Dime Commercial Bancshares, Inc. (DCOM) Q3 2026 Earnings Call Transcript

Good day, and thank you for standing by. Welcome to the Dime Commercial Bank Shares, Inc. Third Quarter Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. Before we begin, the company would like to remind you that discussions during this call contain forward-looking statements made under the Safe Harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Such statements are subject to risk, uncertainties, and other factors that may cause actual results to differ materially from those contained in any such statements, including as set forth in today's press release and the company's filings with the U.S. Securities and Exchange Commission, to which we refer you. During this call, references will be made to non-GAAP financial measures as supplemental measures to review and assess operating performance. These non-GAAP financial measures are not intended to be considered in isolation or as a substitute for financial information prepared and presented in accordance with the U.S. GAAP. For information about these non-GAAP measures and for reconciliation to GAAP, please refer to today's earnings release. I would now like to hand the conference over to your speaker today, Stuart LeBeau, President and CEO. Please go ahead.

Good morning. Thank you, Shannon, and thank you all for joining us this morning for our third quarter earnings call. With me today are Avi Reddy, our Chief Operating Officer and CFO, and Tom Geisel, our Chief Commercial Officer. In my prepared remarks, I will touch upon the progress we made in the third quarter. In addition, I will provide a summary of our acquisition of Empire State Bank. Avi will then provide financial details for the third quarter and the financial impact of the Empire transaction. Suffice to say DIME's organic growth trajectory is very strong and we have clearly differentiated our franchise from our local competitors as it relates to our ability to grow low-cost and best-in-class deposits, diversify our loan portfolio away from its historical CRE focus, attract talented bankers, and at the same time improve NIM and grow net interest income and overall profitability. Revenue news for the third quarter were $135 million, which once again was a record for dime. EPS was up 53% versus prior year. The NIM was up seven basis points versus the link quarter, as we were able to maintain our cost of deposits while improving our yield on loans. On the loan front, we are executing well, and our growth plans are in place. Year over year, Our growth in business loans was approximately $929 million, which represents 30% year-over-year increase. Our loan pipeline continues to be very strong and is at approximately $1.4 billion with a weighted average rate of approximately 6.5%. We are pleased to report a return of assets of 1.10% for the third quarter and a quarter efficiency ratio of below 48%. As you know, we have been very active on the hiring front over the past three years, and it's gratifying to see these investments contributing to improved profitability. We continue to believe that the hires we have made over the last few years have a long runway in front of them as we execute our clearly articulated growth plan. The disruption in our local marketplace remains very high, and the environment for our organic growth strategy as it relates to acquiring clients and bankers continues to be very attractive. In this regard, we are pleased to announce our entry into the affordable housing space with the launch of a dedicated group that will be led by Mike Kamoya. Finally, as it relates to profitability, our significant loan repricing opportunity over the next five quarters will continue to serve as a catalyst for continued revenue growth in the quarters ahead. During the quarter, we reduced our CRE ratio to 338% while repurchasing approximately 1% of our shares outstanding. We continue to see significant long-term value in our shares underpinned by continued NIM expansion and net interest income growth. Avi will provide some color on capital in his prepared remarks. This morning, we announced that we signed a definitive agreement to acquire Empristain Bank. We are very pleased to welcome CEO Phil Gornari and his team to Dime. By way of background, Empire is a $600 million asset-sized commercial bank with a very granular, low-cost deposit base that is headquartered in Staten Island. Dime has had our eye on having a greater ground-level branch president in Staten Island for a long time, and we believe Empire is a very low-risk transaction for our shareholders. given their granular deposit base and low-risk LTV loan portfolio. The transaction expands Dime's presence to all five boroughs of New York City, and we believe Empire's granular deposit base will have real value in a higher-rate environment. Empire represented a unique opportunity for Dime, and the transaction economics and strategic rationale makes sense for both sets of shareholders. With that said, I will end by saying our focus remains on strong organic growth, as seen by our $1.1 billion year-over-year growth in core deposits. Our significant cash position, which stood at over $2 billion at quarter end, positions us very favorably for organic growth, and we expect to benefit from meaningful loan pricing over the next five quarters. I want to end by thanking all our dedicated employees for their efforts and in positioning DIME as the best commercial bank in Metro New York. With that, I will turn the call over to Avi.

