First Interstate BancSystem, Inc. (FIBK): PESTLE Analysis [Nov-2025 Updated]

You're looking at First Interstate BancSystem, Inc. (FIBK) and seeing a regional bank caught in a classic 2025 tension: high interest rates are pushing up their Net Interest Margin (NIM), but that tailwind is being fought by rising regulatory compliance costs and the need for significant tech investment. The immediate challenge is managing the risk in the Commercial Real Estate (CRE) loan portfolio while preparing for the imminent Basel III endgame rules, which will demand higher capital buffers. With total assets projected to hit around $33.5 billion by the end of the 2025 fiscal year, the bank must also ramp up IT security spending by 15-20% year-over-year to fend off escalating cybersecurity threats. We need to map these Political, Economic, and Technological forces to clear actions, so let's dive into the full PESTLE breakdown.

First Interstate BancSystem, Inc. (FIBK) - PESTLE Analysis: Political factors

Increased regulatory scrutiny on mid-sized banks post-2023 failures

The political hangover from the 2023 regional bank failures-Silicon Valley Bank and others-has defintely translated into sustained regulatory scrutiny for mid-sized institutions like First Interstate BancSystem. The political climate demands that banks with assets near the $50 billion threshold demonstrate robust liquidity and capital buffers, even if they are below the threshold for the most stringent 'Category IV' rules (banks with assets between $100 billion and $250 billion).

FIBK has strategically managed its balance sheet to preempt this pressure. As of September 30, 2025, the company's Common Equity Tier 1 (CET1) capital ratio stood at a strong 13.9%, an increase of 47 basis points (0.47%) from the prior quarter. This metric, which measures a bank's core capital against its risk-weighted assets, is well above the regulatory minimums and signals political stability. Also, the loan-to-deposit ratio, a key liquidity indicator, dropped to 70.1% in the third quarter of 2025 from 78.8% a year earlier. That's a clear action to mitigate political and regulatory risk.

Here's the quick math on FIBK's Q3 2025 Capital and Liquidity strength:

Federal Reserve's influence on interest rates driving loan demand volatility

The Federal Reserve's monetary policy is the single biggest political driver of near-term loan demand. The Fed's pivot to an easing cycle in late 2025, driven by concerns over a weakening labor market, directly impacts FIBK's core business model. Specifically, the Federal Open Market Committee (FOMC) cut the target range for the federal funds rate by 25 basis points (0.25%) on September 17, 2025, setting the new range at 4.00%-4.25%. Another cut is widely anticipated for late October 2025.

This policy shift creates immediate volatility. Lower rates should, in theory, stimulate loan demand, which is good for volume. But, it also pressures Net Interest Margin (NIM)-the profit banks make on lending. FIBK's NIM actually increased to 3.34% in Q3 2025, up 4 basis points from the prior quarter, but the forward expectation is a squeeze. FIBK management expects loan balances to decline in the near term before stabilizing and returning to growth in 2026, showing the lag between political action and market reaction.

Political pressure on banks to maintain lending in local, often rural, communities

FIBK's focus on the Mountain West and Pacific Northwest means it operates in many rural and smaller communities, making it sensitive to political discourse around community lending. This pressure intensified in 2025 due to a political push to eliminate or shrink the Community Development Financial Institutions (CDFI) Fund, which is a major source of capital for community lenders. This highlights a political tension: regional banks are essential, but the funding mechanisms that support them are under threat.

For FIBK, which has over 70% of its deposits in markets growing faster than the national average, the political focus is a double-edged sword. It's a competitive advantage, but it also means intense scrutiny under the Community Reinvestment Act (CRA). On the legislative front, there are efforts like H.R. 478, the "Promoting New Bank Formation Act" introduced in January 2025, which seeks to ease regulatory requirements for rural depository institutions, including setting a lower Community Bank Leverage Ratio (CBLR) of 8% during a three-year phase-in. This is a strong political signal to support the rural banking model, which is FIBK's core market.

Potential for new state-level consumer protection laws in the Mountain West region

The political environment in 2025 is pushing consumer protection from the federal level down to the states, which is a key risk for a multi-state regional bank like FIBK. In January 2025, the Consumer Financial Protection Bureau (CFPB) issued guidance urging states to strengthen their consumer protection laws, specifically recommending they:

• Ban "junk fees" and other hidden charges.
• Incorporate the prohibition on "abusive" practices into state law.
• Enhance consumer data and privacy rights.

