Let me get started. Next up, delighted to welcome from East West, we have CFO Chris Niles. Chris, thank you so much for being here.
Delighted to be here. Thank you for having me.
Head of, obviously you provided a bit of an update last night. So if you don't mind running through it with regards to what you're seeing.
Yeah, no. So I think largely the year has kicked off as we expected. And I think as we communicated in our January earnings call, we expected to see particular take a bit of a pause. And we continue to see that, and we continue to expect that to be more muted from an overall growth perspective. So I think that's part of the dimension. The first quarter, and our update is that we saw probably higher levels of utilization going into year-end and at December than we're seeing here early in the January. We saw some of that paydown happen. And so both CRE and C&I will likely be slower than the three to five that we had guided in the first quarter. We're continuing to see residential growth, and we'll continue to fund that growth as we see it.
That continues to come on at a good rate and level. But those elements of growth that we largely projected are coming in a little bit slower in Q1 than the full-year guidance. And that we would further follow up on that and say, given that we have more capital. We said previously, we don't think warehousing capital is the right answer. We think we have a strong capital base, but incremental capital can be used opportunistically. 1.2 million shares so far in Q1.
Got it. Thanks for running through that. I guess maybe just to double-click on some of those things. On loan grid, look through the three buckets around customer. One, your appetite to lend into those. And then customer sentiment, customer demand, what's driving or what's kind of taking down loans or making investments.
Yeah. So I think maybe I'll start with the broader. Dominic has talked about an ideal a third, a third, a third. And he liked to see sort of a C&I loans, a third in CRE, and a third in residential. And right now we're over-indexed on that third, a third, a third in the CRE at 39%. Over time is to continue to grow the residential and C&I books at a slightly faster clip and slow the effective growth in CRE. Of our CRE portfolio is in multifamily, which has been a wonderful asset class. But there's lots of other buckets that. And we're kind of looking collectively and saying, if we're going to slow it. To a more balanced portfolio overall. Second part of that is the reality that we're seeing, which is that there's a fairly significant gap between buyer and seller expectations.
To less volume of real estate transactions, CRE transactions in particular, than you would expect, all things being equal. And that disconnect, we think, because nothing changes for two years and people have to, or because the rates take a step downward and arrive at a level where transactions can clear more efficiently. And so we're, in the meantime, not expecting to see a tremendous uptick in CRE volume, which we're not seeing. And so when we think about the three buckets, emphasis is on continuing of our residential customers, particularly with our targeted solutions in a high down payment product of our markets and through a very relatively low-cost distribution, which is our own branch network. And that seems to work really well. C&I opportunities as they present themselves.
I don't think you meant this, but I'm just wondering, is the construct around the one-third, one-third, one-third changed? Like just relative to the other two?
Yeah, I think the emphasis is on building out over time the other two. So it's not that we won't grow CRE. It's just that. And grow residential faster to get to more of a balanced place over time. We're not trying to get there in any particular time frame, but we think a more balanced portfolio over time will suit us well.
Makes sense. It's been a very strong category for a long, long time. Just give us a little bit of a flavor of what's driving that demand. You said it's coming from acquired through the branches, but just what are the puts and takes that drive growth there?
Yeah, no, I think the bank was founded to meet the needs of Asian immigrants a little over 50 years ago. So you come to this country, you come looking for a better future for your family and part of the American dream is a home. Those for those that can come up with basically half of it, we'll facilitate the other half. And that's worked out really well for that subset. But that's a key component of our portfolio. And that's the part that continues to see growth and opportunity. And to the extent that broadly will represent the largest portion of immigrants expected, at least over the most horizons according to the census and Pew Research and other places, will continue to play a role.
Got it. Moving to the third piece on C&I, I mean, obviously there's been a focus on some of the industry verticals. Where growth is coming from or likely to come from this year. Are there any particular verticals driving that expectation?
Look, I think the bank's done a really nice job in the media sector. New head of our media team from a longstanding Beverly Hills-based bank that has a strong presence in this that has looking for a better home. And we were a better home. And we're delighted to bring that gentleman on board. And I think we'll continue to make strategic investments like that whenever there's disruption in the marketplace that allow us. We'll also continue to make investments in our general commercial middle market teams because the reality is that's our bread and butter. And just literally tens of thousands of businesses stretched across the San Gabriel to Ventura Valley, including Orange County. And the reality is we will continue to do our best to bank as many of them as we can. And they come in all flavors and all markets.
