Brody Preston: Got it. And if I could sneak one more in, just given the strength of the business on a standalone basis, I know it’s smaller for you guys. But just given the pipeline, given the growth outlook, why did Longridge think it was the right time for them to sell? Just because it seems like there’s going to be a lot of strength in that business line going forward.
John Ciulla: Yeah, there’s no story there at all. It’s just a natural private equity investment, and it was time for them to divest. We knew the company through our relationships with sponsor and specialty, and it wasn’t an auction process. We were able to convince the team and the sellers that we were the right buyer and it was a very smooth transaction. So there’s no story there and that’s it.
Brody Preston: Got it. Thank you very much for answering my questions, everyone.
John Ciulla: Yeah.
Operator: Your next question comes from the line of Jon Arfstrom from RBC Capital Markets. Please go ahead, your line is open.
Jon Arfstrom: Thanks. Good morning. Just a couple of cleanup questions. On the loan trajectory, just dissecting that, what drove the late quarter growth, and just talk a little bit about what changed or what the drivers were?
John Ciulla: Yeah. Most of the originations were driven in the quarter by core C&I, but in particular, fund banking, very low risk, and lower yielding, quite frankly. But obviously, we believe still economically profitable loan growth, along with some high quality multifamily and some public sector finance, which is kind of our national government banking. Again, all of those assets, higher quality than the overall portfolio on a risk-rated basis, slightly lower yielding, which was why we gave the answer to the question earlier about lower-than-expected yield expansion in the quarter. And again, particularly in the fund banking side, much of that closed by year end, and so we were kind of working through our pipeline. And that’s why things closed in December as opposed to closing earlier in the quarter.
Jon Arfstrom: Okay. So no real story, just given…
John Ciulla: No. Just — yeah, just timing and it happens quarter-to-quarter.
Jon Arfstrom: Okay, okay. Just second question, bigger picture, John. It seems like the Sterling merger has gone well. It seems like you and Jack have been on the same page. But any new priorities for you as Chairman? I’m assuming it’s business as usual, but thought I would ask as long as you mentioned it.
John Ciulla: No. We are completely aligned and we’ll continue to be. And obviously, I’ll continue to seek out his counsel even after he’s left the organization. But no, there’s no pivot at all. We spent a lot of time, the entire team, management team and Board, making sure that kind of, we knew what the North Star was and what we were trying to build. And we’re still on that journey. We still have opportunities. We think we’ve got good line of sight to continue to deliver a 20%-ish ROATC, a 1.4%-ish ROA, and a leading efficiency ratio to give us flexibility to grow. And I think all the things we’re doing are the things we thought we would do. Obviously, the environment has been a little bit volatile over time. But there’ll be no pivot in culture, strategy or other things. You’ll see us continue to try and execute at a high level.
Jon Arfstrom: Yeah. Okay, all right. Thank you.
Operator: Your next question comes from the line of Bernard von-Gizycki from Deutsche Bank. Please go ahead, your line is open.
Bernard von-Gizycki: Hi, guys. Good morning. Maybe just staying on Sterling, with integration now past you, there’s been this discussions of the opportunities to enhance some of the areas in fee income across commercial consumer HSA. You talked about treasury cash management, card, FX as areas of growth. But can you provide any size, timing of these opportunities if possible? What could be implied in your guide for ’24?
John Ciulla: Yeah, as you know, on the cash management card, FX, and some of the other ancillary businesses, we do have built in, as Glenn mentioned, into our increase in fees, relatively good double-digit growth in those off of a relatively small base compared to our NII. And the truth of the matter is that those activities are not going to materially change the outcome of our steady growth, right. So that’s — we’re working on those things. We’ve already rolled out new capabilities for our clients. Things like Ametros move the needle a little bit in terms of Glenn talked to you about the contribution and expected fees in the year. And so that’s going to be good. We keep looking at interesting opportunities and not built into our forecast and definitely too early to talk about, but opportunities around capital markets, around syndicating, around securitization.
Like are there opportunities, given our strong origination capabilities to generate fee income and further have other options to manage the balance sheet? But those are things we think about to drive fee income over the long term. But nothing in our plans right now and nothing that I would be comfortable giving you guidance on.
Bernard von-Gizycki: Understood. I think last quarter, maybe just talking about the expense opportunities that still remain, I think you talked about consolidation of sub-ledgers, back office processes, and call center consolidation. Maybe could you help frame any of the remaining opportunity on this front?
John Ciulla: Yeah, I think Glenn might comment, but I think that’s sort of built into our overall net expense view. Some of the stuff is a little stickier than others. We’ve made progress on consolidation of the call centers. We have opportunity there. We still need to decommission some old non-core technology that in the transition stays. But I would say it’s an offset to the investments that we think we’re going to make in future technology. And so I don’t know if you have an estimate for what you think the full run rate of some of those opportunities are.
Glenn MacInnes: Yeah, no, but I would just come back to mid to low 40% efficiency ratio, and that’s where we expect to be. And so what that implies is, it gives us, first of all, optionality to the extent there’s more market headwinds. So we have some optionality there. But I also think that the more important point is that we are still getting. I know as a CFO in my world, we’re still consolidating ledgers, and there’s implications down to reconciliations and stuff like that. But that gives us an opportunity to reinvest in the business as well. So I think we like to think of it as we’re best in class at 45% to — low to mid-40s on the efficiency ratio. And so I would just use — if you’re thinking of modeling, that’s what I would use as a guide.
Bernard von-Gizycki: Okay, great. Thanks for the color, guys.
John Ciulla: Thank you.
Operator: Your next question comes from the line of Ben Gerlinger from Citigroup. Please go ahead, your line is open.
Ben Gerlinger: Hey, good morning, guys. Was curious…
John Ciulla: Hey, good morning, and welcome.
