East West (EWBC) Q3 2025 Earnings Call Transcript

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DATE

Tuesday, October 21, 2025 at 5 p.m. ET

CALL PARTICIPANTS

Chairman and Chief Executive Officer — Dominic Ng

Chief Financial Officer — Irene Oh

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TAKEAWAYS

Non-Interest-Bearing Deposit Mix -- Management stated that non-interest-bearing deposits make up "roughly 25%" of new deposit growth, according to Dominic Ng, reflecting continued stability at current rates.

MBFI (Non-Bank Financial Institution) Loan Exposure -- MBFI loans make up approximately 13% of the total loan portfolio as of September 30, 2025, with no direct exposure to Tricolor, First Brands, or Cantor-related entities.

Credit Quality Metrics -- Only two C&I loans totaling $7 million are not rated "pass" as of September 30, while delinquency in the MBFI portfolio stands at $1 million as of Q3 2025; management reported "virtually no losses or charge-offs."

Capital Position -- The tangible common equity (TCE) ratio is 10.2% as of Q3 2025, described by management as "one of the strongest among all peers."

Deposit Repricing Capability -- Management confirmed that nearly all deposits except CDs and non-interest-bearing deposits are instantly repriced, totaling about $24 billion.

Time Deposit Maturities -- Management disclosed "about $10 billion" in time deposits rolling over in Q4 2025, according to Dominic Ng and "a little over $8 billion" rolling over in Q1 2026, positioning for benefit from expected Fed rate cuts.

Net Interest Income (NII) Guidance -- Dominic Ng stated this is "the trajectory we are on" after incorporating recent recoveries.

Net Interest Margin (NIM) Baseline -- The "core run rate of NIM excluding the interest recoveries," according to Dominic Ng, is approximately 6.45% as a reference, as discussed in the context of Q3 2025.

Deposit Beta -- The observed deposit beta on interest-bearing deposits was "0.62" for Q3 2025, according to Dominic Ng, with an expectation that it will be "better than 0.5 going forward."

Wealth Management Expansion -- Ongoing investment in direct hires and new product development in wealth management is generating additional fee income and broader client penetration.

Payments and FX Platform Rollout -- Management aims to launch wire payment capabilities to some customers by end of Q4, broadening in 2026, with FX platform rollout targeted for mid to late 2026.

Expense Growth Outlook -- Management indicated a willingness to allow expenses to grow in the "high single digits" if fee-based revenues continue to grow at double-digit rates, consistent with commentary on expense and revenue growth trends in recent years, aligning with greater operating leverage.

Allowance for Loan Losses -- The reserve level on the residential mortgage book rose from 36 basis points to 41 basis points as of September 30, attributed to economic uncertainty rather than tariff risks.

Shareholder Return Actions -- Board-approved share buybacks and potential dividend increases are being considered, with timing driven by market opportunity rather than immediate pressure.

SUMMARY

Management emphasized broad-based strength in deposit growth across all customer categories during Q3 2025, highlighting continued traction in non-interest-bearing deposits and a disciplined approach to asset growth against a backdrop of economic uncertainty. A major technology platform rollout in payments and FX is scheduled to expand through 2026.

A substantial portion of time deposits—over $18 billion scheduled to mature in Q4 and Q1—is being positioned to capitalize on anticipated Federal Reserve rate cuts at upcoming maturities.

Reserve build in the residential mortgage book reflects a response to generalized economic uncertainty, not specific tariff concerns.

The pace and structure of expense increases are being managed relative to the quality and sustainability of recurring fee income streams.

Updates on share buyback and dividend policies signal a flexible capital return approach grounded in proactive scenario management and ample capital ratios.

INDUSTRY GLOSSARY

DDA: Demand Deposit Account—non-interest-bearing checking accounts, a key source of low-cost bank funding.

MBFI: Non-Bank Financial Institution, comprising customers such as investment funds, REITs, and specialty lenders.

TCE Ratio: Tangible Common Equity ratio—measures a bank’s core capital against its tangible assets, excluding intangibles and preferred equity.

Deposit Beta: The percentage of changes in federal funds rates that get passed through to bank deposit rates.

Full Conference Call Transcript

Dominic Ng: Balance sheet growth that you are already seeing? I think balance sheet growth remains to be seen. I think we are highlighting some uncertainty in the outlook and some uncertainty in the economy, and it will clearly be a function of how those uncertainties unfold over the course of 2026. So we are not here to provide 2026 guidance. But as I look at Q4, I think there are a lot of reasons why we will be very thoughtful and make sure we are supporting our core customers and our line stand customers but not going out to try and hit the cover off the ball on new loan growth.