Asian companies, we finance a lot of Hispanic small businesses and micro companies. We finance a range of customers across the entire spectrum. L.A. Our core market is L.A. But we also finance businesses that are completely unconnected to international trade but just happen to be based there. And a good number that also. Mostly importation of goods and redistribution and selling onward to U.S. consumers in one form or another, right? So a lot of what you buy off the shelf, you get ordered and delivered through Wayfair, may come from one of our customers or distributors that we support.
Got it. I was going to see if this when you're talking about the media business, obviously there was a fair bit of disruption last March in your markets where you market. We've seen other banks talk about big hiring announcements. But my sense, just talking to you and talking to Dominic, has been there's a long runway. West. Just maybe frame that for us in terms of given the overlap that you had both market and business-wise, is there an opportunity there that should accrue over time?
Right. And so the reality is, yes, there was disruption, particularly in Northern California around two very large banks. Account moves related to that. I think Dominic has been very clear with the teams that more isn't necessarily better. It's not, more is not necessarily better. Better is better. And so be very selective. Be very thoughtful about who are the people we want to bring on from those institutions. Who are the customers that we want to bring on, right? And so there's, frankly, a lot of, say, private equity capital call line availability in the marketplace. The question for us is, do we really want more? And if so, what size and scale? Because that can be a very sort of episodic short-term utilization we see as particularly accretive.
And so are there select opportunities to work with select entities that we would think would be accretive to our business profile that will come with the companies that we would be part of, maybe? Are there lots of ones that we'll just take a pass on? Absolutely, right? But we have the opportunity to actually think about that. Is relatively rare. Because oftentimes we find ourselves competing to consider bringing how do we compete to win? Does Christopher have any answers? It's like, there's five guys that want to spend time on. And that's a different dynamic than we've seen here before. And so I think we're winning on that front. And similarly, I think there were people who or someone. There was a handful of banks that in this business or that business where people gravitated towards. And maybe East West wasn't there. But now that those.
Suddenly East West looks a lot more attractive in that relative landscape. Suddenly we're attracting people of a caliber that perhaps was not necessarily available to us in every sector. It's nice.
I guess maybe on the other side of the balance sheet in terms of deposits, I think one of the learnings for all of us was just the speed at which deposits can leave a bank. And while the whole concept of insured versus uninsured, you've done this for a long, long time. Give us a sense of how this has changed, how you think about East West.
Look, I think at the end of the day, some things have changed, but the core hasn't changed, right? The more granular core retail. Stable and stickier deposit base. That's, I think, understood. And that's perhaps better understood by more people today given the dynamics of last March. So finally, East West has a fair degree of larger and commercial relationships relative to its business mix. It has a very strong core retail base, which. And then it has a commercial base that has been very good. But it clearly has more volatility. And we saw that last March, right? I mean, there was DDA drawdown. And it was in large balanced commercial accounts, right? And now we saw it all come back, right, through actions taken at the bank over the course of the year. So was there a drop? Yes. Where was. Commercial.
And where did it come back? It came back in high balanced commercial because everybody got comfortable again. And then we saw $1 billion of deposit growth in the third quarter, $1 billion in the fourth quarter. And we're on. So the good news is everyone saw it. And I think it changed some mindsets within the bank. And the emphasis. $1 billion a quarter deposit growth is everyone's on board with the idea that we have to grow granular small business retail deposit. That's completely uninsured across the bank. I think you asked a question, I think, on the last earnings call about sort of the loan deposit ratio. And I think it's a measure that. Continue to think that in the low 90s% is fine, but we don't want to see it creep higher.
And so the reality is the focus is on continuing to build the level of low-cost to the full maximum extent possible. And we're going to continue down that path. Are we concerned about the commercial we have? No, right? So when I look through the commercial depositors, it's a hospital group that's headquartered not 10 miles from our bank headquarters. And is that hospital group going to go away? No, right? It serves our ethnic communities. It serves the broader market community in the San Gabriel Valley and surrounding areas. There's lots of connectivity between our bank and that institution. And you keep going down the list. And you get to the battery maker that's selling batteries to Tesla or whatever. And yeah, that account's not going anywhere, right? We know where that business isn't going anywhere. And those balances aren't going anywhere.
