Dime Community Bancshares, Inc. (DCOM) Q3 2026 Earnings Report, Transcript and Summary

Good day, and thank you for standing by. Welcome to the Dime Community Bancshares, Inc. Third Quarter Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star 1 on your telephone. You would 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 2000. Such statements are subject to risks, 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 US 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 US 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 H. Lubow, 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 Avinash 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. Avinash 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. Revenues 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 7 basis points versus the linked 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, growth in business loans was approximately $929 million which represents 30% year-over-year increase. Our loan pipeline continues to be very strong and has an approximately $1.4 billion with a weighted average rate of approximately 6.5%. We were pleased to report a return of assets of 1.10% for the third quarter and a core efficiency ratio of below 48%. As you know, we have been very active on the hiring front over the past 3 years. And it is gratifying to see these investments contributing to the 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 Keith Smith. Finally, as it relates to profitability, our significant lowering pricing opportunity over the next 5 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. Avinash will provide some color on capital in his prepared remarks. This morning, we announced that we signed a definitive agreement to acquire Empire State Bank. We are very pleased to welcome CEO, Thomas Reid, 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 presence 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 5 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 a 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 was stood at over $2 billion at quarter end, positions us very favorably for organic growth and we expect to benefit from meaningful lowering pricing over the next 5 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 Avinash.

Thank you, Stuart. Core EPS for the third quarter was $0.91 per share. Core pre tax pre provision net revenue of $70 million represented 106 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 3.35% excluding the benefits from purchase accounting and prepayment fees, the run rate NIM for the third quarter would have been closer to 3.32% compared to a 3.22% 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 addition, 30 to 89 days past due loans also declined on a linked quarter basis. As Stu mentioned, we reduced our CRE 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 CRE ratio that is lower than 350% will set us apart from the other local banks which are operating between 375 to 450 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 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 onetime deal costs and the interest rate mark in an elevated rate scenario. Finally, our pro form a 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 3.32%. We would use this 3.32% NIM as a starting point for modeling purposes going forward. We expect continued NIM 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 NIM by a couple of basis points. And any future rate hikes will likely be neutral to NIM 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 is not subject to cyclical moves based on the trajectory of short term rates. While it is 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 2023. On our prior earnings call, we discussed a run rate quarterly NIM of over 3.50% by the end of 2023. Based on our strong performance this quarter and our current pipelines, we believe there is a clearer line of sight to a NIM on our existing balance sheet of over 3.60% by the end of 2023. Next, I will 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 will turn the call back to Shannon, and we will be happy to take your questions.

Thank you. To ask a question, please press star 1 on your telephone and wait for your name to be announced. Withdraw your question, please press star 11 again. Our first question comes from the line of Stephen Moss with Raymond James. Your line is now open.

Good morning. A nice quarter.

Hey, Steven. How are you? Steven.

Doing well. Maybe just starting here on the margin, Avinash. You know, with that 3.60% margin by the end of 27, just kinda curious. I mean, obviously, rates are higher here. You know, we have some spread compression across the industry. Maybe just a little updated thoughts in terms of dynamics here around that. Around your assumptions to that 3.60% margin?

Yes. I so I just wanna be clear. We are actually increasing the NIM guidance here. So I take your comment. Well, you know, across the industry, there have been some spread compression. We are not seeing that here. You know,, we have been able to maintain our cost of deposits very close to that you know, 1.68% area as we, you know, 3 weeks into the quarter here, there is been a couple of basis points drift up in deposit costs, but it is actually lower than what we thought. And then on the loan side, in our press release, the weighted average rate on loans was around 5.50%. We have seen that expand to 5.58% right now sitting out today. So I think we are we are even more confident sitting here today than we were 3 months back, which is why we increased the guidance both from a, you know, NIM perspective as well as from a NII perspective, And I think that is 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, you know, all of the new business lines that you know, Tom's put in place over the last year and a half, which are now coming to coming to fruition.

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

And just to just tap the marginal further in terms of, if I recall correctly, it is about $2.5 billion of fixed rate loans at around 4.25% type percent. That will reprice next year. You guys gonna think of that, like, up 200 bps at this point?

Yeah. No. So $2.5 billion was the number last quarter, Steven. So you have to roll that forward. So we have had 1 quarter of 1 of those 6 quarters has gone away. So we are closer to $2 billion right now, and the rate on those remaining loans around 4.40% at this point. So there is still around 200 basis points off of that, you know, in terms an improvement. You know, as Stuart said, you know, early on, our pipeline rate right now has actually gone up to 6.50%. So, you know, there should be probably, you know, 10 to 25 basis point increase on that on that $2 billion Now all of that is not going to stay with us. Some of that is going to, you know, refi out of the bank. Some of it is gonna stay with us. But I think we showed this quarter that we are able to grow overall loans 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 mid single digit growth rate that we talked about last time around.