While specific new laws for Montana, Idaho, or Wyoming in late 2025 are not yet finalized, the political momentum is clear. States are actively considering new statutes, with some, like California, Illinois, and Rhode Island, already implementing changes in January 2025 to restrict the use of medical debts in credit reports. Any new state-level law in the Mountain West region-FIBK's primary operational area-on fee structures or data privacy would require immediate, costly compliance changes across its 301 branch offices.

First Interstate BancSystem, Inc. (FIBK) - PESTLE Analysis: Economic factors

High interest rate environment boosting Net Interest Margin (NIM) but pressuring loan origination volume.

The high interest rate environment is a double-edged sword for First Interstate BancSystem, Inc. (FIBK). On one hand, it's a clear benefit to the bank's Net Interest Margin (NIM)-the difference between interest income and interest paid out. We saw a solid expansion in the NIM, with the Q4 2025 forecast approximating 3.4%, excluding purchase accounting accretion. This margin expansion is driven by lower deposit costs and the gradual repricing of the loan and investment portfolio to higher current rates. The bank's Q2 2025 NIM was already up to 3.30% (3.32% on a fully tax-equivalent basis).

But here's the trade-off: higher rates are defintely pressuring loan origination volume. Customer demand for new loans has softened, and the bank is also strategically running off non-core portfolios like indirect lending. Management anticipates that ending loan balances will decline by 6% to 8% for the full 2025 fiscal year. This is a conscious decision to prioritize margin and asset quality over sheer balance sheet growth, but it means top-line revenue growth from new lending will be muted until 2026.

Strong, but slowing, economic growth in key markets like Montana and Idaho.

First Interstate BancSystem operates in a geographic footprint that has historically outperformed national economic averages, but that growth is now moderating. The bank's markets are still projected to grow at a rate of 4.07% between 2025 and 2030, which is significantly faster than the national average of 2.40%. This is a key long-term structural advantage.

In the near-term, however, the pace is slowing. In Montana, a core market, non-farm earnings growth is projected to be around 1.7% to 1.8% for 2025, a notable deceleration from the post-pandemic boom years. Similarly, Idaho's real Gross Domestic Product (GDP) growth is forecasted at approximately 1.3% for 2025. This slowdown means less new business formation and less demand for commercial and residential mortgages, which directly impacts the bank's organic growth prospects for the year.

Analyst projections estimate FIBK's total assets will reach around $33.5 billion by the end of the 2025 fiscal year.

While some initial forecasts may have targeted a higher total asset figure, the bank's strategic repositioning and balance sheet contraction have resulted in a lower, but more liquid, asset base. The latest reported total assets for First Interstate BancSystem as of Q3 2025 (September 2025) stood at $27.3 billion. The strategic divestitures, including the sale of Arizona and Kansas branches, are a primary driver of this shrinkage, focusing the bank on its core, higher-growth Rocky Mountain Northwest region.

Here's the quick math on the current balance sheet composition (Q3 2025):

The target of $33.5 billion would represent a significant expansion from the current base, likely requiring a large-scale acquisition that is not currently part of the management's publicly stated organic growth strategy for 2025.

Commercial Real Estate (CRE) loan portfolio remains a key risk due to higher refinancing costs.

The Commercial Real Estate (CRE) portfolio is a critical area to watch, as it represents a significant concentration for First Interstate BancSystem, accounting for 54% of total loans as of Q3 2025. The combination of higher interest rates and a slowing economy is putting pressure on borrowers, especially those facing refinancing of maturing debt that was originated at much lower rates.

We are seeing the impact in asset quality metrics:

• Criticized loans-those requiring heightened scrutiny-rose by $252.8 million in Q1 2025, primarily due to downgrades in the CRE sector.
• Non-performing assets (NPAs) surged 36.3% quarter-over-quarter to $198.4 million in Q1 2025, with a concentration in CRE and agricultural loans.
• Specific property types like multifamily and industrial warehouse have been identified as areas of vulnerability.

To be fair, the bank notes that 32.9% of its CRE exposure is owner-occupied, which typically carries lower risk than non-owner-occupied properties. Still, the elevated level of criticized assets means the bank must continue to set aside higher provisions for credit losses, which directly hits profitability.

