East West Bancorp at Barclays Conference: Strategic Growth and Optimism

On Monday, 08 September 2025, East West Bancorp (NASDAQ:EWBC) presented at the Barclays 23rd Annual Global Financial Services Conference. The company highlighted strong financial performance and strategic growth initiatives, balancing positive deposit growth and NII with challenges from regulatory changes and trade dynamics. Despite potential impacts from China, East West Bancorp maintains a positive outlook.

Key Takeaways

• East West Bancorp increased its NII guidance to approximately 10% year-over-year growth.
• Deposit growth exceeded expectations, driven by the consumer bank’s liquid CD program and small business customers.
• The bank is focused on fee income growth, particularly in wealth and asset management.
• Potential regulatory relief could increase the category four bank regulation threshold to $250 billion.
• The company is committed to shareholder returns through opportunistic share buybacks and dividend improvements.

Financial Results

East West Bancorp reported strong financial metrics, with NII trending towards $2.5 billion, up from $2.279 billion in the previous year. The increase in NII guidance from over 7% to approximately 10% reflects robust deposit inflows and recent investments.

• Core deposit growth is driven by the consumer bank’s liquid CD program and small business customer acquisitions.
• Spreads in commercial real estate (CRE) are stable, while corporate and institutional (CNI) spreads remain competitive.
• The company maintains a 10% Tangible Common Equity (TCE) ratio, with over $241 million authorized for share buybacks.

Operational Updates

East West Bancorp is strategically investing in growth and technology to enhance operational efficiency and customer experience.

• Fee income is experiencing significant growth, with some categories seeing a 40% year-over-year increase.
• The bank is expanding its presence in Southern California, Texas, and New York.
• Investments in cybersecurity and real-time payment capabilities are prioritized to address increasing cyber threats.

Future Outlook

The company is optimistic about its growth prospects and regulatory environment.

• Organic loan growth is expected to be between 7% and 9% in 2026.
• Focus on fee-generating opportunities, with less emphasis on whole bank acquisitions.
• Potential regulatory relief with the category four bank regulation asset threshold possibly increasing to $250 billion.

Q&A Highlights

The conference call included insights into the company’s M&A strategy and regulatory expectations.

• Nearly half of the audience favored whole bank acquisitions, while around 40% preferred fee income acquisitions.
• Two-thirds of the audience anticipated the category four bank regulation threshold to increase to $250 billion.
• Despite new tariffs, the overall business environment remains positive, with increases in loans and deposits.

For a deeper understanding, readers are invited to refer to the full transcript below.

Full transcript - Barclays 23rd Annual Global Financial Services Conference:

Drew, Interviewer: Great. Thanks, everybody, for joining us for our next session. We’re excited to have Christopher Del Moral-Niles from East West Bancorp. East West Bancorp is about $80 billion in assets, headquartered in Pasadena, California, with operations really throughout the country and internationally, with multiple locations in China and Asia. Chris, thanks a lot for joining us.

Christopher Del Moral-Niles, East West Bancorp: Thank you, Drew.

Drew, Interviewer: I think maybe just kick it off a little bit. You came out with some updated guidance or updated thoughts on a slide deck recently. Maybe just give us a quick overview on how the quarter’s going and what you’re seeing.

Christopher Del Moral-Niles, East West Bancorp: Yeah, look, we’ve had a great year and a continued positive trend with regard to deposit growth. Core deposit growth has continued to be on a very positive trajectory. The mix of deposits has continued to be positive. In total, that’s given us the flexibility to accelerate some investments and accelerate some lending. All of that has worked out reasonably well for NII. In fact, better than expected, given the inflow of deposits that we’ve seen. That’s allowed us to increase our guidance here for NII. We’ve increased the guidance from a better than 7% year-over-year increase in NII to trending towards 10%. That’s based off the $2.279 billion of NII last year, which is now trending towards $2.5 billion on a core run rate basis. We see that because we see the balances have come in in deposits.

We’ve seen the loans that we made in July and August, and we’ve seen the investments that we’ve put into place here recently. That collectively is leading us on this journey towards $2.5 billion on a core run rate basis.

Drew, Interviewer: On that deposit growth side, where are you seeing that growth? Is that coming from new customer acquisition? Is that deepening wallet share? How sustainable is that sort of organic deposit growth story here?