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

Okay. The that is helpful, and that was going to my next question. And then maybe just on the core deposit growth here, it was really strong this quarter. Kind of curious how you are thinking about the cadence here on growth and you know, just any color you can give there.

Yep. I mean, it is a. Steven, typically, the third and fourth quarters of the year are our best quarters due to seasonality, 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 was nothing in the numbers in Q3 that we expect to go away in Q4. So it is a good starting point. And then we have started the quarter reasonably here. So I would say, you know, 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 off of Q3.

Okay. I appreciate all the color here, and I will step back in the queue guys.

Thank you very much. Thanks, Steven.

Our next question comes from the line of Manuel Navas with Piper Sandler. Your line is now open.

Good morning.

Hey, Manuel.

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 and how it accelerated a bit? And I guess the pace should maybe slow a little bit in the fourth quarter, 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 then Q3 was $350 million. So nice chronology of growth across, you know, across the year and across the quarters. The fourth quarter, I think, is probably gonna 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 old the overall economic environment and the momentum. So we feel pretty good about where we think we will end the year. To Stu's point about $929 million or so growth year over year, what we are really happy about is the diversity of that growth. Our C&I business, our traditional c and I business led the way at about 25%. Then when you start to add in some of the new specialty finance businesses we put in place, like 20%. So really happy. We did have 1 business that, you know, pretty much outshined the others. And when you look about the quarter, the quarter had about 1-third growth from C&I, 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.

Hey, Manuel, let me just add a couple of things, right? I think our guidance still, when you go back to last quarter and think about the balance sheet and 3 different pieces. So on the business loan front, you know, really somewhere between $200 and $250 million every quarter. This quarter, we were at $350 million, so probably a little bit higher in terms of the run rate. Multifamily piece, we still expect around $500 million of runoff on that piece. And then what changed this quarter, which is why overall loans grew, is we are back in the commercial real estate market doing relationship CRE. CRE balances were down, you know, only $10 or $15 million 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 gonna be going forward is you know, business loans, you know, some quarters, it may be closer to 200, some quarters, maybe closer to $250 million, 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 6 to 9 months.

Great. And that $500 million multifamily decline, that gets you towards that 25% longer term target. No shift there. In essence, on the mix projected going forward.

Yeah. I mean, it is probably a little bit less than 25%. I mean, right now, we are at 27%. So, you know, I would I would use $500 million off of 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 areas that came from most? I know you talked a little bit about the private banker business mix. Talked a little bit about the trajectory over the course of the year. But just what businesses led it most and where there might be some competition?

Yeah. I mean, where were the only growing deposits is just business deposits. Right? So if you if you look at our base, right now, it is probably 70% to 75% of the base is business deposits. And consumer deposits are 25%. The consumer piece this time last year was 30%. You know, this time, 2 years back, was probably 35%. So we are actually seeing, you know, small declines on the consumer side because we are not the high 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, 3 teams earlier this year in April. They are doing, you know, really well in line with our projection projections. So they have, you know, it takes a little bit of time, you know, for teams to get going, but they were you know, 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 have got the best footprint in our in our area. We have got the best bankers. We have got the best branch network. We have we have hired the best private bankers. So it is really the people that we have, and we. And Stuart said we are able to do this with you know, growing DDA. Right? So you will bring in core operating accounts I mean, we have opened. You know, over the course of this year, we have opened over 6 thousand accounts, So a lot of what is coming in now is, you know, the work that was done over the last 3 to 6 months, and we continue to see that accounting opening process not stop. So I think, you know, this quarter was a, you know, especially strong in the third quarter, but, you know, fourth quarter, you know, we will 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 are not really seeing a creep up in that in that yet.

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

Look. I think we have kind of accomplished what we were set out to do in terms of verticals and business lines. You know, we have been opportunistic, when the opportunity arises and people. And talented people become available, we have we have taken the opportunity to bring them on board, and we have been successful at it. The same thing with private banking teams, There are probably still a few out there that we would be interested in. I think overall, strategically, I think it is really now you know, we are. We need to operate on all cylinders and get things cranking. And I think we are we are really about there. You know, a lot of these teams have been on for quite a while, their pipelines are growing And that is why you are seeing, you know, the results in terms of loan originations and closing. So, you know, there strategically, I think we are really in a spot where we really have to execute and grow the business. And I think we have the horses and the and the manpower to do that now. So, I mean, I do not 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, 1 thing to think about is when you bring a new team on, it takes some 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 is nice to see that the investment that we put into the business a year or so ago is starting to come to fruition. We would just wanna keep pushing that for now. Focusing on the organic side.

