Columbia Banking System Q1 2023 Earnings Call Transcript

Quartr
Provided by Quartr
April 26, 2023

There are 14 speakers on the call.

Operator

For standing by, and welcome to the Columbia Banking Systems First Quarter 2023 Earnings Conference Call. At this time, all participants are in a listen only mode. After the speakers' presentations, there will be a question and answer session. As a reminder, today's conference call is being recorded. At this time, I'd like to introduce Jackie Bohlen, Investor Relations Director for Columbia to begin the conference call.

Speaker 1

Thank you, Valerie. Good afternoon, everyone. Thank you for joining us as we review our Q1 2023 results, which we release shortly after the market close today. The earnings release and corresponding presentation, which we will refer to during our remarks this afternoon, are available on our website at columbiabankingsystem.com. With me this morning are Clint Stein, President and CEO of Columbia Banking Systems Chris Merriwell and Tory Nixon, the Presidents of Umco Bank Ron Farnsworth, Chief Financial Officer and Frank Namdar, Chief Credit Officer.

Speaker 1

After our prepared remarks, we will take your questions. 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 laws. For a list of factors that may cause actual results to differ materially from expectations, Please refer to Slide 2 of our earnings presentation as well as the disclosures contained within our SEC filings. We will also reference non GAAP financial measures alongside our discussion of We encourage you to review the GAAP to non GAAP reconciliations provided in our earnings release and throughout the earnings presentation. I will now turn the call over to Clint.

Speaker 2

Thank you, Jackie. Good afternoon, everyone. It was an extraordinary Q1 for Columbia. We closed our merger with Umpqua Holdings Corporation on February 28, reinforcing Umpqua Bank's position as the largest bank headquartered in the Northwest And creating one of the largest banking franchises headquartered in the West. At $54,000,000,000 in assets, our broader scale and additional products and services enable us to meet the needs of our customer base in expanded ways.

Speaker 2

Over the past 18 months, Our organization has attracted top talent in new and existing markets. These leaders and teams, Alongside our seasoned long time bankers continue to win new business and expand existing relationships. This activity has thrived despite the ongoing preparation for the integration of Columbia and Umpqua. I'm very proud of what our team accomplished during the Q1. In addition to closing the merger, we also completed 2 branch divestiture projects and successfully converted our core systems.

Speaker 2

Careful planning and the dedication of our exceptionally talented team Enabled us to achieve these accomplishments. I want to thank our associates for their commitment and diligence throughout this busy period. It has enabled us to remain on track to realize our targeted cost savings by the end of the Q3. In addition to the heightened activity surrounding the merger, our associates were also engaged with customers Throughout the industry events that unfolded in March. We were uniquely positioned during this period given our robust customer engagement Surrounding the core systems conversion.

Speaker 2

Our teams were able to expand conversations already taking place to discuss Columbia's diversified business model, granular deposit base and tailored solutions for those looking to add products like our insured Cash sweep service. With the historic Q1 for our company, our customers, associates and communities Are already benefiting from enhancements provided by the merger. We remain committed to supporting communities throughout Our 8 state footprint as evidenced by our 5 year $8,000,000,000 Community Benefits Agreement. This agreement supports community development, expanded home ownership and small business formation. In that light, I'm pleased to announce we contributed $20,000,000 to the Unpwap Bank Charitable Foundation in March.

Speaker 2

With the merger closed, our shareholders will quickly begin to realize the expected benefits of our strengthened operations and improved financial performance along with significant capital accretion. And now, I'll turn the call over to you Ron.

Speaker 3

Okay. Thank you, Clint. And for those on the call who want to follow along, I will be referring to certain page numbers from our earnings presentation. Starting on Slide 4, now that we've closed the merger, we present here updated overall financial metrics expected as compared to the original projections in October of 2021. The changes in fair value since then led to significant rate related discounts, which will accrete to interest income over time.

Speaker 3

With that, our tangible book dilution was larger, but our expected GAAP accretion and return on tangible equity increases significantly with a similar earn back. With our core system conversion completed a month ago, we are on track to achieve our expected cost synergies of 135,000,000 on an annualized basis by the end of Q3 this year. Next on Slide 5, We present updated fair value marks at closing as compared to announcement. Given the increase in treasury yields and inversion of the 10 versus 2 spreads since announcement, We ended with $1,760,000,000 in discount marks with all but $130,000,000 of that related to rate. Again, these rate discounts will accrete to interest income, providing a significant and stable additional earnings stream over time, which we'll highlight in a few minutes.

Speaker 3

Also noted, lower in the page is the larger core deposit intangible balance, which will be amortized to expense over time. On Slide 6, we carry forward the discount marks and CDI at closing and also present the current balances as of quarter end. For the AFS securities discount, the decline from closing to quarter end resulted from writing off existing premiums at close of roughly $200,000,000 along with removing the discounts of $165,000,000 on the $1,200,000,000 of bonds sold as part of a restructuring. The remaining decline of approximately $15,000,000 was accreted to interest income. Slide 7 Projects our cost synergy realization estimate at quarter end through the year.

Speaker 3

On an annualized basis, we estimate we've realized $25,000,000 of cost synergies in the month of March run rate with an additional $21,000,000 achieved post conversion, which will reduce our run rate in April. Looking forward, we expect to realize a further $59,000,000 to $64,000,000 in annualized cost savings by the end of the second quarter Or approximately $15,000,000 to $16,000,000 on a quarterly basis, achieving these synergies evenly throughout the quarter. Slide 8 covers our liquidity, including deposit flows during the quarter. For comparability, we presented the table on the left as if we were combined for all periods presented. Total deposits declined 4.9% in the 1st quarter or 3.6% when excluding the divestiture Sure, required with the combination.

Speaker 3

Market liquidity tightening and the impact of inflation on consumer spending continued to pressure customer deposit balances. We utilize short term Federal Home Loan Bank borrowings to fund the outflows, along with adding $2,000,000,000 for higher on balance sheet liquidity. The upper right table details our off balance sheet liquidity with $9,700,000,000 available as of quarter end. Below that, we had cash and excess bond collateral not pledged for lines to arrive at total available liquidity of $17,900,000,000 This represents 121 percent of uninsured deposits as of quarter end. On the next page, Slide 9, we detail out the investment portfolio.

