Q1 2025 Columbia Banking System Inc Earnings Call & PPBI Acquisition Announcement

April 23, 2025

Operator: Banking System Acquisition Announcement Conference Call. At this time all participants are on the listen-only mode. After the speaker's presentation there will be a question-and-answer session. To ask a question during the session you will need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question please press star 11 again. Please be advised that today's conference is being recorded. At this time I would like to introduce Clint Stein, President and CEO of Columbia Banking System to begin the conference call. Please go ahead.

Conference call.

Unknown Executive: Columbia Bank Corp Acquisition Announcement Conference Call At this time, all participants are on the listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star one one on your telephone. You will then hear an automated message advising your hand is. To rejoin your question, please press star 1 1 again.

At this time all participants are in a listen only mode.

After the speaker's presentation, there will be a question and answer session.

To ask a question. During this session you will need to press star one on your telephone you will then hear an automated message advising your hand is raised to withdraw your question. Please press star one again.

Please be advised that today's conference is being recorded.

Unknown Executive: Please be advised that today's conference is being recorded.

Speaker Change: At this time I would like to introduce Clint Stein, President and CEO of Columbia to begin the conference call. Please go ahead.

Unknown Executive: At this time, I'd like to introduce Clint Stein, President and CEO of Columbia, to begin the conference call. Please go ahead. Thank you, Delim. Good afternoon, everyone.

Speaker Change: Thank you good afternoon, everyone. Thank you for joining us as we review Columbia's first quarter results and the announced acquisition of Pacific Premier Bancorp.

Clint Stein: Thank you, Dillon. Good afternoon, everyone. Thank you for joining us as we review Columbia's Q1 results and the announced acquisition of Pacific Premier Bancorp. The news releases and corresponding presentations are available on our website at columbiabankingsystem.com. During today's call, we will make forward-looking statements which are subject to risk, and uncertainties and are intended to be covered by the Safe Harbor provisions of federal securities law. For a list of factors that may cause actual results to differ materially from expectations, please refer to the disclosures contained within our SEC filings. We will also reference non-GAAP financial measures, and I encourage you to review the non-GAAP reconciliations provided in our earnings materials. I want to thank each of you again for joining us on short notice.

Clint Stein: Thank you for joining us as we review Columbia's first quarter results in the announced acquisition of Pacific Premier Bancorp. The news releases and corresponding presentations are available on our website at ColumbiaBankingSystem.com. During today's call, we will make forward-looking statements, which are subject to risk and uncertainties and are intended to be covered by the safe harbor provisions of federal securities law. For a list of factors that may cause actual results to differ materially from expectations, please refer to the disclosures contained within our SEC filing. We will also reference non-GAAP financial measures, and I encourage you to review the non-GAAP reconciliations provided in our earnings I want to thank each of you again for joining us on short notice.

Speaker Change: <unk> releases and corresponding presentations are available on our website at Columbia banking system Dot com.

Speaker Change: Today's call, we will make forward looking statements, which are subject to risks and uncertainties and are intended to be covered by the safe Harbor provisions of federal Securities Law.

Speaker Change: For a list of factors that may cause actual results to differ materially from expectations. Please refer to the disclosures contained within our SEC filings.

Speaker Change: We will also reference non-GAAP financial measures and I encourage you to review the non-GAAP reconciliations provided in our earnings materials.

Speaker Change: I want to thank each of you again for joining us on short notice.

Speaker Change: To get to our discussion of Pacific Premier.

Clint Stein: I'm eager to get to our discussion of Pacific Premier, an acquisition which I'm excited to talk about, but we also have another solid quarter of results to share with you. Our consistent repeatable performance in 2024 carried through to Q1 2025. Our results reflect our disciplined focus on relationship banking as our teams work toward long-term balanced growth in deposits, loans, and core fee income. Our net interest margin contracted modestly as anticipated in Q1 given customer cash usage in December that carried through into January, but the positive effects of our retail and small business deposit campaigns as well as growing commercial balances offset these impacts, defied seasonal norms with $440 million in net customer deposit growth for the quarter.

Clint Stein: I'm eager to get to our discussion of Pacific Premier, an acquisition which I'm excited to talk about, but we also have another solid quarter of results. Our consistent, reputable performance in 2024 carried through to the first quarter of 2025. Our results reflect our disciplined focus on relationship banking as our teams work toward long-term, balanced growth in deposits, loans, and core fee income. Our net excess margin contracted modestly, as anticipated in the first quarter, given customer cash usage in December, it carried through into January. But the positive effects of our retail and small business deposit campaigns, as well as growing commercial balances offset to find seasonal norms with $440 million in net customer deposit growth for the quarter.

Speaker Change: The acquisition, which I'm excited to talk about but we also have another solid quarter of results to share with you.

Speaker Change: Our consistent repeatable performance in 2024 carried through to the first quarter of 2005, our results reflect our disciplined focus on relationship banking as our teams work toward long term balanced growth in deposits loans and core fee income.

Speaker Change: Our net interest margin contracted modestly as anticipated in the first quarter given customer cash usage in December that carried through into January.

Speaker Change: But the positive effects of our retail and small business deposit campaigns as well as growing commercial balances offset these impacts defined seasonal norms with $440 million and net customer deposit growth for the quarter.

Speaker Change: Loan origination volume was up 17% from the first quarter of 2024 as momentum from the fourth quarter carried through into the new year for.

Clint Stein: Loan origination volume was up 17% from the first quarter of 2024, as momentum from the fourth quarter carried through into the new year. Our banking teams continue to win new business with new and existing customers. However, total loan balances were relatively flat as of quarter end due to higher prepayment and payoff effects. Period end totals were also muted by our continued focus on pushing the transactional real estate loans discussed in previous quarters off our balance sheet.

Clint Stein: Loan origination volume was up 17% from Q1 2024 as momentum from Q4 carried through into the new year. Our banking teams continue to win new business with new and existing customers. However, total loan balances were relatively flat as of quarter-end due to higher prepayment and payoff activity. Period-end totals were also muted by our continued focus on pushing the transactional real estate loans discussed in previous quarters off our balance sheet. Beyond the non-recurring items that impacted our expenses in Q1, Columbia maintained its disciplined cost culture while continuing to reinvest in our growing franchise. We opened our first retail branch in Colorado in March and supported the banking teams that have already been offering our full suite of products and services in the market since 2022.

Speaker Change: Our banking teams continue to win new business with new and existing customers.

Speaker Change: However, total loan balances were relatively flat as of quarter end due to higher prepayment and payoff activity.

Speaker Change: Period end totals were also muted by our continued focus on pushing the transactional real estate loans discussed in previous quarters off our balance sheet.

Speaker Change: Beyond the nonrecurring items that impacted our expenses in the first quarter Columbia maintained its disciplined cost culture, while continuing to reinvest in our growing franchise with.

Clint Stein: Beyond the non-recurring items that impacted our expenses in the first quarter, Columbia maintained its disciplined cost culture while continuing to reinvest in our growing franchise.

Speaker Change: We opened our first retail branch in Colorado in March supported the banking teams that have already been offering our full suite of products and services in the market since 2022.

Clint Stein: We opened our first retail branch in Colorado in March in support of the banking teams that have already been offering our full suite of products and services in the market since 2022. We'll continue to fine-tune our branch footprint and expand in geographies where we see opportunity.

Speaker Change: We will continue to fine tune, our branch footprint and expand in geographies, where we see opportunities.

Clint Stein: We'll continue to fine-tune our branch footprint and expand in geographies where we see opportunities. On that point, today we announced our partnership with Pacific Premier. With this acquisition Columbia will become a $70 billion in assets franchise and pick up a complementary set of products and services to support our growing customer base. Our eight-state western footprint remains intact, but as Pacific Premier's footprint is heavily weighted in Southern California, we accelerate our strategic goals in this market by a decade or more. I'm not going to take you through a page-turn presentation of the deal deck, but I will reference certain key slides during my remarks. Slide four in the deck highlights the highly complementary footprints of Columbia and Pacific Premier. I've previously discussed Columbia's expansion plans in Arizona, Colorado, Utah, and Southern California.

Speaker Change: On that point today, we announced our partnership with Pacific Premier.

Clint Stein: On that point, today we announced our partnership with Pacific Premier. With this acquisition, Columbia will become a 70 billion in assets franchise and pick up a complimentary set of products and services to support our growing customer base. Our eight-state Western footprint remains intact, but as Pacific Premier's footprint is heavily weighted in Southern California, we accelerate our strategic goals in this market by a decade or more.

Speaker Change: With this acquisition Columbia will become a $70 billion in assets franchise can pick up a complementary set of products and services to support our growing customer base.

Speaker Change: Our eight state western footprint remains intact.

Speaker Change: But as specific premieres footprint is heavily weighted in southern California, we accelerated our strategic goals in this market by a decade or more.

Speaker Change: I'm not going to take you through a page turn presentation of the deal deck.

Clint Stein: I'm not going to take you through a page turn presentation of the deal deck. But I will reference certain key slides during my remarks. Slide four in the deck highlights the highly complementary footprints of Columbia and Pacific Premier. I've previously discussed Columbia's expansion plans in Arizona, Colorado, Utah, and Southern California. A de novo branching strategy accomplishes our coverage goals in the first three states. but Southern California is different. There are 13 million people in the Los Angeles market alone, which is more than Washington and Oregon combined. and there are over 20 million people in the broader Southern California market.

Speaker Change: But I will reference certain key slides during my remarks.

Speaker Change: Slide four in the deck highlights the highly complementary footprints of Colombia and Pacific Premier.

Speaker Change: I've previously discussed Columbia has expansion plans in Arizona, Colorado, Utah, and Southern California.

Speaker Change: De Novo branching strategy accomplishes our coverage goals in the first three states.

Clint Stein: A de novo branching strategy accomplishes our coverage goals in the first three states, but Southern California is different. There are 13 million people in the Los Angeles market alone, which is more than Washington and Oregon combined, and there are over 20 million people in the broader Southern California market. Pacific Premier's Southern California footprint fills in our western reach from Canada to Mexico, and it enhances our presence in other growth markets like Las Vegas and Phoenix. This acquisition provides the physical footprint to support our Southern California banking teams who have done a phenomenal job with limited infrastructure. It also provides expanded capabilities to the PPBI team through broader product offerings and the benefits of a much larger balance sheet. Columbia's deposit market share position in Southern California moves from 51st to 10th on a pro forma basis as outlined on slide 8.

Speaker Change: But southern California is different.

Speaker Change: There are 13 million people in the Los Angeles market alone, which is more than Washington, and Oregon combined.

Speaker Change: And there are over 20 million people in the broader southern California market.

Speaker Change: Pacific Premier Southern California footprint fills in our western reach from Canada to Mexico, and it enhances our presence in other growth markets like Las Vegas and Phoenix.

Clint Stein: Pacific Premier's Southern California footprint fills in our western reach from Canada to Mexico and it enhances our presence in other growth markets like Las Vegas and Phoenix. This acquisition provides the physical footprint to support our Southern California banking who have done a phenomenal job with limited infrastructure. It also provides expanded capabilities to the PPBI team through broader product offerings and the benefits of a much larger balance sheet. Columbia's deposit market share position in Southern California moves from 51st to number 10 on a pro forma basis, as outlined on slide eight.

Speaker Change: This acquisition provides the physical footprint to support our southern California banking teams who.

Speaker Change: Who have done a phenomenal job with limited infrastructure.

Speaker Change: It also provides expanded capabilities to the PPI team through broader product offerings and the benefits of a much larger balance sheet.

Speaker Change: Colombia is deposit market share position in southern California moves from 51 to number 10 on a pro forma basis as outlined on slide eight.

Ron: Ron will cover the numbers behind this financially attractive acquisition in greater detail.

Clint Stein: Ron will cover the numbers behind this financially attractive acquisition in greater detail.

Clint Stein: Ron will cover the numbers behind this financially attractive acquisition in greater detail, but as part of the all-stock transaction Pacific Premier shareholders will receive a fixed exchange ratio of 0.915 of share of Columbia stock for each Pacific Premier share. Following the deal's closing Pacific Premier shareholders will own 30% of the combined company and Columbia shareholders will own 70%. Notably we expect the transaction to have minimal impact on Columbia's capital ratios and we do not need to raise additional capital to support the deal. Columbia's executive leadership team remains intact and three Pacific Premier directors will join Columbia's board, including Steve Gardner, Pacific Premier's chairman and CEO. The combined organization will operate under the unified brand of Columbia Bank as Umpqua Bank will change its name to Columbia Bank later this year.

Speaker Change: But as part of the all stock transaction Pacific Premier sure shareholders will receive a fixed exchange ratio of zero point 91, 5% of share of Columbia stock for each Pacific Premier share.

Clint Stein: But as part of the all stock transaction, Pacific Premier shareholders will receive a fixed exchange ratio of 0.915 of share of Columbia stock for each Pacific Premier share. Following the deal's closing, Pacific Premier shareholders will own 30% of the combined company, and Columbia shareholders will own 70%. Notably, we expect the transaction to have minimal impact on Columbia's capital ratios, and we do not need to raise additional capital to support the deal.

Speaker Change: Following the deals closing Pacific Premier shareholders will own 30% of the combined company and Columbia shareholders will own 70%.

Speaker Change: Notably, we expect the transaction to have minimal impact on Columbia's capital ratios and we do not need to raise additional capital to support the deal.

Speaker Change: Colombia is executive leadership team remains intact and three Pacific Premier Directors will join Columbia's board, including Steve Gardner Pacific Premier's, Chairman and CEO.

Clint Stein: Columbia's Executive Leadership Team remains intact, and three Pacific Premier Directors will join Columbia's board, including Steve Gardner, Pacific Premier's Chairman and CEO. Combined organization will operate under the unified brand of Columbia Bank. as Umpqua Bank will change its name to Columbia Bank later this year. The Columbia Bank name aligns with our holding company name and other brands the bank operates today, simplifying our family of brands and ensuring brand clarity as we deepen our presence throughout the West.

Speaker Change: The combined organization will operate under the unified brand of Columbia Bank.

Speaker Change: As Umpqua Bank will change its name to Columbia Bank later this year.

Speaker Change: The Columbia Bank name aligns with our holding company named and other brands to bank operates today simplifying our family of brands and ensuring brand clarity as we deepen our presence throughout the west.

Clint Stein: The Columbia Bank name aligns with our holding company name and other brands the bank operates today, simplifying our family of brands and ensuring brand clarity as we deepen our presence throughout the west. Beyond double-digit EPS accretion and a short earnback period, this transaction represents a strategically compelling partnership as slide 5 outlines. Columbia and Pacific Premier are like-minded business banks that share a relationship-based operating philosophy. The banks have nearly identical low-cost deposit compositions, including a top quartile percentage of non-interest-bearing deposits. Pacific Premier's products and service offerings are additive to Columbia's as we strive toward a larger contribution of fee income to our revenue stream. Pacific Premier's custodial trust business complements our existing wealth management platform, adding new capabilities and revenue-enhancing opportunities.

Speaker Change: Beyond double digit EPS accretion and a short earn back period. This transaction represents a strategically compelling partnership slide five outlines <unk>.

Clint Stein: Beyond double-digit EPS accretion and a short earn-back period, this transaction represents a strategically compelling partnership as Slide 5 outlines. Columbia and Pacific Premier are like-minded business banks that share a relationship-based operating philosophy. The banks have nearly identical low-cost deposit comps. including a top quartile percentage of non-interest bearing deposits. Civic Premier's products and service offerings are added to Columbia's as we strive toward a larger contribution of fee income to our revenue stream. Civic Premier's custodial trust business complements our existing wealth management platform. adding new capabilities and revenue enhancing opportunities. We'll also add Pacific Premier's attractive HOA banking, escrow and 1031 exchange businesses, driving additional fee income and adding low cost core deposits as detailed on slide 10.

Speaker Change: Columbia Pacific Premier are Likeminded business banks that show our relationship based operating philosophy.

Speaker Change: The banks have nearly identical low cost deposit compositions, including a top quartile percentage of noninterest bearing deposits.

Speaker Change: Terrific Premier's products and service offerings are additive to Colombia's as we strive toward a larger contribution of fee income to our revenue stream.

Speaker Change: Vic premieres custodial trust business complements our existing wealth management platform, adding new capabilities and revenue enhancing opportunities.

Speaker Change: We will also add Pacific Premier's attractive HOA banking escrow in 2031 exchange businesses driving additional fee income and adding low cost core deposits as detailed on slide 10.

Clint Stein: We'll also add Pacific Premier's attractive HOA banking, escrow, and 1031 exchange businesses, driving additional fee income and adding low-cost core deposits as detailed on slide 10. Execution risk for this transaction is low. It is predominantly an expansion in existing markets with limited overlap, and we expect very little disruption to depositors, borrowers, and our banking teams. Companies have similar credit cultures founded on conservative underwriting, robust review processes, and relationship-centric banking. Our thorough due diligence process confirms significant alignment in our credit approach, go-to-market strategy, operating philosophies, and cultures. In addition, both companies have significant acquisition experience and integration talent, so we expect a smooth combination in every respect. I want to take a moment to address heightened macro uncertainty and the recent market volatility. Columbia's consistent approach to banking is a key contributor to our success through business and credit cycles.

Speaker Change: Execution risk for this transaction is low it is predominantly an expansion in existing markets with limited overlap and we expect very little disruption to depositors borrowers.

Clint Stein: Execution risk for this transaction is low. It is predominantly an expansion in existing markets with limited overlap, and we expect very little disruption to depositors, borrowers, and our banking team. Companies have similar credit cultures, founded on conservative underwriting, robust review processes, and relationship centric banking. Our thorough due diligence process confirms significant alignment in our credit approach, go-to-market strategy, operating philosophies, and culture.

Speaker Change: And our banking teams.

Speaker Change: Companies have similar credit cultures founded on conservative underwriting robust review processes and relationship shipped centric banking.

Speaker Change: Our thorough due diligence process confirms significant alignment in our credit approach.

Speaker Change: Go to market strategy operating philosophies and cultures.

Speaker Change: In addition, both companies have significant acquisition experience and integration talent. So we expect a smooth combination in every respect.

Clint Stein: In addition, both companies have significant acquisition experience and integration talent, so we expect a smooth combination in every respect.

Speaker Change: I want to take a moment to address heightened macro uncertainty and the recent market volatility.

Clint Stein: I want to take a moment to address heightened macro uncertainty and the recent market volatility. Columbia's consistent approach to banking is a key contributor to our success through business and credit sites. Our conservative and disciplined approach to building a diversified and granular balance sheet anchored by enduring customer relationships has historically allowed us to thrive during volatile periods. Our company has grown stronger as we have gained scale, talent, and process improvement through the mergers and acquisitions that have shaped Columbia over the years. Through it all, we have maintained our culture, supporting our growing customer base, maintaining our strong credit profile, and building a superior core deposit franchise.

Speaker Change: Colombia is consistent approach to banking is a key contributor to our success through business and credit cycles.

Speaker Change: Our conservative and disciplined approach to building, a diversified and granular balance sheet anchored by enduring customer relationships has historically allowed us to thrive during volatile periods.

Clint Stein: Our conservative and disciplined approach to building a diversified and granular balance sheet anchored by enduring customer relationships has historically allowed us to thrive during volatile periods. Our company has grown stronger as we have gained scale, talent, and process improvement through the mergers and acquisitions that have shaped Columbia over the years. Through it all we have maintained our culture, supported our growing customer base, maintaining our strong credit profile, and building a superior core deposit franchise. I want to thank our associates for their hard work in delivering another solid quarter of operational results. Their accomplishments contribute to my enthusiasm for our future. Our pending acquisition of Pacific Premier accelerates the organic opportunities in front of us as we continue to grow our customer base throughout our eight-state western footprint. Together we continue to strive toward consistent, repeatable top quartile performance in support of long-term shareholder value.

Speaker Change: Our company has grown stronger as we have gained scale talent and process improvement through the mergers and acquisitions that have shaped columbia over the years.

Speaker Change: Through it all we have maintained our culture supporting our growing customer base, maintaining our strong credit profile and building a superior core deposit franchise.

Speaker Change: I want to thank our associates for their hard work in delivering another solid quarter of operational results their.

Clint Stein: I want to thank our associates for their hard work in delivering another solid quarter of operational results. Your accomplishments contribute to my enthusiasm for our future. Our pending acquisition of Pacific Premier accelerates the organic opportunities in front of us as we continue to grow our customer base throughout our eight-state Western footprint. Together, we continue to strive toward consistent, repeatable, top-quartile performance in support of long-term shareholder value.

Speaker Change: Their accomplishments contribute to my enthusiasm for our future.

Speaker Change: Our pending acquisition of Pacific Premier accelerates, the organic opportunities in front of us as we continue to grow our customer base throughout our eight state western footprint.

Speaker Change: Together, we continue to strive toward consistent repeatable top quartile performance in support of long term shareholder value.

Ron: I'll now turn the call over to Ron.

Ron: Thank you Clint I'll begin with a review of the first quarter's results. We reported first quarter EPS of <unk> 41 per share in operating EPS of 67.

Ronald Farnsworth: I'll now turn the call over to Ron. Okay. Thank you, Clint.

