EWBC - Earnings call 3 2023 | East West Bancorp, Inc.

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Operator

Good day, everyone, and welcome to the East West Bancorp's Third Quarter 2023 Earnings Conference Call. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to [ Adrian ] Atkinson, Director of Investor Relations. Please go ahead.

Unknown Executive

Thank you, operator. Good morning, and thank you, everyone, for joining us to review East West Bancorp's Third Quarter 2023 Financial Results. Ng; new Chief Irene Chief Risk Dominic Del Officer; Oh, are Officer. our Moral-Niles, Financial me Chairman Executive and Christopher Chief With Officer; and on will is available recorded call Relations and This for being replay our Investor website. be call from during Relations make to risks number actual other results The or on which statements, and may available of this due deck our is uncertainties. slide may projections forward-looking referenced Investor site. Management differ materially a metrics. Management may discuss non-GAAP financial

factors more and I refer the reconciliation our and detailed to description over financial a filings filed Securities will risk non-GAAP the For the call GAAP the to of the today. Form turn X-K including of measures, Dominic. to now Exchange please Commission. with

Dominic Ng

you, for earnings everyone, for Thank Adrian you, [ joining call. our thank ]. and Good us morning,

smooth would CFO, help Before assuming Irene congratulate to and review strong thank her a we like and risk begin morning, our reported will now her Chief This advancing Officer welcome on in results will capabilities. I strategy also integral would Chris. Risk and the company's presentation. I be growth for our Slide the like in X and financial as start, ensuring I to the we on of of Their role results. Adrian of transition. service leadership

record quarter net of revenue level a was quarterly $XXX income. income Driven million, was $X.XX. and net Third by XXXX share diluted earnings per and interest

leverage deposits. allowed kept and operating and value. strategy quarter loans diversified East focus generated add the customer growth controlled book tangible quarterly expenses and We to continued customer West prior Our grew from well significant positive grow

projects our well-diversified of a sheet summary that our X and We strong, continue also quality presents stable maintained to ]. Slide efficient. is proactively position balance manage and broadly [ asset

$X can to the the use cash us quarter's largely quarter, consumer that also loan customer These capital. pay in pleased with notable with grew growth, residential commercial nearly growth see excess deposits. allowing came by to and loan returns from generated deposits funded we both half deposits mortgages. In our this third wholesale our we on prior growth billion low-risk our We're of the where mix balances. period, from the You customer down industry-leading maturing growth the

We strength. capital now East and XXXX, are regional for West ratios, continue forward strong from in to highest earnings another looking maintain for are on of the XXXX which position to is of record banks. a starting year track we

in strong our portfolio share our our of Given our earnings and over solid quarter. I detailed more resumption will to now the Directors turn of performance repurchase credit the program Board capital Irene? quality. of levels, for approved discussion fourth the stability, has asset a Irene and call

Unknown Executive

all morning detail portfolio. Slide our Thank industry. East our loan to diversified provides the well exposures book. estate discussion type residential also call. overall you, Dominic, X on and mortgage, across a largely loan of commercial Within our by with C&I, are loans West and C&I. are start I'll by good real on balanced

of FFIC on by commercial to additional commercial the also well commercial Our East of X% at X comparing and portfolio. portfolio by type. our that XXXX. Slide and details loans, It diversified guidelines estate. consistently to guidelines, diversified our provides important geography loans all below real roughly China West's we well total property since detail been greater our nearly limited X remains C&I industry. Slide estate portfolio estate remain is the When the have real end shows concentration note of exposures real the

our within retail a borrowers we our portion with Fewer have was LTVs XX% have shared loan-to-value bank estate commercial XX% In Many our over. of sizes real a estate and full portfolio portfolio. appendix, real similar low than relationships trends is guarantees. with with office As a an the our of long-standing of large of estate see, loan our commercial and $X of size had average the average very loan-to-value for of and low personal the granular commercial loan million. loans recourse are weighted average or XX%. real you The have loans portfolio

reminder, originate a maturity loans amortizing with XX to As a we years. of typically X

