SVB Financial (SIVBQ) 25 Apr 192019 Q1 Earnings call transcript

Welcome to the SVB Financial Group Q1 2019 Earnings Call. My name is Erin, and I will be your operator for today's call. At this time all participants are in a listen-only mode. Later we will conduct a question-and-answer session. [Operator Instructions] Please note that this conference is being recorded. call Meghan the turn now over O’Leary. to I'll Miss. you may begin. O'Leary,

everyone Erin, us and you, for thank Thank you, joining today.

XXXX about Our President Beck, first be talk Dan other the members our and and of quarter joined our management by and CEO, are Greg here Becker; financial will results Q&A. for CFO, to

encourage release this on at We the earnings to be making to call, call. We'll differ this svb.com. actual you forward-looking Relations may section current applies made statements disclaimer earnings Our during the Investor is available statements and results in forward-looking equally website in of dealing release review our information, materially. our which with

call. Greg occurs day turn late manageable I'll of of the over And our to SEC like and timing to of what include our addition, we most the calls the our to call will We it those our issuance more measures. I’d know non-GAAP to this reading document commentary the GAAP of make the in filings our given earnings be call long the release. financial that reconciliation format about hope with with in document you. measures, will quarter that the in found to that beginning prior of earnings on Q&A and the remarks is of couple conducting for little discussion start In may to change some to weeks our for the call in you we you our we in may rather during review release than plan references Information July, a short ask as our before then conjunction a mention including our earnings Becker. Q&A, intend begins prepared issue measures, immediately. We a we now,

$X.XX key substantial liquidity trends thanks venture core private an of a delivered These XXXX: continuing we had on $XXX of bearing quarter. strength shift of earnings the results the related momentum strong and and per environment from continued reflect loan public income excellent in joining net quality, saw fee strong initiatives share the in continued deposit us our capital you, stable XXXX of warrants interest interest markets. income VC and the client Thank driving some and gains healthy net of everyone success added put We quarter our first and million. the robust of core during in positive pressure Meghan, investments. for and in benefit today. Well, a and plus credit deposits We business, income growth, equity

clients’ liquidity and liquidity Our exceptionally strong. remain

for first are to in Highlights perform well XX% including the and client included minute, interest the solid core fee will healthy funds fee business raising income growth, in in full loans, we Dan growth average our SVB momentum the revenue year. And are our of quarter outlook seeing continue across of of about and talk as million pipeline. activity client We to in income growth related annualized excluding $XX X% both bearing a Leerink. core XX% and total deposits, average

investment of XX%. investments higher saw equity of on activity related million notable We return from and a and by fueled VC finally warrants a $XX also and strong gain exit

quarter most momentum XXXX. clients a in following maintains first Our on the Venture a good in decade and starting second and results innovation investment XXXX is continued fundraising investment a numbers speak the invested, our strong recent capital of XXXX the in suggest $XX.X record the quarter broader to industry with off footing. that billion health of best

dollar VC firms plus somewhat to showed funds strong the lot raising billion momentum. be expected first in expectation in money resulting will markets number is are healthy in investment. a looking XXXX Our given for the the of follow VC Exit and it also that of we fundraising currently slowed suit quarter, that

Although IPO pipeline and to partners of IPOed been QX number up to large public liquidity IPOs coming were go for in create has off the have shutdown, the expected but slow unicorns that filling start invest to significant to or a due preparing to is limited government years.

and in we're startup the in us the they startup and in the SVB, continued even expected nearly better growth. the particular finding we we X,XXX the to conditions more the remain of Canada ongoing our and annual At retaining released on XXth underscores year Our on China, this than challenge talent. which business our UK, and on in The investments executives seeing focused scale last majority outlook, February, we markets. pronounced positive surveyed of founders support told uncertainty top U.S., our geopolitical despite trends execution

