Okay. Up next we have East West Bank. I'm delighted to have with us today Dominic Ng, Chairman and CEO. Dominic, thanks so much for joining us. Thank you. Thank you for inviting me here. Dominic, one part of the environment that I did want to bring out, just given that you have this unique vantage point into both the U.S. and Asia-Pacific economies, what do you think investors may be unappreciating about how the relationship between these two large economies is evolving over time? What does that mean for you and your clients? Well, at East West Bank, we've always been proud to be that financial bridge between the East and West. Really, we are talking about U.S. and the Asia-Pacific. In fact, it's been decades. We've seen that the Asia-Pacific region has been growing in a much faster pace than the rest of the world. U.S. being the largest economy in the world, obviously, everyone wanted to do trade or investment with U.S. particular, that U.S. currency is really the most powerful currency ever. I don't think that sort of business in any way is slowed down. It got detoured into maybe some particular industry, such as, we talk about these very high-end, sophisticated semiconducting chips or maybe the most innovative life science type of business. There may be some issues that prohibit the Asia-Pacific from investing in U.S. The reality is that investment keep going. We, as a bank, that have spent decades of building expertise in this area. Also, fortunately, the vast majority of banks in U.S. really don't have much interest in sort of understanding the potential in that region. That helped East West tremendously because we don't really have much competition out there when it comes to competing with our peers in the banking industry. The domestic market in the U.S. is so big and everyone get busy working on most of the domestic business, and we have the entire lane of opportunity wide open for us, and we've continued to benefit from it. Our cross-border banking business continue to stay very strong. We continue to, as you see, what our financial performance have been continuously doing really well. We got record earnings after record earnings, not because of we're taking sort of unnecessary risk and whatnot. It's really coming back down to we have a unique value proposition and have a very unique business that add the extra, what I call the extra gravy on top to help East West from above average performing bank to a top quartile performing bank, simply because our active involvement with the U.S. and Asia-Pacific trade and investment. Okay. Unique positioning, unique relationships. For your clients, I guess the investment cycle continues. There are capital flows. Maybe just bringing it a little bit more near term, the geopolitical environment. There's always been some concerns along the line, but maybe the concerns are a little bit more elevated today. What are you hearing from your client base there? Yeah, I think, a good example, if you're talking about just the U.S., China that competitive environment. The largest economy versus the second-largest economy, they are both spending enormous resources on AI, from the technology side and building up the economy and whatnot. There is that competitiveness out there. Banks like us that understand the dynamic so well, we know how to navigate. A good example would be if I looked at from a perspective of what I talked about earlier. Obviously, we're not going to be actively engaging, doing banking with, let's say, the Chinese companies that are actively involved with AI to drones and so forth. There are a bunch of business in China that are actively engaged in consumer brands. In fact, they continue to come to U.S. and acquire consumer brands and continue to expand the business. Because so many of those businesses in Asia are now looking at markets beyond their territory. Where is the best market? Of course, the U.S., because this is such a huge consumer base here, right? Many of them are acquiring consumer brands in the U.S. Here we are, U.S., East West Bank are there to support them. The other part would be, you look at students. As much as we hear a lot of noises, headline news saying that the U.S. is not granting visas to foreign students and whatnot, there is still an enormous number of students coming to the U.S. for their undergraduate and more so graduate programs because the U.S. is the best place for high-level education. That has not stopped, and many of those folks continue to stay in the U.S. and further their career, and many of them end up being East West Bank customers. As professionals, they work in the U.S., and later on when they became entrepreneur, they also bank with East West. So we are benefiting from this growing population, and the population tends to increase their net worth in a much faster pace, and then all indirectly helping East West Bank to benefit from it. You can clearly see it in the deposit growth and the expense ratios which I know we will get into. One of the things you have spoken about is your ability to follow clients based on how their geographic mix evolves, right? From the student community, you get in early on the consumer side, but also from the business and commercial side, you can follow your clients wherever they go. Can you talk a little bit more about that and what you bring to the table there? A good example is that we have a subsidiary bank in China. We also have a full-service branch in Hong Kong, and a lot of our clients in the U.S. By the way, you look at our balance sheet, like 95% of our assets deposit are based in the U.S. The fact is, but we started identifying these