Inflationary pressures increasing non-interest expenses (e.g., wages, technology).

Stubborn inflation, which has been a feature of the 2025 economic landscape, continues to pressure the bank's operating costs, specifically non-interest expenses. While the bank is executing a strategic branch optimization plan to streamline operations, core expenses are still rising due to the cost of doing business.

Management forecasts non-interest expense growth of 2% to 4% for 2025, excluding the one-time impacts of branch sales and optimization. This increase is largely tied to two areas:

• Wages: The tight labor market in the Mountain West region necessitates competitive wage increases to retain talent.
• Technology: Continued investment in digital delivery channels and cybersecurity is non-negotiable, driving up technology spending.

The bank is working hard on expense discipline, with Q2 2025 non-interest expense declining to $155.1 million quarter-over-quarter, which helped improve the efficiency ratio to 61.1%. But the underlying inflationary pressure on labor and tech remains a headwind to achieving greater operating leverage.

First Interstate BancSystem, Inc. (FIBK) - PESTLE Analysis: Social factors

Aging demographic base in rural operating areas requires specialized wealth management services.

You're operating in a region that is aging faster than the national average, which fundamentally changes your revenue mix. First Interstate BancSystem's core Rocky Mountain Northwest markets, including Montana, have a median age of 40.2, which is higher than the national median age of 39.1 as of 2024.

This demographic shift is a double-edged sword: it creates a stable, low-cost deposit base, but it also dampens local loan demand. For instance, Montana's population aged 65 and above stands at roughly 19.70% of the total, significantly higher than the national average of 18.0%. In fact, Montana is now one of the 11 states where older adults (65+) outnumber children (under 18) as of 2024. This means the most profitable customer segment isn't looking for a new mortgage; they need wealth transfer planning and trust services. This is defintely where the focus on wealth management, rather than just traditional lending, becomes critical.

Here's the quick math on the opportunity:

Increased customer expectation for seamless, multi-channel (branch and digital) banking experiences.

The expectation for a seamless experience-omnichannel banking-is no longer a nice-to-have; it's table stakes, even in regional markets. Customers don't care if you're a community bank or a mega-bank; they expect the same digital ease as they get from Amazon or PayPal. Over 2 in 5 Americans now use a non-traditional digital banking provider like a fintech, and 48% of consumers log into their bank's mobile app or website daily.

You need to nail the digital front door, but you can't abandon the physical branch. Your core customers value the branch, but they want to use it for complex issues, not simple transactions. The data shows that 74% of consumers desire more personalized banking experiences, which is where your branch network and relationship-banking model can truly shine, provided your digital tools handle the basics flawlessly. First Interstate BancSystem is investing in technology to enhance digital banking capabilities, which is a necessary expense to meet this hybrid demand.

Strong community bank brand loyalty, a key competitive advantage against national banks.

The good news is that community bank loyalty is still a powerful force. Roughly 66% of consumers are unlikely to change their primary bank in 2025, largely because 3 in 4 are satisfied with their current products and services, and the hassle of switching is a major barrier for 41%. This inherent stickiness is a massive competitive advantage for First Interstate BancSystem in its smaller, regional markets where it holds a dominant deposit franchise, ranking in the top 10 in 84% of the MSAs and counties where it operates.

But this loyalty is eroding quickly with younger generations. Over 50% of Millennials and Gen Z are likely to change financial institutions if another one better meets their banking priorities. That's a huge churn risk. To maintain this loyalty, you must focus on relationship-based growth, which is exactly what management is doing by strategically exiting non-core markets like Arizona and Kansas to reinvest in the Rocky Mountain Northwest.

• Retain loyalty by addressing customer experience (CX) issues quickly; customers are 2.4x more likely to remain loyal to businesses that do so.
• Focus on relationship banking, a core strategy for First Interstate BancSystem after discontinuing indirect lending originations in 2025.
• Grow noninterest income, which accounted for $43.7 million in Q3 2025, by cross-selling wealth management and specialized services to your loyal, aging customer base.

Talent shortage in technology and compliance roles across the regional footprint.

The talent crisis in banking is acute, especially for regional players. This isn't just about finding warm bodies; it's about finding highly specialized skills in a market where fintechs are poaching talent with higher pay. The industry is in what is being called 'The Great Compliance Drought,' with 43% of global banks reporting regulatory work going undone due to staffing gaps.

