Good morning, everyone from the Lone Star State, welcome to Schwab's 2023 Spring Business Update. This is Jeff Edwards, head of Investor Relations, and I'm joined today by our Co-Chairman and CEO, Walt Bettinger, President, Rick Wurster, and CFO Peter Crawford. Before we jump into the presentation, I'd like to touch on a few housekeeping items. Today's setup is obviously a little bit unique, with the business update immediately following this morning's release of our strong first quarter results. That being said, our time here today will still be dedicated to providing you with a broad strategic update of our growing business. Similar to past events, I'll be helping facilitate Q&A, though given recent events, the team has a fair amount they like to share with you, so dedicated Q&A time may end up being slightly shorter than usual.
It's very important that we all strictly adhere to the one question, no follow-up format that has been in place now for several quarters. We also ask that you vector clarifying or more tactical questions regarding the recently reported quarter to the IR team. Today's slides should be available on the IR website momentarily. Finally, before we move on, let's not forget the mighty Wall of Words, which reminds us all that the future is uncertain, please stay in touch with our disclosures. I'd like to turn it over to Walt now.
Thank you, Jeff, and hello everyone. Thanks for joining us for our April business update. This is an important opportunity for our team at Schwab to speak directly with all of you, to speak with accuracy and facts, and to speak with clarity and transparency. We know that the past few weeks have been very challenging for long-term stockholders, which of course, all of our executives at Schwab are also, me included. Let me start by making a few crystal clear statements. First, our clients, although curious and somewhat surprised about the downward movement in our stock price, remain fully engaged with us and are bringing substantial assets to Schwab on both the retail side and the RIA advisor side. We are winning in the marketplace among clients. Anyone suggesting otherwise is mistaken. Simply put, our franchise strength and financial model remain very much intact.
Second, we did not and have not changed our multi-decade approach to conservatively managing our bank balance sheet. Any suggestions to the contrary of that are false. Although our near-term costs of funding are higher than recent historical levels, and as a result will impact our near-term earnings, this cost is temporary and should diminish over the coming quarters and could wind down between now and the end of 2024. Third, we are well into the execution of the conversion of the former Ameritrade clients to Schwab. As we progress through this conversion and beyond, we will ultimately realize substantial expense savings well beyond the remaining $500 million-$600 million we originally committed to as part of the Ameritrade integration synergies. Looking at the first quarter, it was a complex environment for investors.
Although the equity markets overall performed quite well, investor sentiment was actually quite negative throughout the quarter. The Fed raised interest rates another 50 basis points, while the five and 10-year yield on treasuries fell by 39 and 40 basis points respectively. Yet, despite negative investor sentiment, this wasn't reflected in our clients' engagement with us. Clients entrusted us with over $130 billion in core net new assets, with the monthly level increasing each of the three months of the quarter, peaking with over $50 billion in March and achieving an organic growth rate in excess of 7%, once again validating our long-term track record of growing client assets in every economic environment.
In addition to growth in client assets, clients remained engaged with us in other areas with another quarter of over one million new client accounts, over five million daily average trades, a client promoter score or Net Promoter Score of 66, and almost $9 billion moved into our investment advisory solutions. Let's go ahead and transition from our client results to discuss some of the corporate financial areas that have been in the press, on the minds of investors, and in too many cases, falsely described by some competitors who have tried without much success, as evidenced by our near record March level of net new asset flows to scare clients into leaving Schwab. Our franchise and financial model are strong. We have substantial liquidity.
We have capital well in excess of regulatory requirements, and our strong profit margins deliver ongoing organic capital formation, which can be used to meet future capital needs. We have industry-leading levels of FDIC-insured balances at our bank, our investors bank. Our balance sheet and investments were and are conservatively managed, and managed in a manner consistent with how we have managed our bank balance sheet for the last two decades. For our long-term stockholders, we have great confidence in our ability to deliver a combination of growth and capital return just as we have for almost 50 years. I'd like to go into a bit more detail now on each one of these statements. I publicly stated multiple times and in multiple formats that we cannot foresee any plausible scenario where we would have to sell securities to meet the liquidity needs of our clients.
That's not an accident, because we have always planned for the potential of time periods where high liquidity needs exceed our available cash. Of course, these time periods tend to occur when the Fed is raising interest rates rapidly. While this cycle of interest rate increases has been historically rapid, leading clients to realign their investment cash more quickly than we had predicted, our advanced planning ensured that we would have the necessary liquidity to meet their demands. We prepare in part by minimizing the issuance of CDs and/or borrowing from the FHLB during more normal times, effectively keeping that dry powder for periods of higher liquidity needs. Of course, accessing this higher cost funding is not something we expect to be anything other than temporary. Currently projected to wind down over the next seven quarters and be largely gone by year-end 2024.