Those are larger balances, but they're stable. We feel pretty good about that. We've done that analysis. We've gone. Said, do we think this is rate-dependent? Do we think this is, at some level, all deposits are reputational-dependent? So when we think about what are we going to do, we're going to make sure that drive more granular deposit growth. Then we're going to take steps to ensure that our reputation doesn't get challenged, right? We don't see that as reputation, a cyber event, right?
Right.
OK, let's make sure we don't skimp there. We fully invest. We're as robust as possible there. If that costs us a little more and those people are person to willfully spend money. But he'll invest money in resources that defend and protect and grow the franchise. That's one place, for example.
Granular deposits in this environment, some of that comes to offering promotional rates, CDs. Is that the right way to think about it? And who else around, has there been a revisiting or evaluation of the branch strategy? Are you opening more branches going forward? Any of that?
Yeah. So on the CD strategy, specifically, the bank has a history. And this is the lunar season, Lunar New Year season. And that went into our thinking. So we priced our Lunar CD special a little more aggressively this year. Competitors and said, we don't have to be the highest price. Let's see where some key competitors are, price five basis points below them or 10 basis points below them. We sort of took the opposite approach and said and go out early and sort of set price and force people either to price higher or move differently. Now, as the year started off, I think there was expectation for still people that were in the high fives on deposit pricing. So we put out a 5.25, six month CD special, which is a very attractive rate still today.
Higher than most of our ethnic competitors were willing to go, which has actually just resulted in more activity and more volume and more customers and more net growth. Deposits across the board. And so we're delighted by the results of that. We're seeing net deposit inflow. And again, we're on pace for another $1 billion deposit quarter growth, largely in CDs this quarter. Six months from now, when those CDs come off, we think if the rates environment is lower, then we'll be able to reprice and retain a good portion of that new money. Think we'll be very happy to have locked that in and continue to roll that over at the right price point at that point.
I guess the one area people struggle with with CDs is transactional. You had a high rate. The customer came in. Is this truly a client acquisition tool? Or is there a subset of clients that you're now able to convert to a more stickier relationship?
Rollover analysis. We do this for all kinds of reasons. But liquidity stress testing and other things are part of this equation. We are seeing consistently between 80% and 90%. So to the extent you acquire $200 million of new deposits through this process and you think you're going to keep 80%+ of it, it's a wonderful customer acquisition tool. The reality is deposit portfolio. When rates went to near zero, those CDs didn't necessarily all migrate away, right? They did come down in balances of people for the CD. But they were happy to leave in a money market account with us. So those customers, right, if you look at the history of the bank, our deposit portfolio growth over the last five years has been 11% CAGR in households and customers across the board. It's worked out well.
We're acquiring them partly through these CD specials.
Remind me about this. Around the branch strategy, are we growing branches on a net basis? If so, what markets?
So we haven't expanded a lot here recently. I think one of the questions is opening 500 branches nationwide or something. And I think we're cognizant that the marketplace appreciates. I mean, I think there's no surprise that larger banks do acquisitions. I'm already paying a competitive dividend. Deposit growth might slow. Let's invest in retail branches that at least fund some growth. That makes sense. We're not immune to that logic. And we're thinking about how does that play in a world where core retail deposits are more and more important. And so we've looked at our branch network to an investor group earlier today. And we said, look, we've done a scan where we compared where all of our branches are relative to all of the Ranch 99 and H Marts, which are ethnically focused.
Where they are because they've done their market research to figure out who's going to be coming by their product, where we aren't because a good number of our branches are within two miles of them. So. Focus on where those new emerging markets are and think about it. And I don't think Dominic is quite ready to start investing in a nationwide branching strategy that's not in. There aren't incremental adjacent opportunities. Or because we had this partnership with some of these markets for in-stores that we wouldn't consider upgrading a variety of branches and making some colocation event opportunities come to fruition, right? And so we've taken one that's three miles away. To one mile or 1.5 miles away from each of them, plug it in the middle, and create a new freestanding branch that will sort of merge the two together.
And so we're looking at a variety of likely enhance the network. I don't know that we're, at this point in time, looking to make an investment to grow the network by 10% or something. But we'll continue to look at the network and grow a.
I guess we talked about loan and deposit growth. When you bring this into the NII Outlook.
