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spk_0: the guy and welcome to the east west bank or first quarter twenty twenty two financial out comfortable
spk_1: operative that it will be in love with only mode
spk_0: should you need assistance please signal conference special by putting starkey followed by the rob after today presentation they'll be an opportunity to ask questions you ask a question you may prefer car than one on your told them keypad to act are your question please press dark them feel please note this event is being recorded our to turn the conference other to julian beleaguered director of that during nations please go ahead
spk_2: thank you sarah good morning and thank you everyone for joining us three view the financial results of the for bancorp for the first quarter twenty twenty two but me on a conference call today are dominic game or chairman and chief executive officer and irene of or chief financial officer would like to caution you that during the course of the communist her may make projections are the forward looking statements regarding events or future financial performance of the company within the meaning of the safe harbor provision of the private security location reform act of right ninety five forward looking statements may differ materially from the actual results due to a number of risks uncertainties for more detailed description risk factors that could affect the companies operating results through for to are filings it with the securities and exchange commission including our annual report on form thank you for the year and of december thirty first twenty twenty one and edition so the numbers reference on this call pertain to adjust the numbers please refer to the banks regulatory filings including our for make a file today for the reconciliation of captain on gap but and for measures during the course of this we will be referencing a flight deck that is available as part of the webcast and on of us relation sight of reminder race cause being recorded and will also be available and replay for me or honor investor relations website i will now turn to call over to dominic
spk_3: thankyou juliana good morning and thank you everyone for joining us for earnings call i would begin to review of our financial results with fly three of our presentation
spk_4: this morning we reported net income of two hundred thirty eight million and earnings per share of a dollar sixty six and for the fourth quarter of two two thousand and twenty two both up by thirty seven percent annualized from the fourth quarter of two thousand and twenty one the fourth quarter results were an excellent start to the here
spk_5: i like include like along and deposit that
spk_4: and the federation of both long and revenue growth and expanding net interest income and positive operating loveridge all of these factors drove pretax pre provision income growth of twenty eight percent linked quarter analyzed and pretax prove a provision profitability of two point one percent in the fourth quarter we returned one point six percent on average effort
spk_3: sixteen and a half percent on average equity
spk_4: and eighteen percent on average tangible equity for the core all of our profitability ratios expanded oh high returns reflect our strong financial performance and the strength of each was business model loan for photo is well diversified between the major long categories of commercial commercial will stay and residential mortgage or deposit those spend consumer
spk_6: small business and corporate commercial accounts
spk_7: looking forward
spk_8: woodrow both pipelines
spk_9: strong as a quality
spk_4: and a balance sheet that is well positioned for rising interest way alone we are confident in our ability to execute and deliver strong go and earnings for the rest of the year fly for presents a summary of our balance as of march thirty first two thousand twenty two total loss reach a record high of forty three point five billion an increase of seventeen percent analyzed for somebody first two thousand and twenty one now excluding paycheck protection program homes total long's of forty three point two billion grew by two billion or twenty percent analyzed accordingly based on our current line and you today result we are updating our long growth oh look for the full year to arrange of thirteen to fifteen percent of from twelve percent previously wow made your loan portfolio screwed as quarter with the strongest grow from commercial loans excluding ppp followed by commercial real estate total deposits reached a record high of fifty four point nine billion as much for the first two thousand twenty two a by one point six billion or twelve percent annualized from december thirty first two thousand and twenty one departed growth does quarter was primarily driven by non interest bearing demand deposits which grew to a record twenty four point nine billion and made up forty five percent of total deposits as of march thirty first two thousand and twenty two up from forty three percent december thirty first
spk_10: john into fly fuck
spk_4: poured over quarter our book that you push your declined by to put five percent largely due to and deadly change in the accumulated all the comprehensive income does change reflected the impact of rising interest rate on investment securities valuations and such fluctuations do not have an impact on our earnings auto rectory capital ratios in the exhibit on this line you can see how strong capital ratios as of march thirty first two thousand and twenty two we had a common equity tier one ratio of twelve point six percent a total capital ratio of thirteen point nine percent and a tangible common equity ratio of eight point five percent which provide us with meaningful capacity for future growth if was board of directors have declare second quarter two thousand and twenty two dividends for the company's common stock
spk_6: the quarterly common stock dividends of forty cents
spk_11: is payable
spk_4: on may sixteen two thousand and twenty two to stockholders of record on may second two thousand and twenty two moving on to a discussion about loan portfolio beginning would fly six
spk_5: the and i loath outstanding excluding ppp
