And also sort of the deposit pipeline that can help fund future growth, including liquidity created by securities, cash flows, et cetera. On TCE, we’ve always said 7% is a stretch and the best way to continue to bump up TCE significantly with retained earnings is by maintaining a flat balance sheet. And that’s what we’re committed to for the foreseeable future, because there’s a tremendous amount of remix that can happen within the interest earning assets, especially on the securities book side, as that short duration continues to cashflow provides an opportunity to maintain an increase, the loan deposit ratio, closer to industry medians, as opposed to one of the lower in the industry.
Michael Perito: Got it, thank you. And then just another follow up. I heard you mention in a prior response about the, I think the excess cash you guys are holding, that you hold cash against the CBIT deposit balances. Apologies if I missed it, but did you mention what those balances were at the end of the third quarter? And then just more broadly speaking, as we think about kind of some of the niches and different verticals that you guys are in or have gone into over the recent, past couple of quarters, I’m sure you’re thinking about kind of fee contribution on this business model going forward. It’s more of kind of a high-level question, but obviously I think it’s about kind of 8% or 9% of revenues now, but I would imagine there’s kind of opportunities to grow and optimize that as you get a little bit more of a strong foundation in some of these new businesses. But just curious how you guys are thinking about that as we move into 24.
Sam Sidhu: Yeah, thanks Mike. So firstly, on CBIT, the balances were below our, obviously, our 15% self-imposed cap. Average balances were essentially flat quarter over quarter, around 2.2 billion, plus or minus. So, it’s right where we want it to be. But I think it’s also important just to sort of reemphasize here that we’ve essentially onboarded any customer that we wanted to onboard, that is integral to the industry. We’ve also been able to manage our quote unquote, I’ll call, instead of saying large customers, I’d say most institutional central customers to really stabilize deposit balances that allow us to maintain that non-interest-bearing float. Typical large customer is operating between that 5% to 10% of total associated deposits.
So, there’s not a lot of tremendous concentration within this portfolio, even though it may fluctuate a little bit. Fee income across the franchise is going to be incredibly important. We spent a good amount of time talking about our MPL program and the held for sale strategy on a consumer portfolio, building off of Peter’s question on loan remix. We’ve really brought down our consumer portfolio to about 7% of held for investment today. That’s down a billion and a half in balances over the last year, dramatically reduced the credit risk or perceived credit risk relative to underwriting of our entire franchise, which we think is incredibly important and we’ll continue to focus on that type of remixing, but really look to generate a high-quality revenue from those customers that we’ve worked so hard on building strong relationships over the past five to seven years.
We talked about a $10 million run rate in that business by the end of the year and we are well on target to achieve that.
Michael Perito: Great, thank you guys for taking my questions.
Sam Sidhu: Thanks Mike.
Operator: Our next question comes from Frank Schiraldi from Piper Sandler. Your line is open.
Frank Schiraldi: Good morning. Jay, you mentioned a lot of the opportunities out there. I’m just curious, given you talked about multifamily rolling off to a degree, you guys have been pretty negative on Cree overall, which has certainly been the right call, but just thinking about plenty of room there on that side if you were interested and I imagine with others shrinking their books, there’s opportunity to pick up good business. Just wondering if that’s a business you guys are looking at at all, just the Cree, either permanent or sort of bridge loan businesses.
Jay Siddhu: Hey Frank. We are not a focus on Cree. Yeah, so go ahead, Sam.
Sam Sidhu: Yep, I would agree, Frank. We’re not very focused on Cree, but at the end of the day, when you have very high-quality sponsors that otherwise diversify their business across a number of banks who are willing to consolidate all of their business with one bank and have incredible net worth and liquidity, those are the types of opportunities that we’re evaluating to your question. They’re not going to be major needle drivers, but they will be major franchise enhancement drivers.
Frank Schiraldi: Okay, and then just obviously the loan book that you guys acquired through the FDIC was a great win. And maybe I’ve kind of lost track of what’s left there at the FDIC, but is there anything you guys are interested in that is coming up or is being bid out, I guess, by the FDIC currently?
Jay Siddhu: Yeah, so Frank, I think that what was left of the portfolio was non-core, non-strategic to us, mostly Cree.
Frank Schiraldi: Fair enough. And then just thinking about the loans that you did bring over, and obviously you spoke to the outsized discount accretion. I assume other than that outsized discount accretion, it sounds like there was another portion that was kind of more run rate in the quarter. So just wondering if you can share what the remaining discount accretion is and then the duration of the book so we can kind of model of how that progresses or the run rate over time.
Jay Siddhu: Yeah, Frank. So, I think that we’re not going to be breaking out the discount. As I mentioned, these books are different than a whole bank acquisition when you have a bargain purchase gain and there’s equity created. In this case, these loans are booked on our balance sheet at the discounted rate. So essentially to sort of think about this to your question about duration, it’s about a one-and-a-half-year duration. So, if you say a third was outsized and of the $95 million this quarter, it kind of gives you a sense of how to think about it over a six-quarter type period.