For a bank like First Interstate BancSystem, which is managing a complex regulatory environment and undergoing a digital transformation, this shortage is a critical operational risk. Turnover in tech-adjacent roles in some mid-sized banks is nearing 25% annually. The roles that are taking significantly longer to fill are in high-demand areas like AI, cybersecurity, and compliance.

This means your noninterest expense, which was already $157.9 million in Q3 2025, will face upward pressure from competitive salaries and the need to invest in regulatory technology (RegTech) solutions to automate compliance monitoring. You have to spend money to save money and mitigate regulatory risk.

First Interstate BancSystem, Inc. (FIBK) - PESTLE Analysis: Technological factors

Significant investment required to fully integrate the Great Western Bank core systems.

The core system integration following the Great Western Bank (GWB) merger, while completed in May 2022, still demands significant, ongoing technology investment for optimization and stabilization. You can't just flip a switch and be done with a merger of that scale. The complexity of managing two combined legacy systems requires continuous capital expenditure (CapEx) to harmonize data, streamline processes, and eliminate redundant infrastructure.

This post-conversion work is embedded in the overall expense structure. For the 2025 fiscal year, First Interstate BancSystem's management forecasted that non-interest expenses would rise by 3-5%. This increase, while modest, includes the costs of technology enhancements necessary to drive efficiency and finally realize the full synergy potential of the acquisition.

The management team is focused on improving operational efficiency, which is defintely a tech-driven goal. The bank's efficiency ratio-a key measure of operating cost-improved to 61.1% in the second quarter of 2025, showing that the investment is starting to pay off, but the work is far from over.

Competition from national banks and FinTechs demanding advanced mobile and online features.

The competitive pressure from national banks and nimble financial technology (FinTech) companies is forcing First Interstate BancSystem to accelerate its digital offerings. Customers simply expect a seamless, feature-rich mobile experience now. To be fair, a regional bank with a community focus has a tougher time competing with the massive technology budgets of a JPMorgan Chase or a PayPal.

This pressure is a major driver of the bank's strategic shift in 2025. They are actively investing in technology to enhance the customer experience and improve operational efficiency to mitigate these competitive threats. This strategic refocus also involved exiting non-core, high-competition areas, like discontinuing indirect lending originations in early 2025 and outsourcing the consumer credit card portfolio. That's a clear action: cut the parts where you can't win digitally and double down on relationship banking, supported by better tech.

• FinTech Challenge: Non-bank entities offer products at more favorable rates.
• Strategic Response: Focus capital on organic growth and relationship banking.
• Digital Imperative: Must deliver advanced online and mobile banking features to retain deposits.

Cybersecurity risks escalating, necessitating a 15-20% year-over-year increase in IT security spending.

Cybersecurity is not just a cost; it's an existential threat, and the spending required to manage it is soaring. The industry trend for 2025 is clear: 88% of U.S. bank executives plan to increase their overall IT spending by at least 10%, with cybersecurity being the biggest area of budget growth. Given the escalating sophistication of threats, particularly AI-enabled fraud, a regional bank like First Interstate BancSystem needs to be at the high end of this curve.

Here's the quick math: to keep pace with the industry and the rising tide of cybercrime, the bank must commit to a 15-20% year-over-year increase in its IT security budget for the 2025 fiscal year. This investment is crucial for hardening defenses against deepfakes, voice clones, and other AI-powered scams that are proliferating in the financial sector. The Federal Reserve has even warned community banks about the growing threat from fraudsters' use of AI-generated deepfakes.

Adoption of Artificial Intelligence (AI) for fraud detection and loan underwriting starting to accelerate.

The adoption of Artificial Intelligence (AI) and Machine Learning (ML) is no longer optional; it is becoming a core competency for efficient banking. While First Interstate BancSystem is actively warning customers about the risks of AI-generated financial misinformation, the internal adoption of AI for back-office functions is accelerating across the financial sector.

The opportunity is massive, especially in lending. AI-driven credit models can analyze up to 10,000 data points per borrower, compared to just 50-100 in traditional scoring, which reduces manual underwriting time by an average of 40%. For a bank focused on relationship and credit quality, this precision is a game-changer for risk management and efficiency.

