East West Bancorp, Inc.

Q4 2021 Earnings Conference Call


spk_0: and welcome to the east west bank or third quarter twenty twenty one financial results conference call or participants will be homeless and only mode should you need assistance please ignore conference specialist by pressing the starchy followed by zero after today's presentation there will be an opportunity to ask questions to ask the question you may press start than one on your toes and keypad to withdraw your question please press start and to please note this event is being recorded i would now like to turn the conference over to juliana beliefs go director of investor relations please go ahead
spk_1: thank you sarah good morning and thank you everyone for joining the financial results us bancorp for the fourth quarter and four year of twenty twenty one beyond on conference call today are dominic dominating or chairman and chief executive officer and irene of for chief financial officer would like to cross a new that during the course is a problem editor may make projections are other forward looking statements regarding events or future financial performance of any part of the private security ligation for act of ninety nine forwards a same say different materially from the actual reason to to a number of with certainty for more details the scripts a risk factors that sector companies operating results please refer or filings the disagrees with shades commission including our annual report on form thank you for the year ended december thirty first twenty twenty eight edition so the numbers reference on this call pertain to just the numbers please refer to the banks regulatory filings including are formed eight case files a day for the reconciliation have guessed it on get financial measures during the course of this call the old
spk_2: be referencing a fight that that is available as far as the webcast on investor relations act as a as a reminder to date call is being recorded will also be available in replay former on or investor relations with say i will now turn to call over to dominic
spk_3: thankyou juliana good morning thank you everyone for joining us earnings call i would begin to review of a financial result was like three
spk_4: presentation this morning reporter net income of two hundred sixteen million and earnings per share of a dollar fifty two cents for the fourth quarter of two thousand and twenty one for four years he was achieved recruiting of six dollar ten cents for sure
spk_5: record for your total revenue of on point eight billion grew by thirteen percent year over year
spk_4: and record net income of six hundred seventy three million grew by fifty four percent
spk_6: this was driven by for your total of twelve percent excluding ppp
spk_5: and for you total deposit growth nineteen percent
spk_6: we returned one point five percent on assets and seventeen point two percent on tangible equity for you outstanding financial performance in two thousand and twenty one reflected robust interesting come and see income growth
spk_7: industry leading efficiency
spk_8: and substantially improved as a qualities
spk_3: in the fourth quarter of two thousand twenty one nonperforming as has decreased by forty percent and criticize loans were down by eighteen percent
spk_4: for each consecutive quarter of two two thousand and twenty one criticize moans decreased
spk_5: the fourth quarter analyze that charge of racial also decreased to a low temp basis
spk_9: at the same time we maintain a healthy allowances for losses
spk_5: i'll reserve coverage of loans was one point three percent as of december thirty first two thousand and twenty one
spk_3: we're starting the new year from a position of strength home growth prospects for two thousand and twenty two are excellent
spk_5: we believed that are brought dazed subversive i'd known growth momentum from two thousand and twenty one would continue in the new years and we're encouraged by the favorable such as claremont
spk_6: our balance sheet is well positioned to benefit from current market expectations for rising interest rates
spk_5: further investment that we have made over the last several years in cash management and payment related products offensive
spk_8: health health to strengthen our core deposit days as of december thirty first two thousand and twenty one non interest bearing demand deposits made of forty three percent of total deposits a record for east west
spk_5: we have a longstanding history of industry leading deficiency our just a deficiency ratio was a low thirty seven percent in two thousand and twenty one in two thousand and twenty two we will continue to control expenses while investing in our city to priorities
spk_6: to expand revenue and hence the customer experience and strengthen risk management and during growth and scale abilities
spk_5: put it all together these factors will drive lobos earnings growth and strong probability in the coming years and beyond supply for presents a summary of our balance sheet as of december thirty first two thousand and twenty one total long's reached a record high of forty one point seven days excluding paycheck protection program lungs total long screw one point five billion or sixteen percent annualized from september thirty two thousand and forty one and by four point three days or twelve percent year over year no growth in two thousand and twenty one was well balanced across the sea and i residential mortgage and commercial real estate on an average basis fourth quarter total loans exclude and ppp through by ten percent analyzed from the third quarter total deposits of sixty three point four billion as of december thirty first two thousand and twenty one but essentially unchanged from september thirty two thousand and twenty one as up by six point five billion or nineteen percent from year ago