I would certainly hope that by this point in time, the short-driven speculation that we would find ourselves in a position where we would be forced to sell securities that have temporary paper losses has been put to bed. From a capital standpoint, we have solid levels today, well in excess of regulatory requirements. We understand the possibility that the AOCI opt-out might well be eliminated, and the questions that that raises about the potential need for capital. At this point, if this scenario does play out and a reasonable time frame is afforded to build the capital to support this change, we feel confident today in our ability to build the necessary capital organically given our strong profit margins. Even in the stressed market environment this past quarter, we achieved an adjusted pre-tax margin of almost 46%.
Even under some of the most pessimistic scenarios for the future, we are at least 40% pre-tax. Of course, our unrealized marks on certain securities decline over time, and they've also declined as interest rates have modestly moderated. Declines that you'll see happening when you review our first quarter 10-Q. The conservative nature of our bank management is also reflected in the very high percentage of deposits insured under the FDIC limits. At quarter end, approximately 86% of our bank deposits were under the FDIC insured limits. In addition, these deposits are spread among tens of millions of investor accounts. Lastly, there are no groups of investors or advisors who directly influence or encourage collective behavior.
The 10 RIA firms whose clients hold the greatest amount of cash on our bank balance sheet account for barely 2% of total bank deposits, and the average transactional cash per account for those RIA firms is less than $13,000. I hope these facts remove any concerns about some sort of coordinated action potentially happening that would meaningfully impact our bank deposits. This is a very important slide. I'd like to dive deeper into our clients' cash behaviors. I know this is a critical area of interest, particularly as it could apply to future levels of bank balance sheet cash and client cash realignments. As I've discussed in the past, when interest rates are near zero, clients tend to commingle their transactional cash and their longer-term investment cash together.
Of course, there's very little incentive during times like that to move their investment cash into solutions that offer higher yields than bank sweep. When interest rates rise, we reach out to clients and suggest they consider realigning their investment cash into other solutions, whatever the client sees fit, whether that would be a purchase money fund, a purchased money market fund, a CD, a treasury security, or an other appropriate cash solution that the client is interested in. Of course, this has been taking place predominantly inside Schwab as rates have been rising over the past year or so. The rate, pace, and ultimate level of this realigning has a large impact on our near-term financial results. Not surprising, we study it closely, and we have models that estimate how it will unfold.
By several measures we study, we believe that this cash realigning process is now slowing and getting closer to its endpoint. This should then likely reverse to a stage where bank balance sheet cash begins to grow as a result of our organic net new asset growth, as well as new accounts that we attract. In terms of the slide, we've included a chart that goes back to 2004, and it illustrates multiple time frames where interest rates were relatively high, as well as several time frames where interest rates were near zero, often referred to as ZIRP periods.
When we study this information on a per account basis, what we see as the most accurate way to model this, transactional cash per account is down to an average of approximately $10.4 thousand, a level as low as we have seen in the past 20 years, and down about 50% from the peak period during the COVID pandemic. From a percent standpoint, transactional cash per account is at a 20-year low of approximately 5%. Now, could it go lower? Yes, of course. We believe it is closer than ever to finding its ending point. Here's why. If you look at daily Schwab Bank cash movements, a key metric for identifying trends, far more important than a quarterly summary. February of this year was lower than January.
If we adjust for the single day after the Silicon Valley Bank failure, where cash movement was modestly elevated, March was lower on a per day basis than February. Through the first half of April, even allowing for tax payments, April is also lower than March, measurably lower. Lastly, it's important to recognize that while some clients did readjust their cash allocations in response to the Silicon Valley Bank failure by buying treasuries or CDs or moving from prime money funds to treasury or government money funds, we also saw a sharp increase in new cash coming into Schwab, consistent with being a safe port in the storm.
This slide is also a particularly important one as it provides factual information around a topic that has been fraught with inaccuracies in the press and blogs alike that incredibly to me, often relied on speculative information from short sellers and competitors. Schwab Bank is a bank for investors. We manage client cash at our bank conservatively and consistently. We manage this cash in the same way we've managed it for the 20 years that we've had our bank. We make what we consider to be conservative loans almost exclusively to our existing investment clients. These loans are either backed by our client's securities portfolio or loans against their personal real estate. This makes up about 12% of our assets. We do not make commercial loans, as speculated by one of our competitors on national television. The balance is invested primarily in securities.