Speaker 3

The upper left table takes you from current par To amortize costs to fair value. Noting the difference between current par and amortized costs is the combined net discount, which will be accreted to interest income over time. The $94,000,000 of gross unrealized gains at quarter end Came primarily from the marked Columbia portfolio as the bond market rallied in March, while the gross unrealized losses

Speaker 4

Relate to

Speaker 3

the prior Umpqua bonds, which were not marked. I mentioned earlier, we sold $1,200,000,000 of Mark Colombia bonds in the 1st week of March and reinvested $900,000,000 as part of a restructuring. We sold front end cash flows and purchased longer Dated bonds to extend duration slightly, benefiting our interest rate sensitivity, which I'll cover in a few minutes. The chart on the right breaks out the overall portfolio between the portion with unrealized gains versus losses. Noting $6,100,000,000 of the book is in a gain position with a book yield of 4.53% as of quarter end.

Speaker 3

As you can tell, I'm excited about this portfolio as it gives us significantly higher and stable earnings stream with greater optionality. The overall book yield was 3.62 percent with an effective duration of 5.7% atquarterend. And lastly, we only have $2,400,000 in HGM bonds, which represents some CRA related bonds with no unrealized loss. Now to better help investors given the combination accounting and moving parts, on Slide 10, we provide an updated outlook for the remainder of the year on several key financial statement items. The accretion estimates noted on the lower half of the table accrete based on the effective interest method, meaning they should be fairly stable near term and declining slightly over the life of the portfolios.

Speaker 3

They will provide significant interest income and capital build over time. We also provide an updated outlook for our quarterly expense run rate, which we expect to be in the $260,000,000 to $270,000,000 range in Q2 When CDI amortization and merger expenses are excluded, we expect this level to trend down to $240,000,000 to $250,000,000 in Q4, reflecting the expected achievement of all communicated expense synergies by the end of the 3rd quarter. Slides 12 through 14 provide summary financials for Q1, but I want to take you forward to Slide 15. Here, we break out Q1 GAAP earnings to help investors understand the non operating and merger related impacts and resulting core bank results in the far right column. The first column represents our Q1 GAAP results with a net loss of $14,000,000 driven entirely by merger expense along with the initial ACL provision.

Speaker 3

The second column includes our non operating designation for For income statement changes mostly related to fair value swings along with $116,000,000 of merger costs included in non interest expense, which are detailed out in the appendix. These net to an $86,000,000 reduction in Q1 earnings, resulting in the 3rd column for operating income. This is the key page, the bridge from GAAP reported earnings, Isolating non operating fair value changes, then the merger related items of discount accretion, CDI amortization and the CECL Day 2 double count, then to adjusted operating income. Now in the merger related items call, we have $32,000,000 of net discount accretion From the marks discussed earlier for 1 month, along with the $88,000,000 initial ACL provision commonly referred to as the CECL Day 2 Double Count. Also included is $13,000,000 of CD amortization for the 1 month.

Speaker 3

The value in this column will be a clear view of the net earnings impact from the merger accounting, which will be substantial and again build capital over time. And that takes us to the far right column, Which presents the bank excluding the merger accounting marks. Again, the interest rate environment introduced a significant amount of purchase accounting accretion and amortization into our reported earnings and Slide 15 breaks out the components. This will enable investors to view the earnings power of Columbia outside purchase accounting adjustments, While also seeing the meaningful net capital generation, we expect these adjustments to produce over time. Okay.

Speaker 3

With that, moving ahead for a couple more items. Slide 17 breaks out accretion from net interest income and Slide 18 does the same for the margin. In the footnote, we highlight the NIM for just the month of March was 4.31% as reported and 3.55 percent excluding the accretion. The excess liquidity held on balance sheet Had a 10 basis point impact on the month of March NIM, but an insignificant impact on net interest income. Slide 19 breaks out the repricing and maturity characteristics of the loan portfolio, noting 46% is fixed, 24% is floating and 30% are adjustable.

Speaker 3

Slide 20 provides an updated view of our combined interest rate sensitivity under both ramp and shock scenarios. We've taken proactive measures to reduce the balance sheet sensitivity to a potential declining rate environment, including the bond portfolio restructuring discussed earlier, along with using short term wholesale borrowings. Combined with more locked out bond cash flows, this acts like a swap for rates down environments. You can see here the trend in over the past few quarters where our rates down risk It's been reduced significantly. And noted below, we calculate our cycle to date funding betas, which are calculated on a combined company basis over As of the Q1, our interest bearing deposit portfolio has priced in 28% of the Fed funds rate increases.

Speaker 3

Notably, here is the cost of interest bearing deposits, which was 1.33% for the month of March compared to the quarter end spot rate of 1.43 percent highlighting stability. And with that, I will now turn the call over to Frank.

Speaker 5

Thank you, Ron. Turning to Slide 23, the addition of the historical Columbia loans at fair value Was the primary driver of the quarter's loan growth as new originations were nearly offset by payment activity. Slide 24 details select characteristics of our loan portfolio by major category with added details surrounding production during the Q1. Our portfolio is diversified by mix and geography. Average loan size displays the granularity of the portfolio and where applicable, Average loan to value and debt service coverage supports the quality of our underwriting.

Speaker 5

Additional industry detail For our commercial portfolio is provided on Slide 25, further highlighting our diversification by industry and collateral type. Let's spend a little time on Slide 26, which provides an overview of our office portfolio in response to increase investor focus on this asset category. Like other verticals, our office portfolio is characterized by a diversified mix of granular loans that exhibit strong credit metrics. Our average office loan is $1,300,000 The average loan to value of the portfolio is 57% And the average debt service coverage of the non owner occupied portion of the portfolio is approximately 1.75 times. Properties are located across our broad Western footprint and majority are in suburban markets.

Speaker 5

We have very limited exposure to core downtown metro markets. 83% of our office Loans have a guarantee in place and performance of the portfolio remains exceptional. Past due and non accrual levels are de minimis at a combined $1,000,000 and criticized balances represent only 2% of the overall portfolio and less than 20 basis points of our total loan portfolio. We remain very comfortable with our office exposure given the characteristics I've outlined. Moving on, Slide 27 Highlights are reserved coverage by loan category.

Speaker 5

With the majority of the quarter's build driven by $32,000,000 added as part of the merger for historical Columbia PCD loans and $88,000,000 initial provision booked for non PCD loans. The remaining $17,000,000 provision expense primarily reflects changes in the economic forecast used in credit models. Slide 28 provides an overview for our consolidated credit trends and notes the additional 28 basis points The remaining credit discount on loans adds to our loss absorbing capacity. Overall, our credit trends are benign Outside the anticipated trend in Finpack charge offs. Delinquency and charge off activity And the FinTech portfolio remains centered in the trucking sector of the portfolio, and we believe delinquencies in this area have reached plateau As the supply demand imbalance in this specific space evens out.