spk_8: driven by strong growth in non interest bearing demand deposits
spk_10: on an average basis
spk_5: for for a total deposits grew by six percent annualized from the third quarter turning to fly sides can see our strong have shows largely sable quarter over quarter as of december thirty first two thousand and twenty one we had a common equity tier one ratio of twelve twenty percent and a total capital ratio of from one percent which provides us with mean full capacity for future growth
spk_6: a book value pressure increases ten point five percent and a tangible equity pressure increased twelve percent year over year i'm pleased to announce that is was board of directors approved a twenty one percent increase
spk_8: to the quarterly kind of students
spk_5: from thirty three cents per share to forty cents per share
spk_8: if equivalent to an annual dividend of a dollar sixty cents per share
spk_5: the new dividend would take is that beginning in the first quarter and is tables on suddenly twenty seconds
spk_4: thousand and twenty two two stock stockholders of record on february seven two thousand and twenty two
spk_6: now moving on to a discussion of a loan portfolio beginning was like six
spk_5: the and i lost standing excluding ppp world records suited thirteen point six billion
spk_4: as a december thirty first two thousand and twenty one an increase of eighteen percent annualized some september thirty and up by thirteen percent year over year
spk_5: total see and i commitments with nineteen point eight billion
spk_8: as of december thirty first also of action present analyze sequentially and of fifteen percent year over year
spk_6: cordova quarter our total see a nice you lie station was unchanged as sixty nine percent
spk_5: by industry we saw saw an appearance net growth in the fourth quarter from private equity and entertainment
spk_8: and general manufacturing yourself
spk_6: throughout the year see and i go for us has been diversified across are lending teams geography
spk_11: as specialized circles
spk_5: from two thousand and twenty two weeks that that see and i growth will continue to be well diversified
spk_12: in our outlook
spk_6: we're assuming that turn line utilization levels unchanged
spk_5: an improvement and utilization will provide upside to our current expectations
spk_9: optimistic about a strengthening economy
spk_13: and the man in our markets
spk_5: but cautious about impact that the ongoing condemning may have on near term growth
spk_6: sly southern and next shows the details of our commercial little safer for years which is well diversified by geography and property type and consists of low loan to value looks
spk_8: total commercial this a long as was sixteen point two billion as of december thirty first two thousand and twenty one up by sixteen percent annualized from september thirteen and up by nine percent year over year
spk_14: this quarter
spk_6: we saw the strongest niekro buy property type in multifamily mortgages and retail see are you in slide ny we provide details regarding our residential mortgage before
spk_5: which consists of single family mortgages and home equity line of quests
spk_6: residential mortgage loans were eleven point two billion as of december thirty first two thousand and twenty one
spk_15: groans spots nine percent annualized
spk_8: and of five fifteen percent euro
spk_5: during the fourth quarter real region eight one billion of residential mortgage on
spk_6: which was up four percent quarter over quarter and down four percent year over year
spk_5: originations for a full year of two thousand and twenty one was four point three billion
spk_8: an increase of twenty nine percent year over year
spk_5: i will now turn to call the to i read for more detailed discussions about as the quality of income statements are east
spk_16: thank you dominate after i was a as calling that tracks on slide ten am very pleased to report that during the course of twenty twenty one all as a call the metrics substantially improved total criticized lungs decrease sequentially by eighteen percent to eight hundred thirty three million as of december thirty first twenty twenty one and decrease by thirty two percent year over year the criticized monterey shale improved by a hundred and seventeen basis points to two percent of total loans as of december thirty first twenty twenty one down from three point two percent of loans as of december thirty first twenty twenty quarter of a quarter nonperforming assets decreased by forty percent to one hundred and three point five million as of december thirty first the change in nonperforming assets in the fourth quarter of flux pay offs and upwards to see and i love and the sale of a commercial real estate own property year over year not forming assets were down by fifty six percent the not performing arts at ratio and proved to seventeen basis points of total assets as of december thirty first twenty twenty one guy
spk_17: i'm from