With this balance, we look to manage credit risk by investing between 85%-90% in securities backed by the U.S. government or its agencies. That's our approach to credit risk. Let's talk about duration risk. An area that has been fraught with misinformation. Let me begin by saying it's important not to confuse, as unfortunately some less than savvy alleged researchers and analysts have, that maturity or weighted average life is not the same as duration. We have many floating rate securities that have a long life, but essentially zero duration, and therefore do not contribute to negative marks with higher interest rates, and of course, offer increased yields as rates rise. We do not now and never have tried to guess future interest rate movements. Doing so is a fool's game. It's like trying to guess stock market movements.
We don't guess, and we don't try to time interest rate movements. Our approach is very straightforward. We have historically managed our bank investment portfolio to a duration range between 2.75 and four years. We were approximately 3.5 years as rates began to rise in mid-2022. Admittedly, nearer the higher end of our historic range than the lower end. A fair criticism. Importantly, our overall duration across the firm's aggregate balance sheets, which includes the banks and the broker-dealers, was about 2.5 years. That is it. Not five, not 10, but 2.5 years. We all know that even at 2.5 years, this is not low enough to avoid temporary paper losses when rates rise close to 500 basis points in a year.
We just felt it was important to be transparent on where we were as this rising rate cycle began. Again, we did not change our historic approach during the COVID pandemic. Contrary to some items I've read and heard, we did not buy securities that would take us out of our historic duration range. Even more bluntly, we did not go out and load up our securities portfolio with long-dated bonds during the pandemic, period. It can be a fair criticism that we should have changed our two-decade approach to consistently maintaining a relatively short-term duration bank portfolio during the COVID pandemic in favor of holding primarily cash. That's fair to say. If we would have known that the Federal Reserve was going to raise rates faster than they ever have in history, in retrospect, that would have been a brilliant move to make.
What we did do was to begin to build up higher levels of liquid cash in late 2021 as transitory comments about inflation from the Federal Reserve waned, and in early 2022 as the Federal Reserve began discussing increases in interest rates. We increased our normal cash allocation about $60 billion. Given the pace that the Federal Reserve raised rates, and therefore the pace of the resolving client cash realigning, again, in retrospect, $60 billion was not nearly enough, and that led to our need to execute on our other liquidity measures. I started my comments by making clear that our financial model and franchise strength are intact. The obvious question is how this manifests itself in terms of earnings growth and our ability to deliver for our stockholders.
It's well understood that the temporary cost of higher funding from CDs and FHLB loans will impact our near-term revenue growth and earnings. Hopefully, it is also well understood that as these borrowings are paid off, that will be an accelerant to our medium-term earnings. As client cash realigning moderates and eventually reverses, and the headwinds from higher cost temporary funding sources diminishes over the next seven quarters, what remains? What remains is an extraordinary company. We have a diverse client base spread across approximately 35 million accounts. We have a track record of delivering exceptionally strong organic asset growth in every environment. We are completing the integration of the former Ameritrade client base and adding world-class trading capabilities, along with approximately 10 million new clients who will be exposed to all the additional products and services that Schwab offers that were not available to Ameritrade.
Millions of existing Schwab clients will be exposed to the world-class retail trading platforms that were previously only available to Ameritrade clients. As a result of the integration process winding down, along with investments that we have made in enhancing efficiency during this integration process, we will be in a position to substantially reduce operating expenses. Again, as I stated, well beyond the remaining $500 million-$600 million we originally committed to as part of the Ameritrade integration synergies. It's a powerful formula. It's a winning formula, and I'm confident that it will be a formula that delivers for our long-term stockholders as it has since we went public in 1987. Peter, let me turn it over to you to talk some more about our financial results and projections.
Well, thank you very much, Walt. There are three key points I want you to take away from my portion of the presentation today. First, we're navigating this extraordinary period from a position of strength with robust organic growth, high level profitability, strong and growing capital levels, and access to significant liquidity. Second, although the volume of client cash allocation activity has exceeded the expectations embedded in the financial scenario we shared a few months ago, as Walt mentioned, we are seeing signs of the pace beginning to moderate, and we continue to expect a resumption of deposit growth in 2023. Third, our focus at Schwab remains on our clients.
While the various dynamics we're working through create some near-term headwinds, our business continues to power ahead, reinforcing our confidence about the long-term strength of our diversified model and our ability to keep delivering on our through-the-cycle financial formula. Let's start by briefly reviewing our first quarter results, which we released earlier this morning. Among the many advantages we have as we navigate through this period is our financial strength, our sustained earnings power. There has been so much attention to the balance sheet and dynamics influencing net interest revenue that it feels like some have lost sight of the fact that nearly 50% of our revenue comes from other sources, such as asset management fees and trading.
