Heritage Bank is one mutual bank wide open and maybe eager to make use of Common Equity Tier 1 capital instruments (a novelty for the sector) once the legal framework is worked out.Peter Lock, chief executive of the Toowoomba-based bank yesterday said "yes, we would issue", after providing his assessment of the decision-making unfolding within APRA and Canberra. The bank has roughly A$500 million in capital and a capital adequacy ratio of 13.4 per cent.APRA last month released a discussion paper outlining how mutually owned authorised deposit-taking institutions could directly issue CET1 capital instruments.Greg Hammond, the government's adviser on this topic, has completed his report and this is now being considered by the Treasurer, Scott Morrison, Lock said.Hammond, a director of G&C Mutual Bank, may have reached much the same conclusions as the Senate Economics References Committee, which helped stir up this reform back in 2016. His advice is likely to lead to changes to the Corporations Act that will foster access to capital for mutual enterprises.One category of liability not in short supply for Lock and Heritage is deposits. These surged 19 per cent to A$6.1 billion, the bank said in a media release setting out key metrics for its result for the year to June 2017."We can't keep growing at that rate," Lock said, "we don't want to."Lock said a slightly lower rate of growth in deposits would work for Heritage but clarified that promoting deposits was a function of business priorities laid out since he arrived in mid 2016 as a newly minted CEO."Coming in, I wanted to make that priority customer growth and member growth. The right kind of growth was what we wanted to achieve."Heritage Bank said its net profit lifted by ten per cent to $39.6 million, a number inflated by a gain from the sale of its financial planning business.In the media release Lock said Heritage "maintained its net interest margin at a similar level as the previous year, and had slightly reduced its cost to income ratio" though financial statements are yet to be published.The bank's mortgage business grew by 12 per cent to 7.3 per cent (on APRA data), while total assets rose by 11 per cent.Growth from here, Lock said, would depend on "investing more in our digital capabilities in coming years, both in the front-end and in the back office."