Clint Stein: I'll now turn the call over to Ron.

Operator: Okay. Thank you, Clint. I'll begin with a review of Q1's results. We reported Q1 EPS of $0.41 per share and operating EPS of $0.67, which excludes a previously disclosed legal settlement of $55 million, $15 million in severance expense, and other fair value and hedging items detailed in our Non-GAAP disclosures, which I encourage you to review. Our operating return on tangible equity was 15% while Operating PP&R was $212 million. As Clint noted, our bankers' activity helped offset typical seasonal deposit contraction as customer cash usage in December carried through into January. Balance generation from our small business and retail campaign and other growth in commercial deposits drove $440 million in customer deposit growth during Q1.

Ronald Farnsworth: Okay. Thank you, Clint. I'll begin with a review of Q1's results. We reported Q1 EPS of $0.41 per share and operating EPS of $0.67, which excludes a previously disclosed legal settlement of $55 million, $15 million in severance expense, and other fair value and hedging items detailed in our Non-GAAP disclosures, which I encourage you to review. Our operating return on tangible equity was 15% while Operating PP&R was $212 million. As Clint noted, our bankers' activity helped offset typical seasonal deposit contraction as customer cash usage in December carried through into January. Balance generation from our small business and retail campaign and other growth in commercial deposits drove $440 million in customer deposit growth during Q1.

Ronald Farnsworth: I'll begin with a review of the first quarter's results. We reported first quarter EPS of $0.41 per share and operating EPS of $0.67, which excludes the previously disclosed legal settlement of $55 million. $15 million in severance expense and other fair value and hedging items detailed in our non-GAAP disclosures. which I encourage you to review. Our operating return on tangible equity was 15%, while operating PPNR was $212 million. As Clint noted, our bankers activity helped offset typical seasonal deposit contraction. as customer cash usage in December carried through in January. balanced generation from our small business and retail campaign and other growth and commercial deposits drove $440 million in customer deposit growth during the first quarter.

Ron: Which excludes the previously disclosed legal settlement of $55 million.

Ron: $15 million in severance expense and other fair value and hedging items detailed in our non-GAAP disclosures, which I encourage you to review.

Ron: Our operating return on tangible equity was 15% while operating people Anr was $212 million.

Ron: As Glenn noted our bankers activity helped offset typical seasonal deposit contraction as customer cash usage usage in December carried through into January.

Ron: Balanced generation from our small business and retail campaign and other growth in commercial deposits drove $440 million in customer deposit growth during the first quarter.

Ron: Growth in relationship based accounts enabled us to repay $590 million of wholesale funding <unk>.

Ronald Farnsworth: Growth in relationship-based accounts enabled us to repay $590 million of wholesale funding. Inclusive of Broker Deposit. and the favorable mix shift benefited our net interest margin later in the quarter. As we discussed on last quarter's call, seasonal deposit flows led the four basis points of NIM contraction to 3.60% in the first quarter. Wholesale repayments were largely executed in March. Our provision for credit loss was $27 million to the court. and our overall allowance for credit losses remains robust at 1.17% of total loans. for 1.32% when including the remaining credit discounts. Non-interest income with $66 million.

Operator: Growth in relationship-based accounts enabled us to repay $590 million of wholesale funding inclusive of broker deposits, and the favorable mix shift benefited our net interest margin later in the quarter. As we discussed on last quarter's call, seasonal deposit flows led to four basis points of NIM contraction to 3.60% in the first quarter. Wholesale repayments were largely executed in March. Our provision for credit loss was $27 million for the quarter, and our overall allowance for credit losses remains robust at 1.17% of total loans or 1.32% when including the remaining credit discount. Non-interest income was $66 million for the quarter, with the change from Q4 mostly related to fair value swings given interest rate changes. On page 16 of our earnings release we detail the non-operating fair value changes.

Ronald Farnsworth: Growth in relationship-based accounts enabled us to repay $590 million of wholesale funding inclusive of broker deposits, and the favorable mix shift benefited our net interest margin later in the quarter. As we discussed on last quarter's call, seasonal deposit flows led to four basis points of NIM contraction to 3.60% in the first quarter. Wholesale repayments were largely executed in March. Our provision for credit loss was $27 million for the quarter, and our overall allowance for credit losses remains robust at 1.17% of total loans or 1.32% when including the remaining credit discount. Non-interest income was $66 million for the quarter, with the change from Q4 mostly related to fair value swings given interest rate changes. On page 16 of our earnings release we detail the non-operating fair value changes.

Ron: Inclusive of broker deposits and the favorable mix shift benefited our net interest margin later in the quarter.

Ron: As we discussed on last quarter's call seasonal deposit flows led to four basis points of NIM contraction, the 360% in the first quarter.

Ron: Wholesale repayments were largely executed in March.

Ron: Our provision for credit loss was $27 million for the quarter.

Ron: And our overall allowance for credit losses remains robust at 107% of total loans for.

Ron: For 132% when including the remaining credit discount.

Ron: Noninterest income was $66 million for the quarter with the changed from Q4, mostly related to fair value swings given interest rate changes.

Ronald Farnsworth: With the change from Q4 mostly related to fair value swings, given interest rate change. On page 16 of our earnings release, we detail the non-operating spare value Excluding those items, our operating non-interest income of $56.9 million for Q1 was up $2 million, as last quarter's loss on sale of loans did not... Total GAAP expense for the quarter was $340 million, while operating expenses were $270 million. with the variance detailed on page 16 of the earnings release. seasonally higher payroll taxes, and elevated legal separate from the legal settlement, drove a $7 million increase from the prior quarter.

Ron: On page 16 of our earnings release, we detail the nonoperating fair value changes.

Ron: Excluding those items, our operating noninterest income of $56 9 million for Q1 was up $2 million as last quarter's loss on sale of loans did not repeat.

Operator: Excluding those items, our operating non-interest income of $56.9 million for Q1 was up $2 million, as last quarter's loss on sale of loans did not repeat. Total GAAP expense for the quarter was $340 million, while operating expenses were $270 million, with the variance detailed on page 16 of the earnings release. Seasonally higher payroll taxes and elevated legal expense separate from the legal settlement drove the $7 million increase from the prior quarter. Before taking today's merger announcement into consideration, we continue to expect our operating expense excluding CDI amortization to be in the $1 to 1.01 billion range for 2025. Lastly, our tax rate was impacted by non-deductible expenses during the quarter. We expect it to remain in the mid-25% range on an operating basis for the remainder of 2025. Turning now to the proposed transaction with Pacific Premier.

Ronald Farnsworth: Excluding those items, our operating non-interest income of $56.9 million for Q1 was up $2 million, as last quarter's loss on sale of loans did not repeat. Total GAAP expense for the quarter was $340 million, while operating expenses were $270 million, with the variance detailed on page 16 of the earnings release. Seasonally higher payroll taxes and elevated legal expense separate from the legal settlement drove the $7 million increase from the prior quarter. Before taking today's merger announcement into consideration, we continue to expect our operating expense excluding CDI amortization to be in the $1 to 1.01 billion range for 2025. Lastly, our tax rate was impacted by non-deductible expenses during the quarter. We expect it to remain in the mid-25% range on an operating basis for the remainder of 2025. Turning now to the proposed transaction with Pacific Premier.

Ron: Total GAAP expense for the quarter was $340 million, while operating expenses were $270 million.

Ron: With the various detailed on page 16 of the earnings release.

Ron: Seasonally higher payroll taxes and elevated legal expense separate from the legal settlement drove a $7 million increase from the prior quarter.

Ron: Before taking today's merger announcement into consideration we continue to expect our operating expense.

Ronald Farnsworth: Before taking today's merger announcement into consideration, we continue to expect our operating expense to be in the 1 to 1.01 billion dollar range for 2020. And lastly, our tax rate was impacted by non-deductible expenses during the quarter. We expect it to remain in the mid-25% range on an operating basis for the remainder of 2024.

Ron: Excluding CDI amortization.

Ron: To be in the $1 billion to $1.01 billion range for 2025.

Ron: And lastly, our tax rate was impacted by nondeductible expenses during the quarter, we expect it to remain in the mid 25% range on an operating basis for the remainder of 2025.

Ron: Okay.

Ron: Turning now to the proposed transaction with Pacific Premier Slide.

Ronald Farnsworth: Turning now to the proposed transaction with Pacific Premier. Slides 21 and 22 in the deal deck detail a diversified pro forma loan portfolio and the similar deposit profiles Clint discussed. Slide 18 lays out key deal-related financial assumptions.

Ron: Slides 21, and 'twenty, two and the deal deck detailed diversified pro forma loan portfolio and the similar deposit profiles Clinton discussed.

Operator: Slides 21 and 22 in the Deal Deck detail a diversified pro forma loan portfolio and the similar deposit profiles Clint discussed. Slide 18 lays out key deal-related financial assumptions. We begin with consensus estimates for Columbia and Pacific Premier, and we expect to realize approximately $127 million in pre-tax cost savings, which represents 30% of Pacific Premier's non-interest expense base. We expect 75% of savings to be phased in during 2026 and 100% thereafter. As Clint outlined, we expect to realize revenue synergies given opportunities across our combined customer base, though none are included in our announced financial projections. We expect one-time after-tax deal-related costs of $146 million.

Ronald Farnsworth: Slides 21 and 22 in the Deal Deck detail a diversified pro forma loan portfolio and the similar deposit profiles Clint discussed. Slide 18 lays out key deal-related financial assumptions. We begin with consensus estimates for Columbia and Pacific Premier, and we expect to realize approximately $127 million in pre-tax cost savings, which represents 30% of Pacific Premier's non-interest expense base. We expect 75% of savings to be phased in during 2026 and 100% thereafter. As Clint outlined, we expect to realize revenue synergies given opportunities across our combined customer base, though none are included in our announced financial projections. We expect one-time after-tax deal-related costs of $146 million.

Ron: Slide 18 lays out key deal related financial assumptions.

Ron: We began with consensus estimates for Colombia and Pacific Premier.

Ronald Farnsworth: We begin with consensus assessments for Columbia and Pacific Premier. and we expect to realize approximately $127 million in pre-tax cost savings. which represents 30% of Pacific Premier's non-expense. We expect 75% of savings to be phased in during 2026. and 100% thereafter. As Clint outlined, we expect to realize revenue synergies given opportunities across our combined customer base, though none are included in our announced financial projections. We expect one time after tax deal related costs of $146,000. Fair Value and Interest Rate Marks, which will be increased over the remaining life of the asset. include rate-related write-downs of $449 million on Pacific Premier's gross loan portfolio.

Ron: And we expect to realize approximately $127 million in pretax cost savings, which represents 30% of Pacific Premier's noninterest expense base.

Ron: We expect 75% of savings to be phased in during 2026.

Ron: And 100% thereafter.

Ron: As Colin outlined we expect to realize revenue synergies given opportunities across our combined customer base.

Ron: None are included in our announced financial projections.

Ron: We expect one time after tax deal related costs of $146 million.

Ron: Fair value and interest rate marks which will be accretive over the remaining life of the assets.

Operator: Fair value and interest rate marks, which will be accreted over the remaining life of the assets, include rate-related write-downs of $449 million on Pacific Premier's gross loan portfolio, $327 million on held-to-maturity securities, and $91 million related to available-for-sale securities. We also anticipate a $25 million reversal of existing marks on Pacific Premier's acquired loans, a $12 million write-up to fixed assets, and an $11 million write-up of time deposits which will be amortized over approximately one year. The $96 million credit mark, which is the equivalent to 0.8% of Pacific Premier's gross loan portfolio, is allocated 50% to purchased credit deteriorated or PCD loans and 50% to non-PCD loans. As with interest rate marks, the non-PCD mark will accrete into interest income over the remaining life of the loans.

Ronald Farnsworth: Fair value and interest rate marks, which will be accreted over the remaining life of the assets, include rate-related write-downs of $449 million on Pacific Premier's gross loan portfolio, $327 million on held-to-maturity securities, and $91 million related to available-for-sale securities. We also anticipate a $25 million reversal of existing marks on Pacific Premier's acquired loans, a $12 million write-up to fixed assets, and an $11 million write-up of time deposits which will be amortized over approximately one year. The $96 million credit mark, which is the equivalent to 0.8% of Pacific Premier's gross loan portfolio, is allocated 50% to purchased credit deteriorated or PCD loans and 50% to non-PCD loans. As with interest rate marks, the non-PCD mark will accrete into interest income over the remaining life of the loans.

Ron: Included rate related write downs of $449 million.

Ron: Pacific Premier's gross loan portfolio.

Ron: $327 million on held to maturity securities.

Ronald Farnsworth: $327 million on health and security. and $91 million dollars related to available for sale. We also anticipate a $25 million reversal of existing... Pacific Premier's Acquired List. A $12 million write-up to fix assets. and an $11 million write-up of time deposits, which will be amortized over approximately one year. The $96 million credit mark, which is equivalent to 0.8% of Pacific Premier's gross loan portfolio, is allocated 50% to purchase credit deteriorated or PCD loans. and 50% to non-PC. As with interest rate marks, the non-PCD mark will accrete into interest income over the remaining life of the loan.

Ron: And $91 million related to available for sale Securities.

Ron: We also anticipate a $25 million reversal of existing marks.

Ron: Pacific mirrors acquired loans.

Ron: A $12 million right up to fixed assets.

Ron: And an $11 million write up of time deposits, which will be amortized over approximately one year.

Mark: The $96 million credit, Mark, which is equivalent to <unk>, 8% of Pacific mirrors gross loan portfolio.

Mark: Is allocated 50% to purchase credit deteriorated or <unk> loans and.

50% to non PCI loans.

Mark: As with interest rate marks the non PCB Mark will accrete into interest income over the remaining life of the loans.

Mark: We expect to realize an initial provision expense of $48 million on non PCV loans immediately following the transaction's closing.

Operator: We expect to realize an initial provision expense of $48 million on non-PCD loans immediately following the transaction's closing. The core deposit intangible is estimated at 3.3% of Pacific Premier's core deposits, and it will be amortized over 10 years using a sum-of-the-years'-digits calculation. Lastly, Pacific Premier intends to call its outstanding subordinated debt prior to the transaction closing. These assumptions drive our expectations for 14% EPS accretion in 2026 and 15% in 2027 based on consensus estimates. We project 7.6% of tangible book value dilution and a three-year earnback period. Please refer to the appendix for reconciliation of the metrics I just discussed. Slides 14 and 15 outline the significant value creation and applied equity value upside this transaction offers.

Ronald Farnsworth: We expect to realize an initial provision expense of $48 million on non-PCD loans immediately following the transaction's closing. The core deposit intangible is estimated at 3.3% of Pacific Premier's core deposits, and it will be amortized over 10 years using a sum-of-the-years'-digits calculation. Lastly, Pacific Premier intends to call its outstanding subordinated debt prior to the transaction closing. These assumptions drive our expectations for 14% EPS accretion in 2026 and 15% in 2027 based on consensus estimates. We project 7.6% of tangible book value dilution and a three-year earnback period. Please refer to the appendix for reconciliation of the metrics I just discussed. Slides 14 and 15 outline the significant value creation and applied equity value upside this transaction offers.

Mark: The core deposit intangibles estimated at three 3%.

Mark: Pacific Premier's core deposits and it will be amortized over 10 years, using a sum of years' digits calculation.

Mark: Lastly, particularly premier intends to call its outstanding subordinated debt prior to the transaction closing.

Ronald Farnsworth: Lastly, Pacifica Premier intends to call its outstanding subordinated debt prior to the transaction closed. These assumptions drive our expectations for 14% EPS accretion in 2026 and 15% in 2027, based on consensus estimates. We project 7.6% of tangible book value dilution and a three-year earn-back period.

Mark: These assumptions drive our expectations for 14% EPS accretion in 2026 and 15% in 2027 based on consensus estimates.

Mark: We project seven 6% of tangible book value dilution and a three year earn back period.

Mark: Please refer to the appendix for a reconciliation of the metrics I just discussed.

Ronald Farnsworth: Please refer to the appendix for reconciliation of the metrics I just discussed. Slides 14 and 15 outline the significant value creation and applied equity value upside this transaction offers. Given Pacific Premier's excess capital position, we expect limited impact to our capital resources at closing, and, as Clint noted, we will not need to raise additional funds.

Mark: Slides 14, and 15 outlet the significant value creation, an implied equity value upside this transaction offers.

Mark: Pacific Premier's excess capital position, we expect limited impact to our capital ratios at closing.

Operator: Given Pacific Premier's excess capital position, we expect limited impact to our capital ratios at closing, and as Clint noted, we will not need to raise additional capital. I will now turn the call back over to Clint.

Ronald Farnsworth: Given Pacific Premier's excess capital position, we expect limited impact to our capital ratios at closing, and as Clint noted, we will not need to raise additional capital. I will now turn the call back over to Clint.

Mark: And as Glenn noted, we will not need to raise additional capital.

Mark: I will now turn the call back over to Glenn Hey, Thanks, Ron as you have heard me say many times before the criteria Columbia considers in any transaction or that it makes financial sense for our shareholders. This complementary or additive to our business model and it needs to be culturally compatible our partnership with Pacific Premier is consistent with all of those criteria.

Clint Stein: I will now turn the call back over to Clint. Hey, thanks, Ron. As you've heard me say many times before, the criteria Columbia considers in any transaction are that it makes financial sense for our shareholders, is complementary or additive to our business model, and it needs to be culturally compatible. Our partnership with Pacific Premier is consistent with all of those criteria. Our focus remains on optimizing our financial performance to drive long-term shareholder value. Our capital position continues to build, but our regulatory ratios are expanding in line with our expectations. Our CET1 and total capital ratios were 10.6 and 12.8% at quarter end, well above our long-term target.

Clint Stein: Hey. Thanks, Ron. As you've heard me say many times before, the criteria Columbia considers in any transaction are that it makes financial sense for our shareholders, it is complementary or additive to our business model, and it needs to be culturally compatible. Our partnership with Pacific Premier is consistent with all of those criteria. Our focus remains on optimizing our financial performance to drive long-term shareholder value. Our capital position continues to build, and our regulatory ratios are expanding in line with our expectations. Our CET1 and total capital ratios were 10.6% and 12.8% at quarter end, well above our long-term targets. Our operational performance continues to demonstrate our ability to organically generate capital well above what is required to support prudent organic growth and our regular dividend.

Mark: Our focus remains on optimizing our financial performance to drive long term shareholder value.

Mark: Our capital position continues to build on our regulatory ratios are expanding in line with our expectations. Our CET, one and total capital ratios were 10, six and 12, 8% at quarter end, well above our long term targets.

Mark: Our operational performance continues to demonstrate our ability to organically generate capital well above what is required to support prudent organic growth and our regular dividend we expect.

Clint Stein: Our operational performance continues to demonstrate our ability to organically generate capital well above what is required to support prudent organic growth and our regular dividends. We expect our acquisition of Pacific Premier to enhance our capital generation capabilities and drive additional flexibility for future return to shareholders.

Mark: Our acquisition of Pacific Premier to enhance our capital generation capabilities and drive additional flexibility for future return to shareholders.

Clint Stein: We expect our acquisition of Pacific Premier to enhance our capital generation capabilities and drive additional flexibility for future return to shareholders. This concludes our prepared comments. Chris, Tory, Ron, Frank, and I are happy to take your questions on our first quarter results. Steve Gardner is with us for acquisition-related questions. Delim, please open the call for Q&A.

Mark: This concludes our prepared comments, Chris Tory, Ron Frank and I are happy to take your questions on our first quarter results.

Clint Stein: This concludes our prepared comments.

Unknown Executive: Chris, Tory, Ron, Frank, and I are happy to take your questions on our first quarter results.

Speaker Change: And Steve Gardner is with us for acquisition related questions.

Unknown Executive: And Steve Gardner is with us for acquisition-related questions. So, Lim, please open the call for Q&A. Thank you, sir. As a reminder, to ask a question, you would need to press star 11 on your telephone. To withdraw your question, please press star 11 again. Please stand by while we compile the Q&A roster.

Mark: The limb please open the call for Q&A. Thank.

Speaker Change: Thank you Sir.

Speaker Change: As a reminder to ask a question you would need to press star one on your telephone to.

Operator: Thank you, sir. As a reminder, to ask a question you would need to press star 11 on your telephone. To rejoin your question, please press star 11 again. Please stand by while we compile the Q&A roster. And I share our first question comes from the line of Chris McGratty from KBW. Please go ahead.

Speaker Change: Your question. Please press star one again.

Speaker Change: Please standby, while we compile the Q&A roster.

Speaker Change: And I show. Our first question comes from the line of Chris Mcgratty from <unk>. Please go ahead.

Christopher McGratty: And I'm sure our first question comes from the line of Chris McGrady from KBW. Please go ahead. Oh, great. Good afternoon. Clint, I've got an opening question for you. You're roughly two years removed from the close of the Uncle deal.

Chris Mcgratty: Great good afternoon.

Chris McGratty: Oh, great. Good afternoon. Clint, I got a, I guess, an opening question for you. You're roughly 2 years removed from the close of the Umpqua deal. I guess I'm interested in what experience you can bring from that deal to this deal. I know you talked about this being a little bit of a market extension, but maybe the upside potential and then maybe the risks that you're monitoring. Thanks.

