Thank you, operator. Good afternoon, and thank you, everyone, for joining us to review East West Bancorp's second quarter 2026 financial results.

With me are Dominic Ng, Chairman and Chief Executive Officer; Chris Del Moral-Niles, Chief Financial Officer; and Irene Oh, Chief Risk Officer. This call is being recorded and will be available for replay on our Investor Relations website.

The slide deck referenced during this call is available on our Investor Relations site. Management may make projections or other forward-looking statements, which may differ materially from the actual results due to a number of risks and uncertainties.

Management may discuss non-GAAP financial measures. For a more detailed description of the risk factors and a reconciliation of GAAP to non-GAAP financial measures, please refer to our filings with the Securities and Exchange Commission, including the Form 8-K filed today.

I will now turn the call over to Dominic.

Good afternoon, and thank you for joining us for our second quarter earnings call. I'm pleased to report that East West earned record total revenue, net interest income, and non-interest income in the second quarter.

These results were driven by new record levels of loans and deposits. End of period deposits grew by 8% year-over-year with strength across all deposit product categories.

Notably, demand deposits accounted for more than two-thirds of this quarter total increase. Our continued focus on providing solutions to our customers helped drive a 19% increase in non-interest-bearing deposits year-over-year.

End of period loans were up 7% year-over-year with growth in residential mortgage and C&I, further increasing the diversification of our portfolio. Non-interest income also grew to a new record in the second quarter and is up over 20% year-over-year.

This performance has been driven by consistent execution across all our fee-based businesses. In particular, we see continued growth opportunities in wealth management and have been proactive in building out this business.

Our credit quality remains strong. Non-performing assets, criticized loans, and net charge-off levels all remained broadly stable and continue to reflect our disciplined approach to risk management.

Our capital position remains a key advantage for East West, with a tangible common equity ratio over 10% on which we generate a 17% return. We believe our financial strength and customer-focused strategy position us to deliver sustainable growth and long-term shareholder value.

I will now turn the call over to Chris to provide more details on our second quarter financial performance. Chris?

Thanks, Dominic. Let's start with the deposits slide on page 4.

Our end of period deposits grew by $1.2 billion across our more than 700,000 customer accounts. Demand deposits were up $875 million during the quarter, which accounted for the lion's share of the growth.

Average DDA was up 15% year-over-year, reflecting the continued success of our small business checking campaigns and positive flows from tariff refunds across hundreds of our accounts. Our DDA mix grew to 20%, 26% of total deposits due to core relationship growth.

We continued to shift away from CDs, wholesale, and public funds deposits and further emphasize core DDA. This ongoing shift helped us to support the margin and control our deposit cost during the quarter.

Turning to loans on slide 5, as Dominic mentioned, we continued to diversify our loan portfolio by emphasizing growth in residential mortgage and C&I. Residential mortgage was this quarter's standout with over $300 million of net growth.

We remain committed to our conservative underwriting approach as we continue to maintain a 52% average portfolio LTV in our residential book. C&I lending balances were also up over $300 million in the second quarter with notable growth in lending to financial services, equipment finance and lessors, and manufacturers and wholesalers.

Our NDFI balances increased by just $24 million, reflecting expected paydowns in our private equity loan book and consumer credit portfolios, which we had anticipated and relayed last quarter. Overall, C&I loans are up 11% year-over-year, representing over $2 billion of net growth in that period.

Given the 7% level of growth we've seen over the first half of the year and the pipelines that we see looking into Q3, we are updating our guidance for the full-year loan growth to now be in the range of 6% to 8% by year-end. Switching to NII and margin trends on slide 6, quarterly dollar net interest income grew to a record $685 million, reflecting our balance sheet growth and improving mix shift.

Our net interest margin came in at 3.43%, reflecting one less day in the quarter, in line with our guidance, and up, notably, 8 basis points year-over-year. Our positive deposit remixing trends continued during the quarter and allowed us to further reduce our deposit costs, driving a 6 basis point reduction in our period-end deposit cost.