enablement growth our investment our discussed systems We growth, We've Creating experience platform, and employee areas. through continue progress to in to our processes driving before: make transformation through including support and options enhancing systems healthcare on recent digital and the systems expanding throughout and risk tools, of SVB global richer business five in offer processes their key mobility, help the improving across investments closed a bank the investment robust We SVB the a deepen a propelling management which by client space, we quarter. purchase in leading our early capital them client business. Partners, and One healthcare lifecycles. Leerink, can now relationships Leerink, in believe significant investment Leerink first capabilities was our will

is with SVB start. a Leerink to Our cross-team collaboration strong off

experts investors shaping the collaboration connections and included: highlights companies, the of events Annual and joint together our Leerink’s these Healthcare Bank SVB in brought the industry of Both from public SVB China. new Summit, Some of of referrals. trends the Leerink, future SVB and attendees examine venture which Conference, Xth quarter to between in Global Leerink institutional China X,XXX Silicon resulted many inaugural healthcare Valley and

teams. stages, banking So we’re across early banking the we're excited we're still seeing in the and about commercial our investment momentum

with high over time. growth. balances private well continues strong investments loan XX% to growth bank do platform sciences equity to pace banking and contributing activity and growth are have year-over-year grown there Our and particularly with XX% life of our performances with Commercial by XX% commercial a by strong

with As XX% strong you plucking bank by exceptional, an funds the growth has year-over-year. environment and faster $XXX at increasing been due XX% income science SVB year-over-year and commercial quarter. to total mark been year-over-year. have XX% from fee first know, surpassing bank the Technology grown Leerink. pace funds growth exit growth commercial And course, That's strong client has in without and even clients’ funds client life core in fundraising the of fees across platform billion the

front, order growth. and Earlier opening the we month, in drive to international we On of invest our in to expansion branch this the continue Toronto. celebrated Canada

Erin population Phil as and capabilities, operations growth We veteran in of expansion Moving We the of will our year business was and Dreyer, and in Banking this and is global Chief EMEA UK, of of a clients end, ensuring SVB needs our the at on quarter, makes increasing our as bolstering XX their services, during and our retired her grow Phil number teams Israel. President our branch business. our Mike to a of a and him our in ago our and the This understanding named operations. to that in we of of the to economy our as forward, the experience diversifying appointed better aligning phase to this investors Europe instrumental in Head Xst. oversee that Europe UK Officer, Operations across led on UK and clients years our organizational in of and of most SVB’s leading clients. His launch rapid announced six an the to meeting serve areas Platts, Canada’s recently innovation business, Head who needs To on challenge meeting and team changes. of in to there. deep continue and leader the support of Europe growing entrepreneurs in every SVB’s replacing important our continued their Phil establishing Branch EMEA growth key recently we growth growth. Part been ideal stage to of innovate has leadership and succeed week, April be leadership Relationship of brings Erin our resources involves our next of and Cox as our our focused focus investment region. alongside the in our management

under Head will has We Capital. Technology also SVB’s Banking its transformation. $X.X group, in China, next which of management as appointed John growth phase and SVB former billion lead of President the of John

continue of As ecosystem including for as practice. will of be SVB early stage our his to John the part Capital business part at responsible role,

believe and over but current we'll demonstrated together businesses factors best science all more leverage under practice Banking Technology last continue competition rate to control, will competitive and collaborate. enable Competition conditions. vibrant we sciences and to Dave our Bringing global just intensify we grow and The game clients. positive five goals, And segment challenges life move results, can't in our cycles make the current under traditional led these and the continued them health the market the banking. ability the developments, our the sources, execution and execute in raising practices addition named of evolving also to networks our keeping in and faster, and of and are raise a move The not all continues to most to economy. Dave, there participating the share of things to what of have on cost from rates to better part that's the long-term we new Finally, markets variety of healthcare allow life Sabow, me for the optimistic entrants, remain winning and healthcare market and a our this forces years, environment effectively, these the more from our future. your and macro of who’s Head do. even environment you about in We us will of outlook market. competition many strong remain These and our rapidly are clients priorities well,

success our long-term innovation is due on Our focus and to innovators. partly

us necessary. conditions long-term. turn our Thank the flexibility will financial capital will you call the strategy approach enable their position to and at believe and to in give These long our us difficult very continue and to XXXX the Beck. changing and Our market grow our to business unique clients’ in these success We view of the experience exceptional helping as who our are our to it's our of succeed our elements recreate. is employees, are and culture they measure and to but success. own believe about heart best over adapt I'll strong CFO, clients especially Dan differentiation as due to markets, now to We our and good outlook feel over and focus, XXXX our