Speaker Change: Clearly you guys are.

Chris Mcgratty: Opening question for you.

Chris Mcgratty: Youre roughly two years removed from the closing of the deal I guess I'm interested in what experience you can bring from that deal to this deal I know you talked about this being a little bit of a market extension.

Clint Stein: I guess I'm interested in what experience you can bring from that deal to this deal. I know you talked about this being a little bit of a market extension, but maybe the upside potential and then maybe the risk. Yeah. Hi, Chris. You know, we have a slide in the You know, conventional thinking is it's a two year process for that to happen. So I feel like we accomplished it about six months. Any comments? experienced and what we've been communicating over the past several quarters is that we're in a business as usual operating mode, that the integration was fully behind us.

Chris Mcgratty: Maybe the upside potential and then maybe the rest of it your library.

Chris: Yes, Hi, Chris.

Chris Mcgratty: We have a slide in the.

Clint Stein: Yeah. Hi, Chris. We have a slide in the deal deck that highlights our M&A experience, and when I say our, it's specifically Steve's M&A experience and my M&A experience, but also that of our teams. And since 2010, each organization has done 10 individually done 10 acquisitions, and so with each one of those, you learn something and you have a playbook. What's unusual here is to have a counterparty that is as seasoned or more seasoned than what we are. And so when you look at that track record, it gives you a lot of confidence in your ability to adapt to whatever comes at you that's a surprise because there's always something. But more specific to the merger integration that we wrapped up, I started talking last summer that the integration aspects, the social aspects of the Columbia Umpqua integration were largely behind us.

Chris: And the deal deck that highlights.

Speaker Change: Our M&A experience and when I say, our it's specifically Steve's M&A experience and my M&A experience, but also that of our teams in.

Speaker Change: Since 2010, each each organization has done 10.

Speaker Change: Individually done 10.

Speaker Change: Acquisitions and so.

Speaker Change: So with each one of those you learn something and you have a playbook.

Speaker Change: What's unusual here is to have a counterparty that is as seasoned or more season and what we are.

Speaker Change: And so when you look at at that track record.

Speaker Change: It gives you a lot of confidence in your ability to adapt to whatever.

Speaker Change: It comes at you that's a surprise because theres always something.

Speaker Change: But.

Speaker Change: More specific to the merger integration that we wrapped up.

Speaker Change:

Speaker Change: I started talking last summer that that the integration aspects of social aspects of the Columbia Umpqua integration largely behind us.

And.

Speaker Change: Conventional thinking is it's a two year process for that to happen.

Clint Stein: Conventional thinking is it's a two-year process for that to happen. So I feel like we accomplished it about six months ahead of time. You look at the consistent operating performance that we drove throughout 2024, carried that into the first quarter here of 2025. And so everything that we've experienced and what we've been communicating over the past several quarters is that we're in a business-as-usual operating mode, that the integration was fully behind us. And it was a much heavier lift because if you think about every single individual in both companies was impacted by the Columbia Umpqua merger. Here there's still an impact but it doesn't impact and distract or have the potential to distract every single person doing every single job in both companies.

I feel like we accomplished it about six months.

Speaker Change: Ahead of time.

Speaker Change: You look at the consistent operating performance that we drove throughout 'twenty four.

Speaker Change: Carried that into the first quarter here of 25.

Speaker Change: And so everything that we have.

Speaker Change: Experienced and what we've been communicating over the past several quarters is that we're in a business as usual.

Speaker Change: Operating mode that the integration was fully behind us.

Speaker Change: And it was a much heavier lift because if you think about.

Clint Stein: And it was a much heavier lift because if you think about every single individual in both companies was impacted by the Columbia-Umpqua merger. Here, there's still an impact, but it doesn't impact and distract or have the potential to distract every single person doing every single job in both companies.

Speaker Change: Every single individual in both companies was impacted by by the Columbia Umpqua merger.

Speaker Change: Here.

Speaker Change: There is still an impact, but it's not it doesn't impact and distract or have the potential to distract every single person doing every single job in both companies.

Speaker Change: So.

Speaker Change: I don't want to.

Clint Stein: So, I don't want to, I don't want to make light of that. Any integration is challenging, but also, Steve and I have spent a lot of time talking about and speaking with key members of his team about how to make sure that we execute flawlessly on this, and we have a great plan. So, I'm just very confident in our ability to do this, and I think the environment is also conducive to doing that as well.

Christopher McGratty: So I don't want to I don't I don't want to make light of any integration is challenging. But also, Steve and I have spent a lot of time talking about and speaking with key members of this team about how to make sure that we execute flawlessly on this. And we have a great plan. So I'm just very confident in our ability to do this. And I environment is also conducive to doing that as well. Great. Thanks for that.

Speaker Change: I don't want to.

Speaker Change: Make light of.

Speaker Change: Any integration is challenging.

Speaker Change: But also.

Speaker Change: Steve and I have spent a lot of time talking about and speaking with key members of his team about how to make sure.

Speaker Change: We execute flawlessly on this and we have a great plan so.

Speaker Change: I'm, just very confident in our ability to do this and I think the environment is is also conducive to.

Speaker Change: To doing that as well.

Speaker Change: Great. Thanks.

Thanks for that and then I guess, Mike My follow up would be a little bit of a regulatory angle of our youre 70, youre going to be 70% in assets pro forma.

Chris McGratty: Great. Thanks for that. And then I guess my follow-up would be a little bit of a regulatory angle, right? You're going to be $70 billion in assets pro forma. I guess two-part question. Is there any expenses either gross or net that you're allocating to preparing for $100 billion? And then secondarily what's the CRE concentration going to be pro forma? I know that's a bigger issue once you get closer to $100 billion and Steve was right around 300, so I'm interested in that kind of pro forma number. Thanks.

Clint Stein: And I guess my my follow up would be a little bit of a regulatory angle, right? You're 70, you're going to be 70 in assets pro forma. I guess two part question is, is there any expenses, either gross or net that you're allocating to preparing for 100 billion? And then secondarily, What's the CRE concentration going to be, Proforma? I know that's a bigger issue once you get closer to 100, and Steve was right around 300. So I'm interested in that kind of Proforma number. Thanks. Yeah. So we have a roadmap in terms of preparing. as we skate towards $100 billion.

Speaker Change: I guess two part question is there any expenses.

Speaker Change: Either gross or net that you're allocating to preparing for a 100 billion.

Speaker Change: And then secondarily.

Speaker Change: Whats the CRE concentration going to be pro forma I know thats, a bigger issue once you get closer to a 100 and Steve was right around 300, or so I'm interested in that kind of pro forma number.

Speaker Change: Yeah.

Speaker Change: So we have we have a roadmap in terms of of preparing.

Clint Stein: Yeah. So we have a roadmap in terms of preparing as we skate towards $100 billion. And that roadmap was put in place really as we crossed $50 billion. And it doesn't mean that we've significantly ramped up expense or that we'll need to significantly ramp up at $70 billion. So there's not an expense cliff that comes with this. But what it does mean is that we have to start skating to where the puck's going because there's no phase-in period for the regulatory aspect of crossing $100 billion. At $70 billion my argument would be we're only 70% of the way there. But I do think that we'll accelerate some of the components on our roadmap but it's nothing that will be a meaningful adjustment to your expense models or anything like that at this point in time. And then we just have to wait and see.

Speaker Change: As we scale towards $100 billion in that roadmap was put in place.

Clint Stein: And that roadmap was put in place really as we cross $50 billion. And it doesn't mean that we've significantly ramped up expense or that we'll need to significantly ramp up at $70 billion. So there's not like an expense cliff that comes with this. But what it does mean is that we have to start skating to where the puck's going because there's no phase-in period for the regulatory aspect of crossing $100 billion. At $70 billion, my argument would be we're only 70% of the way there. But I do think that we'll accelerate some of the components on our roadmap.

Speaker Change: Really as we cross $50 billion.

Speaker Change: And it doesn't mean that we've we've significantly ramped up expense or that will need to significantly ramp up at $70 billion.

Speaker Change: So there's not like an expense cliff that comes with with this but what it does mean is that we have discussed start skating to where the puck is going.

Speaker Change: Because there is.

Speaker Change: Theres no theres no phase in period.

Speaker Change: Four.

Speaker Change: The regulatory aspect of crossing a 100 billion.

Speaker Change: At $70 billion.

Speaker Change: Argument would be were only 70% of the way there, but I do I do think that we will accelerate some of the components on our on our roadmap, but it's nothing that will be.

Clint Stein: But it's nothing that will be a meaningful Adjustment to your expense models or anything like that at this point in time, and then we just have to wait and see, you know, there's a lot of a lot of moving. to close this. Thresholds could be different, but we're not counting on that.

Speaker Change:

Speaker Change: A meaningful.

Speaker Change: Adjustment to your expense models or anything like that.

Speaker Change: At this point in time, and then we just have to wait and see.

Speaker Change: There's a lot a lot of moving.

Clint Stein: There's a lot of moving pieces right now in the regulatory framework, and 100 used to be 250, and I don't know if that happens again, but I think that there's just we're in pretty consistent conversations and in constant contact with our regulators at the regional office as well as nationally. So I think that in the time period that we're going through waiting to close, this thresholds could be different, but we're not counting on that just so you know.

Speaker Change: Pieces right now in the regulatory framework and.

Speaker Change: 100 used to be $2 50, and I don't know if that happens again, but.

Speaker Change: But I think that there is just.

Speaker Change: We're in.

Speaker Change: Pretty consistent conversations in constant contact with the with our regulators at the regional office as well as nationally.

Speaker Change: <unk>.

Speaker Change: And so I.

Speaker Change: I think that in.

Speaker Change: In the time period that we're going through waiting to close this.

Speaker Change: Thresholds could be different but we're not counting on that.

Speaker Change: Just so you know.

Speaker Change: Great and then the pro forma CRE, if you have it thank you.

Clint Stein: Great. And then the performance theory, if you have it. Thank Oh, yeah, I think it's 330-325.

Chris McGratty: Great. And then the pro forma CRE if you have it. Thank you.

Speaker Change: Oh, yes.

Speaker Change: I think it's $3 30.

Clint Stein: Oh, yeah. I think it's 330, 325. And if you take out the multifamily, which both companies' multifamily books are pretty much the same, workforce housing, rock solid credit, I think that then that number drops down to 168 or somewhere in that level.

Speaker Change: $3 25.

Speaker Change: And.

Speaker Change: And if you take out the multifamily, which which both both companies multifamily books are are pretty much the same workforce housing rock solid credit.

David Feaster: and and if you take out the multifamily which which both both companies multifamily books are are pretty much the same workforce housing rock-solid credit you know I think that then that number drops down to 168 or somewhere in that that level okay thank you thank you And I show our next question comes from the line of David Feaster from Raymond James. Please go ahead. Hey, good afternoon, everybody. Hey, David. Um, obviously, this is a very complimentary deal. It brings some nice fee income lines, which you alluded to some new lending verticals, expands into some markets that you were already going to.

Speaker Change: I think that then that number drops down to 168 or somewhere in that level.

Speaker Change: Okay.

Speaker Change: Thank you.

Chris McGratty: Okay. Thank you.

Speaker Change: Thank you.

Speaker Change: And I show. Our next question comes from the line of David Feaster from Raymond James. Please go ahead.

Operator: Thank you. Our next question comes from the line of David Feaster from Raymond James. Please go ahead.

David Feaster: Hi, good afternoon everybody.

Speaker Change: Hey, David.

David Feaster: Hi. Good afternoon, everybody.

David Feaster: Obviously this is a very complementary deal.

Clint Stein: Hey, David.

David Feaster: Obviously this is a very complementary deal. It brings some nice fee income lines which you alluded to, some new lending verticals, expands into some markets that you were already going to. You touched on a few of those things that Pacific Premier brings. I was hoping you could elaborate maybe on where you see the most opportunity to add value utilizing some of their core competencies across the combined franchise or leveraging Columbia's expertise across their footprint. Just kind of curious where you see where are you most excited about?

David Feaster: It brings a nice fee income lines, which you alluded to some new lending verticals.

David Feaster: <unk> into some markets that you were already going to.

Speaker Change: You touched on a few of those things that Pacific Premier brings I was hoping you could elaborate maybe on where you see the most opportunity to add value utilizing some of their core competencies across the combined franchise are leveraging columbia's expertise across their footprint just kind of curious where you see where are you most excited about.

Clint Stein: You touched on a few of those things that Pacific Premier brings. I was hoping you could elaborate maybe on where you see the most opportunity to add value, utilizing some of their core competencies across the combined franchise or leveraging Columbia's expertise across their footprint. Just kind of curious where you see, where are you most excited about?

David Feaster: I'll start and then.

Clint Stein: I'll start and then see if Chris and Tori want to want to actually give you give you more more details. The thing that excites me the most and I said it my prepared remarks is This, this accelerates what we had hoped to be able to achieve in Southern California in particular by over a decade. And, and, and that's not just, that's just not something we're putting we're saying just because it and others. Thank you. It's been about a year and a half that we've been trying to solve for how do we get more infrastructure for the bankers that we already have in that market.

Speaker Change: I'll see if Chris and Tori <unk> on actually give you give you more more details.

Clint Stein: I'll start and then see if Chris and Tory want to actually give you more details. The thing that excites me the most and I said it in my prepared remarks is this accelerates what we had hoped to be able to achieve in Southern California in particular by over a decade. And that's not just, that's just not something we're saying just because it is impactful, but it's been about a year and a half that we've been trying to solve for how do we get more infrastructure for the bankers that we already have in that market. And I said in my comments that they've done a phenomenal job. They have with very little, very, very limited infrastructure south of the Grapevine.

David Feaster: The thing that excites me the most is and I said it in my prepared remarks is.

David Feaster: This this accelerates what we had hoped to be able to achieve in southern California in particular by over a decade.

David Feaster: And and.

David Feaster: And that's not just that's just not something we're putting we're saying just because.

David Feaster: It is impactful but.

It's been about a year and a half that we've been trying to solve for how do we get more infrastructure for the bankers that we already have in that market and.

David Feaster: And I said in my comments that they've done a phenomenal job they have with very little very very limited infrastructure south of the grapevine.

Clint Stein: And, and I said, in my comments that they've done a phenomenal job they have with very little, you know, very, very limited infrastructure, south of the grapevine. And so for 18 months of work and trying to find the right places and figure out where our existing customers are and you know, good prospective customers. We identified you know, less than a half a dozen sites at that point in time. And so if you just roll that forward and think about how do you get and build a footprint, that's that's not only the sheer number of locations, but the size and scale of what Steve and his team have built in that market.

David Feaster: And so for 18 months of work and trying to find the right places and figure out where our existing customers are in good prospective customers we identified.

Clint Stein: And so for 18 months of work and trying to find the right places and figure out where our existing customers are, and good prospective customers, we identified less than half a dozen sites at that point in time. And so if you just roll that forward and think about how do you get and build a footprint that's not only the sheer number of locations but the size and scale of what Steve and his team have built in that market, it's easily a 10-year push to do that. And then when you combine that with some of their businesses that where they're just ahead of us in things, HOA banking is one area that Chris and some of his team have been trying to unlock the secret sauce to that.

David Feaster: No less than a half a dozen sites.

David Feaster: At that point in time, and so if you just roll that forward and think about how do you get in build a footprint.

David Feaster: Not only the sheer number of locations, but the size and scale of what Steve and his team.

David Feaster: Net market.

David Feaster: It's easily a 10 year push to do that.

Clint Stein: It's easily a 10 year push to do that. And then when you combine that with some of their businesses that, you know, where they're just they're just ahead of us in things, you know, HOA banking is one area that, you know, Chris and some of his team have been trying to unlock the secret sauce to that. And of course, you know, Steve and and the PAC Premier team have a very robust platform there. And there's other things. And then also we think about some of the things that we're doing on the small business side that have been impactful, you know, on our current operations over the past five quarters and how we can leverage that and have that as an accelerator of growth.

David Feaster: When you combine that with <unk>.

David Feaster: Some of their businesses that.

David Feaster: Where they're just they're just ahead of us in things HOA banking is one area that.

David Feaster: Chris and his team have been trying to unlock the secret sauce to that and of course, Steve in.

Clint Stein: And of course Steve and the Pacific Premier team have a very robust platform there, and there's other things. And then also we think about some of the things that we're doing on the small business side that have been impactful on our current operations over the past 5 quarters and how we can leverage that and have that as an accelerator of growth. So I've kind of given you the appetizer now. I'm going to step back and let Tory and Chris serve up the main course on what the specifics are.

David Feaster: Pac Premier team.

David Feaster: Have a very robust platform, there and theres other things and then also we think about some of the things that we're doing on the small business side that have been impactful.

David Feaster: <unk>.

David Feaster: On our.

David Feaster: Earn operations over the past five quarters, and how we can leverage that and have that as an accelerator of growth. So I was kind of giving you. The appetizer now I'm going to step back and let Tory and Chris.

Clint Stein: So I've kind of given you the appetizer.

Clint Stein: Now I'm going to step back and let Tori and Chris serve up the main course on what the specifics are. Yeah. Thanks, Clint. Tori, I'll jump in real quick. I mean, I've been honestly salivating over the Southern California market for a decade. And just the sheer number of companies of all sizes, the density of it, it's just such a wonderful market to be able to be a part of and to be able to grow into. We will immediately get brand awareness and strength and just share in the market, which is just kind of support both of us as we kind of come together to grow.

Tory: Serve up the main course on what the specifics are.

Speaker Change: Client story I'll jump in real quick.

David Feaster: Yeah. Thanks, Clint, Tory. I'll jump in real quick. I mean, I've been honestly salivating over the Southern California market for a decade. Just the sheer number of companies of all sizes, the density of it, it's just such a wonderful market to be able to be a part of and to be able to grow into. We will immediately get brand awareness and strength, and just share in the market, which is just going to support both of us as we kind of come together to grow. I mean, specifically, you think about some of the product capabilities that we combine; we'll be able to expand. You've got the leasing business. I think a little different offering on the commercial card front. You've got international banking front just a little bit different as we come together. You've got the growth from the scale of our balance sheet.

Speaker Change: Honestly salivating over the southern California market for a decade and just the sheer.

Speaker Change: Number of companies of all sizes the density of it it's just it's such a.

Speaker Change: Just such a wonderful market to be able to be a part of and to be able to grow into.

Speaker Change: We will immediately get brand awareness strength and just share in the market, which is is this kind of support both of us as we as we kind of come together to grow I mean, specifically you think about some of the product capabilities that we combined we'll be able to to expand you got the leasing business I.

Clint Stein: I mean, specifically, you think about some of the product capabilities that we combined we'll be able to expand. You've got the leasing business. I think a little different offering on the commercial card front. You've got international banking front, just a little bit different as we come together. You've got the growth from the scale of our balance sheet. So, you know, as similar to Umpqua and Columbia coming together, you know, we've got the capability to grow with those customers as they grow. And, you know, we're not gonna pass on, you know, 20, $30 million deals as companies grow and need that from a lending standpoint.

Speaker Change: I think a little different offering on the commercial card front.

Speaker Change: You've got international banking front is a little bit different as we come together.

Speaker Change: Got the growth from the scale of our balance sheet. So.

Speaker Change: Similar to encore in Colombia coming together.

David Feaster: So similar to Umpqua and Columbia coming together, we've got the capability to grow with those customers as they grow. And we're not going to pass on $20 to $30 million-dollar deals as companies grow and need that from a lending standpoint. So we've got the capabilities to serve the customers as they grow so we grow with them. And so I think those things combined with inheriting a great group of bankers at Pacific Premier I think is just going to be a wonderful opportunity for us.

Speaker Change: We've got the capability to grow with those customers as they grow and we are.

Speaker Change: We're not going to we're not going to pass on to <unk>.

Speaker Change: $130 million deals as companies grow and need that from a lending standpoint, so we got the capabilities to serve the customers as they grow we grow with them. So I think those things combined with inheriting a great group of bankers at Pacific Premier I think it's just going to be a wonderful opportunity for us.

Clint Stein: So we've got the capabilities to serve the customers as they grow, so we grow with them. And so I think those things combined with, you know, inheriting a great group of bankers at Pacific Premier, I think it's just gonna be a wonderful opportunity for us.

Chris Mcgratty: Yes, David this is Chris.

Clint Stein: Yeah, David, this is Chris. The acceleration of the HOA program is a, that's a huge one, light years ahead of where we are today. The complimentary nature of the custodial trust business and being able to look at how our fiduciary business there and the investment aspects that we put into that as well. And we've been expanding into the market down there. And this accelerates that.

Clint Stein: Yeah. David, this is Chris. The acceleration of the HOA program is, that's a huge one. Light years ahead of where we are today. The complementary nature of the custodial trust business and being able to look at how our fiduciary business there and the investment aspects that we put into that as well. We've been expanding into the market down there, and this just accelerates that. Clint started touching on retail small business. I think what we've shown in the last four campaigns of what we can do with our approach to the market, really looking forward to the opportunity of getting in there, training up the team and the relationship strategy, and then seeing what we can do when we turn that loose. We've talked about the market and the potential. I think there's a lot of tremendous opportunity there.