Let me make one more comment. I think one of the things to consider and I think it's on page 11 is pound for pound. Whether it's per pound of person or per square foot of branch space, East West than almost anybody else out there. So the reality is there is a high level of productivity from our branches. So I think our branches today are extremely well positioned in places where our brand resonates with the immediate customer base in a manner that has some defensive mode around it, right? So a portion of our customers aren't necessarily comfortable for whatever set of reasons, but they're perfectly comfortable walking into our branches and having a conversation, right? And so that accrues to our benefit. Our customer service lines, we answer calls in, I think, it's 11 different languages.
Different product mix. I don't think, no offense to Bank of America. I don't think America answers its customer service lines in that many languages. I think usually I call and there's a habla español. That, right? And the reality is East West serves a broader marketplace that has a lot more variety to it. But it serves extremely well. And those customers are very loyal. High customer retention rates and the high balances per location and per employee.
I'm going to dive in to see what the language options are. In terms of the NII outlook, what were the assumptions around rate cuts? I think you assumed at the start of the year. More broadly, how sensitive is that NII outlook to cuts.
I think we said we're expecting the year-end yield curve, which had for the sake of our forward curve, for the sake of our argument, had about six cuts into it. So we said 4%-6%. So to the extent there are less, there'll be less shrinkage in NII. We further said that we thought it was about $1.5 million per month per cut. Delayed a month, it's $1.5 million more. To the extent they're delayed for three months, it's $4.5 million more, et cetera, to the line item. Then, of course, it's scaling. And it's perhaps $3 million in that fourth month or fifth month of the analysis, right? It's stacked. I think the dynamics that we called for on the margin were we draft in the first quarter driven by two factors.
Factor one, the continuing trickle out of DDA and very low-cost savings and money market into the branch. They see the 5.25% CD special. They see the 4.18 liquid CD. They say, hey, wait, my money market's only paying 2%. Can I move it to one of these two products? Facilitate so the money doesn't leave. And we will, right? And so that just happens. I have excess in my checking account. Can I put $50,000 over here? Yes. They don't get the full yield to do $25,000, they don't get it. And they get some other rate. But it's still significantly higher than zero, right? And so that trickle is going to be part of it. The second is the BTFP. Wonderful program. East West participated in that program last March. That program comes to an end in March.
And we're going to pay back the $4.5 billion. We'll pay some of it back out of into some other Federal Home Loan Bank or other borrowings. But the reality is the cost is going to step up on us, right? So we had it locked in at $437 million or something. And that will eat into our margin beginning in March. And will be a net drag going forward. Now. And we've got slower loan growth. And so therefore, we should produce more deposits and loans. And therefore, we should be able to pay some of that from organic customer resources. Customers is 5.25, then that's our marginal cost of funding. And that's the bogey against the $437 million that we were paying. That's a negative, right?
5.25 is the marginal cost of funding. What's the asset yield or loan yield that's coming on? I'm just wondering, what's the incremental margin today?
Yeah. So I mean, as we sit here today, the residential mortgages are still coming on. Still positive. And there's not a lot on the other side. But most of our commercial loans are in the SOFR + 275-3.25. Smaller business is still basically prime-like. Even if it's not tied to prime, it is basically priced like prime at 3.25. Where commercial stuff comes on. But again, that's slower here in the current environment than in other environments. But we're replacing, at least, the cost of funding, other wholesale options.
Sounds like the balance sheet is asset sensitive outside of the BTFP phenomenon and that's hitting funding costs. Are you doing anything to kind of prepare for rate cuts eventually?
Yeah. We have $4.25 billion of swaps on the books. Roughly, a good portion of $2 billion or so are forward starting. Put on last year in the fourth quarter, third and fourth quarter. And those are, as we sit here today, all in the money, right? And so those are positive trades. And they've been out of the money. But nonetheless, the reality is every step down, we're going to see positive incremental benefits from those. Agents in the market. But I think the answer is about $25 million a quarter. She's not in her head. So the costs today, as rates step lower, it'll cost us less. And the reality is they'll all be positive cash.
Will they put that before they hired you, sir?
Sorry?
I said they put those trades on before you joined the bank, sir.
The last couple they put on when I joined the bank, so I'm glad to be part of those.
And just very quickly, in a couple of topics. One, on Credit Outlook. Give us, of the ACL at the end of the year, what did you assume? And what are you seeing just fundamentally in terms of just how credit trends are migrating?