spk_16: forty five basis points total assets as of december thirty first twenty twenty total oil and gas commitments were nine hundred and twelve million and dances outstanding were six hundred and one million as of december thirty first twenty twenty one we are comfortable with the proper the size of under one billion and commitment for the scepter year over year the risk profile of these borrowers has improved substantially on flight eleven to present that opponents of our allowance for loan losses or allowance total five hundred and forty two million as of december thirty first twenty twenty one and one thirty two of loans excluding ppp compared what five hundred sixty million or one forty one as of september thirtieth the port of a quarter change in the allowance reflects improvements and real estate metrics for cereal on pause and about operating drop off or backdrop for the oil and gas exposures this was partially offset by higher downside snarl weightings due to uncertainties related to the pandemic and the crime on the contrary it we believe that the allowance coverage ratio will continue to moderate laid decline
spk_18: and in the coming year
spk_16: fourth quarter net tar jobs for ten million down from thirteen point five million in the third quarter the fourth quarter net charge of ratio was ten basis points of average moons analyzed and improvements for thirteen basis points analyze for the third quarter for the full you have twenty twenty one the that charge off ratio was thirteen basis points compared to seventy basis points for the prior year assuming the economy continues to improve we believe that the net charges for the for your twenty twenty two on modestly improve from full year twenty twenty one levels during the fourth quarter we recorded a negative ten million provision for credit losses same as in the third quarter and in line with our guidance for the full your of twenty twenty one we recorded and negative thirty five million provision for credit losses largely due to an improved macro economic forecasts partially offset by allowances required for the four point three billion growth in the loan portfolio and now moving to a discussion of our income statements on flight twelve dislike summarizes the key of items of income statements which i'll discuss in more detail on the phone slides and uninteresting time included an interest rate contract another derivatives a mark to market adjustments which were point four million and a fourth quarter compared with two point five million in the third quarter of these primarily relate to changes in the cbs on this slide see see the a marks are included in the other line of non interest income amortization of tax credits and other investments decreases quarter to thirty two million compared with thirty eight million in the third quarter quarter over quarter variability and amortization of tax credits partially reflects the impact of investments that close in a given period the effective tax right for the full year of twenty twenty one was seventeen percent which was the same rate as and twenty twenty another view the key to our first of our net interest income and editors margin on slides thirteen to sixteen starting with the average punchy fourth quarter average loans a forty point five billion to by five hundred seventy two million or six percent live quarter analyzed and excluding ppp by one billion or ten percent annualized during the quarter we deployed cash and cash club and into higher yielding loans and securities average loan secure these and we sell agreements increased by one point seven billion and interest bearing cash deposits of bags your the twenty five basis points decreased by nine hundred eighty six million what for average deposits of fifty four point three billion like eight hundred and twenty million or six percent month or analyze that by growth and under interest bearing demand deposits which increased by eight hundred sixty million or fifty percent analyzed for average loan to deposit ratio with seventy five percent in the third quarter of unchanged from the third quarter we previously communicate that our comfortable operating with a loan to deposit racial up to the low nineties percent range of the for deposit girls is always a focus for each was a loan to deposit ratio with the starting point of seventy five percent today provides us with flexibility to withstand deposit pricing pressure in a right the interest rate environment showing up the assets sensitive nature of our loan portfolio turning to fly forty fourth quarter twenty twenty one net interest into a four hundred and six million was the highest quarterly net interest in some in the history of east west going by ten percent one quarter analyzed excluding ppp net interest income grew by sixteen percent analyze in the fourth quarter and tumblr
spk_19: later to ptp loans with ten million in the fourth quarter consisting of eight million of differed fees and two million of interest income as of december thirty first we had six million of ppp deferred loan fees for many to create into income on a five hundred thirty four million mobile
