East West Bancorp(US:EWBC)2023-04-20 22:12Financial Data and Key Metrics Changes - For Q1 2023, the company reported an adjusted return on average assets of 2.05% and a return on average tangible common equity of 23% [4] - Net income for Q1 2023 was $322 million, with diluted earnings per share of $2.27, adjusted earnings per share increased by 40% year-over-year [86] - The common equity Tier 1 ratio was 13.06%, up 38 basis points quarter-over-quarter, and the total capital ratio was 14.5%, up 50 basis points [6] Business Line Data and Key Metrics Changes - Total loans reached $48.9 billion, an increase of $697 million or 1% from the previous quarter [76] - Commercial real estate loans totaled $19.4 billion, up 2% from the previous quarter and up 14% year-over-year [89] - Average loan yield for Q1 2023 was 6.14%, an increase of 55 basis points quarter-over-quarter [34] Market Data and Key Metrics Changes - Average deposits were $54.7 billion, a decrease of $1.2 billion or 2% from the previous quarter [87] - The domestic uninsured deposit ratio improved to 41% as of April 19, 2023 [83] - The average cost of deposits for Q1 was 160 basis points, up 54 basis points from the previous quarter [27] Company Strategy and Development Direction - The company aims for loan growth in the range of 5% to 7% for 2023, with net interest income growth expected to be between 16% to 18% [38] - The management emphasized a conservative approach to liquidity management, maintaining high capital ratios and a diversified loan portfolio [46] - The company is focused on maintaining a granular deposit base and avoiding overconcentration in any particular sector or client [40][52] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's strong asset quality and proactive measures to monitor the loan portfolio [20] - The current economic environment is expected to be challenging, but the company is well-positioned to navigate potential stress in the commercial real estate market [60][66] - The effective tax rate for 2023 is anticipated to be approximately 20%, reflecting ongoing tax credit investments [44] Other Important Information - The company recorded a provision for credit losses of $20 million in Q1, down from $25 million in the previous quarter [12] - The average loan-to-deposit ratio was 88% in Q1 2023 [32] - The company declared a quarterly common dividend of $0.48, payable on May 15, 2023 [88] Q&A Session Summary Question: How has the recent banking disruption affected deposit strategies? - Management stated that the strategy remains conservative, focusing on maintaining a diversified deposit base and avoiding concentration in any particular client or sector [48][52] Question: What is the outlook for commercial real estate? - Management acknowledged concerns in the market but emphasized that their portfolio is well-positioned with low loan-to-value ratios and proactive customer engagement [59][66] Question: Are there opportunities for capital deployment in the current market? - Management indicated that while the market is uncertain, they are always looking for opportunistic investments and maintaining a strong capital position [95][96]