Operator: Hello, and welcome to Columbia Banking System third quarter 2026 earnings conference call. At this time, all participants are on a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask the 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 raised. To withdraw your question, please press star one one again. At this time, I would like to introduce Jacque Bohlen, Director of Investor Relations, to begin the conference. You may begin.
Jacque Bohlen: Thank you, Towanda. Good afternoon, everyone. Thank you for joining us as we review our third quarter results. The earnings release and corresponding presentation are available on our website at columbiabankingsystem.com. During 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. 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 will now hand the call over to Columbia's Chairman, Chief Executive Officer, and President, Clint Stein.
Clint Stein: Thank you, Jacque, and good afternoon, everyone. Our third quarter results demonstrate steady progress on the same core priorities we have outlined for the past several years, delivering consistent, repeatable performance, continuing to reshape the balance sheet to support long-term profitability, and returning excess capital to shareholders. This quarter, we continued to grow relationship-based commercial loans and utilized funds from strong customer deposit growth to reduce our reliance on wholesale funding, enabling both sides of the balance sheet to contribute to net interest margin expansion. We also returned over $1 billion to our shareholders over the past year through dividends and share repurchases. The completion of our existing buyback authorization resulted in an 8% reduction in our common share count over the duration of the program.
Clint Stein: Given our confidence in Columbia's long-term strategy and our outlook for continued excess capital generation, our board of directors has authorized a new $1.2 billion share repurchase program. Our results reflect the benefits of consistent execution, even as the operating environment continued to shift. Discipline is not always the easiest path, but it's one our teams have maintained quarter after quarter across loan and deposit pricing, credit, and expense management. That sustained consistency has driven improved profitability and a balance sheet increasingly built around full customer relationships. In August, we marked the one-year anniversary of closing our acquisition of Pacific Premier, which was the smoothest integration I've experienced in my 21 years with Columbia. Over that time, we have built a compelling footprint across the West, achieving scale and a competitive presence through the combination of organic growth and strategic acquisitions.
Clint Stein: As I have repeatedly stated over the past 18 months, Pacific Premier was the missing piece to the franchise we envisioned. Our focus remains on fine-tuning our franchise and continued execution on organic growth opportunities. Our Northwest roots support our 10% market share in Washington, Oregon, and Idaho. While our growing presence in other key Western markets provides us with significant opportunity to gain share and further enhance our market position. With the integration fully behind us, we are applying our operational discipline with even greater focus, looking across the company for additional opportunities to improve efficiency and profitability. Together with our continued balance sheet optimization and intentional approach to capital management, this work strengthens our ability to deliver sustainable long-term value for our shareholders. I will now turn the call over to Ivan.
Ivan Seda: Thank you, Clint, and good afternoon, everyone. As Clint highlighted, our Q3 results reflect the progress we continue to make on our strategic priorities. Turning to slide 11, we reported EPS of $0.78 and operating EPS of $0.82 for Q3. On an operating basis, which excludes items detailed in our non-GAAP disclosure, Q3 pre-provision net revenue and operating net income increased 7% and 6% respectively compared to Q2 2026, and 25% and 12% respectively compared to Q3 2025. A more favorable mix of loans and funding together with disciplined expense management drove both the sequential and annual growth. The addition of Pacific Premier also benefited the year-on-year comparison. Turning to slide 12.
Ivan Seda: Average earning assets were $59.8 billion during Q3 as balance sheet optimization and elevated CRE payoffs contributed to modest contraction compared to the prior quarter. We actively managed our funding base using strong customer deposit growth to reduce wholesale funding, including public wholesale balances. Between 30 June and 30 September, we reduced wholesale funding by $1.5 billion, contributing favorably to net interest margin. Slide 13 outlines the contributors to sequential quarter change in net interest margin with NIM at 4.11% for Q3. Adjusting for the three basis point benefit from accelerated repayments this quarter and the three basis point impact of one-time credit-related interest reversals last quarter, our NIM expanded by 12 basis points sequentially. Our balance sheet optimization strategy drove meaningful NIM expansion, building on improvement throughout the past year.
Ivan Seda: As previously articulated, NIM moved above 4%, and excluding unusual items, we expect it to remain above 4% for Q4. More specifically, we are guiding to a Q4 NIM of around 4.05%, which incorporates the impact of carrying excess subordinated debt throughout Q4 at a modestly negative carry. Our latest interest rate modeling continues to show that our balance sheet ratios remain largely neutrally positioned to rates, as Slide 14 details, providing earnings insulation whether interest rates rise or fall. Non-interest income in Q3 was $80 million on a GAAP basis and $87 million on an operating basis, as detailed on Slide 15, at the high end of our guided range. Our results reflect continued momentum across products and businesses, and we expect non-interest revenue to remain in the mid-$80 million range for Q4.
Ivan Seda: Slide 16 outlines non-interest expense, which was $365 million on an operating basis, consistent with last quarter and reflecting disciplined expense management across our core franchise. Excluding CDI amortization, which will decline slightly each quarter, we expect Q4 non-interest expense to be in the $330 to $335 million range as we continue to reinvest in our franchise. Moving on to Slide 17, provision expense was $33 million for Q3, reflecting loan portfolio runoff, credit migration trends, and changes in the economic forecast used in our credit models. Credit metrics remained stable and healthy. Slide 18 details our allowance for credit losses by portfolio, with coverage of total loans at 1.02% at quarter end and 1.25% when credit discount on acquired loans is included. Turning to capital, Slide 19 highlights our regulatory ratios at quarter end.
Ivan Seda: Our CET1 ratio declined slightly to 11.5% as our regular dividend and robust buyback activity modestly outpaced strong capital generation and the benefits of balance sheet optimization. During Q3, we repurchased 6.5 million common shares, returning approximately $200 million to our shareholders and completing our prior repurchase plan. Our total risk-based capital ratio increased to 13.8%, reflecting Columbia Bank's issuance of $250 million in aggregate principal amount of subordinated notes during the quarter. We expect to use these proceeds to redeem approximately $240 million in aggregate principal amount of junior subordinated debentures associated with certain trust preferred securities through early 2027, causing our total risk-based capital ratios to decline by approximately 50 basis points, all else equal. These actions advance our broader strategy to optimize both our balance sheet and our capital structure.
