That’s the first thing, you know, should we expect something like with a 170 handle or a 190 handle? And then, secondly, I guess I’m wondering, I mean, from the disclosures in the 10-Q, it looks like that had has a very long maturities profile. Is there like any significant runoff that would kind of on a natural basis, take that portfolio over, say, 3% yield handle anytime in the next, 12 to 24 months?
Daniel Beck: Yes. It’s Dan. I think, first and foremost, the payoff profile there, we’re getting off that book, anywhere between $2 billion to $3 billion, a quarter. So think $12 billion, annualized, run down in that portfolio. And those assumptions were where 10-year rates were just a couple of weeks ago. So we now think about tenure, 330, 340, you can pick up some pay down acceleration associated with that. We’ll see how material that becomes and where the 10-year ultimately land. So I think you’re going to continue to see some improvement. But in this kind of $2 billion to $3 billion, quarter like a clock just continues to pay down with the opportunity to accelerate if 10-year rates come down from there. We think about yields themselves, I think, as we look at Q1, we’re still talking about in the high 170s to the mid-180 range, in that book, and a lot of that really comes down to where premium amortization comes in for the portfolio.
So, those are really the factors, watch the 10-year yield, to the extent that that continues to come down, you could see an acceleration of payments on that book, which obviously, just make things go faster, faster there and get us closer to that inflection point of NII and NIM sooner, if that were to occur.
Chris Kotowski: Okay. Thank you. That’s it for me.
Operator: Your next question comes from the line of Andrew Liesch with Piper Sandler. Your line is now open.
Andrew Liesch: Just curious if you’d look at the investor dependent cohort right now, how much cash runway do they have? Obviously, they’ve been trying to sell their cash burn. And that sounds like they’ve been successful at doing that. But how does their cash position stand looking out for the next year or so?
Daniel Beck: Yes. So we track remaining months of liquidity we call it otherwise referred to as runway, and the majority of that portfolio at last check, still had over a year’s worth of cash on hand.
Andrew Liesch: Got it. All right. That’s helpful. And then just shifting gears. On the funding side, when investment activity does come back, and client funds come in. How do you expect the mix to trend with respect to deposits versus off balance sheet funds?
Daniel Beck: Yes. This is Dan. I think, based on a potential recovery and venture deployment, again, we don’t have a substantial pickup at all in the earnings guidance for 2023. But imagining that we do start to see a pickup there, I think we’re going to continue to direct those funds on the balance sheet. We think about the composition of those funds as they come in, they’ll likely be less expensive than what we’ve got from the off-balance sheet to on balance sheet product. So over time, to the extent that that accumulates, we’ll look at over time, shifting more of those expensive deposits. That’s one of the benefits of that product is that it’s not a one-way door, we have the ability to shift that off balance sheet to accelerate the improvement in net interest income and net interest margin.
So I think we’ll for — if you think of the switch and how we toggle the switch, the switch will be continued toggled on the balance sheet. As we drive some of those higher costing deposits off the balance sheet. And to be very clear, we don’t expect this to come in is all non-interest bearing it’ll certainly be more heavily weighted to interest bearing in this higher for longer environment, but still be cheaper than those off-balance sheet client funds.
