Bancanalysts Association of Boston's Annual Bank Conference - COLUMBIA BANKING SYSTEM INC

Columbia Banking is a regional bank operating across large, attractive western markets with a strategy focused on deepening its northwest presence, strengthening its competitive position in California, and expanding across other western markets. Its commercial banking model supports a granular, low-cost deposit franchise with total deposit costs of just 1.29% last quarter. The company has also continued to expand through M&A, including last year's acquisition of Pacific Premier. Joining us today is Clint Stein, Chairman, President, and CEO of Columbia Banking System. Clint has been with Columbia since 2005, serving in several key leadership roles before becoming CEO in 2020 and helping guide the company through multiple transformational mergers. To his left is Tori Nixon, president of Columbia Bank since March of 2023. And then earlier this week, those that saw an 8K may have noticed that he is transitioning to a senior advisor role later next year. And then far right there is Ivan Sheda, who is the chief financial officer, a role he's held since late 2025. So typical as the other presentations, I'll kick off the Q&A and then open it up to the floor. First one, if we go back five years, Columbia was embarking on a significant transformation. Today, after two major acquisitions and several years of integration and optimization work, how would you describe the franchise Columbia has today? Well, thanks for having us, and thank you for sticking it out here. I think we're the last one of the day, and so we'll try to make it entertaining if we can. You know, I think that our franchise is the crown jewel of the West, and not that there aren't other good banks and good franchises in our markets, but when I look at our market position, I look at, you know, between, especially banks between 50 and 100 billion, we stand out, and it's the density that we have up and down the coast from the Canadian border to the Mexican border. it's what we're building and and have built uh over the years in the intermountain states um and we just we're just in a in a sweet spot you know as tory likes to call it it's kind of the goldilocks syndrome thanks and uh just sticking with that team columbia is now one of the largest banks in the west and just beyond higher hold limits what opportunities does that scale create that it would that would have been more difficult uh call it five years ago I mean hire hold limits are are are one thing um it it gives us the ability uh to continue to grow with our customers as they grow um you know more importantly it gives our customers the confidence that they can continue to bank with us uh they can continued to expand their business and we're going to be there for them um obviously there's the benefits of of technology um being able to you know spread that over a larger customer base uh our market position comes to you know recruiting talent um you know so it's there's there a lot of benefit to what we've created let me add to that yeah i would just say the um like uh success breeds success and talent likes to follow talent so i think a big part of of it can be the fact that you You know, as we've gotten bigger and we have, you know, developed more capabilities, we're attracting kind of a different class of talent in the company. Some, you Know, highly sophisticated, very talented bankers that are coming to us today, which is different, you Now, than five, six, seven years ago, which Is great. The only other thing I would add is just diversification of the business model. It's very different than it was five years ago, kind of prior to the MOE and prior to the PPBI deal. We track a sheet of what we call wins and losses. So anything above $10 million of TCE, we look at every single quarter. And the thing that I like to see on it is the diversification, both in terms of the industries that we're supporting, the types of products that we'RE leveraging, and then the geographic diversity is up and down, you know, the eight Western states that we now serve. maybe sticking with products what role do treasury management payments wealth management and other fee-based capabilities going to play in strengthening that consumer relationship and and kind of driving long-term value and growth yeah maybe i take that one um if you think about the business alone sometimes it's an entree into the into the customer the customer into the bank But a loan can be more and more commoditized. It can be very transactional. It's the fee-based products, the treasury management, the commercial card, merchant services, international banking. All of those things are the true, I think, foundation of a really good core relationship with a customer. that's kind of where you make a transition from from being a lender to an actual a participant and an advisor for for a company and and and that that's incredibly important for us as a company as we deepen existing relationships and then as we bring new relationships into the bank it is a a full service um how do we how do мы lend you money if you need it but then how do we do all these other things that are part of your working capital that give us this true core relationship with our customers and it's pretty powerful and maybe Ivan could just add from a financial perspective how do you finance that growth and what are some of the products that can really drive ROE improvement yeah in general Tori and I were having a conversation yesterday from a commercial perspective and a business perspective there's really no product gap that we have that we need to go out and acquire or fill or build in regard to that. There are some things that we're doing on the consumer side to make it a little bit easier to come on board with Columbia. And so we'll be rolling some of that out in the first half of next year. In terms of how we finance that, we're a very disciplined company overall in terms of expense management. We had an opportunity with PPBI