Great. Moving right along, next up, among the U.S. banks, very pleased to have Citizens Financial with us. From the company, we have Bruce Van Saun, Chairman and CEO. Bruce is just gonna take us through some slides to kinda give you guys a quick overview and level set, and then we'll jump into a fireside chat. So Bruce?
Okay. Thanks, Jason, and good morning, everyone. Pleasure to be here today. So I'm gonna just offer a few brief remarks, and then we'll go straight to Jason. Here's our cautionary language, which you can read at your leisure. Okay, so we just finished our Q1 results. I'll offer a few comments about that, but I would describe the quarter overall as very solid. Highlights include very strong capital and liquidity position. We continue to do a good job on deposits. We have a very granular, retail-oriented deposit base, and our beta performance through this hike cycle has been slightly better than the peer median.
We also have continued to kinda stay within expectations on credit within our guidance, and all our credit metrics are tracking as expected. Our reserve levels around the portfolios of most interest to folks are very strong. Overall reserves strong, General Office 10.6%.
And then we have, you know, most of that, is about defense, but we also have some really interesting offensive initiatives that are taking place. We have our private bank liftoff. We have the New York Metro play, our effort to serve private equity and private capital, and then our TOP 9 program. In addition to that, we also anticipate meaningful lift in our NII and our NIM, coming from the burndown of non-core and legacy swaps portfolio. So we feel we're really well positioned in the medium term to outperform.
For just a refresher about our franchise, you know, today our consumer bank is really focused on the Northeast of the region of the U.S. We did fill in the New York City hole that we had, through the acquisition of HSBC's East Coast branches and Investors Bank. So now, we're contiguous through the region.
That gave us 200 branches in the New York Metro region and 1 million new customers, top 10 deposit market share. We also serve all 50 states digitally through Citizens Access. We are opening up branches in our footprint for the private bank in Boston and New York, also in Palm Beach, Florida, and then 3 in the San Francisco Bay Area. So, we're gonna further expand around the country there. And then our commercial bank is in most of the big cities around the country, as well. If I look at the businesses here, it's interesting.
We're kind of creating what I would refer to as a three-legged stool, where we have a really strong digitally transformed advice-based consumer bank. We're serving the mass affluent and affluent customers, got a really solid low-cost deposit base. There's continued opportunities for us to deepen in consumer, particularly around wealth advice.
The commercial bank has positioned itself well to serve middle-market companies, and then the sponsors who invest in middle-market sponsors own over 50% of the middle-market companies in the country. So we have, you know, really positioned ourselves well there in terms of the coverage bankers and focus and then all the product set. And then lastly, that important third leg of the stool is around the private bank and private wealth opportunity, where we did a huge lift out last year of First Republic talent, and are kinda scaling up that business. You know, capital is always critically important, and we've managed ourselves since the IPO 10 years ago to have one of the higher capital ratios in our superregional peer group.
And so, with the Q1 results, we're around 9% if you exclude AOCI, which is near the top of the regional bank peer group, which gives you lots of flexibility to support growth, in terms of, you know, loans and credit that our customers need, but then also have a toggle switch to do share repurchase. So we like having that optionality. In the deposit base, again, I mentioned it's a highly attractive deposit base, and it's evolved over time. It's very well diversified by both business, as well as by product type. So we've made continued investments in the consumer capabilities and the commercial capabilities, and now private bank brings another avenue for deposit growth.
If you look at the net results here down at the bottom of this slide, you see that, in terms of the percentage of consumer near 70%, the non-interest bearing and low-cost deposit mix has stabilized in the low 40s. Not surprisingly, given the high percentage of consumer deposits, the percentage that is insured and secured has been around 70%. And then we also continue to just bolster liquidity. So, we've put certain loans into runoff like auto, like some of the flow agreements we had with SoFi and Affirm.
And so we're okay, having loans run down and investing some of that capital in the securities book. We've also been issuing some longer-term debt. Our Federal Home Loan Bank borrowings are down all the way to $2 billion. So we have a lot of backup firepower in terms of contingent liquidity.
So the LCR now is 120 if we were on the same basis as the mega banks, which would be a number larger than the mega banks. So, really feel good about the balance sheet. Just to elaborate a little more on how much the deposit base has transformed, if you look at some of the sequential interest-bearing deposit cost progression from a year ago, where the green peers are in the peer median is in the gray, but we've been inside the peer median for the last five quarters. And as a result, if you look down at the bottom, you can see that we're slightly better than the peer median. So that wasn't the case if you went back to the last time rates went up.