Ivan Seda: Tangible book value declined during the quarter to $18.10, due primarily to an increase in other comprehensive loss as interest rates moved notably higher during Q3. Looking forward, we expect share repurchases to remain in the $150 to $200 million range for Q4 under the new repurchase plan that Clint outlined. Overall, we are very pleased with the financial results for the quarter, generating an ROAA of 1.4% and an ROTCE of over 17%. Our focus remains on protecting the quality of our earnings as we work to improve returns over time. With that, I will now hand the call over to Torran.
Torran Nixon: Thanks, Ivan. Our teams produced another quarter of solid relationship-driven results. Our loan portfolio continues to shift in the direction we want, with commercial loans inclusive of owner-occupied CRE comprising 43% of the total portfolio, compared to 42% at 30 June and 39% a year ago. Competitive pricing and structures that we are unwilling to match contributed to a decline in loans to $46.9 billion from $47.2 billion as of 30 June. Although the pace of decline slowed relative to last quarter. Loan origination volume was $1.2 billion during Q3, with nearly 70% attributable to commercial loans. Our focus remains on winning full commercial relationships rather than single product transactions. These broader relationships extend naturally into deposit and fee income opportunities, supporting stronger overall profitability. Turning to deposits.
Torran Nixon: Strong growth in customer balances supported an increase in total deposits to $52.7 billion, compared to $52.1 billion at 30 June. As we intentionally reduced public wholesale and brokered balances, customer deposits increased by nearly $1.2 billion during Q3 due to seasonal balance growth and new customer activity. As Clint noted, our discipline extends to deposit pricing. The average cost of interest-bearing deposits declined 1 basis point to 1.95% for Q3. Our spot cost of deposits was largely stable at 1.96% as of 30 September, reflecting a measured response to the Fed's rate increase in September. Our relationship approach to banking is driving a greater contribution from fee income to total revenue. We are seeing momentum across core fee businesses, including treasury management, card-based fee income, and services such as international banking. Wealth management also is contributing to more non-interest income.
Torran Nixon: Consistent with our broader focus on improving profitability, we regularly evaluate our physical footprint to ensure it reflects how customers bank with us today and into the future. To that end, we closed 4 branches during Q3 as we continually fine-tune our physical presence. We also opened a branch and a financial hub in Utah, adding locations to support our customers and bankers in our de novo markets. At the same time, we are bringing new talent to Columbia Bank and investing in the development of our existing teams, reinforcing our relationship banking approach and cultivating the next generation of leaders. I will now hand the call back to Clint.
Clint Stein: Thanks, Torran. From the outside, it was a relatively uneventful quarter for Columbia, reflecting another period of consistent execution. Behind the scenes, we are very busy. We have delivered 11 consecutive quarters of predictable financial performance while continuing to reshape our balance sheet and strengthen the franchise we have built across the West. We embrace technology and automation to improve the customer experience and make our teams more effective, enabling our bankers to spend more time serving their customers. Technology enhances our relationship model. It does not replace it. We remain confident in our strategy because our customers are attached to relationships, not a robot. Our customers choose Columbia because of the bankers who know them and their businesses, and our branches remain an important part of how we build and retain these relationships.
Clint Stein: I want to thank our teams for their disciplined execution and drive to get better each and every day. This concludes our prepared remarks. Chris, Torran, Ivan, and Frank are with me, and we are happy to take your questions now. Towanda, please open the call for Q&A.
Operator: Thank you. Ladies and gentlemen, as a reminder to ask the question, please press star one one on your telephone, then wait for your name to be announced. To withdraw your question, please press star one one again. Please stand by while we compile the Q&A roster. Our first question comes from the line of Jon Arfstrom with RBC Capital Markets. Your line is open.
Jon Arfstrom: Hey, thanks. Good afternoon, everyone.
Clint Stein: Hey, Jon.
Jon Arfstrom: Nice job here. There is a lot of places to go, but maybe Ivan, start with you on the margin. Thanks for the thoughts on the Q4 margin, but the 4.05% was a surprise to us, I think. I mean, 4.11% was a big surprise, but I see the items, the 4.05% was a surprise to us, and I guess I am just curious how you feel about the momentum and the margin, where you think this could go over time. You mentioned things like sub-debt maybe suppressing it in the near term, but what do you think the trajectory of the margin could look like over time here?
Ivan Seda: Yeah. Thank you, Jon. I appreciate the question. A couple things I would say around that. First of all, just kind of unpacking Q4 in a little bit more depth, potentially. Recall that while our margin for Q2 reported was 393, that had some negative impacts that we called out last quarter, including the one-time credit related interest income reversals and some of the accounting yield associated with the investment portfolio. When you think about where we landed for Q3, there are really four factors in terms of how I have thought about the margin this quarter. First, obviously, we are benefiting from the absence of those headwinds that we called out 90 days ago, and you can see that pretty clearly on the walk on slide 13.
Ivan Seda: Second, as you get into the earnings release detail, you will see that our loan portfolio optimization, and what Torran articulated earlier, out of lower rate transactional and into our core relationship commercial lending portfolios continues to help support stronger returns. That is something that we do anticipate to continue as we look forward in this higher for longer rate environment. Third, we were, I think, very pleased with the results from a deposit generation perspective without really seeing, at least quarter-on-quarter, a meaningful shift in the overall cost of the deposits. Like I mentioned earlier, that allowed us to continue to optimize the other side of our balance sheet, which has been a core focus of ours with about $1.5 billion of higher cost wholesale funding coming down.
Ivan Seda: Then we noted it earlier, but we did have about $5 million in interest income related to accelerated repayments, and that part of it is more one time in nature. The other factors are really aligned to the strategy that we are pursuing. I think if you look back at the net interest margin over the past four or five quarters, you can see the progress, and it is not always linear. But we anticipated, as we have talked about, I think, pretty openly crossing over the 4%. As we look further on, we will continue to expect to be operating in that low 4% range for the next several quarters. Q4, a few things I would say around that 4.05%.
Ivan Seda: Number one, we will be holding some amount of excess debt as we work through the TruPS redemptions, and that is really just a function of kind of the timing associated with the sub-debt issuance versus going through the various redemption activities over the course of Q4 and Q1. We will work through the majority of that, but that will cause a couple of basis point headwind as we operate through that. Number two, we tend to see seasonal outflows in the second half of Q4, like many of our peers do. So we factor that into our modeling as well for Q4.
Ivan Seda: If you would have asked me, if I would have been willing, which I would not by the way, but if I would have been willing to give you a Q4 number 90 days ago, I would have said 405 at that point as well. We are definitely pacing towards where we expect to be.
