Those deposits didn’t flow out. That’s number one.Number two, the other thing I like what we did, and this is — goes back to the original Bridge team when they started the company to be a challenger brand to SVB was to focus on the portfolio companies and not the venture capital funds. So, those dollars are less likely to flow in and out on the operating accounts than they are with the venture capital funds. So, that was something that was started that we continued that was, I think, a good decision.I think for us, going forward, we now need to tie more of the deposit commitment to the loan documents such that if they do move money, the penalty pricing is severe. Today, it’s a nuisance, but we’re going to tie and may get more severe in order to keep those deposits with us.And by the way, if you want a relationship and you want the experience that we bring, you’re going to need to bring deposits to the table.
And that’s what we say, by the way, to all clients that we sit across the table from them and we say, we’re happy to make your business very, very successful, that’s what we want to do. You’ve got to do the same for us. So, if we’re giving you credit, we need that deposit relationship and we need those sticky deposits.Tim Coffey Great. Okay, thanks. That’s helpful. And then in terms of the deposit outlook of the $2 billion per quarter, how much of that is predicated on the deposits that flowed out of the bank in the last month or so coming back?Ken Vecchione It’s a mix, to be honest with you. I don’t know that I can give you a very specific number how much is returning versus how much is new. I will tell you that this whole disruption gave us an opportunity to spend more time with our clients, if there’s any silver lining, that’s good.To certain clients during the heart of the disruption, we were talking to them every day if they wanted to.
But it also gave them much more access to the senior management teams and it allows us now to call on them. So, I can’t give you a number, but we feel more comfortable with the overall $2 billion coming back for quarter — $2 billion growth per quarter.Tim Coffey Okay. Okay. And since you’re getting back to just old-fashioned relationship-based banking here, is there a minimum interest spread that you’re looking at or targeting?Ken Vecchione So, the answer is yes, by different loan categories, okay? And as Dale said, we’re basically pricing at the margin today. So, effective Fed funds gets offset by SOFR plus. And that spread is what drives us. And overall, the spread is very close to what you see is our net interest margin spread.So, different if you’re doing a construction loan versus a C&I loan versus a hotel loan versus warehouse lending.
But the blend of that, those spreads are pretty much seen in our net interest margin rate.Tim Coffey Okay, great. Those were my questions. Appreciate the time. Thank you.Operator Our next question comes from David Smith with Autonomous Research. Please go ahead David.David Smith Thank you. We’re getting late. Just a few quick ones on capital. Do you have plans for additional credit linked note issuance from here given the way that you’ve reevaluated the existing CLN base? Is it something you’ve ruled out or just–?Ken Vecchione It’s something we don’t need going forward at this point. And it’s expensive, very expensive. So, when we’re done — so we don’t need that incremental cost.David Smith Okay. Can you talk about what changed that led to that reevaluation because I know it was something that the bank had done a decent amount of in recent quarters?Dale Gibbons Well, I mean, one of the benefits of them was that you got a reduction in risk-weighted assets and held capital.
We’re moving away from that to a higher capital level so that whatever the next storm is, with that and with our insured deposit levels, in the top decile relative to the 50 largest banks, we’re not going to be in a situation that for a short game. And so I don’t think the CLNs were productive in avoiding that scenario.David Smith Okay. And with the new 11% target, is that something that you view as a long-term target for Western Alliance? Or do you think you able to come back down towards, say, 10% after everything settles down at some point?Ken Vecchione I think, as I said, we want to be competitive with our — with the money center banks. Now no one’s ever going to confuse JPMorgan and Western Alliance as one in the same company, or at least not in the next quarter.
Let me just say that. So, here a pause for after.But I think one of the things we learned when we’re out on the road talking to non-sophisticated banking people, they understand their business, they’re very smart, but they don’t spend a lot of time. For us to come in to say our capital, like there are a number of studies that were done that we used that put into the model, CET1 less HCM box, less AFS marks, right?And when we went in and we showed people and talked to people and said that we were one of the best in terms of this adjusted CET1. They didn’t have to understand what adjusted meant, they didn’t have to understand CET1. But when they heard our percentage and compare it to a lot of the other large money center banks, and we were higher than that, boom, they understood that.As I said to folks, if my mom was alive, went to us, he was over 90.
I made it as simple as I could if she was alive to tell her. Money center bank A was at 6%, we’re at 8%, we’re better. Money center bank C had insured deposit level this were higher. When people just got that very basic math, the meetings went very, very well and it was well understood, and they were able to check the box and say let’s move on.David Smith Got it. Thank you.Operator Our final question today comes from Jon Arfstrom with RBC. Please go ahead Jon.Jon Arfstrom Hey thanks. This can be quick. The provision, it looks like it was driven by a charge off and it feels like you’re comfortable with credit and growth is slowing intentionally. But anything that prevents that provision from coming way back down next quarter?Dale Gibbons Well, yes.
I mean, it was driven by a charge off. We had — we disclosed in there, we had a debt obligation of actually Signature Bank and so we have written that off.Jon Arfstrom Okay. Just in terms of the provision–Ken Vecchione [Indiscernible] comments about credit quality, they are all.Jon Arfstrom Yes, so you don’t feel like you need to be building reserves from here, I guess, is my–Ken Vecchione We don’t know.Jon Arfstrom Okay.Ken Vecchione Not any way other than the consistent that would be–Jon Arfstrom Yes. Okay, that’s helpful. And then back to the return question, when you guys flesh out your model, are you a mid-teen return on tangible company? Is that the goal? Are you a high-teen return on tangible company? How do you think about that in your mind?Ken Vecchione In terms of return on average tangible common equity, I think–Jon Arfstrom Return on tangible.Ken Vecchione Yes, I think we’re going to be low 20s or greater as we move forward through the end of the year and into 2024.
Remember, too, that with a smaller balance sheet and small — and less spread income, the fee income plays a more dominant role and that’s coming from AmeriHome. And right now, we’re seeing — we got fingers crossed when we say this, we’re seeing the trends move in our favor, and I think that’s going to give us a little extra push in the return on average tangible common equity ratio.Jon Arfstrom Okay, good. That’s a good message with your valuation. And then I guess last question probably would have been a good first question. But you — do you feel like you’re dealing with any abnormal stresses right now at your company? Or is this kind of over in terms of managing the stressful situations from mid-March?Ken Vecchione All right. So, I want to be careful that I’m not like George Bush that things are signed on the aircraft carrier that says mission accomplished.