spk_4: we're record fourteen and a half billion as of march thirty first two thousand and twenty two an increase of twenty seven percent analyzed from december forty four two thousand and twenty one total fee and i commitments were twenty point seven billion as of march for first corn surely up by a nineteen percent annualized our see and i loaned utilization rate increase to seventy percent are so much for divorce
spk_12: up from sixty nine percent as of december thirty first
spk_4: this is a first quarter over quarter increase in our utilization rate since the first quarter of two thousand and twenty when the pandemic begin overall first quarter see and i grow was well diversified across are learning teams geography and specialized protocols all about he and i industry seconds grew in the first quarter except the or guess
spk_13: going into the second quarter we expect long grove to be equally well diversified like seven and eight showed the details about commercial would a staple food you which is well diversified by geography and property type that consists of low loan to value long
spk_4: total commercial good as a long was seventeen billion as of march thirty first two thousand and twenty two up by twenty percent annualized from december thirty first
spk_6: rove was broad based and all of our commercial would say segments by geography and buy property type grew in the first quarter
spk_4: we saw strongest net growth in industrial commercial real estate and multifamily loans
spk_14: in fly nine
spk_4: we provide details regarding our residential mortgage before you would consist of single family mortgages and home equity line of credit residential mortgage loans were eleven point six billion as much for the first two thousand and twenty two growing by eleven percent annualized from december thirty first during the first quarter the originator one point one billion or residential mortgage loans this origination volume is a nine percent quarter over quarter an unchanged year over year are we now trying to call over to irene to a more detailed discussion about effort quality and income statement i really think it on
spk_15: the alpha calling bathroom from flying can
spk_16: report that up all the a lot of need to be strong
spk_17: warner
spk_18: photo credit cards low ratio decrease by a basis points and pungently one ninety two alone help from buffalo qualified loaned it hundred and thirty three million were centrally unchanged from december thirty first quarter of a quarter know how to defeat by nine percent down and ninety four million not the not performing out
spk_17: by to two this point down to can kinda disappointed total of march twenty first
spk_15: i'll try to live on we present a proponent of our lounge for loan losses are and total by hundred and forty six million of the march thirty first or one twenty six of loans excluding ppp compared with five forty two million or one thirty two as of december thirty first the quarter of a corridor increase in the allowance for
spk_19: blood flow growth whereas a decrease in the cupboard ratio reflects an improving for cab and improving out quality
spk_17: moreover quarter net charge of
spk_18: and what eight million down from ten billion in the fourth quarter the first quarter net charge operation with a basis point of average alone and alive an improvement from tampa this point analyzed for the fourth quarter
spk_15: during the first quarter we reported a provision for credit losses of a million compared to a reversal of ten million for the fourth quarter and no provision in the prior quarter and now live under discussion of our income them on flight well good flight some rise of the key lot items with a statement which on the gulf you tell on the pollen lives in non interest income as part of the interest rate contract another derivatives one i know a mark to market adjustment which were a positive
spk_20: seven point six million in the fourth quarter compared with three hundred thousand and the the fourth quarter of twenty twenty one these primarily relate available change it of the kind of valuation a judgment or cbn on the fly
spk_17: easy the day march are included in the other line item of non and
spk_16: amortization of tax credit other investments in the first quarter was fourteen million compared with thirty two million in the fourth quarter quarter or reporter variability and amortization of tax credit partially reflects the impact of them document that code in a given period
spk_17: effective tax rate for the first quarter twenty twenty two was twenty percent compared to twenty one percent for the fourth quarter comebacks back that that twenty twenty two full year effective tax rate will be in the range of eighty to ninety percent the quarterly adopted tax rates are go for base said
spk_15: will decline of more tact part investment club and that projects go into service correspondingly the tax credit amortization them fans would increase over the course of the year for the second quarter of twenty twenty two we currently expect to book a tax hundred amortization extent of approximately thirty seven million dollars
spk_20: on now view the key drivers or barnett
spk_17: income and that interests margin
spk_20: starting on like thirteen to sixteen and we'll start with average balance sheet fourth quarter average low of forty two point one billion excluding ppp move by one point eight billion or nineteen percent annualized the strong willed caught all as part of worried drove available membership to an average early the our third quarter of a quarter the first quarter average alone made up seventy two percent of average urging athens compared with sixty nine percent and proud order
spk_17: first quarter average growth public world of
spk_18: fourth quarter average you deposit of fifty four billion decline by two hundred ninety one million or two percent lumpur analyze primarily due to a decrease in non interest bearing demand deposit partially offset by increases in an average interest bearing checking and savings deposit amanda man deposits laid up forty three percent of our average deposits in the first quarter compared with forty four percent and what quarter and thirty eight and the year ago quarter turning to fly fourteen first quarter twenty twenty two get a trip to become a four hundred and sixteen million with the highest quarterly an interesting income in the history of each was going by ten percent little quarter analyze excluding ppp net interest income grew by fifty percent analyze in the first quarter and i'm ready to ppp loan was five million