Speaker 5

These factors drive our expectations For another quarter of elevated charge offs in the Finpack portfolio as delinquencies continue to roll through the later delinquency bands. We continue to view these trends as isolated to the Finpack portfolio given the unique characteristics of their obligors And we have obviously witnessed no spillover to the broader commercial portfolio or other sectors within the Finpack portfolio. Excluding Finpack, charge off activity at the bank remains at a de minimis level. Though classified asset ratios did increase, they do not represent any notable changes in classified asset balances when viewing the combined portfolio. I will now turn the call over to Chris.

Speaker 6

Thank you, Frank. Shifting the focus to deposits, Slide 29 highlights the quality of our portfolio. 41% of balances are in non interest bearing accounts. Of the overall, consumer balances comprise 41% of our base with the average account balance at $20,000 Commercial balances make up the remaining 49% of our deposit portfolio with the average account balance at $108,000 The company offers multiple deposit solutions like our insured cash sweep service, the ability to collateralize select accounts and opportunities for enhanced returns through Columbia Wealth Management. These products provide our customers with the flexibility they seek And improve the stability of our granular deposit base.

Speaker 6

At quarter end, just 36% of our deposit portfolio was uninsured, Screening on the lower end of peer averages. Net contraction in our deposit balances on an organic basis During the quarter reflects normal customer uses of cash, the impact of inflation on spending and market liquidity tightening. Offsetting these headwinds to net expansion was continued growth in new account balances as customers transferred funds into recently opened accounts throughout the quarter. We also continued the development of our franchise throughout the West. With the merger closed, We now have deposit and other capabilities in Utah, which further enables us to bring full banking relationships to the company.

Speaker 6

We will continue to invest in this market and throughout our other geographies. We believe this will lead to enhanced long term organic growth With the core systems conversion now complete, our teams have an invigorated focus on generating balanced growth for our franchise. Relationship banking within our communities drives our purpose and our broader footprint, Expanded set of products and services and our collaborative spirit across our teams support our expectations for continued success. And now back to you, Clint.

Speaker 2

Thanks, Chris. Our regulatory capital position is outlined on Slide 30. We remain above both well capitalized and internal threshold targets. And as Ron outlined, we expect capital to accrete quickly in the coming quarters. As a result of the merger, we have adjusted our dividend declaration timeline, so that it is similar to the one previously utilized by Umpqua Holdings.

Speaker 2

This concludes our prepared comments. The team is now available to answer your questions. So Valerie, please open the call for Q and A.

Operator

Thank you. One moment for our first question. Our first question comes from the line of Jeff Rulis of D. A. Davidson.

Operator

Your line is open.

Speaker 7

Thanks. Good afternoon.

Speaker 3

Good afternoon.

Speaker 7

I guess to start, I appreciate all The detail in the deck, maybe I'd go first to the cost or the expense run rate. Ron, you kind of rattled through that and I missed Kind of those stair step as you go through Q3, and I guess you ended at $240,000,000 to $250,000,000 in Q4, but Could you repeat that piece again?

Speaker 3

Yes. I think you summarized it well. We've got $25,000,000 we have Included within our run rate for the month of March, there's another $21,000,000 that is in place, but at the end of the quarter, which will be reflected in Q2. So we talked about that. And then on that slide 7, we show you the ramp for the additional $59,000,000 to $64,000,000 we expect to achieve on an annualized basis in Q3, Which will put us at the $135,000,000 level by the end of Q3.

Speaker 3

Sorry. It's $9,000,000 to $64,000,000 additional in the second quarter And then the balance in Q3 will end at $135,000,000 annualized again at the end of Q3 looking forward. And the guidance we gave for Q2 on the expense side reflects Those trends along with the Q4 amount noted in the far right note column on that outlook page.

Speaker 7

Okay, great. Thank you. And then the I guess if I were to jump to capital, your comment about expect to accrete that quickly. And I don't know if you've got projections on kind of year end or expectations for those capital levels. And I guess that's Question 1.

Speaker 7

Question 2 would be other tools with the deal closed now, do you look at The buyback, the other ways of deploying that capital as that grows?

Speaker 5

Hey, Jeff, this

Speaker 3

is Ron. On the first one, very much we have forecast On the capital build, and it's going to be in a range of 20 to 30 bps on the risk based measures across the various Separate ratios over the course of the year and into the following year and the year after. That's got a long lived this will be a long lived level of accretion that Also interestingly enough, just given the nature of how rates have moved up over the last year, you'd have to go significantly below where rates were prior to last year in order See a real acceleration in prepay on a lot of those instruments, so excited about that. That 20 to 30 bps will be a quarterly accretion in the capital ratios.

Speaker 2

And Jeff, this is Glenn. I'll just add that as you do the math in terms of Just what the accretion adds and then factor in earnings and you can pretty quickly Reconcile Ron's comments and mine about the capital generation and the capabilities of the company. With respect to a buyback, I don't see anything this year. I think that Just all the volatility that's out there and the fact that we'll be building in the next couple of quarters to our Long stated, long term target capital ratios. We'll let that And then if market conditions are favorable, by all means, it'd be something that Ron and myself would have a discussion with our Board and Make sure that we're being good stewards and keeping the appropriate amount of capital, so we have flexibility to grown our business through the entirety of any cycle, but also Not have too much capital sitting around that hurts our returns for our shareholders.

Speaker 7

Okay. Thank you. And maybe one last one for Chris. Just on the deposit side, could you comment on flows in April so far is kind of the First part of that. And then second, you talked about expanding tools into Utah.

Speaker 7

And I guess, your expectations for the Growth through the end of the year, if you think you could scratch out from threethirty one levels? Thanks.

Speaker 6

Sure. Into April, with the conversion behind us, still early behind that, you're looking at Getting some people back out into the markets, we've also launched our own deposit promotion. Trends are good on that out of the gate and that's been out for a couple Couple of weeks. More though, I'm starting to see and I know Tory is seeing it as well. We're seeing clients and prospects that are coming to us Requesting new business.

Speaker 6

Now I can't put a dollar amount on it for you right at this time, but it's certainly a very positive sign to see The new business flow that's coming in as well as the multiple conversations that are going on with existing clients around, 1, retaining their deposits And 2, looking at opportunities they might have with funds that are held elsewhere. Expanding into Utah, we should be Up and going sometime during the quarter to attracting actual deposits and would expect that team, which hit the ground running on the Loan side to be able to drive a good amount. Again, I can't put a dollar amount on it, of exactly What we would get, but we're very we've always been excited about the market and I don't see the experienced bankers that we have having any trouble bringing in deposits on that. And then we will look into the other states where we have loan production offices as well. And I would say more to come on that, but We're certainly looking to be full service across all eight states.