Christopher Del Moral-Niles, East West Bancorp: The largest contributor has been our consumer bank. Our core consumer bank has contributed an outsized portion of that. Product-wise, their largest and best-moving product right now has been our liquid CD program, which is essentially a nine-month commitment on rates at 3.88%. It’s a lucky number. The opportunity to withdraw money after seven days and achieve liquidity is attractive to our customers. Given that we foresee rates going lower, from our perspective, having them withdraw funds and recapturing those funds at a lower rate in the future does not pose a particular problem. It’s a low-cost option for us to grant the customer, and we think in the current rate environment, it’s attracting a good amount of flow. The second largest component of flow we’re seeing is actually from small business customers. We’ve got a small business program that we’re working with our branches and retail staff.

It’s having good traction, and it’s continuing to bring in deposits. We’ve seen some positive dynamics on our cross-border business. The combination of those accounts for the vast majority of the core deposit influx that we’ve seen, and we think that’ll be sustained as we move forward.

Drew, Interviewer: When we look at that NII guide and the deposit discussion you just highlighted, how should we think about some of the margin mechanics underpinning that? If you can talk a little bit about the performance on deposit beta within those categories, within those products.

Christopher Del Moral-Niles, East West Bancorp: Yeah, so if I start with the CD product, of course, we’ve historically had a good-sized CD book portfolio. It’s usually $8 billion to $10 billion of CDs repricing and rolling over every quarter. The run-off rate for much of the stuff that was in a special six months ago would have been around $4.08. The run-in rate or the new run-on rate for a new product is going to be somewhere between $3.75 and $4. So across the board, it’s going to be probably a creative positive roll-on even before we get to the September Fed rate cut that’s largely assumed in the marketplace. Our CDs already reflect that pricing, and they already reflect the next cut. To the extent that there’s a third cut in the outlook, they’ll reflect that too, right?

The reality is we find ourselves in this position where we can see our CD pricing is essentially rolling downhill and will continue to be a driver of positive NII dynamics. You would say, wait a minute, Chris, you’ve got lots of floating rate loans and a lot of floating rate securities. Won’t that cut against you? You’re fundamentally asset-sensitive. While that’s true, we are in the long run. The reality is we reprice deposits the same day the Fed moves, and our loans often don’t reprice until three to six weeks later. There’s an inherent pickup that happens. We’re almost instantaneously liability-sensitive, become somewhat neutral over the next 30 to 60 days, and then incrementally asset-sensitive thereafter. In this current environment, we think the short-term dynamics are relatively positive, which is why we’re positive on our NII guidance.

Drew, Interviewer: What about on spreads, especially on the CNI side and CRE? How have those been holding up and reacting recently?

Christopher Del Moral-Niles, East West Bancorp: We’re holding the line on our spreads, and that seems to be competitive. We don’t see a lot of negative downward pressure on CRE spreads in particular. CNI spreads, it’s a very competitive landscape. For the customers that we’re looking at, we’re trying to hold the line on our stuff. Unfortunately, we’re sometimes saying no to stuff if it’s too thin, but we’re holding the line. We generally are looking at pricing that starts with a 2. Whether it’s 2.25, 2.5, or 2.75, that’s probably the lion’s share of our work. It’s not thinner than that in most cases, unless there’s something exceptional about it. It’s typically not much more than that because that probably means there’s more hair on it than we would like.

Drew, Interviewer: Yeah. We have a few questions for the audience. Maybe we’ll run through those first, and that can inform some of our discussion. The first is, what’s your current position in East West Bancorp shares? One is overweight or long. Two, market weight. Three, underweight or short. Four, not involved. Maybe it’s better to phrase it as opposed to not interested.

Christopher Del Moral-Niles, East West Bancorp: Oh, this is a great opportunity for us to get you all more interested and more involved in the story.

Drew, Interviewer: Exactly. Yeah, over half currently not involved, and then a quarter overweight. Second question.

Christopher Del Moral-Niles, East West Bancorp: I feel sorry for those who are short.

Drew, Interviewer: Yeah.

Christopher Del Moral-Niles, East West Bancorp: Particularly on a day where we’re outperforming the BKX by 200 points or so, two basis points or 2% points.

Drew, Interviewer: Second question, which would have the largest impact on improving the relative valuation of shares of East West Bancorp? One, better relative margin performance. Two, above peer loan growth. Three, better expense control. Four, credit quality outperformance. Five, more active share repurchase. Six, accretive bank acquisition. These are what we’re asking all of the mid-caps.