David Feaster: The acceleration of the HOA program is that's a huge one.

Chris Mcgratty: Light years ahead of where we are today.

Chris Mcgratty: The complementary nature of the custodial trust business and being able to look at how our fiduciary business there and the investment.

Chris Mcgratty: Aspects that we put into that as well and we've been expanding into the market down there and this just accelerates that.

Chris Mcgratty: Clint started touching on retail small business I think what we've shown in the last four campaigns or what we can do with our approach to the market.

Clint Stein: Clint started touching on retail small business. I think what we've shown in the last four campaigns of what we can do with our approach to the market, really looking forward to the opportunity of getting in there, training up the team and the relationship strategy and then seeing what we can do when we turn that loose. You know, we've, we've talked about the market and the potential. I think there's a lot of a lot tremendous opportunity there.

Chris Mcgratty: We're really looking forward to the opportunity to getting in their training up the team and the relationship strategy and seeing what we can do when we turn that loose.

Chris Mcgratty: We've talked about the market and the potential I think theres a lot of a lot of tremendous opportunity. There and then we'll be full service and will bring will bring the mortgage business into play as well.

Clint Stein: And then we'll be full service and we'll bring the mortgage business into play as well.

David Feaster: And then we'll be full service and we'll bring, we'll bring the And, you know, Columbia, you guys have had that slide in your deck talking about longer-term balance sheet optimization opportunities. Obviously, we're going to have the Pacific Premier balance sheet marked. Are you considering any asset sales or optimization efforts to, you know, to help improve profitability and maybe accelerate that optimization that you've already identified? Or is that just some conservatism in these numbers and optionality that you guys have? Because I don't think that's in those program numbers. No, no, it's not. But David, as usual, you've zeroed in on some of the key aspects of You know, it provides flexibility, you know, not only does it act as a balance sheet restructure on the PAC Premier balance sheet that then gets created back through earnings as opposed to being a hard-coded loss, but it also creates flexibility for us to do some of the things that we've been talking about for the past year or 15 months on optimizing our balance sheet and just the expanded earnings capability of a pro-forma company also gives us the potential to look at things a little bit differently.

Chris Mcgratty: That's great.

Chris Mcgratty: And Colombia, you guys have had that slide in your deck talking about longer term balance sheet optimization opportunities. Obviously, we're going to have the Pacific Premier balance sheet March.

David Feaster: That's great. And Columbia, you guys have had that slide in your deck talking about longer-term balance sheet optimization opportunities. Obviously we're going to have the Pacific Premier balance sheet marked. Are you considering any asset sales or optimization efforts to help improve profitability and maybe accelerate that optimization that you've already identified or is that just some conservatism in these numbers and optionality that you guys have? Because I don't think that's in those pro forma numbers.

Chris Mcgratty: Are you considering any asset sales or optimization efforts.

Chris Mcgratty: To help improve profitability and maybe accelerate that optimization that you've already identified or is that just some conservatism in these numbers and optionality.

Chris Mcgratty: That you guys have.

Chris Mcgratty: I don't think thats in those.

Chris Mcgratty: <unk>.

Chris Mcgratty: No no, it's not but with David as usual zeroed in on some of the key aspects of Av.

Clint Stein: No, no, it's not. But David, as usual, you've zeroed in on some of the key aspects of it. It provides flexibility. Not only does it act as a balance sheet restructure on the Pacific Premier balance sheet that then gets accreted back through earnings as opposed to being a hard-coded loss, but it also creates flexibility for us to do some of the things that we've been talking about for the past year or 15 months on optimizing our balance sheet. And just the expanded earnings capability of a pro forma company also gives us the potential to look at things a little bit differently in that regard. And as we've mentioned, the deal doesn't require any additional capital, and we've already been growing capital fairly substantially over the last 2 years, and that growth should accelerate as well.

Chris Mcgratty: It provides flexibility not only does it does it act as a.

Chris Mcgratty: As a balance sheet restructure on on the.

Chris Mcgratty: <unk> Premier.

Chris Mcgratty: Balance sheet.

Chris Mcgratty: Gets accreted back through earnings as opposed to being a hard coated loss.

Chris Mcgratty: But it also creates flexibility for us to do some of the things that we've been talking about for the past year or 15 months on on optimizing our balance sheet and just the expanded earnings capability.

Chris Mcgratty: The pro forma company also gives us the potential to look at things a little bit differently.

Chris Mcgratty: In that regard and as we've mentioned.

Clint Stein: in that regard. And as we've mentioned, you know, the deal doesn't require any additional capital. And we've already been growing capital. Fairly substantially over the last two years and and you know that that growth should accelerate as well Okay, that's great.

Chris Mcgratty: The deal doesn't require any additional capital.

Chris Mcgratty: And we've already been growing capital.

Chris Mcgratty:

Chris Mcgratty: Fairly substantially over the last two years and that that growth should accelerate as well.

Chris Mcgratty: Okay. That's great and then maybe just last one from me.

David Feaster: Okay. That's great. And then maybe just last one from me, a higher level one. We've got an extremely volatile backdrop today. You've got the trade wars and all that going on. Just kind of high-level question for you, Clint, is how do you get comfortable underwriting credit today? I mean the good news is I've always looked at Pacific Premier as a very low-risk balance sheet, very conservatively underwritten. Obviously there's a healthy credit mark here too through the marks, but I'm just curious how did you get comfortable around the credit side of this deal?

Clint Stein: And then maybe just last one for me, a higher level one, you know, we've got an extremely volatile backdrop today. You know, you've got the trade wars and all that going on.

Chris Mcgratty: Level one.

Chris Mcgratty: Got an extremely volatile backdrop today, you've got the trade wars and all that going on.

Chris Mcgratty: High level question viewpoint is how do you get comfortable underwriting credit today I mean, the good news is I've always looked at Pacific Premier has a very low risk balance sheet very conservatively underwritten. Obviously, there is a healthy credit mark here to do the March but I was just curious how did how did you get comfortable around the credit side of this deal.

Clint Stein: Just kind of high level question for you, Clint, is how do you get comfortable underwriting credit today? I mean, the good news is I've always looked at Pacific Premier as a very low risk balance sheet, very conservatively underwritten. Obviously, there's a healthy credit mark here too through the marks, but I'm just curious, how did you get comfortable around the credit side?

Frank: Great Frank could hardly wait to unmusical sitting next to me and.

Frank Namdar: Frank could hardly wait to unmute his mic, he's sitting next to me. And, and so what I'll start with is, is, is by saying, I think you hit the nail on the head that Steve and his team have demonstrated a long demonstrated track record of superb credit performance. And that was something that we dug very, very deeply into. And, and because Frank, Frank likes to be bored and he likes to sleep well at night. And he's also very conservative and has a strong track record and credit performance.

Clint Stein: Frank could hardly wait to unmute his mic. He's sitting next to me. And so what I'll start with is by saying I think you hit the nail on the head, that Steve and his team have a long demonstrated track record of superb credit performance. And that was something that we dug very, very deeply into. Because Frank likes to be bored, and he likes to sleep well at night, and he's also very conservative and has a strong track record in credit and performance. And so I don't want to steal his thunder, so I'll go on mute here and let Frank give you some details in terms of the extent of diligence that we conducted.

Frank: And so what I'll start with is is by saying I think you hit the nail on the head that.

Speaker Change: Steve and his team.

Speaker Change: Have demonstrated a long demonstrated track record of Av.

Speaker Change: Superb credit performance.

Speaker Change: And that was something that we dug very very deeply into an end.

Speaker Change: Because Frank Frank likes to the board and he likes to sleep well at Marlin.

Speaker Change: Also very conservative and has a strong track record in credit performance. So.

Speaker Change: I don't want to steal his thunder.

Frank Namdar: And so I don't want to steal his thunder. So I'll, I'll go on mute here and let Frank give you some details in terms of the extent of diligence that we conduct.

Speaker Change: I'll go on mute here and let Frank give you some details in terms of the extent of diligence that we conducted.

Frank: Thanks Clint.

Speaker Change: No thunder to be stolen here.

Frank Namdar: Thanks, Clint. I mean, there's no thunder to be stolen here. I was really excited to see the results of the diligence that we conducted. We looked at over 61% of their loans. and was pleased to find out. I mean, they really had a really similar underwriting and credit philosophy to us here. Their policies were very much aligned with ours. Their application of credit policy was very close to how we apply our credit policy and probably the most important thing In underwriting through any credit cycle, and the ability to continue to underwrite through any credit cycle, is to have a leverage, a burst, credit culture within the portfolio and underwriting and it's not P&Ls that get companies through credit cycles, it's the strength of the balance sheet and time after time we saw within the credits evaluated a low leverage posturing of these companies similar to ours.

Operator: Thanks, Clint. I mean, there's no thunder to be stolen here. I was really excited to see the results of the diligence that we conducted. We looked at over 61% of their loans and was pleased to find out. I mean, they really had a really similar underwriting and credit philosophy to us here. Their policies were very much aligned with ours. Their application of credit policy was very close to how we apply our credit policy. And probably the most important thing in underwriting through any credit cycle and the ability to continue to underwrite through any credit cycle is to have a leverage-averse credit culture within the portfolio and underwriting. And it's not P&Ls that get companies through credit cycles. It's the strength of the balance sheet. And time after time we saw within the credits evaluated a low-leverage posturing of these companies similar to ours.

Ronald Farnsworth: Thanks, Clint. I mean, there's no thunder to be stolen here. I was really excited to see the results of the diligence that we conducted. We looked at over 61% of their loans and was pleased to find out. I mean, they really had a really similar underwriting and credit philosophy to us here. Their policies were very much aligned with ours. Their application of credit policy was very close to how we apply our credit policy. And probably the most important thing in underwriting through any credit cycle and the ability to continue to underwrite through any credit cycle is to have a leverage-averse credit culture within the portfolio and underwriting. And it's not P&Ls that get companies through credit cycles. It's the strength of the balance sheet. And time after time we saw within the credits evaluated a low-leverage posturing of these companies similar to ours.

Frank: Hi.

Frank: I was I was real.

Frank: Excited to see the results of the diligence that we that we conducted we looked at over 61% of their loans.

Frank: And was pleased to find out I mean, they really had a really similar underwriting and credit philosophy to us here there.

Frank: Their policies were very much aligned with ours to their application of credit policy was very close to.

Frank: How we apply our credit policy and probably the most important thing.

Frank: And underwriting through through any credit cycle and the ability to continue to underwrite through any credit cycle has to have a leverage averse crew.

Frank: Credit culture within the portfolio.

Frank: And underwriting and it's.

Frank: It's not P&L said got companies through credit cycles, it's the strength of the balance sheet and in time. After time, we saw within the credits evaluated a low leverage posturing of these of these companies similar to ours. So.

Frank: So it gave me great comfort to.

Operator: So it gave me great comfort to see all of that and not a lot of existing issues within the portfolio either. So clearly both companies stay ahead of potential credit problems by staying close to their customer base. And that's really the best way to do it, is to stay in close contact with them. And I noticed a very active portfolio management and monitoring philosophy similar to ours. So I don't see any surprises with Pacific Premier's portfolio nor do I with ours. I think both companies are very much on top of their portfolios and that'll enable us to win through any cycle.

Ronald Farnsworth: So it gave me great comfort to see all of that and not a lot of existing issues within the portfolio either. So clearly both companies stay ahead of potential credit problems by staying close to their customer base. And that's really the best way to do it, is to stay in close contact with them. And I noticed a very active portfolio management and monitoring philosophy similar to ours. So I don't see any surprises with Pacific Premier's portfolio nor do I with ours. I think both companies are very much on top of their portfolios and that'll enable us to win through any cycle.

Frank Namdar: So it gave me great comfort to see all of that and not a lot of existing issues within the portfolio either.

Frank: To see all of that and not a lot of existing issues within the within the portfolio either so.

Frank Namdar: So... You know, clearly both companies stay ahead of. of America. Portfolio Management and Monitoring Philosophy, similar to ours. So, I don't see any surprises. Pat Premier's portfolio, nor do I with ours. I think both companies are very much on top of their portfolios and that will enable us to win through any cycle.

Frank: Clearly both companies stay ahead of.

Frank: Potential credit problems by staying close to their customer base and that's really the best way to do it is to stay in close contact with them and I noticed a very active.

Frank: Portfolio management management and monitoring philosophy similar to ours, So I don't see I don't see any surprises.

Frank: With.

Pat Premier's portfolio, nor do high nor do I with ours I think both both companies are very much on top of their portfolios and that'll enable us went through.

Frank: Any cycle.

Speaker Change: That's great. Thanks, everybody for all the color and congrats on the deal.

Unknown Executive: That's great.

David Feaster: That's great. Thanks, everybody, for all the color and congrats on the deal.

David Feaster: Thanks, everybody, for all the color and congrats on the deal. Thanks, David. Thank you.

David Feaster: Thanks, David.

Frank: Thank you.

Clint Stein: Bye.

Chris McGratty: Thanks, David.

Speaker Change: And I show. Our next question comes from the line of Matthew Clark from Piper Sandler. Please go ahead.

Operator: Thank you. And our next question comes from the line of Matthew Clark from Piper Sandler. Please go ahead.

Matthew Clark: And I show next question comes from the line of Matthew Clark from Piper Sandler. Please go ahead. Hey, good afternoon, everyone.

Matthew Clark: Hey, good afternoon, everyone.

Matthew Clark: Hey. Good afternoon, everyone.

Matthew Clark: Yeah.

Matthew Clark: Matt.

Matthew Clark: This is my first question on around you.

Clint Stein: Hi, Matt.

Matthew Clark: This is my first question around Your financial targets on a pro forma basis and maybe the lessons learned from the UMQA deal. I know this is only about a 30 year size relative to UMQA, it's a lot larger. Um, but anything You know, you might do differently this time around to ensure that you get these targets because They look fairly strong. Well, we start with all of your estimates. not yours specifically, but you know, consensus estimates. And, and so I guess, you know, as we look at The environment changes, you know, we had 550 basis points of rate increases from when we announced the Umpqua-Columbia merger.

Matthew Clark: This is my first question around your financial targets on a pro forma basis and maybe the lessons learned from the Umpqua deal. I know this is only about a 30% size relative to Umpqua. It's a lot larger. But anything you might do differently this time around to ensure that you hit these targets because they look fairly strong?

David Feaster: Your financial targets on a pro forma basis, and maybe the lessons learned from the Umpqua deal I know this is only about a third of your size relative to oncor is a lot larger.

Matthew Clark: But anything.

Matthew Clark: You might do differently. This time around to ensure that you hit these targets because.

Matthew Clark: They look they look fairly strong.

Matthew Clark: Well, we start with all of your estimates not your specifically, but consensus estimates and.

Clint Stein: Well, we start with all of your estimates, not yours specifically but consensus estimates. And so I guess as we look at the environment changes, we had what? 550 basis points of rate increases from when we announced the Umpqua-Columbia merger. Hopefully, we, one, I expect that we won't have a 17-month waiting period. And two, I would hope that we wouldn't see that kind of rate volatility. But I guess that's the thing that I want to make sure people are aware of is that consensus estimates have come down. I mean for the industry. And so when we build these models and everybody does it, they use consensus estimates. And so there's always going to be some variability. Now in a stable environment, our forecasts are probably not terribly different, maybe a little better, maybe a little worse from period to period than what consensus is.

Matthew Clark: And so I guess.

Matthew Clark: As we look at.

Matthew Clark: The environment changes we had what.

Matthew Clark: 550 basis points of rate increases from when we announced the umpqua.

Matthew Clark: Colombia merger.

Matthew Clark: Hopefully we won I expect that we won't have a 17 month waiting period.

Clint Stein: Hopefully we, one, I expect that we won't have a 17-month waiting period, and two, I would hope that we wouldn't see that kind of rate volatility, but I guess that's the thing that I want to make sure people are aware of is that. Consensus estimates have come down, I mean, you know, for the industry. And so when we build these models and everybody does. Consensus Estimates. And so there's always going to be some variability. Now, in a stable environment, Well, our forecasts are probably not terribly different, maybe a little better, maybe a little worse from period to period than what consensus is.

Matthew Clark: And two would hope that we wouldn't see that kind of rate volatility.

Matthew Clark: But.

Matthew Clark: But I guess, that's the the the thing that I want to make sure people are aware of is that.

Matthew Clark: Consensus estimates have come down.

Matthew Clark: For the industry and so when we build these models and everybody does is they use.

Matthew Clark: Census, estimates and so theres always going to be some some variability.

Matthew Clark: In a stable environment.

Matthew Clark: Yes.

Matthew Clark: Our forecasts are probably not terribly different maybe a little better maybe a little worse.

Matthew Clark: From period to period than what consensus is but.

Matthew Clark: There was a hole seismic shift and in.

Clint Stein: But there was a whole seismic shift. in the operating or the rate environment. And that's, that's what really. I think led. to the differences. You know, so even despite the volatility in the markets right now, what we're seeing from customers, if you don't watch the news, and you're not on social media, life's still pretty good. You know, and so, so we're not seeing any type of major pullback, it's causing us to rethink what our current forecasts are. I know our advisors went through I'm pretty certain that Steve's advisors went through his forecasts and our forecasts.

Clint Stein: But there was a whole seismic shift in the operating or the rate environment, and that's what really, I think, led to the differences. So even despite the volatility in the markets right now, what we're seeing from customers, if you don't watch the news and you're not on social media, life's still pretty good. And so we're not seeing any type of major pullback that's causing us to rethink what our current forecasts are. I know our advisors went through our forecasts, and I'm pretty certain that Steve's advisors went through his forecasts and our forecasts. And we feel pretty good about that we're going to execute and deliver top-tier performance. Now as the market moves, maybe those ratios move around just because that's how it works. But on a relative basis, I think this is going to make a lot of money for a lot of people.

Matthew Clark: In the operating or the rate environment, and that's what really.

Matthew Clark: I think led to.

Matthew Clark: To the differences.

Matthew Clark: So even despite the volatility in the markets right now what we're seeing from customers. If you don't watch the news and Youre not on social media life still pretty good.

Matthew Clark: <unk>.

Matthew Clark: And so.

Matthew Clark: So we're not seeing any type of major pullback, it's causing us to rethink what our current forecasts are.

Matthew Clark: I know our advisors.

Matthew Clark: Went through.

Matthew Clark: Our forecasts and I'm pretty certain that.

Matthew Clark: Steve's advisers went through his forecast and our forecast.

Matthew Clark: We feel we feel pretty good about that we're going to execute and deliver top tier performance now as the market moves maybe those ratios move around just.

Clint Stein: We feel we feel pretty good about that. We're going to execute and deliver top tier performance. Now, as the market moves, maybe those ratios move around just. because that's how it works, but on a relative basis, I think this is going to make a lot of money for a lot of people. That's great.

Matthew Clark: Sure.

Matthew Clark: Because that's how it works, but on a relative basis. I think this is going to this is going to make a lot of money for a lot of people.

Matthew Clark: That's great and then.

Matthew Clark: How about the buyback we were.

Matthew Clark: That's great. And then how about the buyback? I know we were kind of warming up to one sometime this year. Does this deal put that on pause? I mean PPBI has a ton of excess capital. Use all that capital to deliver the marks. But given that your capital kind of on a pro forma basis isn't going to change materially, would you still consider a buyback this year?

Matthew Clark: And then how about the buyback? I know, you know, we were I'm kind of warming up to one sometime this year.

Matthew Clark: Kind of warming up to one.

Matthew Clark: Sometime this year does this deal put that on pause I mean.

Clint Stein: Does this deal put that on pause? I mean, CBBI has a ton of excess capital. You know, you use all that capital to do the marks, Given that your capital, kind of on a performance basis, isn't going to change materially, would you still consider a buyback this year?

Matthew Clark: <unk> has a ton of excess capital.

Matthew Clark: Use all that capital over the marks but.

Matthew Clark: Given that your capital kind of on a pro forma basis isn't going to change materially would you still consider a buyback this year.

Matthew Clark: So so what I said during our first quarter conversations was that I was pretty confident that there'll be capital actions during.

Clint Stein: So, so what I said, uh, during our first quarter conversations was that I was pretty confident that there'd be capital actions during, um, uh, 2025. And, um, and I consider MNA a capital action. Um, uh, you know, so.

Clint Stein: So what I said during our Q1 conversations was that I was pretty confident that there would be capital actions during 2025. And I consider M&A a capital action. So without this, yeah, it would have been extremely likely that we would have started initiating a buyback. Right now, our biggest focus is get the deal closed, see where the capital ratios are, and then from there relative to our long-term targets, make an assessment on a buyback. So I guess short answer is yeah, it probably does push it out. It's probably not a 2025 event but there's still some variables in terms of is this a year-end close or is it a sooner than that type of close? And then where do the final ratios shake out? Right now, we expect a modest decline of 20, 30 basis points from our current levels.

Matthew Clark: 2025 and.

Matthew Clark: And I consider M&A capital action.

Matthew Clark:

Matthew Clark: So.

Matthew Clark: Without without without this.

Clint Stein: Without this, it would have been extremely likely that we would have started initiating a buyback.

Matthew Clark: Yes, it would have been extremely likely likely that we would have.

Matthew Clark: Started initiating a buyback.