We were kind of out in the number 10 of 10 position, so now, being where we are shows the amount of work that we've invested into the deposit franchise and the progress that we've made. The other interesting aspect is credit. And so if you go back to the IPO, we had been under-levered and shrunk the balance sheet. So we had enough capital to actually grow and grow our balance sheet back to regain our profitability. And I think that stuck in people's heads.
Well, if they grew that fast and re-levered, were they taking undue credit risk? But if you look at the track record since the IPO in terms of our charge-off rate, it's been pretty much on top of the peer average. And that applies for retail and commercial. So, again, I think we have been very prudent in our credit risk appetite.
But we have to go through the fire and prove it through a cycle. And I think we have the opportunity to do that here, as charge-offs have drifted up a bit above the through-the-cycle average. You know, our CRE portfolio is, I think, well reserved. It's behaving as expected. So I think we're managing that credit risk well. And we maybe had a little bit of a shorter profile to the book, a little more construction. So those charge-offs are a little elevated, but again, they're behaving pretty much as expected. And then if you look at the consumer side, we've stayed very focused on high-quality segment of the market, superprime borrowers and prime borrowers. So we're seeing no surprises there. Just flipping to the businesses and a brief highlights of the businesses.
But the consumer bank has really been transformed, and I think it's very attractive relative to our peer group. Some of the proof points of the progress that we've made are laid out on this slide. But if you look at on the top left here, deposit performance, we've had very strong growth in low-cost deposits, a 7% CAGR over five years. We've been very focused on deploying our loan capital into deeper primary relationships. And so we've exited things like indirect auto and wholesale mortgage and some of the flow agreements, and we're staying very focused on the suite of HELOCs mortgages, credit card and student. We've been investing in digital. And so you can see some of the stats here about you know good ratings on our app and growth in mobile users, growth in digital payments.
So feel good about how we've transformed that side of the business. If you look at just growth metrics in terms of customer growth, we're probably growing faster than most of the banks in the peer group. Again, we're focused on the mass affluent and the affluent and have a very good value proposition for those segments. We have the New York play, which offers us a lot of growth because the predecessor banks weren't serving their customers the way we can. So even though New York is a tough and challenging market, we've made huge progress in terms of driving growth. And then wealth management here as well, we're getting to deepen, and so we're able to grow relationships and grow assets under management. In the past year, we were up 15%.
Next up, just a few words on the private bank, which we launched last year as a real exciting opportunity. And frankly, there's a big void in the market where First Republic used to play, and people are scrambling to try to figure out how to go take that customer base. And it starts with talent. And so we had the opportunity to bring the kind of world-class private bankers from First Republic who didn't want to go work at JPMorgan.
They looked for another bank that had a really good customer culture and was the right size that they could kind of recreate 2.0. And they came to Citizens. And so we think we're off to a really good start. You can see $2.4 billion in deposits at the end of the Q1. Deposit mix is very attractive. So about a third is DDA or low-cost.
The loan book has been very solid. It's mostly commercial. The yield on that book, by the way, is 8%. So we have more than a 5% spread between the loan yield and the cost of deposits. And AUM is starting to build, and we just lifted out a big team to join us in San Francisco. So part of this is going to be broadening out what we have. We have Clarfeld Asset Management, but we need kind of more scale on the private wealth side. So we're looking to do further liftouts. We did say financially that this business would break even this year. In the H2, the lines will cross. It'll become profitable. And then we let some markers out there for 2025 of $9 billion of loans, $10 billion of AUM, $11 billion of deposits.
If we hit those metrics, we should be about 5% accretive to the bottom line. So, a big, big investment, but potentially very big reward. Moving to commercial banking here, again, I think we're exceptionally well positioned. I'd take our positioning versus anyone in our superregional peers. We have great coverage bankers, and they're focused on where we see great opportunities for penetration and growth, either the industry verticals, the regions of the country, middle market and sponsors, as I mentioned. And we have now built out the full capability. So either through organic hiring, team hiring, acquisitions, we have a full product capability. And, you know, you really haven't seen the full benefit of what we've assembled because with higher rates in the last two years, activity levels have been subdued. In the Q1, things started to turn.
And so we were up 35% in capital markets fee revenues in the Q1 versus the Q4. And we think that we'll continue to see strengthening environments. So the kind of validity and the positioning of what we've assembled will start to really manifest itself, I think, as activity levels continue to pick back up. Just a note on the bottom right, in the league table results, we tend to be kind of in the top 5 banks in the U.S. for the lead arranger of leverage deals in the middle market and in the TOP 10 overall in the middle market. In the Q1, we were number 1 in the leverage league tables. By the way, JPM was number 2, and B of A was number 3. Can't resist just sneaking that one in.