clients or prospects even when they start thinking about, "Okay, how do I expand in the U.S.?" We have already been working with some of these folks. They are in Hong Kong and so forth, and helping them to make sure they set up their business properly in the U.S. A lot of these customers that came to the United States with meaningful deposit balances and also opened a business account, started conducting business in U.S., are being guided by our branch managers, by our lending officer, by international bankers and so forth. Helping them to reach further in the United States, helping them to assimilate and also form partnership with U.S. partners. Those are the things that we do best. Those values build tremendous trust in the banking relationship. That's why oftentimes people always wonder, is that, "Now, how do East West Bank be able to have a cost of funds that are lower than the other banks? Or what exactly you do?" We say, "Relationships." They're like, "What kind of relationship?" Well, a lot of time, it's beyond banking relationship. When they first come to U.S. and they need support, they need help, we provide a lot of service, help them to adjust to the environment. Some of them, as I said earlier, even when they were student, we start helping them. The parents would come over and said, "You take good care of my kid. I'll make sure I take care of your bank." Right? Those are kind of things that we do really well. I've been at East West Bank for 34 years as a CEO, and I looked at it, is that when we were very small, we've done that, and when we are now much bigger, we're still doing that. So far so good. They help us continue to grow organically, nicely. Even on the commercial side, as supply chains have evolved over the past few years, you've been able to follow your clients to different areas of the Asia-Pacific as well. Can you talk a bit more about that? Oh, absolutely. For example, I would say 10, 15 years ago, the vast majority of the manufacturing that support import to U.S. are in China. As the geopolitical issues shift and many of our clients that manufacture in China and start moving their manufacturing plants to Vietnam, to Thailand, to Malaysia, Indonesia. It's basically the same customers that actually originate the goods initially from China, but now start going to these other Southeast Asia countries. We at East West continue to be able to follow that direction and help them and guide them, still doing business with them. The same thing when it comes to tariff. We're able to help them to navigate, to make sure that we stay on top of the tariff issue, identify the risk, and help guide these customers and make sure that get them through the process. To a certain extent, we end up picking up many new clients. In fact, at the first Trump administration, we looked at it as the first time when we have this big tariff hit to a lot of importers. The reality is that we know how to help the clients to navigate. Interestingly enough, many other banks didn't want to learn much about it, didn't quite understand it. They just look at anyone get a hit with tariffs, must be too risky. Exit, exit. We were able to end up taking on those clients who are perfectly fine. Financially, they may not be making as much profit as it used to be, but they're still solid gold as a commercial client, and we're able to sort of bring them over. As you have seen, we're hardly taking any sort of charge-off throughout this whole period of time. Now we're benefiting from some of these clients are getting tariff refund. Deposits start coming in and say, "Whoa, it's nice." Big paycheck, you know? in the longer term, it does drive the stickiness of the client relationship as well. Dominic, maybe to pivot over to AI, I want to get your thoughts there. First, I guess, how is East West using AI today, and how is that impacting how you run the business? Then as you look out three to five years, how do you see that evolving? Efficiency ratio is 35%, can it get even better than that with AI? If you just talk a little bit more about what you're doing there. Well, I think AI is extraordinarily powerful, and I think it's going to make huge impact to society throughout the world. That's a given. I have tremendous respect with what's happening, and I feel like that is still very much at the infancy stage in the U.S. In fact, affecting the banking industry. Our staff sort of start looking at AI as an opportunity to, let's say, potentially on the loan underwriting side when it comes to BSA, know your customer due diligence and the analytical assessment, or there are many different areas in terms of using AI can dramatically improve the process of handling transaction and whatnot. That to me is a given because the technology have proven it can do all of the above. It's just that it would take a bit more time for banks to appropriately apply AI to streamline and make that process more efficient, and making sure not to skip too much and end up getting themselves in big problem in operating losses or whatnot. That's a given. On the other hand, I looked at it, is that do I know what's going to be happening in the next three to five years? I don't have the crystal ball. The other thing is also, my 30 some odd years in banking allow me the opportunity to go through that golden era back when internet was in vogue. If I look at internet in the 1990s, I still remember in 1992 when I was the CEO of East West Bank, I wrote a memo to all associates, then I gave it to my secretary, type it up, and ask her to make 250 Xerox copy so that she don't want to have a mail guy deliver- Right. ...to everybody, to their