Thank you, Stu. Core EPS for the third quarter was $0.91 per share. Core pre-tax, pre-provisioned net revenue of $70 million represented 186 basis points of average assets. By maintaining a strong focus on cost of funds management and the growth of our business loan portfolio, our NIM has now increased for 10 consecutive quarters. The reported third quarter NIM increased to 335. Excluding the benefits from purchase accounting and prepayment fees, the run rate NIM for the third quarter would have been closer to 332 compared to a 322 run rate for the prior quarter. Average earning assets for the third quarter was approximately $14.36 billion. Core cash operating expenses of approximately $64.3 million was in line with our expectations. The loan loss provision was in line with the prior quarter at $13.8 million, and the allowance to loans increased to 99 basis points. The loan loss provision in the quarter was primarily to cover specific reserves on C&I loans, growth in the business loan portfolio, and charge-offs on multifamily loans. While NPAs were up, substandard loans were down 7% on a linked quarter basis, and in In addition, 30 to 89 days past due loans also declined on a linked quarter basis. As Stu mentioned, we reduced our Cree concentration ratio to 338%, while at the same time repurchasing approximately 1% of our shares outstanding. We believe that robust growth in our C&I businesses and operating with a Cree ratio that is lower than 350% will set us apart from the other local banks, which are operating between 375 to $450,000, and DIME will be rewarded in the medium to longer term with a higher valuation. Our strong capital position allowed us to structure the Empire transaction with a $30 million cash component, which represents a little more than 50% of the consideration mix for the transaction. The transaction's return metrics for DIME are very strong, with an internal rate of return well in excess of 20%, which is above our cost of capital. The transaction is expected to be approximately 3.5% accretive to earnings on a run rate basis once all synergies have been realized. We expect the impact on our capital ratios from the Empire deal to be approximately 35 basis points, factoring in the full impact of one-time deal costs and the interest rate marks in an elevated rate scenario. Finally, our pro forma capital levels provide us room for both organic growth as well as continued buybacks. turning next to forward guidance as usual while we will not provide any specific guidance on 2027 until our january earnings call i will provide some thoughts on the remainder of 2026 as i mentioned previously excluding purchase accounting and prepayment fees the run rate nim for the third quarter would have been closer to 332 we would use the 332 nim as a starting point for modeling purposes going forward. We expect continued NIMH expansion in the fourth quarter, driven primarily by loan repricing and secondarily from the recent Federal Reserve rate increase. With respect to rate hikes, we expect the September rate hike to benefit NIMH by a couple of basis points, and any future rate hikes will likely be neutral to NIMH as there will be a lagging effect on deposit costs. We have repeatedly said our large cash position is a competitive advantage that will allow us to take advantage of lending opportunities as they arise, and it will help us create a sustainable NIM that's not subject to cyclical moves based on the trajectory of short-term rates. While it's hard to predict the NIM in individual quarters, and the path may not be in a straight line on equal increments, we are focused on the ultimate destination by the fourth quarter of 2027. On our prior earnings call, we discussed a run rate quarterly NIM of over $350 by the end of 2027. Based on our strong performance this quarter and our current pipelines, we believe there's a clearer line of sight to a NIM on our existing balance sheet of over $360 by the end of 2027. Next, I'll turn to expenses. We expect core cash operating expenses excluding intangible amortization for the final quarter of the year to be around $66 million. Finally, we expect the tax rate for the final quarter of 2026 to be 28.5%. With that, I'll turn the call back to Shannon, and we'll be happy to take your question.

Thank you. As a reminder, to ask a question, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. Please stand by while we can power the Q&A roster. Our first question comes from the line of Steve Moss with Raymond James. Your line is now open.

Good morning. A nice quarter.

Hey, Steve. How are you?