But in case, you know, you wonder, you know, are we able to compete with the big boys? The proof right there is, says we are. So let me just sum up again by saying I think this is a really attractive investment opportunity for investors. We've assembled a really strong team, leadership team, and we have a great track record of execution. We've launched some exciting initiatives that are, I think, pretty unique and pretty powerful, assuming positive execution.
We also continue to keep a really strong capital, liquidity and funding base, which gives us lots of flexibility if things like, you know, we saw the bank failures last year, and we got to bid, and we got to then do something on the back of that and taking a bet and launching the private bank. So keeping that capital and overall strength is important.
And then, you know, when we think about the medium term, we see a very clear path in terms of how we get back to 16%-18%. We were 16.5% in 2021, 16.5% in 2022 last year, 13.5%. But, you know, through a number of factors, just, the way we're positioned, in terms of, NII and some of the burn-off of the legacy swaps and non-core, that's going to be, really positive. The private bank flipping from a drag to being accretive , 20%+, return on equity.
And then non-core, which is a drag running off, we can kind of pretty have pretty good transparency and visibility in terms of how we get back to that 16%-18%. And that should reflate the stock, over time. So anyway, that's it for my prepared remarks. And Jason, I'm happy to take it wherever you'd like.
Sure. Thanks, Bruce. Appreciate the overview. You know, maybe we could just dive into more, maybe just big picture and kind of, you know, what you're seeing in your footprint. You're obviously out talking to customers regularly, but, you know, outlook for the economy. What's the sentiment? What are you hearing from clients?
Yeah. So, I would say up until recently, the business folks were pretty cautious. We saw that through our line utilization continued to trend down a little bit. So most of the businesses are having really good success and making good levels of profitability, but are kind of not ready to step in and take that next level of investment in working capital or in CapEx. I think slowly that's starting to shift. And it's like the broader environment, people are saying, "Wow, this economy is more resilient than we thought." We're not really talking about the Goldilocks anymore. That's become kind of more the baseline scenario that we may have growth slow, but it's really not going to go into recession. I think that's starting to turn sentiment a bit positive.
So, it's only a month, but we saw line utilization tick up a little bit, in April, which was a good thing to see. So, you know, I don't think you're going to see anything really has hit an inflection point and bounce. But I think you'll just see things kind of gradually. It'll get more data that, you know, the economy's still pretty robust and, we're unlikely to slip into recession. And that'll force people to decide to start playing a little more offense.
Got it. It is remarkable to see kind of where Citizens is today relative to where you were in 2014 when we kind of did the IPO roadshow. So kudos to you and the team. But just, you know, maybe, you know, talk to, you know, kind of maybe what you're most proud of, where you kind of have more work to do.
Sure. I would say that we've had a major transformation of where we started. Those kind of things start with building a great leadership team, a great board, putting in the right culture, and getting the foundation laid well. So, you know, I feel good about all that, you know, we brought in some really good people, set up a really good board. We've got a culture that focuses on kind of the customer, and delighting our customers and kind of teamwork and collaboration. And people are attracted to that. They like, we've been able to attract talent because of that. We've tried to be innovative. We try to, you know, stay focused on excellence. We keep a mindset of continuous improvement.
If we want to spend money, we have to figure out how to wring out efficiencies through things like the TOP programs. So I feel good about all those. The foundation also required big investments in technology to modernize the technology stack, to go digital, to have better risk management, better people systems, you name it. So there was a lot of building to do. But then I think we hit an inflection point and, you know, started really playing offense. Like, what do the businesses really need, to serve customers better? What technology investments, what people investments, what acquisitions should we do? And I think we've been smart about how we've gone about that.
So, getting to that three-legged stool where the consumer business is strong, commercial is extremely well positioned, and now we have this exciting opportunity for the private bank, it's been quite a journey, but, I, I think it's all right in front of us. I like I like the hand that we have today.
And then one of the last points you made, from the slides, was that on that 16%-18% kind of ROTCE target. Let me just talk to kind of when do you think you can kind of get back into that range, maybe some of the key drivers, and does, you know, kind of regulation change that?