We continue to have above average pure loan growth and more active share repurchases. I think we can get into that in a little while.

Christopher Del Moral-Niles, East West Bancorp: Both of those sound like put the capital to work, which I think we would take as a positive shareholder messaging. I think we’re generally a shareholder-friendly organization.

Drew, Interviewer: Great. Number three, what will organic loan growth be at East West in 2026? 1% to 3%, 5% to 7%, 7% to 9%, or 9% plus?

Christopher Del Moral-Niles, East West Bancorp: I’d say 7% to 9%, and also a solid almost 30% at 9% plus.

Drew, Interviewer: Setting the bar there.

Christopher Del Moral-Niles, East West Bancorp: I haven’t locked in the 2026 budget, but I think I have some input here and appreciate my shareholder confidence in the ability to deliver that kind of growth.

Drew, Interviewer: Number four, if East West were to use excess capital for M&A, which type of acquisition would be the most well received by shareholders? Number one, a deposit generator tuck-in, two, an asset generator tuck-in, three, a fee generator, or four, a whole bank acquisition. Almost half would say a whole bank, and then 40%, 39% on the fee income side.

Christopher Del Moral-Niles, East West Bancorp: I might just pause on that and elaborate just for a second. As we’ve looked at the banking landscape, I think one of the challenging things is when you think about banks that are generally smaller than East West. You think about the things that would be attractive to East West, right? There are obviously certain geographies and demographics that we’d like to have more of. That having been said, we also would rather have less CRE concentration. We’d like to have more non-exit-bearing deposits. We’d like to have more fee income to total revenue in the acquisition. When you look at the universe of banks that are generally smaller than East West, there are a few that have less CRE, more non-exit-bearing, and greater fee revenues.

The whole bank acquisition landscape that really sort of fits with what we’re trying to drive the entire bank towards would be, unfortunately, probably taken a step backwards. While we are a very efficient bank, the reality is taking costs out of the bank requires effort. There are almost no banks in the country that are more efficient than us. It inherently poses a challenge where we can’t really look at this the way other whole bank acquirers have looked at it and say, yeah, we’re just going to go in there and strip costs down because the costs actually need to be gutted to get to our levels. They’re probably not the core profile that fits the growth profile of what we’re looking for.

Our focus, and I appreciate the feedback here on whole bank, our focus really has been on fee and I’ll say not asset generating, but asset management, wealth management generating opportunities as sort of the focal point, right? I know that the asset generation, we don’t need that much help on core lending generation. We’d like to take the deposits that come to us and where possible, obviously put them to work to help support loan growth, of course. Where excess deposits are coming in, one way to put them to work is in securities, which we’ve been pretty efficient at over the last year. Another way is to divert them to off-balance sheet investment opportunities that serve the customer’s interest and create a fee revenue stream for the bank. Our focus has been a little more in that space.

That continues to be, I think, where we’re spending more time incrementally as we look at the next year.

Drew, Interviewer: Great. The fifth, what do you think happens to category four bank regulation, but really bank asset size? One, nothing, it stays at $100 billion. Two, we see a change where the level is increased with inflation. Three, it’s moved to $250 billion. Four, an asset size is removed and it’s more of a qualitative test. Overwhelming majority, two-thirds think it moves to $250 billion.

Christopher Del Moral-Niles, East West Bancorp: I love the enthusiasm. I look forward to that being the outcome. I do have to note that someone pointed out to us not too long ago that the Fed has gone through a process of tiering all the banks under $100 billion. We’ve dropped them into four different cohorts. We have the pleasure of being in the tier one cohort. There are, I think, seven banks in that tier one cohort, which is banks between $75 billion and $100 billion. It was pointed out to us that that means there are seven congresspeople that care about this moving because there’s only seven banks in seven districts that are applying any pressure to see this move. Legislatively, to the extent that is relevant to this action, congressionally, there’s very little political capital behind making a move.

To the extent the Fed can move things around on its own powers, you know, we’ll see how this plays out.

Drew, Interviewer: We can all hope.

Christopher Del Moral-Niles, East West Bancorp: I would say that the tone, I mean, this isn’t the question, but you know, the regulatory tone has markedly improved. You’re probably hearing that from others, but generally speaking, if there was a tense conversation a year ago, it’s not nearly that today. If there was a dialogue that required some back and forth, there was a lot more pushback, let’s call it. Today, I think we’re feeling a lot more of people putting their best foot forward when there are differences. I think that generally bodes positively. We think that bodes positively for how things evolve going forward. We’re very pleased by the dialogues we have with our regulators today. They continue to seemingly move in a very positive dynamic. We’re optimistic that things will get, that there won’t be impediments to the growth plans and strategies that we’re putting forward, which is all we could ask for.