spk_20: the gap led into a margin of to eighty and expanded by fourteen basis points quarter over quarter as you can keep on the waterfall four or five the that interest margin expansion and order was driven by strong no no resulted in the favorable earning out of that makeshift as well of higher yield on loan and other earning after
spk_15: turning into my the t the first quarter average low yield was three sixty three an increase of four basis points quarter over quarter the average well heeled comprise an average coupon yield of three forty eight
spk_18: plot
spk_15: yield adjustments which contributed to basis points to the overall don't yield of the first quarter of the march thirty first the spot to pile on our total loans were three fifty five a positive impact of rising interest rate on our portfolio will be more evident in the second quarter average low the old of thirty three percent of our
spk_20: loans and to the prime rate which did not increase until mid march
spk_18: and the fly the all the present the coupons bought rage for each major loan portfolio but last three quarter and period sixty five percent or twenty eight billion of our loan portfolio is variable rate most of these loans will be reprising on a monthly basis
spk_17: author's note that of our twenty eight billion and variable rate loan three point one billion and fully of that's right low floored as of march thirty first of which one point seven million or fifty basis point or less from their floors and another seven hundred million billion seven hundred million excuse me
spk_15: fifty to one hundred basis points from their flow rate turning the flight sixty or average cost the deposits corner but henry's point on change on the fourth quarter the spotlight on total deposits with of levin bases point as of march thirty first of by to be responsible than the thirty first are starting a rising interest rate vital from a position of stray
spk_18: same with record level of demand the problem for you to stay strong liquidity
spk_17: author ratio of under eighty percent
spk_20: turning to fly nine seventy total non interest income in the first quarter with eighty million up from dundee want one on new world order customer driven be a car and that gave them filled the land which sixty five million an increase of three percent with quarter or loving percent and your life
spk_21: quarter customer driven interest rate contract revenue and great block didn't improve customer demand of interest rates rise world management the they gave unveiled of every home and deposit account these author increase quarter of a
spk_15: moving on flight eighty first corner non intrusive than one the one hundred and eighty nine million excluding amortization as part of imported powdered and and why are they shun a job and knowledge of fix them with one hundred and seventy five million in the first quarter down three million one and a half percent the constantly
spk_18: we don't have the
spk_20: regal of spam an overall operating expenses what and off that increased competition compensation and employee benefit which is typically seemingly higher and the first quarter due to hire payroll taxes and related expected
spk_22: the first quarter adjusted efficient you issue thirty five percent compared with thirty seven percent in the fourth quarter and thirty nine percent of the year ago quarter and with that on our view are updated i'll look for the full year of twenty twenty two i'm flying nineteen
spk_20: for the for your of twenty twenty two pair to are for your twenty twenty one actual adult currently that your over your number of getting ppp of approximately thirteen to fifteen percent or fluffy huge it a performer current private loan pipeline which are very robust are up
spk_15: dated outlook
spk_17: increase from our previous outlook a paul percent logo year over year net interest income growth excluding ppp and the range of twenty two to twenty four percent this is an increase from a previous outlook of net interest income growth of seventeen to nineteen percent are up the
spk_23: added outlook were fluff flown well as well as the impact of anticipated fed funds rate increases on our out of some to the balance you underpinning or interest income assumption is a board interest rate curve as of march thirty first twenty twenty two with fed funds expected to reach to fit the by year end
spk_15: and
spk_18: a does not interest expense go excluding have tried ever day and of a percent year over year which narrows are prevent outlook of expands gold and the rage and seventy eight percent as a revenue goes from my interest when we expect to reinvest a portion back into our business the thing people and of knowledge support sure to juggle initiative
spk_15: we expect our revenue an expense outlook to gotten positive operating leverage year over year
spk_20: in terms of part of item for twenty twenty two we currently the fact that the provision for credit losses will be in the range of fifty to sixty million this of higher compared with our previous outlook which will visit for lot of under fifty million the continue to anticipate a modern your were your input
spk_15: we met and the for your and that chart toppers show which was thirteen be point of average loans and twenty twenty one
spk_4: the knowledge that that of full or twenty twenty two and that the tax rate will be approximately eighteen or nineteen percent this higher compared with our previous outlook which was born effective tax rate of seventy to eighty percent our outlook include the impact of tax for the batsman and all factors in the agreed income we now expect there will be horribly variability in the tax rate due to timing of tax for investment place and sir
spk_5: with that amount from to call back to dominant for closing remarks
spk_4: thank you i mean when you closer and we'll have to an excellent start for the year and look forward to delivering strong financial results for shareholders in two thousand twenty two global volatility notwithstanding we are well positioned to navigate a current environment
spk_24: al queda quality a strong or balance sheet his efforts sensitive
spk_4: we have strong capital and and poll liquidity to support group
spk_0: but most importantly associate are focused on providing superior banking service to our customers i wish to thank them for their efforts and the clone result i will not open to call to questions operate thank you we will now begin the question and answer session to ask a question you may prefer star than one on your telephone keypad if you're using a speaker phone please pick up your him that before prepping the key withdraw your question please press start going to
