Sentiment Analysis of the earnings transcript to help figure out if there are any bullish or bearish sentiments that could be gathered from it. We're doing ML and AI based analysis on the earnings call to get some more insights.
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| Statement |
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| As shown on this slide, all of our capital ratios expanded quarter-over-quarter due to the strength of our earnings |
| East West is on track for another year of record earnings in 2023, and we are looking forward to starting 2024 from a position of strength |
| This morning, we reported strong results |
| Third quarter 2023 net income was $288 million and diluted earnings per share was $2.02, driven by a record level of quarterly revenue and net interest income |
| Year-over-year, we have successfully grown deposits across our client sectors |
| We kept expenses well controlled generated quarterly positive operating leverage and grew tangible book value |
| We were pleased with our ability to manage deposit costs during the quarter |
| And we are very pleased, in fact, that we're able to get Chris to join us in the CFO position and which allow us to get Irene to rotate to a very important position to be our Chief Risk Officer |
| So in the standpoint of where are we today that we've got plenty of capital to be deployed, we are able to continue to take very good care of our customers for their needs |
| We feel that as our organization continues to grow, it's going to be very important for us to make sure that we have very, very solid and strong leadership, both in the finance area and also in the risk area |
| We're also pleased with the mix of our loan growth where nearly half the growth came from low-risk residential mortgages |
| In the third quarter, we generated industry-leading returns on our capital |
| We continue to maintain strong capital ratios, which are now the highest for regional banks |
| They're low cost base they have today and allowed us to continue to attract the right customers with the right relationship going forward |
| Given our earnings stability, solid credit performance and strong capital levels, our Board of Directors has approved the resumption of our share repurchase program in the fourth quarter |
| Our position is that East West will continue to stay true to our philosophy, which is having a very diverse portfolio and having a strong customer base |
| And I think that all in all, we should be in great shape |
| I want to thank our associates for all their hard work last quarter, which was reflected in our strong performance |
| So, we have, frankly, some really good commercial real estate clients that are year-ins and year-out have been banking with us for decades that went through the cycles of various economic conditions and actually have done really well |
| Residential mortgage has proven to be a resilient source of loan growth for us growing 3% from the second quarter |
| The East West business model is resilient and diversified and our balance sheet has positioned us well to continue to focus on our customers |
| We are pleased with our ability to consistently deliver industry-leading efficiency |
| So, this has been all working out pretty good for us because I think we strengthened our executive leadership depth at East West, and this is going to be pretty good for us for many years ago |
| We actually are in pretty good shape |
| If adjustments were made for AFS and HTM security mark and the allowance for loan losses that is not already reflected in equity, our capital ratios would still be very strong |
| Third quarter 2023 net interest income was $571 million, a new third quarter record for East West |
| Our continued customer focus and diversified growth strategy allowed East West to grow loans from the prior quarter and add significant customer deposits |
| And frankly, we've seen success across the board |
| We also maintained broadly stable asset quality and continue to proactively manage our creditors |
| And so I think, obviously, price pretty good, and so we will proceed |
| Statement |
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| As you can see, actually back in March, some of our other former competitors were really hurting their customer in a big way |
| And doing that next year is going to be more challenging from a revenue standpoint |
| Other investment income of $2 million was down a bit quarter-over-quarter, reflecting higher valuation marks on CRA investments recognized during the second quarter |
| So that one particular industry couldn't hurt us much |
| Net interest margin was 3.48%, which compressed by 7 basis points quarter-over-quarter |
| And I would tell you though I always expect that by the second quarter, the third quarter will be going through a recession |
| As you can see from the waterfall chart on this slide, NIM compression was largely due to the impact of higher interest-bearing deposit costs and the deposit mix shift to higher-cost customer deposit categories, partially offset by the lower wholesale deposits and higher loan bodies |
| Excluding amortization of tax credit and CDI adjusted noninterest expense was $202 million in the third quarter, down over $3 million or down 2% sequentially |
| I mean I will reflect back five years ago, six years ago, I mean, this oil and gas portfolio that we had was not very good |
| The average loan-to-value for our residential mortgage portfolio is also quite low at 51% and with close to 90% of our portfolio below a 60% LTV |
| At this stage, I really -- I mean if I look at the overall credit portfolio, I really haven't seen much that I would say really got me concerned |
| Quarter-over-quarter, non-performing assets as of September 30, decreased modestly to $104 million or 15 basis points of total assets from 17 basis points as of June 30 |
| First, it sounded like you mentioned maybe seeing a little bit of an impression near term, correct me if I'm wrong, but you guys also highlighted a pretty big deceleration and increase in deposit costs with the spot barely up from the quarter average |
| Management may make projections or other forward-looking statements, which may differ materially from actual results due to a number of risks and uncertainties |
| But the way I look at it is that it doesn't really matter whether it's a recession or soft lending |
| Again, it didn't turn out |
| In the medium term, of course, we're managing more towards dollar NII, and in the long term, obviously, our largest risk is actually to rapidly declining rates |
| And so, we had a little bit of charge-off |
| It's just that the overall portfolio is not big enough |
| Third quarter noninterest expense was $252 million, a 4% decrease quarter-over-quarter |
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