Assets under management for asset servicing clients were $1 trillion. And asset management fees within asset servicing were $131 million. Moving to our wealth management business on Page 6. Assets under management for our wealth management clients were $423 [million] (ph). Assets and trust investment and other servicing fees for wealth management clients were $478 million. Moving to Page 7 and our balance sheet and net interest income trends. Our average balance sheet decreased 3% on a linked quarter basis, primarily due to lower borrowing activity. It declined 8% compared to the prior year due to lower client deposits. Average deposits were $102 billion, essentially flat with the prior quarter and meaningfully better than our expectations.
We experienced a stronger than anticipated increase in deposits late in the quarter, ending the year at $116 billion. At quarter end, operational deposits comprised approximately two-thirds of institutional deposits and institutional deposits comprise 75% to 80% of the total mix. Despite significant leverage capacity, we reduced our average borrowings by $4 billion, relative to the third quarter or nearly 4%, reducing both our FHLB advances and Fed funds purchased. Shifting to the asset side of the balance sheet, $3.2 billion securities repositioning we completed in November involved the sale of both high-quality liquid assets and non-high-quality liquid assets available for sale securities with a weighted average maturity of two to three years.
Earlier this week, we completed another $2.1 billion repositioning, which enhances our flexibility given the dynamic rate environment. We’ll record an associated loss in the first quarter of approximately $200 million. The proceeds of both sales were invested in short floating rate securities, further reducing the duration of the portfolio, which is now 1.8 years. Average loan balances were $42 billion, flat both sequentially and relative to the prior year. Our end of period loan balances were up $4 billion or 9% over the third quarter, reflecting an increase in overdrafts related to higher levels of year-end trading and settlement activity. Our loans have since returned to $42 billion. The heightened activity at the end of the quarter did not have a material impact on net interest income in either the fourth quarter or first quarter.
As a reminder, approximately 75% of the loan portfolio is floating. The total balance sheet duration continues to be less than a year. Our average liquidity levels remain strong. Cash held at the Federal Reserve and other central banks was down, reflecting the decrease in borrowings. But high-quality liquid assets comprise more than 50% of our deposits and more than 40% of total earning assets on average. Our net interest income in 2024 will continue to be driven largely by client deposit behavior, which has been less predictable given the unique aspects of this rate cycle. We expect the November and January securities repositioning to provide an incremental $30 million in net interest income per quarter in 2024 relative to fourth quarter levels.
We currently expect first quarter net interest income to be in the range of $480 million to $500 million. This assumes deposits remain stable, but deposit pricing continues to be under some pressure. With further NIM compression possible, as long as quantitative tightening persists and the deposit environment stays highly competitive. Turning to Page 8. As reported, noninterest expenses were $1.4 billion in the fourth quarter, up 9% sequentially and up 5% as compared to the prior year. Excluding notable items in both periods, as listed on the slide, expenses in the fourth quarter were up just under 2% sequentially and under 3% year-over-year. I’ll hit on just a few highlights. Excluding all notable items, compensation expense was up 2% year-over-year.
This reflected the impact from 2023 base pay adjustments, partially offset by reductions in incentive compensation and headcount actions taken year-to-date. Full-time equivalent headcount was down 200 or 1% sequentially and down 500 or 2% over the prior year. Excluding notable items in all periods, non-compensation expense was up 3% year-over-year. Equipment and software expense was up 10% year-over-year, largely due to increased amortization expense. Recall, that as much as two-thirds of this line item is comprised of depreciation and amortization expense. And finally, we realized 200 basis points of trust fee operating leverage in the quarter. Turning to the full year results on Page 9. Trust fees were down 2% in 2023, largely due to asset outflows and weaker transaction volume, partially offset by the elimination of rate-driven fee waivers and new business generation.