Yeah. So to me, you know, 2024 is still a bit of a grinded-out year. We're still suffering the kind of effects of the higher risk interest rate environment and a little bit of drag on the net interest income, at least through the H1 of the year. So, you know, I'd say, what when I look past that, though, I think if the economy stays reasonably in a moderate growth range, which is expected, and then rates start to come down, I think there'll be a lot of benefits to net interest income.
I think there'll benefits to credit. And so the core business that we have, I think will really start to lift off as we get in 2025, 2026, 2027. And then the private bank flipping to, you know, 5% accretive next year, non-core will be down from $14 billion to $5 billion. All those things just kind of build steadily, kind of once we get to the later end of this year into 2026 and 2027.
Got it. All right. So you kind of talked about a lot of strategic initiatives, which was very helpful. I want to delve more into there. I feel like I got to shift to some of the earnings drivers because you know me.
Okay.
But maybe start with, you know, net interest income. You've, you know, talked about full year net interest income of down 6%-9%. You know, is that something you're still comfortable with and maybe could talk to kind of what's getting you to the low end, high end of the range?
Yeah. Yeah. So I don't, we just gave guidance, freshened, you know, three weeks ago. So there's not a whole lot to say. I'll just, you know, the first month of the quarter was good. So there's nothing that causes me to have to reflect any differently. I feel good about what we've laid out there. I'd say on net interest income, you know, the NIM actually is a big focal point. Can we continue to have pricing discipline on our deposit base, and how much migration will we see? We're getting a little bit of help there that the private bank is growing the non-interest bearing set about a third. The overall rate for the company's 21%.
So, you know, that's helpful in keeping the kind of percentage non-interest bearing, stable, which we were in the Q1, and helping the overall cost of funds. So big focus on cost of funds. And then kind of when you look at the H2 of the year, we assume there's going to be a pickup in loan growth, an acceleration in loan growth. And so, you know, that's really twofold. One is the private bank, starting to, you know, deliver more credit to their customers. And then the commercial bank, just the line utilization picking up as the economy, people some of the factors I mentioned, people getting more optimistic about the economy, and then deal flow picking up too. If we get a rate cut or two, I think you'll see private equity get more active.
And so there'll be real kind of new, new deals, creation, and the financing that goes along with that. So, that's an important driver of where we come out in that range, I would say, is that loan volume. But, in any case, we also have that flex toggle that if we don't get quite as much loan growth, we have a strong capital position. And kind of where our stock is trading, it's pretty powerful to actually put away the stock. So got a little bit of a built-in cushion over there. But, at this point, we still think that we'll see that loan growth in the H2 of the year.
Then I guess with respect to, you know, margin, you talked about a kind of a 3.25%-3.4%, you know, targeted NIM range. Just maybe talk to kind of what are the main drivers of that and when do you think you can get there, where you're positioned, you know, against the current rate backdrop.
Yeah. So there's a lot of detailed analysis of the benefits of non-core and the benefits of the legacy swap runoff in the future, which kind of undergirds that, you know, if we're at 290 today, there's 50-60 basis points lift out of the swap portfolio itself. If you make an assumption that rates go down somewhat over the next 2-3 years, we're asset-sensitive structurally. So that would offset some of that benefit from the swaps. But if you net that out, you know, the 50-60 basis points would take you up to, you know, 350. And then we said 325-340 because that asset sensitivity hurts you a little bit. That's how we get there.
You know, I'd say right now we're just still, as I in 2024, just stabilizing, trying to find bottom, trying to keep it, you know, 285 or kind of above. We have some forward starting swaps, that some kicked in at the beginning of the year, some more are kicking in this quarter. You know, there's, there's other aspects in higher for longer that, you're still getting more front foot, back foot benefit, etc., etc. So people lose sight of that a little bit. But, in any case, I think we'll kind of be relatively stable here and have kind of a good visibility into 2025 and start to see some of the benefits of these other drivers like, non-core and, and the swap, book.
Got it. Maybe just delve more into deposits. You know, I guess twofold. I guess first off, maybe your outlook for balances, price mix if kind of rates stay higher for longer. And then, you know, you made the point that your deposit beta, kind of this cycle versus last cycle, in a rising rate environment was lower, which was good. I guess how do you think about betas, you know, in the next cycle when the Fed cuts?
Yeah. Yep. So I, I'd say, you know, NIM, we'd like to be, you know, we just kind of stabilized here in the low 20s. I think, I think we can grow that back into the mid 20s, you know, if you look out kind of in a medium-term planning scenario. So, you know, we have continued effort and focus on growing low-cost deposits, particularly in the consumer bank and, in the private bank. So I feel, I feel pretty good about that. And then, you know, in terms of the betas, we're probably near the end of, you know, the terminal, IBD beta.