Thank positive the performance across conditions. and afternoon kicked you, segments XXXX We good a backdrop with off all market profitable of of everyone. growth Greg, continued against strong featuring our

deposit Our remains are growth succeeding. strong our story initiatives and clearly

Although our also we expectations for performance our raised based fee XXXX interest we outlook. lowered outlook higher if is our expense and lowered of on have the lower costs, impact and The net securities financial that our portfolio outlook not expectations on changed. deposit our income rate income net overall

to like the results talk to included QX. quarter's I'd The about highlights. following Now, relative quarter the

strong growth. loan First, continued

client Second, good client funds. growth sheet off-balance in and with liquidity deposits

as earnings related SVB Third And continued strong fee in line SVB Leerink, lending of the warrants client from finally, an securities. with fees despite income, results impacting loans. mostly share to in and as per and despite on higher $X.XX shutdown related recent investment fees to approximately core Fifth, increase Leerink our Fourth, investment IPO outstanding plans the well non-performing from and expectations. with in our was acquisition government our stable quality also positive contributed credit market. line which the expenses gains

Average with well sciences sheet. bank. strong by life our starting call in billion, as Now, or $X.X billion continued increased private in lines by driven loans get to detail, the primary private as growth primarily momentum X.X% we'll into $XX.X the and capital balance equity

liquidity well and funding although loan the growth. clients the New as client to as activity deposit as growth well fund growth success technology $X funding technology or banking This funds during sheet Average environment at to our $XXX.X and about to our quarter environment reflecting robust X.X%, client off-balance strong billion, to continued acquisition. funds overall remained due lending strong client total a sheet grew headwind growth. in by billion remain on-balance the exit Greg healthy was as talked commitments continued

fundraising as Our well bearing attract their bearing demand rounds growth on-balance driven of and sheet sheet excess for the is our was deposits accounts as cash. interest result trends by stronger and larger interest on-balance continuing initiatives deposits of deposit for to client

billion, slower was growth this equity increase, our strength average $X.X or at by $XX.X billion. offset increase deposits interest an X or Asia. a X.X%, that The of total $X.X by period clients by X.X%, growth increased an distributions $X costs quarter sheet to private remains from $XX.X drove low non-interest our billion, of $XX.X bearing deposit Despite Average points X.X%, leading XX to funds end of from client in our to billion, lower in Average of points. and off-balance cost with On increased by continued level. investment momentum deposits Some basis, industry coupled bearing basis this basis our total deposits to deposits billion. deposits increased or growth billion.

deposit compared drive liquidity. enable costs expect remain growth strategy our strong We deposit continued will with profitable believe to organic peers to and us our low

interest Turning $XXX compared fourth primarily the lower $X.X in two to by million statement, income strong the Reserve shorter billion the to million interest by benefits loan to In the decreased due These sale XX our our on rates The to of lower were fewer higher the points, and loan by basis cash growth margin partially first interest quarter, first short-term and borrowings, and and well net offset costs of higher Federal in the reflects portfolio million. flows quarter for of to income meant from net offset available from deposit borrowings. increased loan securities costs. days quarter. to increase as securities the portfolio of X.XX%. income yields balances. portfolio impact securities growth This Net as our $X we as interest well higher sale as the average benefited investment cash earning quarter and and balances higher repayment deposit by due fund of by approximately short-term loan repay $X.X

Now stable higher despite remained let's loans. non-performing move on which to credit quality,

reserves $XX was to an losses trend. low we primarily life our exceptionally specific This credit for $XX which mostly and portfolio, quarter. $XX million, believe two of the non-performing in are do amount any provision Our in million million science to new new indicative compared healthcare not fourth attributable loans reflects of

