Christopher Del Moral-Niles: Sure, Eb. So the good news is most of our customers put on swaps to the maturity of their loan. And so, there really isn’t a significant inter maturity rate rollover risk on the vast majority of them. So that risk for us is highly contained, and that’s by design and the way we market the solution to our customers. We have been steadily growing the fixed rate portfolio, the other side of that chart. And the combination means that as we think about future, we’re locking in more and more fixed rate, as we move towards the expectation that there might be, a downdraft in rates in the future. And the swaps that we put on to hedge our balance sheet, have all been received fixed forwards. And so, to the extent that in 2025, we’re staring at inherently a lower rate environment.
And today, we think that combination of factors will all play into our benefits. Our customers who have locked in will be perfectly fine, continue to be perfectly fine through maturity and our balance sheet, we will be more fixed and receiving more fixed in what we expect to be a declining rate outlook, which we think is to our benefit and our shareholders benefit.
Ebrahim Poonawala: And just give us a perspective, Chris, in terms of when these loans are coming up for maturity, what’s happening? Are they refying into another sort of fixed rate loan on the balance sheet? Or how many of these are moving out getting refied by insurance companies, et cetera?
Christopher Del Moral-Niles: I think we see the gamut of activity. The good news is there’s a history here of relatively low LTV lending. And so, there’s plenty of equity for these guys, to always find another outlet, if not with back with us.
Operator: Your next question comes from Chris McGratty with KBW. Please go ahead.
Chris McGratty: Great. Thanks. Chris, going back to the comments on the HQLA. You referenced the – your about where you need to be. If you kind of zoom out, is that the comment more about the size of the balance sheet today? Or kind of you think where you need to be, for when you cross 100?
Christopher Del Moral-Niles: No, I’m going to comment on where we are for the current institution. Keep in mind, we’re only 70%. It’s a pretty long way from 100.
Chris McGratty: No, I get it. Okay. But in terms of, I guess, asking the capital question a little bit differently, you commented about buybacks. But should we be thinking about perhaps more liquidity, but at a lower NIM producing higher NII is kind of a dynamic, of what you’re doing to the balance sheet right now?
Christopher Del Moral-Niles: Probably the implication of what we did in the first quarter for sure. And that will play itself out. But we’re optimistic that we’ll see loan growth pick up in the second quarter, and continue to drive towards the loan guidance that we’ve laid out. And we think that will contribute to, again helping the NIM bounce back later in the year, while still growing NII.
Operator: [Operator Instructions] Your next question comes from Samuel Varga with UBS. Please go ahead.
Samuel Varga: Good afternoon.
Dominic Ng: Good afternoon.
Samuel Varga: I just wanted to follow-up on the loan growth funding question, I guess, understanding the sort of backdrop of the HQLA build. How much of a willingness, do you have to actually use some of the cash to fund the loan growth?
Christopher Del Moral-Niles: Sure. So the investment portfolio will throw off $450 million per quarter of net proceeds. And so, we think that is part of how we could fund some of the growth as we look forward.
Samuel Varga: Okay. Thank you. And then, in terms of just the trade-off between putting on the CDs at very competitive rates versus FHLB, is that going to be a simple always CD preference? Or how do you think about that sort of funding mix?
Christopher Del Moral-Niles: Yes. Look, I think we obviously know the FHLB is there for us. We clearly would rather pay at the margin, our customers a better rate than borrow from a wholesale institution. And we think that is both a better economic outcome, and a better outcome for the franchise and the value that we create for our customers. So there is a preference there, but I think we will look to optimize our cost of funding in the ordinary course and do incrementally, the right thing as we move forward.
Irene Oh: And maybe just I’ll add one thing. The FHLB we put on is the variable rate. So that also was a part of the analysis for us.
Operator: Your next question is a follow-up question from Ebrahim Poonawala with Bank of America. Please go ahead.
Ebrahim Poonawala: Hi, good afternoon. Again…
Christopher Del Moral-Niles: Eb, you cut out.
Dominic Ng: We cannot hear you.
Ebrahim Poonawala: Hi, can you hear me now?
Christopher Del Moral-Niles: We can hear you now. Go ahead.
Ebrahim Poonawala: Yes. Just wanted to understand, given East West capital positioning, the market disruption, just talk to us in terms of investment and banker hiring, like how fertile is it to attract talent, and maybe move market share in a world where, overall growth may be slow? Thank you.
Dominic Ng: The question on investment in talent.
Ebrahim Poonawala: Yes.
