Are you seeing an opportunity over the next maybe six months to 18 months to do something opportunistic or on the offensive? I mean is there — are you seeing stress in your markets with some of your peers that might avail an opportunity? I presume buybacks aren’t a priority right now, but just trying to think how this capital could be put to work for your shareholders? Thanks.Dominic Ng Yeah. Well, good question. We are always trying to be optimistic — opportunistic. We have a call from…Irene Oh Opportunistic…Dominic Ng Yeah. Opportunistic. Right now, the market is not very optimistic, but then, yeah, we are always trying to be opportunistic and whenever there is a great deal, then I think that will be very, very positive for our shareholders, we always like.But on the other hand, we are very prudent, because we have never declined that just jump into the playground and want to be — just want to be the portable party and then end up getting burned and that’s just something won’t happen in the East West.So I do feel that maybe in the next 12 months to 24 months, but probably have more opportunity than, let’s say, the last few years, but just because there should be more opportunity, that’s just and logical thinking whether that would be something coming up, I don’t know.I think I do want to point out is that you have always seen and there are many questions asked before about why we didn’t buy back when we have high capital.
It’s really — this call will be a good sort of reflection, because we want to prepare for this crazy thing like Silicon Valley Bank, Signature Bank just disappeared in a couple of days, that kind of scenario.And if we did not have capital ratio at this level or if we have overconcentration of customer base in one particular or two particular sector, we may be hurting in a similar way like a few other banks that they are experiencing right now.So we always look at it as a balancing act that is the balancing act is that, are we performing as one of the top performing level that we can look at ourselves and say that, hey, we have done good for the shareholders.Therefore, maybe we only to do too much, but sort of like further pushing and this is what I always reflect on with us over 20% of return on equity, over 2% of ROI [ph] and look at the regional banks around and then comparing with us, I said, wow, we are pretty good.
S&P just gave us the Number One Best Performing Bank ranking last month.So I look at it as that, we are doing pretty good right now. Let’s not overstretch ourselves and get way having the pack. So in that standpoint, that’s why as you heard from Irene, that’s why we put up $3.75 billion of the swap and collar right in the middle one, we are in a rising interest rates, asset sensitive, enjoy the margin expansion and instead of like going for 4.5%-odd margin increase quarter-after-quarter, we dialed it back down.We started to dial it back down even early last year and we continue to dial it back down even during this crisis and we just got $500 million and dial it back down immediately and the whole idea is that, hey, even with all of that, we still cranked up over 20% return on equity.So why stretch?
Because as long as we keep doing this balsa, managing the balance sheet prudently, but be extremely aggressive in terms of ensure we perform to the best we can, opportunity will come, because then we will eventually position ourselves at a level that would attract others to make more on the joint force with us.So I look at it is that we have no control of what other people would do, but we do have controls on what we can do and we are going to continue to keep working hard to make sure that we crank up one of the best-performing metrics.And then in the meantime, making sure the capital stays high. So we have all kinds of flexibility and then making sure our liquidity stay high. So there will have all kinds of flexibility to do what we need to do and managing the credit risk as the best we can so that we do not go side way when the opportunity comes.And that’s what we have been doing for the last many years.
I have been in the bank for 30 years now. So just a same old single thing, one crisis or new crisis, managing the same way, one at a time and all looked up and so far, so good.Operator The next question comes from Manan Gosalia with Morgan Stanley. Please go ahead.Manan Gosalia Hi. Thanks for taking my question. I just wanted to ask around the NII guide. Can you talk about what that would be if you take out the rate cuts in the back half there, just given that the forward curve has come up a decent amount in this quarter end, I was wondering if there’s any change in that guide?Irene Oh Yeah. Great question. I think if that doesn’t happen, right now, we are modeling various scenarios, given where just the high level of our rates are, certainly, one of the things I want to just share is, even if rates do not decline, we are modeling that deposit betas will continue to chop just realistically, given this kind of environment.
So if that doesn’t happen, certainly, there may be a little bit more relief there.Manan Gosalia Any sense of quantification of what that would be?Irene Oh No. I don’t have that in front of me, but I can share that with you after the call.Manan Gosalia Got it. Okay. And then as we think about credit, you gave great color on CRE by property type in the deck. Can you talk about the trends you are seeing with new property appraisals? Are you seeing that what kind of declines are you those new property appraisals? And then also if you have it, how much of your portfolio has already been appraised for new values and how much of it is still appraised at the time of origination?Irene Oh That’s a great question. Generally speaking, we don’t reappraise the existing loans, but certainly, there’s market data that we get a simulation.
It really depends, honestly, property-by-property and when the loan was originated.All in all, and to a certain extent, I don’t know if averages are about meaningfully here. We don’t see a substantial change if we estimate what the current, but as I mentioned, I think, low-by-low is more important.But with that said, I think, with our underwriting criteria, the loan, loan-to-values that we originated and what that means is strong cash flows as Dominic mentioned in the prepared remarks, we are not seeing a lot of problems. As we continue to review these portfolios again and again, it’s a continuous review process. I’d say it’s very positive that we do not see new surprises.Operator The next question comes from Matthew Clark with Piper Sandler.
Please go ahead.Matthew Clark Hey. Thanks. First one for me, just on your office CRE exposure. I appreciate the additional detail. Can you give us the reserve on office CRE and is there any amount of that exposure that’s criticized at this point?Irene Oh Yeah. Great question. On the — we have the details of the total allowance. We do have a little bit more allowance on the office CRE. On average, I would say, is about — for the total portfolio about 1.5%. And I will just also mention a lot of that is in qualitative factors versus the quantitative.On the credit side, the level in general is very low of our office CRE. I think if I look at it, I don’t have the number off the top of my head, Matthew, but it’s pretty consistent with the total criticized loans for the office CRE bucket, which is about 2.5%.Matthew Clark Okay.
Great. And then the second one for me, just on the change in accounting that eliminates the TDRs. What is due for you? Does it provide you additional flexibility to work with the borrowers, maybe by extending amortization schedule and not having to call a TDR or any additional color there would be helpful?Irene Oh Yeah. That’s a great question. And generally, accounting changes offer more excitement for allowance at banks, but not this quarter given what happened. If you look at our allowance table, that’s part of our press release, you will see that with the change in the accounting of TDR, what this did for us is that we instead of individually looking at these loans for impairment, if we look at it kind of a collective basis, we added $6 million of reserves and that was for about $75 million of performing TDRs.And I will just note, this is generally what we see with our loan portfolio.