We of also $XX.X of million non-performing and a the quarter were additional million quarter. second to for of in the non-performing $XX.X the decreased loan, fourth partially XX the one first for compared which basis million loan also reserves and quarter, our loan $X.X had million in show XX recovery points end resulted by recovery repayment balances growth our $X.X Since million lower principal low in the will loan offset to in end performing have large by $X.X Net period charge-offs of reserves portfolio. basis interest. or points results. at This repayment or due up

$X investment our in on and banking non-interest revenue warrants, from quarter first valuation $XXX Now, strong our and our million million growth by income securities driven net This million valuation investments sales venture million gains and income of gains as remind we'll to lines. equity core variety prior unrealized warrants SVB investment fluctuations, non-interest market driven venture of Leerink I updates. $XX factors fund volatility, one primarily commission in and turn lockups. to restrictions valuation to $XX includes gains portfolio. gains subject including were on investments interest, GAAP Net also of and increases SVB such Equity losses and and This quarter. reflects Leerink primary non-controlling want and you $XX securities, of increase from million fee were income. healthy was sale capital investment capital related that from primarily the are million $XX investment public to our a at and compared of the in warrant securities from related by investments. $XXX of our in gains healthy million, gains strong

markets SVB million. spite fees by to in the composed million X.X% and related as $XX investment and and income $XX million and core to was expectations aggregate investment fee performance strong client core $XX shutdown transaction. M&A other $XX equity rates IPO on in came $XX $X well SVB revenues of from our The income underwriting of with and million commission. in excluding million our half and in investment in investment million Leerink primarily income as through in fees. increased the of core million fees card from revenues fees the of were and from higher balances. securities, gains excludes Leerink public increase The These $XX results included credit first fee line in $XXX lending fees Moving Core that banking approximately in million the income banking quarter. fee from totaled higher

million additional cost Now less $XX turning the to $XXX by Leerink. non-interest The reflects to fourth down SVB expenses lower were increase slightly with the X%, was Non-interest quarter. SVB due professional associated to $XXX than expense million compared primarily expense, of excluding Leerinks, fees. expenses, in service million from

our Moving at by ratios company capital basis during strong. points Risk-based Leerink. to decreased XX capital, to of acquisition SVB the capital the ratios holding the quarter approximately remained due

and leverage bank capital X Our increased and to provided the strong to positions. flexibility basis continue XX liquidity one points feel by Tier we our X.XX% about good will by ratio

the share. $XXX average million and of have Turning to stock million first our shares program the used repurchase common to of X.X stock repurchased since the repurchase $XXX on per hand of of an stock million our price of $XXX in cash approximately program, we common quarter beginning at

changes with a expectations Now, at overall details remains which no to our few net to I our outlook, upside mentioned I'd results in start of overall positive financial discuss downward XXXX. in XXXX that for change the the like as

to growth high-teens outlook mid-teens. the net interest our This year change income for factors. We are from reflects two the full lowering

given First our expectation securities flatter is curve. market lower of investment for rates the purchases yield

part deposits higher deposit lower balances Second, in non-interest coming we driven bearing expect by of QX. costs out

as of succeeding. to our addition, order meet strategy, That a part in needs. strategy our is bearing more we're products interest In deposit deposit adding clients’

We rest deposits are the forecasting in continued for bearing non-interest growth year. both of the deposit and interest

result a majority from average basis these factors, will adjusting by accounts. full deposit and net bearing outlook expect X.XX%. interest related to Also XX of we as we’re trends, margin our points our of the X.XX% to come growth However, a down these interest range between year

plus outlook low by fee increasing trends SVB to increase stronger growth income balances core excluding high-teens income the quarter our categories. for SVB across from was primarily the driven side, other With are core fund On we in the strong Leerink. core range. fee growth we and client This low XX% the fee off-balance XXs expect Leerink, first