We also near-term have risk maturity. low from

geography mortgage As X, portfolio and is XXXX XXXX. On portfolio, of the we also residential quite mortgage mortgages up close largely real by and of made our the credit. quarter single-family estate well of provide and income-producing XX% XX% portfolio quarter low property. -- XX% in also mortgage a our loan-to-value end, detail only is below commercial commercial our of Slide our portfolio to average and equity all of before of at XX% X% of for real The diversified for matures residential on fourth a Like estate, residential is LTV. home portfolio lines which with

are second XX% As the in from you with resilient commitments, also coming residential branch a our overwhelmingly loans be quarter. Residential has growing can in origination of for mortgage distribution our growth loan source of on see footprint to like HELOC source we in are proven the our to would the lien I highlight network. us behind primary through mortgage our position. first geography, of X% that slide over

portfolio of The X. broadly our stable. asset Slide to Turning remains quality

estate investment of to second basis XX the we for points The increased points XX or XX decreased held of loan trends XX mention higher XX% There basis reported ratio were compared commercial increases risk. driven no The ratio the loan loans or modestly sector proactive and $XXX net We credit points for borrowers to criticized being special increase XX. for investment. and charge-offs losses to industry basis in loans or increased $X.XX. loans nonperforming basis points basis basis and points points, September net were million XX, basis geographic Quarter-over-quarter, quarter-over-quarter of for as in During points of normalize. loans to held assets quarter. for as from trends X with provision the June total charge-offs X XX primarily quarter the C&I basis criticized the credit rates loan by $XX of The third We assets June from remain in quarter, million highlight to million impacted inflation. ratio XX September some XX, increased X to as from $XX of uptick million X.XX% of third criticized classified reported an a continues of in and the real quarter as monitoring loans. slight $XX in the credit allowance losses managing vigilant as this increase and ratio to and CN no XXX% by point of building our also are for second

Turning XX. to Slide

increased the be this As for for strength ratios our is reflected common slide, adjustments our as were quarter-over-quarter would capital value dividends our our per tangible strong. made due of Directors fourth available X, of stock. per XX. record still stock very not November Board value of will expanded stockholders for already November capital buybacks. $X.XX million quarterly share $XXX shown grew that and XXXX, equity, share on payable common of be equity to the per earnings. increased to X.XX% of the book XXXX dividend currently future ratios AFS to for West's in HTM XX%. losses have security XXXX. We that If on loan all Tangible on East share repurchase XX, remains mark of authorization common allowance of The and tangible company's quarter has September Quarter-over-quarter, declared book X%. Year-over-year,

fourth as income of shares repurchase we Chris a the did not to outlook. XXXX, of now quarter. I'll call intend we for release, quarter our in the discussion during Chris? and any the over announced more repurchases third of statement detailed turn drivers our earnings Although in the to resume

Christopher Del Moral-Niles

source. income Irene, XX morning with start deposit by our and and drivers our our to will of review have key type commercial you, client of cost net the deposit good and of increased Thank the customer we and net we then accounts margin. Slide deposits. customer both interest mix balances, discussion third Year-over-year, the reduce a highlights successfully and consumer grown and deposit sectors. segments, I wholesale number strength higher all. deposits interest across In quarter, grew

are commercial consumer well Our and granular. remain industry deposits deposits diversified our by fairly

balance sheet XX. the Slide to Turning on

loans driven sequentially, growth by all in categories. Third major quarter X% grew average

X% deposits billion Third $XXX $XX.X average quarter. increased of second the or from million quarter

was During higher a the third by declines money reflecting deposits other market offset in in quarter, customers deposit categories, largely growth environment. time and in yield average their interest optimizing rate

up Our for the ratio was average demand quarter of the average made XX% during average deposits deposits and loan-to-deposit noninterest-bearing third period. XX%

to XX. Slide the NIM Turning on

quarter-over-quarter. $XXX margin Third record was new Net by was X XXXX sorry, East basis which compressed X.XX%, net million, income third points interest West. quarter quarter for a interest

to lower due and deposits higher mix of higher-cost categories, the see was on customer can this interest-bearing chart you compression to from wholesale deposit As the NIM bodies. largely slide, offset waterfall loan partially higher the deposit by the shift deposit and costs impact