Drew, Interviewer: We heard that this morning from Jonathan Gould, the Controller of the Currency, really trying to refocus back on the core mission of the regulators as opposed to the, you know, the political mission that has implemented or creeped into it over the last 40 years, or even more than the last 40 years. I guess maybe, you know, looking or following up on the fee income side, you know, fee income has been very strong. You’ve had that be an initiative for a while. You’ve talked about the potential to add there. Do you think you have the pieces in place right now to continue to see good growth there, or would it really require some inorganic mechanism to see a meaningful move higher in fee income?

Christopher Del Moral-Niles, East West Bancorp: It’s worth noting, with the pieces we have in place today, we’ve been driving record fee incomes and in some categories, 40% year-over-year growth. To answer your question directly, yes, we have what it takes to grow meaningfully and deliver a positive trajectory on the various fee income sites today. That having been said, you know, the more you know, the more you know you don’t know. We’re finding that out here in our wealth and asset management business. The more we’re doing and the more customers we’re interacting with and the more we’re pursuing that, the more we’re realizing we have some gaps in our product capability and in our expertise delivery. We recognize there’s opportunities to fill in those gaps and deliver even more over time. Yes, we’ve been successful at growing those fees. Yes, we’ve been successful at driving that customer acquisition.

Yes, we recognize there’s more we could do, and there’s probably more fees and value we could capture for our shareholders. There’s more value we could deliver to our customers if we could fill in the capabilities a little more. The answer is yes, there’s more to be done. Yes, we will probably look to complement our organic build of that business with some acquisitions or partnerships or investments.

Drew, Interviewer: When you look at the organic build of fee income and the broader organic build of growth, are you going to be able to do that and maintain your class-leading efficiency ratio? At what point, whether it’s asset size and continuing to make investments for what’s now category four thresholds, as well as building out fee income that generally is less efficient, maybe it’s still providing good ROTCE, but on an efficiency ratio, it’s more expensive. How long can you keep the efficiency ratios sort of in this range?

Christopher Del Moral-Niles, East West Bancorp: I think Dominic is on our record as saying he’s okay with the efficiency ratio creeping higher as long as we’re consistently delivering top quartile ROTCE type returns. The focus is to deliver top quartile returns consistently to our shareholders, which he has a 33+ year track record of doing. He does not intend to disappoint on that front. I don’t think he’ll let us. We’ll continue to drive that. If that means that through the investments that we’re making and the partnerships, acquisitions, or others that we strike, the efficiency ratio creeps up a bit, he doesn’t seem too concerned on that outcome. As long as that means revenue is growing and the bottom line is growing in a way that’s driving accretive capital returns, that’s in the best interests of shareholders for the long haul. I think that answers the question.

Drew, Interviewer: Yeah. Maybe when you look at the work the bank has done as you’ve grown asset size and preparing for that $100 billion, what could be some of the immediate, if we do see an increase in the threshold, where could we see either savings or money released to be able to be invested in other areas?

Christopher Del Moral-Niles, East West Bancorp: Yeah, so I think there’s, Dominic’s used the analogy at one point in time that the regulators are a bit like parents, right? They are happy to remind you that you should be putting your coat on because it’s getting cold out and that you should go outside. When you’re a child, that seems a bit annoying. As you grow up, you come to recognize it yourself and you put the coat on yourself. We’re at that point where we recognize when it’s cold out and we should put our coat on. To a certain extent, we recognize that the cyber threats that are out there, the dynamics around system access management that are prevalent across all landscapes and platforms, are real and that we need to make sure we have super hardened defenses for. Those investments are going to be front and center.

At the same time, we realize that customers demand to have access anywhere and everywhere. In our case, that means anywhere and everywhere in the U.S., as well as in various regions around the world, is such that we need to be able to deliver that capability seamlessly across multiple platforms and multiple geographies. There’s a challenge there that we’ll have to continue to invest in to make sure that we’re delivering the right security with the right access for our customers. We also recognize that the capabilities and expectations are only growing. If there’s a threat for real-time payments, then we need to figure out how to make our existing payments platforms as close to real-time as possible, make them as frictionless as possible. We’re investing in those today, right? We’re not waiting to see what happens. We’re going to see what people evolve to a year from now.