Speaker 6

And I don't know, Torrey, do you want to add anything?

Speaker 8

Jeff, this is Torrey. Nick, I think the only thing I would add is For the 1st 3 weeks of April, deposit balances are down just a little bit, mostly in retail and consumer banking and that's A typical tax payments and just kind of traditional outflow, not significant at all. And to Chris' point, A lot of activity inside the commercial bank on new relationships, prospecting Funds deposit funds from for our customers from other institutions. So a lot of really, really good activity.

Speaker 7

I guess, put it in another way, I guess, by year end, are you looking at in your budget from the threethirty one jump point deposit balances, are you in a Stable down or up type mindset?

Speaker 8

Yes. No, I think there's a really great opportunity for us to grow the balances of the company. And we all hands on deck to do that. We are continuing to focus on C and I relationships And full banking relationships and what comes with that is core deposits, fee income, I mean all those things that drive value for the company.

Speaker 2

And Jeff, I'll just add, there's a bit of a wild card in there.

Speaker 9

And that's

Speaker 2

it appears that we've returned to kind of seasonal patterns That we haven't had for since pre COVID. And if you go back Prior to 2020 and throughout the history of the company, A lot of the deposit positive deposit flows occur in the second half of the year and they start to build late Q2. So in addition to the activities that Tory mentioned and Chris, There's that seasonal pattern and I would expect that that will return and behave as We've seen in the past, but then the Fed still removing liquidity from the system. And so and I think there's still just From an industry perspective, there's still some of that activity that's yet to occur. So that's why it's hard to just tell you, yes, it's up X percent.

Speaker 2

But I think I share the team's optimism On our ability to take market share and the conversations that we're having and it gets back to my prepared remarks Along the lines of not only the new teams, but our seasoned bankers, They're continuing to win new business and deepen those existing relationships. And so I think those activities, no matter what happens at a macro level, you'll see the positive benefit to our balance sheet.

Speaker 3

Okay. Appreciate it.

Operator

Thank you. One moment, please. Our next question comes from the line of David Feaster of Raymond James. Your line is open.

Speaker 10

Hey, good afternoon, everybody.

Speaker 3

Good afternoon, Dave. Hi, David. Hi, David.

Speaker 10

Maybe just kind of staying on the deposit I'd be curious maybe some of the flows that you saw in the quarter, if you could just talk a bit about you talked about A lot of it's really a function of the declining balances at existing customers. I'm curious whether you saw that more on the commercial or the retail side? And how much is that seasonality versus customers utilizing cash to pay down higher cost floating rate debt, migration Into the wealth or versus turmoil from the banking failures or even the conversion?

Speaker 3

Dave, this is Ron. Let me take a crack at that pretty wide ranging. But I'd say overall, traditionally, seasonally, it's like a bell curve over the course of the year, right? Stronger Q2, Q3, a little bit more pressure Q4, Q1, depending on the segment, etcetera. And on Page 8, we did lay out The changes in deposits in that upper left table as if we were pooled or combined on a basis for comparability purposes.

Speaker 3

And when we look at the Ex broker to the divestitures or the public deposit change on the customer account side, it's pretty evenly balanced between commercial and consumer similar to just the overall mix The portfolio, right? I think on the consumer side, it feels like a similar continuation of the inflation story we talked about last quarter for Looking at Q4 results on the commercial side similar. So just the kind of effects of QT at the customer level utilizing cash from that standpoint. Yes.

Speaker 6

And David, you asked in there, there was a lot packed into that of and you mentioned investments and things moving away, We've talked about that in the past. And we saw a very similar, I'd say it's probably a little bit of a larger activity than historical averages on that. But the really nice thing about this combination now is we have even more options that are available. And so all of the clients aren't looking To immediately move into a treasury bill or something of that nature with the insured cash sweeps and The deposit promos that we have, we've got our bankers have multiple tools available for them based on what the clients' needs are. And I think that just gives us maximum flexibility to solve the issue that they have.

Speaker 10

That makes sense. Maybe touching on the growth, the loan growth side, obviously, the market's pretty volatile right now. But I'm curious how demand's Trending from your standpoint, how new loan yields are, what segments you're still seeing good risk adjusted return, And maybe just you probably have some unique opportunities for growth just given the deal and some bigger targets and opportunity Increased relationships, does that maybe support outsized growth in the short run? I'm just curious how you think about the organic loan growth opportunities?

Speaker 8

David, this is Tory Nixon. I think you kind of summarized a lot of things in that question. I think there's great opportunity for the company to go forward and to do a lot of what you just described or just asked. I mean, I think there's The ability for us to certainly serve markets in all of the states that we're in, whether it's Small business, whether it's in the consumer side, whether it's in commercial, middle market banking, in the real estate space, I mean, we just have A lot of capability. We've got certainly the opportunity as a combined company to increase hold levels and continue to expand Credit facilities for customers, our customers as they grow.

Speaker 8

I think that's a great opportunity for the bank. I mean, we have A leasing capability for the organization that I think will be very is being very well received by our C and I customers that typically wasn't available in the legacy Columbia portfolio or customers. So great opportunity to kind of see us. We have a lot of financial strength and to be very active in all the markets that we are in. And I'm excited about the ability to grow loans.

Speaker 8

Pipeline looks strong. It's actually just up a little bit from last quarter, which is nice Demand in the marketplace is certainly not the same as it was 6 to 9 months ago, But there's still is demand. And I think to Clint's point earlier, we've got a great opportunity to take market share in all the markets that we are in.

Speaker 10

Okay. And then just kind of in that question too, how are new loan yields and what segments are you still Expecting to kind of drive that growth and give good risk adjusted returns?

Speaker 8

Yes. I think it certainly depends on the asset class, but I think they're in the They're near the 6% range on yields, maybe a little higher. And I mean, just we've Got a lot of dry powder and a lot of opportunity and able to serve our customers and bring in new ones into the company.

Speaker 10

Okay. And then you guys have done a great job continuing to expand at both Columbia and Umpqua with new hires and new markets. We've already touched on Utah. I guess as you look at your footprint and thinking about new hiring opportunities in the future of the bank, is this the time to be greedy No, didn't pick off new talent just given the volatility. Are you looking at new hires?

Speaker 10

And if you are, is it primarily deepening existing footprints? You talked about continuing to invest in the franchise, but are you considering further market expansion?