Slide quarter fairly September the rate nearly to end with portfolio quarter a prime In the and XX with XX. SOFR-linked on quarter-over-quarter, yield XX% coupon Turning increased of our at June I and by X.XX% variable spot at rate split loan points loans average balanced XX. our compared XX basis was was at third rate loan X.XX% total, between loans.

collars. rate the of years, hedge we many were use C&I through CRE customers and and swaps, last help the also low, several our of Over to continue while rising caps some rates against risk

on environment the shocks clients September a nearly These the result, the service CRE to customer higher was payment XX. book over partially at the near side, protected total rising are rate debt As term. rate the of and costs X/X the them from fixed against

Turning XX. to Slide

basis the the of cost XXX up from second basis average points, Our XX quarter quarter. third deposits for was points

higher We a with the In of on rate We has change manage been December same on relative the in XX% $X.X down cost deposit points basis spot total beta costs much of to our over comparison, XX% was XX, with cost period. [indiscernible] the replaced quarter. of our loans deposits cumulative deposits customer during since XX. September were XXX that funds. reflecting the paid cumulative billion to as and beta Our ability lower wholesale pleased

Moving Slide income noninterest on on quarter income in was Total the XX. million. to $XX noninterest

reflecting For other higher rate $X quarter. second bit was on in investments quarter, contracts market Other quarter-over-quarter, second from income derivatives million primarily of quarter, the increased CRA changes a reflecting $XX and the down recognized of during marks interest valuation the million third income investment $X valuations. million

income was $XX fee period for million. Our the

XX. Moving on to Slide

a $XXX Third quarter noninterest X% expense decrease million, quarter-over-quarter. was

This expense, was and lower Excluding lower lower quarter, lower driven and comp occupancy credit costs consulting expense sequentially. several noninterest million of [indiscernible] third the tax $X X% million in including expense. by was expense categories, loan-related benefits amortization over adjusted down or $XXX in and decreases down

adjusted in The the efficiency third quarter. quarter compared XX.X% XX.X% with ratio prior was

efficiency. industry-leading year review with deliver We consistently outlook on for XX. that, Slide I'll updated And the now are our full pleased with ability to our

For are income, the full net for year, the adjusted period items. expense we prior credit guidance noninterest interest end reaffirming and loans, of our

expect our turn to tax investments. tax the we of will currently We effective remarks. Regarding to credit tax tax XX% $XXX approximately closing the be of Dominic call that items, rate XX% quarter, the now about $XX based anticipate the credit will for on between million. With full amortization that, be million now for year his fourth back investments for I'll

Dominic Ng

Thank to finishing closing, a we forward are In high XXXX looking you, Chris. note. on

profitability customers. net has call thank business to positioned is was to in open work their to for focus which continue our all diversified now quarter, balance Operator? hard us West the I and associates well to strong performance. last our The revenue our questions. sheet will on East our interest reflected model measures and and remain want income resilient Our I high.

Operator

Casey Haire [indiscernible] Instructions] with from [Operator question Our first comes

Casey Haire

everyone, welcome Yes. morning, back, and Thanks. Good Chris.

First for Chris. question you,

the to NII. position on the those Just going working wholesale retire rest into more cash The those how curious much Can you forward? can of the -- and down wholesale the deposits? lean about deposits position cash

Christopher Del Moral-Niles

Sure.

down wood a Irene in to with that was here off. $X.X on mentioned up year-end talked lot it paid quarter and $X.XX intention obviously As third billion the last to by our the call, of we've pay billion

next that we and forward. will go that take year's bit optimal as of planning. we're we that's little as we had a care of cash level planned there's evaluate to So going into maturing, to move the continue they

Casey Haire

it. Got

know just trying that? be but And curious aggressive a how you on resumption, at are on a might $XXX specific I looking follow-up get payout authorization, Just the stock to my [indiscernible] ratio obviously sense might the the or have ratio? you how be at buyback CETX you Okay. buyback as with with evaluation? million the aggressive you just of to

Dominic Ng

word the aggressive. would use I know. don't I

I opportunistic. we're think always

already been that's million to We left authorized. have $XXX go,

so And think, -- will I proceed. obviously, price and so we good pretty

it And so I will leave that. at

Operator

comes Securities. from with King Our Brandon Truist question next

Brandon King

margin I some longer to so wanted you could being do think or net more trends, potential regards stabilization context environment. in we And bottoming? for interest potentially to When in give rate higher the -- see