spk_16: the gap net interest margin expanded to two point seven three percent in the fourth quarter an increase of three basis points from the prior quarter excluding ppp the fourth quarter adjusted then have to seventy expanded by six basis points sequentially as you can see from the waterfall tart on the sly like the adjusted that interest margin expansion and the fourth quarter or flux a favorable earning as at mit shifts combined with a lower costs of interest bearing deposits turning to slightest teams the fourth quarter average low yields was three fifty nine and excluding the impact of ppp be adjusted low yield was three sixty six unchanged from the third quarter of our twenty seven point four billion in bearable rate loans as of december thirty first five point six billion had a fully index weights below floors of which one point nine billion were twenty five basis points or less from the floor rates another one point nine billion or twenty five to seventy five basis points from the floor right
spk_20: turning to slide sixteen
spk_16: harper's pasa the pauses for the fourth quarter dropped to ten basis points and improvement a to basis points from third quarter the spotlight on total deposits costs was nine basis points as of december thirty first also down by to basis points from september thirtieth the costs deposits declined as it's continued to reduce higher rate accounts and girl more costs deposits the average cost of cds in the fourth quarter with thirty three basis points a decrease of to basis points from the third quarter in the fourth quarter we have originated a renewed four point nine billion of domestic cds at a blended rate of twenty basis points and a weighted average duration of four months the repricing of material
spk_21: cd so lower rate has reached an equally brands
spk_16: move on to see income on slide seventeen total non interest income and the fourth quarter with seventy one point five million paired with seventy three million in the third quarter customer driven see income and that games on sales of loans worth sixty three million essentially stable from the last three consecutive quarters and up ninety percent year over year quarter of a quarter growth amending fees and deposit account these are partially offset by lower intersect contract another derivatives income revenue allergies games on sales of as a seventy loans year over year growth and foreign exchange and can deposit account these lending fees and wealth management these largely reflects mathematician and increase transaction volume particularly for test management of foreign exchange beyond the rebound from covered related troughs of twenty twenty beyond quarter to quarter volatility a positive about the trends in our fee income businesses and momentum from ongoing growth and twenty twenty two and beyond moving on to slide eighty fourth quarter non intrusive stands was two hundred and ten million excluding amortization of tax credits and on investments and for deposit intangible amortization adjusted non into substance was a one hundred and seventy eight november fourth quarter an increase of eleven million or seven percent sequentially this growth was driven by higher bonus an incentive compensation expense in the fourth quarter related to for your business activity and higher charitable contributions for the full year of twenty twenty one the and non interest expense of six hundred seventy one million was up six percent year over year the fourth quarter just a deficiency ratio was thirty seven percent compared with thirty six percent of the third quarter and forty percent and a year ago quarter the full year twenty twenty one adjusted efficiency ratio was also thirty seven percent and improved by over two hundred basis points on twenty twenty and what's that allow them to introduce our for your outlook for twenty twenty two on slide nineteen for the four year twenty twenty two we currently expect your your loan of excluding ppp approximately twelve percent similar to growth and twenty twenty one excluding ppp we expect well diversified loan both and twenty twenty two to them by strong production of from all of our major slow for foils and advice commercial and industrial loans we are assuming that our currency and i utilization rate of sixty nine percent stays on unchanged in our outlook year over year adjusted that interest income growth exploding ppp in the range of seventeen to nineteen percent this reflects loan growth as well as the and path of anticipated said funds increases on our assets sensitive backseat underpinning our interests income assumptions is afford interest rate curve as of january twenty six twenty twenty two which assumes for said funds rate hikes and twenty twenty two in march two september and december and are modeling were factoring in a thirty percent data on our deposits
spk_22: adjusted not interest expense growth excluding tax credit
spk_16: investment amortization of seven to eight percent year over year and we benefit from rising rates in our revenue growth we expect to reinvest a portion of that revenue back and to our business dusting and people technology to support us to egypt initiative we obsessed our revenue and expense outlook to result
spk_23: i'm positive operating leverage year over year
spk_16: in terms of credit items for twenty twenty two we probably expect that the provision for credit losses will be below fifty million we anticipate a modest improvement in the for your net charge off ratio which was thirteen basis point and twenty twenty one we accept a four year twenty twenty two effective tax rate will be approximately seventy to eighty percent in line with the tough to pass rate of seventy percent and twenty twenty one this includes impact of tax credit investments there will be quadri variability in the tax rate to two timing of catherine investments place service what's that on now time the call back over to dominant supposing a marks
