And we’re going to continue to do that. The area where I want to be careful is we’ve all agreed that we’re going to manage concentration better so that we don’t end up with depositors that are too large for our balance sheet. And we have corporate asset management. We have a great tool that we can use to have balances in the family, but not on the balance sheet. So we might be successful Timur by bringing back relationships, even if they don’t show up in our deposit numbers, because they’re in asset management off balance sheet. And so we’re doing both. We want them back, we want them in the family, we want them here. We think we can serve them better than others, but we’re going to be careful what we keep on balance sheet and what we lend against.
Timur Braziler: And then, I guess just last from me and again, you touched on this a little bit, but looking at the payment rollout and, and where Deepstack fits into all of this originally when that was introduced, the update was kind of revenue contribution back end of ‘23. I’m wondering if A, the PacWest deal delayed that a little bit? And then B, if you can provide some update on the magnitude of what the payment vertical might look like and what PacWest does to that run rate?
Jared Wolff : Absolutely. So we said that PacWest, we said that Deepstack on a standalone basis, old Banc of California, we said that Deepstack would start contributing meaningfully to fee income in 2024. PacWest has fee income historically at $10 million to 12 million per month. And you know that that is continuing. So the ability of Deepstack to make an impact on a fee basis, on a revenue basis to the combined company is no longer there in 2024 to the same magnitude it would’ve done on a standalone Banc of California. So just to put it in context that on a standalone basis, it would’ve contributed meaningfully but it’s obviously diluted now. The payments business that we’re building is three things. Its merchant processing, which is our ability to go direct to merchants, to process credit cards without any third party intermediaries.
It’s issuing, issuing credit cards directly on our balance sheet to clients to whom we have credit. This isn’t selling consumer credit cards broadly. This is giving card solutions to our existing clients to whom we already provide credit and benefiting from the interchange as the issue of those cards. And third is using our rails, our infrastructure that we’ve built and the bins, the identification numbers that we have with Mastercard and Visa to process third-party transactions for trusted partners like Worldpay, like others who are well-known in the business. Those are the three layers of our ecosystem, and those are all rolling out now. And so I’m hoping that later in this year or by the end of the year, it’s making enough that we want to call it out specifically and making enough so I call out specifically means meaningful enough on this combined balance sheet.
That doesn’t mean it’s not contributing anything, but we’re not going to call it out till we think we have something to talk about. That’s of a good enough number. It’s obviously going to have to be a bigger number now, but there are many ways in which we think this is going to accelerate the merger. For example, the HOA business is going to be using Deepstack as a digital payment acceptance tool for their clients. It’s got $4 billion in deposits, it’s got hundreds of clients and they think Deepstack is a great feature to allow them to accept payments and to provide a tool that their clients really would like to make their payments acceptance easier. The venture business has embedded clients interested in our payment tools. PWB was actually further along than we were at Banc of California in digital account opening, which is a huge part of rolling out our payments business.
So there’s lots of positive synergies that we are going to realize through the year that I think will benefit us. Hopefully this year, but certainly in 2025. We’re also focused on optimizing the FIS integration and setting up payments in a truly optimal way. I’m meeting with the FIS CEO, and Worldpay executives at their headquarters in Jacksonville in February to discuss this. They’ve been very focused on what we’re doing in payments. We’re very unique. Worldpay is obviously the 100 pound gorilla out there, and we’re excited to partner with them and see if we can find some ways to accelerate our progress.
Operator: Our next question comes from Kelly Motta from KBW.
Kelly Motta: I thought maybe we could talk a bit about fees and not Deepstack, but just fees more broadly in general. On a combined basis, I know you’re bringing together two banks with different capabilities. I’m just wondering where you see like complimentary opportunities to maybe sell one product or another to either PacWest or bank of what you may have not had before. And kind of how — what your run rate fee income looks like as we start next year and kind of how that could be additive to it.
Jared Wolff : Yes, so I’ll start with cards. I mean, PacWest was much further along than we were in kind of their card partnerships. They weren’t an issuer of cards, they were basically a reseller of others’ cards, but they had, they were doing it in a good way with a virtual card program. And I was just looking at materials this morning that I think were great. And Susan Tang leads that group and they did a great job with it. And we were looking at how we can accelerate that and build-off the momentum that they had previously. The $10 million to $12 million per month of fee income wasn’t solely from that. PacWest did a good job of collecting fees in a variety of ways, but for now, we think that that fee income per month is the right level that people should expect.
And then hopefully we can build on it from there. We have some — we have a little bit of retooling to do as an issuer. The way we’re going to build this out and roll it up is we have to close down the partner programs and then start with our new programs. And so, it’s not going to slow down the fee income, but I don’t think we’re going to see any acceleration in it till later in the year.
Kelly Motta : I was also — it was really good to see the tangible book value number come in higher than what you had expected last quarter. I was hoping maybe this is a question for Joe, but if you could help us kind of bridge the gap on how we should be thinking about AOCI with the — what that’s against in the securities book duration and how we should be thinking about the exceed back of that over time. Just trying to get a sense of the cadence of tangible book value growth.
Joe Kauder : On the AOCI, we’ve come down significantly to $434 million, compared to where the PacWest was on a standalone basis, which was, I think, $800 million and some change in the third quarter. Our duration of that portfolio is north of five years up in the six year period. We’d like to over time bring that duration down and add higher yielding securities to that portfolio. We feel pretty good about where we are on the unrealized loss. These are high quality securities and as interest rates, if interest do continue to come down as the four curve suggests, the unrealized loss as an AOCI will continue to come down as well.
Jared Wolff: Yes, I should have mentioned, we have got a whole team working on this payments ecosystem. And I have mentioned before, it’s led by Jagdeep Sahota, who is our Chief Payments Officer. And what I have been so impressed with is how, as we brought the banks together, we found the best pieces of each to kind of move this forward. There is a development team that that PacWest has, that we didn’t have a Banc of California that’s really jumped in and done a great job of helping to build the user interfaces and the things that we want to move forward on payments. And so there’s a lot of good things going on and I wish I can mention them all, but we’ll be excited to see how this rolls out later in the year
Operator: [Operator Instructions] Our next question comes from Tim Coffey from Janney.