We’re going to make it possible for you to move money seamlessly between geographies and portfolios instantly. That’s not a capability that many have, but it’s one that we think we’ll be able to deploy in short order for a number of currencies and geographies. We think that’ll be a competitive advantage. The fact that we’re moving faster than some others is a good thing. That requires investment, and we’re making those investments that require some effort. We’ll continue to do those things. Are there enterprise risk functions that come along with that, that we’re building alongside that to make sure that all of that is done the right way? Absolutely. Could, in theory, we dial back on some of those because they’re not required? We might. On the other hand, they’re there for a reason. Risk management and the fraud risks in the world are not getting smaller.

To a certain extent, I think the investments that we’re making now are consistent with best banking practice, and they’re largely going to continue. Are there additional administrative regulatory form filing pieces that come? Yeah, they come a little later. As we’re at $80 billion, we haven’t really started to expend a lot of resources on those, but we’re building the teams and capabilities that we’re ready to. We’ll continue on that journey. Dominic’s plan is not to hire an army of consultants to do this for us. It’s to hire the right people that can help us get over the right hurdles in the right timelines so that we have all the preparatory work that we need to do ready, and we have the muscle to move forward when we need to be, but not necessarily sooner than we need to be.

We’re going to build, and we’re going to build the teams internally. We’re going to build the teams organically. We’re not going to outsource this to the big four accounting firms or something. We’re going to do it ourselves. We think we have the right team to do so. We’ll do it in a cost-efficient East West way. I think we’ll continue on this path. If the burden of regulatory expectations shifts to $250 billion or some other level, that’ll give us more breathing room, but we’ll still become a better, faster, stronger bank as we move forward.

Drew, Interviewer: Your growth has been a hallmark of East West for several years. You’ve generally been able to surpass initial expectations for guidance on the growth side. How has the bank been attracting new business customers over time? How do you anticipate that changing going forward as that velocity continues to stay strong?

Christopher Del Moral-Niles, East West Bancorp: Yeah, so I think in some of our demographic and geographic submarkets where we’ve got particular market presence today, we have the benefit of sort of being the incumbent leader. We’re capturing share almost just because we’re there, right? We’ve got greater than 50% market share in certain geographies, and that’s a leader’s advantage, right? We recently did an analysis on San Gabriel Valley. If you strip out our Almonte region, which is sort of where we book a lot of corporate deposits and things, and you look at the rest of the San Gabriel Valley, which is sort of the valley where we traffic in, our 20 branches in the San Gabriel Valley over the last five years have attracted more deposits than all of the B of A and Wells Fargo branches, which add up to like 40 branches in the same market versus our 20.

Pound for pound, branch for branch, we outperform even the leading brand franchises in the United States on deposit growth in core markets where we focus our attention. The question for us is how can we find that focus in some other regions and geographies so we continue to sort of roll this out in a concerted focus manner, recognizing and capitalizing on our strengths. We’ve done that very effectively in Southern California. I think there’s more opportunity to do that, particularly in Texas and in New York. There are other markets that we’re focused on as well. Those are two that are large and come to mind where we lack the penetration, but clearly see the potential for substantial expansion over time.

Drew, Interviewer: Let’s check and see if there’s any questions out in the audience. We have a microphone. No, a shy group right now. Maybe we can, you know, look to the single-family residential growth. You know, that’s been a meaningful contributor overall, and you have a unique market position there. What’s been the impact of the increased uncertainty with the trading relationship with China on capital flows that you’ve seen? Is that impacting, you know, the pace of home purchases and capital coming into the U.S.? Do you think that the current rate is sustainable?

Christopher Del Moral-Niles, East West Bancorp: There’s a lot in that question. I’ll stick to the single-family and we’ll come back. The short answer is we have seen consistent application volumes, transaction volumes, closing volumes in our single-family portfolio over really the last nine months. There’s not a material change in that flow. The dream of American homeownership is alive and well within our client base. They continue to come to us for our differentiated product, which continues to appeal to a certain subset of the market, which we’re able to deliver at a slightly better net yield to us than alternative products, yet on terms that our customers find very acceptable and are more than happy to sign up for. That continues to come in. It’s hard to say. It’s not like clockwork because it feels like it’s like clockwork. It continues to come in remarkably consistently. The pipelines are remarkably refilling.

