Core Viewpoint - East West Bancorp is portrayed as a resilient financial institution that withstands market fluctuations, likened to a mountain in contrast to other financial entities that resemble swaying skyscrapers [1]. Company Analysis - East West Bancorp has consistently demonstrated its ability to endure and remain stable through various market cycles, highlighting its strength and reliability in the financial sector [1]. Industry Context - The article suggests a preference for discussing lesser-known stocks while also covering larger entities like HSBC, indicating a diverse approach to investment analysis within the financial industry [1].

Core Viewpoint - East West Bancorp (EWBC) is identified as a strong momentum stock with a Momentum Style Score of A and a Zacks Rank of 2 (Buy), indicating potential for near-term gains [3][12]. Price Performance - EWBC shares have increased by 2.32% over the past week, outperforming the Zacks Banks - West industry, which rose by only 0.08% during the same period [6]. - Over the last month, EWBC's price change is 5.86%, compared to the industry's 3.84% [6]. - In the past quarter, EWBC shares have risen by 18%, and over the last year, they have gained 36.34%, while the S&P 500 has only moved 8.78% and 20.41%, respectively [7]. Trading Volume - The average 20-day trading volume for EWBC is 751,808 shares, which serves as a useful baseline for price-to-volume analysis [8]. Earnings Estimates - In the last two months, 7 earnings estimates for EWBC have been revised upwards, with no downward revisions, leading to an increase in the consensus estimate from $8.87 to $9.03 [10]. - For the next fiscal year, 7 estimates have also moved upwards without any downward revisions [10]. Conclusion - Given the strong price performance, positive earnings revisions, and high Momentum Style Score, EWBC is positioned as a promising investment opportunity [12].

Core Insights - The company has experienced significant deposit growth, leading to a positive trend in core deposits [1] - The increase in deposits has provided the company with the flexibility to accelerate investments and lending, positively impacting Net Interest Income (NII) [1] - The guidance for NII has been raised from a year-over-year increase of over 7% to a trend towards 10% [2] Financial Performance - Last year's NII was reported at $2.279 billion, with the current trend indicating a potential increase to $2.5 billion on a core run rate basis [2] - The company has observed positive balances in deposits and successful loan disbursements in July and August, contributing to the improved NII outlook [2]

Summary of East West Bancorp FY Conference Call Company Overview - **Company**: East West Bancorp (NasdaqGS:EWBC) - **Assets**: Approximately $80 billion - **Headquarters**: Pasadena, California - **Operations**: Nationwide and internationally, with multiple locations in China and Asia [1] Key Points Financial Performance - **Net Interest Income (NII)**: Increased guidance from a year-over-year growth of over 7% to trending towards 10%, with a core run rate expected to reach $2.5 billion, up from $2.279 billion last year [4][5] - **Deposit Growth**: Strong growth in core deposits, particularly from the consumer bank and small business customers, with a notable product being the liquid CD program offering a 3.88% rate [6][7] Margin and Spread Management - **CD Pricing**: Historical CD portfolio of $8 billion to $10 billion, with a new run-on rate between 3.75% and 4%, indicating a positive NII dynamic [10] - **Spreads**: Competitive spreads maintained in Commercial and Industrial (CNI) and Commercial Real Estate (CRE) sectors, with CNI spreads starting at around 2% [11] Growth Strategy - **Loan Growth**: Anticipated organic loan growth of 7% to 9% for 2026, with a focus on maintaining high capital efficiency [21] - **Acquisition Strategy**: Interest in whole bank acquisitions and fee-generating opportunities, with a preference for banks with less CRE concentration and more non-interest-bearing deposits [24][27] Regulatory Environment - **Regulatory Tone**: Improved regulatory dialogue noted, with optimism about future growth plans and strategies not facing impediments [33] - **Asset Size Regulation**: Majority opinion suggests a potential increase in the asset size threshold for bank regulations to $250 billion [29] Fee Income and Customer Acquisition - **Fee Income Growth**: Record fee income growth of 40% year-over-year, with plans to fill product capability gaps through acquisitions or partnerships [35][36] - **Customer Base**: Strong performance in attracting new business customers, particularly in Southern California, with over 50% market share in certain areas [44][45] Credit Quality and Risk Management - **Credit Performance**: Continued good credit quality with a proactive approach to managing potential challenges, particularly in the CRE sector [56] - **Reserves**: Adequate provisioning for potential losses, with a strong capital position to absorb economic challenges [56] Capital Management - **Capital Ratios**: Comfortable with a 10% Tangible Common Equity (TCE) ratio while delivering top quartile returns, with buybacks considered as a tool for capital management [60][62] Market Outlook - **Economic Context**: Despite uncertainties in international trade, core business fundamentals remain strong, with optimism about customer prospects and overall bank performance [65][66] Additional Insights - **Single-Family Portfolio**: Consistent application and transaction volumes in the single-family portfolio, indicating strong demand despite market fluctuations [47][48] - **China Operations**: Approximately $2 billion in footings, primarily focused on U.S. dollar deposits related to businesses with U.S. market interactions [52] This summary encapsulates the key insights and data points from the East West Bancorp FY conference call, highlighting the company's financial performance, growth strategies, regulatory environment, and market outlook.