Looking back over the past year, we have decreased interest-bearing deposit costs by 49 basis points against a backdrop of 75 basis points of cuts in the fed funds target. Given our robust NII growth year-to-date, we now expect full-year NII growth to be in the range of up 7% to 9%, an improvement from the prior guidance range of 6% to 8%.

Moving on to fees on slide 7, quarterly fee income grew 19% year-over-year to $96 million. While total fee income was down $3 million from Q1, this largely reflects the record wealth management results we reported in the first quarter and a slight downtick in some derivative activity.

Nonetheless, loan and deposit-related fees were up 14% year-over-year, reflecting our ability to grow fees as we grow the balance sheet. We remain focused on driving a healthy level of fee income and further diversifying our revenue streams.

We are on track to deliver double-digit year-over-year growth in fee income for 2026. Turning to expenses on slide 8, total operating non-interest expenses were $268 million for the second quarter.

Comp and benefits costs were flat quarter-over-quarter. However, we expect the level of comp and benefits to actually moderate over the back half of the year.

Other expense categories experienced an uptick as we continue to invest in people and platforms to sustain growth. Nonetheless, East West delivered another quarter of industry-leading efficiency.

The Q2 efficiency ratio was 36.7%, consistent with our prior periods, and our operating non-interest expense to average asset ratio remained flat at 1.29%. Based on our year-to-date trends, we are narrowing our full-year expense growth guidance range to 8% to 9% versus last year.

I will now hand the call over to Irene for comments on credit and capital.

Thank you, Chris, and good afternoon to all on the call. As you can see on slide 9, our asset quality metrics held broadly stable.

Quarter-over-quarter, non-performing assets saw a slight uptick of 3 basis points to 29 basis points as of June 30th, 2026. We recorded net charge-offs of 19 basis points in the second quarter, or $27 million, compared to 9 basis points in the first quarter, or $12 million.

We are reaffirming our guidance range of 15 to 25 basis points for the full year. We recorded a provision for credit losses of $33 million in the second quarter compared with $36 million for the first quarter.

Overall, we continue to remain vigilant and proactive in managing our credit risks. Turning to slide 10, the allowance for credit losses increased $6 million to $842 million, or 1.43% of total loans as of June 30th, reflecting quarter-over-quarter loan growth and portfolio mix shift.

We believe we are adequately reserved for the content of our loan portfolio given the current economic outlook. Turning to slide 11, all of East West's regulatory capital ratios remain well in excess of regulatory requirements for well-capitalized institutions and well above regional and national bank averages.

East West's Common Equity Tier 1 capital ratio stands at a robust 15.4%, while the tangible common equity ratio now sits at 10.4%. These capital levels continue to place us amongst the best-capitalized banks in the industry.

We currently have $117 million of repurchase authorization that remains available for future buybacks. East West also distributed approximately $111 million to shareholders via quarterly dividends.

East West's third quarter 2026 dividend will be payable on August 17th, 2026, to stockholders of record on August 3rd, 2026. I will now turn the call back to Chris to share our outlook.

Chris?

Thank you, Irene. To recap, we have updated four elements for our guidance today, each of which is reflected on slide 12.

Number one, we're assuming flat fed funds through the end of the year. Number two, we're increasing our 2026 full-year guidance for end of period loan growth.

Number three, we are increasing our full-year 2026 net interest income guidance. Number four, we're narrowing the range of our full-year expense guidance.

With that, I'll now open the call for questions. Operator?

Hey, good afternoon. Thanks.

I guess maybe just starting with margin. It was great trends in cost of funds.

It looks like we saw a little bit of spread compression maybe on the loan side. How should we think about some of those components going forward in this flat-rate environment?

Is there still an expectation that loan yields grind lower from here?

Jared, we're focused on, first of all, hitting our net interest income targets, and those continue to come along quite nicely. Absolutely, we consider margin dynamics.