Even at the residual rate levels that we’re seeing in the marketplace, which are higher than they were for most Americans that refinanced at some point pre-COVID or during COVID, the still steady drumbeat of flows at current levels is a good thing. It continues. We have a pipeline that we know loans will close here in September, October, and into November. That pipeline is full and continues to refill with each closing thereafter. It’s a good thing. It’s a continued positive trend. It hasn’t stepped up, nor has it diminished despite all the noise that we’ve seen in the headlines of trade things in the last nine months.

Drew, Interviewer: Yeah, I think it was maybe on the April call, Dominic had pointed out that the actual direct impact on the CNI portfolio with cross-border trade is 1%. I think it was. How is the tariff environment and the trading dynamic with China impacting at all sort of the broader sentiment of your customers, even though it’s a relatively small impact today compared to, you know, several years ago?

Christopher Del Moral-Niles, East West Bancorp: I think one of the things we would point out is deposits are up, right? Deposits across the board are up. To a certain extent, that means at some level, either folks are making more money or putting less money to work and choosing to put more into liquidity with East West. The reality is I think both of those are true, right? We think the reality is we have a core consumer demographic that is disproportionately professional class, higher income, higher net worth, also disproportionately entrepreneurial. That has been winning in the current economic context for some time. That’s continued to win. At least if I read some of the headlines, they’re probably representative of a good portion of that top 10% that’s continuing to spend. Yet they’re also continuing to save and accrete assets. That’s a good reflection of a good cross-section of some of our customer base.

We’re participating in their continued savings and participating in their continued growth. Second component is there’s a portion of our business that’s involved in bringing goods from Asia, selling them to U.S. retailers, and collecting them and play the middleman role. Those businesses continue to have, it appears, invested early in this trade dynamic, seeing the potential for risk, increased their inventories, and have been successfully selling that off at the same or sometimes higher prices and reaping a small benefit in the interim. That has probably somewhat reflected itself in the higher balances as well. That combination of factors, the benefit from retail plus the benefit from the cross-border, has been a net plus to deposit levels, which has allowed us to do this lending. We haven’t seen the cross-border lending really move that materially. The reality is it just hasn’t manifested itself yet.

Perhaps it’s still because there have been multiple delays to the tariffs. There have been multiple delays to the de minimis package dates, etc. Now that most of those things are sort of looking like they’ve taken hold and haven’t been further delayed, we expect we’ll see some incremental impact as we move forward. To date, it’s been nominal. To date, loans and deposits are up. Despite all the headlines, loans and deposits are up, and therefore NII is up and margins holding up.

Drew, Interviewer: Great. In China, you have about $2 billion of footings, maybe a little more. I guess it’s been a little while since we’ve got a full update. Any change to the outlook or the positioning?

Christopher Del Moral-Niles, East West Bancorp: No, yeah, again, we have more deposits than we have loans. The activity there is really focused on those that have some interaction or dependency with the U.S. market, right? People don’t go to our subsidiary entities because they want to do domestic business, right? We do no commercial real estate business, right? You have a commercial purpose that involves U.S. dollar receipts. That’s how you become engaged or go look for a relationship with East West. Those folks that have been exporting occasionally are importing. The focus is on U.S. dollar deposits, and the receipt of those deposits back is the biggest piece. Even some of our balances overseas are actually U.S. dollar deposits simply held in our Hong Kong or Chinese subs.

Drew, Interviewer: Great. Maybe shifting to credit, credit has been really good as we’ve, you know, for a long time and certainly as we’ve moved through COVID. Are there any areas you’re more focused on today than earlier? I guess how should we think about expectations for losses given the allowance has been growing while MPLs and criticized classifieds have been declining?

Christopher Del Moral-Niles, East West Bancorp: Yeah, look, I think as we continue to grow the balances overall or the balance sheet, you’ll see the incremental levels probably of NPAs tick up a bit in dollar terms. Percentages perhaps won’t move that materially, but in dollar terms, as we grow the portfolio, those dollars will grow. That having been said, if you’d asked me earlier this year, I would have said we were still working through a lot of the names that I had heard when I first arrived. There was sort of a 12 or 15 month window where we were working through a lot of the same names. The good news is a lot of those have resolved themselves. They’ve gone away. In some cases, they’ve been sold off. In some cases, they’ve been fully paid off. A confluence of different factors has led to changes in that portfolio mix.