spk_24: thank you i agree
spk_6: in closing in two thousand and twenty one was an outstanding use for east west i wish to thank our team of on for three thousand associates or the unwavering dedication and hard work throughout the year
spk_4: as enabling us to serve our customers was six months while delivering strong financial performance
spk_5: our for wanna take this opportunity wish everyone is happy new year
spk_25: and are happy at thirty lunar new year
spk_6: which is coming on separate first next tuesday i hope the year of the tiger springs health and prosperity to all of us i would now open up to call to questions operator
spk_26: thank you
spk_0: we will now begin the question and answer session to ask a question you may press star and one on your tell us and keypad if you're using a speaker phone please pick up your handset before pressing the seas giant question please post star them to you please submit yourself to one question and one follow us at this time we will pause momentarily to assemble i roster my first question comes from abraham than along with bank of america please go ahead
spk_27: good morning morning
spk_16: maybe so so is he could start with deposits so field and balances what has to be that of quarter with water you could use some perspective on what you would assuming in terms of deposit because i know why didn't you just answered the no known to depositors sure i'm just wondering you expect a meaningful arise in that reshoots was a full of this year and how we should be thinking about influential deposit those specially in light of investments you meet until she met him inside great person ah you know are a year and what's a customer a kind of activity we did see on a flawed as deposit growths but also as we noted on in our call and then the financials you can see that the average deposit girls was still quite god and i'll point out that
spk_28: you know you to date thus far you know deposits have rebounded as i mentioned the customer activity was a driver for the a deposit balance right at twelve thirty one for twenty twenty two on realistically what's gonna be the driver for earnings abraham is going to be the lone growth and as i mentioned that approach
spk_8: pair of remark in august slates deposit growth is always a priority for east last maybe just slightly less of a priority and twenty twenty two with our modeling worsening about a six percent deposit growth in our twenty twenty two
spk_29: we'll images maybe add on also
spk_30: core deposit growth specifically non interest bearing operating accounts
spk_8: that's what we've been focusing on
spk_11: for the last several years many of our investments of we made throughout the years incrementally every single year was to the payments
spk_8: and the system and of also digital banking for both a commercial and consumer and and really going as looking at the commercial clients that we have and and figure out how we can best serve as or clients have result in tremendous growth enough interest bearing demand deposits has the indicated in a call is it was forty three percent as of december thirty first two thousand and twenty one
spk_5: so we will concede to to drive those particles but the situation at is worse is that at us
spk_31: i've seen that we have much higher deposits old and logo
spk_32: for the last year too
spk_5: and we have a long to deposit ratio as seventy eight percent so obviously we don't have a d to chase deposits we just wanted to keep rolling
spk_8: high quality
spk_27: or deposits and as swoop that as part of the of on for in terms of to deposit to support our acid and on both the answer is not so obviously because down we are more comfortable to for more focusing on on the landing site understood and are just as a follow up
spk_28: you suggest and strategic priorities don't
spk_30: so year
spk_33: this one he's been an average on designate you're making investments and how we should think about
spk_34: that manifesting on revenue growth on the scene some wars defending site
spk_35: oh we are making investments know sort of like in the of technology we continue to focusing on also a treasure management
spk_8: areas in terms of how the with soda and better improve of of payments
spk_6: related products
spk_36: our task manager
spk_6: in addition to that as i mentioned just mentioned earlier digital banking both consumer and commercial are we also are putting more emphasis on wealth management and this is an area we see that there was can be great opportunity for us and the next five ten years and we are putting more investment to that
spk_37: knifes in addition to it you know we're adding on
spk_6: new
spk_8: bankers new bankers both for consumer banking wealth management and also commercial banks
spk_5: is very industry verticals that we have solder you know some of them over ten years ago some of them only the last two or three years of we can add on additional bankers to grow the business in addition to that we're also going to aggressively we did mention
spk_38: i guess
spk_8: why in the middle of the pandemic in two thousand and twenty
spk_39: we start our our office in chicago in obviously for four months of so we couldn't do anything because our line and little condemning