Ivan Seda: If we do outperform that, I think it will be a function of what we have seen within rates and the rate impact on asset yields potentially impacting our margin more rapidly than the funding side. But we will see how that shakes out as we move through the course of this quarter.
Jon Arfstrom: Yeah. Okay. Very helpful. It was a good performance. Maybe just to follow up on that, Torran, the origination pace. You mentioned some irrational competition in spots. Can you touch on that a little bit? Then just also maybe comment on what you are seeing in the pipelines.
Torran Nixon: Sure. Yeah, so production was really strong and steady. Pretty consistent quarter over quarter over quarter. So great to see that. As I look into Q4, it looks pretty comparable, like the direction that the teams are going in. The irrational behavior at sometimes in some markets is a little bit silly, especially on the real estate front. You either see much too much leverage in a deal that we are just not interested in or without any real recourse, any guarantee, so a non-recourse structure that the income from the property really does not warrant it, or you are seeing rates that are crazy low. I have seen a bunch at SOFR +100. I have yet to see one dip below 100, but I know it is coming.
Torran Nixon: We just kind of have a quick conversation with the teams and just pass on it because it is not something we want to do. I have been looking a lot at it to see geographically or product type or kind of where it is coming from. It is not a ton of it, and it is broad based, so it is not in one geography or one asset class. It is kind of spread out a bit. It is not all the time, but it is enough to kind of make you shake your head for sure.
Jon Arfstrom: All right. Thank you very much.
Operator: Thank you. Our next question comes from the line of Chris McGratty with KBW. Your line is open.
Chris McGratty: Oh, great. Thank you. Clint, for you, when you announced last year's buyback, which was about a year ago to the day, I think I asked you intent to use, and you said, "We are going to do it," and you did. When you gave the guide for Q4 of the 150 to 200, how do we think about the pace of the 1.2 billion? I guess it is a lot in there between the trough and the balance sheet. You are making a ton of money. You were doing a capital stack of it. It feels like that 150 to 200 pace could move higher over the next few quarters. Just opportunity to agree or disagree.
Clint Stein: Yeah, I think we're comfortable with the pace that we've been at, that 150 to 200 per quarter. We did the authorization that we just completed had a duration of 12 months. We didn't put a 12-month cap on this one. I guess you could do the math and think about that our run rate that we've been doing the last several quarters if we just roll that forward. There's a little more time for that to run past, say, the next 12 months. Again, though, all things being consistent, the economy still being resilient, and things of that nature, our intent is to fully utilize it. We didn't throw a number out there that we don't intend to utilize. But the pacing of it will be pretty consistent, I believe, with what you've seen over the past year.
Clint Stein: Unless we see some sort of major pullback in the stock, then again, we would have the flexibility to do a little more at that point in time if conditions warranted.
Chris McGratty: Okay, great. Then maybe for you and Ivan, just the triangulation between the capital targets, your risk base, I think has always been your kind of binder, but CET1 and TCE. Any more comfort giving us kind of a bogey that you're targeting over the medium term?
Clint Stein: Well, I think we've been pretty consistent for 15-plus years in terms of where we want to be on the target level. We've also had a hard time getting our capital down to those target levels. I think, and Ivan can speak more to, I don't know if he will share with you, but all the modeling that he's done and stress scenarios and how not only the newly authorized repurchase plan, but also our regular dividend. And we feel really comfortable with those stressed results and our ability to continue to return capital to shareholders. The one area that we've talked about in the past is the TCE ratio. And just kind of naturally over time in a stable operating environment, 12% total risk-based capital, 12 and a half, somewhere in there, equates to roughly 8% TCE. And at least on our balance sheet, that's been the historical alignment.
Clint Stein: I exclude the AOCI to a certain extent when I am thinking about TCE. Just like as we were building from below 7 to well above 8 over the past couple of years, I excluded it at that time as well because we have a phenomenal deposit base. We have great liquidity. And we have the ability to hold those securities that are driving those AOCI marks to their maturity or until the rate environment changes course a little bit. I think also back to the modeling that Ivan and his team do. They also model additional rate shocks and what that impact is on our tangible ratio, and we have a lot of comfort around it. I do not know, Ivan, if you want to add any detail.
Ivan Seda: Not a ton to add there. Like Clint indicated, every single quarter as we go through this, we model out what we expect from a capital generation, capital needs, payback period associated with the repurchase program. We are also keenly aware and monitor closely capital ratios on the marked-to-capital basis, including TCE to TA.
Ivan Seda: Like everyone else, we are also keeping an eye to the future with regard to monitoring the potential regulatory capital effects of Basel III proposed rulemaking, and we have a sense for what that could offer. But we are not explicitly counting on that sort of capital relief at this point in time. So long-winded way of saying that it all goes into the mix. We keep track of all of it and we are comfortable with our current levels. Confident in terms of the capital generation that we are going to create here in Q4 and into 2027.
Ivan Seda: That all goes into the equation as we balance out the capital impacts. I guess the last thing I would say, and you did not explicitly ask about it, but we are also in the midst of our Tier 2 capital remix strategy as you know, Chris, with the bond issuance that we completed in Q3 and then the associated redemptions that we are working through now. So that is an active part of our capital management that we are in the midst of as well.
Chris McGratty: Great. Thank you.
Operator: Thank you. Our next question comes from the line of Jeff Rulis with D.A. Davidson. Your line is open.
Jeff Rulis: Thanks. Good afternoon. If I could swing back into the margin for a minute. Ivan, I wanted to make sure I get the headwind in Q4, but it sounds as if you are alluding to that flips as you get those TruPS redemptions. Does that ultimately turn into a tailwind? I just want to understand that piece first, I suppose.
Ivan Seda: Yep. So I will not go over all the details of the specifics of the sub-debt issuance. We completed that 10 non-call five transaction in mid-September. So when we think about Q3 and the funding profile of the bank, that really was only in effect for two weeks out of the full quarter. The TruPS activities, we are working through the redemptions that we have identified as potential. In totality, there is about $240 million worth of Tier 2 capital in the form of trust preferred securities that will be redeemed. About 80% of that pool, 75%, 80% of that pool will be redeemed between now and the end of this year. Then we will have kind of a hanging chad that we will clean up in Q1 of next year.
Ivan Seda: So really what that does is it means that we have got somewhere in the ballpark of $200 million of excess Tier 2 capital. That is our most expensive form of capital, whether it is the legacy TruPS or the sub-debt. So we will have a slightly higher reliance upon that in Q4 relative to Q3 and relative, as you said, in terms of potential future 90 days from now as we talk about outlook for Q1, likely talking about that as a modest benefit going into next year. The other dynamic is more just the seasonal flows associated with our deposit portfolio. Q3 is seasonally strong for us, and that was not the entirety of the strength that Torran talked about earlier.