Hey, Steve. Doing well. Maybe just starting here on the margin, Avi, you know, with that 360 margin by the end of 2027, you know, just kind of curious. I mean, obviously rates are higher here. You know, we've seen some spread compression across the industry. Maybe just a little updated thought in terms of dynamics here around your assumptions to that 360 margin.

Yes, so I just want to be clear. We're actually increasing the NIM guidance here. So take your comment. Well, you know, across the industry, there have been some spread compression. We're not seeing that here. You know, we've been able to maintain our cost of deposits very close to that, you know, three weeks into the quarter here. There's been a couple of basis points drift up in deposit costs, but it's actually lower than what we thought. And then on the loan side, in our press release, the weighted average rate on loans was around 550. We've seen that expand to 558 right now sitting here today. So I think we're even more confident sitting here today than we were three months back, which is why we increased the guidance both from a NIMH perspective as well as from an NII perspective. And I think that's just a testament to the quality of the deposit base that we have at the bank, the new deposits that are coming into the bank, as well as all of the new business lines that Tom's put in place over the last year and a half, which are now coming to fruition.

You've got to remember, our core DDA now, non-interest-bearing DDA, is now up to over 32%, and it's continuing to grow. The private bankers continue to bring in new customers, new clients, new relationships. So we're very excited about where we are in terms of our core funding abilities. And then on the loan side, with all the teams in place now and the verticals in place, the pipeline is very strong, and they're also bringing a nice chunk of the deposits in as well. So, you know, we're very comfortable that the, you know, we're going to continue to see NIMM expansion, you know, at these levels.

Right. And just to tie up the margin a little further, in terms of, if I recall correctly, it's about $2.5 billion of fixed rate loans at around $4.25 type percent that will reprice next year.

Are you guys going to think of that like up $200 bps at this point? yeah no so the two and a half billion was the number last quarter steve so you got to roll that forward so we've had one quarter of you know one of those six quarters has gone away so we're closer to two billion dollars right now and the rate on those uh remaining loans around 440 at this point so yeah there's still around 200 basis points off of that uh you know in terms of an improvement you know as to said uh you know early on uh a pipeline rate right now it's actually gone up to 650. So, you know, there should be probably a, you know, 210 to 225 basis point increase on that 2 billion. Now, all of that's not going to stay with us. Some of that's going to, you know, refi out of the bank. Some of it's going to stay with us. But I think we showed this quarter that we're able to grow, you know, overall loans, you know, keeping in mind the reduction in the multifamily portfolio as well. So you should see, you know, the repricing benefit as well as, you know, continued growth in the overall loan portfolio at a low to mid-single-digit growth rate that we talked about last time around.

Yeah, I mean, you know, in the previous quarters, you've been seeing about $150 million to $175 million of commercial real estate move out. So you have to assume that that will continue, most likely. And, you know, it's been about $150 million a quarter of multifamily has been prepaying or paying off and refinancing out. So we're still seeing those same metrics, although in a higher rate environment, it might slow down a little bit.

Okay, that's helpful. That was going to be my next question. And then maybe just on the core deposit growth here, it was, you know, really strong this quarter. We're just kind of curious, you know, how you're thinking about the cadence here on growth and, you know, any color you can give there.

Yep. I mean, Steve, typically the third and fourth quarters of the year are our best quarters, just given, you know, seasonality, you know, the East End, you know, some of our, you know, private bankers in terms of the type of business mix that they have. So I would say there's nothing in the numbers in Q3 that we expect to go away in Q4, so it's a good starting point. And then, you know, we've started the quarter reasonably here. So I would say it's kind of hard to predict in individual quarters where we go. Q1, generally, we do see some outflows, but I think, you know, Q4 should steadily build off of Q3.

Okay. I appreciate all the time you're here, and I'll step back in the queue, guys. Thank you very much. our next question comes from the line of manuel novice with piper sandler your line is now open hey mario i i i hear you on the low single digits mid single digits growth pace it was really strong this quarter can you talk a little bit about the mix this quarter what how it accelerated a bit and um um and i guess you the pace should maybe slow a little bit in the fourth quarter but can you just talk about the growth trajectory and what businesses drove it most?