Matthew Clark: Right now.

Clint Stein: Right now, our biggest focus is get the deal closed. see where the capital ratios are, and then from there, relative to our long-term targets, make an assessment on a buyback. So I guess short answer is, yeah, it probably does push it out. It's probably not a 25. But, um, uh, You know, there's there's there's still some some variables in terms of of is this is this a year in close? Or is it a sooner than that type of close? And then where did the final ratio shake out? Right now? We expect a modest Decline of 20-30 basis points from our current levels, and our current levels are modestly above where our long-term targets are.

Matthew Clark: Our biggest focus is is.

Matthew Clark: I get the deal closed.

Matthew Clark: See where the capital ratios are.

Matthew Clark: And then from there relative to our long term targets make an assessment on.

Matthew Clark: On a buyback so.

Matthew Clark: I guess short answer is yes, it probably does push it out is probably not a 25.

Matthew Clark: Event, but.

Matthew Clark: Theres still some some variables in terms of is this is this a year end close or is it a sooner than that type of close.

Matthew Clark: And then.

Matthew Clark: Where does the final ratio shake out.

Matthew Clark: Right now we expect a modest.

Matthew Clark: Decline of Av.

Matthew Clark: 2030 basis points from from our current levels and our current levels or modestly above where our long term targets are so we still would expect that we'd be above those targets.

Clint Stein: Our current levels are modestly above where our long-term targets are. We still would expect that we'd be above those targets. But I'd hate to go initiate a $300 or $400 million buyback and then find out that, "Oh, rates moved around and we needed to go out and raise $200 million of capital and dilute our shareholders." That wouldn't do us any good.

Clint Stein: So we still would expect that we'd be above those targets, but I'd hate to go initiate a $300 or $400 million buyback and then find out that rates moved around and we needed to go out and raise $200 million of capital and deliver to our shareholders. That wouldn't do us any good. Yep, fair enough.

Matthew Clark: But I'd hate to.

Matthew Clark: Go initiate a 300 or $400 million buyback.

Matthew Clark: Buyback and then find out that.

Matthew Clark: Rates moves around and we needed to.

Matthew Clark: Go out and raise $200 million of capital and dilute our shareholders that that wouldn't do us any good.

Matthew Clark: Fair enough and then my last question just around any potential divestitures.

Matthew Clark: Yep. Fair enough. And then my last question just around any potential divestitures on PPBI's balance sheet. I know Steve has scrubbed that portfolio quite a bit over the years. But is there anything within there, maybe franchise lending or maybe even multifamily, you might want to deemphasize or do you feel good about the whole portfolio?

Clint Stein: And then my last question just around any potential divestitures on PBBI's balance sheet. I know Steve has scrubbed that portfolio. lot more. We feel pretty good. I mean, Steve and team have done a good job of deemphasizing some of the things. You know, I think that's, that's the other the other piece of it is, is we've talked about that, that we've, we've run our company and we've built our company to, to, to perform through cycles. And, you know, and we've been waiting for a recession for many years. I don't consider 2020 a recession because of all the stimulus that was pushed into the system.

Matthew Clark: On <unk> balance sheet, I know, Steve has scrubbed that portfolio.

Matthew Clark: Quite a bit.

Matthew Clark: Over the years and but is there anything within there maybe franchise lending or maybe even multifamily you might want to deemphasize or do you feel good about the whole portfolio.

Speaker Change: We feel pretty good I mean, Steve and team have done a good job of deemphasizing some of the things.

Clint Stein: We feel pretty good. I mean, Steve and team have done a good job of deemphasizing some of the things. I think that's the other piece of it, is we've talked about that we've run our company and we've built our company to perform through cycles. And we've been waiting for a recession for many years. I don't consider 2020 a recession because of all the stimulus that was pushed into the system. And I think Steve also kind of built a fortress balance sheet and a tremendous amount of capital in anticipation of some form of economic slowdown. And as part of that, it wasn't just building capital but it was also kind of pulling back from different areas of their portfolio. So it's super, super clean. Yeah.

Speaker Change: I think that's the other the other piece of it is.

Speaker Change: We've talked about that.

Speaker Change: We've run our company, we built our company.

Speaker Change: Two to perform through cycles and.

And.

Speaker Change: We've been waiting for a recession for many years I don't consider 2020, a recession because of all the stimulus that was pushed into the system.

Speaker Change: And I think Steve also kind of build a fortress balance sheet and a tremendous amount of capital in anticipation of Av.

Clint Stein: And, and, you know, I think Steve also kind of built a fortress balance sheet and tremendous amount of capital in anticipation of, of some some form of economic slowdown. And as part of that, it wasn't just building capital, but it was also kind of pulling back from different areas of, of their portfolio. So it's, it's super, super clean. You know, Yeah, on the multifamily side, we could We could reduce CRE exposures by selling some of those that are marked, but they're going to be at current market rates through purchase accounting. And there's absolutely zero credit concerns on those.

Speaker Change: Some some form of economic slowdown and as part of that it wasn't just building capital, but it was also kind of pulling back from different areas of Av.

Speaker Change: Their portfolio, so it's super Super clean.

Speaker Change: No.

Speaker Change: Yeah on the multifamily side, we could.

Clint Stein: On the multifamily side, we could reduce CRE exposures by selling some of those that are marked, but they're going to be at current market rates through purchase accounting. And there's absolutely zero credit concerns on those. So I don't know that we would necessarily do that. There are some things in the bond portfolio that I think we're looking at that could provide some opportunities for us. And then like I said, I think on one of my earlier responses is I think this gives us some flexibility with our existing balance sheet to maybe look at some things as well.

Speaker Change: Sure.

Speaker Change: We could reduce.

Speaker Change: CRE exposures by selling some of those that are marked but theyre going to be at current market rates through purchase accounting and there is absolutely zero credit concerns on those so I don't know that we would necessarily do that.

Clint Stein: So I don't know that we would necessarily do that. There are some things in the bond portfolio that I think We're looking at that that could provide some opportunities for us. And then, like I said, I think on one of my earlier responses is I think this gives us some flexibility with our existing balance sheet to maybe look at some things as well.

Speaker Change: There are some things in the bond portfolio that I think.

Speaker Change: We're looking at that.

Speaker Change: Provide some opportunities for us.

Speaker Change: And then like I said I think on one of my earlier responses.

Speaker Change: I think this gives us some flexibility with our existing balance sheet to maybe look at some things as well.

Speaker Change: Great. Thank you.

Speaker Change: Yes.

Clint Stein: Great, thank you.

Matthew Clark: Great. Thank you.

Speaker Change: Thank you.

Speaker Change: And I show. Our next question comes from the line of Tim Brasil Luna from Wells Fargo. Please go ahead.

Unknown Executive: Thank you.

Operator: Thank you. And our next question comes from the line of Timur Braziler from Wells Fargo. Please go ahead.

Timur Braziler: And our next question comes from the line of Timur Braziler from Wells Fargo. Please go ahead. Hi, good afternoon.

Hi, good afternoon.

Speaker Change: I'm wondering how long the courting how long was the courting process for this transaction.

Timur Braziler: Hi. Good afternoon. I'm wondering how long was the courting process for this transaction? And it's pretty impressive to get a deal announced in the midst of some of this volatility in the broader market. I'm just wondering, more recently, did you have to update any deal terms, considerations, marks? Did you have to recalibrate any parts of the transaction just given some of the market turbulence here to date?

Timur Braziler: I'm wondering, how long the courting, how long was the courting process for this transaction and you know, it's pretty impressive to get a deal announced in the midst of some of this volatility in the broader market. I'm just, I'm just wondering more recently, did you have to update any deal terms, considerations, marks? Did you have to recalibrate any parts of the transaction, just given some of the market turbulence here today? We'll have all of that in the S4. But what what, what I'll give you is that Steve and I started getting to know each other a couple years ago, and, you know, just trying to assess, my mindset at that time was executing on the task at hand, which was the integration of Columbia and Umpqua.

Speaker Change: Pretty impressive to get a deal announced in the midst of some of the <unk>.

Speaker Change: Volatility in the broader market I'm just I'm just wondering more recently because you have to update any deal terms considerations marks did you have to recalibrate any parts of the transaction just given some of the market turbulence year to date.

Speaker Change: We will have all of that in the S four but.

Clint Stein: We'll have all of that in the S4. But what I'll give you is that Steve and I started getting to know each other a couple of years ago. And just trying to assess, my mindset at that time was executing on the task at hand, which was the integration of Columbia and Umpqua. And I think if you ask Steve, and you can because he's here in the room as a reminder, his thought process was probably around seeing if we could execute on the task at hand. And once we both were at a point of where I said, "Yeah, we've executed," and he was able to witness it from an external viewpoint, then we started talking about the possibility and when timing might be right. And I would say as a kind of a full-on approach and endeavor, it really started at the first of the year.

Speaker Change: What what ill give you is that.

Speaker Change: Stephen I started getting to know each other a couple of years ago.

Speaker Change: In.

Speaker Change: Just trying to assess.

Speaker Change: My my mindset at that time was.

Speaker Change: Executing on on the task at hand, which was the integration of Colombia and Umpqua.

Speaker Change: And I think.

Speaker Change: Yes, Steve and you can because he's here in the room as a reminder.

Clint Stein: And I think, you know, if you ask Steve, and you can, because he's here in the room as a reminder, his thought process was probably around seeing if we could execute on the task at hand.

Speaker Change: His his.

Speaker Change: Thought process was probably around <unk>, if we could execute on the task at hand and.

Speaker Change: And once we.

Clint Stein: And once we both were at a point of where I said, yeah, we've executed, and he was able to witness it from an external viewpoint, then we started talking about the possibility and when timing might be right, and I would say as a kind of a full-on approach and endeavor really started at the first of the year, and so here we are in the fourth month. But I'll lean back into both of our experience in M&A. I think both teams and boards were able to see through the short-term market noise and volatility and really focus on where the long-term shareholder value could be created.

Speaker Change: Both were at a point of where I said.

Speaker Change: Yes, we've executed and he was able to witness it from an external viewpoint.

Speaker Change: When we started talking about the possibility of wind timing might be right and.

Speaker Change: And I would say as a.

Speaker Change: Kind of a full on.

Speaker Change: <unk> and endeavor really started at the first of the year end.

Speaker Change: So here we are in the in the fourth month.

Clint Stein: And so here we are in the fourth month. But I'll lean back into both of our experience in M&A. I think both teams and boards were able to see through the short-term market noise and volatility and really focus on where the long-term shareholder value could be created. And so I think we ended up remarkably close to where we originally started. But yeah, it was a wild ride with some of the market swings.

Speaker Change: But.

Speaker Change: I'll lean back into our both of our experience in M&A.

Speaker Change: Thank both teams and boards, we're able to see through.

Speaker Change: The short term market noise and volatility and really focus on where the long term shareholder value could be created.

Speaker Change: And so.

Speaker Change: I think we ended up remarkably close to where we originally started but yes. It was.

Clint Stein: And so I think we ended up remarkably close to where we originally started. But yeah, it was, you know, a wild ride with some of the market swings. And I guess in that same way...

Speaker Change: Hum.

Speaker Change: A wild ride with some of the market swings.

Speaker Change: And I guess on that.

Speaker Change: Uh huh.

Timur Braziler: I guess in that same light. Oh, sure. Go ahead, Steve.

Speaker Change: Sure go ahead Steve.

Speaker Change: Sure.

Speaker Change: <unk> is a very disciplined process and I think importantly here.

Clint Stein: Sir, it was a very disciplined process. And I think importantly here, that as 100% stock yield, this is a reinvestment opportunity for Pacific Premier shareholders and an extremely attractive one. Because we firmly believe the upside here is significant. And so when you get two companies that have very similar culture. Operational areas, it really it makes for a relatively low risk, low execution risk in our minds. And so yes, there was certainly a lot of volatility, both in the equity markets, also the debt markets, and that had an impact. But given that we had a long term view here, and this is a investment, we thought the process throughout was very collaborative, and really pleased where we ended up.

Steve Gardner: Sure. It was a very disciplined process. And I think importantly here that as a 100% stock deal, this is a reinvestment opportunity for Pacific Premier shareholders and an extremely attractive one because we firmly believe the upside here is significant. And so when you get two companies that have very similar cultures, operational areas, it really makes for a relatively low risk, low execution risk in our minds. And so yep, yes, there was certainly a lot of volatility both in the equity markets, also the debt markets, and that had an impact. But given that we had a long-term view here and this is a reinvestment, we thought the process throughout was very collaborative and really pleased where we ended up.

As 100% stock deal. This is a reinvestment opportunity for Pacific Premier shareholders, and an extremely attractive one because we firmly believe the upside here is significant.

Speaker Change: And so when you get to companies that have very similar cultures.

Speaker Change: Operational areas.

Speaker Change: It really it makes for a relatively low risk low execution risk in our minds.

Speaker Change: And so yes, there's certainly a lot of volatility both in the.

Speaker Change: The equity markets also the debt markets and that had an impact.

Speaker Change: But given that we had a long term view here and this is a reinvestment.

Speaker Change: We thought the process throughout was very collaborative.

Speaker Change: And really pleased where we ended up.

Speaker Change: Okay, great and obviously, a very different transaction from Umpqua, Colombia deal, but that took longer than expected here you guys are expecting to close this in the second half of this year I guess just can you previous as some of the conversations that maybe haven't had with regulators and framing that clothing.

Timur Braziler: Okay. Great. And obviously, a very different transaction from the Umpqua-Columbia deal, but that took longer than expected. Here you guys are expecting to close this in the second half of this year. I guess just can you privy us to some of the conversations that maybe have been had with regulators in framing that closing timeframe?

Clint Stein: Okay, great.

Clint Stein: And, you know, obviously a very different transaction from Uncle Columbia deal, but, you know, that took longer than expected. Here, you guys are expecting to close this in the second half of this year.

Clint Stein: I guess, just, can you privy us to some of the conversations that maybe have been had with regulators and framing that closing timeframe? Yeah, there's there's a body of evidence that continues to build on deals getting approved quicker, and for banks either our size or to create banks that are our size. And so that, that gives us a lot of optimism. And the other thing is, is, is that we, we had fairly robust pre flight conversations with the regulators, both at the regional office level, as well as in DC. And, and, you know, I'll say I left those meetings very encouraged that it would be a much more efficient and more transparent process than what we went through last time.

Speaker Change: Im frame.

Speaker Change: Yes, there is.

Speaker Change: The body of evidence continues to build on deals getting approved.

Clint Stein: Yeah. There's a body of evidence that continues to build on deals getting approved quicker and for banks either our size or to create banks that are our size. And so that gives us a lot of optimism. And the other thing is that we had fairly robust pre-flight conversations with the regulators both at the regional office level as well as in DC. And I'll say I left those meetings very encouraged that it would be a much more efficient and more transparent process than what we went through last time. And the other aspect of it is we don't expect a DOJ review. And the DOJ review cost us 11 months with the Columbia and Umpqua one. So that right there is I think another data point that leads us to believe that getting this as close as a 2025 event is very likely.

Speaker Change: <unk>.

Speaker Change: And for banks, either our size or to create things that are our size and so that that gives us.

Speaker Change: A lot of optimism.

Speaker Change: And the other thing is is that.

Speaker Change: We.

Speaker Change: We had fairly robust pre flight conversations with the regulators both at the regional office level as well as in D C and.

Speaker Change: I'll say I left those meetings very encouraged that it would be.

Speaker Change: A much more efficient and trans more transparent process than what we went through last time and the other aspect of it is is we don't we don't expected Doj review and the Doj review cost US 11, 11 months with the Columbia one so.

Clint Stein: And, and the other aspect of it is, is we don't, we don't expect a DOJ review. And the DOJ review cost us 11, 11 months with the Columbia qual one. So that right there. I think another. data point that leads us to believe that getting this as close as a 2025 event is very likely.

Speaker Change: That right there is I think another.

Speaker Change: Data point that leads us to believe that.

Speaker Change: Getting this is closer to 2025 event is very likely.

Speaker Change: Okay, and then just last for me and maybe for Frank just.

Timur Braziler: Okay. And then just last for me, maybe for Frank, just looking at the credit mark, it looks well below PPBI's allowance level. Can you just talk to kind of the methodology in coming up with that 80 basis point mark relative to what looks like almost a 1.5% reserve for PPBI?

Frank Namdar: Okay, and then just last for me, maybe for Frank, just... Looking at the credit mark, it looks well below PVBI's allowance level.

Speaker Change: Looking at the credit Mark it looks well below <unk> allowance level can.

Speaker Change: Can you just talk to kind of the methodology and coming up with that 80 basis point Mark.

Ronald Farnsworth: Can you just talk to kind of the methodology in coming up with that 80 basis point mark relative to what looks like almost a 1.5% reserve for PVBI? Yes, Ron. And as Frank mentioned earlier, obviously quite a bit of Significant amount of credit dealing. Reviewing ACL modeling, economic forecast, etc. Given the weight of the multifamily portfolio, the loss is just aren't there to support a higher level. That's how we weighed it into that 80 basis points. In essence, 55% of the portfolio being multifamily is sitting at, you know, just under 60 basis points. And even that's probably overstated, just given the long term lack of No credit issues expected in that portfolio were seen over the history.

Speaker Change: Relative to what looks like almost one 5% reserve for BBVA.

Speaker Change: Yes. This is Ron as Frank mentioned earlier, obviously quite a bit of it.

Matthew Clark: Yeah. This is Ron. And as Frank mentioned earlier, obviously, quite a bit of a significant amount of credit diligence and reviewing, ACL modeling, economic forecasts, etc. Given the weight of the multifamily portfolio, the losses just aren't there to support a higher level. That's how we weighted into that 80 basis points. In essence, 55% of the portfolio being multifamily is sitting at just under 60 basis points. And even that's probably overstated just given the long-term lack of credit issues expected in that portfolio we're seeing over the history.

Speaker Change: We have an amount of credit diligence and.

Speaker Change: In reviewing ACL modeling economic forecasts et cetera, given the weight of the multifamily portfolio the losses just.

Speaker Change: Aren't there to support a higher level, that's how we're weighted into that 80 basis points in essence.

Speaker Change: 55% of the portfolio being multifamily is sitting at just under 60 basis points and even that's probably overstated just given the long term lack of.

Speaker Change: Credit issued as expected in that portfolio were seeing over the history.

Speaker Change: Got it and then also jived with due diligence activity as well looking out looking out three months six months, then also factored into that number.

Clint Stein: Got it. And that also jived with the due diligence activity as well looking out 3 months, 6 months. That also factored into that number.

Ronald Farnsworth: And that also jived with the with the due diligence activity as well, looking out, looking out three months, six months, that also factored into that number. Thank you.

Speaker Change: Great. Thanks.

Speaker Change: Thank you.

Timur Braziler: Great. Thanks.

Speaker Change: And I show. Our next question comes from the line of John Armstrong from RBC Capital markets. Please go ahead.

Operator: Thank you. And I share our next question comes from the line of Jon Arfstrom from RBC Capital Markets. Please go ahead.

Jon Arfstrom: And I show our next question comes from the line of Jon Arfstrom from RBC Capital Markets. Please go ahead. Hey, thanks. Evening, everyone. Hey, Jon. Usually, we'd be neck deep in the nuances of your earnings, I guess.

John Armstrong: Hey, thanks.

Speaker Change: Good evening everyone.

Jon Arfstrom: Hey. Thanks. Evening, everyone.

John Armstrong: Hey, John.

John Armstrong: Usually we'd be neck deepen the nuances of your earnings I guess.

Clint Stein: Hey, John.

Jon Arfstrom: Usually, we'd be neck-deep in the nuances of your earnings, I guess. But what would you call out in your earnings for the quarter that you think went well and what you need to work on further? Just curious your level of confidence in that 2026 consensus estimate. I know it's our estimate, but what are some of the puts and takes to hitting that?

John Armstrong: But what would you call out in your earnings for the quarter that you think went well.

Clint Stein: But what would you call out in your earnings for the quarter that you think went well? and what you need to work on further. And I'm just curious to your level of confidence in that 26 consensus estimate. I know it's our estimate, but what are some of the puts and takes to hitting that? I think that the thing that I really looked at is the deposit growth that we had and and what we were expecting. You know, as Ron said, you know, guiding into the first quarter, that our seasonality could be up to a half a billion of additional wholesale funding.

John Armstrong: And what you need to work on further in it.

Just curious your level of confidence in the 2006 consensus estimate I know, it's our estimate but what.

John Armstrong: What are some of the puts and takes to hitting that.

John Armstrong: I think that the thing that I really looked at is.

Clint Stein: I think that the thing that I really looked at is the deposit growth that we had and what we were expecting, as Ron said, guiding into Q1 that our seasonality could be up to $500 million of additional wholesale funding. To have the growth that we had and still see the seasonal activity, we could still see the patterns that we historically would because, I mean, literally by month and by the point in time in the month, if it's bonus payments, tax payments, or distributions, you can see the flows. And those flows are still there. So it wasn't like we didn't experience the seasonality, but the results of our bankers both on the retail small business side but also on the commercial side made a difference for us.

John Armstrong: The deposit growth that we had.

John Armstrong: And what we were expecting.