Ivan Seda: I am sure we will talk more about it here in a bit, but that was a factor in Q3, and we tend to see a little bit of an outflow in H2 of Q4 from a core deposit perspective, typically. That is worth a few basis points as well. Those are the two things that we are looking at in terms of that guiding to that 405 relative to that pro forma adjusted 4.08 for this quarter, excluding the one-time accelerated prepayment.
Jeff Rulis: Right. Sorry, I was kind of alluding to 2027. If you just think about the major pieces of if you enter the year with maybe the seasonal deposit outflows are a headwind in H1, but the TruPS redemptions, the flip of what is happening in Q4 is maybe a net positive. Then you layer on the favorable back book repricing potentially in 2027. I just want to net that out. It still looks like a 405 starting or if you are going into the year, it is still a net maybe positive upward trajectory. Is that fair to say on the margin for 2027?
Ivan Seda: I think that is fair. Although, Jeff, it almost sounds like you are trying to tease out a 2027 guide, but I know you are not. What I would say, we are still going through our planning on 2027, but there are a few things I think that we could expect, at least as we turn the corner into H1 of the year. I think on the balance sheet, you can largely expect more of the same over Q4 and Q1 as we continue to optimize the mix of loans out of transactional and into core relationship-based commercial lending. Which as you have seen throughout the course of this year, mutes the actual balance sheet growth, but does provide what you are alluding to, which is positive revenue momentum in the form of margin expansion.
Ivan Seda: We will continue to maintain what I would call an intense focus on driving core sticky client deposits and leveraging that funding to continue to optimize our wholesale sources. I think when we have connected with you in the past, you will note that that is not linear. There are seasonal flows associated with that optimization, but that will continue as well. I think the resulting NIM kind of in that low four range to start the year but continuing to expand is a reasonable expectation when you put those puzzle pieces together.
Jeff Rulis: Yep. Just trying to get to the drivers. Appreciate it. Maybe hopping over just one other question on the provisioning and the reserve levels. You had net loan runoff this quarter and NPAs down. I guess theoretically, you have a more relationship-heavy model, so de-risking in some ways. I just want to get some understanding of the reserve build with some of these other factors would suggest maybe lightening up. I appreciate it.
Ivan Seda: Yeah. You are spot on. I guess one of the things I would say is I would categorize. I am not sure I would note this being a material shift, right? Going from, it is basically a 1 basis point movement in our overall allowance for loan losses. The economic backdrop that we put into the model this quarter versus 90 days ago was pretty darn similar. I think the one difference being the rate environment and not just kind of where we are at today, but what the model expects going into next year, where I think most folks are modeling a further increase later on this year, and then anywhere from one to three increases over the course of kind of the first half of 2027.
Ivan Seda: Whether or not that translates into more pressure for certain borrowers in real estate and other verticals or not is probably beyond my crystal ball to read. But I think that is probably what the model is catching up on is just that factor. So it is really more the economic backdrop that I think the model was picking up versus anything idiosyncratic in our portfolio. Look to Frank if he wants to add anything to my comments here, but generally in terms of what we are seeing in our book, it has been very positive.
Frank Namdar: No, I think you said it really well. I do not have anything else to add.
Jeff Rulis: Appreciate it. Thank you.
Operator: Thank you. Our next question comes from the line of David Feaster with Raymond James. Your line is open.
David Feaster: Hey, good afternoon, everybody.
Clint Stein: David.
David Feaster: I wanted to dig a bit into the deposit growth. Really, really strong. Obviously, there is some seasonal dynamics, nice tailwinds from the small business campaigns. Could you just touch on some of the drivers that you are seeing on this outside of maybe those two dynamics? How much is commercial versus retail? New account growth versus deeper relationship? If there are any markets or segments where you are seeing more opportunity for growth, just kind of curious what you are seeing there.
Clint Stein: Yeah, David. I will kick it off, and then I am sure Chris and Torran will fill in the details on that. But I think it comes back to what we have been saying really for the last three and a half, coming up on four years is post the Umpqua acquisition. We have been running the legacy Columbia model. A little bit of that has been tempered optically by the balance sheet repositioning and things. But each quarter we have talked about the activities of our bankers, and that is what we really focus on. I know a lot of folks run their models off of just earning asset growth. But I really look at it from the standpoint of, are our bankers doing the right activities?
Clint Stein: As time progresses, both the consistency and stability of our earnings, the growth in fee income, which is a byproduct of what we are doing on the commercial C&I side. The small business activity that we are driving out of there. We had another great year in terms of the SBA rankings. That has been a big focus of ours and making sure that we are serving the smallest of businesses as well as all the way up through the upper middle market. I think that what you saw in addition to Q3 is always our seasonally strongest from a deposit standpoint. But I will point you back to it is our business model and it is the ongoing activity of our bankers that are committed to that model. I will step back and see if Chris is anxiously waiting to add his commentary here, David. Anxious. Very anxious.
[Company Representative] (Columbia Banking System): Thanks for the question, David. Small business campaigns, they extend across quarters. I want to be pretty upfront that that is not driving all of this growth. There is no special products, there is no special pricings. It just allows our branches to have a common purpose and actually have some fun. I think, though, most of all, we are proud of the focus of our bankers that they have on relationship selling to not only new customers, but to deepening existing customer relationships. There is lots of opportunities there, too, with deposits that are held elsewhere. I would also kind of pile on to that of campaigns are just a piece of what we do. The Q3 deposit growth, it was truly a team effort across our franchise, and it touched every single business line.
[Company Representative] (Columbia Banking System): As was previously stated earlier in the call the deposit growth is driven in a disciplined model towards pricing.
[Company Representative] (Columbia Banking System): I mean, holding our cost of funds steady while we continue to remix from higher priced CDs into core deposits is, it's actually fantastic. Simply put, I will turn it over to Torran, I would say this is how we do business.
Torran Nixon: Well, between Chris and Clint, they probably stole all the thunder, but I got a couple of things I want to add because I was very proud of the commercial folks this quarter. They had nearly $1 billion in customer deposit growth, and it is a combination of new customers, new relationships, and new money to the bank with just growth in existing accounts. But then also confidently going back to our customer base and really having that confidence to have conversations to bring any balances they have other places into the company. I give a special shout-out to those folks and our treasury management folks for the work that they did. Clint talked a lot about activities and behaviors. We have, over the last year or so, really instituted some accountability around working capital assessments and relationship reviews.