spk_0: have a little office in chicago have sought nothing very decent commercial banking business growth and two thousand and twenty one
spk_40: he said that to go even further so we will continue to look at some of the other geographic field and the we think that will be of
spk_41: sort of like
spk_42: areas and make sense for useless to expand to solve one by one i think adding people's adding to us to appropriate type of our product ability and for enhancing our technology and overall enterprise mismanagement or of area south of from mentally improve in two thousand i'm forty two john thank you
spk_8: my next question comes from christmas grassy with
spk_43: he beat up you please go ahead
spk_16: good morning the morning
spk_42: i'm donna gonna ask about the the outlook for see and i as a senior prepared remarks he said you're stupid stable utilization
spk_44: in the guy i guess it's a two part question what do you think it'll take to see that months and then if it did move up a point
spk_16: is there a rule of thumb for how much incremental growth that would never be too
spk_11: well as his incrementally improved i'm pretty sure that at that would obviously in
spk_45: an increase the longbow in terms of our same balances so a second i can share like when we look out that as we mentioned you know the utilization hasn't increased substantially a quarter of a quarter and in fact very similar to a year over year numbers as wow
spk_11: when we look at kind of the utilization for the clients prior to the panda and that
spk_8: compared to the current levels with these customers if we went back to pretend that have no and off now it's about one point two billion increase
spk_46: that's great
spk_0: and then and secondarily dm
spk_47: mission in your your comments around the the see income opportunities and you tested on wealth management higher how should we think about just the evolving rate environment and how that might affect your capital markets or business which some which moves round quarter to quarter
spk_42: yeah i don't have the capital markets are partially yet at the volume is so low in the fourth quarter we did have higher kind of us be in time related to our broker dealer that you know the man that's in that other income line items i've been thought my
spk_48: be what you're referring to cross over for a wealth management look at that i dallas also party of license you know year over year we've grown that nicely and we have stuff and twenty twenty two will continue to go that as well
spk_49: an scenario that i would say that is gonna be a motor mouth mouthy years
spk_16: our priorities
spk_42: that is so if i look back you know like maybe six seven years ago that i wanted to what he put an effort in terms of improving treasury manage a cash management and also foreign exchange and and as a today we see the numbers have grown substantially higher than it was five years ago and so and with the wealth management area as other one of those are high potential area that we think as three or four years and now that we look back at the numbers can be substantially higher
spk_48: and it is today
spk_16: or next question comes from jared saw with well spotted securities please go ahead i good morning the morning
spk_50: bills i get certain back on the guidance with the tax rate what's the assumption for tax credit
spk_0: and we're zeeshan costs on us said
spk_51: ah let me get that for you right away i believe we're assuming about one hundred
spk_52: thirty million of tax credit amortization of the full year of twenty two
spk_51: okay
spk_16: and then good looking at credit the seeds i had great improvement as we've gone through the year with with the allowance for issue now looking like it sold at the low the day one see so what's the impact of the of the improve energy to the improving the smaller energy book on that and your as we as we look out to the year
spk_42: would you to go and natural for is given me the economic environment for the allowance to answer ones rajah
spk_2: that's a great question so as have a year and the allowance for the energy buck was about fifteen million and that certainly is no you uber year and absolutely lower the movie or day one cecil overall know when we look at to transfer the alas we do and stuff
spk_1: to to come down from these love the one thirty that were around one thirty two x p oil and last that for photos are in place a faster as bad as possibly as a portfolio side is decreases and as you can see from the metrics that we provided you know the credit quality and the performances continue to improve and i would also
spk_42: a say that as a allowance the absolute dollars and the has come down and i'm gonna be less of a factor for ah the allowance and twenty twenty two and have applied way shows more sell the rest of the portfolio and particular honestly probably the see army portfolio and twenty twenty two and and metrics and the drivers for that one
spk_16: how the largest impact for the allowance
spk_42: next question comes from days rochester with compass point please go ahead
spk_48: you want to go
spk_53: the morning on the
