Question-and-Answer Session
Operator
Thank you, ladies and gentlemen. (Operator Instructions). We are going to the line of Joel Jeffrey with KBW. Please go ahead.
Joel Jeffrey - KBW
Good morning.
Tom James
Hi, Joel.
Joel Jeffrey - KBW
Can you give us the most updated capital ratios at the bank?
Steve Raney
Joel, this is Steve Raney. We are actually finalizing our true financial report, which is due next week. We are still finalizing all those numbers, but we are in a well capitalized status as of 12/31. Approximately, our risk-weighted capital ratio is going to be in the 10.2% range, as an example. Once again, we are finalizing that, and we will have it all filed next week.
Tom James
Our goal, just giving you some forward, is to move that up to the 11% range in the not-too-distant future. We will be continuing on that process over the quarter.
Steve Raney
Adding some cushion in the bank, as you know, Joel, we have been managing the capital on a just-in-time basis and all feel that it is appropriate and prudent to have a little bit more cushion in the capital ratios in the bank.
Joel Jeffrey - KBW
Okay, great. In terms of the net interest margin; do you see any possibilities for expansion in the upcoming quarter, given the timing of the Fed cuts in the last quarter?
Steve Raney
I would say that probably will not happen, Joel. These are record margins already. Our cost of funds is extremely low right now, with really no ability to take them lower. We do enjoy wide margins both in our residential portfolio and in our corporate borrowers as well. If it was to improve, it would only be nominally. There is probably more risk of margin compression than expansion.
Tom James
Because responses to the client yield concerns, we may have to increase yield to depositors from current levels in spite of what is going on in the marketplace, just because there are these anomalies that allow customers to be able to find higher yields. I would not look for that, and as I said, I do not foresee much change in terms of net earning contributions from the bank going forward. However, that would be the negative part of that formula.
Joel Jeffrey - KBW
Okay, great. Lastly, if you guys could just expand a little bit on the strength of the fixed income business in the quarter, and was it purely tied to the mortgage-backed securities? Or were there other asset classes within that that were driving this?
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