Speaker 8

So, this is Tore again. I'll talk about commercial, let Chris Talk about consumer a bit. We're doing all of those things. So we're looking to hire in the markets, the new markets that we've expanded into Arizona, Colorado and Utah recently, we're looking to hire some really talented folks in those markets. We have hired talent.

Speaker 8

We have recently hired talent And then infill and the rest of the company, I mean, we continue to look at talented people and have a philosophy that we're going to bring Allen into this company, when we find it. And we've got a great story to tell. You can obviously tell we're very excited about the future of Company, when we think about the opportunity that we have and the opportunity that bankers in our markets have working here, they get very excited. We continue to tell the story. We continue to hire people in the Pacific Northwest, in Northern California, in Southern California, In Idaho, I mean, you name it, we're continuing to broaden, expand and push the bank forward.

Speaker 6

Yes. And David, what I'd add to that is the states where we have the commercial presence, we're certainly looking at Bringing on the retail, as I mentioned, we'll bring on small business to fill in where those loan production offices have historically been. And what I would say is that we're also though looking at the wealth side of it and bringing that into the 8 states In the areas that we're in expanding as well. And I think we've both companies have always been opportunistic That when good bankers raise their hands, we're ready for them. And so I would say that's still out there.

Speaker 6

I echo Tory's comments about People are excited. And when you think about the capabilities that we have and the balance sheet construction as Ron described, I think there's going to be plenty of opportunity for that.

Speaker 10

Yes. Thank you. Appreciate it and congrats on closing the deal.

Speaker 6

Thanks, Dave. Thanks.

Operator

Thank you. One moment, please. Our next question comes from the line of Chris McGratty of KBW. Your line is open. Pardon, Mr.

Operator

McGratty, your line is open. One moment please. Okay, one moment. Our next question comes from the line of Jared Shaw of Wells Fargo. Your line is open.

Speaker 11

Hey, good afternoon.

Speaker 3

Good afternoon, Jared.

Speaker 11

Hey, maybe just staying on the track of opportunity, clearly, there's been a lot of disruption With Silicon Valley and First Republic and just in general, some banks said that are seeing more weakness. Maybe more specifically, do you see specific opportunities in some of those business areas, some of those markets to step in? And I'm not sure when you talk about new commercial customers coming to approach you, any of that from some of those specialty business lines That some of those banks focus on that that could be an opportunity for you?

Speaker 2

Yes, Jared, this is Quint. I'll kick it off and then see if Tory and Chris want to add anything to it. The short answer is yes. We have seen opportunities. We saw that actually in the days and hours leading up Silicon Valley's failure.

Speaker 2

We've got a pretty diverse Offering and we talk about our portfolio and you look in the slide deck and you can see both sides of the balance sheet. There's a lot of granularity and diversification. And so with that, we have a lot of very experienced bankers And we won't do something if we don't have expertise in it. But there is some crossover. And to the extent that there's crossover, there's we'll compete for the business And I think we compete very well and it will create opportunities.

Speaker 2

But in terms of going all in And shifting our focus, that's not necessarily the plan. We love the diversification that we have. We think that's Foundational element of strength for our company, but Certainly, we'll be opportunistic when and where we can be. Torrey, anything to add?

Speaker 8

No, I think you summarized it really well. I mean, there I think there's that the opportunity exists in all of our markets and we're going To do what we do, what we've historically done and do it exceptionally well and continue to find Commercial people, customers who want to be part of the bank or people who want to be part of the bank.

Speaker 11

Okay, good. Thanks. And then maybe shifting a little bit on Capital, you highlight getting back to that CET1 target of 9%. Do you think is that sufficient Going forward, is 9% high enough? Or do you think that maybe you end up needing to bring that floor up a little bit before Really exploring other capital deployment opportunities.

Speaker 3

Yes, Chris, this is Ron. I'd say our long term target on CET1 is 9 and we're 8.9 percent, so we'll be there heck next month. I'd say on the total risk based capital ratio, Long term, again, target is around 12%. And I expect we'll get there over the course of the year again through that earnings and accretion, the capital accretion bill just Coming off the financial benefit of both companies coming together, cutting the cost and having the accretion. So That's really you got to look across all four ratios both at the parent and the bank.

Speaker 3

And so, yes, by default then that CET1 would be above 9%, but Long term target wise, not significantly.

Speaker 11

Okay. So you don't feel need to change that or raise that in light of sort of the turmoil that we've seen in the last month?

Speaker 3

In terms of long term targets, no. There are times where you might want to be below or above depending on which way the wind flow. And like I said, we're going to have quite a bit of capital generation Over time and again so much of the mark, I mean $1,600,000,000 of the $1,700,000,000 in March was rate related Like on the bonds, that's all the vast majority of that is backed by government to government agencies. So it's interesting For you to think about the impact of the merger accounting on this, reducing our capital ratios today, but then accretive back over time. I'd say 2, CET1, that's a measure I know a lot of analysts and investors focus on.

Speaker 3

Also, we got to look at the other ratios as well though. And total risk based capital Generally between the bank and the parent is where I'm targeting to be around $12,000,000 over time is a good sweet spot.

Speaker 2

And I think the history of Pre merger both companies, that was always a challenge trying to get, walk it back down to those long term targets. And you add in the accretion income as well as the earnings power after we Get the full cost synergies baked in. That's still, I think, the primary challenge For us is in the coming years is how do we keep those capital ratios from getting too far north of You know those targets and you can pick any ratio. They're all going to grow pretty rapidly.

Speaker 11

Okay. And then just finally for me, when we look at the average earning asset guide, Do you see cash going back down to a I guess, where do you see cash going as a percentage of the balance sheet after we get through The end of March here, back down to 5%, below 5%.

Speaker 3

Yes. And on that guide, we're making the note call that we assume we maintain an elevated level of cash. Of course, A lot of that is going to be subject to what happens from a macro standpoint with overall deposit flows, etcetera. So, But I'd say all else being equal, if we brought on $2,000,000,000 of additional off balance sheet liquidity on balance sheet just to have that on balance sheet and we're sitting at 3 We'd be somewhere in the $1,000,000,000 to $1,500,000,000 range if we had not done that. So that's probably better representation of And where do I expect that in spring cash flow for the floor at?

Speaker 8

Yes, I think Chad, we had

Speaker 2

flexibility and we decided It was appropriate to use that flexibility and just keep a little more cash on balance sheet during the near term.

Speaker 11

Yes, totally understand. Okay, thank you.

Speaker 3

You bet.

Operator

Thank you. One moment please. Our next question comes from the line of Matthew Clark of Piper Sandler. Your line is open.

