We’re investing the businesses. The outlook Zach has shared with you, we’ll have continued investment in the businesses, all of which is designed to enhance our flow our earnings and enhance our returns.Erika Najarian Got it. And just to be clear, Steve, I was asking about organic opportunities. That wasn’t a hidden bank acquisition question.Steve Steinour Well, I’m glad you clarified that. I thought, you might go in a different direction.Erika Najarian Yeah, absolutely. And just as a follow-up to that, Zach, heard you loud and clear in terms of continuing to optimize the right-hand side of your balance sheet. As you think about senior debt issuance, I suspect that everything that you may be doing in the future would have lens towards the potential for TLAC eligibility.Zach Wasserman It’s certainly on the thought process, yes, we’re watching that development carefully.
Still pretty early days, clearly to see where that might play in, but it’s part of the thought process.Erika Najarian Thank you. Operator Our next question comes from Ken Usdin with Jefferies. Please state your question.Ken Usdin Thanks. Good morning. Just 1 follow-up on the capital front. Zach, you show on that Slide 19, where the current potential impact of AFS would be on CET1. I’m just wondering, do you have a rule of thumb if we kept all rates equal on just how fast that would pull to par either on a sequential basis or maybe by the end of ’24?Zach Wasserman Yeah, it’s a great question, and a considerable analysis of this. It’s around 5% to 10% a year kind depending on which year in it is which our maturities are so like a totally flat curve basis.
I’ll give you a sense, we’ve just read this analysis on the forward curve as of March, it will be 42% recaptured by the end of 2024 in a forward curve scenario is benefiting in that one of interest rates declining relative to [indiscernible] scenario.Ken Usdin Great. Thank you. And just 1 question on the asset repricing side. You guys have some fixed rate assets that are still repricing even though I understand how you’re slowing production. Just can you give us a sense on just what your front book, back book benefits are in some of your fixed rate portfolios? And have we even really started to see some of those benefits come through given where rates have moved to?Zach Wasserman Yeah, it’s a great question. We look at that very carefully.
And we’re seeing really nice step-up in loan yields. To give you a sense, new volume rates up almost 50 basis points — sorry, new volume up almost 70 basis points, back book up almost 50 basis points in Q1. We estimate that our loan beta at this point through Q1 is 37%, and that could easily be over the next couple of years approaching 60% so if you just sort of model the yield curve. So we’re a little further through the loan beta than we are at the deposit beta, but not much. And there’s certainly much more room to go in terms of loan yields from here. Just given kind of about just over 10% of the portfolio in auto, that turns pretty quick, just over two years. So going to get the benefit of that repricing and some at delays but impactful beta there.
And then obviously, the sort of the longer-dated loan book likewise is seeing a nice reset in terms of rates, and it’s about a benefit for us over the coming quarters as well.Ken Usdin Okay. Thanks, Zach. Operator Next question comes from Jon Arfstrom with RBC. Please state your question.Jon Arfstrom Thanks. Good morning, everyone. A few questions here. Zach, on Slide 14, that green line on the bottom, the last time you said, it took a couple of quarters for deposit cost to roll over after the Fed stop. If we’re done in May, do you think that relationship holds? Does it — is it two quarters and deposit costs stopped going up? Is that fair?Zach Wasserman That’s generally the expectation we’ve got, John, yes, based on just the prior basis.
Obviously, the [indiscernible], it could be a kind of function of the pace with which rates might begin to decline and also what the kind of economic environment, hence, the loan growth environment across the industry that would affect the competitive environment of deposits. So that will clearly play into it. But generally, our planning assumption is, as you know, which is very much in keeping with what we’ve seen, not only in the last year’s cycle, but in multiple recycles for that.Jon Arfstrom Okay. Fair enough. Steve or Rich, maybe for one of you. You used the term in the deck rigorous client selection for commercial real estate. Can you talk a little bit more about that, what you go through? Help us understand the type of work you do and do you think this is different than what your peers are doing?Rich Pohle I really can’t speak to what our peers are doing, but I can tell you that we, for four years now, have developed a process of really fine-tuning who we do business with in this space.
As you know, real estate cycles and you have to be able to depend on who you’re doing business with to support the projects. And so we really narrowed the funnel around the types of the sponsors that we work with. And we said — we cure them. We look at their — just how long they’ve been in business. We look at their financial wherewithal. We look at their liquidity. And more importantly, we look at how they’ve behaved in past cycles. And we cure them and are curing how much we’ll have out to any particular sponsor how [indiscernible] single project we will have to them and other metrics associated with that. So we — right now, we are focused on serving the core and that has served us well going forward.Steve Steinour Jon, we’re always disciplined in our credit.
And I think that’s going to prove to be the case as we come through the cycle. Obviously, pleased with where we are at the moment. So we’ll see. But I can tell you, especially in [indiscernible] where we had enormous challenges in ’08-’09 we have sustained a discipline here since that time. And Rich has been a big part a bit along with that, our lending fees.Jon Arfstrom Good. One more for you, Steve. I know this seems like a softball, but if not, I’m genuinely curious. But what surprised you the most over the past six weeks as you manage through some of this disruption?Steve Steinour The speed of the one on the banks was a surprise, Jon, faster than that we’ve seen that I can ever recall. And I think, as a consequence, it lead — the regulators and others, maybe a little behind what they would become they didn’t expected either.
And that’s why I think it’s a couple of weeks to go as we be resolved and signature as well. Normally, there’s more front-end planning. They have a chance to line things up. This turned into a little bit more of a scramble. Having said that, I thought the reaction that something from treasury and as just — it was just outstanding timing and fully appropriate.Jon Arfstrom Okay. All right. Thank you. Operator Our next question comes from Steven Alexopoulos with JP Morgan Chase. Please state your question.Steven Alexopoulos Hi, everybody. Steve Steinour Hi, Steven. Steven Alexopoulos I want to start. So on the net interest income, outlook, which has taken down a bit. Given everything is actually detailed on the swaps and the forward curve, as of right now, where do you see yourself trending within that?