The bad news is they’ve been replaced by some new names, roughly in the same level of magnitude. I think it’s positive that we’re working our way through credits and that we’re proactively continuing to be very active around pre-positioning for challenges that we see in the current environmental context. I also think I take to heart Dominic’s comments from earlier in the year where he basically said that if we saw roughly 150 basis points in move down in the Fed, he anticipated a lot of the concerns around CRE would be dialed back. We note that we’ve seen 100 basis points already. We largely expect 50 basis points or more between now and the end of the year. To the extent that we dial back the concerns in CRE land, I think that’ll go a long way towards giving us more comfort with where we are.

I think we’re provisioned obviously at the right level or we wouldn’t have signed off on that level. I think it’s a level of overall reserving that is consistent with some of the strongest reserve levels we’ve had and reflects our positioning for what may come. I think we are in a good place. I think we’re well positioned. If there are further challenges to the economy, we have the reserves and the capital to absorb that. If there are no further challenges, we’ll have plenty of upside for our shareholders.

Drew, Interviewer: You know, on the capital topic, East West has led peers on virtually all ratios for several years since you’ve joined the bank.

Christopher Del Moral-Niles, East West Bancorp: Dominic’s quite proud of his 10% TCE.

Drew, Interviewer: Yeah, I think since you’ve joined the bank, we’ve seen the increased use of the buyback on a more regular basis. What are your thoughts on optimal capital ratios for the bank today, given the broader environment? Should we expect to see buybacks have a bigger impact in coming quarters as you try to maybe manage that?

Christopher Del Moral-Niles, East West Bancorp: Sure, yeah, at the end of the last quarter, we had a little over $241 million remaining authorization. We’ll continue to look at that. Obviously, our first and highest use of our capital is to support our customers and our customer balance sheet growth. You can see the balance sheet has grown. I think you mentioned the $80 million. That’s up from the number we posted at June 30th. We continue to grow our balance sheet for our customers’ benefit. We continue to make loans. I think we’ll continue to be thoughtful about the dividend. Dominic has a longstanding 30-odd-year track record of improving the dividend on an annual basis. I’m sure we’ll continue to look at that very carefully as we go into the fourth quarter for the first quarter next year. Buybacks will be one of the tools that we look at to manage.

On the one hand, I think we’re very comfortable having a 10% TCE when we’re delivering top quartile returns. As long as that dynamic is happening in concert with each other, I think it’s a really good place to be. High levels of capital with high performance, not a bad outcome for banking. If that dynamic changes, we’ll obviously be very thoughtful about that. For the moment, we will continue to grow NII, grow fee income, and grow the bottom line. It feels like we can be a little opportunistic around the share buyback and perhaps have earned the right to be a little more patient on capital deployment.

Drew, Interviewer: is no ratio target, whether it’s CET1 or TCE, that you feel is the optimal level for you. It’s just, you know, as long as you’re able to continue to put up the ROTCE, that’s the.

Christopher Del Moral-Niles, East West Bancorp: Ng’s on record that he likes having a 10% TCE, and he’s also on record that we’re going to deliver top quartile results.

Drew, Interviewer: Let me see if there’s any questions now out in the audience. I don’t think I see anything. Thanks. If you have any closing comments.

Christopher Del Moral-Niles, East West Bancorp: No, look, I think it’s proven to be an interesting year. I think we started the year knowing new administration, there would be changes. We’re encouraged by the changes that we see in a variety of regulatory conversations and the landscape overall for banking. Everything is improved. I think we were apprehensive about what might happen on international trade and dynamics. The reality is nine months into the year, we’re seeing those still with some apprehension, but the reality is our core business fundamentals have continued on a very positive trajectory, both on the loan, deposit, credit, and fee side. We continue to be fairly optimistic about our customers’ prospects and therefore the bank’s prospects here as we move towards the end of the year.

We expect rate cuts to have some impact, but the reality is, you know, a December rate cut will be sort of a non-event to anything that happens this year. The other two cuts, to the extent there are two, will probably be at this point in time offset by volume. We feel pretty good about the guidance that we’ve given. Obviously, we just updated the guidance and the general outlook. We’re hopeful that investors, those particularly not involved in the name right now, would be willing to take a good look at a significantly growing, high deposit outcome-oriented institution that is delivering top quartile returns over time and has the capital to do the right thing as needed in the future. Thank you so much for listening.

Drew, Interviewer: Great, thanks very much.

Christopher Del Moral-Niles, East West Bancorp: Thank you.

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