Torran Nixon: It is producing some really nice results for us, not only on the deposit side, but on the fee income side. Just to give you a couple stats that are, I think, very relevant to it on the fee income side. Our treasury management business is up 7% year over year. Our international banking business is up 19% year over year. Our commercial card business is up 23% year over year. Our merchant card business is up 11% year over year. All of that is a result of some real core behaviors and activities. I think the teams are doing great. Lastly, Clint talked about the integration with Pacific Premier.
Torran Nixon: When you look at the deposit growth for commercial, nearly half of that came out of legacy PP Southern California folks and really shows that they have fully integrated into the company, and they are making some real progress in their existing customers, but getting out in the markets and taking advantage of who we are there to grow our customer base in Southern California.
David Feaster: Okay. That was super helpful. Maybe just touch on the expense side. You have always been cost conscious. We have talked about this previously. It is a part of your DNA. How do you think about the expense front? Where are you finding these savings and improving efficiency to fund the investments that you are making? Just what are some of the key investments that you are focused on as it relates to tech or hiring and even some of the branch expansion that you highlighted in the release?
Clint Stein: Well, David, you as always tend to pack a lot into a single question. As a group, we will try to do our best to touch on all those points. I will just start off by saying that we have put three large organizations together. Anytime you do that, there are processes and things that maybe worked for one organization but are not as efficient as what they can be for an organization with our size and scale now. Then you add into that the speed to which we can automate things. Again, I will go back to my prepared comments about we have a lot of technology. I think our platforms are contemporary. We do not shy away from that. It is a tool. It is a tool that helps remove friction, increase our speed to market, take care of our customers, and create a better employee experience.
Clint Stein: We are always looking at how do we get better every day. The team, and you have probably heard this over the years, whenever they come forward with an investment opportunity, it is usually do you have an offset? There has got to be an inefficiency somewhere in your vertical. Go find it and use that to offset it. In the rare occasion that we cannot find an offset, then we let the revenue projections speak to themselves, and we will make the investment that way. That is kind of similar on our branch. Our de novo branching activity is we determine if there is an underserved market. If there is a gap in continuity of our existing footprint, things of that nature. Most importantly, do our commercial bankers in those markets, are they pushing for and requesting and stating the need for a branch location?
Clint Stein: Because once they do that, then we know the whole market is committed to making that a success. That has been the model we had, I do not know, 6, 7 years ago when we put our first branch in downtown Boise. That is the same model we have utilized as we have expanded to Utah, Arizona, and Colorado, as well as within existing markets. We just opened a branch last quarter in Las Vegas. That is one that, again, the teams were saying, "We need some infrastructure. We can leverage that. We can bring in more commercial customers." I am sure I have only touched on a fraction of the points that you had, so I will step back and see if Ivan, Chris, or Torran want to add anything.
Ivan Seda: I mean, not much to add from my perspective other than, David, I know we have talked about this when we have been together here over the course of the year, that we flagged from the very beginning that we felt we had a unique story to tell for 2026 with
Ivan Seda: embedded within positive operating leverage, right? With revenues coming up as we continue to optimize our business, continue to drive the core fee income that Torran talked about with a lot of singles and doubles. On the expense side, a scenario where we had an opportunity to, as revenue goes up from H1 to H2, an opportunity to take expenses down. I think we have been extremely disciplined in execution of PPBI. I think we celebrated outperforming our original goals and targets with regard to identification of cost savings, predominantly in vendor-based spend and contract spend, which is great. That has allowed us the, frankly, the luxury from my perspective of continuing to reinvest while still staying within the guardrails that we have established for ourselves in funding.
Ivan Seda: Again, this quarter, being able to redeploy some of that capital into future growth in the form of expanded physical presence in markets that we are really excited about. I think as you look out into next year, that discipline will continue as will the reinvestment. I think it is a pretty good mix with regard to that.
Torran Nixon: The only thing I would add, this is Torran, would be some of the people side of it, where to Clint's point, we find an offset and we have invested some on the commercial banking side in Utah and Arizona, our Native American banking business, and our fast food franchise business. Those are like four or so areas where we really look to increase the number of folks. But the talent. We are bringing in some incredibly talented bankers into many parts of the company, but specifically those areas.
Clint Stein: Yeah, David. What I would add on that is we are doing the same thing in the wealth management space. Pretty excited about some of the talent we are currently talking to. When you look at the addition of the private trust business, joined us a year ago from Pacific Premier. Wealth management continues to become a bigger presence, bigger part of that non-interest income. The last quarter was actually our second-largest source of it. We are expecting great things out of that and continued growth as well.
David Feaster: Maybe just kind of a following up on some of those to some degree. Clint, the way you started out the call was talking about the consistency of your performance and what you guys have done. We spend a lot of time talking to investors, talking about the durability of earnings. What gives you confidence? A lot of that we have talked about has been a decent amount of self-help in balance sheet optimization. There is still some tailwinds there. We had tailwinds from the synergies from the deal. A lot of the repricing and shrinking of net negative yielding assets. What gives you confidence that is sustainable going forward? Just as rates are rising and competition is intensifying, there is potential for weaker macro trends. Just kind of curious, what gives you confidence that that is sustainable going forward?
Clint Stein: Well, David, what we cannot control is the macro environment. There is a little bit in as our industry, as the macro environment changes, our industry either gets headwinds or tailwinds, and we face those same headwinds and tailwinds. We do focus on what we can control, and we can control our expense discipline, our pricing discipline, the quality of our fortress balance sheet, the granularity and diversification that is on both sides of the balance sheet, whether it is the loan portfolio, the quality of our investment portfolio, or our core deposit base. That has given us a very resilient, stable-performing company that throughout the 33-year history of our company, and various business cycles. I will use the GFC as an example.
Clint Stein: We took our lumps just like everybody else, but we came through it, bought 5 failed banks from the FDIC and built the company that we have today. So it was not fun, but it was an opportunity for us to really thrive coming out of it. A lot of our customers we view the same way. They are good operators. Whenever their industry goes through any type of pullback or downturn, they usually come out stronger because it is the weaker operators that go away or retrench. We are no different in terms of how we think about our business. I always look at on a relative basis, how are we doing? We have stated that our objective is to always be top quartile. If we are not, then we are working hard to figure out how to get there.