Sure. So under CECL, we're using sort of a Moody's version. So we're all Moody's model dependent. Other stress alternative scenarios. S3, as they call it, right? And so we're taking a mix of those two. And the reality is we all expected to see a softening and slower. Guidance page is we expect a soft landing. And what a soft landing means is slower growth. Yes. And we're seeing that. And some incremental credit events, right? Last year, that number's too good to be sustained. It's true. It's just too good to be sustained. And so we call charge-offs as we move through the course of the year. We had 15 basis points in the fourth quarter.
And we wouldn't be surprised if it was sort of in that zip code here earlier in the year and migrating higher as we move through the year. It will probably trend to that level or higher because there'll be incremental stress in some sectors. To the extent there are rate cuts, we feel pretty good about that outlook. But that does still mean likely next year, this year, 2024, than last year, 2023, where we booked $125 million of provision. And so it'll be some level higher than that.
Those are the small numbers. But the 15-25 basis points, are there pockets of C&I or CRE that's expected to drive those higher losses?
It's interesting. Cross-sectional view that points to any particular trend, right? So it's an importer here. But we have three other importers. More company specific. Did someone lose their contract with Costco? Did someone lose an order at Walmart? And therefore, they're having an issue. We've got a bunch of furniture guys, a bunch of lamp guys, a bunch of frozen food guys. One of issues. But not across all of them, right?
Maybe, Chris, if you don't mind spending some time on the CRE book, where I think the issues in the office CRE. Your office CRE book. Then as we think about higher for longer rates, the implication for the rest of this CRE book or some pressure on the borrowers.
Yeah. So I think our suburban, sort of almost by definition, Class B and lower book. I think Adrienne went through the entire list of sort of individually with pictures and one of the services to just validate this and make sure we could all talk to there's only one in our portfolio that sort of meets the definition of a tower. It's 13 stories and includes a parking lot, which is part of the valuation, in a central business district. So the reality is loan sizes. I think we have no loan over $55 or no loan over $60 for sure. And it's really kind of in that mid-50s level. And then there's a handful of loans in our highest bucket of categorization. And we scale down rapidly from there, right? So our average loan sizes are below.
And we're not concerned that there's a significant people aren't commuting into their Manhattan office issue or their San Francisco office issue or their. People are still commuting to that three-story building in West Covina or in Riverside or in the San Fernando. Right? The nature of those smaller businesses is they usually expect their people to show up a little more often than perhaps someone in some tower downtown. And we locally. Someone asked us, well, can you show us? The answer is, well, no, we don't have it. So I can give you a chart that shows you the occupancy by tier or by place. But the reality is we see it, right? Because we drive by those streets on our way to and from our offices, except for those of us that walk.
But broadly, we're middle market, three-four-story office tower, quote-unquote, "office building.
Minute, like.
Stay very well occupied. See the issues the way you see them in some CBDs. And we're not exposed to the CBDs. So we think our relative rate, I think. Large bank headquartered in California, one. And if you look at their portfolio and they do their CRE analysis, they break it out into sort of listed bankers. And they've got a giant reserve on it. And then the other portion, which we think is probably more comparable to our suburban office, and their reserve is almost identical to ours. So. Do reserving. And then they have a CECL Outlook that's similar to ours. Then we think we're in line with office reserving levels given the outlook and the portfolio that we have.
That's good. Beyond office, when you think about multifamily or multi-use retail, hotel, just talk to us. Any pressure points? Are there any pressure points as you look out into next year?
I mean, my one thing noticing is hotels seem to be really highly booked in lots of places. I'm surprised that's. Booking dynamic seems real. So I don't see that emerging in lots of places. Are there pockets? Yeah. I don't think San Francisco hotels are back to where they used to be. We have. But there's some exposure there, right? And so I think there's exposure. But it hasn't bled through yet in any way, so.
Maybe just lastly, actually, two things. But maybe first, remind us on expenses. East West, for those of us who followed it for a long time, extremely efficient bank. You think about incremental dollars of investments, are there still areas where you're accruing savings and getting those to reinvest? Or how should we think about what the organic bank is over a medium term?
Yeah. So I think the structural benefit of the very efficient branch network we have is real. It's really driven by the fact that pound per pound, we garner twice as many loans and deposits per employee. And therefore, our efficiency ratio is that much lower than many banks. Where do we need to invest? We need to invest where everybody else is. We need to invest in cyber. We need to invest in digital. We need to invest in broadly technology that further allows us to scale that network, branches and people at the same rate. And that has been investment dollars that have been good investments that we've made. The bank's own mobile front end. And that's worked out wonderfully for the bank. The bank has invested in some incremental development for its customers, been very effective at yielding new deposits or new solutions for our customers.