Christopher Del Moral-Niles

expect given NII, towards Well, our think year-end. the dollar and term, actually managing long our modest of rate term, rates. generally potentially current more that declining there's I is outlook expectations obviously, given fed the we rapidly course, medium to continued action largest we're In in compression towards the risk and another

we're term. taking for proactive measures positioned to So sure long we're make the

Brandon King

to to doing a maintaining in And revenue are expense more be terms Okay. with from of operating going standpoint. managing you or base? next thinking that year challenging is leverage regard positive What about

Christopher Del Moral-Niles

be We typically follow we'll happy that think a I for then. January little and to us to guidance. early XXXX up call, do in you it's give

Operator

from comes with Preston next UBS. Our question Broderick

Broderick Preston

it. more pointed maybe Using on buyback, to name. my I full the a like ask question Dominick. wanted I

of you $XXX out robust. of $XXX million bought well where left The obviously the income over the it million paying in stock cheap So XQ is net after authorization. got you and had And you in Capital past. alone. dividend below back is

amount would the using quarter? fourth in the you So full consider

Dominic Ng

as said we Well, are earlier, I opportunistic.

whatever not. have is any -- like And don't and doing quarter be it And do that And one be we'll at that the assured, direction go. X the Banks so we really what we thing And best. And according how to right what that go West we the to sense you sort or we price time. specific rest how the always in see things can makes think is we'll of thing right East always have shareholders-friendly.

Broderick Preston

Got it.

on have a question. that, which multipart I is Okay. much of I bank's And lead portfolio is? wanted don't the portfolio Chris the also, loan the to have ask if kind follow-up, on? would of Irene a know the underwriter amount to have what bank, do And do the of is reserve happen what then And this, SNCs. then how or you I office

Unknown Executive

Brody. Yes,

held million And we've which want of day, lead to $XXX we're participated next that we of Out think X/XX, although purchased X/XX, on others. squeeze you SNC questions on your on of from also of as offsets. them $X.X others. out we question, syndications, comment I the So billion million have I that X of $XXX for to

] versus XXX for as the that of reserve ] reserve the quality. X/XX -- credit that from increased portfolio XXX of reserve continues we we [ Total quantitative So the for to of as that office. And for as be at look portfolio qualitative of office economic just the we the was ]. XXX [ [ factors I'll share and and need outlook half

we it to is and is make sure our it the given appropriate think So monitor that as building environment. we reserve continue

Operator

comes America. question Next with Ebrahim of from Bank Poonawala

Ebrahim Poonawala

Good morning.

Just maybe Dominic for you.

approaching? a just lot So of lot have give pulling we a think -- you are us and demand back growth customer it sense as areas? you the opportunity -- or Are certain driven about us a today? about excess how that just be on of peers you of pulling banking back seeing you're sense the lending commercial of a you're as Just demand in share think market capital, customer side give driven

Dominic Ng

our of customers. has a actually mainly in see, our taking been back in were really as March, good customer competitors Well, other focusing care our their of you way. some hurting can priority on big former

and that of one things West So is offer the East stability consistency.

and banking done decades, and cycles frankly, the route with economic actually have, of conditions really went good that us various real well. clients have in that estate we really commercial are for So some been through

banks do they -- there we down like are to customers other there tend they whenever sure And financing better. find that, step fact, down cycle, are and like who things customers when of and opportunities, we is get not them fleeting chasing we're that. care needs. But great good that every really the up take In make a and other

of all as the obviously, great high strong out And very customers relatively are there our out level. not there. we many side, rate on interest And there many substantial are know, is investments. So making C&I that also the not deals

So be plenty deployed. are got today standpoint of we that of where to in the we've capital

continue We our for good their there lot on to making that and the needs. But to line not very customers of other customers take are able aggressive acquisitions whole or care purchases forth. our very out a are hand, of additional or so require increases

and in March. relatively would is I stable, expect I that that with say that back So happened dramatic I don't something somewhat market of growth that, just think the because disruption the

banks. felt from Secondly, West. are From increase I East have the to that customers other well. see making more not Their currently are we are from doing customers getting do banks increase that all banks

taking just prudently these are then just on for to customer We start and causing bringing We ourselves. quickly digestion at too a don't want time. many new one then and in

one So is general, few them the we favorable taking time. feel landscape. next competitive years, a more the simply are then And in market West just somewhat because that current East we to the prudently in of at on

