Then one last thing, this part of the fee based portfolio is [Technical Difficulty]. I think it’s hard to impart the importance of a board $10 million or plus fee revenue contribution on five different areas of the [Technical Difficulty] investment bank, syndications, capital market, capital solutions, M&A and sales and trading. That’s super encouraging in a very healthy investment bank.
Matt Olney: Okay, thanks guys.
Operator: Our next question comes from Woody Lay with KBW. Your line is open. Please go ahead.
Woody Lay: Hey, good morning, guys. I wanted to start on the deposit base. Broker deposits continued to move lower in the quarter. And then the slide, you called out that the funding base continues to transition to a target state composition. Can you just remind us what you think the target state composition looks like when we look out a couple of years from now?
Rob Holmes: We will never hit our target state composition of a funding base, Woody. If any bank’s CEO tells you they have, be concerned. So we will always look to improve the funding base. We have made significant progress, with our funding base, it’s dramatically important, as we said. We know every client, commercial client that is on the platform that we’re listed with them. As you saw broker deposits are down and the deposits [Technical Difficulty] probably $9 billion plus, I got here to just over $1 billion. So we feel like we’ve made a dramatic improvement in the quality of the deposit with the quality of client. Also, there will be no, there will be no expiration [Technical Difficulty] in terms of target fee base. The more regular higher quality client. Sorry, I say the more regular higher quality client than the funding base.
Woody Lay: That makes sense. Maybe moving to the asset sensitivity. You touched on that that have moved lower as evident on slide nine. Does the seasonality and mortgage impact — does that impact the disclosure or is that not really an impact?
Matt Scurlock: No, I mean, that definitely impacts the disclosure, Wood. So the disclosed sensitivity is based off end-of-period balance sheet. So should you have an end-of-period balance sheet composition that has higher weightings of cash or higher weightings of loans, which those things vary for us depending on which quarter you’re looking at, that’s going to impact your forward NII, which shows up right below that chart is base NII. That’s in part why it’s lower this quarter. So that’s [Technical Difficulty] impacts that.
Woody Lay: Yes. Got it. And maybe more lastly on mortgage finance. Go ahead.
Matt Scurlock: No. Go ahead, please.
Woody Lay: Yes. Just lastly on the mortgage finance. You noted in the slides that the deposits to loan level should sort of normalize back to where it was in the third quarter. I mean do you think the yield pop back up to that mid 2% range? Or is that a little bit aggressive next quarter?
Matt Scurlock: I think we think the yield does move up from the 112. The dynamic is greatly influenced the self-funding ratio. So you had a 145-ish self-fund ratio this quarter. Should that move back down to 120 in Q1, which is our internal expectation . You’ll see that yield move up. If you think about full year, if the rate curve was out as the market expected to, your average yield on mortgage business will still be low in ’24 than it was in ’23, but the volumes should be sufficient to generate higher net interest income. So you have lower yields, but higher NII. And then to Rob’s earlier comment, our focus in that business is as well as candidly all the businesses is driving additional value beyond just the loan product. And we’re increasingly bringing our broker dealer and treasury capabilities to bear within that business. So incremental NII should also result in incremental revenue elsewhere on the platform.
Woody Lay: Got it. All right. That’s all for me. Thanks for taking my questions.
Operator: We now turn to Anthony Elian with JPMorgan. Your line is open. Please go ahead.
Anthony Elian: Good morning. Looking at slide eight, it looks like average noninterest-bearing declined due to mortgage finance, but then noninterest-bearing excluding mortgage finance, the gray bar at the bottom, continued to decline to about $3.6 billion in 4Q. What drove that sequentially. And do you think that the $3.6 billion average or $3.3 billion in the period represents a bottom?
Rob Holmes: Yes. So the 3.6 average in the fourth quarter, Tony, matches almost exactly the third quarter end-of-period balance, which would suggest that the decline that unfortunately occurred on the last day of the quarter, it’s just due to general client transactions as opposed to some sustained or potentially emerging trend. So but that trend of folks actively looking to reposition excess cash into higher-paying options on our platform has largely abated. So fluctuations at period end are just going to be driven by client transactions. And then if I think about — if we think about full year ’24, the double-digit growth and growth P times V that’s now been sustained over the last three years. It really accelerated into the back end of this year.
We talked on the last call that generally shows up in between 6 and 18 months after you win the business. You should see start some of that begin to show up in the middle to latter half of this year. And then maybe just a last comment. I know you know this, Tony, but others on the call may not fully appreciate it. I mean our noninterest-bearing deposit base is commercial noninterest-bearing. It’s not a bunch of very small retail checking accounts. So for clients to transact at the end of a quarter, and that could cause slight fluctuations, there’s no way a surprise. So I’d say the trends we described in Q1, Q2, where folks were actively seeking higher options, that’s largely abated at this point.
Anthony Elian: Understood. Thank you. And for my follow-up, big-picture question on slide four. It’s been more than three years since you provided your performance metric targets on return on average assets and return on tangible common equity. I guess, do you guys feel like you have everything in place now in terms of people, businesses, technology, systems in order to achieve those targets in 2025? And is it just a matter of execution now. Thank you.