coming on board this year to really think about operating leverage in a very powerful way. We closed the PPBI deal last fall, and it was a opportunity where given the treasure trove of capital that they had within the bank our capital ratios actually increased so you had a situation where capital ratios are coming up you know it allowed us to be a more profitable institution in general and then we had the cost synergies which were going out of the company over the first half of this year so we had you know revenues going up expenses coming down and that's been a fantastic part of the engine this year to drive that profitability profile that we have it may be just sticking with the kind of strategy side you often describe yourself as relationship banking as the core differentiator which a lot of banks to be to be clear kind of use that how important is that to you how do you execute on that and how does that support growth i mean that's that's uh that's a how we differentiate ourself and and we've been relationship oriented for the entire 33 year history of our company uh you know tory mentioned um you know being an advisor to our clients and And we think about that trusted advisor, and you can't earn that without building those relationships. And so we think with our business customers, they have their advisory network, their attorneys, their accountants, we fit into that as their banker. I actually offended somebody a few weeks ago, I was at a lunch and I was explaining how we differentiate ourself in that trusted advisory capacity. And he's in the insurance industry, and he says everybody always forgets about the insurance broker. So if there's anybody that thinks that insurance is there, I think it's a necessary evil. But for those insurance brokers, they're part of that as well. Great, shifting over to Judge's question on deposits. As customers have become more rate conscious, fewer barriers to moving funds around how are you winning deposit relationships today again our our value proposition has never been rate we don't compete on rate um i mean it's important you have to be uh you have be in the ballpark uh on on that um but you know if if if you you know going back to my my previous comment if you're part of that trusted advisory network You can be a little lower on deposit pricing, you can be a little higher on loan pricing, and I think that's where, in particular, a lot of the smaller banks get it wrong, is they don't fully understand their value proposition. They start to compete on rate, and once you do that, you've already lost. I don't know, Tori, if you want to add. Yeah, we look at pricing in a very holistic way, So a full relationship pricing, and it's a combination of on the loan side and the deposit side and the fee income part of the business, and look at it that way. That's how we price, and there's a bunch of different levers to pull. I think that's one way to Clint's point. You get somebody in the company, and you have them as part of your customer base. You have multiple products and services that you're negotiating all the time on price. Deposits seem to be one piece of it. it becomes less sensitive when you have a bunch of other things that you're working on with them versus just focusing on just deposit pricing. And I think we've done a really good job looking at a holistic view of the value we bring and the value that we want from a customer. We'll touch on AI later, but AI agents, what is the risk to Colby and the banking industry in terms of moving low-cost funds into higher-yielding products? So, on Monday, I was at a function that we hosted for some of our family-owned businesses and I asked them the question about, you know, did they ever see a day where they would trust AI to move their money around, either personally or with their business, and without exception, they were absolutely not. I think it's a real thing. We joke around, kind of half-joking for those of you that are familiar with us and know our Chief Strategy Officer, Aaron Deere. Aaron will be the one on our team that he's probably working on building an agent right now to move his money around between his 27 bank accounts to get that extra three basis points. He claims it's for R&D purposes to see what other people are doing. Everyone has hobbies. Yeah, yeah. But in all seriousness, I don't want to diminish the potential for that. But I think that we're better situated than most because we're a Main Street commercial first bank. And while we have roughly 40% of our deposits are consumer oriented, I do not think that our customer base is going to be a fast adopter of using AI to manage their money flows. But like everything else, stablecoin and tokenized deposits, we don't see a demand or a need from our customers. That doesn't mean that we're not studying it, that we are not staying abreast of the developments there. So that if it does become something that's important that we can capitalize on that. My personal view, just to add on top of that, is that if there is a risk of that in the industry, it's going to be in the more rate-sensitive and digitally native deposit bases, which really, as you get to know our companies, is not how you would describe our deposit base. I would describe ours as, again, diverse geographically, diverse between consumers, small businesses, and commercial, and tends to be much more of a Main Street-style banking model. So that's my personal view. And when you're traveling across your footprint, meeting with customers, what are you hearing from business leaders? You know, a lot of optimism. I'll say, you know, cautiously optimistic. You know there's a lot volatility, but you know for the last six, seven years there's been one thing after another that they've had to navigate. you know, we strive to bank the best operators in any industry that we're in, and good operators tend to find a way to navigate through uncertainty and actually benefit from it. So, I mean, that's, I guess, you know that cautious, cautiously optimistic