Jason Tyler: Yeah. So the — overall, the cash has been obviously a positive story, not just in deposits, but also in our money market mutual fund complex, which is up meaningfully sequentially and year-over-year. And that complex is very important to us. It’s highly profitable. it’s large. So our most sophisticated clients see it as a good opportunity to invest there with good yield with the benefits of being in a collective fund but at the same time, not having significant concentration. And so the overall liquidity and cash in the investment management business, but also in the broader financial model has played very significantly into the strength of the quarter.
Mokshith Reddy: Thanks for taking my questions.
Jason Tyler: Of course.
Operator: We will take our next question from Betsy Graseck with Morgan Stanley.
Betsy Graseck: Hi, good morning.
Jason Tyler: Good morning, Betsy. Nice to hear you. Welcome back.
Betsy Graseck: Good, thanks. Just wanted to make sure you could hear me. So I guess two questions. One on capital. And I realize that your business model is one that is capital rich. And just wanted to understand how you think about capital — levels of capital accretion and when is the right time to start leaning in more to buybacks given the excess capital that you have.
Jason Tyler: So the — you’re right that the capital levels are strong. And even with where we are right now at 11.4% in CET1, I’d argue that that’s a little artificially low right now. We talked about the fact that loans were elevated because of the operational dynamics at the end of the quarter. And so we expect — RWA is already down as a result of loan volumes, which we mentioned earlier coming back more to normal levels. Plus, we’ve got $700 million in AOCI, pulling the par, plus we’ve got Visa, and plus we’re still returning on an operating basis at a good level. And so those are all good. They’re also — and you’re right to note that we like having strong capital levels and still able to develop good returns at these levels.
And we also are always looking at where our peers are to make sure that when we say strong, it’s not just absolute, but relative. Now all that said, particularly with Visa coming online, you can imagine likely going to have an upward impact on the trajectory of share repurchase. It’s not like we’re going to do something enormous right away, but it goes into our capital framework and with capital levels being higher as a result of that and even in anticipation of it, it obviously will have an upward lift, all other things equal.
Betsy Graseck: Okay. Great. And then, separate question just on — I think you mentioned earlier about opportunities to extend duration in the book — in the securities book at some point, and maybe you could just give us some context and color as to how you’re thinking about that, given the fact that typically you have a very, very short duration. So when you say longer duration, what are you thinking about in terms of how long is long? Thanks.
Jason Tyler: Yeah. That’s a good focus and everything is relative. So we had gotten out to about two years on the securities portfolio a couple of years ago and now being meaningfully under one year, it gives you at least some sense of range. But I also think it’s important to note everybody should take a lesson from what we’ve seen in the markets over the last couple — in banking over the last year that deposits have a shorter duration than anybody anticipated. And so on bias, we’re going to be shorter relative to history than what we have been before but we’re quite short right now. And particularly as deposits seem to be leveling off in general and a little bit more predictable, it gives us an opportunity and more confidence and then we have to test, do we see the investment opportunities?
And does the yield curve indicate to us that it makes sense to go out. And that’s part of the reason that we’ve been shorter. We felt like it was — that it was going to be better to be at the short end of the curve over the last year that led to that repositioning work that we did. And so it’s not going to be dramatic, but given the way the shape of the yield curve is right now, any step-out protects us nicely from significant declines in short-term rates, but it gives up a little bit in short-term NII.
Betsy Graseck: Yeah, got it. Okay. Thank you. That’s very clear.
Jason Tyler: Great.
Operator: We will take our next question from Brennan Hawken with UBS.
Jason Tyler: Good morning, Brennan.
Brennan Hawken: Good morning. Thanks for taking my questions. Hey, how are you, Jason? Got a couple of follow-ups. One on the deposit front. Jason, you commented how deposits have declined, but it seemed like you were commenting more on an EOP basis than versus the average. We saw the average balances of above that $100 million to $110 million range that you had previously talked about, we saw some stability in noninterest bearing. So when we think about the go forward on an average basis, have we hit a level where now things should be relatively stable comparing it to where we were on an average basis? I appreciate that you said this is the hardest part of the balance sheet to predict. So I recognize I’m asking a challenging question.
Jason Tyler: Yeah. I think I said our overall financial results to predict. It’s been really hard. That’s — you’re right to point out that the comments I made were relative to the $124 million. We have seen, obviously, balances come down. We naturally do the first couple of weeks of the quarter. But this dynamic of tax payments is one that can have an impact. And also just the fact that clients may be doing exactly what we were talking about a minute ago with Betsy’s question of thinking about redeploying out of cash into different types of securities and maybe buying treasuries, that has a dynamic as well or maybe moving into money market funds to pick up, even if it’s not six months or two years of duration, taking up 45 days.