of for strong Finally, associated SVB excluding impact low-teens expectation our net we and outlook In growth interest costs, and lower first services, portfolio we’re compensation in our expectations in from while with professional related outlook light performance are non-interest decreasing closing, and pleased lower quarter costs deposit the very expenses Leerink. expected investment higher opportunities rates the overall to mid-teens from there’s with our are lower the intact. our expense much and from common purchase securities and still lower

do retain do deliver clients to We we'll growth. and what strong and for profitability we long-term right our continue decisions to need make the ROE and to

rates the thrive potential lower ahead near credit year position as and future. the their in ourselves we stable for in clients growth solid and markets the even continue to Our expect and we

see, remains our to capital Israel. plans. believe and to growth adapt now, on conditions you ample focused can and open outlook growth. you. necessary liquidity And the And flexibility as ask remain changing Overall, Our if we Thank on positive to Q&A. execution operator flexibility investment to on our strong and give and remains expenses the I'll our us we our manage

from Thank with you. comes [Operator Stanley. Instructions] line And open. your Ken is Ken, Morgan first question Zerbe your

Good thanks. Great, evening, guys.

are Hi, How doing? you Ken.

bearing flows, of the interest success to looking well, I I and you're start having in at Doing non-interest guess off bearing bringing the very specifically bearing. deposit you. terms the thank between relation Obviously, wanted side, – good are about sets? but going into or the outflows? interest is at two the bearing very coming just Or expense customers they of that are customer talking we different non-interest in Thanks.

am add then this Ken, Greg. start onto and is will I'll I it. Dan sure So,

So to right, I think this it's which important note. I very think you said

We that of client are amount inflows fortunate right. incredible have an client we for funds,

a $X.X average on basis up an look at billion. up – we're end period billion basis on $X So if period we’re

right. So bring there clients is good that momentum our and we're able with in to flow client

So as it a and concentrated. lot becoming is we this more cash of saw

So the look are years, at over amounts. of so been number there the have there, if there than out fewer bigger dollar financings you

sheet. a And excess us off-balance or so dollars that to choices for of cash obviously they get sheet what in it on-balance off-balance we comparable cash or that get to when should sheet. to that's direct got did the yield be come want certain we means in, a It's pay they direct more And to going and excess yield. you've should it can

we sheet. the it choice made balance a for that yield the that. more competitive to wanted onto during so, quarter that have we have And more to for drive we And that of

kind there think of into an the amount but have starts of we fact organization. funds incredible it is that background, that's client flow the the that So with I coming

Dan? So

I'll that. to Ken and add Yes,

attention the the from what as China Asia outflow the Europe business slower our to an perspective we a happening we Brexit. some So were related we’re distributions quarter of trade think to from somewhere to well saw And as equity in inflows our funds what's and non-interest lot our private tensions paying in business and bearing. related and growth

close we're bearing into to our What to sectors. new coming and we're primarily other business interest related more paying is So technology attention flows from seeing that.

bearing of out flowing to and in distinction interest non-interest So there's a bearing. coming between what's

Got it.

not is groups They're they my just sounds customers. are you're understanding of non-interest cannibalizing not it right? they're so necessarily current people, different like two – your I – Okay, correct? bearing If

Yeah, that's correct. That's correct.

over all negatively $XX fairly of shutdown is by at or commissions, the million Okay, rate good that of perfect. And fees that in think to of effected a run the the few obviously then about with $XX Leerink, the million terms next quarters? government and

So, want to but I on and they Dan this shutdown. considering is an job it, Greg ended the incredible think government up may to doing so add again –

And they what strong first a were deliver were shutdown. kind of would would quarter, in I surprised so expected little came I with how say, out it given on we by the the to they which track say government

the team back amount jumping for So had on deserves of a when first it during market credit and open huge some the listings quarter. the did great up just they

The does tend better first quarter. quarter to be a higher – a

And the fee income so, is think that SVB fee just that would far as I overall I guidance or into. the gave back Dan go to as income Leerink baked core level obviously

to we going continue then I question. we're Okay, second expected can last for done just money I talking the still if you some helps. that you into that of a first see the potential quarter? did paying of Or with quarter. LPs, about just out into you general do mentioned which one think to sort the think partners And Do close being that? to Dan,

Ken, this Mike is Descheneaux.

