Dominic Ng: Well, we are less than $100 billion, far less than $100 billion. We are $68 billion to be exact and so therefore, this is around 2/3, just about 2/3 of that first threshold. So right now, looking at organic growth, it’s going to take a while to get to that $100 billion. Also, if you think about it, even if we’re a $100 billion, we always do whatever we need to do to make sure that we are above and beyond the minimal requirement that required from the regulators. And so with our capital ratio, it’s really not much an issue at all because you do get a lot of banks are really struggling with the potential new regulatory proposal because the capital ratio is low once they start adding here one item here and there and then making they may not meet the threshold.
We’re way about it. So one way or the other then they get a difference, but I wanted to keep reminding folks on the call that we’re actually only 2/3 the size. So, we’re not qualified to worry. But in the meantime, getting back to the increase — slight increase of guidance of the expenses, as Irene mentioned earlier that as of April — in the mid-April, when we start putting in the guidance after the first quarter earnings in the midst of the Silicon Valley Bank, Signature Bank and First Republic kind of situation, we didn’t expect as much opportunity to grow at that point because we expect this will be probably a recession company, right? So it’s going to drop rates and all of that did happen. So in fact, not only did happen, we saw our deposit also kind of stabilized a little bit.
And the customer demand for much higher rate. It was very much so in March and April. But by May or so, it’s somewhat subside. And in addition to that, there was increase from customers of these banks and got into trouble, saw it coming. Because once it’s stabilized, they start looking at that, well, maybe some of the new parents that acquire those bands are not the right fit and they start talking to us. When we start looking at all of that, we feel that it is appropriate to start hiring some of the talented bankers. And it is appropriate that we continue to stay vigilant to invest whatever we need to invest. We are not overinvesting. We never overinvest. East West always invests incrementally from a technology, from an operational infrastructure and in terms of hiring.
But we are absolutely out there looking at talent to see whether they fit into our culture and bring them on. We do not get way over concerned about, well, would that affect a 1% or 2% of our expenses. And then therefore, we should wait, sometime you wait, you don’t get that. And — but why we feel comfortable about doing all that is because we still have positive offering leverage today. So one way or the other, we’re still making more money because revenue growth is still going to be bigger than the expense growth. So, we feel very confident that this is the right thing to do in light of what our very high return on equity ratio compared with the industry. Let’s just continue to keep doing what’s right, what’s good for the bank.
Manan Gosalia: Right. So, it sounds like the expense and the investment spend is coming more from a growth mindset rather than anything that regulators might even ask banks well below $100 billion to do. So, I appreciate that.
Operator: Our next question will come from Brandon King with Truist. You may now go ahead.
Brandon King: Yes. So, I noticed criticized loans have declined quarter-over-quarter and it stands out amongst your peers are actually seeing opposite effect. So, if you could please elaborate on to what you’re seeing with your customers that’s driving that effect?