We are trying to just deliver for our customers and be consistent in the marketplace. Great. Thank you. The next question is from Ebrahim Poonawala with Bank of America. Please go ahead. Hey, good afternoon. Hey, good afternoon, Lee.

Ebrahim Poonawala: Hey, Chris. Maybe just following up on the balance sheet growth comment. When we look at especially like the non-interest-bearing deposit growth, better than expected this quarter, just talk to us in terms of are there certain verticals driving that growth? Like what is the momentum there? Or could we actually now are we at a point with the Fed probably getting close to ending QT just from a system standpoint? Could we see NIB mix actually grow as a percentage of total deposits moving forward?

Dominic Ng: So as we think about it, the drivers this quarter clearly included a nice lift in household accounts, a nice lift in small business accounts, and further positives from our commercial. So, really thought in all three major categories, and so it was broad-based but driven by our consumer and retail bank group. And so we continue to believe that will be a source of continued DDA growth as we move into the fourth quarter.

We are not yet guiding for 2026, but I would like to think that as you alluded to, our stability in DDA growth has found its footing here, and we are tracking at roughly 25% or so of new deposit growth in line with the bank's growth coming in the form of DDA, and that feels like a comfortable level at today's interest rate environment. We have said previously, we see the DDA mix as interest rate level dependent. So if we go down 100 basis points from here, I would assume the 25% gets a little better, but at these levels, 25% seems like the right place to think about as we move into 2026.

Ebrahim Poonawala: Got it. And I guess maybe just as a follow-up for you. Or maybe Irene, when looking at the credit metrics, just talk to us what you are seeing when we look at relative stability, guess, on criticized loans. As you laid out or non-performing assets, but when you think about this both from a C and I and commercial real estate, where are the soft spots? And then again, you break down your C and I disclosure around this focus on the NDFI loans. Just your visibility around this portfolio, your comfort on sort of the credit quality of the non-bank lending piece of it? Thanks. Sure, Yvette. So first when we talk about credit quality,

Irene Oh: I would say that when we look at credit quality and the loan portfolio today, it is very stable. I think that is something we have been pleasantly surprised at, especially given really the absolute low levels of problem loans incoming that we are seeing and have continued to see and also the metrics that you see for NPA criticized classified loans, delinquency, etcetera. So that is something we have maintained, I would say, a lot of discipline on as far as ensuring that we do not have concentrations in one area.

That is something that we continue to do on the CRE book, single family, and then also from a C and I perspective I think you also asked about the I guess the topic of this earnings cycle MBFI book. You know, we do have MBFI. Exposure. It is about 13% of our total loan portfolio as of September 30.

Ebrahim Poonawala: Just any comments but

Dominic Ng: Sure.

Irene Oh: When we look at the MBFI book that we have, and I will just maybe to make sure it is very clear, we do not have any direct exposure to Tricolor, First Brands, Cantor, or any of the developers or related entities behind Cantor as well. Right. When we look at that MBDFI book, much of it has been customers that we have kind of grown and industry verticals that we have grown over many years. If we look at the different subsets of that, a big component of that you see the details on Slide 15.

Where we show the loan portfolio and the composition of C and I, a big component of that is capital call lending also other elements within that you see are in the real estate investment and management sector financial services, art finance, consumer finance, and equipment finance. And I would say for East West, when we look at this, generally we are comfortable. These are clients that we have been working with for a long time. We will also ensure that from a collateral perspective, our collateral is secured. This is something that we independently validate or confirm as well. So overall, when I look at this portfolio EV, at this point in time, I am comfortable.

If you look at the subset of C and I loans, we only have two loans totaling $7 million that are not rated pass. There are virtually no losses or charge-offs and delinquency as of September 30 was $1 million. Got it.

Dominic Ng: I want to add even historically for the past fifteen years, we hardly have any losses in the NDBI portfolio. So this is something that we feel pretty strongly that so far so good and then has historically been very good.

Ebrahim Poonawala: Got it. Thank you both. To a certain extent,

Dominic Ng: EB credit is credit. And it is all about knowing your customer perfecting your collateral, managing your concentration risks, and monitoring the cash flows and East West has a long-standing track record of being very good at all of those things.

Ebrahim Poonawala: No, agreed. Thanks for that.

