East West Bancorp, Inc. (NASDAQ:EWBC) Q2 2023 Earnings Call Transcript

Brody Preston: Okay. Great. And then the last question that I had was just — it sounds like there’s some improvement in the mix shift in June and you’ve got the brokered run down and if maybe we stabilize mix shift and kind of steady out here, at least on the NIBs. But I guess I was hoping that maybe you could help me think about the bifurcation between commercial clients and retail customers at this point? And how mix and beta acceleration between those customers are maybe differentiated at this point in the cycle? Because I guess my baseline thought was that you would have gotten a lot of commercial mix and beta catch-up done earlier and already and then maybe you’re going to have more of a catch-up on the retail side just because they’re a little bit slower to move. I just was hoping that maybe you could speak to that?

Irene Oh: Yes. I think that’s a great question. I would say that probably what we have seen is that you’re right, you’re exactly right. On the commercial side, it was earlier on the consumer side, there was a lagging impact. And part of that is the nature of the customers that we have, Brody. We have many, many customers, thousands with our primary personal checking account is at East West. That is still — as of today, out of 6.30%, $4 billion of the DDA balances are consumer checking accounts. Now in this current environment, we’ve had trouble growing that quite candidly as clients and customers are moving their excess liquidity to CDs. So one of the things that in the second quarter is that although there was quite a lag overall on the consumer deposit betas up until the second quarter with this mix shift and the pivot a little bit to CDs and consumer balances remaining stable, which quite candidly in the current environment, tough to do, but with that growth, stable about that $1 billion point.

The betas on consumer did increase from where we after 31. And at this point in time, quite honestly, if we look towards the future, I think with the growth that we continue to see in the opportunities on the commercial side perhaps over time on the commercial side. I think consumer will kind of moderate, right, because to a certain extent, if you haven’t been alerted to the interest rate environment or you’re probably not going to at this point in time. So, we’re not seeing that continual migration as well on the consumer side, but the commercial side as we continue to onboard new clients. I think that will help as well.

Operator: This concludes our question-and-answer session. I would like to turn the conference back over to Dominic for any closing remarks.

Dominic Ng: Well, thank you all for joining our call today, and we are all looking forward to speak with you again in October. That concludes our call today and thank you very much. Bye-bye.

Operator: The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.