spk_25: please limit yourself to one question and one all up
spk_26: at this time we will pod momentarily to assemble a doctor
spk_27: i first question comes from abraham colonel all where the bank of america please go ahead
spk_26: good morning
spk_4: the morning this girl force mean republic you're going to be optimistic the alone growth outlook would after your oh oh a little more detail or own just have a bar or man complete out during the course of the quarter or and have you seen inclement to supply chains mags oh impact the customer sent him and since the war began to be under federal law and just in from the when you think about look growth from below if you could give us a sense of fear was a see and i eyewitness then she'll have you think that looks very odd oh and terms of the long growth we're looking at all pipelines you know a lot of a why look at the of their current hard lines know a lot of the see and nylon so we walking on you know whether it's from the p private equity all and chamberlain technology and healthcare and the general manufacturing and and consumer goods and so full all these business that would be working on with clients so i saw it in the process of trying to make make it happen in the second quarter so i we feel pretty good about both was coming and then how to what extent that business will or would not be affected by the external environment which was pretty good about a lot of the deals in the pipeline would he would not be having much ah impact by for example is russia ukraine war know is is so tragic from a humanitarian person perspective but there's video haughty any bearing to our customers business that we're during during work and that's one for to see a knife or a commercial real estate again you know we have you know klein's that are in the midst of maybe closing deals that we're walking with and so are those are the are we feel pretty certain again in the second quarter would be closing same thing for the single form family mortgages
spk_26: what's in our pipeline is something that we expected to be funded you know it takes you know two and pure have time to get long funded so we feel pretty good about what we expect to be coming out in the second quarter obviously the longer the horizon to harder for us to predict you know you ask us about what would your fourth quarter long grove would be like why this point oh we don't have as
spk_4: much visibility as we have with a second quarter you know because second quarter we see the numbers are we walking on a lawsuit
spk_28: very healthy and but how did the say the third and fourth quarter would develop i think that external environment where have a lot to do that and then we'll see how it goes
spk_4: and just wouldn't bigger picture question don't think if i man there's a lot of chatter for a bank that has crossed our presence and short know there's nothing freedom lot of discussion on the globalization the potential for the deterioration and you ashamed of fish and shape how do you handicap of and and for to take the bank from a risk standpoint the perfected that sweden sentiment around the stocks would love to hear how you think about managing please give you a senate and before to deteriorate further well oh we we don't necessary protect the bank from the challenges we accurate excel in the challenges you know use worth of always have done extraordinary well whenever there is something that from a perception sampling looks bad that and in reality that we actually come out where have a lot
spk_6: here banks but let me just address your concerned maybe one by one know first and foremost are said it before you know our greatest china
spk_4: oh including china and hong kong loan portfolio it's only five percent of our total loans and ninety five percent are loans or domestic in the us and that includes like commercial real estate you know that if locals you can get rid of they cannot move it which is and thirty nine percent of total along a residential mortgage is twenty seven percent about total i'm so out loan portfolio in china hong kong also is very well diversified by industry you know ranging from general manufacturing consumer goods technology and attain and to digital media cetera
spk_6: and credit profile these customers also was excellent was strong down shoot and high level of liquidity across all of our portfolio long before you so i would say that in both china and us it all comes out diversification and grand reality of the most important factor for us to manage risk so i feel pretty good about you look at so much about ninety five percent about total loan portfolio
spk_4: out of that base and us and majority of them are you the residential or commercial real estate and then many of the domestic see nylons from entertainment p l private equity healthcare and digital media or domestic in nature so the exposure from china is very minimal as to begin with and even within china the five percent i'm very very strong credit quality business and is also with well diversified so from that perspective
spk_24: would you very very comfortable where we are today
spk_29: now but going back to what i talked about we don't necessarily have looked at you know we need to protect from the us china
spk_30: dynamic were trick though is that when we looked at you as china scenario
spk_4: we actually always find opportunities when people shy away from it and the fact if you had seen what we have done in the last in the last of
spk_31: four years in fact our or or what i would you say five and a half years now you know everything know there
spk_4: the did the beginning of the trump administration
spk_12: oh that
spk_32: you are declared tray war against china
spk_33: and yes
spk_24: there's clearly you know disruption to the
spk_4: international trade was per se but each was able to find our natures and we continue have
spk_28: de a quality
spk_4: we didn't take any losses due to these so trade towers all that went on for two years and we continue to find way to grow the business
spk_34: so i looked at it is that when you looked at what we are today
spk_28: and then we can reflect back on p b for the last thirty years i've been in love with east west bank and and ninety ninety one