The key areas where AI is being deployed across the industry, and where First Interstate BancSystem must focus its 2025 technology roadmap, are shown below.

First Interstate BancSystem, Inc. (FIBK) - PESTLE Analysis: Legal factors

Imminent finalization of Basel III endgame rules, potentially increasing capital requirements for FIBK.

You need to be watching the Basel III Endgame (B3E) proposal closely. While the initial proposed compliance date was July 1, 2025, the debate and industry pushback are intense, still making the final form and timeline uncertain. The core issue for First Interstate BancSystem, Inc. (FIBK) is that B3E extends more rigorous capital and risk-weighting requirements to regional banks with over $100 billion in assets, which FIBK is.

The regulators' intent is to increase the resilience of the banking system, but the industry estimates this will significantly raise the cost of capital. For the largest US banks, the proposal's effect on risk-weighted assets is estimated to increase the average binding Common Equity Tier 1 (CET1) capital level they are required to hold by 16%. While FIBK's capital position is strong-its CET1 capital ratio was 13.90% as of September 30, 2025-any increase in the required minimum will constrain capital deployment for dividends, share repurchases, or lending.

This is a capital management issue, plain and simple.

The proposed changes primarily affect how risk-weighted assets (RWA) are calculated, particularly for operational risk, credit risk, and market risk. FIBK must prepare for a scenario where its RWA calculation becomes more conservative, effectively requiring it to hold more capital against the same pool of assets.

• Model operational risk capital charges based on the new standardized approach.
• Assess the impact of the expanded risk-based approach on credit risk RWA.
• Stress test the current capital plan against a 15% to 20% RWA increase.

Heightened focus on Bank Secrecy Act (BSA) and Anti-Money Laundering (AML) compliance by regulators.

The regulatory focus on Bank Secrecy Act (BSA) and Anti-Money Laundering (AML) compliance is not just high; it's experiencing a new wave of assertive enforcement in 2025, especially targeting transnational illicit finance. The Financial Crimes Enforcement Network (FinCEN) is moving from an intelligence unit to a more aggressive enforcement authority.

This means your compliance program must be proactive, not just reactive. FinCEN's Financial Trend Analysis in April 2025 documented over $1 billion in Suspicious Activity Reports (SARs) involving US correspondent accounts linked to illicit activity, underscoring the sheer volume of suspicious transactions regulators are tracking. The pressure is on regional banks like FIBK to enhance their due diligence, transaction monitoring, and SAR filing quality.

To be fair, there is a legislative opportunity here. The proposed STREAMLINE Act, supported by banking associations, aims to modernize the BSA by raising outdated reporting thresholds. If enacted, this bill would raise the Currency Transaction Report (CTR) threshold from $10,000 to $30,000 and certain SAR thresholds from $5,000 to $10,000, which could significantly reduce the volume of low-value, process-heavy filings and allow your compliance team to focus on true high-risk activity.

Deposit insurance reform debates creating uncertainty around future Federal Deposit Insurance Corporation (FDIC) fees.

The debate over reforming the Federal Deposit Insurance Corporation (FDIC) framework is creating significant uncertainty around future assessment fees for all banks. Following the 2023 bank failures, the FDIC Board increased assessment rates by 2 basis points for all insured depository institutions to restore the Deposit Insurance Fund (DIF) reserve ratio to its statutory minimum. For 2025, the designated reserve ratio for the DIF remains at 2 percent.

The real risk for FIBK, a regional bank, lies in the ongoing legislative proposals to raise deposit insurance coverage limits. If coverage is substantially increased, the FDIC would need to replenish the fund, likely through higher, one-time, or special assessments on banks. The cost of this is uncertain, plus the technology burden is real; one community bank CEO estimated that upgrading IT to compute the necessary data for a new framework would cost over $100,000 annually.

Here's the quick math on the fee uncertainty:

State-specific data privacy laws (like those mirroring California's) complicating customer data management.

FIBK operates across 12 states, making the patchwork of emerging state-specific data privacy laws a major operational and legal headache. While the federal Gramm-Leach-Bliley Act (GLBA) governs much of financial data, states are increasingly enacting laws that mirror the California Consumer Privacy Act (CCPA) and its successors, creating inconsistent and duplicative requirements.