Mike. Hi,

nicely of to board strong like as as and government UK Pretty across in to PS even looks as coming strengthening the shutdown strength know end are life It well March. when the impacted, much even you world too. certainly look sciences well life back too, towards sciences the at was the the we see in we're things be seems starting

positive that well. in feeling the pretty on of good, in going kind earnings the think see people releasing outlook looking Street forward. I really The So you here And that about as the economies definitely

definitely, So, looks outlook good. the

much. right. you all Okay, Thank very

Yeah.

Bank your Okay. And question next Ebrahim Poonawala of America. from with comes

Your is line open.

Good afternoon, guys.

Ebrahim. Hi,

deposit. Hi. I just wanted follow on to up

bearing deposit what points correctly, average XX:XX of the Dan, the you the XX:XX, recall I be the end last total XX being talked you jump still we've to Do cost bearing? costs. for points was deposit heard basis seen Clearly, deposits driven growth bearing basis big XX non-interest expectation the basis about being So on interest interest I year. expect quarter think by expectations? said updated you if to a period growth interest bearing? And I deposit versus What's about in

Yeah.

it. we So bearing. based at overall If more heavily started be is weighted we towards I'll overall year, the deposits that tackle how growth to average the deposits interest on expectation average, going of much are just my look

would will So it going say bearing majority just putting At the mentioned, we're the bearing. our – some look a non-interest be percentage be Mike second quarter. I in we're that deposits. we growing already interest what's here there we And to average on have same the at as positive we on as would seeing point, expectations happening trends

So see quarter the what of towards It's non-interest interest function just really bearing. a growth driving will in we in first happened of that's bearing. more this expectation

And deposits, cost of thoughts? any total the

think it'd approximately XX – to bearing is The happens obviously basis say total points. and cost subject about be we of this on variability deposits if we based what it but with interest deposits flows,

saw big pickup QX you as as what see QX. a So between and you of won't

fair shifting yields, so well. variable That's the asset as loan about earning build side, rate. a helpful. What's there have expectation, the cash the up think XX% you amount of to asset is of And just book was

what should yields talk well as sheet? balance expect loan we the If terms just of in as of in side terms you just the can to of

Yes.

for we a forward, is we take rate if overall see the look of much yields. additional hikes So, on loan at going the obviously progression year yields, upward more that expectation the won't without remainder

When are think It side of to year. made with the XXX there the five-year small point see comments, on of and and over more XX amounts might that last this the rest a days, the much timeframe. treasury remark significantly the some we the loan in the the between a paying portfolio, about here in as attention We yield I competitive even days, my decline over environment margin has obviously lot even in and compression the XX changed basis last environment.

at dollars ample reduction invested interest would to income is driving have dollars of net a part lower be rate, which we'll So, those expectations. invest, the in our

up, down? was be similar to Right. as cash expect a of go balances, levels $X.X billion, the those them percentage at assets But you which earning

billion would we $X anywhere expect billion $X will Yeah, fluctuate the to between that year. throughout those

it, you. Got thank

Yeah.

question with comes next open. Jared, your your Jared line Fargo. from Shaw Wells is And

I rate right from the sheet environment that growth more income on-balance When thanks. sheet look fee from for of funding alternative term? EPS. stream positive Hi, that now the to investment in guess, longer sticking you increase trade the balance off-balance is deposits. a with to the In to the Or at on-balance versus is this that? near-term sheet net sheet

Dan. And Jared it's

perspective. So, it is EPS accretive from an

these as get along our incremental but ancillary by relationship mix securities rates margins. is of we much that what rates, and deposit makes to can benefits very deposit what an put lending to a the it's well. lines additional perspective. an of is think and to continue offering the obviously on and EPS continue offer these because at sense And important we When investment makes obviously Even security, us it those of for true, we accretive, incremental to the doing we're us. from all-in obviously clients but the if in investment if about look types So it albeit, benefit is lower it a from to only wise things all income fee fees we at we side, sense do not

community investment for push any market the of strength sponsors a more of then sense shifting And thanks. of given here. the on the Are feeling with a of PE companies? the tech stable of to horizon it, side get their exits, to keeping comfortable for VC, you the do the invested over urgency they the Okay, of part