Dominic Ng: The next question is from Dave Rochester with Cantor. Please go ahead. And that is a different Cantor by Different Cantor. Just one of them. Yeah. Exactly. How you doing, guys? Appreciate the Very great.

Ebrahim Poonawala: Timing is everything.

Dominic Ng: Exactly. On fees, your trends there have been

Dave Rochester: consistently very strong. Can you just talk about some of your efforts to build out some of those fee baselines, specifically wealth management that you highlighted earlier? Then can you give an update on where you stand on the new FX platform?

Dominic Ng: Thanks. Sure. So we continue to build out the team around wealth management area because the reality is it continues to provide additional opportunity. And with each new set of hires, we are finding additional growth opportunities, additional client penetration opportunities, and additional frankly revenue opportunities. And so, we continue to invest in direct hires in that line of business and we continue to invest in some new product development, alongside those new hires to get ourselves to the right place. With regard to our payments business, we continue to roll out and develop enhanced payment solutions and we are working through integrating that with the FX platform, Dave, that I think you are referring to.

That we are continuing to develop the APIs for. That we can be in a better position we believe in 2026 to have that capability launched.

Dave Rochester: That is great. Early in 2026 or later in the year?

Dominic Ng: I think where the wire payment capability will be immediately ready for a subset of our customers frankly, here at the end of Q4 and broadening to a broader set, throughout 2026. And then the foreign exchange capability will come probably mid to later in the year.

Dave Rochester: Great. Appreciate that. And then, just switching to capital, the TCE ratio is at 10.2% now. I know you mentioned you like that 10% level and I was just curious if you are going to end up liking 11% at some point or if maybe the outlook for growth and buyback might be accelerating a little bit next year and can keep that sort of stable from here? Any thoughts on that?

Dominic Ng: Yes. We are looking at all different scenarios. One thing for sure is that we always wanted to be one of the strongest among all peers when it comes to capital ratio, because it really helped us to attract customers to attract

Ebrahim Poonawala: talents, to come join East West Bank

Dominic Ng: and for us to do well we need to have strong talents

Ebrahim Poonawala: to build relationships with great customers.

Dominic Ng: And having strong capital makes it much easier for us to attract talents and attract clients. So with that, it is just part of the formula of us being successful. And as you look at our return of equity and return of asset, we generate high teens in return of equity and 1.8% plus on return of asset. With that kind of return, we outperform most of our peers anyway. Despite the fact that we have substantially higher capital. So obviously in our perspective is that strength of high capital ratio helps us to continue to generate this kind of high performance and we want to stick with that.

But that does not mean that we are not going to be

Ebrahim Poonawala: looking for opportunistic buyback.

Dominic Ng: We got board approved

Ebrahim Poonawala: allocation

Dominic Ng: about X dollar amount

Ebrahim Poonawala: to do buyback. At the appropriate time. So we are always looking for opportunities.

Dominic Ng: Have we not been in the quiet period, the last several days was a pretty good opportunity. So every now and then there is always a few weeks out of the year is a great opportunity. And our advantage is that we always have these kinds of situations that allow us to do the right thing at the right time. And not having a gun on our head. To do something.

Ebrahim Poonawala: Right.

Dominic Ng: The other thing would be obviously from a dividend standpoint,

Ebrahim Poonawala: after the fourth quarter, we are always going to be

Dominic Ng: start looking into

Ebrahim Poonawala: reassessing how much dividend we want to pay

Irene Oh: and obviously there are. Always opportunities for us to possibly increase dividend and we are always out there looking for whatever other opportunity for us to grow. And so I think we are in a very, very advantageous position right now. With the strong capital and then we are going to continue to stick with that.

Dave Rochester: Sounds good. I would agree. Thanks.

Dominic Ng: Thank you, David. Thank you. The next question is from Timur Braziler with Wells Fargo. Please go ahead. Hi, good afternoon, Timur.

Timur Braziler: Hi.

Dominic Ng: Chris, going back to your deposit-related commentary on the ability to reprice deposits that might have Fed actions. Just what is the size of that base that gets repriced that same day? It is the vast majority of everything other than the CDs and of course the non-interest bearing. So, substantially all of the money markets all of the interest-bearing checking, even the savings accounts that are above 1%. So a lot. It is on the order of magnitude

Timur Braziler: $24 ish billion or so.