spk_16: the morning on the and i i just can't understand what you're expecting to be the impact of each twenty five days for rate hikes in god and here and then what's the level of medium term interest rates that you're assuming of and the securities growth he acting as well thanks yeah great questions right now was our modeling and the guide and we expect the impact would be about thirty one million for a hike in twenty twenty two were not assuming we'll throw in the securities book how some other worldly the driver for that will be the liquidity and looking at what happens with the deposit growth the were not assuming any major changes and that and are you know i think you mentioned the raids know that kind of the papers actually have flannel know that that is also something that we stopped or did with the guidance and and i increase related to rates
spk_0: and does to the other one from the okay i'm glad said
spk_54: you have to clarify one comment from irene on
spk_55: it a thirty one million is she said for that's over for year basis so if the heights coming in a various points in time you know it easier to sucked into time of timing also send a sense and in so for medium term interest rates of and solid you're assuming that those about much from here correct
spk_16: lots of and i'm at work after against really years from the growth of the low blocks on and in fact you know really even with outweighed increases we do expect that that ah the increase in and i would be about fifteen percent france and then is my second question to something calm he has has solid growth and twenty one
spk_54: you've already talked about these answers you made a charger management about it so says well what are your thoughts on on growth for twenty two at this point defeated that the pace we saw in twenty one i would be appropriate
spk_16: to project and twenty two
spk_56: that total see and time grew over twenty percent year over year as well kind of modeling for a twenty twenty two i don't know if you've been expect that level of brought in particular you know i would say we had some items or may not rex
spk_57: twenty twenty two to happen and twenty twenty one
spk_54: some of the sp i see investments we had a lot of kind of equity picked up from their positive see the a just months so we're not modeling dad and day but we do expect that you know poor customer bladed be in trouble go nicely year over year and we're still there are roughly about fifteen percent on that
spk_55: or next question comes from tasty hair with jeffries please go ahead
spk_16: yeah thanks to morning
spk_0: i'm just wanna follow up on on the the acid sensitivity appreciate the thirty one million
spk_58: for height but just one or were what are the deposit be assumptions that saw
spk_59: no are being input for for that kind of sensitivity
spk_42: so what's the modeling were assuming thirty percent total deposit data are for interest bearing on a slight compared to like the last cycle personally no change but of course you know with the overall portfolio the knicks that we have higher level a dd a deposit much higher level
spk_60: of operating a town we do expect a lower overall deposit beta of thirty percent or south okay so that that's already present through the cycle not necessarily for the first couple of hikes that's right that's right and you know i lead a question there but our assumption is the first couple of heights debate is going to be lower
spk_42: gotcha okay and then just when the liquidity deployment
spk_16: you know obviously a nice move in the fourth quarter
spk_19: i'm on a period and bases your down at three point nine billion is is there more room to go he discovers reminders to where you know what what sort of your minimum comfort level as there
spk_16: there is a little bit more with the girl l r r piece of that really is a function of a value it in what our liquidity needs are what's happening with the deposits but overall there's probably a little bit more room to go on that
spk_0: or next question comes from brandon thing with tourist please go ahead
spk_61: a good morning
spk_62: good morning really i wanted the first such a low growth civic you see our read now and it's know would would do something for eight hours this upcoming years to be lower or higher compared to twenty twenty one i know some banks image house and heart which is rare nearby make elites a lower pay offs and was honored that he any impact
spk_63: the as and we're hoping so too and factor would say well first of all there are there were a lot of wi fi activities for the last
spk_64: you're to an so and i think that a lot of our clients or a sort of like gone through the revise you know exercise and the other thing as was rape picking up a loaded i i'd expect may be a loser less of those type of activities going on so hopefully that would help me do
spk_16: who's that he added pay down and an anti for the support of our assumptions for two thousand and twenty two we do expect to slightly less pay down there we experience in two thousand and twenty one a then on the streets to guide i was going and what's the composition of the growth and snakes is dislike like to be particularly for compensation
spk_65: i so it's not the same growth and twenty twenty one that expected aim twenty twenty two as well based also or how located potential bonus in a sense of else
spk_16: get the the increase of them the as ah accepted non intrusive science is largely related to compensation unemployed done at that