Clint Stein: It is just I have seen it play out over the last 21 years. When I say we are running the historical Columbia business model, you can see that in terms of what is coming on the balance sheet, what we are flushing off the balance sheet. Then we have these headwinds or these tailwinds that you mentioned, mixing out of lower yielding assets, mixing into more of our traditional assets that are coming on at 200-plus basis points higher than the stuff that is rolling off. Then I know we still have pockets of inefficiency within our company that either exist as a byproduct of bringing Umpqua and PacPremier under our umbrella, or just with the advancement in technology and our ability to do things quicker and better. It is not any one single thing. It is really just being focused on every little detail.
Clint Stein: I think I probably drive the team nuts sometimes with some of the details that I come back and ask them with. You are pretty busy right now. You have got a baseball team to root for in the World Series. Mariners didn't make the playoffs. So October, I spent a lot of time digging into the weeds instead of watching baseball. That is why I am pretty confident that we still have some things we can do. Are any of them going to move us from, say, a 140 ROA to a 160? No. What they will do is enable us to maintain our level of performance, maintain that top quartile and top decile returns, and continue to make these investments in our company, whether it be platforms or some of the investments in people that Torran spoke of. We are just a lot of optimism.
David Feaster: That is terrific. Thanks, everybody.
Operator: Thank you. Please stand by for our next question. Our next question comes from the line of Bernard von-Gizycki with Deutsche Bank. Your line is open.
Bernard von-Gizycki: Hey, guys. Good afternoon. Just on the geographic optimization. You opened up the 2 locations in Utah while closing the 4 branches elsewhere. Are there any particular states where you have more optimization remaining, branch closures than others? I would just like to hear some color on the effort. Torran, I believe you said it is more just fine-tuning, so maybe there is not a lot to go?
Clint Stein: Well, I think Chris and Torran can add their thoughts. When we look at where we have a lot of density, and the way that the company was built over time and some of the markets that we are in. They are stable markets. They are not high growth markets. We have great market share and plan to stay in each community that we are in. You look at kind of, well, let us use the Phoenix market as an example. I think we have 5 offices there now. We probably, over time, maybe need 2 or 3 more. We will have the entire metro area covered in terms of how we think about folks. My view is folks will drive 30 minutes if they have a problem that they need to solve or they want to strategize and meet with somebody in person.
Clint Stein: In our metro areas, 30 minutes is kind of what everybody's commute is anyway. In a market like Phoenix where traffic moves and everything, we can do it with a very branch-light approach. The problem that we were trying to solve, and we spent a couple of years trying to solve it, PacPremier solved it for us, was how do we build that kind of density in Southern California? Because one, it is an immense market. Two, 30 minutes with LA traffic, you might go 2 and a half or 3 miles. It is really market by market. Then I look at things like Washington. In Washington, we have our highest branch count. It is a few more than what we have in Oregon and a few more than what we have in California. There is an underserved market that we are looking at right now.
Clint Stein: We believe that that branch would be profitable very quickly. It is just sometimes being opportunistic. Sometimes it is satisfying the request from customers who are saying there is an unmet need here, then assessing it and determining the type of value and business volume we can drive from it. Where we look at it, we probably need some more infrastructure in Colorado to properly serve the Denver market. What we did in Utah was we had some money pigeonholed for Southern California that we were able to divert and reinvest in the Salt Lake area. I feel like that strategically where those offices are placed, we pretty much have coverage that we need in that market. We will shift our attention to some of the other locations. Chris, you want to add anything?
[Company Representative] (Columbia Banking System): Yeah. The only thing I would really say is that fine-tuning is always going on. What Clint describes is almost a daily process. We are always looking at branch profitability, coverage, where customers are going. I would kind of just say it is demand drives some of those new opportunities, and customers certainly do. Beyond that, what you will not see is a mass announcement of closures or something of that nature. We are going to be pretty strategic on any new locations. Yeah, expect to see probably some down the road.
Bernard von-Gizycki: Okay. Just as a follow-up, just to clarify on the $1.2 billion buyback authorization. Was it contemplated the potential capital release from Basel III in that? Is that still just additive? Just kind of curious on that one.
Ivan Seda: No, that would be additive. Clint indicated earlier, unlike what we talked about 12 months ago, almost to the day, this one does not have a time-bound nature to it. So we do have flexibility to look beyond a one-year marker with what our board has authorized regarding that. No, we are not counting on Basel III regulatory capital relief to be able to fully leverage that program. Again, it will take longer than the one-year marker that we executed this latest authorization under.
Bernard von-Gizycki: Great. Thanks for taking my questions.
Ivan Seda: Thank you.
Operator: Thank you. Our next question comes from the line of Matthew Clark with Piper Sandler. Your line is open.
Matthew Clark: Hey, good afternoon, guys. I wanted to hone in on that securities yield up nicely this quarter. I know last quarter rates up, you got tagged with creating less of the discount. I just wanted to answer the question that I am sure I am going to get as to why that was not a headwind this quarter with rates up.
Ivan Seda: Thanks, Matt. I will take that one. I think you have got the backstory right, and you will recall that last quarter I noted as part of our discussion around the investment portfolio itself, that while we had some temporary headwinds with regard to the accounting yield, I expressed confidence that over a long period of time, we would continue to see the bond portfolio yield increase, which is essentially what we are seeing. We continue to have the dynamic of purchases and front-book acquisitions in the bond portfolio coming in at significantly better yields and rates than the back book as that kind of matures off or amortizes away. And we have got something like $250 million to $350 million per quarter of that activity occurring.
Ivan Seda: You think about kind of modeling us out over a longer period of time or if you look kind of on a year-on-year basis, you will continue to see that fixed asset repricing story continue. More specifically to your question, last quarter, what we saw was a decline in the discount accretion associated with rising interest rates, essentially translating into slower prepayment speeds. Directionally, I think that that makes sense. But the nuance that I would introduce to the conversation there is that for those underlying assets, predominantly mortgage-backed securities and commercial mortgages, rates and prepayment speeds aren't linear. As we dig deeper into the modeling, there is typically an S-curve that goes into it. Unlike last quarter, we did not see a meaningful headwind to discount accretion via CPR speeds in Q3.
Ivan Seda: Rates moved up, but prepayment speeds had essentially already reset or adjusted to very low levels last quarter in response to the initial rate increase in the marketplace. With refinance activity already minimal, this quarter's additional rate movement did not really translate significantly into CPR speeds. Overall, our discount accretion on the securities portfolio in Q3 was not all that materially different than it was in Q2, i.e., very low. But it is still significantly below what we recognized in Q1 when we were in a lower rate environment. If you were to kind of balance out two factors, last quarter, the factor of discount accretion recognition reduction was greater than the core back book repricing factor, and it was the inverse this quarter.
