Michael Perito: So you think the biggest area for investment will probably be growth facing people as you guys continue to scale infrastructure.
Sam Sidhu: It’s absolutely right. Yes, there’s a lot of folks that have had logos on their business cards changed in the past nine months, and there’s a lot of folks that have elected to change the logos in their business cards who are now looking to change again.
Michael Perito: And then just one last one for me. Just would love a minute on kind of where you guys are at on the technology road map. I mean, any kind of internal investments in your core or other capabilities? Just not really kind of an earnings impactful question necessarily. I’m sure it’s baked into your budget and efficiency ratio guide. But just would love any flavor you can give on where you guys are spending some money on on the technology and infrastructure side?
Sam Sidhu: So I think that we’re always looking to streamline and improve the effectiveness of our technology platform. We were one of the first banks going back seven or eight years ago to invest in middleware that sits on top of our legacy core. We are probably on the third iteration of that today and continue to enhance it. We’re also, in the midst of — again, this is not something that is required a kind of investment because we have the people at our institution. We have developers. We have API developers. We have a lot of experts who have come from both big and small institutions who can help us continue to enhance our technology platform, but we’re really looking to rewire and rearchitect things that sit even above and below the middleware.
And we’re happy to share some more information on that over time. Again, it’s not requiring investment but it’s really going to enhance and streamline the way that we look to port in and add new technology providers and also how we currently service our customers. So that’s one. Again, similarly, on some of the now, I guess, more legacy type software providers like a Salesforce or nCino we’re multiple years into probably second or third contract negotiations. And whenever those come up, which come up in the next sort of 12 months or so, we typically look to pivot and reset and use that as an opportunity to redesign and think about what we’ve learned over the past couple of years, think about sort of the new business lines. And in many cases, what’s really interesting is some of the new team members that we bring on have different ways of doing things that we can sort of export to the rest of our organization in a very positive way.
So hopefully, that gives you a bit of flavor. I touched on AI as well. And these are the types of things that are very low stakes, test cases that we continue to expand upon exploring across the organization. But again, these are all things to enhance the customer experience and to streamline operations. Nothing that’s requiring a tremendous amount of investment. But what’s important is that we truly are at the cutting edge of thinking about these types of investments and initiatives.
Operator: Your next question comes from the line of Steve Moss from Raymond James.
Steve Moss: Sam, on the deposit pipeline here, just curious if you give a little color on the underlying mix whether there’s a mix shift this quarter here and just so what you’re thinking is roughly the average cost of those deposits as they’re expected to come on?
Sam Sidhu: So just to sort of recap, I think I mentioned this earlier, it was broad based across the franchise. This is a $1.1 billion of core deposit growth, not dissimilar at all to last quarter. We had almost 220 of our deposit channels that saw good growth and these channels had growth of $25 million or more individually, which really sort of helps put a pin in the broad based nature and the quality of the growth. About a third, to put it with more specificity came from private client groups in New York, about a third came from our financial institutions group and the balance was more broadly spread across the organization. So it’s a little bit of a shift from — towards more of our private client groups versus last quarter, which was more focused on the Venture Banking Group because of the migration of the portfolio at the end of the second quarter that really brought in those customers in the third quarter.
But I think what’s more relevant is to just to zoom out and focus on the $3 billion over the past couple of quarters for a second, because I think that really puts color on the total transformation. So about a quarter of that came from our private client groups, 15% to 20% came from the Venture Banking Group, 20% from our financial institutions group and the balance was spread across the organization like fund finance, commercial real estate, equipment finance, consumer and others. So it’s also worth mentioning, as we added $3 billion of core deposits, we also increased our noninterest bearing deposits by about $1 billion over the same time period. So hopefully, that gives you color on where the deposit growth came from. The pipeline is very similar.
So I don’t need to sort of rehash it. But I think on the venture side, the team was more on transitioning customers in the third quarter. Fourth quarter was outgoing business development and we’re going to start to see the customer growth after a foundational quarter in sort of the first half of this year. I think you also asked about rate. So all in rates when accounting for the noninterest bearing balances are coming in not so dissimilar to last quarter in sort of that mid 3% range right now. So I think that we’re optimistic. We’re getting close to an inflection point in the interest rate hiking cycle. So hopefully, this is where things will continue. Having said that, I think it’s very important to note, we’re not going to miss market share opportunities by standing on ceremony, especially given all of this dislocation here.
So if we need to bring in true primary customer relationships and have a portion of those deposits to be at market rates, we won’t shy away from that.
