So we’re applying that standard, and that would be the reconciliation between two quarters of build and no change in the charge-off guidance.Mike Mayo Given that extra caution, you kept your loan growth the same at 6% to 9%. So I’m trying to reconcile your more caution with your provisions with no change in your loan guidance, whereas, others have brought down their loan guidance as they tighten things up.Chris Gorman Yes, Mike. Our — we have basically — we are at the low end of our guidance for the year already. So what we’re going to be doing for the balance of the year is we’re going to be recycling capital. And to your point, there’s no question that the cost of raw material has gone up significantly.We’re certainly not going to change our lending standards.
But in terms of pricing, we will make those adjustments. We’re fortunate that we have a bunch of relationships that pay us really well, and we’re in a position to serve those relationships.But as you and I have talked before, lending on a stand-alone business that’s hard to return your cost of capital. So you can imagine when your cost of capital goes up, that the pricing and the other things that you’re doing for those customers, frankly, will have to be even greater.Clark Khayat Yes. So just to — sorry, Mike. Just to be super clear, the 6% to 9% year-over-year loan growth really was resident at the end of 2022. So it really just reflects the growth that occurred in 2022, just to make that abundantly clear.Mike Mayo And so, one more follow-up.
It seems like the capital markets is pricing for risk more than the lending markets. But when you have that conversation with your commercial customers and say, ‘Hey, we’re going to pass on this higher cost of raw materials.’ Are you seeing any additional pricing power in lending markets? I mean, it just seems like loan yields should be going up more than they’ve already have done.Clark Khayat Yes. And they never go up as much as they should because, frankly, there’s too much excess capacity in the banking market. But no, they haven’t moved. And that’s where it really pays to have a wholesome relationship like where we can drive a bunch of other revenue, but there hasn’t been the adjustment yet that there should be based on the arbitrage between the capital markets and the bank market.Mike Mayo I guess, I sneak one last in there, if that’s the case then, I mean, the cost of all materials are going up and you can’t get the loan yields you desire, maybe just delever a little bit and just not have much growth, but have less risk, or I mean, how do you view that trade-off?
Because just…Chris Gorman I think, over time, that’s what you’re going to see, right? We’ll be using the capital markets as they open up to actually place paper for people. But in terms of putting new debt on our balance sheet, we’re not going to do it unless we have a complete relationship and we can drive a whole bunch of revenue. And that in itself will be limiting.Mike Mayo Got it. All right. Thank you.Chris Gorman Thanks, Mike.Operator And our next question is from Manan Gosalia with Morgan Stanley. Please, go ahead.Manan Gosalia Hey, good morning. I wanted to follow up on the cost-cutting efforts that are underway to counter inflation. Just given the events of the past few weeks, how does that change? What do you think you need do on the investments, right?So as I think about deposit competition accelerating, are there any investments you think you need to make on either the technology or the product side in order to retain and grow deposits?
And how much of that is embedded in your expense guide?Chris Gorman Yes. Thanks, Manan. So, right question. The good news for us is, we undertook the expense cuts, so we could make those investments, and we’ve got both on the consumer and commercial side, a focus on deposit and customer acquisition technology, whether it’s digital capabilities in consumer, things like embedded banking, which we’ve talked about before or other payments capabilities on the commercial side. So that cost cutting was in part to make room for exactly those types of investments.Manan Gosalia But is there anything additional you need to do given the events of the past few weeks?Chris Gorman I mean, we’ll assess that as we go forward. I think we feel well prepared to handle the deposit challenges in front of the market right now, and I think our numbers have shown that.
I think more than anything, we’re probably likely to be more offensive on the deposit side than we’ve been to date, and we feel well armed to do that.Manan Gosalia Got it. Great. And then just on securities. I appreciate the detail on the AOCI accretion over time. I wanted to ask how do you think about the future mix and duration of the securities book just given what we’ve seen in the past few weeks? And just given the potential for higher regulation, would you skew the mix of your securities more shorter dated towards treasuries. Just want to get a sense of how you’re thinking about that?Chris Gorman Yes. It’s a good question, hard to answer in a vacuum, but my sense would be you’ll see higher quality portfolios, although ours is pretty high quality today, and you’ll probably see shorter duration or more floaters.
So it will be interesting to see if that’s the way it shakes out. The broader impacts of bank security portfolios moving in that direction and how that might impact the market more broadly.Manan Gosalia Great. Thank you.Operator And next, we have a question from Steven Alexopoulos with JPMorgan. Please go ahead.Steven Alexopoulos Hey, good morning, everyone.Chris Gorman Good morning, Steve.Steven Alexopoulos So first, on the deposit side. So your uninsured deposits are fairly high, but it does not appear that you saw a large degree of outflows, right, that many of your peers saw in the aftermath of Silicon Valley Bank. Could you comment on that were there notable outflows or because of the operating nature of these accounts, which you called out, Chris, was that enough of a factor where you just didn’t see what many peers saw?Chris Gorman Yeah.
Just to be clear, 66% of our deposits are either uninsured — either insured or collateralized. So that’s point one. But I don’t know — I can’t speak to other people’s book. We — like everyone, we saw some deposits move out, particularly in places like high net worth individuals. We saw some in the smaller end where kind of small business and business banking, where basically the deposit is the business and the person are sort of synonymous.We saw a couple larger excess deposits move. But in general, the reason we’ve enjoyed such stickiness of the deposit is kind of the comments that I made earlier, these are operating accounts or businesses, and these are businesses that have been clients are key for a long time. And frankly, there wasn’t even a lot of angst.
I mean, we obviously did a good job of reaching out to all of our customers as we always do. But I was very pleased with the stickiness of the deposit in the core deposit base.Steven Alexopoulos Okay. That’s helpful. And then, Chris, on the potential for new regulation, and you said you’re in a good position to organically build capital, right, in anticipation of new regulations potentially coming. Do you assume that you need to suspend buybacks for an extended period until we see new regulation in order to build that capital?Chris Gorman Yes. I don’t really plan — we don’t plan on executing any buybacks until there’s clarity as to what the capital framework is going forward. So I don’t anticipate that we’ll be doing any share repurchases until there’s clarity.Steven Alexopoulos Got it.