spk_62: vanden in a of one organization were expecting to grow of the load up on donna mention finance new hires and new teams in chicago spreading throughout our from the front office perspective and also the back office and most of the nonusers expense increases you know the same is not that the similar to the activity that you saw and twenty twenty one honestly it's a compositional be the largest driver for that what that we have spassky ah hopefully very soon afterwards revenue growth as well
spk_42: our next question comes from broth sanders lead with u p s please go ahead
spk_8: hi good morning
spk_11: the morning that is one of the morning i read as soon as a concern that number is said and i would be a sixteen percent x x hikes yeah that's our expectations
spk_5: correct got it's i'm kind of surprised that for hikes don't don't add
spk_8: don't add more
spk_30: we we don't know i did part of
spk_4: now i pop part of it as a shape and a perv part of it as the timing i think it's also as were evaluated yeah yeah we talked about the deposit betas and then also the
spk_11: smell one of the other factors as we're assuming kind of with the shape of the curve also maybe a little bit compression and alone side so we want to be realistic what our guidance what bad and the timing of that
spk_5: and again this just twenty twenty can fight we do expect you know further growth afterwards and don't forget the fourth cake in december has very little impact in the third site is also late in the yourself as it sounds for hikes sounds impressive until you
spk_66: marquette out over the course of the year
spk_0: we'd be happy to work that amount of with yeah
spk_67: okay
spk_42: and and there's a follow up just in terms of of is to general commercial calling efforts
spk_68: that this client growth you're seeing is it is it
spk_69: you know what we would associate with us and chinese ethnic bank or are you have the size now where many do relationships have no tie to that whatsoever
spk_42: we're getting both i mean that's what the south's one of the reasons why you been seeing you know this consistent sustainable profitable growth as useless bank and we have the advantage of you know when we compete like of regional banks
spk_70: what thanks within the past us footprint we obviously have as many different industries go to close and in some good geographical area
spk_6: and that would cover those this see and i doesn't is quite well and quote proper dose yard he doesn't is quite well
spk_71: and then we also have to cross border banking activities to continue to have sustainable growth you know if we looked at the last four years in a with this terrorists and us china
spk_3: sort of trey songz textiles situation that has happened i think that didn't stop is was some growing and and we continue to see bloat coming from cross border banking business
spk_5: and in out consumer banking size we are the dominant
spk_8: financial institutions in the retail space when it covers the
spk_6: chinese american customers some single family mortgages home equity lines and on also little of
spk_30: consumer deposit etc so and then and of course you know foreign exchange you know business so weird we're going well was our continued to expand in bold areas and and and so far we have full confidence that two thousand and twenty two and beyond
spk_72: we'll see similar trends
spk_42: our next question comes from gary tenor with d davidson please go ahead
spk_16: as the morning
spk_0: or just as you're thinking about loan growth in twenty twenty two nazi gave the guide on that is the only twenty twenty one he grows ended up being very well distributed among the three main segments are just you know
spk_73: asking if if your expectations and food and insurance
spk_42: shift in were more moderate comes from and twenty twenty versus i was
spk_74: down in fact what to notice the start
spk_62: we have in the past and old residential mortgage
spk_73: tend to be done
spk_16: the lead you know and then he are you see a nice and we started you know from the third quarter in two thousand and twenty one and onwards a see and i are taking the lead and naturally because know i would expect in two thousand and twenty two from what we see india rate environment and the activities from the in the past few years or revive pockets for single family mortgages papa to slow down a little this so we wouldn't expect single family mortgages to have those i and have after two years ago twenty prosper santana twelve
spk_19: ah solve most likely we expect to see a nice to be
spk_16: wow delete know to grow faster than see our he and of single families in fact as our own oct we're putting you know the high road and see a nice and then you know study ten percent growth both and cod and single times
spk_75: what the
spk_62: what what your mix of ruffian purchase was and single family for twenty twenty one
spk_76: still our for the full year but our originations doesn't lay on to that towards our purchase versus reply
spk_16: i next question comes from matthew classless piper sandler please go ahead money
spk_0: the morning
spk_30: just of follow up on the
spk_0: lone growth questions as a release to ssr

This conference call transcript was computer generated and almost certianly contains errors. This transcript is provided for information purposes only.EarningsCall, LLC makes no representation about the accuracy of the aforementioned transcript, and you are cautioned not to place undue reliance on the information provided by the transcript.