I mean, on the March 31st forward, it has three cuts, 75 basis points worth of cuts after one increase. So, to the extent that were to happen, we will still be within that range. If it stays higher than that, then we’d be at the upper end of the range.And we have some received fixed swaps that actually come on board in the second half of the year to protect us from lower rates. We’re not saying that the rates will be cut. That’s what the market says. I personally don’t see that that will happen at that pace. But we wanted to be able to center the discussion on what the market is saying, and that’s why we gave you that and then we gave you some sensitivity around it. So, we feel very good about the range.Where we are in the range? There are a whole lot of factors.
The pace, the timing of cuts would take us down, even if we had a couple of hundred basis points of cuts, then ‘24, we’re still in the range. So, does that get you what you wanted?Erika Najarian Yes. And as we think about perhaps a more measured pace of cut, how would you anticipate being able to normalize your deposit costs in that backdrop?David Turner Say that again. How would we — say that again, Erika.Erika Najarian Yes. How quickly could you lower deposit costs in an environment where the Fed is cutting in a measured pace? I’m just trying to think about the other side as I think about your — sort of your long-term NIM target range?David Turner Yes. Well, so you can see our deposit cost relative to our peers is 19% fair are lagging.
And so, the ability to cut, we have to be competitive. We have to offer a fair price to our customer base. And I think to the extent you start seeing a pause and/or cuts coming from the Fed, the beta that we just mentioned could change and may not be as severe. What happens is the increase in deposit cost lagged the last increase of — that the Fed is going to have. So, it will take some time for that to manifest itself.So, if you look at the retail side, the retail side is very slow to react. But on the commercial side, it’s almost instantaneous as treasurers look to lock in the best yield that they can. We have some index deposits that move with changes in Fed funds. So that will react pretty quickly, which I think is a benefit to us in that scenario.Operator Our next question comes from the line of John Pancari with Evercore.John Pancari In terms of your maintaining the cumulative or through-cycle beta at 35%, I hear you where you’re trending down 19% in your confidence.
But I’m just curious how the liquidity crisis through March and how it really impacted that outlook. We saw a number of of other banks increased their deposit beta expectations given the intensifying pressure around deposit costs as well as broader funding costs. So, how has the liquidity crisis impacted your view? And how does that not influence an increase in how you’re thinking about the through-cycle beta? If you could just walk us through that.David Turner Yes, John. So our — this is — our competitive advantage is our deposit base. And so we haven’t had to react at the pace at others. So if you look at the incremental beta of our core peer group, that was some 73% this quarter and ours was 40%, 41%. So we just haven’t had to move at the pace and I still think based on how we fund ourselves, the core retail, 70% of our deposits being retail really has helped us from being able to keep that beta where it is at 35%.So, as we think about some of the larger customers that are seeking rates, seeking returns, that’s where there’s been more competitive pressure and we saw some of that being put to work in the first quarter.
And we called for some of that. That’s part of the $3 billion to $5 billion that we’re talking about. As a matter of fact, in our beta assumption, we had all that coming out of noninterest bearing. That wasn’t quite what we saw, but we gave it — we assumed noninterest-bearing because that was more conservative to give you the guidance.And so if you take all that into consideration, I think that’s why you didn’t see us change our cumulative basis of 35%. And being at 19%, there’s a long way to go from 19% to 35%. We understand that, but if we miss it, maybe it’s a tad underneath that, which is why we gave you also some guidance on our slide number 7, that would show you if beta was a little bit better than 35%, how much it might mean.John Pancari Got it.
Thanks, David. That’s helpful. And then, separately, on the capital front, I know you increased your target to 10% — and so just — or 10% or just above, I believe you said. If you could maybe give us a little bit more color in terms of the rationale. And then, could that allow for buybacks at some point? How are you thinking about deployment and the pace of where you — the timing of when you get to around that 10% range?David Turner Sure. So, you saw our common equity Tier 1 increase from 9.6% to 9.8%, and that’s after absorbing about 7 basis points due to the CECL impact for the first quarter. So, we’re generating 20 to 30 basis points worth of CET1 every quarter. After loan growth, we first and foremost want to be here as a source of strength for our customers and be able to make all creditworthy loans we can make.And we’re open for business and ready to do that.