Overall, we expect our margin to hold relatively stable as we look to a relatively stable fed funds environment. That having been said, yes, we're seeing some marginal compression, or grinding, as you put it, on loans.

Part of that was mix-driven, and part of that was some one-time accretion benefits that we saw in the first quarter, which partly offset by some negative items that we saw in the second quarter. That having been said, our general outlook is we're going to hold the margin relatively stable and continue to grind out stronger NII through balance sheet growth over the balance of the year.

Obviously, there'll be some deposit competition factors that we're very mindful of and very thoughtful about as we think about how we're going to roll over and reprice particularly our CDs in Q3. Far, our customers have hung with us, even as we've been pricing below what might be considered top of market by a decent amount, and a reflection of the customer relationships that we have and our ability to manage those at the branch level.

Okay. All right, thanks.

I guess on the deposit side, you called out the DDA growth, part of that coming from tariff benefits. What's the expectation of those balances staying through, or are customers going to be deploying that windfall?

Could you remind us of what the CD roll-off is in third quarter?

Sure. Let me take those in backwards order.

The CD roll-off in the third quarter will be $13 billion, and we're proactively pricing that today at 3.60% and 3.75%, on 3.60% on a six-month and 3.75% on a 12-month, although we'll be looking at those levels as we migrate through the quarter. In all likelihood, we'll be a little bit more competitive later in the quarter.

With respect to tariff deposits, yes, we did see inflows. We estimate roughly somewhere between $200 and $250 [million?]

of the period-end balance likely reflected net excess tariff-related inflows. What we saw throughout the quarter is money came in, and money went out.

We would tell you that of the 250, 200, 250 that was there at quarter-end, most of it has already gone back to wherever it needs to go. On the other hand, there are ongoing tariff deposits coming in, still under those refund programs, and they'll likely continue into August.

Thank you.

Afternoon, Casey. Casey, you might be on mute.

Casey, going once? All right.

Next one, operator.

Afternoon, Dave.

Hey, good afternoon, guys. Just maybe one quick one on expenses on the guide.

It looks like you would need to see a decrease from that 2Q level in the back half of the year, and, Chris, you spoke to moderating comp expense going forward earlier. Is that primarily where you're going to see the decrease to be able to hit that guide?

Then what is it that made that comp line elevated this quarter?

Sure. I think you've probably heard two or three of our peer banks talk about deferred comp expenses this quarter,

and so

we, too, have a deferred comp plan, and that's part of it, obviously. We also had some changes to the way we think about vacation pay around here that influenced that number this quarter.

Those two things will moderate out, therefore, the comp line, certainly in Q3 and likely dampen what would otherwise be growth in Q4. That gives us comfort that overall expense levels will remain relatively stable as we move through the back half of the year.

Great. Then just back on the DDA growth, again, that was outstanding.

I know some of this is coming from the tariff benefit. Have you guys changed any of your banker incentives or anything else that could support that going forward as you focus the shift towards more DDA?

I think it's been more a change of messaging and direction and focus. That combination has resulted in, I think, a behavioral shift where people have seen the light on the need to essentially go door-to-door and make sure that we are evangelizing the East West value proposition as efficiently and effectively as possible.

That continues to work really well in our core markets.

On the retail banking side, we have a focus on getting our retail bankers to go after small business checking accounts. That campaign have been going pretty well.

In fact, it done really well last year. It continue to do well this year.

Getting them to focus on commercial banking clients. Small business, one small business at a time.

Now, that's not to say they are not taking care of retail consumer clients, as that's always their core business. They have continued to bring in retail consumer core customers.

Meanwhile, they are also out there in the market, on the street, and then talking to small business, one at a time. Far, they've generated some pretty decent momentum.

I think that clearly contribute to our growth of non-interest-bearing deposits.

Sounds good. Thanks, guys.

Good afternoon.

Hey, good afternoon. C&I growth was pretty strong.

Can you talk about the range of industries driving this? Are there a few standouts or is it a pretty diverse set of sectors at work?

Then if you could compare that breadth to what you were also seeing a quarter ago, please?