[Forward-Looking Statements](index=4&type=section&id=FORWARD-LOOKING%20STATEMENTS) This section outlines the company's forward-looking statements, emphasizing that they are based on current assumptions and subject to inherent uncertainties - Forward-looking statements are based on current assumptions, beliefs, estimates, expectations, and projections, many of which are inherently uncertain and beyond the Company's control[10](index=10&type=chunk) - Key risk factors that might cause future results to differ materially include changes in local, regional, and global business, economic, and political conditions, soundness of other financial institutions, changes in trade/tariff/tax policies, and disruptions in operational or security systems[11](index=11&type=chunk)[12](index=12&type=chunk) [PART I — FINANCIAL INFORMATION](index=6&type=section&id=PART%20I%20%E2%80%94%20FINANCIAL%20INFORMATION) This part presents the unaudited consolidated financial statements and management's discussion and analysis of financial condition and results of operations [Item 1. Consolidated Financial Statements](index=6&type=section&id=Item%201.%20Consolidated%20Financial%20Statements) This section presents the unaudited consolidated financial statements of East West Bancorp, Inc. and its subsidiaries for the periods ended June 30, 2025, and December 31, 2024 (for balance sheet) and June 30, 2025 and 2024 (for income, comprehensive income, cash flows, and equity changes) [Consolidated Balance Sheets (Unaudited)](index=6&type=section&id=Consolidated%20Balance%20Sheets%20(Unaudited)) The Consolidated Balance Sheets show the financial position of East West Bancorp, Inc. and its subsidiaries as of June 30, 2025, and December 31, 2024, highlighting significant changes in assets, liabilities, and stockholders' equity | ASSETS ($ in thousands) | June 30, 2025 | December 31, 2024 | | :---------------------- | :------------ | :---------------- | | Cash and cash equivalents | 4,409,941 | 5,250,742 | | Debt securities: AFS | 12,488,913 | 10,846,811 | | Debt securities: HTM | 2,892,982 | 2,917,413 | | Loans held-for-investment (net) | 54,200,768 | 53,024,585 | | Total Assets | 78,158,067 | 75,976,475 | | LIABILITIES ($ in thousands) | June 30, 2025 | December 31, 2024 | | :----------------------- | :------------ | :---------------- | | Total deposits | 65,029,493 | 63,175,023 | | FHLB advances | 3,500,000 | 3,500,000 | | Total Liabilities | 69,956,300 | 68,253,421 | | STOCKHOLDERS' EQUITY ($ in thousands) | June 30, 2025 | December 31, 2024 | | :------------------------ | :------------ | :---------------- | | Total Stockholders' Equity | 8,201,767 | 7,723,054 | - Total assets increased by **$2.18 billion (2.87%)** from December 31, 2024, to June 30, 2025, primarily driven by increases in AFS debt securities and net loans held-for-investment[15](index=15&type=chunk) - Total deposits increased by **$1.85 billion (2.94%)** over the same period, with interest-bearing deposits showing a notable increase[15](index=15&type=chunk) [Consolidated Statement of Income (Unaudited)](index=7&type=section&id=Consolidated%20Statement%20of%20Income%20(Unaudited)) The Consolidated Statement of Income provides a summary of the company's revenues, expenses, and net income for the three and six months ended June 30, 2025, and 2024, indicating year-over-year performance changes | Income Statement ($ in thousands) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Total interest and dividend income | 1,058,999 | 1,034,414 | 2,090,801 | 2,058,031 | | Total interest expense | 441,925 | 481,185 | 873,526 | 939,663 | | Net interest income before provision for credit losses | 617,074 | 553,229 | 1,217,275 | 1,118,368 | | Provision for credit losses | 45,000 | 37,000 | 94,000 | 62,000 | | Total noninterest income | 86,178 | 84,171 | 178,280 | 162,658 | | Total noninterest expense | 256,020 | 235,932 | 508,168 | 482,306 | | Net Income | 310,253 | 288,230 | 600,523 | 573,305 | | Basic EPS | 2.25 | 2.07 | 4.35 | 4.12 | | Diluted EPS | 2.24 | 2.06 | 4.32 | 4.09 | - Net income for the three months ended June 30, 2025, increased by **$22.02 million (7.64%)** year-over-year, primarily due to higher net interest income and noninterest income, partially offset by increased provision for credit losses and noninterest expenses[17](index=17&type=chunk) - Net interest income before provision for credit losses for the three months ended June 30, 2025, rose by **$63.85 million (11.54%)** year-over-year, driven by a decrease in total interest expense[17](index=17&type=chunk) [Consolidated Statement of Comprehensive Income (Unaudited)](index=8&type=section&id=Consolidated%20Statement%20of%20Comprehensive%20Income%20(Unaudited)) The Consolidated Statement of Comprehensive Income details the changes in comprehensive income, including net income and other comprehensive income (loss) components, for the three and six months ended June 30, 2025, and 2024 | Comprehensive Income ($ in thousands) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------------------ | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Net income | 310,253 | 288,230 | 600,523 | 573,305 | | Other comprehensive income (loss) | 32,635 | 8,560 | 122,880 | (33,577) | | Comprehensive Income | 342,888 | 296,790 | 723,403 | 539,728 | - Other comprehensive income significantly increased to **$32.64 million** for the three months ended June 30, 2025, from **$8.56 million** in the prior year, primarily due to net changes in unrealized gains on AFS debt securities and cash flow hedges[19](index=19&type=chunk) - For the six months ended June 30, 2025, other comprehensive income was **$122.88 million**, a substantial improvement from a loss of **$33.58 million** in the same period of 2024, driven by positive changes in AFS debt securities and cash flow hedges[19](index=19&type=chunk) [Consolidated Statement of Changes in Stockholders' Equity (Unaudited)](index=9&type=section&id=Consolidated%20Statement%20of%20Changes%20in%20Stockholders'%20Equity%20(Unaudited)) This statement outlines the changes in each component of stockholders' equity for the three and six months ended June 30, 2025, and 2024, including net income, other comprehensive income, stock issuances, repurchases, and cash dividends | Stockholders' Equity ($ in thousands) | Balance, April 1, 2025 | Balance, June 30, 2025 | Balance, January 1, 2025 | | :------------------------------------ | :--------------------- | :--------------------- | :----------------------- | | Total Stockholders' Equity | 7,929,465 | 8,201,767 | 7,723,054 | | Net income | 310,253 | 310,253 | 600,523 | | Other comprehensive income | 32,635 | 32,635 | 122,880 | | Cash dividends on common stock | (83,743) | (83,743) | (167,844) | | Repurchase of common stock | (2,770) | (2,770) | (88,212) | - Total stockholders' equity increased from **$7.72 billion** at January 1, 2025, to **$8.20 billion** at June 30, 2025, primarily driven by net income and other comprehensive income, partially offset by cash dividends and stock repurchases[22](index=22&type=chunk) - Cash dividends declared for the six months ended June 30, 2025, totaled **$167.84 million**, representing **$1.20 per share**[22](index=22&type=chunk) [Consolidated Statement of Cash Flows (Unaudited)](index=10&type=section&id=Consolidated%20Statement%20of%20Cash%20Flows%20(Unaudited)) The Consolidated Statement of Cash Flows categorizes cash activities into operating, investing, and financing for the six months ended June 30, 2025, and 2024, showing the net change in cash and cash equivalents | Cash Flows ($ in thousands) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------------- | :--------------------------- | :--------------------------- | | Net cash provided by operating activities | 556,554 | 525,411 | | Net cash used in investing activities | (2,969,683) | (3,284,294) | | Net cash provided by financing activities | 1,569,368 | 2,513,010 | | Net decrease in cash and cash equivalents | (840,801) | (249,293) | | Cash and cash equivalents, end of period | 4,409,941 | 4,365,691 | - Net cash provided by operating activities increased to **$556.55 million** for the six months ended June 30, 2025, from **$525.41 million** in the prior year[25](index=25&type=chunk) - Net cash used in investing activities decreased to **$2.97 billion** for the six months ended June 30, 2025, from **$3.28 billion** in the prior year, mainly due to lower purchases of AFS debt securities[25](index=25&type=chunk) - Net cash provided by financing activities decreased to **$1.57 billion** for the six months ended June 30, 2025, from **$2.51 billion** in the prior year, primarily due to a lower net change in deposits and FHLB advance repayments[28](index=28&type=chunk) [Notes to Consolidated Financial Statements (Unaudited)](index=12&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements%20(Unaudited)) These notes provide detailed disclosures and explanations for the unaudited consolidated financial statements, covering accounting policies, fair value measurements, specific financial instruments like securities and loans, derivatives, commitments, and equity-related activities [Note 1 — Basis of Presentation and Current Accounting