spk_4: so we double our size to into savings loan quite a financial crisis
spk_35: the night to two thousand and nine with double our size do the global financial crisis
spk_28: oh well today we weren't able to just double five in one year
spk_4: but since the trump administration
spk_36: ah it
spk_13: i'm taking on the
spk_6: the rain and us in two thousand and seventeen to today we double our size also but we double of happened the longer but with about five organically so i'm trying to get at is that east west bank always will find a way to grow up business
spk_4: and we have history to demonstrate that and thirty years and that smacks of not rubber eggs and the other thing i wanted to point out is that going back to your concern about globalization know maybe decoupling between us and china if you talk to the export in the business ah come out by the way i'm talk about even political experts know added r us trade representative catherine tie up our janet yellen caused up secretary of treasury ah romano who's the secretary of commerce and each and every one of them have never once
spk_37: while declare that us wanted to decouple in fact they all continuously i like that our engagement but we don't need we do need to find a way to more effectively engage with china are those know kind of worse a coming out on these are up
spk_4: total expert in the area there are other experts obviously that you know who see it from the media are that talk about yes you as china would need to decouple and so forth and de gaulle gli station but those are the folks are selling books and solid but actually weapons so witty are not the same like the of the wonder who after he to run the business
spk_38: a we're east west bank weird expert in turn in terms of managing
spk_6: our book a business
spk_39: we understand us china relationship
spk_40: that and and most everyone in the country
spk_41: when a risk management business
spk_5: so we feel very confident about where we are today in terms of the credit quality and the potential risk of the us china decoupling are which quite frankly
spk_4: is extremely unlikely
spk_41: and and in in addition to that
spk_4: we also feel that besides the unlikelihood of decoupling that be globalization in the world
spk_28: is also extremely unlikely it talked about forty years or so for the world to work together which hyena to create to supply chain infrastructure
spk_42: it's not that easy
spk_4: kitty globalize in five ten or even twenty years and it's something that once people really understand it the the nuances and exactly what detective builders supply chain and they were understand that it's never gonna be that easy to have these decoupling i think that us china would just have to country to walk through their differences and there are challenges in terms of philosophical differences values and so forth
spk_43: they going to need to find a way to walk through what we noticed just recently
spk_4: ugh china in fact it up
spk_0: the people's bank of china and the say administration a foreign exchange on april it just issue twenty three measures to help a business impact by the pandemic and six of those measure directly related eating of cross border tray and payments
spk_44: so those are kind of things that china's been working on to trying to make sure they can get the economy going also and any it every now and down when we see these kind of opportunities comes out those opportunities that is worse and also will be able to take advantage of and the the the key things for us we'll get down to the and
spk_45: sam we are
spk_44: a bank the have very unique value proposition we understand that business and we have shown for many years and have proven for many years we know how to navigate through this us china of relationship and continue to be able to have sustainable growth and we feel very confident that in the next many years will continue to be able to outperform are pure banks because of this unique value proposition
spk_46: our next question comes from christian a with kp govea please go ahead
spk_44: a great but thanks to the question i'm
spk_45: dominic arabia and just want to dig into the guide a little bit really good outlook
spk_47: i'm having a little trouble
spk_18: getting to turn an interesting comment a good night my notes suggest you should be a little bit higher
spk_15: given the growth and the margin that up
spk_18: i get the question is
spk_48: what are the assumptions embedded for deposit growth deposit betas you know maybe the missing component is beside the bounty but it feels like the guided is awfully conservative
spk_15: oh crap
spk_45: i'm glad to hear the say that were very tired i want to start by saying we're very positive on the out loud and are the the as he killed ah as dominant mentioning the pipeline that very strong particular my as we're going into the second quarter what's that saddle riding think also we'll look back of the increase kind of meh
spk_41: apple insurgency you with the war rising rate as wow orbital we have no direct exposure to the war in europe
spk_4: so what that sad and well we're a modeling now when we also use more case scenarios as far as looking at and we share during the last call that we started this year when we don't raise we're going to increase one hundred basis points out a deposit beta and to for the for your thirty per side so we're definitely higher from that opera that's where modeling for the from for a full year given rates are expected to increase a bit more than that and also related to that i would say that we're we're looking on the opposite side i think we're trying to be conservative as far as were positive not alone well but the some type of in this type of rising way
spk_49: our a man without any credit issues either more time to be a conservative about and of any kind of spread pressures that might be there with that that i just wanna say you know we are starting this environment a rising rate environment from a position of strength that dahmer at a last record you the i boarded they
spk_50: percent of average deposits forty five a period and and then although deposit under a eighty percent and i we've talked about before we have operated and comfortable operated up and told a alone ninety
spk_51: okay grabbing onto that went and bought our yeah i want our point out also add this data