That’s what our job is. We want to make sure we pay our shareholders a fair dividend, 35% to 45% of our earnings in the form of a dividend, and we have been at the lower end of that. But — and then we’ve used our capital for other nonbank acquisitions and mortgage servicing right acquisitions, which we’d like to continue. And then to optimize our capital, we’ll buy stock back from time to time.Given the uncertainty that’s in the market, obviously, there’s a lot of review going on to what happened in the month of March, and there’s going to be some reports coming out from our regulatory supervisors on what may change. And we just want to be prepared for that, and we think it would be inappropriate at this time to be buying our stock back when we have this kind of uncertainty.
You’ll lop on top of that the uncertainty in the economy and monetary policy. So there’s just a lot of noise, which caused us to rethink, let’s just wait, let us accrete up to that 10%, maybe slightly over that. And to the extent things settle down, then we’ll optimize capital, and we’ll use share repurchases as a mechanism to do so.Operator Our next question comes from the line of Matt O’Connor with Deutsche Bank.Matt O’Connor How are you thinking about managing liquidity going forward? Obviously, like with a very strong deposit base, you’ve been less reliant on wholesale borrowing. But both in light of current conditions and then just kind of the way the regulation might be moving, what are you thinking about in terms of borrowings and then also both cash and securities?
And again, like you’ve got a smaller AFS book than others, which has worked well given the moving rates. But what’s the outlook on both the funding and asset side? Thanks.David Turner Yes. So, we still believe in growing customer relationships, core checking accounts and operating accounts of businesses. It’s the basis of our whole business, and we’ll continue to do that from — to help us from a liquidity standpoint. Clearly, some things have changed. We’ve given you a list of our total primary liquidity and also liquidity at the discount window, should we need it. What we’ve learned, I think, over this, is that it can move much quicker that we all had anticipated the world has changed a bit.And so, we’ve had one of the largest cash balances of anybody in the peer group, the lower securities book.
And we did that intentionally because we were not clear on the surge deposits on the pace that they would move out. So, we’ll probably maintain a bit more cash than we historically have been. Obviously, there’s — currently, there’s a new term bank facility that the Fed created that’s temporary. I hope there’s some thinking about how to maybe keep some of that in place. But we did not use that, as you can tell from our disclosures. But we tested it after quarter end, just to make sure the pipes were worked up, and I think we borrowed $1,000 and repaid it quickly. But posting collateral to something like that, that you can get access to quickly. Clearly, the Federal Home Loan Bank is still our primary source we go to. We have a little bit outstanding there at quarter end, a couple of billion dollars.And so, just having access to multiple levels — if we learned anything, it’s diversification.
And you need to make sure your funding side is diverse. And within your deposit base, it needs to be diverse. So if you end up with a concentration, you end up with a problem. So I think that’s a big lesson learned for everybody and staying as diverse, so we can a little more cash on hand I think, is in order.Matt O’Connor And then specifically on the securities book, how would you think about that relative to assets kind of near or longer term with the current framework?David Turner We’ve historically been in that 20% range of earning assets, and we don’t see that changing dramatically. I think we need to be careful. There’s been a lot of discussion about shortening up maturities and things of that nature. And we need to be real careful because there could be broad implications of that.
The banking system is a big buyer of mortgage-backed securities, and we need to support the mortgage industry and the housing industry and consumers that way. So, we are forced to go too short. There are much broader implications to the economy. So we’re going to be careful of that. We’ll see what the policymakers come up with and we’ll adapt and overcome as we see fit. But right now, I think having a book about where we’ve been, which is a little lower than others, I think, is the right spot for us based on our — again, our funding profile. Operator Our next question comes from the line of Gerard Cassidy with RBC.Gerard Cassidy John or David, or both of you, obviously, Regions has derisked its balance sheet dramatically from the ‘08, ‘09 time period.