While the remaining half is generated through net interest revenue, roughly one-third of our interest earning assets are floating rate, meaning the yield on those assets has increased dramatically in the last 12 months. That diversified all-weather revenue model is reflected in our strong Q1 financial performance, during which we grew revenue by 10% versus the first quarter of 2022. We grew adjusted earnings per share by 21%, and we delivered an adjusted pre-tax margin of nearly 46%, a level nearly unsurpassed in the financial services industry. Turning to the balance sheet. The evolution of our balance sheet during the quarter reflected continued client cash realignment. We supported this by utilizing temporary funding sources, including issuing more CDs and securing additional advances from the FHLB.
Our usage of these was front-loaded and increased modestly by our decision, consistent with our conservative management approach to build extra liquidity within our banks, almost doubling the amount of cash on hand in the month of March. We also opted to suspend our buybacks during the quarter, and our strong earnings supported organic capital formation, which allowed us to maintain our Tier 1 leverage ratio at 7.1%, well above the regulatory minimum. I know there's been much written, we'd argue too much written about the tangible common equity ratios of our banking subsidiaries, but those ratios have all increased significantly from the 12/31 levels due to both a $2 billion reduction in the unrealized mark-to-market losses and continued strong capital formation.
Those of you who followed the company for a while know that we have a long-term orientation, executing a strategy and business model that has delivered for clients and stockholders for multiple decades. I want to emphasize that the current challenges we're facing are quite manageable, and the impact on our financial performance is near-term, which means that Schwab's long-term financial model of growth plus capital return remains firmly intact. As we've discussed, there are some early signs of moderation of the client cash allocation activity, the overall level to start the year has exceeded the assumptions incorporated within the scenario shared at the winter business update. We've utilized a higher level of supplemental funding, with the vast majority of that now expected to be paid off by the end of 2024.
This temporary, emphasis temporary, mix shift toward higher cost of funds is expected to pressure the next few quarters of revenue, at which point the impact should start to decrease, reverse. We now expect Q2 revenue to be down a mid to upper single-digit % versus the second quarter of 2022. It'll have very minimal impact on our long-term financial performance with our NIM, net interest margin, still poised to increase throughout 2024 and approach 3% by the end of 2025, even if rates fall from current levels as the market anticipates. It's important I think to put that NIM outlook into perspective.
As I mentioned earlier, net interest revenue only accounts for half of our revenue, and with an adjusted pre-tax margin well in the upper forties, we can continue to produce margins that would be the envy of most other financial services firms, even as we navigate these dynamics. Remember that as all this has been happening, we have been adding clients, adding net new assets, increasing the adoption of advice and lending, and moving forward on the Ameritrade integration. Regarding expenses, disciplined expense management has been a hallmark of our financial formula, and throughout our history, we have taken steps to pull back on our spending when we're facing environmental headwinds without sacrificing the client experience or undermining long-term growth.
As Walt said earlier, we feel very confident about our ability to deliver over $500 million of expense synergies by the end of 2024 as we complete the integration of Ameritrade. As we do so, it's also a good opportunity for us to take a step back and examine our overall spending levels to look for additional efficiencies as we continue our decades-long focus on driving down our expense on client assets or EOCA, which we view as a key competitive advantage. Finally, our capital ratios, our capital position, our capital ratios remain very strong.
As Walt noted in his remarks, even if we have to eventually absorb AOCI into our regulatory capital ratios, we see a clear path organically for our Tier 1 leverage ratio, inclusive of AOCI, to exceed 5% within the next year and cross 6.5% by the end of 2024, even if rates stay flat. Thanks to our strong earnings, a reduction in balance sheet assets, even after deposit growth rebounds as we pay off the supplemental funding, and the continued reduction of our AOCI as our securities portfolio matures.
I note that again, even if rates remain flat, we'd expect those mark-to-market losses to decrease by a further $7 billion between now and the end of 2024, and obviously more if rates fall as the market is expecting. Putting it all together, we're not blind to the near-term dynamics we're navigating, but we're very confident that our financial formula will reassert itself as we emerge from this period. That formula, of course, starts with taking care of clients, growing accounts and assets, deepening relationships, building our capabilities, expanding our moat. That is what builds long-term earnings power and will be the driver of performance for our stockholders over time. To tell you more about the strength of our franchise and how we're continuing to serve our clients, it's my pleasure to turn it over to Rick.
Thank you, Peter, and hello, everyone. In the winter business update, I described how well Schwab is positioned to sustain an organic growth rate of 5%-7% over the long term through a combination of growth from existing clients, attracting new clients, and growth from our strategic initiatives. First quarter was a great example of this as we grew net new assets by over 7%. As I share with you our business results, I'd like to leave you with three takeaways. First, our business is thriving, and we again delivered strong organic client growth. Second, through the volatility in March, we saw an increase in net new assets and client engagement, and asset flows at the bank remained steady. We emerged from the crisis not weaker, but stronger. Third, our strategic initiatives are paying off and lots of opportunity remains.