Sure. I think in the first quarter, by contrast, we saw a very significant uptick in private equity capital call line activity in particular.

We called out at the end of the first quarter that we expected to see that volume pay down, and, in fact, that's exactly what we saw in April and into early May. In the second quarter, we saw a pickup in financial services, equipment finance, lessor financing, and as well as manufacturers and wholesale distribution borrowings.

All of those sectors contributed to this quarter's growth range. While we continued, obviously, to have strong growth as well in residential mortgage.

Those two portfolios together accounted for the larger part of the total growth, and we're certainly delighted to see both the breadth and diversification of the C&I book and the continued conservative quality of the residential mortgage book drive our loan growth.

Thanks. Then just for the loan growth this year, assume that should continue to be predominantly C&I and residential mortgage into the second half?

We continue to be focused on attaining a third, a third, a third diversification at some point in the future. As we look at our balance sheet mix today, we're still find ourselves a little underweight in resi mortgage, we're happy to see that be the standout this quarter, and expect that we'll have a good quarter in Q3 as well.

We, obviously, are continuously focused on growing our C&I business, and that's there. We're at 34% C&I to total loans right now.

We intend to defend that level and, hopefully, improve on it a bit. Together, those two will chip away at the allocation to CRE, which at 37% is still a little heavier than our long-term vision.

We're very comfortable with our clients in that space. We're very comfortable with our portfolio.

We're very comfortable with the credits. There's no intent for us to shrink those portfolios.

It's just that we're growing all of our portfolios in a balanced manner.

All right. Thank you.

Good afternoon.

Hey, good afternoon. Maybe on the NIB deposits again.

If I understood comments correctly, just given the tariff-related deposits coming in and going out, is it fair to say that the average deposit number in 2Q is the right number to grow off of as opposed to the end-of-period number?

That's part of the reason I mentioned the 15% average quarter-over-quarter in my comments. Yes, good catch.

Perfect. Then, as we think about the jumping-off deposit rates, right?

You mentioned that you might take another look at the six- to 12-month promo deposits that you're offering. As we look at some of these deposit rates on slide 6, the 2.76 on 2.76% on interest-bearing deposit cost spot, and then the 2.04% on total deposit costs, I guess is that 2.76% the right number to jump off of for 3Q and 4Q?

That is the end of period deposit cost, so that's the right launch point. I think what we're trying to figure out is where do we think that number lines up relative to the competitive landscape as we move forward through the balance of the year.

As we sit here today, I think we recognize there are a number of smaller banks and some larger banks that are offering deposit rates well above where we are. That having been said, we continue to see progress, and expect to see more progress, on our DDA over the balance of the year.

We're not sure we need to stretch for the highest yields, and I think we need to focus on making sure we're servicing our customers on a holistic basis across all of their deposit and lending needs, and that the relationship we think is worth a few basis points.

Got it. Thank you.

Good afternoon, David.

Hi. Thanks for taking the questions.

On net interest income, how you raised the guide to 7 to 9 from 6 to 8, is the main driver of that the DDA deposit growth? Can you talk through that?

I think it's both because we're also raising the loan growth, and so the asset growth profile of the bank I think is coming in a little stronger, in part because overall deposits have come in. Added to that is the fact that some of those deposits have come in in non-interest-bearing.

The combination of the fact that deposit growth and loan growth continue to come in, perhaps better than we would have expected earlier in the year, is a positive, coupled with the fact that we are getting some of those deposits, in fact the majority of those deposits, in a lower-cost framework, allows us to lift the guide.

Great. Thanks for that.

Then on rate sensitivity, you mentioned about stable NIM with a stable fed funds. How should we think about if we do get a rate hike, the impact on East West?

We are modestly asset-sensitive, and we've said in the past that we think a 25 basis point rate hike or rate cut probably costs us about $2 million a month with about a 45-day lag.

Thank you. Yep.

Timur?