spk_45: we normally east west bank normally don't momentum more like in the third and fourth quarter and then fourth quarter nor would i wouldn't call it a struggle fourth quarter nominees god thought
spk_17: that of this year i think we are in a much substantial better position we have a garish one quarter and we feel that our pipeline the second quarter looks pretty decent and so once you get to strong quarters in a row and pretty much we feel pretty good dad
spk_20: for the rest of the year
spk_24: it's hard to not have strong financial performance
spk_28: great
spk_52: thank you for that if i follow up would be awesome
spk_4: the debate it helps irene amish increasing baited what are you assuming for deposit growth because we see tell me your peers with commercial books have have notable kind of junk enough underscore i was just wondering but you i could double digit growth i'm just trying to i get a little more color on what you're so mean for just deposit for us
spk_0: we are not feeling the same level of the positive growth as the are on the loan side as we just talked about you know realistically we don't think we need it and also realistically in this kind of environment the kind of a particular that we had and twenty twenty one twenty twenty probably not likely to occur so we are
spk_53: in a lower level of deposit girl but still i would also comment that all archie leaders are our and and our cash management sale team are all very busy bringing in and a quarter papa which should expect to continue to grow from we talk for from customers damage me also highlight of we are not the
spk_51: emphasize deposit grow despite the fact that we have you know this kind of long to deposit racial a we are getting or our frontline people to focus our growing or deposit
spk_54: ah core deposit we won every time every every any day but what i'm looking at is that if you look at depaul to go last year that in fact the last two years we actually
spk_53: accommodate our clients excess liquidity quite a bit we really did not need that kind of deposit grow for the last two years but these are good clients they have tremendous excess liquidity and we are more than happy to accommodate them but i just don't see that are kind of and continue have this kind
spk_55: of excess liquidity so we do expect that to deposit grow with table know why get from last year
spk_15: next question comes from game rochester with campus please go ahead
spk_20: beg my guy friends quarter
spk_18: banking
spk_53: you don't think you can just dig into the be non interest bearing apology growth of the quarter that was exceptional and it is
spk_17: it gets noted previously yeah
spk_20: i guess got a quizzical previously that and not not that major competitors rebel put up numbers like that the quarter
spk_53: on that trend was just wondering if the finale the the treasure map you guys up with the the driving matter is there anything else it's the five and i growth and then how you feel good about that
spk_15: the forward and and then follow up after that
spk_56: yeah
spk_57: even though the unusual as far as the adventure of the and hard to grab you know some of our customers with that probably they have your honestly and their businesses your balance is where op
spk_0: especially compared to ah
spk_58: the average for the corner point two point nothing unusual erbil industries or anything specific but as mantra the you know the teams are hard at work greedy and court apartment so that's something we expect to continue because you check your luggage a to see that that manages bearing growth remain pretty healthy here near term a weird maybe i'll clarify i definitely laid back we will be bringing on more poor deposits quarter deposit operating in town and would that ruin dd a balance as with that sad you know there is a certain amount of liquidity ah that with the rising rate environment you know made their
spk_59: maybe disintermediation into other asset classes other departments and i think we're realistic about that but overall goal and court upon the customers that's something we're very positive about how are you guys forget about using the organs get rate from here to keep that growth going and manage their
spk_15: yeah you don't certainly that the factor for some of our client a dave you know the way that we look at were very practical nice last whether you pay out of interest expand or nine hundred years expand your we view at the same way sol you know we don't get that into different way we look at the economics of that
spk_60: google ventures
spk_48: thank you
spk_19: next question comes from jersey shore with both barreto please go ahead
spk_59: a good morning thanks the
spk_16: there may maybe shifting over yet to be income
spk_15: some really good strength bearing interfere contracts and derivative you know is well as is this is or overall out should be thinking about that was writing as usual this quarter that
spk_0: is unlikely to to go and guess will be a good base going for it on it
spk_61: that's a great question over all their work anything unusual or drawing attention to fly seven that maar dat for we break out the mark to market and not unusual but a fluctuate and quarterback
spk_17: mark potter mark to market love higher phoebe a judgment but aside from that
spk_61: from a poor be income perspective of fact wealth management the irish sea and a deposit account in a we expect to continue to grow that are you over here okay thanks for then on the his portfolio it looks like i was at a requires of securities and to help majority are you actually buying your different different product last two to start building that out and how should we be thinking about the breakdown of security in the growth of that going forward got great question during the quarter and bath affected february
spk_62: first we transferred three billion of our airport security in the h t m i'm on a go forth bay so and just depending on the duration there may be new securities we produce in to help from maturity
spk_4: ported a day for the second quarter there's been a little bit but not significant do that and if i don't think it will change dramatically in the pace of what will buy into that are depending on rates and depending on the kind of our expectation around with happening with that not portfolio you know will buy more but the probably at a lower level where next question comes from to be here with jeffrey please go ahead there's actually more than one i read maybe just following up on that that question on armor on the security budget is there an appetite for maybe run that that security portfolio lower as a percentage of running assets and you know potentially fund some of those mangroves going forward from there
