John Woods: Yes. I mean I think we have gotten to the point where we had the liquidity build late last year. And that’s basically largely done. And so where you see the securities book right now as a percentage of our overall interest earning assets is about where we will be over time. As we grow loans, we will probably grow securities and cash on a similar mix basis from a volume standpoint, but the percentage of cash and securities to overall interest-earning assets at the end of the first quarter is about where we will be for the rest of the year. And I would hasten to add that when you look at that, that’s reflected of our deposit franchise and being primarily consumer and having a much higher proportion of insured secured deposits than most peers.
And then if you crank it all through the way the Fed looks at standardized Category 1 banks, our LCR incorporating all of that at 03/31 was 120%, which is incredibly strong from a liquidity standpoint. And that’s played through based upon the balance sheet mix overall, including cash and securities.
David Konrad: Perfect. Thank you.
Operator: Your next question comes from the line of Manan Gosalia with Morgan Stanley. Please go ahead.
Manan Gosalia: Maybe as a follow-up to the last question, is there any change in how you are thinking through positioning in the medium-term with the expectation for fewer rate cuts coming through? So, with loan growth being a little bit weaker right now, deposit growth being pretty solid, as you noted, are you willing to put on a little bit more duration on the securities side? And separately, has it got cheaper to put in some downside protection on NIM as you look into 2025 and 2026. And is that something you are considering right now?
John Woods: Yes. I would say on the securities side, I would say there is a couple of objectives being addressed, and it’s the interplay between capital and liquidity and interest favors management. So, what we did over the last couple of quarters is we have added $7 billion of pay-fixed swaps that has paid off quite nicely because of our view that rates were likely not to be down, whatever, however many cuts we thought they were at the beginning of the year, five, six, seven cuts, we thought that was probably a little overcooked. And so we put on those pay-fixed swaps in part related to that. But in part related to the multiyear objective to reduce the duration of the securities book given how it will likely be treated from a capital standpoint.
And so both of those objectives came into play when we shortened the duration of the securities book, which right now is about 3.8 years. We are likely to continue to shorten the duration book of that securities book over time and get down to something closer to 3 years [ph] or thereabouts. And so that’s really the driver there. But you got to look at the overall balance sheet and from an overall balance sheet standpoint, it made sense to add a little asset sensitivity in the fourth quarter and the first quarter. And we had at 03/31, we remain an asset-sensitive balance sheet. When it comes to adding downside protection in the out years, we do note that we have a significant drop off of receive-fixed swaps when you get out into 2026 and ‘27.
And I think entry points matter. So, if rates continue to stay elevated, and we think there is value there. We want to be careful that we don’t give up our upside that the C&I loan book provides us and we will do that when the entry points are attractive in terms of that trade and locking it in. And in general, that would be consistent with something that would be north of 4% of a receive rate out into ‘26 and ‘27, and we will be opportunistic as the rate environment plays out in terms of how we continue to protect the balance sheet over the medium-term.
Manan Gosalia: Got it. Very helpful. And then this morning, one of your peers has suggested that they are seeing corporate behavior shifting from NIB to IB. Are you seeing some of your corporate clients take another look at optimizing their NIB balances in the higher for longer rate environment recently?
Don McCree: I think it’s pretty much run its course at this point. We have had a little bit of a shift in the book, but it’s really slowed down. I think the clients have been pretty opportunistic in terms of taking advantage of higher rates. So, I would say our book and our mix is pretty stable right now, and we expect it to stay here.