Hi, good afternoon. Looking at the CD repricing, I'm assuming you're now starting to get into some of the back end of '25 production that I think was in the 3.40s and now coming in kind of 3.60, 3.70.

Is that the right way to think about it? Do CD costs start going up here?

I'm just wondering, to what extent is the expectation internally that some of the growth in DDA will be a gating factor and maybe containing some of those CD costs going higher?

I think we've been relatively both successful and pleased by our ability to retain the CD book here through the second quarter, and the majority of our CD book has, in fact, been around the six-month maturity. Most of the lower-level 3.40 special-type dollars already repriced into 3.60 or 3.68, which is where we ran our Lunar New Year CD campaign earlier this year.

The baseline for those repricings will be what happens in August and September. That's what we're looking at is, given that those were at 3.68, what's the right level to price to retain those as we sit here in July looking out to what's going to come rolling in in August and September.

We haven't quite decided how we'll land on that, but I think we're looking at a variety of maturity structures, in part to spread out that over a longer horizon, and in part because, to the extent the forwards are telling us rates might move forward, it could help pay for it over the longer term. We're pricing for retention, not necessarily for CD balance expansion.

Got it. Helpful.

Thank you. Then as a follow-up, would love to hear how you are thinking about that $100 billion threshold both in terms of LFI-related expense and maybe what that means for capital optionality here.

We continue to have a significant level of capital optionality. We continue to be focused on driving ourselves to be the best operational bank we can be, making the investments in things like cyber, resiliency, backup, that we think support having a high-quality, high-performing bank.

The emphasis, regulatory-wise, seems to have shifted to one of safety and soundness, and from a safety and soundness perspective, while East West Bank perhaps can't claim to be too big to fail, we aim and strive to be too strong to fail, and we've consistently made sure we had the capital and the liquidity profile to support that. That's been the emphasis and focus.

Dominic, would you care to add to that?

That's all sounds good.

Great. Thank you.

Hey, good afternoon.

Good afternoon, Ebrahim.

Hey, Chris. Maybe just on capital, revisit that.

One, given the trajectory you're on, do you see capital levels building? I'm assuming you're okay with it.

In your priorities, you list buybacks below M&A. Is it just that you like buybacks even less than you like M&A, or should we read anything into that?

I think that's a pretty standard lineup for us here, and given that we haven't done M&A in now going on 12 years, it's clearly not the first burner. Obviously, focusing on organic growth is the primary driver.

From a total capital perspective, we feel very comfortable, in fact proud, of maintaining a 10+ percent tangible common equity level. From a capital distribution and return profile, we think our current dividend is very competitive, but we'll obviously look to revisit that from time to time.

I think the market is one where there will be opportunities for disciplined M&A, but in the absence of that, we obviously have been very opportunistic even this year in share repurchases and will remain very opportunistic going forward.

Hey, yeah, I'll just add a little bit more. All of us here are professional hired guns at East West Bank, and we don't like or dislike M&A, or buyback, or anything.

We love our shareholders. What we do is that we always weigh each opportunity against the other, and we do it on a regular basis.

Our sort of instant reflex is that whenever there is, let's say, an M&A opportunity, we assess, evaluate, and then we weigh against is it better to do this versus just go ahead and then buyback, right? Those are the things that we constantly evaluating, and we're very neutral, and there's nothing particular that we either like or dislike.

We're just going to do what we think is the best option that enhance long-term shareholder values. We also keep in mind is that long-term shareholder values may not come if we don't do well short term.

That's what you're seeing this record earnings after record earnings, and a record whatever. It's because the strong performance quarter after quarter is the best validation that we have the ability to sustain long-term growth and long-term shareholders' return.

In that standpoint, we actually don't take these buyback or not buyback lightly. We're just looking at the entire East West Bank situation, and we also looking at the global landscape in terms of what's happening in this world, and we make our decision about what is the appropriate time to execute whatever is best for our shareholders.

That's what we do.

Got it. Very clear.

I guess maybe just on the fee side, so, good growth over the last several quarters. We have seen fees kind of bounce around in this $90 million range over the last three or four quarters.

