promotional thoughts to and of accounts? any rate talk seen keep terms clients those you balances and whether rates like in Just up. of go deposits seeing want sort of and you one, – run are seen of in running the more in pricing Can market about to sort movement deposit certain in time of: and are competition terms touch you’ve letting we've sensitive of some the rates upon that's some money

Gregory Guyett

of couple a there. So I points think

saw deposits think focused the and in our categories. retail commercial during shifted customers how might and on with start me growing both core focused that deposit and deposit Let you quarter, mix we We've those I add. others on and been the our core very then

we – accounts being being we with those keep to need are where be in to are be proactive where customers. to and We we're those competitive we deposit leaning need and in order

party said I we accounts. want So think before, bit we we're we the competition are be again little and more core the and a as seeing to don't to being late around deposit proactive so

We haven’t but the across done consistently anything that Board, at, make we again, something sure competitive. that's we're to look

cetera, other had deposit as been been obviously, comfortable core and We’ve market categories, more the deposits. The some during those money we've it's, et comfortable competing given not transaction. quarter on letting the we a of of ability that where grow that price run-offs much there to

Ebrahim Poonawala

Understood. That’s helpful.

Dominic Ng

haven't simple, like it I we not adjustment really walk big promotions, have that. really like any mix make rates in a on think just to anything we and really done

for we do And our So of managers to very about have strong fortunately match it. them we provide many to core to flexibility that relationships give competition. our that's And some customers. the us some authority to to variance

what and we the and of you the core When accounts years. with of And different And then much the for that the than core, you accounts, focus you grow look get some always grow get business. at that's past. these deposit trend So because you not grow run-off on offering We business, with on. of have this it's in CD we quarter, then also it. continue to

mentioned quarter direction. able deposit growth growth. we to as would to on our we're loan kind average long earlier, be as I was pace this to match grow to And in the continue still so overall, expect and last attractive during this balance deposit pretty clearly that and origination will as And of Greg

shape. feel to and day-to-day continue like good keep or And a accordingly it forward. we we're obviously, So to watching that react going it, on we basis will managing but in then respond

Ebrahim Poonawala

X% I could switching in last the I all core in the had that of XXXX it growth to guidance or you've and you Appreciate growth Just that up realized infrastructure year-to-date board XX% been investing I follow basis. frame Jan, on year-over-year, give and back, And recognize a across we’ve Understood. color of you’ll but if years? few the about expense in gave revenue expenses. on

next Or into year basis of right the hundred think terms few look ratio we that in just you is higher that out the points ratcheting should to up As be investments? are X% about? kind of a

Gregory Guyett

specific make the going business. guidance in as said, We'll to investments in need make I to the January, but we give we're

the that and business. so we've think continue to revenue invest to have And business able I will Dominic strong and with not will diverse able every fund investment in that growth to noted, clients, to But under certainly our attracting of as generate that going kind been be and we'll expectation new and we be the likely fluctuate. we're

Ebrahim Poonawala

Understood. my questions. Thanks for taking

Operator

KBW. question McGratty of Please next The go from comes ahead. Chris

Christopher McGratty

good the Hey, morning. for Thanks question.

Given the recurring strong loan growth that's recurring, your credit numbers great. look

it's that to can the have that mix speak lower start the given Thanks. reserve build of it to growth much the mentioned forward when current? go? you of X%. going the could do How that Or You to level that's given

Irene Oh

reduce of ways. low into our charge-offs the Yes, because the level loans of past grades, adversely loan classified kind of and substandard of migration less because

the kind future our that based in of calculation really think loss largely on potential in with the unknown that of qualitative I is a added with the that is is historic allowance losses. what

largely, at has from growth it and portfolio. the that for the from dollar in the loan and the had perspective, originations when a So the come allowance you we've growth us, look new

to think trends this to look be doesn't of to we of I see I need So now that with will as that's because with all think that you will same credit you level happen, add continue a to I right other coverage, that think rate the comfortable benign, the the equal, reserve. I'm see things continue that being this said, of trends the thing that there But the growth out that then are If we're Chris. drivers at kind at.