Speaker 4

Hey, good afternoon. The first one for me, just around the borrowings, the 6 $1,000,000,000 of borrowings and then 2 of it was for fund cash. But I guess what's your what are your thoughts on how borrowings might trend for the balance of the year? And whether or not you might use securities to sell securities, pay them down?

Speaker 3

Yes. Ideally, we're going to see our deposit activities strengthen over the The next couple of quarters post consolidation as you heard sorry, post conversion as you heard Chris and Clint talk about earlier. So no plans to Reduce the investment portfolio. That's very well structured. That's going to provide a lot of value over time and that discount will accrete if we keep those Now discounted bonds on the books.

Speaker 3

So plan on maintaining the wholesale borrowings, but then that will fluctuate just as the opposite of what Yes, we see with the net loan deposit flows, so near term relatively stack.

Speaker 4

Okay, great. And then you've had a lot of time With how long the merger took to close to identify the cost saves, make sure you can get $135,000,000 out, they're coming out sooner than previously thought. But are there And it may not necessarily be the focus in the near term, but have you been able to quantify Some additional cost saves above and beyond that $135,000,000 and whether or not, if so, how much and could that hit the bottom line?

Speaker 2

Yes. Matt, this is Clint. We have spoken over the past year that our internal target It's actually above the $135,000,000 And if we seem overly confident in Delivering on the $135,000,000 by the end of the 3rd quarter is because we have in fact identified up to that internal target. What we haven't done is we haven't What that internal number is and there's a couple of reasons. With inflation and wage pressure that's happened over the past year and a half since we set that Target, we wanted to maintain flexibility.

Speaker 2

And then the other Component of that is the investment in growing our franchise that Chris and Tory spoke about. So we wanted to make sure that we're still going to do those things. We're still going to make the appropriate investments.

Speaker 8

But net net, we want

Speaker 2

to make sure that that doesn't dilute the $135,000,000 or 12.5 percent cost saves that we promised To investors, so there is a higher internal target. It's identified. It'll Trickle in Q4 and beyond. It could be Diluted somewhat by other investments that we may elect to make, we'll talk about those At the time that they occur. But then the other aspect of we put 2 pretty large banks together And I think we did a really good job as a team of setting the org structure for $50 plus 1,000,000,000 Thank you.

Speaker 2

But we also know that there's probably areas where well, not probably. We know there are areas where We're a little heavy in terms of people or redundancy. And I think that's a longer term Process of just fine tuning and making our company the best and most efficient it can be. And so that's the type of activities that you'll see in 2024, 2025 And then ongoing as we go through the years.

Speaker 4

Okay. And then just around The deposit pricing outlook, it sounds like you're doing some promotional activities in some of your newer markets. But can you talk through the deposit pricing philosophy now that you guys are together? I mean, legacy Colby wasn't very promotional when it came to deposits, But obviously, with the combined entity that may have changed a little bit and the Terminal in March may have also changed your view on pricing maybe going forward. Just any comments around deposit Pricing outlook, in particular, when

Speaker 8

the Fed stops raising rates?

Speaker 6

Sure, Matt. Great question. And I would say that Separately, we actually were very similar in our approaches to exception pricing and doing things of that nature. Coming together, yes, we're still on the same track there. We do have some promo rates that are out there.

Speaker 6

That's not just new markets, it's existing markets. It's all across the footprint. And so that kind of sets the that sets a marker for us, but we're still negotiating rates With clients and looking at options, looking at where what's the real need, what are they really trying to do with the money. And so as I mentioned previously, Lots of different ways to go about that. The Fed and the slowing, I think That's going to maybe you'll see some lag and we think deposit rates tend to lag that and that's historically for both companies as well.

Speaker 6

So as it approaches the slowing, I think that, yes, you start maybe getting near the peak of it, but then I'll always throw in the caveat of We don't know what competitors are going to do. And so we just have to maintain our discipline. We have to stay in touch with our clients and understand what's going on in the market. And Tore, if you want to add anything.

Speaker 8

Matt, the only I would add is that with all the conversations that we're having with clients, which is a lot, which has been great, The conversation is less about price and more about security and safety. I mean, certainly there's some price in the conversation, but a lot of it's around security and safety and Explaining the balance sheet of the company in our earnings stream and our deposit base, etcetera, is like very valuable to the customer, our customer base. And then we have as Chris, I think talked about in his comments, we have a couple of products that are really valuable to kind of take money and Create incredible safety and security around it through our ICS product or Cedars. And so we've done that on a lot the last Couple of months. I think we probably increased the ICS balances about $400,000,000 to $500,000,000 which is just reciprocal Assurance for deposits, especially on the commercial side.

Speaker 8

So I mean we've got a lot of options for customers and had a lot of conversations. And again, it's And again, it's a little less about price and more about a relationship and about safety and security.

Speaker 4

Okay. Thanks. And last one for me, just housekeeping. Tax rate, what do you suggest we use going forward?

Speaker 3

25%. Okay. Thank you. You bet.

Operator

Thank you. One moment, please. Our next question comes from the line of Andrew Terrell of Stephens. Your line is open.

Speaker 12

Hey, good afternoon.

Speaker 3

Good afternoon.

Speaker 12

Clarification on the margin guidance. I think You noted the margin was 4.31% on a GAAP basis in March. I think the borrowings were about the excess cash and borrowings were about 10 basis points To that, in your full year margin guidance that $415,000,000 to $425,000,000 what do you assume for borrowings and cash? Do you assume it stays at a relatively similar level?

Speaker 3

Yes. We assume a consistent level and also recognize that that full year number will also reflect the effective averages with The combination fully included for 10 of those 12 months, but not the full 12. So maintaining Consistent cash balances and I'd clarify one item. So when we talked about the impact of the excess liquidity, I was really referring to The month of March, the 355 would have been ballpark 365 had we not brought on that excess borrowing, but insignificant impact in terms of net interest income, but 10 bps

Speaker 12

Yes. Got it. Understood. Okay. And on the core fee income side, it looks like when I adjust The items called out that the core operating fee income was around $47,000,000 or so for the quarter.

Speaker 12

I guess given there's several moving parts Can you help us out with just expectations for kind of a core fee income run rate moving forward?

Speaker 3

Yes. We didn't provide a guide on that, but I can tell you for the month of March Noninterest income excluding again the fair value change type stuff was $22,000,000 just for the month on a combined basis.

Speaker 12

Okay. So imply, yes, okay. That makes sense.

Speaker 3

You bet.