John Armstrong:

John Armstrong: As Ron said.

John Armstrong: You're guiding into the first quarter.

John Armstrong: Our seasonality to be up to.

John Armstrong: 5 billion of additional wholesale funding.

Clint Stein: And, and, you know, to have the growth that we had and still see the seasonal activity, we could still see the patterns that we historically would, you know, because I mean, literally by by month, and by the point in time in the month, bonus payments or tax payments or, you know, distributions, you can see the flows and those flows are still there. So it wasn't like we didn't experience the seasonality, but the results of our bankers, both on the retail small business side, but also on the commercial side, made a difference for us. And I think that as we look at, as we've said, really around the margin, which then drives a big portion of earnings.

John Armstrong: And and.

John Armstrong: To have the growth that we had and still see the seasonal activity, we could still see the patterns.

John Armstrong: We historically would because it mean literally by by month and by the point in time in the month.

John Armstrong: <unk> bonus payments or tax payments or distributions you can see the flows and those flows are still there. So it wasn't like we didn't experience the seasonality, but the <unk>.

John Armstrong: Results of our bankers both on the.

John Armstrong: Our retail small business side, but also on the commercial side.

John Armstrong: Made a difference for us and I think that as we look at and as we've said.

Clint Stein: I think that as we look at and as we've said, really around the margin which then drives a big portion of earnings, it's deposit flows that are going to determine our level of performance in that regard. So that's really encouraging. From my perspective, I would have liked to have seen some more CNI loan growth. But I'm encouraged by the year-over-year origination activity was up 17%. But unlike in Q4 where the activity's translated into some really strong annualized growth, Q1 it didn't. So Tory and I and Chris are really watching closely. There's still a lot of optimism in terms of Q2, Q3 from our bankers and things they have in their pipelines. But that's the area where I'm really looking. And then of course, we'd always love to have more CORFI income. So I kind of hit the major ones.

John Armstrong: Really.

John Armstrong: Around the margin, which then drives a big portion of earnings its deposit flows that are going to determine our level of performance.

Torran Nixon: It's deposit flows that are going to determine our level of performance in that regard. So that's really encouraging. From my perspective, I would have liked to have seen some more C&I loan growth, you know, but I'm encouraged by the year-over-year origination activity was up 17%. But unlike in the fourth quarter, where the activities translated into some really strong annualized growth, first quarter, it didn't. So Tori and I and Chris are really watching closely. There's still a lot of optimism in terms of second quarter, third quarter from our bankers and things they have in their pipelines.

John Armstrong: In that regard so that's really encouraging.

John Armstrong: From my perspective.

John Armstrong: I would have liked to have seen.

John Armstrong: Some more C&I loan growth.

John Armstrong: <unk>.

John Armstrong: But I'm encouraged by the year over year origination activity was up.

John Armstrong: 17%.

John Armstrong: But unlike in the fourth quarter were the activities translated into some really strong annualized growth first quarter. It didn't.

Speaker Change: <unk> and Chris are really watching closely.

Speaker Change: There's still a lot of optimism in terms of second quarter third quarter from from our bankers and things they have in their pipelines. So.

Speaker Change: But that's the area, where I'm really looking and then of course, we'd always love to have more more core fee income.

Clint Stein: But that's the area where I'm really looking. And of course, we'd always love to have more core communities. So I kind of hit the major ones.

Speaker Change: Hit the major ones look down the table and see if tori Chris want to add anything.

Torran Nixon: I'll look down the table and see if Tori or Chris want to. This story, I think the only thing I'd add to it is, as Clint talked about, the pipelines are pretty strong, actually, there's a lot of momentum. We had some C&I growth, as Clint talked about, that didn't book in the first quarter. They kind of got pushed last minute into the second quarter, but pipelines are strong. They're up about 10% from end of Q4. So a lot of good momentum. So I like to see that. And I think the fee income side, same. And we've got some really good pipelines, both loan deposits and in-core fee income.

Clint Stein: I'll look down the table and see if Tory or Chris want to add anything.

Speaker Change: <unk> I think the only thing I'd add to it is as Glenn talked about the pipelines are pretty strong actually there's a lot of momentum and we had we had some C&I growth as Glenn talked about that didn't book in the first quarter. They kind of got pushed last minute into the second quarter.

Tory Nixon: This is Tory. I think the only thing I'd add to it is, as Clint talked about, the pipelines are pretty strong actually. There's a lot of momentum. And we had some CNI growth as Clint talked about that didn't book in Q1 that kind of got pushed last minute into Q2. But pipelines are strong. They're up about 10% from end of Q4. So a lot of good momentum. So I like to see that. And I think the fee income side's same. And we've got some really good pipelines both loans, deposits, and in core fee income. So I think things are looking pretty good for us going forward.

Speaker Change: But pipelines are strong they're up.

Speaker Change: 10% from from end of Q4, so a lot of good momentum so I like to see that and I think.

Speaker Change: The fee income side same and we've got some really good pipeline loans deposits and core fee income. So I think things are looking pretty good for us going forward.

Torran Nixon: So I think things are looking pretty good for us going forward.

Speaker Change: Okay fair enough.

Speaker Change: And then maybe a follow up on Chris Mcgratty question.

Jon Arfstrom: Okay. Good. Fair enough. Then Clint, maybe a follow-up on Chris McGratty's question. Just some of the feedback tonight's been that there's still more opportunity from the Umpqua merger. This could be a little bit too early. I know that might be unfair, but curious where you think you're going to push your people just to make sure you are ready for the merger.

Clint Stein: Good, fair enough.

Clint Stein: And then Clint may follow up on Chris McGratty's question. Um, just some of the feedback tonight's been that there's still more opportunity from the UMQA merger. This could be a little bit too early. I know that might be unfair, but curious where you think you're going to push your people just to make sure you are ready for the So so the opportunity, the unharvested opportunity from the Umpqua merger is really around process improvement. And we have a get better every day type of mindset, not change for the sake of change, but that do things better, simplified, more efficient.

Just some of the feedback kind of it's been that there's still more opportunity from the umpqua merger this could be a little bit too early.

Speaker Change: It might be unfair but.

Speaker Change: Curious, where you think youre going to push your people just to make sure you are ready.

Speaker Change: For the merger.

Speaker Change: So the opportunity.

Clint Stein: So the opportunity, the unharvested opportunity from the Umpqua merger is really around process improvement. We have a get better every day type of mindset, not change for the sake of change but that do things better, simplify, more efficient. And that work will never be done. I would say some of the things that we would have done maybe over a longer time horizon was the expense initiative and reorg that we did in the Q2 of last year. So rather than pacing that out, we did that over a 90-day time period. And so that lift was done. But really, it's kind of operate our business, make it the best that it can be. And we're never satisfied. We always think we can do something better.

Speaker Change:

Speaker Change: The unharvested opportunity from the Umpqua.

Speaker Change: Merger.

Is.

Speaker Change: Really around process improvement and we have a get better everyday type of mindset.

Speaker Change: <unk> not changed for the sake of change but that.

Speaker Change: Do things better simplified more efficient.

Speaker Change: And that's that work will never be done.

Clint Stein: And that work will never be done. I would say some of the things that we would have done, maybe over a longer time horizon, was the expense initiative and reorg that we did in the second quarter of last year. So rather than pacing that out, we did that over a 90 day time period. And so, so that that that lift was done. but but really that's that's the It's kind of operate our business, make it the best that it can be. And we're never satisfied. We always think we can do something better. But in terms of having our bankers on their front foot, out winning new business, competing in the marketplace.

Speaker Change: I would say some of the things that we would have done.

Speaker Change: Over a longer time horizon.

Speaker Change: <unk> was the.

Speaker Change: Expense initiatives in.

Speaker Change: Re org that we did in the second quarter of last year, so rather than and pacing that out we.

Speaker Change: Did that over a 90 day time period and so.

That lift was done.

Speaker Change: But but really that's that's the.

Speaker Change: It's kind of operator business make it the best that it can be and we are never satisfied. We always think we can do something better but in terms of having our bankers on their front foot out winning new business compete.

Clint Stein: But in terms of having our bankers on their front foot out winning new business, competing in the marketplace, continuing to invest in the growth of our franchise whether it's products and services or technology or our people, we're doing all of those things. And so it really is business as usual. So there's not a laundry list of things that we have to do and that any of those get delayed by this partnership with Pacific Premier. The one other element that's there is just the balance sheet remix. And that's just a matter of when rates cooperate or these things hit their maturities, hit the bid, and get it done. So that's not anything that's a distraction or requiring a heavy lift on the part of any of our team members that would then inhibit our ability to execute on this deal that we're talking about today.

Speaker Change: Competing in the marketplace.

Speaker Change: Continuing to invest in the growth of our franchise, whether it's products and services our technology.

Clint Stein: Continuing to invest in the growth of our franchise, whether it's products and services or technology or our people. We're doing all of those things. And so, it really is business as usual. So, there's not a laundry list of things that we have to do. and that any of those get delayed by by this partnership with PAC Premier. The one other element that's there is just the balance sheet remix. And and that's just a matter of of when when rates cooperate. These things hit the maturities, hit the bid, and get it done. So that's not anything that's a distraction or requiring a heavy lift on the part of any of our team members that would then inhibit our ability to execute on this deal that we're talking about today.

Speaker Change: Sure.

Speaker Change: Our people.

Speaker Change: We're doing all of those things and so it really is business as usual so theres not a laundry list of.

Speaker Change: Things that we have to do in in any.

Speaker Change: Any of those get delayed by.

Speaker Change: By this partnership with Pac Premier the one other element. That's there is just the balance sheet remix and.

Speaker Change: And that's just a matter of win win rates cooperate or.

Speaker Change: These things hit their maturities hit the bid and get it done so thats not anything thats, a distraction or requiring a heavy lift on the part of any of our team members that would inhibit our ability to execute.

On on.

Speaker Change: This deal that we're talking about today.

Speaker Change: Hey, John This is Steve Gardner.

Steven Gardner: Hey, Jon, this is Steve Gardner. You know, you bring up an important point. This was very early on. One of the primary questions that we as a management team and a board had, and something that we did a lot of due diligence around, was exactly where was the combined entity and were they ready to take this next step. And I can tell you, we have a high level of confidence in the organization, otherwise we wouldn't be here today. Very helpful.

Steve Gardner: Hey, John. This is Steve Gardner. You bring up an important point. This was very early on one of the primary questions that we, as a management team and a board, had, and something that we did a lot of due diligence around was exactly where was the combined entity and were they ready to take this next step? And I can tell you we have a high level of confidence in the organization. Otherwise, we wouldn't be here today.

Steve Gardner: Hey, Jon. This is Steve Gardner. You bring up an important point. This was very early on one of the primary questions that we, as a management team and a board, had, and something that we did a lot of due diligence around was exactly where was the combined entity and were they ready to take this next step? And I can tell you we have a high level of confidence in the organization. Otherwise, we wouldn't be here today.

Speaker Change: You bring up an important point this was very early on.

Speaker Change: One of the primary questions that we as a management team and our board at and something that we did a lot of due diligence around was.

Speaker Change: Exactly where it was the combined entity and where are they ready to take this next step and I can tell you we.

Speaker Change: A high level of confidence in.

Speaker Change: In the organization otherwise we wouldn't be here today.

Okay.

Speaker Change: Okay, Great very helpful and I would just say for the record I'm I'm.

Jon Arfstrom: Okay. Very helpful. And I would just say for the record, I'm happy about the name change. I think that's smart just to be under one brand for what it's worth. Thanks.

Clint Stein: And I would just say for the record, I'm I'm happy about the name change. I think that's smart, just to be under one brand, for what it's worth. Yeah, thanks, Jon. Thank you.

Speaker Change: I am happy about the name change I think that's that's smart just to be under one brand.

Speaker Change: For what it's worth.

Speaker Change: Yes, Thanks John.

Speaker Change: Thank you.

Tory Nixon: Yeah. Thanks, John.

Tory Nixon: Yeah. Thanks, Jon.

Speaker Change: And I show. Our next question comes from the line of Jared Shaw from Barclays. Please go ahead.

Operator: Thank you. And our next question comes from the line of Jared Shaw from Barclays. Please go ahead.

Jared Shaw: And I'm sure our next question comes from the line of Jared Shaw from Barclays. Please go ahead. Hey, good evening. Thanks. Congratulations on the deal.

Jared Shaw: Hey, good evening.

Speaker Change: <unk>.

Jared Shaw: Hey. Good evening. Thanks. Congratulations on the deal. I guess as we look at the CRE and the work that Clint and you all have done to bring that concentration level down, should we think that going forward you're just more comfortable sitting at a higher level of CRE with this combination, or as sort of time progresses, should we expect to see that come back down to where you are now?

Speaker Change: Congratulations on the deal I guess.

Speaker Change: You look at the CRE and the work that you.

Clint Stein: I guess, you know, as we as we look at the CRE and, you know, the work that Clint, you all have done to bring that concentration level down, should we think that going forward, you're just more comfortable sitting at a higher level of CRE with this combination? Or, you know, as, as sort of time progresses, you'd expect to see that come back down to where, where you are now? You're good. You're going to see a similar trend line that you've seen over the last couple of years. Post Columbia-Umpqua merger, you're going to, you know, if you go back further in time, and you look at at deals that Columbia did, there was always a downward slope in the CRE ratio, just because the banks that joined us typically had a higher level.

Speaker Change: You all have done to bring that.

Speaker Change: Concentration level down.

Speaker Change: Going forward you just more comfortable.

Speaker Change: Sitting at a higher level of CRE with this combination or.

Speaker Change: As.

Speaker Change: Time progressing should we expect to see that.

Speaker Change: Come back down to where.

Speaker Change: Where you are now.

Speaker Change: Youre going to see a similar trend line.

Clint Stein: You're going to see a similar trend line that you've seen over the last couple of years post-Columbia-Umpqua merger. You're going to, if you go back further in time and you look at deals that Columbia did, there was always a downward slope in the CRE ratio just because the banks that joined us typically had a higher level. Steve has a great slide in his IR deck that shows their history of doing the same thing of walking down those ratios over time. And so I think we're in alignment. And really what's got the ratio above 300 is the multifamily book. We're not opposed to multifamily. We've talked about stability and the quality of the credit. But what I'm not a fan of is transactional multifamily. And that's where we still have on our balance sheet today about $3.7 billion of transactional multifamily.

Speaker Change: <unk> seen over the last couple of years.

Speaker Change: Post.

Speaker Change: Columbia Umpqua merger.

Speaker Change: Youre going to if you go back further in time and you look at it.

Speaker Change: Deals that.

Speaker Change: Colombia did there was always a.

Speaker Change: A downward slope in the <unk>.

Speaker Change: Sorry ratio just because of the banks.

Speaker Change: <unk> joined US typically had a higher level.

Speaker Change: Steve has a great slide in his IR deck that shows the history of doing the same thing or walking down those ratios.

Clint Stein: You know, Steve has a great slide in his IR deck that shows their history of doing the same thing, of walking down those ratios. over time. And so I think we're in alignment and, and really what's got got the ratio above 300 is is the multifamily book. We're not opposed to multifamily. We've talked about stability in the quality of the credit. But what what I'm not a fan of is transactional multifamily. And that's where, you know, we still have And on our balance sheet today, about 3.7 billion of transactional multifamily and I think Steve is still working through some on on his balance sheet as well.

Speaker Change: Over time, and so I think we are in alignment.

Speaker Change: And really what Scott got the ratio above 300 is the multifamily book.

Speaker Change: We're not opposed to multifamily we have talked about stability in the.

Speaker Change: Quality of the credit.

Speaker Change: But what what im not a fan of it is transactional multifamily and that's where we still have.

Speaker Change: On our balance sheet today about $3 7 billion of transactional multifamily and I think Steve is still working through some on his balance sheet as well you move that down and we're comfortable comfortably below 300. So that's why I say youre going to see.

Clint Stein: I think Steve was still working through some on his balance sheet as well. You move that down and we're comfortably below 300. So that's why I say you're going to see you're going to see that number come down. Now, we're still going to do relationship-based multifamily for customers where we have a meaningful relationship. But that activity won't keep pace with the runoff that you'll see in those other portfolios.

Clint Stein: You move that down and we're comfortably below 300. So that's why I say you're going to see, you're going to see that that number come down. Now we're still going to do relationship for for customers where we have a meaningful relationship.

Speaker Change: Youre going to see that that number come down and we're still going to do a relationship based multifamily for customers, where we have a meaningful relationship.

Speaker Change: That that activity won't.

Clint Stein: But that that activity won't won't keep pace with the runoff that you'll see in those other portfolios. Okay.

Speaker Change: We will keep pace with the run off that you'll see in those other portfolios.

Speaker Change: Okay, Alright, Thanks, and then could you speak a little bit about the.

Timur Braziler: Okay. All right. Thanks. And then could you just speak a little bit about the cultural integration that you anticipate going forward and what the alignment looks like with the way the two banks do business and maybe especially around some of the incentive structures for RMs? Is that similar to what you have at Columbia?

Clint Stein: All right. Thanks.

Clint Stein: Then, could you speak a little bit about... The cultural integration that you anticipate going forward and what the alignment looks like with the ways that two banks do business and maybe especially around some of the incentive structures for RMs, is that similar to what you have at Columbia? Yeah, I'm excited. I'm excited about some of the components that that PAC Premier has in their incentive structure, because I think it can enhance ours and not enhance from a standpoint of just pay people more money, but align closer to actual desired outcomes and results. And so I do think there's a value that's placed on performance and execution at PAC Premier.

Speaker Change: The cultural integration that you anticipate going forward in.

Speaker Change: What's the alignment looks like with the ways that <unk> business.

Speaker Change: Maybe especially around some of the incentive structures for RMS is that similar to <unk>.

Speaker Change: To what you have at Columbia.

Speaker Change: Yes, I'm excited I'm excited about some of the components.

Clint Stein: Yeah. I'm excited about some of the components that Pacific Premier has in their incentive structure because I think it can enhance ours and not enhance from a standpoint of just pay people more money, but align closer to actual desired outcomes and results. And so I do think there's a value that's placed on performance and execution at Pacific Premier. And those are the same things that we value. And so from a cultural standpoint, I think there's really good alignment. One of the things that we did, we gathered our senior leadership teams - what was that? - at the end of February, and we kind of talked through some major components of each operation and each entity. And one of the things that Steve walked through was a deck on their culture. And the words are different, but the principles and the values are identical.

Speaker Change: Components that.

Speaker Change: The Pac Premier has in there.

Speaker Change: Incentive.

Speaker Change: Structure, because I think it can enhance ours.

Speaker Change: And.

Speaker Change: And not enhance from a standpoint of just pay people more money, but.

Speaker Change: <unk> closer to actual desired outcomes and results and so.

Speaker Change: I do think there is a value that is placed on performance and execution at Pac Premier.

Speaker Change: And those are the same things that we value.

Clint Stein: And those are the same things that we value. And so from a cultural standpoint, I think there's really... really good alignment. One of the things that we did, we gathered our senior leadership teams. What was that? At the end of February, and we kind of talked through some major components of each operation and each entity. And one of the things that Steve walked through was a deck on their culture. And the words are different, but the principles and the values are identical. And so when you start from a place like that, then I think that the nuanced differences are very minor.

Speaker Change: And so.

Speaker Change: From a from a cultural standpoint.

Speaker Change: I think theres really.

Speaker Change: Really good good alignment one of the things that we did we gathered our senior leadership teams.

Speaker Change: What was that at the end of February and we kind of talked through some major components of <unk>.

Of each operation at each entity.

Speaker Change: One of the things that Steve walked through was a deck on their culture and.

Speaker Change: The words are different.

Speaker Change: But the principles and the values are identical and.

Speaker Change: So when you when you start.

Clint Stein: When you start from a place like that, then I think that the nuanced differences are very minor, so.

Speaker Change: From a place like that then.

Clint Stein: When you start from a place like that, then I think that the nuanced differences are very minor, so.

Speaker Change: At.

Speaker Change: <unk>.

Speaker Change: But the nuance differences are very minor.

Speaker Change: So.

Speaker Change: This is Tory I just wanted to add one piece of this because I think one of the things that I'm. Most excited about from a cultural standpoint is I've been doing this business for a long time and if you think about commercial bankers in particular.

Torran Nixon: This is Tori. I just want to add one piece to this, because I think one of the things that I'm most excited about from a cultural standpoint is, I've been doing this business for a long time. And if you think about commercial bankers in particular, you kind of get two camps. One is somebody who just likes to make loans, and that's it. And the other is somebody who really understands full relationship banking. And culturally, both companies are completely aligned in the relationship banking aspect of that. And that is, they're kind of simple words, but it's a much more difficult process from a sales standpoint.

Tory Nixon: This is Tory. I just want to add one piece to this because I think one of the things that I'm most excited about from a cultural standpoint is, and I've been doing this business for a long time. And if you think about commercial bankers in particular, you kind of get two camps. One is somebody who just likes to make loans and that's it. And the other is somebody who really understands full relationship banking. And culturally, both companies are completely aligned in the relationship banking aspect of that. And they're kind of simple words, but it's a much more difficult process from a sales standpoint. And the fact that we are both so aligned, I think, is a very, very nice fit and will allow us to grow the combined company much faster and much better than if it wasn't that way.