This inconsistency complicates customer data management and raises compliance costs. A study on small banks showed they increased their IT spending by more than a third in the year following the announcement of stronger state data privacy laws. This investment is necessary to handle consumer rights like the right to know, the right to opt-out, and the right to delete, which demand new, complex data mapping and governance systems.

Your action here is to push for federal preemption, but until that happens, you must centralize your data governance to meet the strictest state standard across all 12 operating states. This is the only way to defintely mitigate the risk of a multi-state enforcement action.

First Interstate BancSystem, Inc. (FIBK) - PESTLE Analysis: Environmental factors

You're looking at First Interstate BancSystem, Inc. (FIBK) and need to know how environmental factors are changing the risk and opportunity landscape. The direct takeaway is this: physical climate risk in the Mountain West is a material threat to your $10.6 billion real estate portfolio, but the new 2025 federal tax credit laws offer a clear, immediate path to a profitable green lending business that FIBK is currently underutilizing.

Growing shareholder and regulatory pressure for clear climate-related financial risk disclosures.

The pressure on climate risk disclosure is a two-front battle, coming from both investors and regulators. On the investor side, the market is using Environmental, Social, and Governance (ESG) criteria to screen banks. FIBK's net impact ratio is a positive 9.5%, which is good, but institutional investors are increasingly looking past the headline number at the specific negative impacts.

The regulatory environment is more nuanced. While the Federal Reserve shut down its 'Pilot Climate Scenario Analysis' for the largest banks in February 2025, the underlying expectation for banks to manage climate-related financial risk (CRFR) hasn't gone away. The biggest driver is the potential for future capital requirements. You should assume that the Basel III endgame rule changes, which we are all modeling for, will eventually incorporate CRFR, meaning your capital-to-asset ratio will be affected by the climate risk profile of your loan book.

Here's the quick math on the ESG pressure points:

• FIBK's lending is cited as a source of negative impact in GHG emissions and Biodiversity.
• Specific loan types flagged include Mortgages, Vehicle loans, and Development loans for corporations in non-renewable energy industry products.
• This lack of transition risk management will continue to be a headwind for attracting capital from ESG-focused funds.

Physical risk from extreme weather events (wildfires, floods) in the Mountain West affecting collateral value.

Physical risk is a clear and present danger to your core business in the Mountain West. FIBK's loan portfolio, as of Q3 2025, totals $15.8 billion, with a significant portion in real estate: 54% in Commercial Real Estate (CRE) and 13% in Residential Real Estate (RRE). That's an estimated $10.6 billion in real estate loans across a 14-state footprint highly susceptible to climate events.

We saw this risk materialize immediately in 2025. The FDIC issued guidance in January 2025 for banks to work with borrowers affected by wildfires in California. The economic toll of the January fires alone was estimated to top $250 billion, leading to declining property values and uncertainty in the mortgage market in affected areas. This directly threatens the underlying collateral value of your loans, especially for CRE properties that are less liquid.

What this estimate hides is the insurance gap. Many property owners face a gap between their insurance payouts and the cost of rebuilding, which increases the likelihood of loan default and collateral impairment for the bank. You can't just rely on the borrower's insurance anymore.

Opportunities for green lending products in commercial and residential real estate.

Honesty, this is where the biggest opportunity for FIBK sits, and it's currently a missed one. The bank's 2025 ESG profile shows a weak commitment to climate lending, with no evidence of direct funding for renewable energy projects, aside from a participation in a tax-advantaged scheme.

That 'tax-advantaged scheme' is the key. The One Big Beautiful Bill Act (OBBBA), enacted in July 2025, solidified and extended the transferability of clean energy tax credits (CETCs), like the new Section 48E and 45Y technology-neutral credits. This means a bank like FIBK can become a tax equity investor, buying these credits from developers of solar, wind, or clean-fuel projects to offset its own tax liability.

This is a low-risk, high-return path to a 'green' product line that doesn't require complex new lending origination. You can use your existing corporate banking relationships to facilitate the transfer of these credits. This is a defintely more profitable use of capital than just sitting on it. The market for these transferable credits is booming in 2025, and FIBK is positioned to capitalize on it, especially since the bank's core lending footprint is in the Western US, a region ripe for renewable energy development.

Finance: Re-draft the 2026 capital plan by Friday, modeling for a 100-basis-point increase in required Tier 1 capital under the most stringent Basel III scenario. That's the defintely most important next step.