Speaker 12

And last one for me is just on the office. I appreciate all the color here on Page 26 A couple of questions. For the 6 properties that are listed as greater than 30,000,000 What markets are those in? And can you talk about the underwriting specifically on the larger end of the spectrum and whether it differs at all from what you list as the Kind of averages there. And then, the second part was the credit mark taken on acquired office portfolio, is that similar to the overall credit mark In the transaction or did the deal allow you to put a greater kind of mark against the office book?

Speaker 5

Yes. This is Frank, Chief Credit Officer. Regarding the first part of your question, the majority of those in the larger tranche Are really centered in the Puget Sound area, if you will. And the underwriting It's very similar, but the qualification criteria, I would say, is much more steep. So we've got to know the sponsors extremely well.

Speaker 5

They've got to sensitize Extremely well. We shock it for rate. We shock it for Vacancy, even to a greater degree of some of our smaller relationship Relationship deals that we evaluate. So they are all Leased at this point, I will say, fully leased Under lease agreements and are performing well.

Speaker 12

Okay. And then on the credit mark on the office portfolio specifically, was it similar to just the overall mark or was there a bifurcation that I guess, does the deal allow you to put a larger credit mark on the office book?

Speaker 3

We have the ability to do if the data supports it. But again, we talked about This portfolio I'd say is ballpark and average in line with

Speaker 8

the overall

Speaker 3

CRE level.

Speaker 12

Okay. Thanks for taking the questions and congrats on closing the deal.

Speaker 3

You bet. Thank you. Thanks, Andrew.

Operator

Thank you. One moment please. Our next question comes from the line of Brody Preston. Your line is open.

Speaker 9

Hey, good evening, everyone, or good afternoon for you all. Thank you for taking the questions. Just wanted to ask on the securities that you sold, and then the securities that you purchased, at the end of March, What was the duration of those securities? And what was the rate on the $1,200,000,000 that you sold? I guess, more the effective rate You know, for the remarks.

Speaker 3

Yes, this is Ron. I'd say, so again, we sold off front end cash flows. So the duration on the Purchases was probably about a half year longer than the overall duration. Again, we wanted to extend that. So we would have been probably around 5.5 and up at 5.7 just with the effect Of the repurchases were longer dated, right?

Speaker 3

So and again with an eye towards when we did this, it was actually the 1st week of March, Right. So you had a top tick in the bond yield, February 28 in that 1st week and it wasn't for another week or week and a half or so following that you saw the rally in the bond market So overall, the mark book was, I think, talked about 4.5%. The ones sold were probably a bit below. The ones Purchased were a bit above just given the slight difference in duration.

Speaker 9

Got it. Thank you for that. And then on The NIM guide, the core NIM guide that you have, I just wanted to ask, you outlined What your rate expectations are, but I wanted to ask what the interest bearing beta and the NIB mix assumptions are that underpin that?

Speaker 3

You bet. It will be a continued what we talk about later in the interest sensitivity slides working out closer to that model beta from our sensitivity Standpoint, so higher than 28%, but probably but not at the 53% level that we actually noted on that slide later on. So continued Increase just because we're assuming there's a lag to deposit pricing increases.

Speaker 9

Got it. And is there a static deposit mix So assumption that underpins the NIM guidance?

Speaker 3

It's relatively static. Granted, we talked about earlier, for example, DDA are up Here in December sorry, here in April, but just in terms of the overall mix, not a significant change in the overall mix.

Speaker 9

Got it. And then on the I guess on the margin waterfall chart that you have in there, The 43 basis point drag that you have for deposits, do you have a sense for how much of that was mix versus rate?

Speaker 3

Well, I think in terms of this waterfall, you've also got the effect of The Q4 reported amount was standalone Umpqua Holdings. The Q1 reported amount was combined company for 1 month And then standalone prior uncle holdings for the 1st 2 months of the quarter. So you've got that really driving a good chunk of that from an overall mix standpoint.

Speaker 5

Okay. Understood.

Speaker 3

Make a lot more sense for you next quarter.

Speaker 9

Yes. I wanted to ask on the loans that are maturing in the less than 6 months bucket, the fixed, the 2.6 Bill, do you have a sense for what the current yield is on those loans versus what current origination yields are?

Speaker 8

I don't know. Yes. Like current yield. Yes.

Speaker 3

I mean, those loans are going to be dated from prior to The move up, so it's going to be in the call it mid-4s to 5 range at the highest, which is going to be well below what Tory talked about earlier for new loan yields.

Speaker 9

Got it. And do you all have any hedges in place on the loan portfolio that we need to think about for NII modeling?

Speaker 3

Not on the balance sheet. We do have customer swaps, but those are offsetting back to back on our balance sheet. We've taken the approach of using Instruments within the portfolio, specifically here in this case, we're talking about the bond portfolio, along with the use of the short term borrowings to really Help improve our interest rate sensitivity position we talked about earlier.

Speaker 9

Got it. And then just one last one for me. I'm sorry If you mentioned this earlier and I missed it, but just on the Finpack portfolio, I wanted to ask 2 questions. What is the growth outlook For that portfolio going forward, I know it's a much smaller piece of the overall loan portfolio now. And then the 3.89 percent annualized charge off ratio, I know it's tough to say, but could you help us think about what a Peak net charge off ratio kind of looks like through cycle for that loan book?

Speaker 8

This is Torey. I'll talk about the growth side of it and Frank can weigh in And if you want on the charge off piece. I mean, first of all, the FinTech portfolio is 3 different This is a small ticket which makes up about half of it

Speaker 2

and then we have

Speaker 8

a vendor space and a traditional commercial bank leasing business for our customers. Each of those are about 25 percent of the portfolio. The growth outlook for the combined Finpack portfolio is somewhere between $50,000,000 $100,000,000 over the course of 2023, And that's evenly distributed within those three businesses. So moving up a little, but nothing significant at all. Frank, do you want to talk about it?

Speaker 2

Yes.

Speaker 5

Generally, what we find within the FinTech portfolio, we look at the non accrual numbers and how those are tracking and generally Of the preceding quarter approximately 80% of those non accruals typically rolled the charge off. I think that The top of it will be north of 4%, and I would be surprised if it Peak is over

Speaker 9

5%. Got it. That's very helpful. And I guess just if I could sneak one follow-up in on that. Do you view the Finpack Portfolio is, I guess, when you look across the rest of the equipment finance kind of space, do you view it as Different from a mix and the type of stuff that you're underwriting relative to what other banks underwrite?

Speaker 9

Or do you think it's fairly similar to the Equipment loans that other banks are also underwriting?