Christopher McGratty

that's basis so sequentially about much. loan look helpful. Thanks there think on the hike. Okay, And after core quick, I at yield real if points maybe could the I margin, for I X if

maybe you kind core than improvement that's lower after yields? points increased basis have I'm competition that a it few is a the couple a wondering, the in if Thanks. statement? And loan is, of hikes. there's little bit noticed think I correct first driving

Irene Oh

I payment interest there interest a mentioned kind is in have competition income, prepared is Also our in think Yes, remarks, included were that of – the net recoveries few and than there were reflected that less that we less penalties. yield.

so that impact. impact $X points quarter-over-quarter probably quarter-over-quarter, basis the made quarter, in And especially X the million it for about

Gregory Guyett

we was disciplined were around part I of thing that would hard probably sure we the we're good so growth other pricing the elevated we're our going during our business, quarter that is on from supporting marketplace. be that, also expectations – that making to looking add we're sure Yes, our but very making CRE the the and as in customers, particularly pricing, at noted

Christopher McGratty

thanks for the taking question. Great,

Operator

Matthew The next Clark Piper Please of from question comes ahead. Jaffray. go

Matthew Clark

Hey, morning. good

one to efficiency in there's next around any to and – adjusted given year XX% fourth, the to just I that in here the no on here slower upcoming wanted have. this there's loan the ask quarter why you dip shouldn't is expect and January. Just you? obviously even time, reason you we'll mean and more like control, that you did outlook the quarter wildcard I sense guess makes the ratio learn below seem in that more doesn't underscore XX% particularly the further growth expense But in below

Dominic Ng

or a question? statement Said

Gregory Guyett

say will I Well, that.

up to then to all up out only we better in customers We be the going a whatever likely that then point have be most because we an and this is and so get much can a quickly we not what said, it expenses I to would numbers. organization a growth just build pluck-in and to to spend this definitely customers like care not is that is focused be loan with be can of that quarter. up strong continue desire earlier, and what control of determine. much to is something stated – expect is continue stronger strong we similar and at Like franchise. fee we As comes and that ending There's it’s can even very they a the will income, is I is, taking number bring we whatever with will new will

It’s expect would other. the be surprising number anything comes going one to I or that So out. whatever not way

Matthew Clark

some looks possibly that Okay, third line I some great. of assume a fair? remain here we fourth should little be the coming, expenses, next is around year quarter, not like with just there in then relief BSA release as they just it quarter. if item look And the out that in this consulting elevated in

Dominic Ng

I BSA clearly, will trail mean the expense, we that’s off. given. consulting With

and a but There then earlier two on worked enterprise quarter have then risk long others business it's can way management. and on we about we the – are We started than a working are of so or we of plenty really usual, as going well, on. on And entire came areas expected. have starting that other

but at our the like can things at. So these then side, customer base, basis too. to quite and in from purpose, in looking frankly franchise the side future in do for, sustaining for to also of not areas These looking regulatory revenue in banking are forth. valuable deep what a and basis that long-term driven and needs for that west for run value will are for looking long building and are banking a we the opportunities a Those really we future digital mobile for and at so kind adapting east we of purpose proposition continue consumer application the are look creating terms customer at

growth, strong we reinvesting have obviously, when these a not profitable position mean, to future. and extract sustainable building excess just of these I do even some our profitability to using likely more not So there is we that opportunities sit again earnings

constantly the foundation investing earlier. other all looking to done from we maybe sustainable opportunity about the quarter we've in And a how the to related build as revenue of it continue year-out, great a We've growth we cybersecurity even like the banking get for we in specialized particular talked possibility a in we things look many consumer achieving many working start that management the on. to after West So to changing. needs Part point but is Greg customer sometimes years. that at strong Like that. that part do are new that team are banking future unique from like year-in, been start the of been looking for these things digital have that there and at a that. will past, East by because There be enjoying quarter for years bridge The something at view. segment base have last at to bringing we're the capability us looking risk of

are So are that of things those we exploring. kind

details everyone right start So highlight more out XXXX, maybe but point at we in now, together. hunkered bank are in down, senior this give a strategic you the when level in we'll lot the putting plan sharing

to too get at it be we able stage. share wouldn’t until obviously color all we you So much finalized, this to