Yeah, sure. So, a couple of things. So, if you go back and take a look at the year, right, on the business loan side, Q1 net loan growth was about $125 million. Q2 was $275 million, and Q3 was $350 million. So, So nice chronology of growth across the year and across the quarters. The fourth quarter, I think, is probably going to be flat to where we were in this quarter. Q1 tends to be lower just by the nature of the business. Q2 and Q3 tends to be stronger, as you know, in banking. And Q4 just depends on the overall economic environment and the momentum. So we feel pretty good about where we think we'll end the year. To Stu's point about the $925 million or so growth year over year, what we're really happy about is the diversification of that growth. Our C&I business, our traditional C&I business, led the way at about 25%. And then when you start to add in some of the new specialty finance businesses we put in place like lender finance, fund finance, sponsor finance, and healthcare, they all came in at about 20%. So we're really happy we didn't have one business that, you know, pretty much outshined the others. And when you look about the quarter, the quarter had about one-third growth from CNI, followed by Fund Finance, and then the balance of the other specialty groups fell behind. So real diverse business growth across the year and across the quarter.

Manuel, I'd just add to a couple of things, right? I think our guidance still, when you go back to last quarter, think about the balance sheet in three different pieces. So on the business loan front, really somewhere between $200 million and $250 million every quarter. This quarter, we were at $350 million, so probably a little bit higher in terms of the run rate. The multifamily piece, we still expect around $500 million of runoff on that piece. And then what changed this quarter, which is why overall loans were back in the commercial real estate market doing relationship Cree. Cree balances were down, you know, only $10 or $15 million this quarter. We probably originated $100 million this quarter. You know, nice spreads, nice LTVs, nice debt service. So that should continue going forward. So where the variable is going to be going forward is, you know, business loans, you know, some quarters it may be closer to $200. Some quarters may be closer to $250. Some it may be closer to $300. over there but if you put all of that together you come back to that you know low to mid single digits for the next probably six to nine months great and that that 500 million uh multifamily decline that gets you towards that 25 percent longer term target no shift there in essence on the mix uh projected going forward yeah i mean it's probably a little bit less than 25 i mean right now we're at 27 percent um so you know i i would i would use 500 million off of off the current numbers basically I appreciate I appreciate that and is there any other

color you could add on kind of the deposit growth which was so strong kind of what what areas that that came from most I know you talked a little bit about the private banker business mix and you talked a little bit about the trajectory over the course of the year but just what businesses led let it most and where there might be some competition yeah I mean where we're really growing deposits is just business deposits, right?

So if you look at our base, right now, it's probably 70 to 75% of the base is business deposits and consumer deposits are 25%. The consumer piece this time last year was 30%. This time two years back was probably 35%. So we're actually seeing small declines on the consumer side because we're not the highest rate payers out there for consumer deposits, which really means business deposits are growing at an even faster pace, right? So we did hire, you know, three teams earlier this year in April. They're doing, you know, really well in line with our projections. So they've, you know, it takes a little bit of time, you know, for teams to get going, but they were a good contributor to third quarter growth. Our municipal business did really well in the third quarter. Our branches did well. So I would say, look, we think we've got the best footprint in our area. We've got the best bankers. We've got the best branch network. We've hired the best private bankers. So it's really the people that we have. And Stu said we're able to do this with, you know, growing DDA, right? So we're bringing in core operating accounts. I mean, we've opened, you know, over the course of this year, we've opened over 6,000 accounts, basically. So a lot of what's coming in now is, you know, the work that was done over the last three to six months. And we continue to see that accounting opening process not stop. So I think, you know, this quarter was, you know, especially strong in the third quarter, but, you know, fourth quarter, you know, we'll have to see where we end up at. I will say we have been able to manage the cost of funds really well, and we're not really seeing a creep up in that yet.