Greg, Mike is and add. want to I'll start, This may then

don't I going going looking to that's I urgency of don't I out feel they're sense saying, and opportunistic there that certainly if anything looking be or – any think like is at. the markets to that, it's in they're open, – heightened be there.

always I got are see and IPOs, they all, it as think coming. to I some The we can definitely think opportunistic be more receptive opportunistic. markets not the continue you and market of to with the

it good open. as and see So, they're I stays we'll looking time think, long that at a how

it's know be and now right little As bit looking tends but healthy. a you the to fickle, open market

in market as is I be really The that saying clearly for only Greg is a XXXX, that. can was views really, thing add healthy strong would year a everybody

all right is don't they now, get that’s as out any than I reaction. but think No, natural there sooner later. sense doubt doubt can happy absolutely be just they'd urgency of a So, no know, we if

money said have to the about excited seeing Earlier opportunity. with them guess quarter back additional very system. put an are last then you the had talking that they appetite were sponsors, And I into investment the from you that

that money reinvested is the going system? the back still that that are the the getting to So, into from back they're exits case be

saying hear are telling capitalists and – for market Yeah, a what the venture obviously as a have time looking investing. venture be out sure I in points just feel invested validates and still I bunch engage think, We $XX.X are have We at they're but active. good us, this they're it's very numbers with first quarter of that we we that you of billion to standpoint the they from capitalists that. a data in told the

what and validated is number they're the saying validated. So

from money valuations some of put capitalists I think more how are directly are that there even – stories many that I to couple out there's a really in heard they're they're money, feeling high this looking environment good, up, behind quality companies amazing it. surprised that and is still venture

market. I think, very, a it's still very So, good

powder high Absolutely, so-called and from are level. think you also VC about when extraordinarily PE that dry both and

of liquidity, and go them plenty what for So, cash there's to plenty invest to of paid get do. they that's

deploy So, they high-quality are to it definitely into looking company.

and would are too. I boy, turn they're looking market think, it down, believe a so all firms that really look onto buying They're if does to add powder pay ready hearing to Yeah, we're to I with the as less. do could that going see this dry a at I it, Now private downturn, equity I saying, that like opportunity.

I it to think, going think, I of interesting capital, the more many what's capital lot a we’re to balanced, see up all and years in today is venture So, side. the downs in because PE ago would even venture activity been it a the when downturn, we're right versus portfolio so was of but, in tied now, about have was what our it the that

thanks color. Great, for that

Yeah.

And from your your open. line with JPMorgan. Alexopoulos Steven next Steven, question is comes

everybody. Hi,

Steve. Hi,

appetite up market the at lower grow have out, is opportunity would money the your to start, and Dan sheet yield I raised wanted look deposits of sharply called reduced would I on which reinvestment pretty to curve have that sweeps. I on-balance so thought securities sort the when given

So, What what here given to that to to be emphasize shift seem rate me. clear not drove strategic – a it’s the drove the reinvestment down quite bit?

would was that XXX been, the better what -- reinvest is ago. what days we this money it could would have Greg. at at off Clearly, if been we So, have

little hard think think and a working not so are longer-term. We to short-term bit

accretive the go – view the the when it something, to were decision when the if for go it we it it we could our money at on-balance us first take successful end many, question on it focus so be to made. it really really was, that's could coming successful closely many what was you sheet, it's years sheet from we balance was of at let can quarter. know it. would And sheet the as We off-balance to bring we at and on bring And watching sheet, this is in, as the off-balance but it

we're that a so, options have should product take need make of going is to sure to see and we're see off-balance be possible offering many it that what as at the going be to look we to and if watch to sheet. as more And a balance

standpoint. that sheet. we sheet the to if at quarter return, onto off-balance a of a going we that more great drive kind lesson direct from decent we're What our was of balance can getting in think it So, is not proved this and I we're