Let's dive into the results in more detail. Put it simply, we are winning across all fronts. We're winning with existing clients, with new clients, and on both the retail and RIA sides of our business. Within Investor Services, we attracted $60 billion in core net new assets. In addition, we saw an 18% year-over-year increase in high net worth net new assets in the quarter. Our no trade-offs approach continues to attract clients and engender trust from our existing clients, and that was particularly true in a period of uncertainty. As I mentioned in our winter business update, our client base continues to get younger, with 56% of new-to-firm households under 40 this quarter. This is notable because with an average age under 50, our clients are still accumulating assets.
Within Advisor Services, we had an outstanding quarter of growth, with $71 billion in core net new assets. When the going got tough in March, our growth accelerated with $32 billion in NNA in March alone in Advisor Services. In periods of uncertainty and heightened volatility, advisors win. They win because they are trusted fiduciaries with clients' best interests in mind. We win because we are the trusted partner of RIAs and partner with them to deliver for clients in all environments. Our TOA ratio remained high and was in excess of 2 for the quarter. We are committed to helping RIAs of all sizes grow by delivering the leading custody platform with no fees alongside practice management support, industry advocacy, and relationship support RIAs can count on. There are no trade-offs. In summary, our business is thriving. Our no trade-offs approach was recognized by the industry.
The third-party accolades you see on the screen speak to the way we serve our clients each and every day. We were recognized by Investor's Business Daily as the number 1 online retail broker overall, by J.D. Power as the number 1 full-service broker, and for the sixth consecutive year, Schwab was named one of Fortune Magazine's top 50 world's most admired companies. I'd like to turn now to our strategic initiatives of scale and efficiency, win-win monetization, and client segmentation. We are continuing to advance these initiatives within our strategic focus areas, as I mentioned, these are paying off with tangible wins in the first quarter of this year. Let me start with scale and efficiency. Integration remains our top priority. We successfully completed our first client transition group in February, bringing over around 500,000 client accounts, including a small number of advisors.
Service teams achieved an average speed to answer of just six seconds during the conversion, a good indication of how seamlessly the transition went after years of preparation. We remain on track to bring over 13 million clients this year, representing 97% of Ameritrade clients, with the remaining 3% our most active traders coming over in 2024. As Walt mentioned earlier, we are on track to achieve $1.8 billion-$2 billion in run rate expense synergies by the end of 2024. Most important is the client benefit we see. In retail, clients will benefit from the combination of our modern wealth management platform alongside the leading trading and education platform in the industry. For advisors, we will add iRebal thinkpipes, two capabilities advisors love to an offer that, as it stands, has no trade-offs.
Turning now to win-win monetization, one of our priorities is growing our wealth business. Wealth is an area in which we delight clients, as the client promoter scores of wealth clients are typically the highest at Schwab. Our clients are increasingly asking for help and advice, providing us with a growth opportunity. Wealth offers a diversifying source of economics to us as a business. We've been investing heavily to deliver for clients and accelerate our growth, and we saw meaningful progress in the first quarter. Net flows into the Wasmer Schroeder strategies were $1.5 billion, and assets under management surpassed $17 billion. This is a clear example of a win-win opportunity for clients in Schwab.
The offer brought down the cost of access to fixed income managed accounts on Schwab's platform. Interest from clients has been strong as Wasmer represented the majority of net flows into fixed income managed accounts. We launched several key enhancements to Schwab Personalized Indexing, including more customization and digital capabilities. Retail clients who work with a Schwab FC can now exclude more individual stocks as well as entire industries and sub-industries from their portfolios. We also launched a digital dashboard for retail clients that shows a real-time view of their account value and highlights clearly the value of tax-loss harvesting. Clients continue to turn to Schwab for advice during market volatility. Schwab Wealth Advisory had $3.2 billion in net flows in the first quarter, the highest quarter of net flows in the history of the offer, as both Schwab and Ameritrade clients increasingly find the offer attractive.
Finally, we continue to meet the specific needs of our client segments. We are launching this year Schwab Private Client Services and Schwab Private Wealth Services for our high net worth and ultra-high net worth clients. We are winning with this client segment today, and the differentiated service, support, and offering will further add to our no trade-offs experience for this client segment. Our world-class trader offering remains unparalleled in the industry. We released new features on thinkorswim while preparing to convert thinkorswim clients and preparing to make the offer available to Schwab clients this year. Another key priority in this focus area is to provide tailored solutions and experiences for RIAs of all sizes. In the first quarter, we acquired The Family Wealth Alliance, a membership organization that provides resources to the family wealth community serving ultra-high net worth clients.