Speaker 5

It's different. It's With respect to the classic FinTech, these are tiny ticket loans. They are high yielding. They are higher risk, Specialized lending, so that's why you see the loss numbers where they're at and that's why we're not surprised. Typically, When you say equipment finance company, most equipment finance companies do not have a tiny ticket, small ticket leasing operation.

Speaker 5

They're typically middle market, Which we also have and those losses are extremely low if existing at all, but it's also extremely low yielding business As well. So, it is more of a specialized leasing business. Yes.

Speaker 9

Got it. That's very helpful. Thank you very much for taking my questions, everyone. I appreciate it.

Operator

Thank you. One moment please. Our next question comes from the line of Brandon King of Tuohy. Your line is open.

Speaker 3

Hey, good afternoon. Good afternoon.

Speaker 7

Just one question for me. And I know a lot has changed since the merger was announced. But with the return on tangible common equity 15% was kind of the estimation then, but should we think about that as a long term target for the company now?

Speaker 3

Well, I'd say this, we did also include on Page 4 this kind of our updated expectations as compared to the original Announcement date and with that, just in terms of return on tangible common equity, driven again by a lot of the accretion, 15% is now 20% plus. So I guess it depends on the long term and the definition of long term for that. For the next couple of years, we feel pretty good about that. Longer term beyond that, I think just going back over 27 year career, not specific to Columbia, but just For regional banks in general, somewhere in the mid teens seem to make sense for long term targets.

Speaker 7

Okay. That is all I had.

Speaker 3

Beth, thank you. You answered my question.

Operator

Thank you. One moment please. Our next question comes from the line of Jon Ahfstrom of RBC, your line is open.

Speaker 13

Hey, good afternoon, everyone.

Speaker 3

Hey, Jon.

Speaker 13

Hey, Jon. Hey, just a few follow ups. Just Focusing out a bit on credit. I understand the Moody's impact on the provision, but Credit seems claim you have high reserves and marks. Is it safe for us to assume just minimal provisions from here?

Speaker 13

Or what would drive a provision from here?

Speaker 3

This is Ron. When I say, what drives the provision of course will be changes in the economic forecast, right? So as those change, you'll see From a CECL standpoint, Persians. But the real key is what's happening with charge offs. And so we've seen elevated levels with Finpack over the last couple of quarters specific to that Small owner operator transportation type business that will continue here for a bit.

Speaker 3

And we're just we're not seeing Any migration for the rest of the portfolio, which is the vast majority of the portfolio. So I think specific to provisions, it's going to be solely based off of And what we see with the Moody's baseline economic forecast or consensus economic forecast over time, how they change.

Speaker 13

Okay. That's good. That's helpful. Just one follow-up on office, that last bullet where you give some of the stats in terms of, what you're seeing in that portfolio. Is any of that abnormal In your minds?

Speaker 13

The Central Business District and Suburban Office that talking about are any of those stats different from what you'd normally see?

Speaker 5

No, they're not. Pretty typical as to what I We're expected to see.

Speaker 13

Okay, good. And then, I guess the other one, Slide 10, I want to make sure I have this right. The earning asset message Ron, when I just do the math, it suggests that Q3 and Q4 average earning assets Are going to look a lot like Q2. Is that the right way to read that? I know it sounds like a simple question, but I just want to clarify that.

Speaker 13

That is. Yes. Okay. And then last one, Clint for you. Are the name changes done and just big picture, how did the conversion go?

Speaker 13

Thank you.

Speaker 2

The name changes are done. The reason I hesitate is so like If you drive by the like a legacy, a former Columbia Bank branch, Most of those are signs are bagged right now, because there's 150 locations that we have to re sign. And then even in markets Like the Puget Sound area where we both had or Portland where we both separately had a significant presence. Well, we want to make sure that the branding in that market and a particular market matches. We don't want mismatched signs and things.

Speaker 2

So that's a summertime project. But when you do drive by one of the locations That formerly said Columbia Bank, it now says Umpqua Bank. Our branch That's in the 1st floor of our headquarters building here, has been fully rebranded, was done, I think, the 1st week. So that side of it, I think has gone very well. What I'll say about the conversion, When Ron was talking about the bond portfolio during his prepared remarks, He could hardly contain his excitement and

Speaker 11

even right now,

Speaker 2

I just mentioned bond portfolio and he's bringing ear to ear. That's kind of how I'm not an excitable person, but that's how when I think about the team of that we've assembled With this combination and I referenced it in my prepared remarks and this has been a pretty lengthy call. I don't know if anybody even remembers an hour and 10 minutes ago when I made these comments. But If you think about what we accomplished organizationally in the Q1, 2 separate divestiture projects. I mean, those are kind of many M and A transactions in and of themselves, closing a transformative merger mid quarter And then having this level of detail already to go.

Speaker 2

And along the way, 2.5 weeks after you close it, you convert the systems. And so I think about the talent that it took to pull that off Yes, we did it. And so I think about myself as an employee of the company. I'm utilizing all our current go forward platforms. It's working great.

Speaker 2

It would be disingenuous if I didn't say the 1st day after my e mail converted that I wasn't like trying to figure out Where the heck everything was, but by the 3rd day, man, I was loving the enhanced functionality that we have. And then if I step back and think of it from a customer's perspective, on a personal level, Utilizing all of our go forward platforms and they're working great. And more importantly, when I go home at night, my wife's not complaining about Zelle or the mobile app or anything like that. So just a couple of kind of high level Points of view that we've monitored and then we've had a lot of conversations with Some of our very complex larger middle market clients and Just a lot of success stories. So I think I was telling somebody this the other day, Our IMO team, they gave themselves an A-.

Speaker 2

I give them a solid Maybe even an A plus Now that doesn't mean there still aren't just some things that are in flight, but overall It went great. And that's why there's the optimism around the pipelines building, the outlook for the rest of the year, the ability to go out, Take market share and all of those things that we've talked about for the last hour and 15 minutes.

Speaker 13

Okay. That's helpful. And thanks for the great deck. A lot of good detail in there. I appreciate it.

Speaker 2

That's the fine work of Jackie Bohlen.

Operator

Thank you. I'm showing no further questions at this time. I'd like to turn the call back over to Jackie Bohlen for any closing remarks.

Speaker 1

Thank you, Valerie. Thank you for joining us on today's call. Please contact me if you would like clarification on any of the items discussed today or This will conclude our call. Goodbye.

Operator

Thank you. Ladies and gentlemen, this does conclude today's conference. Thank you all for participating. You may now disconnect. Have a great

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Earnings Conference Call
Columbia Banking System Q1 2023
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