Matthew Clark

Okay. just if quick BSA agreement any? then the a update on And

Dominic Ng

So came progress. were far have our in that with we pleased examiners and they

a been mentioned now, last also to business the the So love off right obviously, lifting we've at that of the that's where as as before activities the that is lot we agreement. are the doing quarter regulators see but I usual, they would finalize more seasoning

the we feel compliance very got of mind, ratio still substantial had talked when efficiency there of together consulting how and making and work out then we sure in you BSA strong all we two and to money procedures then system, in expenses we in are that years, and and of year-out. making where three we your Keep somehow our new we but area, years people – process this that that taking in record well also customers. last spent put So terms we of and the in that, that today have year-in we’re really terms done, sure comfortable organization in expenses and BSA what are care earnings about more for still

than tripled area, to record with that's end BSA supposed we more but I we found deficiency to that do. I the that's So think have know cost, area some in recognize about way at ratio said earnings obviously just when because XXXX. XXXX to don't do there. in earlier tripled We to the get why XXXX what there's management that And because factor in one that of worry we and make the efficiency we staff has as I somehow that

come company, we harder. the and know We spend to to out the that kind manage need are some to will need take care spend we and We find then a work collectively associations make to here I we organization, way step expenses all make XXXX. then and to reason why then work we When result and money there to see to company. performance enough XXXX, of and revenue are then a challenge. manage all to have strong the find spend entire year. regulatory And the expenses offset money that, immediately sure earnings we of a the they in record figure why and have up, harder with this out to the we wouldn’t we that after against no have

Operator

question of will from Wedbush ahead. go The come next Please David Securities. Chiaverini

David Chiaverini

thanks. Hi,

another on expenses. So follow-up

XXXX? or go to making? match mentioned will that will growth given wherever it Would expenses investments go actually at assume all coming expenses you revenue a expense growth be that So unreasonable different looking out exceed the in you're XXXX it could way

Gregory Guyett

the revenue whether think to an future any and of Well, the I it's investment fund predict today future Bank been hard I going book or expect to made to think different of the non-interest with income ability to East and the whether NNI point adding guess I be of reason it's very, West loan future prudently that history have but any is sitting very has us Dominic for invest don't course, than that it's new past. growing the the strongly and to here customers the

Dominic Ng

just bank guess been answer. let can I have years. how for XX so we that Since better for the involved much I've see Well, me discussion I expenses,

XXXX from not went and strong had a record were earnings. losses loan of for other earnings that because we XXXX to did savings lot record have then we remaining one-year was by down, So all The and S&L. back didn't loan and we pay the the XXXX all reason and have except to that a when S&L XXXX savings the

So got a we XXXX big save one-time assessment.

our that consecutive down. our earnings assessment down XXXX, took one-time record even down money, earnings record but that went we though So made

from XXXX XXXX. reasonable to we through earnings way we year, XXXX pick And XXXX year. through went earnings down lost up record So Bank record every the then all earnings earnings. XXXX to And record for have it record every West the XXXX, first money. in XXXX history money XXXX with We in time then we made XXXX of though. not East earnings

Possible in is - have we it that So that something growth? like exceeding likely happened revenue will expenses XXXX. because

happen, it's just don't but it I hope So I it don't hope possible. happen.