Yeah. Manuel, I just round it out by saying we are very focused on getting our profitability to a level by the back half of 27. Where you are talking about, you know, an ROA in excess of 1.31% at that point. And so you saw this quarter with, you know, the efficiency ratios, you know, sub-48% at this point. We have updated our NIM guidance where, you know, we think NIM guidance is gonna be over 3.60% at that point. So we have we have 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 Stuart said, right now, it is about execution and driving the profitability to reflect the value in our deposit base, which still not still not in terms of the overall profitability because there is so much repricing assets that we have over the next, you know, 5 quarters.

I really appreciate the commentary. Thank you.

Thank you.

Our next question comes from the line of David Konrad with KBW. Your line is now open.

Great. Thanks. Good morning. Just wanna talk about credit for a little bit. You mentioned, classified and special. I mentioned was down high single digits. But you also mentioned the NPA, growth was pretty strong this quarter. Looks like partially in business loans and in multifamily. So maybe a little bit of color of the NPA moves and then maybe expectations in the fourth quarter for provisions and maybe NPAs as well?

Yeah. Sure. I will I will take that, David. So on the CRM side, we had 1 relationship. This has been substandard for a couple of years with us. We took, you know, $6 million specific reserve on this. We have some collateral behind it as well. So feel pretty well secured over there. Person was involved, you know, in property management, you know, kind of tied to the tied to the real estate space over there. On the multifamily side, 1 relationship, this had been in the 60 to 89 day bucket for the last 2 years. Slow paying relationship, and so we kind of charged that down and, you know, got an updated appraisal on that. So I would say look, it is 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 will see those disclosures in the 10-Q when we when we put that out. Look, I would just say overall in terms of, you know, provisioning levels, we would probably expect something similar to the last couple of quarters for the next couple of quarters. Our goal really is to get the earnings stream of this company to a, you know, 1.31% plus ROA by the back half of 2027. So I do not think we should be operating at a $13 million to $15 million provision level more than a couple of quarters. But, you know, I think for the next couple of quarters, that is not unreasonable. Just given, you know, we would just like to work out some of these credits And it really depends. Right? Certain situations, know, you sell the loan and you move on. that is the best, you know, lowest cost option for the bank. In other situations, you take a specific reserve and you do a longer term workout. So I am not really gonna comment on, you know, projections for, you know, different type of credit quality What I will say is we feel pretty well resolved with what we have right now. We have got a pretax pre provision earnings of 1.85% basis points. 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 1 more You know, the operating leverage story here has been pretty remarkable, and you are at an efficiency ratio, you know, roughly around 48%, a little bit better than 48%. Know expenses are going up a little bit for the fourth quarter, but is that sustainable? It feels like it is when you are talking about more than 30 bps better NIM expansion next year. So like, how much can you drive that operating leverage?

Yes. I would use that $66 million as a, you know, reasonable run rate for next year. And then if you assume, you know, a 3%, 4%-ish regular amount increase type stuff, Look. It depends. Right? I think we have done the heavy lifting on the expense side in terms of building out the infrastructure to support the private bank. We have opened, you know, 2 new branches. We have gone into New Jersey. We have added a lot of teams underneath Tom. So I think all of that is done. So going forward, you know, our goal is to get, you know, that 48% down to, you know, 45%. And 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 have 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 are 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 1 on your touch-tone telephone. Our next question comes from the line of Matthew Breese with Stephens. Your line is now open.

Hey, good morning. A few questions for me. Just starting on the NPA pickup you know, within multifamily, you know, how much of that was tied to the rent regulated space? And, Avinash, maybe you could give us just an update on the health of that portfolio from a NPL and delinquency standpoint And then secondly, know, I was just curious. 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, Matt, that was rent regulated the NPS that we have in the book are all rent regulated on the multifamily side. Anything that is free market, you know, we do not have anything there that is NPA at this point. I would say, look, overall, we are monitoring the portfolio, you know, very closely. What we really spend a lot of time on is, you know, there is a billion dollars-ish, you know, overall of rent regulated, which is over 50% basically is how we 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 are seeing a steady decline in that portfolio. Specifically in the multifamily portfolio. So classified actually is substandard. that is the definition. Right? So in that particular portfolio on the multifamily side, we probably have overall, we have around $135 million of substandard. Last quarter, it is down to probably $125 million. This quarter. So we are not we are not seeing any pickup there. I think we know our portfolio. We know what we have got. There will, you know, could there be some, you know, hits over time? Sure. But by and large, it is very manageable. You know, our average loan size is around $3.5 million in the overall multifamily portfolio on the rent regulated side, it is less than that. Pre-2019 portfolio that, you know,, we keep our eyes on is down to $275 million So we feel good about that. You know, it is it is it is winding down. it is not a growth part of our business. We are not doing any new rent regulated loans at this point. And I think, you know, we have reached the point where our earnings power is so strong that, you know, we will work through anything that comes up over time.