spk_41: yeah absolutely i think that in funding we would evaluate your kind of depending on kind of what the spread the word earning and what makes sense as far as our overall balance sheet as you know we generally look at the securities blog really to make sure that we have another liquidity
spk_63: and we're not necessarily a balloon that out but certain my with the rising rate environment this is something that we're having more discussions with i'll go committee as well as far as what the right now
spk_64: okay very good it and just or following up on the long road
spk_4: get you know you guys are off to a very strong start you know twenty percent link quarter analyze we've seen i commitments up twenty percent which is a piano very positive leading indicator
spk_65: i'm on the potential growth near term i know there's obviously we allow lot of visibility in the fourth quarter but just wondering why that why the long growth guide is in a little bit stronger than that means methane levels or just general conservatism or do you see something more substantial to to slow down along growth going forward
spk_4: well i think as we said earlier
spk_41: we
spk_4: look at where we are today you know we're very pleased that you know the fourth quarter momentum your continue spilled over the first quarter and and looking at second quarter of still got on our legs going i'm in so that's all good and then the what i liked most about it is that it is coming from all different sectors so you know this whole thing that we will so high for the last ten years to get more granular to more diversified portfolio of is walking exactly what we planted you know almost a decade ago and so multiple engines are all you know producing and and you know we always looked at it it and one particular period of time maybe a few of them would do better and the others know and and and it's everything's kind of even out but will just happened that the last two or three quarters in a row that we actually have multiple factors mobile mobile units on
spk_41: all going strong now that said you know as i said earlier
spk_66: we have you know path
spk_41: inflation
spk_4: today that is at a somewhat obey i'm president situation for the last decade two and then we also have yeah
spk_67: you know this war going on between russia and ukraine which while i said that we have no bearing to east west bank business the fact is it is
spk_68: clearly effect of macro economic environment
spk_4: and so when we start looking at all these different things and a pandemic is not over yet we do need to have to be you know ghoulish stick about to what extent how would interest rates by by the fed would have would would affect
spk_67: for example
spk_0: d of residential
spk_69: market and to that extent would have some point in time you know the raid get high enough then they get not likely for people to do transactions so we we will look we we picked out into effect and i would say that i don't want to get to overly excited about
spk_10: wow just because his momentum going so strong now that may be by the fourth quarter
spk_70: it was the thing that kind of moment now i do have out one way to look at it from a positive note if that one there is maybe it less mortgage origination for single family
spk_69: there is less pay down to so net net you know the growth rate may not be that negatively impacted even with a rate hike same thing for commercial real estate we're not going to originate as many theory i would think in the second half audition
spk_70: however they'll be less pay down so net net our local may still be there are strong ah but that what we a whole the direction is going to be that without having a of a lot of clarity about the interest rate spike impact oh how exactly
spk_45: does russia ukraine situation would give auto and to what extent of affect the
spk_20: overall global supply chain and how can damage would actually continue to have new variants coming up all of that it we start looking at it i do feel that we wanted to make sure we being prudent
spk_0: the to project
spk_45: the second half of the next question comes from brandon king with truth security please go ahead hey i had a a few questions on loan grow or in the summer uses may have been implied in some previous answers but
spk_4: with the united nations increasing in the first quarter oh what is implied in the guide is bars where they lived a shame level stays in the near term ah we assume that utilization say around the same are we have not solo like of put any addition know you know it rose and of utilization great to pick a to get the assumption of out of our oh look oh grow up in a larger number one prefab pro clinton but it is also just one percent share one way and it's like percent yeah a lot of a lot of to thank you you like they should go from one know there's a outside their home
spk_71: i'd rather have the power of lap right we're going to be able to go without utilization increases and that's to a reactive arrival
spk_4: he added prowler live for theory i was wrong as well i wanted you know how much of the growth in the first quarter how much that we should be too slow paid else
spk_28: there definitely was a decrease in the paid out and the order and freshly compared to if you look at like the back half of last year by would also say we had increase origination from a combination of both bandit
spk_4: our next question comes from a broken by hundred lead with you bs please go ahead hey everyone i did the like abraham for brock vegas wanted to dig into a mortgage for a minute i mean i get that your business model is that bit different than most but in a bit even given that the the origination volume games that pretty resilient the air just have flat year over year when most you know about competitors are are down you know the either share gain happening there is there any other color you can offer around that oh actually relatively speaking at at i mean if you recall are going back to our earnings release for the last few years residential mortgage always that the leading ah ah but the leading category in terms of our local always outgrew ah cr yoshi an eye for the last few years and actually a two quarters and roll residential mortgage are falling behind compared the other two relatively relatively speaking and which is obviously by nature you look at the external environment