Dominic Ng: Okay, great. And then maybe looking at some of the tariff-related impact, we are hearing from some others that you are starting to see a little bit of relief there and there is third-quarter loan growth as clarity increases in some cases. Is East West seeing any of that? Was that any part of the 3Q growth? Or is this really still an opportunity maybe we get a little bit more clarity on some of the tariffs that may be more impactful to your client base? Look, think clarity is going to be good for our customers, for the economy, for everyone. And so, reduce tensions and increase transparency and clarity about what will happen in everyone's best interest here.

That having been said, our customers have proved remarkably resilient throughout this period. They have taken steps to prepare themselves well in advance, taken steps here in the interim to do other things, and seem to be looking forward to business opportunities and finding the right way to do business in whatever environment presents itself. We like to think that East West is very nimble. Our customers have proven remarkably nimble, and we think they will find a way to navigate through whatever environment exists. But right now, they are not coming to us with concerns about navigating the current waters. Okay, great. And then just one last one for me, maybe for Irene.

Just looking at Slide nine, the linked quarter reduction in multifamily criticized loans and then kind of linked quarter increase in commercial real estate non-performers. Was there any migration from the multifamily book into MPAs there? And then just maybe talk a little bit more broadly about California multifamily, been a topic that has been getting a little bit more focus.

Irene Oh: I did not hit the last part of your question. Could you just repeat that?

Dominic Ng: Yeah. The link order reduction in criticized multifamily versus the quarter on quarter step up in commercial real estate non-performers? Was any of that related? And then just maybe speak to the broader multifamily environment in California, as that has been getting a little bit more questions.

Irene Oh: Great. Okay. So when we look at the linked quarter reduction in multifamily, albeit at a very low base, the reduction was really kind of the ability to kind of upgrade loans. Right. So really the cash flows were there, we were able to upgrade them for multifamily. For CRE, the changes that we have seen as far as the criticized level there excluding multifamily as well, Overall, I would say that there are inflows and outflows that happen there generally speaking. It is something where we find it very manageable at this point. For multifamily in the markets that we are in, which is largely California, we are finding that the markets continue to be holding up.

When we look at kind of the cash flows and information that we are receiving from our customers, their ability to debt service continues to be very resilient.

Timur Braziler: Great.

Dominic Ng: Thank you. The next question is from Jared Shaw with Barclays. Please go ahead. Hey, good afternoon. Good afternoon, Jared. Hey. Maybe sticking with credit, Irene, you

Dave Rochester: just talk through the thought process behind the sale of non-performers? And it looks like, I guess, you must have got some good pricing on that assuming if the NII benefit is mostly interest recoveries. Is there an opportunity to do more NPL sales

Dominic Ng: It was not a sale. It was a full payoff from an existing set of customers where the loans least one of them was had been on accrual for years. So it was the full payoff, the recovery of the principal, recovery of our prior charge-offs, and the recovery of years and years of accrued interest. That had compounded. So it was not a sale, it was just we worked with the customers, long enough and well enough that collectively we were able to recover in full.

Dave Rochester: Okay. You just have to do that now with everyone else, right?

Jared Shaw: It will be that sounds easy.

Dominic Ng: Dominic expects that on pretty much everything. So yes, that is the mandate around here.

Jared Shaw: Okay. All right. Well, that is good color. Thanks. Then I guess just looking at expenses, with all this growth in fees, especially on the wealth management side, how should we think about correlating growth on the expense side? I guess I was a little surprised to see such good expense control with that fee income growth.

Dominic Ng: Look, I think if you look over the last several years, we have been growing at a steady clip in the upper single digits. We continue to grow in aggregate at that level here even into this year. And so the reality is, we continue to grow the bank, we are always looking to obviously grow on an accretive basis but if we are growing revenue double digits, then I certainly have no problem with expenses growing in the high single digits and creating operating leverage as we continue to grow.

Jared Shaw: Yes. But I guess, we is there any sort of paper for performance component to the wealth management growth And any of the other sufferers, it really just more salary and bonus and we should not tie them directly? To that growth? No. When we think about our fee revenue businesses,

Dominic Ng: for sure, our wealth management businesses, they have a higher efficiency ratio to their business model. And I think as Dominic alluded to on our last call, we will be happy to see our expenses grow a little bit faster if we are growing our fee businesses faster because those obviously are good long sustainable revenue streams. That we think the market values at a premium, that we value at a premium internally, that we will be happy to pay people for to generate over time. So if our efficiency ratio goes up a little bit because we are developing a steadier more recurring fee stream, I do not think anyone will be too upset about that.