The acquisition continues a relationship that has existed between the two companies for years. Together, we'll be able to expand the services we offer for multifamily offices and single family offices. We are thriving. Our growth initiatives are paying off. I shared in the winter business update some of the statistics you see on the left side of this page. They show we have lots of opportunity in front of us. We remain confident we can close the share of wallet opportunity I described by introducing clients to the collective capabilities of our integrated firm. We also believe we can accelerate the growth of our wealth business, both at Schwab and by introducing it to Ameritrade clients. We saw very positive signs this quarter as it was our strongest quarter of flows ever in the full-service wealth solutions.
95% of eligible Ameritrade FCs enrolled a client into a wealth solution, a very promising sign for the future. We continue to invest in our lending platform to increasingly be there for clients in the future. Finally, the combination with Ameritrade allows us to enhance our trading capabilities for a highly engaged and important client segment. Investing in a thinkorswim platform and bringing the powerful platform tools and education to our trader clients will be an important differentiator for Schwab as we look to the future. I'd like to wrap up where I started. We are in a position of strength. Our business thrived in the first quarter, and our growth accelerated through the recent market volatility. The virtuous cycle will continue to help us sustain our attractive organic NNA growth from both new and existing clients.
We are continuing to execute on our key strategic focus areas of scale and efficiency, win-win monetization, and client segmentation. We saw meaningful impact from some of those initiatives in the first quarter, while other initiatives will help accelerate the growth of our business into the future. We are delivering wins for clients and the firm each quarter. The future is bright. With that, I will turn it over to Jeff for Q&A.
Operator, let's turn to the queue, and please remind everyone how they can ask a question if they'd like.
Thank you. For those on the phone line, if you would like to ask a question, please ensure that your phone is unmuted, press star one and record your name clearly when prompted. If you would need to withdraw your question, you may press star two. Again, that is star one to ask a question over the phone. Our first question is from Dan Fannon with Jefferies. You may go ahead.
Thanks. Good morning. A lot of debate that this cycle has raised the client awareness for cash. Given the ease of access and movement today, you know, the historical cash allocations are likely to be different going forward. As you look over the long term, how do you think about sweep cash in the percentages and how that may be different than what we've seen historically?
Thanks, Dan. I'm gonna go ahead and comment on this. I think when you look at client cash realigning, we feel fairly confident that the metrics we've shown have good basis in history. I guess I would encourage you to think of a client cash aligning, it's an event, it's not a process. I'm gonna illustrate that by an example. If you have a retail client that has, say, built up $50,000 in cash during the pandemic period, and they look at that and say, "Well, I wanna keep $20,000 of that liquid and available for immediate trading or other uses.
Paying bills. They don't take that $30,000 and say, "Well, I'm gonna move $10,000 this quarter and $10,000 next quarter, and then $10,000 several quarters in the future." It's an event. They reinvest the $30,000. What you generally will see is you'll see a rapid acceleration of client cash realigning early in the process of rate rise, let's call it in the first year. Then you begin to see it go the other way. We think as it goes the other way, it goes the other way in a relatively accelerating manner because again, the event has occurred. The client, in my example, has moved their entire $30,000. We understand the question. We think that the cash, as we indicated, the cash realigning process is slowing.
We are very encouraged by what we see in April with measurable slowing. Again, we're looking at three consecutive months of declines. We feel very good about the chart and the results we're able to share with you.
Does that conclude your questions, Mr. Fannon?
Yes. Thank you.
Thank you. The next question is from Rich Repetto with Piper Sandler. You may go ahead.
Yeah, good morning, Walt and Peter. First, thank you for doing the timely call. At least I hope you consider this format going forward. I guess my question is sort of related to the first question. You know, there was about or calculate $44 billion in decline in balance sheet cash or uninvested sweep cash. Helped by the organic close in March that you talked about. My question is, you know, your terminology has changed a little bit, I think. Anyway, do we still expect 8%-12% decline in the average interest earning assets, Peter? That's factoring in sort of this protection of AOCI.
You know, does that factor in it if you're even at all trying to keep aware of that or manage that risk? Yeah, the 8%-12% average interest earning asset decline by December versus December.
Thanks, Rich, for your question. Yes, we still do think that the 8%-12% decline in interest earning assets is the right way to think about it. The way that we fund those assets may be a bit different than what we had anticipated when we shared at the winter business update. The overall asset decline is a function of the assets rolling off and the sort of the gradual roll off of our securities portfolio.