inbox. That's how it worked in 1992. In 1996, I have a to all associate email. Right. I typed it myself. That I still remember in 1996, there were a lot of talks about there'll be no more branches in 25 years because digital banking will replace all banking. I never believed that would happen, but I absolutely believe internet was for real. Now, internet was for real, and today you look at what we're doing right now. Without internet, I don't know how on earth we can survive. I look at my iPhones, everything's in here, right? The fact is it changed behavior and increased productivity in a big way. It also, that whole process sort out a whole bunch of wannabe, never could quite make it. Yeah, the Google still stay alive, the Amazon doing great, Meta's doing great, a whole bunch of Pets.com, eToys.com, and all these other stuff is all gone, right? Right now, AI is going through exactly the same process. There's going to be a few of them, it's going to dominate, but there is like thousands of these AI companies now hanging around in San Francisco paying high rent. They're not going to make it. That's what it is. Eventually, AI is going to be getting into our daily lives. That's going to make a big difference. People talk about what robot would do. I've already seen it, what's happening in China, in the manufacturing plants. Robot replace tens of thousands of laborers. It's already happening. The technology is already there. It's already applying that technology. It's not even it would've been this, it would've been that. I very much respect that direction, and that East West Bank will take the position is that we'll be a quick adopter that will watch out and will let Sam Altman and those guys do whatever they wanted to do. Elon Musk, do whatever you want to do. Whatever they do, there will be something that's very applicable for the bank. Make sure that some pioneer banks who love to be the first one to get there, let them test it out. After they test it out, get burned with cyber attack or whatever that is, when that's done, I'm coming in fast. That's the approach of East West. What I look at is that, of course, we're going to have to spend some money and hiring the people who understand AI and whatnot, and then make sure that we beef up our information security area to make sure we don't get in trouble. All in all, I don't expect East West will be at the forefront to trying to be out there working with those big guns to develop anything. That's not our priority. That's not our job. Let JP Morgan do that. Yeah. Maybe bring that 30+ years of experience and you've seen how the landscape's evolved through various technology cycles. One of the debates that we've been having here is around how agentic AI might impact deposit costs down the line, how stablecoin might impact deposit costs. Given your views early on that branches are not dead, that they will continue, how do you bring some of that experience into this debate, and what do you think about it? Yeah. Again, my approach is that do not get stubborn and refuse to change. I'm a strong believer that we need to constantly be changing and adapting to the new environment. That's what we do at East West. While we're changing, adapting, we also not get too naive and start getting so overly excited and exuberant about any new technology coming in and wanting to be the first one to get in there. My view is this, is that when I look at, for example, what AI would do, to what extent it would cannibalize deposit and then deposit rate goes up higher because now we've got agentic AI that comes in and it automatically help you to move balances from your checking account to maximize your deposit rate and whatnot. I look at it as that it doesn't take much IQ that I look at my balances. I have too much deposit, I can move it too, right? This whole idea about that sort of stuff, I don't think that it's going to be that big of a deal. Again, I'm talking about my longtime experience 20-some odd years ago. I remember when Charles Schwab and Fidelity started that low-cost brokerage accounts, right? We all used to in the old days, I had my Merrill Lynch account, and I have to pay commission every time I do a trade. The commission was not cheap. Suddenly the Charles Schwab and Fidelity said, "Oh, you can, through internet, you go online, you can do your own trade. Won't charge you much or won't charge you anything." Right? The money market accounts there actually pay a higher rate. Did I see some outflow? It's not just East West Bank. The entire banking industry saw some deposit get sucked out to Fidelity and Charles Schwab and whatnot, right? That happened. The industry overall, banking industry shrunk a little. Those who survived, those who continue to sustain, stay pretty healthy. I looked at it as that AI is going to make some impact. I don't know what it's going to be, but it's going to make some impact. It's going to change the banking industry. It changed the banking landscape. One thing I do know is that like a bear chase, we always run faster than everybody else. That's all it is when it comes to, if you look at it when I first became CEO of East West Bank in the 1990s, there were 13,000 banks, and now it's 6,000-something, right? Down the road, it may be only 2,000. As long as we always perform at the top quartile, good, and that's what we're looking at. That brings me to a question on scale. You spoke about how East West would be a fast adopter as opposed to the leader in deploying some of these technologies. How do you think about the impact of scale in an AI world and the ability to invest in these technologies over time? In