Developments](index=12&type=section&id=Note%201%20%E2%80%94%20Basis%20of%20Presentation%20and%20Current%20Accounting%20Developments) This note describes the basis of presentation for the unaudited interim consolidated financial statements, which are prepared in accordance with U.S. GAAP and regulatory guidelines - The unaudited interim Consolidated Financial Statements are presented in accordance with U.S. GAAP and applicable regulatory guidelines, primarily updating the Company's 2024 Form 10-K[32](index=32&type=chunk) - New accounting pronouncements adopted on January 1, 2025 (ASU 2023-05 and ASU 2024-02) did not have a material impact on the Company's Consolidated Financial Statements[34](index=34&type=chunk)[35](index=35&type=chunk) [Note 2 — Fair Value Measurement and Fair Value of Financial Instruments](index=12&type=section&id=Note%202%20%E2%80%94%20Fair%20Value%20Measurement%20and%20Fair%20Value%20of%20Financial%20Instruments) This note details the Company's fair value measurements for assets and liabilities, categorizing them into Level 1, 2, or 3 based on the observability of inputs | Assets Measured at Fair Value on a Recurring Basis ($ in thousands) | June 30, 2025 (Total Fair Value) | December 31, 2024 (Total Fair Value) | | :------------------------------------------------ | :------------------------------- | :------------------------------- | | AFS debt securities | 12,488,913 | 10,846,811 | | Affordable housing partnership, tax credit and CRA investments, net | 25,769 | 25,021 | | Derivative assets (Gross) | 468,056 | 523,133 | | Derivative liabilities (Gross) | 436,446 | 545,885 | - AFS debt securities measured at fair value on a recurring basis increased by **$1.64 billion** from December 31, 2024, to June 30, 2025[47](index=47&type=chunk)[48](index=48&type=chunk) | Level 3 Fair Value Measurements ($ in thousands) | June 30, 2025 | December 31, 2024 | | :----------------------------------------------- | :------------ | :---------------- | | Derivative assets: Equity contracts | 377 | 239 | | Derivative liabilities: Equity contracts | 15

Core Viewpoint - East West Bancorp, Inc. (EWBC) reported strong second-quarter 2025 results with adjusted earnings per share (EPS) of $2.28, exceeding the Zacks Consensus Estimate of $2.23, and reflecting a 9.1% increase year-over-year [1][9] Financial Performance - Quarterly net revenues reached $703.3 million, marking a 10.3% year-over-year increase and surpassing the Zacks Consensus Estimate of $699 million [3][9] - Net interest income (NII) was $617.1 million, up 11.5% year-over-year, with net interest margin (NIM) expanding by 8 basis points to 3.35% [3][9] - Total non-interest income increased to $86.2 million, a rise of 2.4%, driven by growth in most components except for customer derivative income and lower gains on available-for-sale debt securities [4][9] - Non-interest expenses totaled $256 million, up 8.5% from the prior-year quarter, influenced by increases across most components [5][9] Asset and Deposit Growth - As of June 30, 2025, net loans held for investment (HFI) were $54.2 billion, reflecting a 1.3% sequential increase, while total deposits rose 3.1% to $65 billion [6][9] Credit Quality - Annualized quarterly net charge-offs were 0.11% of average loans HFI, down 7 basis points year-over-year, and non-performing assets decreased to $171.7 million, down 12.5% year-over-year [7][9] - The provision for credit losses was $45 million, up 21.6% from the prior-year quarter [7][9] Capital Ratios - As of June 30, 2025, the common equity Tier 1 capital ratio improved to 14.51 from 13.74 a year ago, and the total risk-based capital ratio increased to 15.82 from 15.05 [8][9] Share Repurchase - In the reported quarter, the company repurchased approximately 26 thousand shares for $2 million, with $241 million of authorization remaining available for repurchase as of June 30, 2025 [11]

Company Overview - East West Bancorp held its Second Quarter 2025 Earnings Conference Call to discuss financial results [2][3] - Key participants included Adrienne Atkinson (Director of Investor Relations), Dominic Ng (Chairman and CEO), Chris Del Moral-Niles (CFO), and Irene Oh (Chief Risk Officer) [3] Financial Results - The financial results for the second quarter of 2025 were reviewed during the call, indicating a focus on performance metrics [3] - A slide deck was referenced, which is available on the Investor Relations site for further details [4] Forward-Looking Statements - Management may provide projections or forward-looking statements that could differ from actual results due to various risks and uncertainties [4] - Discussion may include non-GAAP financial measures, with a recommendation to refer to SEC filings for detailed risk factors and reconciliations [4]