is how I would characterize it broadly. Tory, you spend as much time on the road as I do, I don't know if you have anything else to add not not not much but we do a survey every year a business barometer about 1200 small medium and and uh probably up to half a billion in revenue uh businesses across the country and there's 60 questions we get the results back in april and um was very optimistic surprisingly optimistic from that group and um i've had a follow-up with with a few people involved in it and to your point on the advisory group the optimism has waned a bit over the last uh you know several months i think because of a lot of things going obviously things going on in the in this the macroeconomic world but still optimistic still surprisingly so um you got a lot of customers who have uh pent-up demand to do something they want to make an investment they've they've been on the sidelines for a bit um they want they're like ready to go at some point i think that that kind of can be unleashed uh but i think they're to your point they're still cautiously kind of sitting on the side lines and in optimistic that they'll get that chance in the near future and maybe sticking with you tory you mentioned um talent what are you doing to retain develop and add talent and bankers i mean it's a it's a full-time all-out assault i mean it starts with the the story of the bank i mean we i mean we we tell the story being a um a large enough company to matter um where we have the capabilities we have a balance sheet and we have services to kind of compete with anybody but we combine that with a community bank service model so we kind of look at it as we're big enough to matter small enough to care kind of mentality and when you tell that story to bankers in in in all of our markets it's a very attractive story nothing against big money center banks but sometimes you can't you work for a place like that you don't move the needle much at Columbia Bank you can move the needle and you can be very powerful part of the success of the company that's attractive to a lot of people so part of it just is that itself I said earlier talent attracts talent when you've got talent in the company and they see the people that we have and they're like I want to be a part of that team at the end of the day the the team with the best people usually wins most of the time so that's kind of mentality around it obviously years of significant interest rate volatility how do you approach balance sheet positioning and in franchise optimization how's that evolved so I'll jump in on that one so from a balance sheet perspective, what we strive for is neutrality, right? I think it's anyone's guess what's going to happen in terms of interest rates. I think if you go back 12 months ago, everyone was probably sitting in the room here expecting a rate cut in December and probably two more over the course of 2026. And here we stand with a rate increase last, I guess, two months ago now and potentially another one coming in December. So if you look at the ALM posture that we have, it's generally around neutrality. And I think we do a good job of managing to that within a reasonable range in a first year effect. We are going through a balance sheet transformation. And so I'll take it back to about a year ago, as we put PPBI into the company, we had about $8 billion of our $48 billion loan portfolio that's transactional in nature. And this really came from, think of legacy multifamily, legacy mortgage assets, long duration, low yield, about $8 billion that was yielding just north of 4% coupon. And so we've been evaluating that and working that off over the course of the last year. There's no credit concerns. It's not a good bank, bad bank type concept. It'S just that we've got about $600 million of our capital base stuck within loans where there's no other relationship with those borrowers outside of the credit itself. ItS just not part of our business model going forward. So as that's been coming down off the balance sheet to the tune of about $250 million per quarter, we're replacing that with core relationship lending. It's about a 200 basis point yield pickup. It comes with the deposits, the core fee income, what Tori talked about earlier, merchant, card, all the different services that we want to wrap around our clients in regard to that. And so that's really allowed us to continue to move the needle from a net interest margin perspective. We have added approximately 25 basis points to our NIM, so we're operating just north of 4% today. And we expect that story to continue as we go into 2027. On the flip side, we talked about deposits earlier. I think everything has to come in tandem. And so from a deposit perspective, you know, low to mid single digit core deposit growth has allowed us to continue to optimize the funding stack as well. We still have about $5 billion of what I consider wholesale funding costs that are higher. And so we look to continue TOA to whittle away at that over the course of several years. And then finally, the third part of our balance sheet that's moving has been around capital, strong capital position. We go through a capital stress test every single quarter as part of our processes. And so that's allowed us to unlock the share repurchase program that we announced a year ago, just completed our first year of that, and announced a few weeks ago as part of our earnings call that we'll be continuing that story going into Q4 in 2027. Maybe one more for me, and then I'll open it up. The net interest margin in Q3 exceeded expectations. Was that a function of you being conservative as you thought about the quarter, Or was there some positive underlying trends that drove that outperformance? And continuing that theme, as you think about your comments on fourth quarter and first quarter, do you feel like you're being conservative there as well? It's a great question. So there were a couple different things that factored into it. So the printed number is 4.11% margin in Q3. Included