terms of scale, I think that we're always going to be looking at any kind of technology, whether it's AI or whatever else that come in, as long as it can help the bank to do the work with higher speed, higher accuracy, and help us be more productive, we'll do it. Most importantly, we'll do it with the perspective about to what extent that would help our customer. Because East West Bank, ever since I've been involved with the bank, we have always been focusing on we are a relationship-driven and customer-centric organization. We always follow that guiding principle, relationship-driven and customer-centric. Whatever that efficiency that would come in from the technology, how does that help these two? If it helps, we absolutely embrace it and adopt it and put the resources on it. If it's helping us to be more transactional, helping us to be more internal driven and said, we do whatever we do that may not necessarily be beneficial to the customers, that doesn't work for us. Our guiding principle help us to go from a $40 million market value to today over $17-some odd billions, well, I think that something is going right. Therefore, I look at it as that we're going to say continuous stay focused in that direction. Got it. All right, perfect. Let's maybe pivot over to the competition and one of the things that makes East West unique is the focus on the Asian American community. How does your more focused client concentration insulate you from new competitors that are coming in? Yes. In fact, we started with this Asian affinity focus. Because the founders of East West Bank, who founded East West many years ago, opened the bank in Chinatown, Los Angeles, because the Chinese immigrants in L.A. were not able to get banking services from a mainstream bank, and that's why they had to open their own bank. That was the origin of East West. Gradually, when I came in and I took over, I said, "No, I'm not only going to be focusing on helping the Asian immigrants." In order to effectively help the Asian immigrants, East West needs to break out and actively engage in the mainstream community. If we actually have more mainstream customers, the more that we have, the more we can help the immigrants, customers that we brought in, to further assimilate and reach out and enjoy the full citizenship of being an American citizen. That to me is a much better calling than just tell these immigrants and say, "Stay in Chinatown. Don't go anywhere. You don't need to be exposed to anybody. I, East West Bank, know your culture, know your language. I'll take care of you." That to me is not the right way to help our customers to reach further. That's why when I first joined East West, I changed the mission, vision and be that bridge and then continue to expand, and we've done exactly just that. That said, as of today, our total asset size, $83 billion, $84 billion, it's actually bigger than all the other Asian affinity banks in the entire country. All of them added together, it's still smaller than us. That's why obviously we have the great advantage because when it come to supporting the Asian customers, particularly in the retail consumer space, we're so big. Our brand is so big, and there is so much trust from our customers, and they are the one that's spreading the words. We don't have to do a whole lot of marketing. Our customers are telling their friends. They're telling their children. They're telling their cousins who are migrating over that, "Well, when you come here, just open an account at East West." It just makes it so much easier. That's why to a certain extent, we continue to always outperform. That only works because most of the banks do not have a strong interest in focusing on our arena. I always worry about 20 some odd years ago is that, wow, one day HSBC just woke up, right? They didn't. They slept enough time, then they exit. I don't care. It's good. I mean, we'll just keep doing whatever we're doing, then so far so good. We think that we will have plenty of growth opportunity because that segment continue to be the fast-growing community. On top of it, there are certain cultural affinity and so forth, that allow us to putting together products that really cater to their needs. Again, going back to the customer-centric principle. We build products that cater to their needs, that allow them to comfortably enjoy the banking relationship with East West. We continue to grow in size, but we can help them to grow. When you think about growing in new geographies, I guess what drives your decision-making process there? What KPIs do you typically focus on? Yeah. We're focusing on metropolitan cities. Have a lot of, let's say, direct flight to Asian country. Let's put it that way, right? Because it'd be highly unlikely for me to open a branch, let's say, in Jackson Hole, Wyoming, and things like that. We are more into like if you look at our geographic footprint today, all the way in California from down south in San Diego, all the way up to Sacramento, in between San Francisco, Silicon Valley, L.A., Orange County, and whatnot. Vibrant community with a lot of Asian Americans, plus international flights allow us to do a lot of cross-border banking business. To Seattle, Boston, New York, Atlanta, Houston, Dallas, Las Vegas, and then we have also loan production office in Chicago. When we start growing, we'll be looking at these fill in, and then if there are cities that we think that fit that criteria, we'll obviously be interested to opening more branches there. Got it. Okay. Let's talk about capital and, contrary to popular demand, I'm not going to ask the buyback question because I think