the is make we we continue based So on on business what in our based have, be and sure to going Bank do what to the the had we harder run West time on we're our much that like best that always to we'll do the can the geographic that talents run. position is capabilities, the All we to the way product based that I reach, balance do, say doing a future. sheet East

optimistic opportunity have future should today, bit condition tend I pretty little that good confidence the and more be the standpoint, better to I in a a slightly be we macroeconomic that So see that that thing on any most think faster no based that disasters banks. than we the have may if of kind that would problem, we assume that any come probably actually there's But I can make of other predict. borrowing to adjustment

any can only here call our the do a what's that watching and shop But really is management have can that's right. day-to-day happening. economic would I thing that assure, So on that be we one what's thing we that I outcome can that it's project exact count

It's be we things, it’s that something sometime but a see good. to ability always we as the not we particular one apparent in that honing but more the worked necessarily at particularly now two a so time, to quarter to may lack out something be quarters opportunity somehow like public, it time, always the at rational it's that to one so going manage, may into be rational. but And of we item, here line enormous lot because wanted to spend that kind I'm simply to that of and money, to not spend going is have

And been that's so we've far, doing. what

David Chiaverini

color. the afterward? agreement. written could the that's appetite what lifted, gears have to of for Shifting type Thanks M&A you Once

Dominic Ng

you this beat. to the country. have really mean, That’s growth Greg the loan this today, I'm look are that than to So the I double-digit loan we quarter-to-quarter even expecting we low in course, mean mentioned where in organic just XX% point, growth I basis, both about of speaking if at of financial relatively better talk about at hard is institutions if still you be annualized. to It's a basis. as growth not

So to things going do is now. if it and I'm right like want acquisition sitting said the are here way would I why

that now much. but come So if and say East so is I acquisition really would someone do West we opposition love in our

buy then relative of can book rational and You ability it, consolidate cetera, management, right? So any rational et all times results, less and again have I course, to it's than two these making decisions. you like are would

that's was extremely years If And made we did and one attractive them, you the basically one every the because at plus opportunity great we out. year look at back early in reasonable time going, we to willing very at XXXX, price anyway and a the have bought cost where strong them many the we because the they’re a have we for acquisition fact to consolidate what loan growth price. organic search of despite strong

to to without kind of goal M&A, the to ability have that's to it. money will we team ourselves just do the capable, additional with at be the growth time, able don't love long current opportunity we a be we we when comes, sustained But okay. long go independently we then continue product, the at earn to why One out which pattern landscape, as can is anything we and So if if and get find we’re the long one that to as to look have capability. ordering

once our So it in could be based rational good making not – rationally us. get better we on strategy. we that I was will averted acquisitions, that’s strategy, to for

Operator

The Rochester Bank. come question from Dave next Deutsche of ahead. will go Please

David Rochester

morning good guys. Hey,

Irene Oh

Dave. morning Good

David Rochester

that it that, conservative timing, range imply Not stay here, the lot reasonable think sense. the you're question expense part and of the year. I just a because side, picture you've is mid and will going getting this spending you thinking in to mid growth on generally really level range that about talk seems expense than talking is the faster appropriate to I'm horse I know efficiency super beat a XXs XXs rate but low forward. level seen of a about dead you're just the and thinking big here make just the XXs much

Dominic Ng

We're out trying question again. way to in figure another answer how the to

digital first and those back is some step thing the is of terms as long-term little perspective acquisition further Infrastructure, is Dominic because clearly customers. is that continue right point, I is we’ll to growth your around of mean that clearly sort And for a make points to of for guess of in that one and very we you technology, that of from sure, our going right what banking I year prophecies that think the infrastructure we a making enhance. from procedures, to if I discussed want we're we some make that think both see to we are couple make a both bit support that's business. to of opportunities a the some in retail investments mobile business of customer

the way been time the growth to to over that those in think we I that historically. able that support point revenue to try second make believe we our we’ve that is going do sufficient investments is that

there focus a out going can't fast, don't start the is the sometime a to – you the head – want the invest on bit to the to as the particularly bit revenue efficiency to teams, that thing the is go made I obviously good on And make the think you use depending before, have the revenue revenue you as we little In producing third point and pretty I think reduce expenses, than But ratio, but of we've a expenses something efficiency make revenue point an on of investments. behind about is revenue you side, little bounce revenue the we this, that coming. going more it's it's come which grow if follows office thing quarter-over-quarter some ratio. you the one going around of that. is point other the on to front impact timing