Yeah, that does bode well. And my last question is you've added now Staten Island with the transaction today. You've grew an affordable business vertical. What is remaining for where you'd like to add density? Perhaps another team by next April. What is it you're looking at next as like to have in terms of a new lending vertical or a new geographic area you'd like to invest in?

Look, I think we've kind of accomplished what we were set out to do in terms of verticals and business lines. You know, we've been opportunistic when opportunity arises and talented people become available. We've taken the opportunity to bring them on board, and we've been successful at it. The same thing with private banking teams. There are probably still a few out there that we'd be interested in. But I think overall, strategically, I think it's really now, you know, we need to operate on all cylinders and get things cranky, and I think we're really about there. You know, a lot of these teams have been on for quite a while, and their pipelines are growing, and that's why you're seeing, you know, the results in terms of loan originations and closings. So, you know, strategically, I think we're really in a spot where we really got to execute and grow the business. And I think we have the horses and the manpower to do that now. So, I mean, I don't see any significant moves away from that. We will be opportunistic if an opportunity arises in terms of teams or verticals.

Yeah, I think, you know, one thing to think about is when we bring a new team on, it takes them anywhere from a year to 18 months to really get their footing. And you can tell by the loan growth results, many of those teams are just starting to get there now. So it's nice to see that the investment that we put into the business a year or so ago is starting to come to fruition, and we just want to keep pushing that for now and focusing on the organic side.

Yeah, Manuel, I just rounded out by saying we're very focused on getting our profitability to a level by the back half of 27, where you're talking about an ROA in excess of 130 at that And so you saw this quarter with the efficiency ratios, sub-48% at this point. We've updated our NIM guidance where we think NIM guidance is going to be over 360 at that And so we've made all the investments, you know, anything, you know, going forward is probably, you know, marginal and, you know, and pays for itself pretty quick. But as Stu said, right now it's about execution and driving the profitability to reflect the value in our deposit base, which is still not still not in the end terms of the overall profitability because there's so much repricing assets that we have over the next, you know, five quarters.

I really appreciate the commentary.

Thank you. thank you our next question comes from the line of david conrad with kbw your line is now open great thanks good morning um just want to talk about credit for a little bit um you know you mentioned criticizing special mentioned um was down high single digits but you also mentioned the mpa um growth was was pretty strong this quarter um looks like partially in business loans and multi-family so maybe a little bit of color of the MPA moves and then maybe expectations in the fourth quarter for provisions and and maybe MPAs as well yes well I'll take that David so uh

on the ceiling side we had one relationship uh this had been substandard for a couple of years with us uh we took a you know six million dollars specific reserve on this we have some collateral behind it as well. So we feel pretty well secured over there. A person was involved in property management, kind of tied to the real estate space over there. On the multifamily side, one relationship, this had been in the 60 to 89 day bucket for the last two years, slow paying relationship. And so we kind of charged that down, got an updated appraisal on that. So I'd say, look, it's part and parcel of the business that we have. You know, substandard loans were down 7%. The 30 to 89 day bucket was down substantially. You'll see those disclosures in the 10Q when we put that out. Look, I would just say overall in terms of, you know, provisioning levels, you know, we'd probably expect something similar to the last couple of quarters for the next couple of quarters. You know, our goal really is to get the earning stream of this company to a 130-plus ROA by the back half of 2027. So I don't think we should be operating at a $13 to $15 million provision level for more than a couple of quarters, but I think for the next couple of quarters, that's not unreasonable just given we'd just like to work out some of these credits, and it really depends, right? Certain situations, you sell the loan and you move on. That's the best, lowest-cost option to the bank. In other situations, you take a specific reserve and you do a longer term workout. So I'm not really going to comment on, you know, projections for, you know, different type of credit quality metrics. What I will say is we feel pretty well reserved with what we have right now. We've got, you know, pre-tax, pre-provisioned earnings is 185 basis points, you know, could be some choppiness next couple of quarters, but I think by the time we get to the back half of 2027, we feel pretty good about, you know, earning stream of the company on a, you know, including provisions.