Just talk to us in terms of the trajectory of that, like the growth that we've seen year-over-year, is that repeatable on fees? Maybe if we can spend some time on the wealth management side.

You've talked about this in the past, where are we investing, and what should we expect in terms of the growth for that sort of revenue stream, and the opportunity there? Thank you.

Sure. Thank you, Ebrahim, for the question.

I would note wealth management fees, if you're looking at page 9 of the press release tables, are up 71% year-over-year over the first six months. Clearly, that's been a market opportunity for us.

We have leaned into that opportunity with new hiring. We have leaned into that opportunity with investments in the platform and the people and the talent to drive that business further forward.

We continue to think that is an area where there'll be additional opportunities for growth as we look through the back half of this year and into next year. We're certainly investing in the people and the platform to do so.

Commercial and consumer deposit-related fees have also been growing nicely. They're also up more than 15% year-over-year six months.

Again, we see that as an area where we have been able to offer new solutions to our clients that have resulted in additional uptick, which has been quite positive. FX, loan-related fees also up quite nicely.

Taken together, all fees up 15% year-over-year gives us comfort that our double-digit growth aspiration is very much attainable for the full year 2026.

Got it. Sounds like, Chris, if all else equal, macro remains more or less the same, the runway to deliver sort of double-digit growth, the kind of growth that you're seeing in wealth, that there's still meaningful runway on both fronts: overall fees as well as the growth on the wealth side.

I'm not calling for a sustained 70% year-over-year growth,

but

I am hoping that the investments we're making in the people and the platforms will continue to pay dividends to us and our shareholders in the quarters ahead.

Understood. Thank you.

Good afternoon, Chris. Hi.

Good afternoon, everybody. Chris, maybe on the NII guide, up the second quarter in a row, you tightened up the expenses with it.

If we are sitting here in six months and the NII growth is perhaps better than even this, does your expense guide move, or is that kind of baked?

I guess I would look at it slightly differently. I think we're guiding to an NII that we think is in line with the current expectations for the flat curve and the growth that we see ahead.

I think we're giving you a guide for expenses that recognizes the current trajectory. To the extent that, for example, in particular fee income lines grew, the marginal efficiency ratio on those lines is slightly higher.

As both [unclear] and I have said in the past, we see the efficiency ratio as an output, but it's one that will be tied to additional revenue growth. To the extent that we are coming in hotter on expenses, as I sit here today, I would think that would only be driven if we came in better on revenue growth.

Great. Then just coming back to the NIBs, it's 26% on an end-of-period mix and 25 on average.

Up from 24, too.

Exactly. I just want to make sure that the guide assumes what in terms of mix?

Similar mix, any tweak either way?

I think we're assuming today, given a flat-rate environment, relatively stable mix to our growth trajectory, but that obviously means growing dollar balances as we continue to grow deposits through the end of the year.

Great. Thank you.

Afternoon.

Hey, good afternoon, everyone. Wanted to ask about the uptick in C&I criticized.

It looks like your C&I reserve is down a little bit, probably not something you're too concerned about, but anything within that bucket to call out or anything lumpy? Then also just the uptick in CRE non-performers.

Good question. On the C&I criticized, we obviously go through our process where we're getting annual financial statements quarterly in some situations, and there were some where there were cash flow reductions, which is why we downgraded those to special mention.

With that said, in those same reviews, there were many loans that we upgraded from substandard, and that's why, as you noted, overall, the allowance for C&I, the drivers of those, ultimately, the coverage, the amount that we needed, was a little bit lower quarter-over-quarter. I think your second question was on CRE in general.

Overall, when we look at CRE non-performing, there were about four loans that moved into non-performing. I would say we've always taken a very kind of conservative view as far as reserving and charge-offs, and some of those were resolved in the quarter or subsequent to the quarter.

We don't believe there's a lot of loss content as of 6/30 and a go-forward basis from those that flew into non-performing.