Ivan Seda: That we kind of took our lumps and sustained at a lower level on discount accretion recognition in Q3, and then really the core thesis being kind of that back book repricing kind of carrying the day from a securities yield perspective. Probably more than you asked for, Matt, but you did ask, so figured I would get into the details there a bit.
Matthew Clark: That is great. Great color. Thank you. Just on earning asset levels and loan balances, net loans down less than last quarter. I think the expectation is flat to down until maybe mid-2025 on loans. But just help us think through kind of net loan balances. I would assume they are still maybe down a little bit, but in overall earning asset levels over the next few quarters.
Ivan Seda: Yeah, I think you have it right. I think for the next quarter, two quarters, probably three quarters, you can continue to expect to see more of the same from us in terms of core focus on driving relationship-based lending. The variable there that probably is the most, the transactional portfolio has been fairly consistent, and we keep a very close eye on that. I look at it almost daily in terms of the trends that we see within that portfolio. One factor that could play out in Q4 and into Q1 is a slight reduction in CPR speeds in that book. As rates have reset to a higher for longer environment. It has been pretty consistent in order to plan around that transactional portfolio at roughly a quarter of a billion dollars per quarter.
Ivan Seda: The CRE marketplace, as Torran described it earlier, is dynamic, and we have each and every time erred on maintaining our discipline, both regarding structure and price, as Torran talked about. We think that that is serving us very well as we continue to work through this in a disciplined manner and optimize our portfolio. So I think flat to slightly down over the course of Q4 and into Q1 would be a fair expectation there. Then maybe I will just ask Torran if there is anything else that he would speak to in terms of what we are seeing in the marketplace.
Torran Nixon: No. Activity-wise, pipeline, the things that I am seeing on the commercial side of the house is pretty confident that our C&I growth can remain in this low to mid-single digit level, kind of consistent what we have done the last three quarters. Obviously, barring any big macroeconomic headwind. But lots of good activity, lots of good stuff going on in the various parts of the franchise. So feel relatively optimistic to continue what we have been doing.
Matthew Clark: Great. Thank you.
Operator: Thank you. Please stand by for our next question. Our next question comes from the line of David Chiaverini with Jefferies. Your line is open.
David Chiaverini: Hi. Thanks for taking the questions. I wanted to ask about deposit costs. You guys mentioned about down 1 basis point. Can you talk about deposit beta assumption and the outlook from here on deposit costs?
Ivan Seda: Yeah. Great question. You will note, I think, in our materials that we now have kind of the yo-yo is going to keep bouncing around here. So we showed an up run in the beta there and then a down run. We have been pretty consistent, and I have guided to a 50% beta on a through the cycle basis. When I think of that beta, I tend to view it.
Ivan Seda: My personal bias is to view beta over the course of months and quarters, not days and weeks, because some of these things take time to fully settle in. What we saw in the marketplace is in Q2, really the market started to react in what we have seen from competitive pricing perspective. We did adjust some of our pricing around our money market and CD rates over the course of summer. But we have maintained discipline as rates have increased.
Ivan Seda: Yeah, I would say 50% beta is a fair assumption going forward, thinking about Q4 and beyond. I will turn it over to Chris.
[Company Representative] (Columbia Banking System): Yeah, David. What I would add to what Ivan laid out there is that he previously in this call stated that Q4 rates could projected to potentially rise. We always look at it from the standpoint of whether rates go up or they go down, we are going to perform better than the peers. I think we have been able to show that through this latest cycle, that we are able to hold costs low through our relationship strategy and disciplined approach between higher-priced CDs and things of that nature. But the goal is to outperform what the market is. What Ivan puts out there is a good proxy for it. But we battle it each and every day. We talk about deals each and every day, and it just all adds up. So it is just part of our discipline.
David Chiaverini: That is helpful. Then on the non-interest-bearing deposit mix, holding in nicely at 33%, how do the pipelines look on that side? Is the ability to hold this steady kind of in the cards, given, or I should say, despite the backdrop of higher rates?
Torran Nixon: Yeah, this is Torran I would answer that pretty briefly and say, yes, the goal and the assumption is to continue to maintain that mix. It is a result of core operating accounts, new businesses brought into the company, managing and working through all the things we have been talking about for relationship banking is just going to come with non-interest-bearing demand deposits, and that is the emphasis and focus.
Torran Nixon: Yeah. In the current rate environment, that is a pretty steady. We have seen it be steady, and that is kind of the mix that the customers or how they are choosing to keep their money between operating accounts and money market accounts or whatever it may be. It would take a pretty significant rate decrease before people start looking at it and going, "There is no reason to move it into a money market." So I think that is the goal, and I think we are seeing that just over and over especially with new customers as well.
Torran Nixon: One thing that we do, I will just add on one thing real quick, is this relationship profitability model that we leverage in the company of how we price loans, how we price deposits is dependent on all the various pieces that we earn from the customer. Some of that is just good old-fashioned blocking and tackling and telling customers, "Hey, this is what you need to have with us so that we can maintain this level of pricing so that we can all continue to win and be profitable.
David Chiaverini: Good color. Thank you.
Operator: Thank you. Our next question comes from the line of Janet Lee with TD Cowen. Your line is open.
Janet Lee: Good afternoon.
Ivan Seda: Afternoon.
Janet Lee: You've clearly made a lot of good progress running off and repricing the transactional portfolio. I just want to make sure that I'm understanding this correctly on slide 25. The non-transactional loans there have been flat over the past year. Is that basically due production being offset by payoffs? What changes that gets overall loan growth back to positive around mid-2027?
Ivan Seda: Yeah. Page 25 is just a quarter-on-quarter view, so it's not a full year-on-year. But you're right that excluding the rundown in the transactional portfolio, it's been roughly flat over the course of the quarter. We talked about production levels. We've, I think, bounced around between call it $1.2 billion, $1.3 billion. I think we've hit a high point potentially from a production perspective on lending up to $1.4 billion. So we've been in that range pretty consistently. So you don't see a lot of volatility in terms of the production that we produced. We continue to, as Torran alluded to earlier, drive core commercial lending at a 5%, 6% annualized level pretty consistently each and every quarter. So it really has been that transactional headwind from a growth perspective that has held our balance sheet level in check to where it's been here the last several quarters.