within that, we will disclose if there's a discount recognition on a loan that pays off early. We had two loans that paid off, which contributed about three basis points of that. And I see that as kind of a short-term pop in the net interest margin for Q3 that we don't expect to repeat in Q4. The core of it was just the strength of the funding stack. And so we put up a quarter where we had $1.2 billion of core client deposits. We outperformed what we had expected in terms of maintenance of the deposit costs. And so we actually had deposit cost decrease over the course of Q3, which I think, you know, was very strong and positive in regard to that. As we go into Q4, one of the factors that we talked about during our earnings call is we've got a little bit of excess debt on our balance sheet over the course of the quarter. And what we're doing there is we raised about, well, exactly $250 million of 10 non-call 5 sub-debt in September, mid-September of last quarter. The purpose of that is not to bolster our capital ratios. It's basically a refinancing of our Tier 2 capital. So we have, I want to say, 23 tranches of trust-preferred securities, of which about 17 of them we're going to work through and redeem over the course of this quarter. And so what that does is we'll have slightly higher costs associated with our term debt over the course of Q4, and that'll contribute about three or four basis points of pressure. So the way I would describe it is I think it's going to take a breather, kind of where it's at, you know, steady state within a few basis point range of that adjusted Q3 NIM. And then as we get into next year, we do expect to continue to see that NIM story continue as we optimize the balance sheet, like I talked about earlier. Perfect. See if there's any questions in the audience. Hi, Brent here. I know how to pronounce Spokane. So I was just wondering, how do you measure gaining market share against the big guys, Bank of America, Seabird, and JP, and you mentioned you're big enough to matter but small enough to care. Can you give us some war stories about how you beat them in the market share game? The question is, do you know how to pronounce Puyallup? That's where it gets a little bit more difficult. Very difficult. So, I'll start, and then, you know, Tori and Ivan can jump in. Columbia Bank was founded 33, a little over 33 years ago, and it was after KeyBank acquired Puget Sound National Bank, and the reason I'm kind of going back to that point in time is um you know that's where where um the ceo former ceo of puget sound national bank partnered with somebody else and did an ipo and started columbia banking system um because he wasn't ready to be done and his bank got sold out from under him um our market shares just about double key banks in the northwest uh so i i think that's kind of an important thing over the last 30 years that um you know they they started with something right they started within the northwest of puget sound national bank franchise we started from they put a couple of bank charters together a couple hundred million in assets uh to the point where now we're we're fifth um you know we have wells that's a little bit ahead of us uh chase sits a little bit ahead of us u.s and then uh b of a um we take you know and that's in deposit market share that's the that's the easiest thing that we can track the other thing is is we look at where we're attracting talent from we're typically attracting talent from all of those banks um we look at at you know customers i had um i was in uh oregon on monday and i had breakfast with with somebody that's part of a Fortune 500 company, and he said all of their deposits in Oregon are at Wells Fargo, and they're getting terrible service. All of their, the deposits in Washington are at US Bank, and they are getting terrible services. And it's about 300 million of deposits. He goes, we're bringing them all to Columbia. So it's back to that place where we're at, and I'm not trying to, I don't wanna be too critical of our competitors and the larger banks, but it's a matter of what Tori said, where we're big enough that we can handle all of their needs but we're small enough that they still matter to us and small enough to care and they get that access. Jamie Diamond's not gonna go out and meet with the 45 customers I've met with in the last week. So that's how we differentiate ourself we know where we can win, and we're very targeted in competing where we can win. And we're pretty successful at it. Yeah, I'll give you one example. I mean, this kind of stuff happens frequently in the company, but I'll give you an example in Arizona a couple years ago in Phoenix. We had a new team there, kind of growing the bank there. There was a family, basically a family-owned company that had been a customer of B of A's for quite a long period of time, and they tripped a covenant. They had a rough year, tripped the covenant. Their response from the bank was like, you know, no one is talking to us. They kind of don't want us. We don't feel like we're wanted in the company anymore, and so we sat down with them on a couple occasions, talked about where they had been previously, what their forecast was, where they were taking the company the shifts and the changes they were making we felt comfortable enough that we would provide a 50 or 60 million dollar credit facility to them took them from the bank brought them into Columbia Bank all the deposits all the every part of the relationship and it was because we sat down and spent enough time to kind of go through it and understand okay why did you have a little bit of a struggle and what are you doing about it going back to your comment around by trying to bank the best operators possible you know people that have been doing their business for a long period of time they can they figure out the good ones figure out how to get through a struggle and come out the other end it's one example since then they've they've turned the company around completely paid off