Thank you. The next question is from Alex Blostein with Goldman Sachs. You may go ahead.
Hey, good morning. Thanks, everybody. I was hoping we can double-click on some of your capital management comments. It sounds like if you were to start to include AOCI changes in capital, you expect it to be a bit of an organic build, and you provided some sort of stats around it. Why not sell a significant chunk of the securities portfolio? I understand it will crystallize the loss, but your Tier 1 leverage actually will not move significantly when you do that. Help us think through maybe some puts and takes from doing something like that, taking the loss, but also at the same time, you know, significantly enhancing the firm's earnings power since, you know, $60 billion plus of that securities book is massively at the water.
Thanks for the question. I guess I'd say a couple things. You know, certainly you are right that if we were to sell the securities a meaningful portion of our securities portfolio, it would actually be accretive to our capital levels, if you included that, or certainly accretive to our tangible capital levels. You know, we have said multiple times that we see no reason, no need to be forced to sell securities, given the strong, the ample access to liquidity and the nature of our deposit base and so forth. Beyond that, you know, just don't really wanna speculate or sort of talk in hypotheticals about the conditions under which we would sell that securities portfolio.
I just would say that we see no need to do so. We're, you know, always of course, we're always going to be thinking about what's the right thing for stockholders. We see no reason to do so and certainly wouldn't do it right now, given sort of the, some of the volatility, if you will, in the market around firms that have made that decision.
Thank you. The next question is from Ken Worthington of J.P. Morgan. You may go ahead.
Hi. Good morning. Thanks for taking the question. You broke the BDA investments, I think, in the third-party BDAs this quarter. With BDA balances down $20 billion in 1Q23 and floating rate securities down to $2.2 billion in the quarter, do you foresee having to break the TD managed BDA investments? If so, is this a charge that you would be responsible for? What do you foresee as the charges needed to maintain this program given your outlook for sorting this year?
Hey, Ken, it's Jeff. Obviously that, you know, there's a lot of nuance with that question and just kind of in the interest of time, why don't we circle up kind of offline and we can walk through kind of what's available there and all the public disclosures. I'll give you a chance if you have one other question you wanna touch on.
Thank you. The next question is from Brian Bedell with Deutsche Bank. You may go ahead.
Great. Thanks. Thanks for taking my question. Peter, if you could just comment on the pace of the wholesale borrowing. If we are seeing the cash shorting slow throughout the year, why not wind that down more quickly instead of having that conclude more in 2024? It seems like if you are in the position where the balance sheet will start growing again later in the year, you would be in a position between the organic growth of cash coming in from the securities portfolios and cash growth from clients that, you know, you could potentially wind most of that down, you know, certainly by year-end or the beginning of 2024. Any comment on the pace of that?
Sure. You know, so some of the certainly the CDs that we issue are termed out, so it's not like we can recall those necessarily. The FHLB advances have different terms. As I mentioned, we, you know, the decision to build up cash in March meant that we front-loaded some of that activity. Of course, if we as we see the pace of this client realignment slow, very reasonable expected, of course, we will, you know, initiate less advances and let those advances that we have roll off.
Absolutely, we could see, you know, we could see this roll off, you know, very, very quickly, even as we start to see a resumption of deposit growth over the course of latter part of 2023 and then into 2024. I mean, the key point on these advances is these are, these are limited, and they're temporary. This is not something that is going to be part of our long-term financial picture, and we will certainly pay them off as quickly as we can.
Thank you. The next question is from Michael Cyprys with Morgan Stanley. You may go ahead.
Great. Thank you. Good morning. Thanks for taking the question. Wanted to circle back, Walt, to your commentary around the ability to deliver substantial expense savings beyond the $500 million-$600 million or so. Just hoping you might be able to help quantify how meaningful that could be. Is that $1 billion? Is that $2 billion? Maybe you could expand on where that's coming from. What are some of the actions that you guys might be able to take to hit that? How do you ensure this doesn't hit the overall growth in customer and overall assets?
Yeah. Thanks, Mike. I don't think at this point we're going to quantify the extent that we believe that we can generate ongoing expense saves beyond the $500 million-$600 million that we have committed to and have remaining in the integration. We think it is substantial. Yeah, it's important to keep in mind that as we approach this integration, one of the decisions we made was that getting the integration right was our number one priority. Therefore, we were willing to spend quite aggressively along the way to ensure that there was nothing that got in the way of ensuring the integration went as well, as smoothly as it could possibly go.