Core Viewpoint - East West Bancorp reported quarterly earnings of $2.28 per share, exceeding the Zacks Consensus Estimate of $2.23 per share, and showing an increase from $2.07 per share a year ago, indicating a positive earnings surprise of +2.24% [1][2] Financial Performance - The company achieved revenues of $703.25 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 0.60%, compared to $637.9 million in the same quarter last year [2] - Over the last four quarters, East West Bancorp has exceeded consensus EPS estimates three times and topped consensus revenue estimates four times [2] Stock Performance - East West Bancorp shares have increased approximately 13.2% since the beginning of the year, outperforming the S&P 500's gain of 7.2% [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the market in the near future [6] Future Outlook - The current consensus EPS estimate for the upcoming quarter is $2.22 on revenues of $707.2 million, and for the current fiscal year, it is $8.82 on revenues of $2.81 billion [7] - The outlook for the industry, particularly the Banks - West sector, is favorable, ranking in the top 28% of over 250 Zacks industries, suggesting potential for outperformance [8]

Financial Data and Key Metrics Changes - The company reported record quarterly revenue and net interest income, with average loan and deposit growth of 2% quarter over quarter [5][6] - Adjusted return on tangible common equity was 16.7%, and return on average assets was 1.6% [6] - Total average deposits grew 2% quarter over quarter, while end of period deposits increased by 3% [8][9] - Net interest income rose to $617 million, up $17 million from Q1 [10] - Total non-interest income was $86 million, with fee income at $81 million, marking the third highest quarter for fees in the company's history [11] Business Line Data and Key Metrics Changes - Average loan balances increased by $940 million quarter over quarter, with commercial and industrial (C&I) lending being the largest contributor [9] - Demand for residential mortgage products remained strong, with expectations for continued contribution in Q3 [10] - Commercial real estate balances grew modestly as the company supported longstanding clients [10] Market Data and Key Metrics Changes - The company maintained strong asset quality metrics, with non-performing assets decreasing to 22 basis points of total assets [14] - Criticized loans ratio decreased to 2.15% of loans, and special mention ratio decreased to 81 basis points of total loans [14] Company Strategy and Development Direction - The company aims to continue growing its loan portfolio, with full-year loan growth expected to be in the range of 4% to 6% [17] - The focus remains on optimizing deposit costs and managing asset repricing to maintain margins [21][34] - The company is exploring opportunities to enhance fee income capabilities and is actively hiring to support growth [75] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about client sentiment improving, despite ongoing tariff uncertainties [39][42] - The company is confident in its ability to manage risks associated with tariffs due to its diversified loan portfolio [41] - Future net interest income and revenue trends are expected to exceed 7% for the full year [17] Other Important Information - The company repurchased approximately 26,000 shares of common stock for about $2 million, with $241 million remaining for future buybacks [16] - The effective tax rate for the second quarter was 22.9%, with expectations for the full year to be around 23% [12] Q&A Session Summary Question: Beyond margin, how sustainable are loan yields and deposit beta? - Management is focused on deposit cost optimization and expects to maintain margins through Q3, regardless of potential rate cuts [21] Question: Can you provide insight on the reserve build related to C&I? - The reserve build was influenced by the CECL model and economic outlook rather than specific issues within the C&I book [25] Question: What is the impact of recent legislative changes on renewable energy tax credits? - Existing investments and loan commitments remain unaffected by new rules, but future strategies are being reconsidered [27] Question: How does the company view NII growth relative to loan growth? - The company is asset sensitive, and slower rate cuts would be beneficial for NII growth, which is expected to align with loan growth [34] Question: What is the sentiment around client investment pace? - Client sentiment is improving, with more certainty