Great. I appreciate all that. And then just on deposit cost, Avinash, I heard you say it is coming in better than expected. I am just curious, as you think about that 3.60% or north NIM you know, by year end 2027, what kind of deposit beta are you anticipating?

Yes. I think the on the first rate hike that happened, Matthew, you know, we have not seen much over there. You know, there is there is, you know, obviously clients we have moved. I think you know, as we see a pickup in rate increases, you are gonna see, you know, the beta be a bit higher on the deposit side. I do not think it is gonna be any different than, you know, on the way down. The 1 difference I think is that, you know, the DDA that we have. I mean, right now, it is real DDA. it is real operating accounts. it is real stuff that is 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 is a lot of migration out of DDA into interest bearing. We just do not see that happening. This time around. Right? So I think for the for the second rate hike, if there is 1 in, you know, October or December, you will 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 deposits of 1.68%. We are sitting up today at, you know, 1.72% plus or minus. And there will be a little bit more creep, you know, off the 1.72%, but not substantial. I do think on the second and third, it will 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 NIM. And then once you get to the second 1, we are probably more neutral on NIM at that point.

Yep. That makes sense. And then the other, you know, tying also tying to the NIM outlook you guys are sitting on a lot of cash. I think it is up to 14% of total assets. Can you help me out with kind of the deployment strategy there and time frame for deployment? And within that ROA target you have and the 3.60% NIM guide? You know, what is the cash as a percentage of assets look like?

Yeah. So I think we would 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 would like to have a little bit more visibility into where rates you know, end up at before, you know, jumping in and buying securities. I think that 3.60% really does not assume know, much deployment of the cash position. it is just, you know, off $2 billion-odd of, you know, maturing and repricing loans, if you assume let's call it $1.7 billion, $1.8 billion of that, you know, you can reprice up 200, 225 basis points. That itself should get us you know, 25 basis points -- 20, 25 base points of NIM, you know, off of that. I think that the cash deployment, that is something over and above that. But if you come back to our loan growth assumptions, we have said low to mid single digit growth on the loan side. And we are growing deposits you know, faster than a low to mid single digit growth. So that would really mean there is more cash. On the balance sheet. Right? So long story short, it does not does not really capture that. I think that is upside in the NIM. And another way to look at it is if we did deploy it, the 3.60% is more like, you know, 3.80%, 3.90% if we ran with the loan to deposit ratio closer to 90% to 95%.

Okay. Do you think cash could build from here? I did not 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 rate went down even though we grew loans because we grew deposits fast. Right? So it is a possibility, but, you know, we will you know, deal with it as it comes.

Yeah. I. Once we get to a point, Matthew, where we are comfortable with our CRE ratio, and, you know, we are back in the CRE business today. On a selective basis. You know, you will see larger loan growth and then the deployment of the cash. But at this point, you are still seeing net runoff on the commercial real estate side, both on the multifamily and obviously on the on the know, straight commercial real estate. Once that kind of levels out, that is. At that point, and we expect that toward, you know, mid to late 27. You will start to see, you know, more significant loan growth and deployment of more cash.

Okay. Last 1 for me, Avinash. Just on the deal, there is a few numbers I was hoping you could help me out with. Maybe forecasted cost saves, a percentage you are using for CDI, and then the credit interest rate marks. Oh, and once it is-- so that is the-- sorry.

Yeah. Sure. So the deal size is pretty small. Right? You know, 4% of our asset base. So I think overall, we expect to run this at a ROA well in excess of 2% at the bank. We fully factor in cost savings over there. You know, the rate mark and credit mark, you know, you probably end up, you know, somewhere close to, you know, somewhere between 4% to 5% plus or minus, including the rate and credit mark. Obviously, you know, rates are elevated, so it depends on what point in time you do it. We kind of assume, you know, the worst case where, you know, the 5 year was at was at, you know, 5%. I think if you include that, it is probably, you know, somewhere between 4.5% and 5% rate and credit put together on it. You know, in terms of the CDI assumption, yeah, I will just use 3% you know, on the core deposits on that. 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 pretax basis.

I will leave it there. Thank you for taking all my questions. Appreciate it.

Okay. Thanks, Matt.

Thank you.

And I am currently showing no further questions at this time. I would now like to turn the call back over to Stuart Lubow for closing remarks.

Thank you, Shannon, and thank you all and our dedicated employees and our shareholders for their continued support. 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.