East West Bancorp, Inc.

Good day, and welcome to the East-West Bancorp First Quarter 2022 Financial Results Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on your telephone keypad. To withdraw your question, please press star, then two. Please note this event is being recorded. I would now like to turn the conference over to Julianne Obelika, Director of Investor Relations. Please go ahead.

Thank you, Sarah. Good morning, and thank you, everyone, for joining us to review the financial results of EastWest Bancorp for the first quarter of 2022. With me on this conference call today are Dominic Ng, our Chairman and Chief Executive Officer, and Irene Oh, our Chief Financial Officer. We would like to caution you that during the course of the call, management may make projections or other forward-looking statements regarding events or future financial performance of the company within the meaning of the safe harbor provision of the Private Securities Legation Reform Act of 1995. These forward-looking statements may differ materially from the actual results due to a number of risks and certainties. For a more detailed description of risk factors that could affect the company's operating results, please refer to our filings with the Securities and Exchange Commission, including our annual report, on Form 10-K for the year end of December 31st, 2021. In addition, some of the numbers referenced on this call pertain to adjusted numbers. Please refer to the bank's regulatory filings, including our Form 8-K filed today for the reconciliation of GAAP to non-GAAP financial measures. During the course of this call, we will be referencing a slide deck that is available as part of the webcast and on the Investor Relations site. As a reminder, today's call is being recorded and will also be available in replay format on our Investor Relations website. I will now turn the call over to Dominic. Thank you, Juliana.

Good morning, and thank you, everyone, for joining us for our earnings call. I will begin the review of our financial results with slide three of our presentation. This morning, we reported net income of $238 million and earnings per share of $1.66 for the first quarter of 2022, both up by 37 percent annualized from the fourth quarter of 2021. The first quarter results were an excellent start to the year. Highlights include record loans and deposits, an acceleration of both loan and revenue growth, an expanding net interest income, and positive operating leverage. All of these factors drove pre-tax, pre-provision income growth of 28 percent linked quarter annualized and pre-tax provision profitability of 2.1 percent in the first quarter. We returned 1.6 percent on average assets, 16.5 percent on average equity, and 18 percent on average tangible equity for the quarter. All of our profitability ratios expanded. Our high returns reflect our strong financial performance and the strength of East-West business model. Our loan portfolio is well diversified between the major loan categories of commercial, commercial real estate, and residential mortgage. Our deposit base spans consumer, small business, and corporate commercial accounts. Looking forward, with robust pipelines, strong asset quality, and a balance sheet that is well-positioned for a rising interest rate environment, we are confident in our ability to execute and deliver strong growth and earnings for the rest of the year. Slide four presents a summary of our balance sheet. As of March 31st, 2022, total loans reached a record high of $43.5 billion, an increase of 17 percent annualized from December 31st, 2021. Now excluding Paycheck Protection Program loans, total loans of $43.2 billion grew by $2 billion, or 20% annualized. Accordingly, based on our current pipeline and year-to-date results, we are updating our loan growth outlook for the full year to a range of 13% to 15%, up from 12% previously. All our major loan portfolios grew this quarter. with the strongest growth from commercial loans, excluding PPP, followed by commercial real estate. Total deposit reached a record high of $54.9 billion as of March 31, 2022, up by $1.6 billion, or 12 percent annualized from December 31, 2021. Deposit growth this quarter was primarily driven by non-interest-bearing demand deposits, which grew to a record $24.9 billion and made up 45% of total deposit as of March 31st, 2022, up from 43% on December 31st. Turning to slide five, quarter over quarter, our book value per share declined by 2.5%, largely due to a negative change in the accumulated other comprehensive income. This change reflected the impact of rising interest rate on investment securities valuations, and such fluctuations do not have an impact on our earnings or our regulatory capital ratios. In the exhibit on this slide, you can see our strong capital ratios. As of March 31st, 2022, we had a common equity Tier 1 ratio of 12.6 percent. a total capital ratio of 13.9 percent and a tangible common equity ratio of 8.5 percent, which provide us with meaningful capacity for future growth. East-West Board of Directors has declared second quarter 2022 dividends for the company's common stock. The quarterly common stock dividend of 40 cents is payable on May 16, 2022, to stockholders of record on May 2, 2022. Moving on to a discussion of our loan portfolio, beginning with slide six. D&I loans outstanding, excluding PPP, were a record $14.5 billion as of March 31, 2022, an increase of 27 percent analyzed from December 31st, 2021. Total CNI commitments were $20.7 billion as of March 31st, sequentially up by 19% annualized. Our CNI loan utilization rate increased to 70% as of March 31st, up from 69% as of December 31st. This is a first quarter-over-quarter increase in our utilization rate since the first quarter of 2020 when the pandemic began. Overall, first quarter CNI growth was well diversified across our lending teams, geographies, and specialized verticals. All of our CNI industry segments grew in the first quarter except the oil and gas. Going into the second quarter, we expect loan growth to be equally well diversified. Slide seven and eight show the details of our commercial real estate portfolio, which is well diversified by geography and property type and consists of low loan-to-value loans. Total commercial real estate loans were $17 billion as of March 31, 2020, up by 20 percent annualized from December 31st. Growth was broad-based, and all of our commercial real estate segments by geography and by property type grew in the first quarter. We saw strongest net growth in industrial commercial real estate and multifamily loans. In slide nine, we provide details regarding our residential mortgage portfolio, which consists of single-family mortgages, and home equity lines of credit. Residential mortgage loans were $11.6 billion as of March 31, 2022, growing by 11% annualized from December 31. During the first quarter, we originated $1.1 billion of residential mortgage loans. This origination volume is up 9% quarter-over-quarter and unchanged year-over-year. I will now turn the call over to Irene to a more detailed discussion about asset quality and income statement. Irene.