Ebrahim Poonawala

there And XX That it you're was mention apologies you. we saw just but softness? pick was maybe, it, certain color. that the it. loans, review? seeing commercial maybe bps Got own where that? just XX internal if one, some Chris, I the driving good portfolio Is What's areas your sites. for missed up And within Or special are book

Christopher Del Moral-Niles

our Risk address let Officer, Chief one. that I'll

Unknown Executive

that of ratio, in It prepared given expect broad-based, very do are way will rates that, mentioned classified and to aren't of very, continue or there as kind honestly, one very those carefully. monitor portfolio there basis the the [indiscernible] the we some Chris. or asset I And low you, any another really increases the in Thank sector. appropriate, we pretty is look kind given remarks, as When we criticized where drivers, are, at really be

Operator

Our next with question Compass Point. comes from Rochester Dave

David Rochester

you growth and expense need big early keep would that on congrats for little anything any out watch just bigger the on side or that front the the like on to Irene Chris, either for elevated it's potentially roles. I picture, items, expense next know upgrades there a new But that, is or year. ticket we anything mentioned next year? rate regulatory systems

Unknown Executive

but think the obviously, assessment, don't special SAIC mean, that everyone so, the particular. nothing Dave. I the special impact industry, I we access, but Yes. will have in

David Rochester

follow-up as on And a then margin. the

First, it me and impression seeing wrong, costs if you correct deceleration with average. a barely bit a deposit term, pretty sounded like also I'm big mentioned but spot you little an near of maybe guys increase highlighted the up the from quarter in

actually And just wondering, stabilize seeing you are and growth higher? absent could changes, that XXXX? any benefit term near assets continue earning to into So repricing see Fed rate NIM from you'll you

Christopher Del Moral-Niles

to that I certainly I deposit deposits against quarter, mix be should able that the some repricing the some be customers probably to we're from compression That if risk. as that us. the As look see there's there'll work of growth hike, fourth seeing Fed our been another having to lift existing providing will continue we said,

that at So play, well. the I those remarks are but are spirit dynamics captured think of you've the

Unknown Executive

got excuse better me. Maybe I'll third July of around our the of you [ XXX thoughts at look I and bit the was ] September, the XXX and and ] NIM trajectory a helps August so for this if so for from [ both of then quarters, this, we've little NIM kind months, And mean, just add. quarter inform

fray forward. of at kind and we're with move comfortable as us we stabilization we're helps where the that So

Operator

The Morgan Stanley. from Gosalia next question with Manan comes

Manan Gosalia

on some loan to ask It bit like sounds here. continue to you're it you're little like I to getting funding going side. just color and wanted more looks lean the in nice about growth a

and funding that money deposit growth fund quarter I be this coming bringing Is the from market to think that new you you're is loans? where time noted to focused on going deposits. market in

Christopher Del Moral-Niles

board. I the And think success we're going across the to seen be across board. we've looking frankly,

customers push some expecting and medium-sized well on a better to we have internally into small to well further deposits as consumer new mortgage initiatives driven grow by on as fact, our our integrate checking consumers checking ecosystem. businesses with In the business we're side, as accounts, as

we'll higher-end be at significant have to, bank. see new won't as commercial deposits also there balances. And been Dominic we're new for the with think lift opportunities with obviously but us points. at customers consumer I be selective necessarily to to the So alluded prioritizing customers and that that the right cost, proactive And to price come expecting we're grow

Manan Gosalia

maybe So that...