Ivan Seda: What could change that? A variety of factors macroeconomically. I mentioned earlier that there's the potential that some of these transactional credits stick around for longer under a higher-for-longer scenario. If that does occur, we still have the benefit of repricing behavior within the portfolio. The buckets that we laid out here on slide 25 are generally not maturity dates, but they're when these assets come up for repricing. So even if they stick around for a little bit longer, they become less and less of a headwind. And I think you see that in the form of this transactional portfolio kind of inching up over time in terms of the yield associated with it.
Janet Lee: Okay. It seems like it's $40.3 billion, the same from a year ago slide. But maybe I'm misunderstanding something. Can check back. You've been obviously holding the line very well on expenses, which is really impressive. But as the growth accelerates in 2027 versus 2026, should the growth trajectory on expenses change in any meaningful way versus what we've seen over the past couple of years? Thank you.
Ivan Seda: Great question. Obviously this year, we had over the course of Q4 in 2025 and then Q1 and Q2 of this year, we were operating through identification and execution on $127 million worth of PPBI cost synergies. The 127 being our original target. We outperformed that. I think we landed at 132 or 133 in terms of total identified savings. That provided an opportunity to continue to bring our expense base down from H1 to H2. I signaled that a range for Q4 that is pretty static to where we landed this quarter in terms of operating expenses. Then as we think about 2027, we guide to something that is in the realm of kind of inflationary-based expenses. Something in the 2% type range is probably a pretty reasonable modeling assumption. Again, we are building our plan now.
Ivan Seda: We will continue to invest in infrastructure and people and technology to grow the bank for years to come. But we will continue to maintain our discipline and find offsets where possible.
Operator: Thank you. Please stand by for our next question. Our next question comes from the line of Timur Braziler with UBS. Your line is open.
Timur Braziler: Hi, good afternoon. In reference to slide 21, it looks like payoff activity slowed this quarter. I am just wondering, was that also rate driven and maybe prepay slowing? Is that level sustainable? Then maybe just provide some color on that $417 million in the other column.
Ivan Seda: From a payoff perspective, yes. We did start to see a little bit of reduction in prepayment speeds over the course of Q3, in particular in August and September as rates rose. It is anyone's guess as to how that is going to manifest in Q4. I would suspect that prepayment behavior will slow down relative to earlier in the year in H1. I did not quite catch the first half of the, or the second question there that you asked.
Timur Braziler: It looks like in the other column, it is negative $417 million. That number is larger than it has been in recent quarters. I am just wondering what that driver was.
Ivan Seda: I do not have that readily available. Maybe we can follow up with you on that one.
Timur Braziler: Okay, great. Maybe just circling back to the deposit commentary. It looks like there is a decent slug of CDs that mature here in the coming quarter. I guess, what is the intent to retain the maturities there? I appreciate your comments about starting to adjust some of your rates for increased competition. I am just wondering what your current CD replacement rates are.
Ivan Seda: Yeah. In general, I think the movement that you have seen over the course of the last year around term deposits, a lot of that movement was in the function of brokered CDs. You can see in our liquidity slide that that is a very small piece of our funding stack at this point. So we really have finalized the optimization of our brokered CD portfolio. The vast majority of what remains is retail consumer CD portfolio. We are working to stabilize and maintain that portfolio under its current size. I think we are seeing CD rollover rates probably north of 80% in general, Chris.
Timur Braziler: Yes.
Ivan Seda: Which is kind of where we would like to be there. We have adjusted some of our flagship offers really in the 6 to 9-month term structures at this point. We continue to look at rate environment outlook, what is likely, and then balance that out with our asset liability management position. So we will continue to be active, usually one or two terms per quarter where we will look to adjust our pricing. See if Chris wants to add anything.
[Company Representative] (Columbia Banking System): Yeah. What I would further add to that is we really look at those CDs on a daily basis of what is renewing, what is coming in. Obviously, if we saw a need to boost the retention rate, we could change the underlying rate for tomorrow. Vice versa, if we were renewing too much, we could take it back the other day.
[Company Representative] (Columbia Banking System): So it really works hand in hand with what our other balances are doing as well. We do not utilize it as a one-off, let us drive balances through higher-priced CDs. We use it as a tool amongst the whole portfolio. We are pretty comfortable with where it is at. We are comfortable with where we fall into the market. You saw earlier in the year where a lot of banks went out and raced out and raised rates, and we held ours down for a while and continued to monitor it.
[Company Representative] (Columbia Banking System): We have come back to where we typically fall, kind of in the middle of the pack or so. Again, I am not sure what the competitors are going to do, but Monday I will know what the new offers are and we will go from there.
Timur Braziler: Great. Thank you.
Operator: Thank you. Please stand by for our next question. Ladies and gentlemen, just in the interest of time, our final question will come from the line of Jared Shaw with Barclays. Your line is open.
John Rao: Hi, this is John Rao in for Jared. Most of my questions have been asked, but just looking at the treasury management growth that you have had this year, what is the penetration that you have of your commercial customer base using that product? I guess how much more runway is there to keep extending that?
Torran Nixon: This is Torran. A couple of things. I am going to go on memory here a bit. Penetration rate for treasury management commercial is roughly 58%. The growth has been from a few different things that we have incorporated. One, when I think of treasury management, I am also kind of adding in some of the other fee-based products, some of the big ones that we mentioned earlier. Based on customers' behavior, we have a technology in the company that gets driven through Salesforce that based on customers' behavior in their accounts, it kind of signals a next best offer for the customer. It could be commercial card, it could be international banking, it could be something else. I think that is feeding that to the Salesforce and our salesforce.
Torran Nixon: And we are getting better and better and better at leveraging that technology, having relationship reviews with customers, providing working capital assessments with customers, and just driving the opportunity that our customers need and want to more efficiently and effectively operate their business. The last thing I would just say is over the last year, we have added some not incremental costs into the company, but we have added some really strong treasury management salespeople in the company. When I think about where we have added bankers throughout the franchise, I think the greatest acumen and strength and just banking prowess has been in our treasury management folks. They really have elevated the game and they are doing some great things. All of those things combined are, I think, allowing us to continue to focus on and grow the business.
John Rao: Okay, great. That is a really good overview. That is all for me. Thanks.
Operator: Thank you. Ladies and gentlemen, at this time, I would now like to turn the call back over to jacque for closing remarks.
Jacque Bohlen: Thank you, Towanda. Thank you for joining this afternoon's call. 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.
Operator: That concludes today's call. Thank you for your participation. You may now disconnect.