Great. Thank you. And then one more. You know, the operating leverage story here has been pretty remarkable. And you're at an efficiency ratio, you know, roughly around 48, a little bit better than 48%. I know expenses are going up a little bit, you know, for the fourth quarter. But, you know, is that sustainable? It feels like it is when you're talking about, you know, more 30 bps, better NIM expansion next year. So, like, how much can you drive that operating leverage?

Yes, I'd use that $66 million as a, you know, reasonable run rate for next year. And then if you assume, you know, I know 3%, 4%-ish, you know, regular merit increase type stuff. Look, it depends, right? I think we've done the heavy lifting on the expense side in terms of building out the infrastructure to support the private bank. We've opened, you know, two new branches. We've gone into New Jersey. You know, we've, you know, added, you know, a lot of teams underneath Tom. So I think all of that's done. So, going forward, you know, our goal is to get, you know, that 48% down to, you know, 45% and then lower than 45% down the road. So, I think, you know, expenses are what they are. You know, I think with, you know, additional scale with the Empire deal, which we've not talked about, you know, that should help the efficiency ratio as well, given, you know, given the fact that, you know, a lot of the back office, you know, we're able to support with what we have right here. So we should see that, you know, continuing to trend down over time, you know, mainly driven by revenue growth.

Great. Thank you. Appreciate it.

Thank you. As a reminder to ask a question at this time, please press star one one on your touchtone telephone. Our next question comes from the line of Matthew Breeze with Stevens. Your line is now open.

Hey, good morning. A few questions from me. um just starting on on on the mpa pickup you know within multi-family you know how much of that was tied to the rent regulated space and avi maybe you could give us just an update on the health of that portfolio from an npl and delinquency standpoint um and then secondly you know just curious i i i heard you on substandard what did classified loans do this quarter and any kind of directional change there.

Yeah, sure. So the relationship this quarter map that was rent regulated, the NPAs that we have in the book are all rent regulated on the multifamily side. Anything that's free market, we don't have anything there that's NPA at this point. I'd say, look, overall, we're monitoring the portfolio very closely. What we really spend a lot of time on is, you know, there's a billion dollars-ish overall of rent regulated, which is over 50%, basically, is how we characterize it, right? So that portfolio, you know, this past quarter, there was probably around $40 million of a decline in that. So we're seeing a steady decline in that portfolio, specifically in the multifamily portfolio. So classified actually is substandard. That's the definition, right? So in that particular portfolio on the multifamily side we we probably have a overall we have around 135 million of uh substandard last quarter it's down to probably 125 million this quarter so we're not we're not seeing any pickup there i think you know we know our portfolio we know what we got uh you know there you know could there be some you know hits over time sure uh but by and large it's very manageable you know our average loan size is around three and a half million dollars in in the overall multi-family portfolio on the rent regulated side, it's less than that. Our pre-2019 portfolio that we keep our eyes on is down 275 million. So we feel good about that. It's winding down. It's not a growth part of our business. We're not doing any new rent regulated loans at this point. And I think we've reached the point where our earnings power is so strong that we'll work through anything that comes up over time.

I appreciate all that. And then just on deposit cost, Avi, I heard you say it's coming in better than expected. I'm just curious, as you think about that, you know, 360 or North NIM, you know, by year-end 27, what kind of deposit beta are you anticipating?

Yes, I think on the first rate hike that happened, Matt, you know, we've not seen much over there. You know, there's obviously clients we've moved. I think, you know, as we see a pickup in rate increases, you're gonna see, you know, the beta be a bit higher on the deposit side. I don't think it's going to be any different than, you know, on the way down. The one difference I think is that, you know, the DDA that we have, I mean, right now it's real DDA, it's real operating accounts, it's real stuff that's been coming into the bank. So I think the last time around rates went to 5%, the issue that a lot of banks had was there's a lot of migration out of DDA into interest bearing. We just don't see that happening this time around, right? So I think for the second rate hike, if there's one in, you know, October or December, you'll see, you know, a bigger pickup than the first hike. But on the first hike here, you know, we ended the quarter with the cost of deposit 168. We're sitting here today at, you know, 172 plus or minus. And, yeah, there'll be a little bit more creep, you know, off the 172, but not substantial. I do think on the second and third, it'll probably pick up a little bit off of that, which is why, if you go back to my guidance on the NIM, we said the first rate hike was probably a couple basis points accretive to NIMH, and then once you get to the second one, we're probably more neutral on NIMH at that point.