Speaker Change: Kind of get two camps, one is somebody who just likes to make loans and that's it and the other is somebody who really understands full relationship banking and culturally both companies are completely aligned and our relationship banking aspect of that and that that is.

Speaker Change: Kind of simple words, but it's a much more difficult process from a sales standpoint, and the fact that we're both so aligned I think is a very very nice fit and will allow us to grow the combined company much faster and much better than if it wasn't that way.

Clint Stein: And the fact that we're both so aligned, I think, is a very, very nice fit and will allow us to grow the combined company much faster and much better than if it wasn't that way. Yeah, it inspired Chris to sharpen a pencil on deposit pricing and he saw Pat Vermeer's cost was lower than ours by a few basis points. Yeah.

Speaker Change: And this is Chris I'll add to that Tori that.

Clint Stein: Yeah. And this is Chris. I'll add to that, Tory, that when you look at the cost of funds, you can tell a lot about how bankers go to market. And very similar to the way that we've done it, it's not leading with rate. It's leading with value. It's leading with relationship. And like I said, that comes through in the total cost of funds that you see on their Pacific Premier's books.

Speaker Change: When you look at the cost of funds you can tell a lot about how bankers go to market and very similar to the way that we've done it it's not leading with rate, it's leading with value, it's leading with relationship and that let's say that comes through in the in the total cost of funds that you see on their own Pacific Premier's books.

Speaker Change: Yes, inspired Chris to sharpen our pencil on deposit pricing and you saw it.

Christopher Merrywell: Yeah. It inspired Chris to sharpen the pencil on deposit pricing when he saw Pacific Premier's cost was lower than ours by a few basis points.

Speaker Change: Pat premiers.

Speaker Change: The cost was lower than ours by a few basis points.

Speaker Change: Yeah.

Speaker Change: And just finally for me when you look at La in Southern California.

Timur Braziler: Yeah. And just finally for me, when you look at LA and Southern California, is this the platform you sort of need to get to where you want to be or do you think that there'll be additional hiring or is there an opportunity to take advantage of some of that market disruption from the last few years to grow the team beyond what it will be now?

Clint Stein: And just finally, for me, you know, when you look at LA and Southern California, is this the platform you sort of need to get to where you want to be? Or do you think that there will be additional hiring? Or, you know, is there an opportunity to take advantage of some of that market disruption from the last few years to grow the team beyond what it will be now? I think I can answer that, that it's a little bit of both. So, you know, a $70 billion franchise that has coverage from the Canadian border to the Mexican border has the density that we will have in, you know, what's the world's fifth largest economy.

Speaker Change: Is this the the platform you sort of need to get to where you want to be or do you think that there will be additional hiring or is there an opportunity to take advantage of some of that market disruption from the last few years too.

Speaker Change: Two to grow the team beyond what what it will be now.

Speaker Change: Yeah.

Speaker Change: I think it's I can answer that but it's a little bit of both.

Clint Stein: I think I can answer that. That it's a little bit of both. So a $70 billion franchise that has coverage from the Canadian border to the Mexican border has the density that we will have in what's the world's fifth-largest economy, top 10 pro forma deposit market share, and then our position just broadly in the eight western states, [where] there's four of us that are $70 to $80 billion. But the way that we go to the market as a down the middle of the fairway commercially oriented bank, I think that creates a tremendous amount of opportunity. And we've seen it even with limited infrastructure in that market that we've seen the power of that market, and we've seen the power of being a $50 billion bank in that market. So I think it just acts as an accelerant for what we've done.

Speaker Change: So a $70 billion franchise that has coverage from the Canadian border to the Mexican border has the density that we will have in.

Speaker Change: Whats the world's fifth largest economy.

Speaker Change: Top 10 pro forma deposit market share.

Clint Stein: You know, top 10 pro forma deposit market share, and then our position just broadly in the eight western states of, you know, there's, there's, there's a, you know, four of us that are 70 to 80 billion. But the way that we go to the market is that down the middle of the fairway, commercial commercially oriented bank. I think that creates a tremendous amount of opportunity, and we've seen it, even with limited infrastructure in that market, that we've seen the power of that market, and we've seen the power of being a $50 billion bank in that market.

And then our position just broadly in the eight western states of Av.

Speaker Change: There is there is there is a.

Speaker Change: Before of US that are 70% to 80 billion, but the way that we go to the market as it down the middle of the fairway commercial commercially oriented bank.

Speaker Change: I think that creates a tremendous amount of opportunity and we've seen it even with limited infrastructure in that market that we've seen the power of that market and we've seen the power of being a $50 billion bank in that market. So I think it's just.

Clint Stein: So I think it just acts as an accelerant. for what we've done. And then you take what the talent and the experience in the market of Steve's people. And, and, and I think that it also kind of supercharges what they've been able to do. So I don't know that that, you know, it's going to be a pretty dynamic company, it's gonna, I mean, it's tremendous scarcity value, and we're going to be able to drive additional value in that, particularly in Southern California, but also, you know, throughout throughout 8 states that we have. And And then when we look at What's been really kind of interesting, and even when we were going through the merger and while we were in the waiting period for the Columbia-Umpqua merger, the level of talent that sought us out, that wanted to come and be a part of what we were going to create, and all we had at that point was a promise to create You know, the premier business bank throughout the West.

Speaker Change: Access an accelerant.

Speaker Change: For what we've done and then you take what.

Clint Stein: And then you take the talent and the experience in the market of Steve's people, and I think that it also kind of supercharges what they've been able to do. So I don't know that it's going to be a pretty dynamic company. I mean, it's tremendous scarcity value, and we're going to be able to drive additional value in that, particularly in Southern California but also throughout the 8 states that we have.

Speaker Change: The talent and the experience in the market of Steve's people.

Speaker Change: And.

Speaker Change: I think that it also kind of supercharge is what they've been able to do.

Speaker Change: So I don't know that that.

Speaker Change: No.

Speaker Change: It's going to be a pretty dynamic company, it's going to have I mean, its tremendous scarcity value and we're going to be able to drive additional value.

Speaker Change: In that.

Speaker Change: Particularly in southern California, but also.

Speaker Change: Throughout throughout.

Speaker Change: <unk>.

Speaker Change: The eight states that we have and.

Speaker Change: And then when we look at.

Clint Stein: Then when we look at what's been really kind of interesting and even when we were going through the merger and why we're in the waiting period for the Columbia-Umpqua merger, the level of talent that sought us out that wanted to come and be a part of what we were going to create and all we had at that point was a promise to create the Premier Business Bank throughout the west, this solidifies that. And I think then again, we become the employer of choice in all of our markets.

Speaker Change: What's been really kind of interesting and even when we were going through the merger and why we're in the waiting period for the Columbia Oncall merger.

Speaker Change: Level of talent sought us out that wanted to come and be a part of what we were going to create an all we had at that point was a promise to create.

Speaker Change: Yeah.

Speaker Change: The Premier business bank throughout the west.

Speaker Change: This solidifies that and I think then again, we become the employer of choice.

Torran Nixon: This solidifies that, and I think then, again, we become the employer of choice in all of our markets.

Speaker Change: And all of our markets.

Tory: And this is Tory I was just going to add one other thing here that we there is so much disruption in the southern California market and we will continue we're going to get 40, plus new <unk> going be great teammates.

Torran Nixon: This is Tori. I'm just going to add one other thing here. There is so much disruption in the Southern California market. And we will continue, we're going to get 40 plus new RMs, they're gonna be great teammates. And, and we'll just, we'll keep looking for talent. And when we find talent that we think is creative to the company and helps take market share and grow, we're going to bring them into the bank. We just recently hired a couple folks in Arizona, I think that they're gonna be fantastic for the bank. To Clint's point, you know, we just keep looking for people that want a really good home to have careers.

Tory Nixon: This is Tory. I'm just going to add one other thing here. There is so much disruption in the Southern California market, and we will continue. We're going to get 40+ new RMs. They're going to be great teammates, and we'll keep looking for talent. And when we find talent that we think is creative to the company and helps take market share and grow, we're going to bring them into the bank. We just recently hired a couple of folks in Arizona. I think they're going to be fantastic for the bank. To Clint's point, we just keep looking for people that want a really good home to have careers. And I think that's going to help us even further in Southern California.

Tory: And we'll just we'll keep looking for talent and when we find talent that we think is accretive to the company and helps take market share and grow we're going to bring them into the bank. We just recently hired a couple of folks in Arizona, I think youre going to be fantastic for the bank to <unk> point, we just keep looking for.

Tory: People that want a really good home.

Tory: To have careers.

Unknown Executive: And I think that's going to help us even further in Southern California. Thanks. Thank you.

Tory: That's going to help us even further in southern California.

Tory: Thanks.

Tory: Thank you.

Timur Braziler: Thanks.

Speaker Change: And I show. Our next question comes from the line of Jeff <unk> from D. A Davidson. Please go ahead.

Operator: Thank you. And I share our next question comes from the line of Jeff Rulis from D.A. Davidson. Please go ahead.

Jeff Rulis: And our next question comes from the line of Jeff Rulis from DA Davidson. Please go ahead. Thanks. Good afternoon. I guess. Checking in on kind of the plan to open more branches. And I guess the first part of that question is, is that somewhat on hold with this deal? Do you see that through? You've got too much to juggle or not?

Jeff: Thanks, Good afternoon.

Jeff Rulis: Thanks. Good afternoon. I guess checking in on kind of the plan to open more branches. I guess the first part of that question is, is that somewhat on hold with this deal? Do you see that through? You've got too much to juggle or not? And then maybe the second question, and I know Clint, you're fairly conservative and you're going to take care of one thing before the next, but I guess it begs the question, some of these states in the Rocky Mountain swath, you say you're accelerating Southern California expansion by 10 years with this transaction. Does that open up the discussion to look for M&A to accelerate the Utah, Colorado, Arizona expansion through M&A? So that's part two. Thanks.

Jeff: I guess.

Jeff: Checking in on kind of the plan.

Jeff: Open more branches.

Jeff: I guess first part of that question is that somewhat on hold with this deal do you see that through you've got too much to juggle.

Jeff: And then maybe the second question and I know the clinic fairly.

Clint Stein: And then maybe the second question, and I know, Clint, you're fairly conservative and you're going to take care of one thing before the next, but I guess it begs the question, some of these states in the Rocky Mountain SWAT, you say you're accelerating Southern California expansion by 10 years with this transaction. Does that open up the discussion to look for M&A to accelerate the Utah-Colorado-Arizona expansion through M&A? So that's part two. Thanks.

Jeff: Fairly conservative and you're going to take care of one thing before the next but I guess it begs the question some of these.

Jeff: States in the Rocky Mountain swath.

Jeff: Say youre accelerating southern California expansion by 10 years with this transaction is that <unk>.

Jeff: It went up the discussion to look for M&A.

Jeff: Celebrate.

Jeff: The Utah, Colorado, Arizona expansion through M&A.

Jeff: So thats part too thanks.

Jeff: Yeah, So hi, Jeff.

Clint Stein: Yeah. So hi, Jeff. It doesn't put our De Novo branch expansion strategy on hold. We have two locations in the Phoenix area right now that are under construction. We have one in LA that I think also is a nice fit with Steve's existing footprint, and that will move forward. We just opened Denver last month. We have Colorado Springs coming online. So those things will continue to move forward. And that's really mostly a different group in a different part of our company that executes on those De Novo branch openings. What this does is it allows us to pivot our focus from a De Novo strategy in Southern California to the intermountain states and looking at some opportunities there because again, we see some disruption, and we've seen what our bankers have been able to achieve with limited infrastructure in those newer markets for us.

Clint Stein: So, hi Jeff. it doesn't put our it doesn't put our Our De Novo branch expansion strategy on hold. We have two locations in the Phoenix area right now that are under construction. We have one in in L.A. that that I think also is a nice fit with Steve's existing footprint, and that will move forward. We just opened Denver last month. We have Colorado Springs coming online. So those things will continue to move forward. And that's that's really a different, mostly a different group in a different part of our company that it executes on those De Novo branch openings.

Jeff: It doesn't put or it doesn't put R. R.

Jeff: Our de Novo branch expansion strategy on hold.

Jeff: We have.

Jeff: Two are.

Speaker Change: Two locations in the Phoenix area right now that are under construction.

Jeff: We have one in.

Speaker Change: In L. A that that I think also.

Speaker Change: A nice fit with <unk> existing footprint and that will move forward.

Speaker Change: We just opened Denver last month, we have Colorado Springs coming online.

Speaker Change: So those things will continue to move forward.

Speaker Change: And that's really a different.

Speaker Change: A different group and a different part of our company.

Speaker Change: It executes on those de Novo branch openings.

Speaker Change: The.

Speaker Change: What what what this does is it allows us to pivot our focus from a de novo strategy in southern California.

Clint Stein: The. What this does is it allows us to pivot our focus from a de novo strategy in Southern California to the Intermountain states and looking at some opportunities there. Because again, we see some disruption and we've seen what our bankers have been able to achieve with limited infrastructure in those newer markets for us. And as I always say, they're earning the right for us to reinvest in them and help them grow their franchise. And so I don't want to give the keys to the strategic roadmap out across a conference call. But what I will say is your line of questioning aligns with our way of thinking is that it allows us to pivot those other resources that are not necessarily involved in M&A type stuff towards those newer markets and figure out some opportunities there to capitalize on what we're already seeing.

Speaker Change: To the inner mountain states and looking at some opportunities there because again, we see some some disruption and we've seen.

Speaker Change: What our bankers have been able to achieve with limited infrastructure in those in those newer markets for us.

Speaker Change: And as I always say.

Clint Stein: And as I always say, they're earning the right for us to reinvest in them and help them grow their franchise. And so I don't want to give the keys to the strategic roadmap out across to conference call. But what I will say is your line of questioning aligns with our way of thinking is that it allows us to pivot those other resources that are not necessarily involved in M&A type stuff towards those newer markets and figure out some opportunities there to capitalize on what we're already seeing.

Speaker Change: They're earning the right for us to reinvest in them and help them grow their franchise and so.

Speaker Change: I don't want to give the.

Speaker Change: Ah.

Speaker Change: The keys to the strategic roadmap out across to a conference call, but what I will say is your line of questioning aligns with our way of thinking is that.

Speaker Change: It allows us to pivot those those other resources that are not necessarily involved in M&A type stuff.

Speaker Change: Towards.

Speaker Change: Those newer markets and figure out some opportunities there to capitalize on what where are you seeing.

Speaker Change: Okay. Thanks, Glenn.

Jeff Rulis: Okay. Thanks, Clint.

Clint Stein: Okay, thanks, Clint. Thank you.

Speaker Change: Thank you.

Speaker Change: And I show. Our next question comes from the line of Anthony <unk> from JP Morgan. Please go ahead.

Operator: Thank you. And I share our next question comes from the line of Anthony Elian from J.P. Morgan. Please go ahead.

Anthony Elian: And our next question comes from the line of Anthony Elian from JP Morgan. Please go ahead. Hi, everyone.

Speaker Change: Hi, everyone.

Speaker Change: Curious what type of balance sheet growth you expect from the combined franchise, Ryan if I look at Colombia, Standalone, it's been pretty much on low single digits for the past couple of years, but youre, adding Pacific Premier now because in higher growth market. So what level of balance sheet growth do you envision the combined company to eventually generate.

Anthony Elian: Hi, everyone. Clint, I'm curious what type of balance sheet growth you expect from the combined franchise, right? If I look at Columbia standalone, it's been pretty much a low single-digit score the past couple of years. But you're adding Pacific Premier now, which is in higher growth markets. So what level of balance sheet growth do you envision the combined company to eventually generate?

Anthony Elian: Clint, I'm curious what type of balance sheet growth you expect from the combined franchise, right? If I look at Columbia standalone, it's been pretty much a low single digit score the past couple of years. But you're adding Pacific Premier now, which is in higher growth markets. So what level of balance sheet growth do you envision the combined company to eventually generate? I think one of the things we'll have to work through is this rundown in those transactional real estate. portfolios. And so that's both the multifamily, as well as the single family resi book. You know, I've said publicly that single family resi was too big of a portion of our portfolio, by virtue of being a bigger bank, that helps us kind of start to right size that it gets us about halfway to where we want to be, which is 10% or less of the book.

Speaker Change: I think one of the things we'll have to.

Clint Stein: I think one of the things we'll have to work through is this rundown in those transactional real estate portfolios. And so that's both the multifamily, as well as the single-family resi book. I've said publicly that single-family resi was too big of a portion of our portfolio. By virtue of being a bigger bank, that helps us kind of start to right-size that. It gets us about halfway to where we want to be, which is 10% or less of the book. So bottom line, loan growth will be muted some as those portfolios run off. I would say that if we're not, I would zero in on the CNI and the owner-occupied real estate portfolios. And if we're not growing at least the rate of double of GDP, then I'll be disappointed.

Speaker Change: We'll work through as run down in those transactional.

Speaker Change: Real estate.

Speaker Change: Portfolios and so thats both the.

Speaker Change: The multifamily as well as.

Speaker Change: The single family resin book.

Speaker Change: I've said publicly that.

Speaker Change: Single family Resi was too big of a portion of our portfolio.

Speaker Change: By virtue of being a bigger bank that helps us kind of start to right size that it gets us about halfway to where we want to be which is 10% or less of the book.

So bottom line loan growth will be muted some as those portfolios run run off.

Clint Stein: So, you know, bottom line loan growth will be muted some as those portfolios run run off. You know, I would say that, you know, if we're not on on, you know, I would zero in on the CNI and the owner occupied real estate portfolios. And if we're not growing at at least the rate of double GDP, then I'll be disappointed. So I guess if you have your crystal ball and you tell me what GDP is, and I can tell you in two years and three years, what what I would expect for loan growth, but right now, you know, GDP is expected to be pretty muted.

Speaker Change: I would say that.

Speaker Change: We're not on.

Speaker Change: Zero in on the C&I and the.

Speaker Change: Owner occupied real estate portfolios and if we're not growing at.

Speaker Change: Lisa rated double a GDP then I'll be disappointed.

Speaker Change: I guess.

Speaker Change: If you have your Crystal ball and you can tell me what GDP is and I can tell you in two years three years what.

Clint Stein: So I guess if you have your crystal ball and you can tell me what GDP is, then I can tell you in 2 years and 3 years what I would expect for loan growth. But right now, GDP is expected to be pretty muted. So I'd say that translates into kind of low to mid-single digits.

Speaker Change: What I would expect for loan growth, but right now.

Speaker Change: GDP is expected to be pretty muted side, I'd say that translates into kind of low to mid single digits.

Clint Stein: So I'd say that translates into kind of low to mid single digit.

Speaker Change: Okay, and then my follow up for Steve I'm curious why Pac Premier is not going at this alone right Clint outlined the attractiveness of southern California in his prepared remarks, and I would just think that there is already a ton of growth opportunities for you available given the number of banks out of <unk>.

Steven Gardner: Okay, and then my follow up for Steve, I'm curious why PAC Premier is not going at this alone, right? I mean, Clint outlined the attractiveness of Southern California in his prepared remarks. And I would just think that there's already a ton of growth opportunities for you available given the number of banks that have exited that market in recent years. Thank you. Yeah, no, it's a good question. I mean, that is certainly one of the important areas that the board has been considering from some time for some time, is that what is the best use of the excess capital that we have in looking at organic growth, potentially doing some tactical things around the balance sheet and the like.

Anthony Elian: Okay. And then my follow-up for Steve, I'm curious why Pacific Premier is not going at this alone, right? I mean, Clint outlined the attractiveness of Southern California in his prepared remarks. And I would just think that there's already a ton of growth opportunities for you available given the number of banks that have exited that market in recent years. Thank you.

Speaker Change: <unk> that market in recent years. Thank you.

Speaker Change: Yes.

Speaker Change: It's a good question I mean, certainly.

Steve Gardner: Yep. No, it's a good question. I mean, and that is certainly one of the important areas that the board has been considering for some time is that what is the best use of the excess capital that we have in looking at organic growth, potentially doing some tactical things around the balance sheet and the like. Ultimately, when we looked at it and in particular this opportunity, it was readily apparent that this would accelerate the returns that we generate for our shareholders in a very significant fashion. I'll maybe fall back on one of Clint's comments earlier. Certainly get a hold of the S4 proxy registration statement and read through it. But really, it's the reinvestment that we have here is very attractive.

Speaker Change: One of the important areas that the board has been considering from some time for some time is that what.

Speaker Change: It is the best use of the excess capital that we have and.

Speaker Change: Looking at organic growth.

Speaker Change: Potentially doing some tactical things.

Speaker Change: Around the balance sheet and wide.

Speaker Change: And ultimately when we look at it looked at it and in particular.

Steven Gardner: And ultimately, when we look at looked at it, and in particular, this, this opportunity, it was readily apparent that this was would Accelerate the returns that we generate for our shareholders in a very significant fashion and I'll maybe fall back on one of Clint's comments earlier, certainly get a hold of the S-4 proxy registration statement and read through it, but really it's the reinvestment that we have here is which is very attractive.

Speaker Change: This opportunity.

Speaker Change: It was readily apparent that this was.