We can do some more of that sort of core development ourselves. But we also have other vendors that will accelerate our efforts. And we're doing so on a variety of ways, right? And so foreign exchange is an important part of our business and our fees. Slick mobile offering. We'll have one later this year. And so those are kind of solutions that we know we can incrementally introduce that are out there. We don't have to build them ourselves. More effective way. And nobody wants to have a third bank app on their phone, right? So if you can integrate it back, single sign-on and all that stuff, and trade. That isn't part of the standard Bank of America app, right? And so it's a differentiated solution that we can offer for some portion of our customers that'll be interesting.
Want to talk about fee revenue as often with the bank. Is that an opportunity? Or just given your clientele, where you see areas of strength. And the need to invest on growing fee revenues?
No. And I would say it differently. So I think the reality is we have a clientele that keeps higher average balances. And their overdraft fees, right? I mean, there's less than $1 million of overdraft fees for this bank. Think about that. You've got a $70 billion bank with less than $1 million overdraft fees. Why? Our customers hold balances. We lower deposit revenue, deposit account revenue, et cetera, because they all exceed if we tell them they have a $10,000 minimum balance, they all keep $40,000, right? If we tell them it's a $25. It's great. But we don't collect fees, right? And so the real opportunity is on the commercial deposit side, right? So the commercial deposit side, what we call Global GTS team is the opportunity set that we see to introduce incremental things, right? And what are the incremental things? It's additional.
Reality is our customers perhaps aren't as used to the full suite of options that someone might get from a Bank of America corporate team. But we can offer those solutions, right? In part, sell them on those solutions that being value added. I think there's incremental security solutions that some of our customers haven't availed themselves. With business email compromise, with check frauds that are sort of more easily to perpetuate today than ever before, a lot of the services. And it's easier to sell them on. All it takes is one bad check hitting their account. And they suddenly realize, hey, don't you have something to help us? Oh, yes, we do. Here's two different things that you could do to make that less. Are resonating. And we'll continue to make progress on those.
And there's a broader set of our customers where we play a part of their relationship. More of it, right? And so there will be treasury sales that will be an important part of the mix and foreign exchange and swap business, right? And those have been contributing. Continue to grow. And we continue to see positive dynamics in both. And to the extent that we continue to facilitate importation of goods, which is part of what we do, right? Get something off the shelf at Costco, Home Depot, or otherwise, comes from Asia, there's a possibility that we played a hand in getting it there. But then a portion of those funds get remitted back to some. The agent or perhaps the same company back in Asia. And that has to go through some foreign exchange process. And we help facilitate those transactions as well. And.
Take on that and facilitate that business. That's been a profitable, growing business. As long as the importation continues, whether it's from China or. As long as there's somebody buying something off the shelf that's coming from Asia, we may support it in one way or another.
Got it. I guess just one last question around capital. Buybacks. Just remind us if there's a right way to think about the appropriate level of capital for East West and how you're thinking about just the pace of buybacks as we think through.
We have what we see as an appropriate level of capital. We don't necessarily see a reason to warehouse more. We will be opportunistic as we think about buying back. Fourth quarter, I think it's fair to say we have been opportunistic in this first quarter. There was some disruption. Some bank in New York had some issues. The market. Great time to buy, which we did. We'll continue to be opportunistic as we move forward.
Got it. And so you haven't been particularly acquisitive there over the last 10, 15 years. Is M&A really on the radar right now in terms of is it of interest? Or just there are too many macro and regulatory.
I think it's challenging. I think we have a differentiated client and business profile. One of the challenges is if we were to meaningfully share that perspective, it would dilute to a certain extent some of what makes East West special and perhaps contributes to its profitability profile. Cost profile, structure, perhaps, et cetera, et cetera. On the other hand, there aren't that many things that line up perfectly well with East West that would make sense to bring in. That dynamic. So I think there's limited landscape for things that make sense. But we are not in all the target markets that we could be. So could there be a targeted. Right? A targeted smaller institution that tucks in that helps us meet the needs of a different market? Possibly. But I don't see us.
Through acquisitions in any meaningful way unless it's an incredibly rare opportunity.
Got it. Thank you, Chris.
Thank you. Appreciate it.
It's a night.
Thank you. Thank you. Thank you.