Yeah, that makes sense. And then the other, you know, also tying to the NIMH outlook, you guys are sitting on a lot of cash, things up to 14% of total assets. Can you help me out with kind of the deployment strategy there and timeframe for deployment, and within that ROA target you have and the 360 NIM guide, you know, what does the cash as a percentage of assets look like?

Yeah, so I think we like the cash position because it keeps us neutral to, you know, short-term rates at this point. In the third quarter, we did not buy any securities. So I think we'd like to have a little bit more visibility into where rates, you know, end up at before, you know, jumping in and buying securities. So I think that that 360 NIM really doesn't assume, you know much deployment of the cash position it's it's just you know off the two billion of odd of you know maturing and repricing loans if you assume you know it's called a billion seven a billion eight of that you know you can reprice up 200 225 basis points that that itself should get us you know 25 basis points 20 25 basis points of nim you know off of that I think that the cash deployment that's something over and above that but if you come back to our loan growth, you know, assumptions, we've said, you know, low to mid single digit growth on the loan side, and we're growing deposits, you know, faster than a low to mid single digit growth. So that would really mean there's more cash on the balance sheet, right? So long story short, it doesn't really capture that. I think that's upside in the NIM. And another way to look at it is if we did deploy it, the 360 is more like, you know, 383, 94% if we ran with the loan to deposit ratio closer to 90 to 95. Okay.

Do you think cash could build from here? I didn't really anticipate that, but it sounds like you might be leading me there.

No, look, if you look at it this quarter, the loan-to-deposit ratio went down, even though we grew loans because we grew deposits faster, right? So it is a possibility, but, you know, we'll deal with it as it comes.

Yeah, I mean, once we get to a point, Matt, where we're comfortable with our Cree ratio and, you know, we're back in the Cree business today. on a selected basis, you know, you'll see larger loan growth and then the deployment of the cash. But at this point, you're still seeing net runoff on the commercial real estate side, both on the multifamily and obviously on the, you know, straight commercial real estate. Once that kind of levels out, at that point, and we expect that toward, you know, mid to delaying 27, you'll start to see, you know, more significant loan growth and deployment of more cash. Okay.

Last one for me, Avi, just on the deal, there was a few numbers I was hoping you could help me out with.

Maybe forecasted cost saves, the percentage you're using for CDI and then the credit interest rate marks oh and once yeah so that's sorry yeah sure so so the deal size is pretty small rate you know four percent of our of our asset base so you know I think I think overall we you know we expect to run this you know at a our way we know well in excess of two percent at the bank you know you know fully factoring cost savings over there you know the rate mark and credit mark you know you probably end up you know somewhere close to somewhere between 4% and 5% plus or minus, including the rate and credit mark. Obviously, the rates are elevated, so it depends on what point in time you do it. We kind of assumed the worst case where the five-year was at 5%. So I think to include that, it's probably somewhere between 4.5% and 5% rate and credit put together on it. In terms of the CDI assumption, I would just use 3% on the core deposits on that. And then, you know, deal costs, you know, they probably should be in the, you know, $12 to $13 million area, plus or minus, on a pre-tax basis.

I'll leave it there.

Thank you for taking all my questions. Appreciate it. Okay. Thanks, Matt.

Thank you. And I'm currently showing no further questions at this time. I now like to turn the call back over to Stuart LeBeau for closing remarks.

Thank you, Shannon. And thank you all and our dedicated employees and our shareholders for their continued support. And we look forward to speaking with you after our fourth quarter.

This concludes today's conference. Thank you for your participation. You may now disconnect.