And be on of of ratio an time why controlled. going say be fully you’re the it's efficiency to going over so to probably be investments because if range trying a we’re that’s within timing focused very to some the can’t

David Rochester

level, just trend was the That the was over I Okay, little expect one quarter. on up And group one loan-to-deposit strong wondering moved XX% great. bit. you to this loan about Thank appreciate obviously ratio XX%. quick you. see. high you're just to Still going that deposit to ratio, now That It's that. very and but I forward? how a really other healthy growth how thinking nice

Gregory Guyett

we we and probably average end cautious like bit it's it the I think number that necessarily look more points the were successful which don't we of guided, feel towards fourth quarter. I quarter, I a two average that make is the over this the discussion, the sort is of about One helpful balances for think I out. we we'd as Yes, called which to think the little noted because as I for particular at period think very period why us got hearing you're and growth

very was more doing and new of our our we pleased teams was existing getting to were that growth average growth our customers average those add customers, funded fully their as operating Again, core forth. at more loans. new look of and Dominic with than ability we the you those to noted balances, some remembering that our so deposits. adding grow average when And in of If deposits customers, that some that accounts in see

that focused other course the And many, driving shift allowed be this on many continue to deposit us bank the and quarters. not been has so that mix the categories over some of as of

we to And whatever our on very number sure fourth have to with in quarter. the ability can and move so we we comfortable the out we're the growth make very are we to with order loan levers where are where comfortable find turn in

Operator

SunTrust. Please of Young ahead. Michael from come will question go next The

Michael Young

thanks. Hey,

coming follow-up on growth much that of portion provide portfolio, of the characterizing of any way maybe bank commercial the some like deposit relative more could versus Just from how the that? year-to-date much or is just on a you retail how to is color

Irene Oh

was does in wouldn't look we businesses than and a the very so commercial but me say other. necessarily from one numbers greater as It especially growth deposits the well. good. retail of as at a year-to-date I both been don't specific the on the much I the balances front when far perspective of category both perspective the are but trend has Michael, have fluctuate go, segments the commercial doing

Michael Young

Okay, growth balances associated following commercial when in the in strong you year-to-date, see just the accounts great. latency and And new that of actually convert what's those? up, deposit loan typical you terms maybe then with the

Gregory Guyett

with said, as bit build that is those understanding are tend we're business kind fully and put to loan, coming whether discussion commercial accounts degree it the about side, have but in some commercial financing, on customer time. the operating the over operating actually I'm I goes depends Dominic on and along loan operating type way customer question. the and customers of if and will business little the generally not and we or a the accounts funded so that loan. a upfront to And your running is that place loan Well all may then the of mean, with deposits in generally be the our we associated other with the

businesses growing course, pick et Q&A cetera, Of right are the you et their if of customers, cetera. End

Operator

question-and-answer our would now session. back to like any And over to Ng this concludes the Dominic conference I closing remarks. for turn

Dominic Ng

you. Well, thank

summary, are and believe in had outstanding third on quarter, an So track. we we we

As year of another in earnings I earlier, record XXXX. said

with to XXXX. again talking in you. Thank forward you looking January we're So

Operator

concluded. now for The conference is you Thank attending presentation. today's

day. You a may lines. your disconnect great now Have

East West Bancorp (EWBC) 19 Oct 172017 Q3 Earnings call transcript