Even if it meant ratcheting up spending to a level that was much higher than maybe we would have thought several years ago. We have the opportunities that I mentioned, then we have the opportunity after multiple years of allowing spending to grow relatively quickly to do a step back and evaluate it overall. Our early work gives us the confidence to say that it is meaningfully higher than the remaining synergies, I don't think we're ready to quantify it yet. The one thing I will make clear though is, as we have done in the past when we made moves around expense that were significant, we will protect the client experience.
We will not be looking at impacting the parts of the organization that build relationships with clients, that serve clients, and that deliver that client experience.
Thank you. The next question is from Bill Katz with Credit Suisse. You may go ahead.
Okay. Thank you very much for taking the question, and also appreciate you tightening up the window between this and the earnings. Super helpful. Walt or Peter, just a question. As you think about lessons learned from this cycle versus prior cycles, and I appreciate you're consistently running the franchise, but should we be assuming a higher core deposit beta, all else being equal, to avoid these kinds of dynamics we've all experienced in the last month or so? On the other side, the earning asset side, would you envision running a more liquid earning asset strategy, all else being equal? Thank you.
Yeah. Thanks for the question, Bill. In terms of the deposit pricing, if you will, I mean, our philosophy on that hasn't changed, right? Our clients keep as we know from history that our clients have sort of two buckets of cash, their transactional cash and their investment cash. Our philosophy on the transactional cash is to offer a rate that is very competitive. Certainly today is at 45 basis points, it's a lot better than what clients can earn in their checking accounts at most of the traditional banks.
To offer our clients a range of options for their investment cash that are, in many cases, industry-leading, whether that's access to Treasuries or brokerage CDs or purchase money funds or whatever it might be. And what we've seen is and that's served us well for multiple decades. Whether we pay 45 basis points or 65 basis points or 100 basis points for that transactional cash has very, very little influence on client behavior. I don't necessarily see that aspect of our philosophy changing. Of course, you know, as we always do, we'll, you know, learn from the experience, from what we learned about client behavior.
We'll have to take into consideration potential regulatory changes, and we'll adapt. But I have every confidence that we'll thrive as we have every time we've faced changes around us previously, whether it was, you know, when the dot-com bubble burst in 2000, or whether it was when we launched the bank and came under Fed supervision or went to zero commissions. In every single situation, we adapted, and we came out the other end even stronger than we were going into it. That's because we stay, as Walt and Rick have talked about, we stay focused on our clients and doing right by our clients. If we do that, everything else will take care of itself.
Operator, I think we have time for one last question.
Thank you. Our last question is from Ben Budish with Barclays. You may go ahead.
Hey, guys. Thanks so much for squeezing me in here. I just wanted to ask kind of about your approach to buybacks. You mentioned earlier in the call that you had suspended them for the meantime. What are the sort of data points you're looking at or indicators that would cause you to get more positive and feel comfortable resuming there?
Thanks, Ben. I, you know, I think what we would like to see a little bit more clarity on the regulatory front and what's gonna happen with how capital is treated and a timeline there. As I said, we feel very confident in our ability to build into the potential inclusion of AOCI into our regulatory capital ratios. We'd like to see a little bit more clarity there before we would, I think, you know, strongly consider or look to resume the buybacks. Of course, our buybacks are always opportunistic, not programmatic, as we've said multiple times, but I think that's probably one of the key points we want to wait for.
We'll turn it over to Walt to close us out today.
Thanks, Jeff. Thanks, everyone for joining in and participating, and thanks for the feedback on the timing of this update relative to our earnings report. Please continue to provide that feedback, and we'll look to be responsive to, excuse me, to what we hear from all of you around the best time to do these updates. I think as all of you know, I've been doing this a long time. This is my 15th year as CEO of Schwab. During that time, I've seen a lot of different environments, good as well as much more difficult ones.
When I look at that history, what's consistent to me is that long-term success comes from maintaining a focus on clients. There are always going to be circumstances that come up on a periodic basis that have more of a short-term impact, and we're well aware. We're not oblivious to what's going on. We also know that we have driven much of what has gone on that has affected our near-term earnings because we've been proactively reaching out to our clients of all sizes for the last year and explaining to them the options that they should consider with their investment cash. Again, I'd like to put this in the context of what I led with around clients. It's the right thing to do, and it's what we would do during this environment if we're faced with this environment again.
We're well aware that long-term success comes from a focus on clients, and we're well aware that our bank is unique as it serves as a bank for investors. We're also well aware that as storms come, storms also go. Eventually, they come to an end. What we know from history is that when those storms end, the firms who stand tall are those who have a focus on clients. That's something that I believe you can count on for Schwab as you have for many years in the past and can count on again in the future. Thanks again for all of your time today. We very much appreciate it, and we appreciate the thoughtful questions.
Thank you. That concludes today's conference. Thank you all for participating. You may disconnect at this time.