Great. Then the other one for me, just on M&A, your comment in the deck about disciplined M&A, can you just remind us of the type of bank or organization you'd ideally want?

We talked about wealth in recent months. I assume you'd want it to have a wealth component and a Asian American market to some degree, but any updated thoughts on the criteria there?

I think banks generally are sold more so than bought. I think, as Dominic pointed out earlier, when things become known to us, we dive in and we take a good look at evaluating if they make sense.

We clearly have been investing on the wealth side of our business. We made significant investments back in an outside asset manager in 2023.

We've continued to make investments in people and talent and platforms here more recently. If we could find the right opportunity to invest additional capital behind a wealth platform or a wealth-oriented banking organization, that might be attractive to us, we just haven't found the right one yet.

From a Asian community banking standpoint, I think it's a relatively small universe, and we know all the players, and all the players know us. I think continue to monitor that market, but there's nothing further to comment on.

Dominic?

You said it fine. Yeah.

Great. Thank you.

Good afternoon. Just making sure that I'm understanding the NIM dynamics.

Outside of the any expected move in the Fed, should loan yields decline from the second quarter level through the rest of 2026 from spread compression or mix shift perspective?

We're not seeing spread compression the way we saw it last year. As I sit here today, it wouldn't be spread compression-driven.

We are seeing some mix shift elements, and so to the extent that, for example, there's less NDFI, which in some cases can be yieldier, and more core C&I, we would see a potential shift downward. Again, it depends on exactly where those loans originate from.

As we sit here today, we would anticipate the margin remains relatively stable given what we see in the pipeline at this point in time.

Okay. Got it.

That assumes that the interest-bearing deposit cost increases from the 2.81 level?

I think that assumes our base level that if there's no fed funds hike, that our need to be competitive on deposit pricing might step up a tad, but would be offset, we hope in part, by additional DDA growth as well.

Right. Got it.

Just quick last one. You have no problem growing loans and fund it with deposits.

Should we expect the size of your securities portfolios to continue grinding higher, consistent with the pace we've seen in the first half of 2026?

I think we look at our securities portfolio as a reservoir to fund growth, and so at this point in time, it can be added to, to the extent deposits exceed loan growth, or it can be detracted from to fund loan growth, to the extent they don't materialize. Given that we've been able to grow deposits even faster than loans, it has been a net contributor year-to-date.

Got it. Thank you.

Good afternoon, Bernard.

Hey, good afternoon. Just maybe on loan growth, it's broad-based during the quarter, and there's some nice growth in CRE, especially in multifamily and construction.

Wondering if those trends during the quarter are expected to continue, and you'll still see good growth in those particular areas in the second half of the year?

We appreciate the growth that we have seen across all the portfolios. We will continue to be there for our clients, particularly the long-standing, well-tenured, well-experienced developers that are active in today's market.

To the extent there's things we can do for them, we're very supportive.

Just as a follow-up, I know the capital deployment priorities were discussed, but just wondering if we could look at the potential Basel III impact versus peers. It must have changed.

I think previously you've mentioned expecting 160 to 180 basis points uptick in capital versus peers who are probably expecting somewhere about 100 basis points increase. Your relative advantage in capital would continue to increase.

Would you be more or less inclined or have no impact on lowering your capital levels to similar move down versus some of the larger banks just on the Basel III impact?

I think we're focused and very happy to manage the bank around the tangible common equity goal and driving a top-quartile returns on tangible capital. As we think about those Basel impacts, they really don't influence our focus on either TCE or the ROTCE.

That having been said, it gives us comfort that our strategy of holding low-risk residential mortgage is a great strategy and one that effectively others have taken notice of by reducing what they see as the risk profile, which we had noticed long time ago.

Great. Thanks for taking my questions.

Sure.

Thank you. To conclude, as always, our results are a reflection of the dedication and discipline of our team, and I want to thank them for their continued contributions.

We remain focused on creating long-term value, and we're looking forward to speaking with you again next quarter. Thank you.