Irene Oh: Maybe I could just also clarify, because maybe this is the nature of your question With that increased fee income, there is increased kind of compensation for those individuals and that is reflected in the same period. Revenue recognition,

Ebrahim Poonawala: Okay.

Jared Shaw: All right. Thanks. And then just finally for me, do you have the impact the hedge impact this quarter? I think it was $6 million last quarter.

Dominic Ng: It was also negative $6 million for Q3.

Jared Shaw: Thanks.

Timur Braziler: The next question

Dominic Ng: is from Chris McGratty with KBW. Please go ahead. Great. Thanks for the question.

Chris McGratty: Chris, maybe to start with you just to follow-up on the revenue growth operating leverage conversation. Does the operating leverage outlook get any easier with deregulation and the momentum there? In terms of what you are spending on perhaps currently that you might be able to either cut or divert next year?

Dominic Ng: I think the things that are in flight are largely things that we recognize as appropriate to have a better control, better managed better monitored bank in the long run. We are of course developing plans for what might come a few years down the road. But I would say, we are generally today doing things that make sense for our business, make sense for our customers and make sense for the shareholders and that continues to be what we focus on.

Chris McGratty: Okay, great. And then second question would be on just loan demand from clients. I know you touched upon it a little bit before, but what do you think it will take to you to get the loan book growing at a quicker rate in 2026?

Dominic Ng: Look, I think our residential mortgage demand fairly steady and consistent. The American dream is alive and well. And for the niche that we focus in on, it is a very steady consistent contributor to our business. On the real estate side, it has been interesting. I think you have heard me say on these calls and Dominic say and other forums, that it felt like for a while some of our best customers were sitting on the sidelines. We have seen some of them come back and look at things and some of them even start to do things. So I think real estate, is at the edge. Of additional interest.

Lower rates will probably create more opportunities for things to happen in that space. Dominic said, a few cuts ago that he thought 100 basis points would probably be enough to bring the market back into alignment. I think we are still 50 basis points away from that. So a few more cuts maybe into next year and real estate could have some more traction. We will see how that plays out. And on the C and I side, I think Irene alluded to the fact that we have got a lot of private equity capital call line type activity. That portfolio has been relatively quiet.

Lower rates probably means they come back in more, but it still remains relatively quiet as we sit here today.

Chris McGratty: Thanks for that. And then Chris just on the full cycle beta, can you just remind us the assumptions for deposits?

Dominic Ng: Sorry. I think you cut out there, but the question was deposit beta and I think we are our observed deposit beta on interest-bearing deposits was 0.62 and we continue to expect it will be better than 0.5 going forward.

Chris McGratty: All right. Perfect. Thank you. The next question is from Ben Gerlinger with Citi.

Dominic Ng: Good afternoon. Good afternoon, Ben.

Dave Rochester: Chris, you have laid out a lot of information on kind of moving to deposits being

Chris McGratty: almost instantaneously cut outside of the time deposits. On time deposits, I have noticed you guys keep cutting the term from basically six months to four to three. Seems like you are kind of trying to time everything into the first quarter. Also at the same time you also have the Lunar New Year every year, which is so it is a big quarter for repricing in general. I am just kind of curious

Jared Shaw: do you have anything in front of you? Like, how much

Chris McGratty: time deposit dollars are supposed to be repriced in 1Q next year?

Dominic Ng: Yes, very perceptive question. And yes, very observant of you.

And yes, we do have a fair amount that we have structured so that we have the ability to do something meaningful and Q1 around our Lunar New Year special and we have been shortening those maturities as you stated to both keep the balances today but in recognition and anticipation that there will be a few Fed cuts coming here at the October and December that would allow us therefore to roll over and so specifically address your question, we have about $10 billion, a little over $10 billion as rolling over in Q4 and a little over $8 billion before any rollover that happened from Q4 that would otherwise come due in Q1.

So that is $18 plus billion rolling over in the next six months, and we assume the vast majority of that will benefit from the embedded 50 basis points of rate cuts that is already out there. So our current six-month CD rate that is out there today is a three fifty five rate.

Chris McGratty: Got it. Yeah. So Citi's patent pending CD tracker is doing pretty good. Anyway, so when you think about the I mean, you are not going to give NII guidance next year, but it seems like it is going to be another really big year. Are there any investments down the road that we might think about otherwise I would imagine this year's guide is probably similar to next year's guide.

Dominic Ng: We have not given guidance yet for 2020 but I appreciate your enthusiasm. Fair enough. Alright. Appreciate it. Thank you. The next question is from David Smith with Truist. Please go ahead.