Dominic Ng

that few want cash also our fully whatnot. the add Bank, management that I clients it's have to in online set take a going commercial East And time West to to it's take and clients, a new accounts to a to to operating commercial banking operated, going transfer some over up that for we primary have order in brought months.

those the So increase deposits. noninterest-bearing to gradual going therefore, to it is a be when comes

Manan Gosalia

Got it.

then the Is online given maybe It to able have there. is where it I your about see banks do below you can to deposits. slightly the a I elsewhere seeing that because you're And about it the services And good how and can Okay. talk just market X.X% in relationship Is looks traction I rate. depositors? it some offer? that? with relationships like time other pricing CDs guess on -- you longer you are focus think of you're you're offering

Christopher Del Moral-Niles

customers low the at to And forward. to on relationship able judgments with them. They're our going West make rate base to part we're that's able And the have is forward to, exceptions hallmarks think folks rack today. right allowed also and to us on we've I referring to both of opportunities appropriate they look entire been attract to and with the think what's they're bring opportunities. cost East basis. and look of individualized success relationship on move one the which an you're continue right rates, new I business of in and opportunities, at individual had selected given that's

Operator

Piper comes with question Matthew from next Clark Our Sandler.

Matthew Clark

If your itself start deposit you to how you me, deposit -- curve fourth costs? might quarter. the out, deposit be quickly forward think First able guess, the kind on cutting for one cost do just outlook I plays beyond of

Christopher Del Moral-Niles

be as fast a near function to a I a the going the as bit But it of starts be lag there's think soon Fed moving. term. Fed starts the over moving, will Well, of how

when Fed and rates of lag function next and the moves turn to rapidly year. 'XX, well. how will pretty And So as the how in why on and it reacted be obviously, react a precipitously bank fell we'll the

Matthew Clark

Okay.

then on one And versus office of central Okay. as on of CRE, a performance competitors differences to portfolio your seeing your relates of side couple Are within office. suburban suburban the you office it any nonperformers had new business district?

Unknown Executive

Yes. Matthew, we with at smaller for size you actually as kind smaller loan And district, honestly. see exposure reflected it's far sizes, or don't if have the any granular loan, quite as can properties. or much that business the all the central of of really right,

based seeing of grades, are non CBD. And I kind with as sector that, strategy. most no kind more to one or major I is overall, say suburban with ours or that said, we're comfortable we on geographically. comfortable the that the would say of we we're that the of clients, are continue working there would we're portfolio, So with really there's out in difference With although loans region conduct

Operator

Timur Our next Wells Fargo. Braziler question with comes from

Timur Braziler

questions Maybe Two me. Dominic. big for picture for

in And much single get cycle? question current navigating credit seems much timing How announcing I that buyback, your the a the mean, every confidence it just is like call. of conference on in nature? that wondering, does you symbolic here. that speak of Just how It's I'm to the it

Dominic Ng

the it. quite did I you heard I don't and exactly Irene hear didn't -- question? quite Chris,

Unknown Executive

of of to think start capital, The of as look look have at to just your just answer continue growth also uses of ] we grow if Look, thought I'll mean, this quarter-by-quarter, at. Maybe question. we the I quite capital, candidly, investees is I highest are capital. multiyear, is [ where the the we capital part but capital that levels not the confidence our the

the question, in capital with our the do is on happen where of commentary we of and will answer see level. we it a is think strength franchise to I So your what kind yes,

Timur Braziler

management the just and relates maybe thinking then planning? that recent changes And great. That's your how talk on to to succession Okay.

Dominic Ng

rotate be in for it's to We of very, and and that the leadership, both important risk can't very also going going Chief feel at better he's Chris our West Oh, the in CFO like and can Irene. make join which to to that to very at West Risk act We leadership us thank that- important shortly, then that also Bank's fact, person job our think in think organization us us we And any allow for I Irene and always been to to plan, lighting years. in very Risk Officer position Officer. continues we're to very are Chief a sure forward, to to and in is area get development, we like as And of able East East the feel position long-term goodness, in area. strong fact, the planning. this be that succession grow, the have pleased, solid get came Chris finance sort moon

working East to we ago. many pretty leadership because for West, been for and depth So I think pretty this going good has us all strengthened years at our out for executive is us good this be

Operator

Tenner Gary Davidson. D.A. with question next from comes Our

Gary Tenner

As think wondering maybe about $XX quarter. versus there XX. headwind longer additions to like comments of it planning million the first, math was the the interest there rate Because or quarter-over-quarter million of if kind was quick to book, June swap term. second I'm the as looks your any higher relates, $X which are billion I $XX