Speaker Change: Would accelerate the returns that we generate for our shareholders and a very significant fashion and maybe.

Speaker Change: Maybe fall back on one of <unk>.

Speaker Change: Comments earlier certainly.

Speaker Change: Get a hold of the S. Four.

Speaker Change: Proxy registration statement.

Speaker Change: And read through it but really it's the reinvestments that we have here.

Speaker Change: Is.

Speaker Change: It's very attractive.

Speaker Change: That's great. Thank you.

Steven Gardner: That's great. Thank you.

Anthony Elian: That's great. Thank you.

Speaker Change: Thank you.

Speaker Change: And I show. Our next question comes from the line of Andrew turnaround from Stephens. Please go ahead.

Operator: Thank you. And our next question comes from the line of Andrew Terrell from Stephens. Please go ahead.

Andrew Terrell: And I show our next question comes from the line of Andrew Terrell from Stevens. Please go ahead. Hey, good afternoon.

Speaker Change: Hey, good afternoon.

Andrew Terrell: Hey. Good afternoon. If I could just ask maybe for Ron on the margin, just from an organic standpoint, you had a big drop in the securities purchase accounting this quarter. I would assume that's mostly due to rate volatility that we saw interquarter. But if I step that back up from here, it seems like you could pretty easily get above your kind of margin guidance over the near term. Just maybe wanted to get a sense of where the purchase accounting is going to go or where you're expecting it to go, and then just your thoughts on the organic margin going forward.

Andrew Turnaround: If I could just ask maybe for Ron on the margin just.

Andrew Terrell: If I could just ask, maybe for Ron on the margin, just the from an organic standpoint, you had a big drop in the securities purchase accounting this quarter. I would assume that's mostly due to rate volatility that we saw inter quarter. But you know, if I if I step that back up from here, it seems like you could pretty easily get above your, your kind of margin guidance over the over the near term, just maybe wanted to get a sense of where the purchase accounting is going to go or where you're expecting it to go.

Speaker Change: From an organic standpoint, I mean, you had a big drop in the securities purchase accounting this quarter I would assume thats, mostly due to rate volatility that we saw intra quarter, but if I if I step that back up from here. It seems like you can pretty easily get above your kind of margin guidance over the over the near term just maybe wanted to get a sense of where the purchase accounting is going to go.

Andrew Turnaround: Or what are you expecting it to go and then just your thoughts on the organic margin going forward.

Ronald Farnsworth: And then just your thoughts on the organic margin going forward. Yeah, thanks.

Andrew Turnaround: Yes. Thanks, good great question on the bond portfolio and it is interesting when you get the CPR that essentially is at zero or below. So I was just a complete slowdown in prepays could be related to the overall volatility in the markets and that has pushed out the discount accretion. It didn't go away. It just delayed the recognition.

Ronald Farnsworth: Yes. Thanks. It's a great question on the bond portfolio. It is interesting when you get a CPR that potentially is at 0, if not below. So it was just a complete slowdown in prepay speed. Could be related to the overall volatility in the markets. And that in essence pushed out the discount accretion. It didn't go away. It just delayed the recognition over time. So all else being equal, if there's stability, then yeah, we would see potentially some additional discount accretion back between the last couple of quarters levels, which would help on that front. But if it continues, I'd expect that to continue to stay at this depressed level for at least a couple of quarters. Overall though, back to the NIM question. Really pleased with the results in Q1.

Ronald Farnsworth: Great question on the bond portfolio. And it is interesting when you get a CPR that potentially is at zero if not below. So it's just a complete slowdown and prepays could be related to the overall volatility in the markets. And that in essence pushed out the discount accretion, it didn't go away, it just delayed the recognition. Over time, so all else being equal, if there's stability, then yeah, we would see potentially some additional discount accretion back between the last couple quarters levels, which would help on that front. But if it continues, I'd expect that to continue to stay at this depressed level for at least a couple quarters.

Andrew Turnaround: Over time, so all else being equal if there's stability then yes, we would see potentially some additional discount accretion back between the last couple of quarters levels, which should help on that thread, but if it continues.

Andrew Turnaround: That will be continuing to stay at this depressed level for at least a couple of quarters overall, though back to the NIM question.

Ronald Farnsworth: Overall, though, back to the NIM question, you know, We're pleased with the results in Q1. And like I said, we did pay down the $590 million of wholesale later in the quarter. So we'll see the benefit of that on NIM in Q2. But all else being equal, seasonally, historically, we're usually weaker in the first half of Q2, tax time, etc. It starts to build back up late in the second quarter. Third quarter is always the best month. So overall, in terms of the NIM and the last couple of quarters levels, it's going to be subject to how deposits flow over that time period.

Andrew Turnaround: We are pleased with the results in Q1 and like I said, we did pay down the.

Ronald Farnsworth: And like I said, we did pay down the $590 million of wholesale later in the quarter. So we'll see the benefit of that on NIM in Q2. But all else being equal, seasonally, historically, we're usually weaker in the first half of Q2, tax time, etc. Then it starts to build back up late in the second quarter. Third quarter is always the best month. So overall, in terms of the NIM and the last couple of quarters levels, it's going to be subject to how deposits flow over that time period and are we able to continue to reduce wholesale.

Andrew Turnaround: $590 million of wholesale later in the quarter. So we will see the benefit of that on them in Q2, but.

Andrew Turnaround: All else being equal seasonally historically, we usually weaker than the first half of Q2 tax time et cetera.

Andrew Turnaround: First to build back up late in the second quarter third quarter is always the best months. So overall in terms of the NIM in the last couple of quarters levels SMA subject to how deposit flow over that time period, and we're able to continue to reduce wholesale.

Ronald Farnsworth: And we're able to continue to reduce wholesale.

Speaker Change: Can you Jason I think you guys last quarter I think we were talking about a margin in the range of <unk> 55 to $3 65.

Ronald Farnsworth: Any change to I think you guys, you know, last quarter, I think we were talking about a margin in the range of 355 to 365. Can I try to that level any any refresh to that? That's just what I just covered. Yeah, so subject to deposit flows over the coming couple quarters, if those are better, we're able to reduce wholesale seasonally, as would show maybe in Q3, then that's definitely potential to be in the upper end of that range. Understood.

Andrew Terrell: Any change too? I think you guys last quarter, I think we were talking about a margin in the range of 355 to 365, kind of tracking that level. Any refresh to that?

Andrew Turnaround: Kind of trying to that level any any refresh to that.

Speaker Change: This is what I just covered yes, so service of deposit flows over the coming couple of quarters if.

Ronald Farnsworth: This is what I just covered. Yeah. So, except if the deposit flows over the coming couple of quarters, if those are better and we're able to reduce wholesale seasonally as would show maybe in Q3, then that's definitely potentially been in the upper end of that range.

Speaker Change: Those are better we're able to reduce wholesale seasonally as would show maybe in Q3, then that's definitely potential there in the upper end of that range.

Speaker Change: Understood, Okay, but the rest of my address and congrats to both parties on that deal.

Andrew Terrell: Understood. Okay. The rest of mine were addressed. Congrats to both parties on the deal.

Ronald Farnsworth: Okay, the rest of mine were addressed and congrats to both parties on the deal.

Speaker Change: Thank you.

Unknown Executive: Thank you. And I'm sure our last question in the queue comes from the line of Nick Holowko from UBS. Please go ahead. Hi, thanks for taking my question.

Ronald Farnsworth: Thank you.

Speaker Change: And sorry, one last question in the queue comes from the line of Nick <unk> from UBS. Please go ahead.

Operator: Thank you. And our last question in the queue comes from the line of Nicholas Holowko from UBS. Please go ahead.

Nick: Alright, Thanks for taking my question.

Nicholas Holowko: Hi. Thanks for taking my question. Clint, just thinking about the CRE concentration conversation and the tendency for that to drip lower on the other side of deals that you've done in the past, along with your increased focus on growing relationship-type CNI lending, as you were thinking about potential M&A activity, how did you weigh a deal of this nature versus potentially something that might have been more CNI-focused that could accelerate your growth efforts there?

Nick: Just thinking about the CRE concentration conversation and the tendency for that to drift lower on the other side of deals that you've done in the past.

Nick Holowko: Clint, just thinking about the CRE concentration conversation and the tendency for that to drip lower on the other side of deals that you've done in the past, along with your increased focus on growing relationship type CNI lending, you know, as you were thinking about potential M&A activity, how did you weigh a deal of this nature versus potentially something that might have been more CNI focused that could accelerate your efforts, your growth efforts there? I think... I think I think PAC Premier is CNI focused and I think it gets back to if you look at, you know, zero back in on on the comment that Chris Merriweather said earlier about the deposit composition and and the pricing and the similarities.

Nick: Along with your increased focus on growing relationship type C&I lending.

Nick: As you were thinking about potential M&A activity, how did you weigh a deal of this nature versus potentially something that might have been more C&I focus that could accelerate your efforts your growth efforts there.

Nick: I think.

Nick: I think I think Pac Premier is C&I focused and I think it gets back to if you look at.

Clint Stein: I think Pacific Premier is CNI-focused. I think it gets back to if you look at we'll zero back in on a comment that Chris Merrywell said earlier about the deposit composition, the pricing, and the similarities. So you look at the activities that the Pacific Premier teams are engaged in today, and they very much align with a lot of what we do across our footprint today. So the multifamily is a work walkdown position for Steve. I'm sure we'll chime in on what their focus has been. But I think that it's similar to the multi-year kind of process I've talked about with what we'll do with some of the legacy Umpqua portfolio in multifamily and single-family resi is it takes time to burn that stuff off your balance sheet.

Nick: Zero back in on on the comment that.

Speaker Change: Chris Meriweather said earlier about.

Nick: The deposit composition and.

Speaker Change: And the pricing and the similarities and so.

Speaker Change: You look at.

Clint Stein: And so, you know, you look at The activities that the PAC Premier teams are engaged in today, and they very much align with a lot of a lot of what we do in across our footprint today. So, you know, the multifamily is work, walk down position for for Steve and, you know, and I'm sure will chime in on what their focus has been. But I think that it's similar to the multi-year kind of process I've talked about with what we'll do with some of the legacy UMPQAW portfolio of multi-family and single-family resi is it takes time to burn that stuff off your balance sheet.

Speaker Change: The activities that debt.

Speaker Change: The Pat from your teams are engaged in today and they very much aligned with a lot of a lot of what we do.

Speaker Change: And across our footprint today so.

Speaker Change: The multifamily.

Speaker Change: Work walk down.

Speaker Change: Position for Steve and.

Speaker Change: I am sure will chime in on what their what their focus has been but I think that it's similar to the multi year kind of process I've talked about with what we'll do with some of the legacy Umpqua portfolio of multifamily and single family resi as it takes time to burn that stuff off your balance sheet.

And I think a lot of this that Steve has came through the.

Clint Stein: I think a lot of this that Steve has came through a prior acquisition that he did. That's why I referenced the chart in his investor presentation where it shows over the years how they've walked that down. I don't know that maybe there's one or two other franchises that would be similar in terms of what Pacific Premier brings from a CNI perspective. But there's nobody that brings the density and the core density in the LA and Southern California markets.

Clint Stein: And I think a lot of this that Steve has came through the prior acquisition that he did and that's why I referenced the chart in his investor presentation, where it shows over the years how they've walked that down. So, you know, I and I don't know that maybe there's one or two other franchises that that would be similar in terms of of what Pat Premier brings from a C&I perspective. But there's nobody that brings LA and Southern California markets. I mean, this is this is like This is like a such a natural fit that, you know, and I and, you know, I hate to index too much on the dots on the map.

Speaker Change: A prior acquisition that he did in and that's why I referenced the chart and he is.

Speaker Change: Our investor presentation, where it shows over the years, how they've walked that down so.

Speaker Change: And I don't know that.

Speaker Change: Maybe there's one or two other franchises that that would be similar in terms of what.

Speaker Change: Premier brings from a C&I perspective, but there is nobody that brings the density and the core density in L. A and southern California markets. I mean this is this is like.

Clint Stein: I mean, this is like this is like such a natural fit that and I hate to index too much on the dots on the map, but when you go and you look at the slide deck and you see the complementary nature of our footprints and where Steve has a little bit here in the northwest, and we have a little bit in Southern California, and together it just fits. So probably not the answer you're looking for, but to me, I think this was the deal to do. I think it creates the most value long-term for both sets of shareholders. And yeah, and that's. I'm not worried about the activities. What I want to do is make sure that we keep the great customers that Pacific Premier has and keep their talent.

Speaker Change: This is like such a natural fit.

Speaker Change: And I.

Speaker Change: I hate to index too much on the dots on the map, but when you go and you look at the slide deck and you see the complementary.

Clint Stein: But when you go and you look at the slide deck, and you see the complimentary nature of our footprints, and where Steve has a little bit here in the Northwest, we have a little bit Southern California, and together it just fits. So probably not not the answer you're looking for. But to me, I think this was was The activities. What I want to do is make sure that we keep the great customers that Pacific Premier has and keep their talent. you know, as we say, our focus is keep our people, keep our customers and drive value for the shareholders.

Speaker Change: Nature of our footprints and where Steve is a little bit here in the northwest we have a little bit southern California, and together it just fits.

Speaker Change: So.

Speaker Change: Probably not not the answer Youre looking for but to me I think this was.

Speaker Change: Deal to do I think it creates the most value long term for both sets of shareholders and.

Speaker Change: Yes.

Speaker Change: And that's.

Speaker Change: <unk>.

Speaker Change: I'm not worried about the activities I want to do is make sure that we keep the great customers that Pacific Premier hangers, and keep their talent and.

Speaker Change: As we say our focus is keep our people keep our customers and drive value for the shareholders and that's what we're going to zero in on for the next 24 months.

Clint Stein: As we say, our focus is keep our people, keep our customers, and drive value for the shareholders. That's what we're going to be zeroing in on for the next 24 months.

Steven Gardner: And that's what we're going to be zeroing in on for the next 24 Yeah, Nick, this is Steve Gardner. You may not be familiar with our institution, but similar to Columbia over the years, when we do acquisitions, it typically does take our CRE ratio of 300%. It was well below that prior to the Opus acquisition that we did in 2020, and took us up to 385%. We've been working that down, probably just given the nature of the what had occurred with through the pandemic, and in the subsequent years, it's come down a bit more slowly than we have anticipated.

Steve Gardner: Yes, Nick this is Steve Gardner.

Steve Gardner: Yeah. Nick, this is Steve Gardner and Ron. You may not be familiar with our institution, but similar to Columbia over the years, when we do acquisitions, it typically does take our CRE ratio above 300%. It was well below that prior to the Opus acquisition that we did in 2020 and took us up to 385%. We've been working that down. Probably just given the nature of what had occurred through the pandemic and in the subsequent years, it's come down a bit more slowly than we have anticipated. But we are historically a CNI-focused bank. And you can really see that in spades through the deposit franchise.

Speaker Change: May not be familiar with our institution.

Speaker Change: Similar to Colombia over the years, when we do acquisitions that typically does take our CRE ratio above 300%. It was well below that prior to the Opus acquisition that we did in 2020 and took us up to 385% we've been working that down probably just given the nature.

Speaker Change: The what it occurred with through the pandemic.

In the subsequent years, it's come down a bit more slowly than we have anticipated, but we are historically, a C&I focused bank and you really see that.

Steven Gardner: But we are historically a CNI focused bank, and you can really see that in spades through the deposit franchise. Understood. Thank you both very much for that.

Speaker Change: In spades.

Speaker Change: The deposit franchise.

Speaker Change: Understood. Thank you both very much for that.

Andrew Terrell: Understood. Thank you both very much for that. Then maybe just one final question on the regulatory front. Just thinking from the perspective of the Umpqua deal not having been that far in the distant past, did you feel any sense of urgency to get a deal done in this more favorable regulatory backdrop that we're in, or did the stars just really align for the deal to come to fruition? Thank you both for your answers again.

Speaker Change: And then maybe just one final question on the regulatory front and just thinking from the perspective of the courtyard not having been that far in the distant past did you feel any sense of urgency to get a deal done in this more favorable regulatory backdrop that we're in.

Clint Stein: And then maybe just one final question on the regulatory front.

Clint Stein: And just thinking from the perspective of the UMCOR deal not having been that far in the distant past, did you feel any sense of urgency to get a deal done in this more favorable regulatory backdrop that we're in? Or did the stars just really align for the deal to come to fruition?

Speaker Change: Or did the stars just really aligned for the deals that come to fruition. Thank you both for your questions for your answers again.

Clint Stein: Thank you both for your questions, for your answers again. Yeah, I'm going to say it's the latter. The stars just aligned, you know, and I'll go back to, you know, Steve and I are very experienced in M&A, and we know and understand the importance of developing a relationship with your counterparts at these different institutions, so that when the stars appear that they may be aligning, that there's already a familiarity. And you can have good, candid, honest dialogue and determine if the timing is right. And so, you know, as I said earlier in the call, We've, it's been a couple of years that we've been talking and developing that relationship.

Speaker Change: Yeah I'm.

Speaker Change: Im going to say, it's the latter the stars just aligned.

Clint Stein: Yeah. I'm going to say it's the latter. The stars just aligned. I'll go back to Steve and I are very experienced in M&A, and we know and understand the importance of developing a relationship with your counterparts at these different institutions so that when the stars appear, that they may be aligning, that there's already a familiarity and you can have good, candid, honest dialogue and determine if the timing is right. So as I said earlier in the call, it's been a couple of years that we've been talking and developing that relationship. If it would have been 2026 that the stars aligned, I think we would have done this in 2026. If it was 2027, we would have done it in 2027. But the fact is that everything just kind of aligned, and now is as good of a time as any.

Speaker Change: And I'll go back to.

Speaker Change: Steve and I are very experienced in M&A, and we know and understand the importance of developing a.

Speaker Change: Our relationship with.

Speaker Change: With your counterparts at these different institutions, so that when the stars appear that they may be aligning.

Speaker Change: As already are.

Speaker Change: Familiarity and you can have good candid.

Speaker Change: Honest dialogue and determine if the timing is right and so.

Speaker Change: So as I said earlier in the call.

Speaker Change: Yeah.

Speaker Change: It's been a couple of years that we've been talking and.

Speaker Change: Developing that relationship and.

Speaker Change: If it would've been 2026 that the stars aligned I think we would have done. This in 2026 through 2027, we would have done it in 2027, but.

Clint Stein: And, you know, if it would have been 2026 that the stars aligned, I think we would have done this in 2026. It was 2027. We would have done it in 2027. But the fact is, is that everything just kind of aligned and now it's as good of a time as any. And we believe that, you know, whether you want, however you want to think about it, where we ended up from a go forward pro forma ownership standpoint is kind of where we would have ended up regardless of when we did the deal.

Speaker Change: The fact is is that.

Speaker Change: Everything just kind of aligned in that analysis as good of a time as any and.

Speaker Change: We believe that.

Clint Stein: We believe that, whether you want however you want to think about it, where we ended up from a go-forward pro forma ownership standpoint is kind of where we would have ended up regardless of when we did the deal.

Speaker Change:

Speaker Change: However, you want to think about it where we ended up from a go forward pro forma ownership standpoint is kind of where we would have ended up regardless of when we did the deal.

Speaker Change: Understood. Thank you and congrats on the deal.

Unknown Executive: Understood. Thank you and congrats on the deal. Thank you.

Andrew Terrell: Understood. Thank you and congrats on the deal.

Speaker Change: Thank you thank.

Speaker Change: Thank you.

Clint Stein: Thank you.

Speaker Change: I show no further questions in the queue at this time I would like to turn the conference back to Jackie Bohlen Investor Relations director for closing remarks.

Operator: Thank you. I share no further questions in the queue. At this time, I'd like to turn the conference back to Jacquelynne Bohlen, Investor Relations Director, for closing remarks.

Jacquelynne Bohlen: I show no further questions in the queue.

Jacquelynne Bohlen: At this time, I'd like to turn the conference back to Jackie Bohlen, Investor Relations Director, for closing remarks.

Jackie Bohlen: Thank you Bill and thank you for joining this afternoon's call since we will not be hosting our traditional earnings call. Originally scheduled for tomorrow. Please contact me. If you have any questions I would like to schedule a follow up discussion with members of management.

Jacquelynne Bohlen: Thank you, Dilem. Thank you for joining this afternoon's call. Since we will not be hosting our traditional earnings call originally scheduled for tomorrow, please contact me if you have any questions or would like to schedule a follow up discussion with members of management.

Jacquelynne Bohlen: Thank you, Dylan. Thank you for joining this afternoon's call. Since we will not be hosting our traditional earnings call originally scheduled for tomorrow, please contact me if you have any questions or would like to schedule a follow-up discussion with members of management. Have a good rest of the day.

Speaker Change: A good rest of the day.

Jacquelynne Bohlen: Have a good rest of the day.

Speaker Change: This concludes today's conference call. Thank you for participating you may now disconnect.

Unknown Executive: This concludes today's conference call. Thank you for participating.

Operator: This concludes today's conference call. Thank you for participating. You may now disconnect.

Unknown Executive: You may now disconnect.

Q1 2025 Columbia Banking System Inc Earnings Call & PPBI Acquisition Announcement

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