you've been pretty clear that you will remain opportunistic there given your high capital levels. Maybe talk about, I guess, how do these high capital levels maybe help you get more client relationships and help you get more business? Is that part of the conversation, and how does that form part of the conversation when you show up to a new client? Absolutely. I think that what I looked at throughout the last 30 some odd years, we've done really well during time of prosperity. Like right now, the last few years, record earnings. The time that we did best is when there were financial crisis. In 1991, when I made the acquisition of East West for savings and loan, there was a savings and loan crisis. The minute I bought East West, I merely doubled the size of East West Bank because I wanted to RTC, the Resolution Trust Corporation, and bought this distressed S&L. When I looked at the 2009 global financial crisis, East West doubled its size because, again, we're in safe and sound position and have ample capital. We got invited by the FDIC to acquire our competitor, who even were bigger than us. That we're able to, again, make a huge impact by doubling our size. COVID, we have more time to do PPP loan for our customers, finish them in one week, and have plenty of time to help the other banks' customers. That's why we grew our balance sheet substantially because many of those customers from other banks who didn't get help come to us. 2023, Silicon Valley Bank, that March madness, we also benefit. All of that is because East West Bank have so much capital that the customers feel safe to bank with us. We have to keep in mind, that is that we're not the Big Four. The media have classified the Big Four. They are too big to fail, and therefore, no matter what they do, it doesn't matter. The deposit's always safe. If you're not the Big Four, you have to, every day, prove to the customers that you are safe. I'm not naive enough to say just because we have great, strong financial performance, that automatically give me the A grade from a customer standpoint. Customer have every right to be feared. They have $250,000 insurance deposit, and if they park $5 million, $10 million at East West Bank, they have every right to be fearful, right? The only way I can prove to them is that, "Hey, look at my capital ratio. There's nobody out there have my capital ratio, tangible capital ratio over 10%." I would say, "You go find a bank that can be bigger." When we rationally discuss with the bank, that's why relationship banking is important. Customers of East West Bank would actually listen to us making a pitch to them. During that Silicon Valley Bank crisis, we had to make our pitch because every day from Bloomberg, The Wall Street Journal, they are spreading these rumors out there say all regional banks will be in trouble, right? If the second and third largest bank at California went down, how do you feel when you're the fourth largest bank? Rationally, the customers were concerned. Then we have to explain to these customers, the easiest way to explain is that, look at the financial performance of East West. We make so much money. We have so much liquidity. Our capital ratio is so much higher. The last thing you need to worry about is East West. That's how we win customers, and we continue to be able to be in a position of strength. Now, I would look at it is that if my financial performance really sucks, and I perform in the average or even above the average level, I obviously would spend a lot of time thinking about the capital level. We're performing the top quartile all the time, right? I'm not putting too much attention to that, a bit of excess capital. As you think about the Basel Endgame rules and the benefit that that has to capital ratios as well, does that change how you think about allocating capital, whether it's in capital return or in capital deployment within the business? No, because again, it's the same philosophy. That bit of excess capital, if it actually would, that excess capital would cause us to be not getting the kind of profitability to be above our peers, I absolutely would need to do something intensely just because we are extraordinarily shareholder-friendly. As a shareholder-friendly bank, and also I understand that we work for our shareholders, I got to do what's right. I'm giving these cash dividends increase year after year, and then I am buying back. It's just not buying back excessively. I'm buying back opportunistically. I wanted to have some extra capital just in case. Who knows when's the next crisis coming, right? Who knows where's the next potential in organic opportunities coming. I got to look at all of that. All in all, it's more importantly is that we are in the top-performing financial performance at this point, and I look at it that those other stuff is not essential. Even in terms of allocating capital within the business, does it make more sense to, say, do mortgage or invest in great credit or anything else there? I would do whatever that makes sense for us to grow and then also make sure that we continue to keep it safe and sound and no concentration risk. You look at it, we keep diversifying our growth, we continue to make sure that we don't have over-concentration risk. We are in the perfect time to sort of strengthen our balance sheet by creating even a stronger, healthy East West. That's what we're doing right now. That on a rainy day, we are substantially stronger than anybody else to take advantage of whatever opportunity that would come. All right. Perfect. With that, we're out of time, Dominic. Thanks so much for joining us. Thank you.