And, depending on the number of cuts, you'll, you'll see that kind of retrace somewhat. You might have kind of in the 25% range for the first couple of cuts. Then that should start to build if you get more cuts and you end up down sub 4%. We'll just wait and see how that plays out.
And then at the income front, you know, I think you had good growth in the Q1, up 3%, you know, led by, you know, pretty strong capital markets activity. You know, can you grow again in 2Q and maybe just kind of walk us through kind of the main puts and takes for the rest of the year?
Yeah. So we did, in the guide for 2Q, have another 3%-4%. And, again, I think capital markets is kind of at a new, robust level given what we're seeing externally in the markets. And that would cross the syndicated loan fees, the kind of bond and equity fees, and the M&A fees. So we have some diversification there, but pretty much firing pretty well, and seeing an upward trajectory across each of those fee categories. And, you know, we have more growth coming in wealth. We have, you know, card is at a new level. We renegotiated our vendor arrangement with Mastercard. We're pretty hopeful about the growth trajectory we can have in card, off the back of that. And, you know, mortgage is in the doldrums, but seasonally in Q3, we usually see a pickup there.
So, you know, I'd say a pretty broad base. We also seem to have a little softness in some categories that was unexpected. So in FX and interest rate book, there was less activity than we would have expected. Service charges and fees, the activity was a little lower. I don't think those are secular shifts. I think those were temporal. So there should be a little bounce back there. So that gives us confidence that broadly we should continue to see fees tick up.
You may talk a bit just in terms of how you're managing expenses. You're obviously spending a fair amount of money in this private bank buildout, but you also have these TOP programs. I think we're on like nine or ten, but just, you know, how that plays a role.
Yeah. So if you go back to the time of the IPO, and this is a little bit pulling a number out of my head. I'm usually pretty good remembering numbers. But, I'd say our gross rate of expense growth maybe has been 5%, but with the TOP programs, we've been able to knock that down by 1.5% or 2%. So the reported growth rate has been kind of 3%-3.5%.
So what that's been allowed us to do is to actually address some of the chronic underinvestment from the RBS era, and kind of build out our business model and put the people and the things in place that we need to be successful, but still get positive operating leverage because we were keep finding ways to run the shop more efficiently through top. And so, you know, that's, that's embedded in how we operate now.
So, you know, I remember you saying when we had our TOP 3 , "Is there going to be a TOP 4 , Bruce?" you know, you go all the way through and there's like 9 programs in 10 years. So, you know, there'll probably be a TOP 10. I'll just leave you with that.
Maybe shifting gears to credit quality and just kind of delve into your office portfolio. You just give us an update, what's going there? I know you have a 10.6 reserve, you said on the CRE piece. You know, is that right level, the right level? And just, you know, how does, how does this play out? Obviously, every day there's an article in The Wall Street Journal saying this is a disaster, but.
Yeah. I don't, I mean, all, all real estate is local at the end of the day. And so kind of how your real estate book is distributed matters a great deal. Fortunately, we're not as tilted towards Central Business District, which is kind of where potentially there's going to be more pain. So, like 70% of the book is urban. We don't have as we have a, a preponderance of Class A. So we're not as exposed to B and C. And so, I kind of look at that and we've gone through every loan and assessed every loan as to where there's value, where there's probably some value deterioration, and try to get in front of that and work with the borrowers to figure out, you know, a win-win situation.
If we restructure the loan and charge off some of it and you either put equity into the business or give a personal guarantee, are we going to reboot and continue on and kind of play for stabilization ultimately and maybe some recovery down the road with the more quality side of the portfolio? I feel like we've got good people doing that. We have it all tracked out. We can see what loans are maturing quarter by quarter into the future and we're getting in front of that. So currently we've just been charging off the loans and leaving the reserve. We're not charging that reserve. So we've charged off like 5%. If you add that to 10.6%, that's an incredibly large loss kind of ratio, which I don't think we'll hit.
The assumptions that we have to even drive the 10.6% are very draconian, far worse than what would happen in the Great Financial Recession. So, you know, hopefully at some point as we kind of see this thing play out, that we'll be able to draw down on that reserve and then we can potentially release some reserves, through provision. But, that time ain't now, yet. But, that day will come. And I, you know, we'll see. We'll see when that happens.
I guess away from General Office and what other areas of the portfolio are you concerned with?
