We do not have any huge one, couple of them [ph] and doing all of those typical banking 101 type of risk oversight.And in addition to that, very, very proactively helping our customers to get interest rates swap so that while we are enjoying this adjustable rate and the last year or so that even now enjoy this wide margin — net interest margin, our customers are actually paying fixed rate.So we have been very, very proactive for the last actually eight years to nine years doing interest rate swap. And I think that we do have a portfolio that are, quite frankly, are much more immune against the high rate attack for commercial real estate borrowers.Secondly, as I looked at the current interest rate environment, we looked at predominantly 2023 or maybe the higher part of 2023 and also the full year 2024 will probably will be a more stressful year for the CRE owners and when I look at our portfolio, I believe that we only have 6% of our CRE loans coming due in 2023.
And Irene correct me if I am wrong, I think next year will be 8%.Irene Oh That’s correct, Dominic.Dominic Ng Yeah. So 6% this year, 8% next year. We are in a much better position in terms of not having to deal with a lot of those big loans coming due. First of all, we don’t have any big loans come due. Certainly, we have portfolio is only 6% coming due and next year we are 8% coming due.We have a very, very low loan-to-value and then many of our customers given personal guarantee. And so we are working with some of these customers, most of them, they have so much just coverage ratio even when the rates reprice to a new rate for refi, not that big an issue.For those properties, we think that may potentially be get a little bit more stressful when it comes to with the high rate, we work with them to make sure they have at least 24 months, 36 months of additional interest reserve or maybe making some additional down payment when you have customers that have a high liquidity, when you have customers have personal guarantee, it just makes it so much easier to start that conversation and get that taken care of.And that’s why we so far are working in a very orderly manner.
We don’t have enough for us to even get to overexcited about it, but we continue to work with our customers and one at a time, and so far, it’s been working out very well. So I think now that if we can get through the next two years and most likely, the environment will get there.So from that standpoint, I was saying that, yes, no matter how much we keep it in a safe and sound manner, there’s always going to be outside sectors that can affect the market as a whole that would also potentially impact us negatively.However, we always prepare for the worst and we will make sure we be proactive and do everything upfront and just stay ahead of the industry maybe by several steps so that we do not get caught like sometimes either November this year or maybe June of 2024.
No one is maybe coming and expect the worse and eventually getting the best out of it.Operator The next question comes from Gary Tenner with D.A. Davidson. Please go ahead.Gary Tenner Good morning.Dominic Ng Hi.Gary Tenner Just thinking about longer term expectations regarding balance sheet management. As I think Irene noted, the cash balance is quite a bit higher as a percentage of the balance sheet than they were at December 31 and understandably so. How do you think about kind of a more permanent shift, whether it’s cash balances or do you grow high quality liquid assets in the securities portfolio over time to increase that to some more permanently elevated level?Irene Oh Great question. There’s no question, given kind of the market disruption, but this is something we are evaluating.
I think we try to be prudent with this carry and in the current situation, this is one of the reasons why we have the borrowings and we kept the cash balances high, cash of Fed is like $4.5 billion aside from the other cash we have elsewhere.So in the near-term, I would say probably, given the market disruption that happened not that far in the past, we will keep that higher and we will continue to evaluate as far as security and other HQLA that we need.Dominic Ng I…Gary Tenner Okay. Thank you. Go ahead, sir.Dominic Ng I want to add just briefly with Irene’s comment here is that, we — this kind of like a disruptive market, we wanted to be excessively prudent and that’s why we went ahead and increased in cash balances and cash equivalent and then also went ahead and borrowed from the Fed.We don’t have to do it.
We did it anyway, because we can afford to do it with our current balance sheet, with our capital ratio, with our profitability and our return on equity and whatnot, we are in a position that we can afford to be a bit excessive in terms of making sure that show a very, very small balance sheet, because ultimately that’s what matters to our customers.When you look at the anxiety going on in the market back in late March, when all these news media putting out our regional banks, are they all in trouble and whatnot. We do need to make sure that we demonstrate to our customers and that East West and the last thing they need to worry about and so if that means that we even show more borrowing capacity. Why not, right? And then that’s something that we have done it and so far so good.Gary Tenner Great.
And then follow-up with regard to loan growth, not shocking, I guess, that you lowered the loan growth outlook for the year, just given the economic uncertainty, et cetera. Obviously, C&I was lower in the first quarter, but it’s a little seasonality for you. Can you talk about kind of where you think the contributions to loan growth come over the remainder of the year? Is it kind of specialized C&I verticals? Is it single-family, kind of where is that growth coming from?Dominic Ng At this point, I think, our thoughts about the 5% to 7% loan growth guidance is that we just looked at the current economy and we feel that the direction of this economy that there may be continued to see our commercial clients paying down the loan.So we thought — we actually brought in a lot of new customers.
We just have a lot of existing customer pay down the lines, which I can say, because in this sort of uncertain environment, they are not making aggressive investments. They are not — I mean, they are not looking into aggressively expanding or acquiring any companies and so forth.So why pay this high interest rate and so many of them are paying down the loans that’s why we see C&I actually slow down a bit, not because we weren’t able to gain new customers, it is really coming down to most of our customers in general just staying put.In CRE, we don’t expect much growth, because I just talked about it. With this kind of environment, there’s not a lot of deals that make sense. If there are a lot of other customers from other banks who want to come to us will be financed, it’s not going to be that easy to pass the entry level test from East West.
So, therefore, we are not expecting much growth at all.And the only one that we see so far still carries some decent momentum is on the single-family mortgages. So far, so good. We are still are chucking along and our niche product and continue to attract customers, very low loan-to-value, but just as the convenience of East West Bank and so we are still generating decent amount of profit so far.So we see, I think, at this point, that’s what we expected the growth will be and we will continue to watch the market and see how it goes. I look at it is that at some point, latter part of next year with just changes in the banking landscape, I would expect that there may be some more opportunities for us to bring even more customers organic.Operator The next question comes from Chris McGratty with KBW.
Please go ahead.Chris McGratty Oh! Great. Thanks. Maybe Irene, a question on the strategy you doing with the margin. How should we think about just the level of downside protection into — over the medium-term, given what you have been doing to reduce asset sensitivity if the forward curve plays out?Irene Oh Well, I think, in the medium-term, we don’t see that much variability. Quite candidly, with the NIM, in particular, I think, the largest variability is really going to come with the market pricing on the deposits. I think some of the hedging strategies and the balance sheet strategy, we are planning for 2024 and beyond, quite honestly.Chris McGratty Okay. And then maybe, Dominic, for you. You have just accumulated a ton of capital over the years.
