iMac mail not finding Contacts - Sonoma M3

I have an M3 running Sonoma 14.6.1 and use the Mail. Since buying the M3, when creating new emails, it not not find email addresses that are stored in Contacts the way it did on previous iMacs. I can't find any settings to turn on this ability. I expected this to be default behaviour but I guess it's not anymore.

I do NOT use iCloud and do not send/receive emails on other devices.