Columbia Banking System, Inc. (NASDAQ:COLB) Q3 2023 Earnings Call Transcript

Frank Namdar: Yes. Hey Matt, the increase in classified was really driven by a migration from special mentioned into the classified loan status, and it’s really centered in the commercial book of business and again, these are the two properties — not properties, but the two commercial borrowers that I mentioned that just continued to struggle when we had to downgrade them into classified status, and that’s the bulk of that change. And as far as the building of the reserve, I mean, you see the FinPac continues to have elevated charge-offs, we’ve got the increase in classified loans and the Moody’s baseline economic forecast continues to move in the direction that warrants building of the reserve.

Matthew Clark: Okay. Okay. Yes. I was actually speaking to the $16 million, not $22 million, $16 million increase in C&I. Okay. And then just on the overall reserve. I think last quarter, there was an expectation that maybe reserve coverage kind of trends lower towards 1%, but went the other way this quarter. Just any updated thoughts. I know obviously macro assumptions change and the environment changes. But any updated thoughts on the overall reserve coverage going forward?

Ron Farnsworth: I would just say you just said yourself, the macro environment changes. The economic forecast change. They got a little worse this quarter. We had a little bit of migration this quarter. And so we’ll have 3 bps instead of down 3.

Matthew Clark: Okay, fair enough. Thanks.

Ron Farnsworth: Okay, thanks.

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

Jacque Bohlen: Thank you, Valerie. Thank you for joining us on this afternoon’s call. Please contact me if you’d like clarification on any of the items discussed today or provided in our earnings material. This concludes 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 day.