the credit facility which i'm just i guess i'm happy that they pay us back but also disappointed that they pass back kind of thing but it's a it's afford strong relationship And that's just one example of, I think, what happens a lot throughout our company in different footprint, different parts of the footprint. Any other questions up front here? Hello. Hi, Jen. I'm from TD, TD Kevin. if you look at given the strength or the good performance on the deposit front and you're obviously optimizing your balance sheet and profitability if i look at your prior cycle i think your beta on the deposit was in the mid 50s you're guiding to about 50 i feel like there could it seems pretty conservative given that you're not rapidly growing your balance sheet? Is there some sort of conservatism baked into the 50% they assumed on your deposits? It's a fair question. So a couple things. When you go back to the prior year, we've done a couple different things that I think have allowed us to outperform that. One is, if you go back a year ago, we had several billion dollars of brokered CDs within the deposit portfolio as well, and we've really remixed that entirely off the balance sheet, and so that goes into the equation. We've also had about $450 million of the PPBI deposit portfolio that was single service, higher cost retail CDs that didn't fit the bill in terms of how we operate our business going forward. And so that's also come off. So there's been a few things within there that's allowed us to outperform that. I still think 50% is a good expectation on a through the cycle basis. But as I look at Q4, I do think there's potential opportunity to outperform that just in what we're seeing in terms of initial discussions from a client perspective but overall through the cycle I still expect something in the 50% ballpark to be reasonable I'm also curious on the multifamily side, which is about half of the total, what the trends are in vacancy, supply, across your footprint, and then just finally, how do you expect this portfolio to develop as a percentage of total loans over time? I think it's shrinking, and Fitch actually has a more negative watch based partly on this. Is that a consideration as well? What do you think is an ideal percentage for you over time, I think? I can start with a few things, then you guys can jump in there. From a multifamily perspective, we really are not seeing a whole lot of pressure within that portfolio. I think we were talking about a six basis point overall delinquency level within the multifamily portfolio. Debt service coverage is still above 1.5, and so very comfortable from that perspective. You're absolutely right that over time, the percentage of our balance sheet that is within commercial real estate assets will continue to decline. We have an overall goal of eventually getting to 50% of what we consider to be commercial balances, so CNI as well as owner-occupied. We jumped up to, I'm going to go from memory here, I want to say it was a 315% commercial real estate concentration ratio in Q3 of last year, in part because of PPBI coming on board. We're now below 300 and kind of in the 295 type range, and we expect that to continue to drift further south as we go through the remix that we talked about earlier. Overall, the transformation that we're doing on the loan side of the balance sheet has de-levered the balance sheath by about a billion dollars, and we expect that the guide for Q4 is flat to slightly down. I would expect that in Q1 and Q2, you'll hear a fairly similar guide from me, although you can wait another 85 days or so for that officially. But there will reach an inflection point where we've kind of seen most of that growth headwind diminish, and then we'll start to grow again. And from a capital allocation perspective, that'll make my job a little bit more difficult in terms of balancing between the things we're doing on the share repurchase program versus consuming capital for our client needs. So that's a littlebit of how I would think of it at a high level. Do you want me to talk about occupancy and stuff? So most of our multifamily lending is in the western west coast so a lot of it in California. Occupancy is still very high in apartment complexes. The restrictions and the costs to build are significant in that part of the country. You also have a very high single family home pricing so the demand for multifamily is still very strong in the West. The cost of rent has increased over the last several years. And the one thing that has happened is that that's kind of stalled out a bit. There's a little more concession that's being given by developers and owners of projects than there was before, but it's very slight. But you have seen kind of a stall in the actual rent that they can charge. But the performance of the loan portfolio is still very pristine. So I can't help myself. Our Director of Investor Relations, Jackie Bolin, is here. She's going to kill me for this. But you mentioned the Fitch having us on negative watch. I guess we're going to have to start bringing one of those T-shirt cannons to these things and shoot T-shirts out to the audience that says, we're not those guys. Because whenever there's something, whether it's NDFI or anything, office. software we all get painted yeah software life sciences we all get painted with the same brush and um so i i think that um you know fitch's work was a little bit lazy and incomplete and they painted us with a broad broad brush i mean our credit metrics remain some of the best in the industry um our underwriting standards uh we've not deviated uh one bit from those we pass on hundreds of millions of dollars of deal flow every quarter uh simply because we don't either like the the you know underwriting the guarantor or um uh you know somebody else is willing to lend much much deeper into the the collateral um so i'll i'll stop my rant now but i just i couldn't help myself i i gave it three minutes to see if i could let it pass and i couldn't the other thing that