I really am not concerned with consumer broadly because we again we play in the higher credit spectrum and don't see any real tough trends in delinquencies or anything. And I'd say in commercial as well, the C&I book looks pretty clean. There's really little spots here or there, but there's nothing systemic there. And then in CRE, we're kind of broadly diversified. The biggest concentration we have is in multifamily. I'm not really worried about multifamily. The kind of size loans, these are modest apartment buildings. Many are kind of multi-generational family-owned.
Average loan size is $6 million. And you know, good loan-to-value ratios. There's good liquidity in multifamily for other arrangements, loan arrangements that borrowers can make. So anyway, that's not a concern. So to me, really the heightened focus on our credit people is still on office, making sure we get through that, reasonably well.
Maybe just expand a bit in terms of just how you're thinking about, you know, targeted capital ratios and, you know, where do you kind of think you should kind of be in the near- to intermediate- to longer term. I think you're 9% CET1 xAOCI last quarter. Earlier you kind of mentioned, well, if loan growth comes back, maybe we pull back or loan growth doesn't materialize, maybe we buy back more stock, but you're hoping loan growth comes back. So should we expect maybe a slowdown in buyback? Just how do you think about that?
Well, you know, we set one target for the year was going to be between 10%-10.5%. For the end of the year, we were at 10.6%. End of the Q1, we're 10.6%. We haven't really seen that much loan demand. So, you know, we bought back $300 million in the Q1 and we indicated that, you know, we'll have a sizable buyback in the Q2 as well. And then we'll wait and see the rest of the year. If the loan growth comes back, we won't be as active in terms of share repurchase. But, anyway, I think we can end at the kind of higher end of the 10%-10.5% range.
We still can flash that capital strength and have that optionality and it goes with that, while I think meeting all the credit demand from our customers and continuing to buy back stock through the year. That would be my expectation.
Got it. And then, you know, you've obviously been successful with, you know, the HSBC and ISBC acquisitions in New York. You did JMP on the capital market side. Seems to be additive. You know, it feels like there's a little bit more of kind of a pickup in smaller bank M&A at the moment, some in your footprint. Maybe talk to, you know, any appetite to do bank, non-banks, or, you know, thoughts on acquisitions.
Yeah. I would say, right now, our plate is full. I think we have some great, organic, initiatives that we really need to drive to good execution. So, we're kind of not really looking beyond what we're doing in a significant way. The one area that I mentioned that we did this liftout of a really high-quality team out in San Francisco Bay Area and private wealth, we will kind of look at more of those. Those are not really the same as acquisitions because they're kind of team hires, but you almost have to do the deal math on them to make sure that the financials are going to work out. So that's what's keeping our team busy right now is kind of looking at some of that.
I think there's potential to look at some like innovative things in the payments space that, you know, does it make sense to own it or is it better just to partner with it? Payments is another big focus of ours. It's a hotly competitive frontier that there's non-banks going up against banks and there's banks trying to hold their ground and do more for their customers. And so can we get innovation fast enough through our vendors and through our own internal people or should we access that potentially through an acquisition? Might be another thing. But I don't really see a bank transaction in the cards for a while.
Then in the final minute or two, you know, there's talk of kind of maybe some increased regulatory requirements for regional banks, whether it's the long-term debt or liquidity changes to LCR. Just maybe your thoughts around that and how does that impact you?
Yeah. Well, I'd say just, in terms of how it impacts us, because we hold more capital, because we have all the liquidity we have and, we've been on a kind of re-recurring, issuance schedule on our long-term debt, there's really not a lot that will change that we would have to modify how we're running the bank to come into compliance, with, kind of what's on the table.
Having said that, I do think, there's an overreaction to the events of last year and some of these proposals are, extreme and, and not kind of well, thought out and could have negative, consequences for the economy or the supply of credit. And I think the industry has made a lot of those points and is gaining some traction to have the regulators reconsider, some of those proposals at this point.
So the first front was really focused on capital and Basel III endgame. I think the stay tuned. The next effort will be on the long-term debt proposal and then coming soon to a theater near you is the rumored liquidity proposals. And so, you know, I think the industry is on the front foot to basically say, "Don't misdiagnose the issues that caused the banks last year to fail and with a sledgehammer that kind of hurts the industry and hurts the economy."
We're going to kind of force you to really be precise in your logic as to why you're doing these things and is this the appropriate response. I mean, we're all in it together. The regulators want a safe and sound banking system. We do too, but we also want to support the economy and make sure the US economy reaches its growth potential. So.
Great. With that, please join me in thanking Bruce for his time today.