Chris McGratty: Hey, there. Good have confirm I just wanted to confirm on the guidance,

Dominic Ng: is the NII guide inclusive of the accretion and recovery this quarter? And does the expense outlook include the equity plan adjustment? And can you also just help us give us some color on when the timing on those

Chris McGratty: became clear to you? Like was NII item already contemplated with the guidance update last month? And have you had the equity comp item already

Dominic Ng: planned when you gave the guidance earlier this year? I know some folks have been surprised

Chris McGratty: last quarter, the expense guide staying where it was seemed to imply such a step up in the

Dominic Ng: half of the year.

Chris McGratty: Thank you.

Dominic Ng: Yes. So I think we have been thinking about our employee retirement eligibility over the last six months and had not taken any definitive actions until this quarter. So that was I will say in the back of our minds, we had not concretely defined it. We had not gone through the appropriate approvals had not updated our board, etcetera. So that came together in Q4 and the revenue side came together because it the clients paid off, and no, we did not control that. They controlled that, and they paid it off. With regard to, you know, our guide, I would say, look, we are guiding to over 10% today.

Because we are clear that is the trajectory we are on. You know, I do not know that we had a clarity of vision around

Irene Oh: all the pieces

Dominic Ng: when we last spoke, but clearly we have that clarity now and clearly it like it is not just trending towards 10%, but obviously trending well above 10%.

Chris McGratty: Okay. And on expenses that had, I guess, been contemplated in the guide from earlier this year then? If you were not even if you were not sure on the exact timing within the year, is that the right way to

Dominic Ng: understand that? That is the right way to think about it.

Irene Oh: Yeah.

Ebrahim Poonawala: Thank you.

Jared Shaw: The next question is from Janet Leigh with TD Cowen. Please go ahead.

Irene Oh: Hello.

Irene Oh: Just back on NIM, so am I interpreting your commentary correct to assume that there will be a bigger increase in NIM and then the NIM expansion after the first quarter will be moderating or flattish?

Samuel Varga: Is that the right way to think about this NIM trajectory comment?

Dominic Ng: So if I look at the core run rate of NIM excluding the interest recoveries, and focus on Page six, that is the adjusted number at around six forty five. That is a good run rate number. And we are moving obviously to continue to grow the balance sheet modestly and hopefully we will have some benefit from the repricing dynamics in the short run. That could make that a little bit better but that is a good run rate starting point.

And the question will be is what happens to both the long-term rate which impacts the back book refinancing and repricing that will drive sort of the long end of our loans and securities investments in 2026 versus the short end effects and how that plays out over the course of 2026. And if the answer is we get a steepening yield curve that is generally a positive for us. If the answer is for some reason the yield curve flattens because of the dynamics, well that will not be as good for us.

I think those are the things that are at play and the things that we are looking for is looking to better understand as we also move in towards 2026.

Samuel Varga: Okay. Thank you. And just going back to credit, I know you guys gave a lot of color on credit and tariff, but I still want to just understand this direction of allowance for loan losses. Because when I look at other banks, reserve ratios tended to be more so stable. Is your reserve increase tied to resi mortgage and CRE to capture potential effect of business cycle. Is this really just referring to the potential tariff-related uncertainty?

Dominic Ng: Is more than just the tariffs? Yeah, I would look, I think the reality is it is across the board and I will let Irene jump in here. But it was not just in our resi mortgage book. We were thoughtful about different positions in different portfolios. Irene?

Samuel Varga: Yes. And

Irene Oh: look, the resi book with the kind of incredible credit quality we have had over thirty years for much of that portfolio, we increased the reserve level from 36 basis points to 41. So ultimately, when you look at those levels, I think they are appropriate given the credit quality, but in a situation where the economy is more certain, certainly when we look at consumer credit, even consumer that is well secured by low loan to value real estate mortgage, that is impacted when we do the modeling. So it really less so on the tariffs, more so on kind of the economic uncertainty and what could happen there. Does that make sense?

Know what kind of metrics and drivers for that unemployment GDP etcetera.

Samuel Varga: Got it. Thank you.

Chris McGratty: This concludes our question and answer session.

Dominic Ng: I would like to turn the conference back over to Dominic Ng for any closing remarks.

Irene Oh: Well, thank you all for joining our earnings call this afternoon. And we are looking forward to speaking with you in January.

Samuel Varga: Next year.

Dominic Ng: The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.

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