i think that we talk about with rating agencies as well as is around our capital ratios. And when you come out and announce a $700 million share authorization, and we've been very clear that we intended to use that, I think that that was something that we wanted to make sure was out there with them. As you look back at our capital ratios, we measured twice and cut once. I'm a very conservative person by nature, and so the remit for my treasury team is Fortress Balance Sheet. And included within Fortress Balance Sheets is ensuring capital and liquidity for good times and bad times. So we go through that stress test piece of it, I think as we go quarter to quarter to quarter and we continue to execute that, we've got more of a track record in terms of how we will continue to thoughtfully return capital to shareholders, diminish our share count over time, but also manage to, you know, within a fairly tight band from a regulatory capital ratio perspective. And so I think that that's been part of the conversation that we've had, and we do take their feedback seriously. But that's been the other factor that I suppose I would comment on. This is an AI question, but from a very different lens. Clint and Tori talked about going from a loan is transactional and then you move into an advisor relationship, hopefully, and getting to be a trusted advisor. But that was in a period of time when AI didn't exist in the customer's hands. And people talk about lawyers nowadays, they're finding more and more that clients are showing up fairly informed in a way that they had never been informed before about legal matters. And it used to be if I was a client and had an attorney, I could go do some searching, but I couldn't connect the dots together. How do you start to deal with a customer who is bringing information to you and remain an advisor if their knowledge base is starting to get more connected and far more sharper? And I guess what are you doing about that? That's a really, really good question. AI hallucinates still. And so I think it's a matter of they want to inform themselves. but you know a lot of our customers they want to spend time on building their business whatever that business is you know if they if they're running a steel fabrication business they want to build stuff um and we have that relationship and so they're not you know they're no um lacking a resource where they have to go out and get it um i'd say a differentiating factor between us and say an attorney is we don't bill in six minute increments so you know our advice to a certain extent is free it's kind of it's you know included in the package uh deal of the relationship um but you know that's that's a very insightful question and and and one that i think we'll see as time goes on um you know but um but but i i think there's a little nuanced difference between say what somebody might you know ask us that free advice component versus you know getting $500 bill from the attorney if you feel any differently no I mean I I think it's a potential transition evolution of multiple industries if you will making happens to be one of them at the end of the day we have it we have to educate our our workforce they need the knowledge they need the information um i will still say you know today people want to bank with people and relationships are are people driven um that advisor role is is about having a seat at the table and being being a part of a solution that uh that a business you know uh needs and wants and you know that that's that's what we built this franchise on and feel that it's incredibly powerful. Does that change over time? As you said, don't know yet, really. Hi, thanks. Timor Brasiler with UBS. In 3Q, it seemed like the traditional loan book payoffs slowed for the first time in a handful of quarters, given the backup in rates. I guess, what have you seen quarter to date? Has that trend continued into the fourth quarter? And And then maybe a separate question, but kind of on a similar topic, once loan growth does return, what is Columbia's ability to maintain a 4% plus margin in an environment where loans are growing? Thank you. Yeah, I'll jump in on both of those. The first answer is yes. Not in a way that's dramatically different, but the one area that I monitor most closely is the pace of that transactional portfolio rundown. For a while, you could almost set it like a metronome. It was very consistent in terms of the daily reductions that we would see out of that portfolio. I think with what's happened in the bond markets over the last 90 days, you have seen CPRs diminish in regard to that. So I would expect that we'd see a slightly lower level of prepayment overall through the portfolio over the course of Q4. In terms of a second question, I think the answer generally would be yes. I think that if you look at our balance sheet and take a step back, we still have, like I mentioned earlier, $7.1 billion worth of transactional loans that are yielding coupons of 4.25%, and we're funding it in part through $5 billion of wholesale financing that's approaching 4%. It's not a good trade. So you've got $600 million of capital locked into those assets. And so as that continues to mature and come off, that is going to continue to be the gift that keeps on giving from a net interest margin perspective and so one of the conversations we have pretty consistently is this balance between growth and optimization and clearly we've been on the optimization journey for for the last year we expect that to continue whether that tide shifts in we reach the low ebb in may or june or july or september of next year is you know is anyone's guess we have obviously forecasts and and we do think that we'll reach kind of a low point at some point in 2027 and then and then we'll see that continue but in the meantime we're going to continue to optimize return capital where we're available and see that net interest margin continue to expand and with that excuse me please join me in thanking columbia bank thank you