spk_45: are weeks that that residential mortgage grow will continue to be more challenging as you looked at it we used to have like twenty plus percent growth a couple of years ago were down to eleven percent in the fourth quarter of we back to the second quarter maybe down even a little more you know and and and i would like even in and by the fourth quarter maybe down you know to single digits you know ah so that's the way i looked at it is that
spk_72: the external i'm and like to refinancing
spk_18: very challenging and it may also discourage the homebuyers to purchase home
spk_17: one race bike to over five posts all right over five percent it will be no like want to get to even six percent of something use gonna be there discouraging for from biased by home so the likelihood that we do a lot of ready
spk_15: levi or poachers is a slow now that that as i just said odeon
spk_18: pay down would drop substantially because for the last few years
spk_0: we just turn on our laurels live where we were originate and a high volume we also have pay down in a high volume simply because many of our existing customers as we findings the new mortgages for lower rate and we just do a lot a bunch of work for the same that number so i looked at it in two thousand twenty
spk_73: two particular the latter half of the you i would say that to origination volumes you to up substantially however the pay down also would drop substantially hopefully you know who's to have some odd
spk_20: net growth but we were pretty much expect that in two thousand and twenty two the majority of too long twelve will be coming from see and i and c r e and less old from single family mortgages
spk_0: mean that very helpful i'm just as my follow up images finally bigger picture question for this rate hike a rate hike cycle is a bear barely started and the efficient see ratio up at east west is already he looks to already be below where
spk_17: where it was when the last i cycle was well underway though it just wanted it if you could help us understand what may have changed in the profile hear that helping you guys achieve such stellar efficiency and and maybe even a tenth of how how low it could it could reasonably go
spk_0: overtime
spk_74: back
spk_75: but we never managed to the bank add to the efficiency wage show i think that's something that we make clear on these call and that certainly isn't something that than any or ups our drivers but with that sad you know and also related to that we have continued to make the investment that we think are appropriate for the bank for a for our strategy that i think the continued investment
spk_4: the acceptable of that men are part of the reason our efficiency well if you look at it the other side of it really is if you look at balance and said no some blame were well position right now are rising way environment whether it's also very benign on obviously not factoring into the efficiency racial a nun the lab you know the additional kind of operating costs related to kind of michael i'm not here so i i think it's a combination of all the factors a certain way that's something that you know will be very important for us as we go for we continue to make the investment that we think are appropriate and then also you know week them away
spk_76: ward on the revenue side
spk_4: but next question comes from gary tenure with dated did go ahead best morning mcquarters have largely been asked and answered but just regarding the guide on the confusion expense is that was that increase purely function of the the or higher lol great guide for the full year or any other factors a changes to the she a model that are trying a member in her
spk_41: great question in largely a function of the high or low growl gary
spk_77: yeah i think also you know as you know we run off he scenarios as far as far as a calculation for just about waiting that with a little bit of the uncertainty for the future with that sad and i said i think i said in a prepared remarks
spk_4: credit quality is very benign continued to be and that's our expectation for the full year
spk_78: beckett
spk_19: attacks question comes from murphy clark with piper sandler
spk_79: ahead
spk_80: make morning
spk_17: first question just on would trade finance portfolio can just reminded how big their portfolio is kinda the first quarter and and how that portfolio has performed from a growth perspective
spk_75: with the supply chain disruption in his pre nup some degree
spk_27: now in terms of that portfolio i think that is going else is going fine i mean we have not how much you know in for the last four years we have not have much growth that poor photo i mean them naturally so
spk_81: from a tray finance perfect perspective i mean as couple of reasons one is that good
spk_2: the the trade tower of plus sob the a pandemic that a of supply chain and and also we have to recognize that the international out of
spk_0: trade finance business
spk_45: rudy are something i would say is more or less like i owed a business model
spk_44: would the advancing in technology we have less and less of that don't require the tradition no international trade finance that
spk_45: from banks you know a lot of the payments ah today are done electronically are are much easier and faster so we're east west bank actually while we're actively involved with the cross border banking business a lot of cross border banking business actually i bob with some ecommerce and then to on
spk_80: digital media and entertainment business and private equity business and and most of those businesses that there are cross border edelman's but not necessarily required to provide letter of credit support and social yeah so that's what we are what are the business still going solid and i don't know irene do you have any numbers that
spk_0: that you wanted to share yeah quarter of a corner we are often tried by and that parts that you know what they hear about five hundred million
spk_6: balance okay player about plant not up
spk_82: about five hundred odd yeah clarify yes we're up about twenty four percent
spk_0: the balance what five hundred million of juliana
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