So thinking kind forward? going that of view how about

Christopher Del Moral-Niles

$XXX of of a transparency the came call, had Irene further another million for $XXX here $XXX the million for on after just quarter, quarter. a Sure. in mentioned total add we've that Yes. fourth We million earnings last done which the did that. And

Unknown Executive

start board your date. To

Christopher Del Moral-Niles

start. forward a with Yes,

at costing risk the of total alluded The looking Fed say, swaps we're all that to, protecting XX caller our higher quarter would appropriate precipitously that's prudent was us long-term currently that we're us for NIM, we So moves essentially collectively in against that place. forward. cost previous ourselves in which place, of downside of quarter, in million putting income the $XX and $XX the as to a reasonable have think to against profile. had downward, That's protecting we we're the with the not for price risk that that's and points to sort protection that those but but think basis been million, cost the the is insurance we pay or going

Gary Tenner

for just over? fixed, me, appreciate XX% a is [indiscernible] that. your adjusted or And loan remind swaps is that's little adjusted in slide yield I that the

Unknown Executive

is It adjusted. not

Christopher Del Moral-Niles

of Irene And ones swaps as numbers The an the Yes. that. mentioned, recent are are starting. loans the Slide some most swaps underlying actual have been again, to the overlay the XX keep and that all forward mind in

So there take lag will but of effect, bit a there's component. obviously a before there's they a

Operator

from Next comes KBW. McGratty question with Chris

Christopher McGratty

for Maybe the team. Great.

capital given think the You an reposition that. about appetite capital about the the of of a in seemingly, buybacks market a talked to portion What the likes portfolio -- bond use rates? lot I move

Christopher Del Moral-Niles

we'll at right as fourth be at do always be. going take I planning I for thing what that But we'll shareholder-friendly of year, look the And strategies, dynamics to looking has we're think that think thoughtful I And right at we're next into strategies. Dominic very portfolio right quarter as portfolio cash think the all our and looking consideration. positions, growth thing. about our we'll into here we're said, be we the going our should and

Christopher McGratty

we've C&I questions the I market. from focusing. credit Like this Okay. that's of the a rank of we where Great. But -- go about what by going credits peers about into seen worried should you think maybe and Dominic, year? And guess most stack you're mean where say? do next some then lot would you be some a office I quarter. sideways your

Dominic Ng

actually terms pretty much but that's have good in quarters. We are in too mean pickup I like for we really with do last all credit I Right now, relatively, perspective. of not anything, I'm compared frankly, charge-offs, a charge-off concerned mean, slight the shape. few almost at about no

the had oil really think was I at reflect would of normalize credit mean not I I So point. portfolio years gas I will we At if say I I very me back this really I that X X we concerned. -- good. overall years kind mean seen got haven't just stage, mean, that I this this really ago, that and ago, look at I much portfolio,

of And the having our oil a that nice still despite that challenges diverse have gas we else is we so earnings, record fact a doing have simply about But the the making is portfolio and end that well. some had bit thing everything fact we portfolio, little with very charge-off. so we because is

hurt So us much. particular couldn't that industry one

It's people pretty I of the now, when And look take a building, earnings overall is right of we size day, So and therefore, The is there. the just enough. at the and the can and as in in lot is all, low loans. of so some be hit that of average so LTV the and small think high. you see, for I else may it. a on great I'm this The big eyes we at so everything point, should have is shape. And size, at size that end not portfolio so office to sure all their the here CRE portfolio

right now? exactly out. that whether the look like soft But by that third quarter at knows. quarter, X.X X will I who So this the second really is it way a would recession it didn't actually That's we I that expected. the turn you concerned. be Or A stage I recession. is months doesn't ago. though, I'm still or at year, I Again, the be years it's going would not always lending. And a lending matter in from it through And tell it are expect now, what soft

stay day, position Our [indiscernible] a this make is And will sure we how portfolio the that to end East -- base. and up West at strong of is is to of always diverse a having which having continue at we our we relatively very banks. philosophy, true better the the customer doing that end speaking,

Operator

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

Dominic Ng

to to call all again want looking to in talking you everyone today, for just and January. I Well, to thank of listening you. Thank forward our I'm

Operator

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

disconnect. may all You

East West Bancorp (EWBC) 19 Oct 232023 Q3 Earnings call transcript