regarding tariffs, and the company is well-positioned to manage these changes [39] Question: Can you discuss the trends in deposit costs? - Average total deposit costs decreased, and the company expects to continue this trend as it approaches future rate cuts [46] Question: What are the expectations for core expenses in the second half of the year? - The company is investing in hiring and building capabilities, which will lead to increased expenses [49] Question: How does the company plan to optimize its balance sheet? - Continuous efforts are being made to optimize deposits and the investment portfolio, with a focus on growing the C&I book [73] Question: What are the long-term plans for capital utilization? - The company intends to build out key businesses and enhance fee income capabilities while maintaining strong returns for shareholders [75]

Financial Data and Key Metrics Changes - The company reported record quarterly revenue and net interest income, with average loan and deposit growth of 2% quarter over quarter [4][5] - Adjusted return on tangible common equity was 16.7%, and return on average assets was 1.6% [5] - Net interest income increased to $617 million, up $17 million from Q1 [9] - Total non-interest income was $86 million, with fee income at $81 million, marking the third highest quarter for fees in the company's history [10] Business Line Data and Key Metrics Changes - Average loan balances increased by $940 million quarter over quarter, with commercial and industrial (C&I) lending being the largest contributor [8] - Demand for residential mortgage products remained strong, with expectations for similar or higher volume in Q3 [9] - The company experienced notable growth in commercial deposits, alongside consumer and business banking balances [7] Market Data and Key Metrics Changes - The criticized loans ratio decreased to 2.15% of loans, and non-performing assets decreased to 22 basis points of total assets [13] - The allowance for credit losses increased to $760 million, or 1.38% of total loans, reflecting changes in the economic outlook [14] Company Strategy and Development Direction - The company aims to maintain a strong capital position, with a tangible common equity ratio of 10% and a common equity Tier 1 capital ratio of 14.5% [15] - The focus remains on diversifying revenue streams and enhancing customer relationships to support growth [5][10] - The company is actively managing credit risk and optimizing deposit costs while preparing for potential rate cuts [20][49] Management Comments on Operating Environment and Future Outlook - Management expressed optimism about maintaining margins and loan growth, despite potential rate cuts [20][34] - Client sentiment is improving, with businesses becoming more comfortable navigating tariff-related uncertainties [39] - The company expects full-year loan growth to be in the range of 4% to 6%, with net interest income and revenue trends projected to exceed 7% [16][17] Other Important Information - The company repurchased approximately 26,000 shares of common stock for about $2 million, with $241 million remaining for future buybacks [15] - The second quarter income tax expense was $92 million, with an effective tax rate of 22.9% [11] Q&A Session Summary Question: Ability to sustain loan yields and deposit beta - Management is focused on continuous deposit cost optimization and expects to maintain margins through Q3 [20] Question: Credit reserve build and C&I outlook - The reserve build relates to the CECL model and economic outlook rather than specific issues within the C&I book [23] Question: Impact of legislative changes on renewable energy tax credits - Existing investments and loan commitments remain unaffected by new rules, but future strategies are being reconsidered [26][28] Question: NII growth relative to loan growth - Management confirmed that NII growth is expected to track loan growth, with potential upside if rates remain higher for longer [34] Question: Client sentiment around investment pace - Client sentiment is improving, with businesses adapting to tariff situations and feeling more comfortable [39] Question: Trends in deposit costs - Average total deposit costs decreased, and management expects to continue this trend as they approach future rate cuts [46][49] Question: Core expenses and investments - The company is focused on hiring and building capabilities to support future growth, which will lead to increased expenses [50][51] Question: Loan growth in commercial real estate - The company aims for balanced growth across loan types, with a focus on C&I and single-family loans [81]