much we it and the keep how think how really that's balance So, want on we do longer-term sheet. about to

to would decisions remains it a a look the from yes, more Steve, thing low. much basis, is cost at thin add funds incredibly total if of but marginal you it's those the I on only spread all-in perspective,

can at liquidity low continue cost. very to we a drive So,

start optimization off-balance that things or to But liquidity in some we right for and on shown drive able Greg that talked of evolution in start the either balances sheet. decisions about and just we've the of optimize good the loan and the do make part when to above to us and that's we'll grow us deposit As to way the to to of in – power be and with how progress. of drive drive this is franchise to

are those? a And now be they increase need or to where be to you there see to competitive rates need where sheet the do off-balance further

So, we're pretty Steve, close.

think there some drive small I a other changes just product that incremental be of couple that cost. may

you quarter over small related may some two, we're expect maybe next or to that additional rate see there. that I'd the other increases there but So, changes, than

what Okay. And understand then seasonal just better. distributions quarter? the private this Can you equity all of quantify we nature the can the first were quarter

In of total private at too hard we’re seeing look kind get what equity if least specific, we data. dollar in over plus to is at billion it within for the billion. was range $X roughly It’s but balances a it our

for Okay, my perfect. taking questions. Thanks

Yes, thanks Steve.

open. next from your Brett Rabatin Brett Your comes with Jaffray. Piper question line is

Hi, good afternoon.

Brett. Hey,

guidance is? how of the your and why a versus income down to you're and don't building IPO don’t business update understood the fee about sort government your your market? And of terms Why kind really on of in despite what cream around mentioned just just did you're the you thinking around normal the IPO I you what the of in And guidance go the just companies, some what's what shut that be might expecting of lot. bigger guidance kind sure Leerink back make well being into market of expectations top the you

so business a we were off quarter of it. it best They then on seasonal at said and a in their being for year backdrop a basis tails a we this at shot SVB look markets their full it’s Brett as quarters have a the left generally did Leerink Yes, first guidance the good, the bit. of strong also point part But as first two unchanged.

seeing we back seeing what card felt in made banking you’re Where is sense we're transactions, fees leave going it So the core that business was. the where to it really improvement FX. the to with in

at If quarter, than actually we number of days lower quarter. this you are fourth the it’s look where

better on that look you that apples-to-apples at basis, in an business. doing If we're growing

there. big So the core is fees deepening clients driver our and with

just color flat is the appreciate the I funding. there. and then thinking that the you've And dynamic have with guidance, yield Okay. you curve the margin about got obviously

of it Just relative thinking as might exit as the where you low curve a through year, obviously about below but of see so that now we end the like the it's seem guidance I about guidance XXXX range. Any progressed and would we margins think how thoughts the the the mean from on just kind were you about XXXX is. far thinking guidance, yield

in at why rest well in and funds the substantial the quarter. the first as deposits on we XXXX QX, bearing interest-bearing seeing the pickup heading so as slower we're into with look into that's Yes, as big QX quarter interest of in cost second the

materially, So quarter second expect from to we slow that the down on.

we’re forward So be portfolio you'll slightly range. re-pricing re-price, margins the yields call the year. that. to higher are the and in quarter it continues above and going XXX And of much in That's margin low help rest as though from actually let's down the see perspective, a drive second even lower securities in the to yield incremental throughout

Okay. color. That's great I appreciate it.

open. question comes next is from line McGratty your Chris Chris, your with And KBW.

current capital that, to talk terms Can may the we you Dan be buyback or your to Great use to capital? additional the the buybacks complete kind at be with thanks. might a months. be call going beyond elaborate of in it about, could what pivot of on thoughts or you're of rate in six

have basis, see we head first. Yes year, capital On economy firms at so look on in up obviously how buyback. a the market the conditions forward go a And to as next we're wise. continue to we'll good into position based we’ll

us continuing that extent capital the we year And it the buyback, things where of growth think end that'll to are we've up how about. at and we'll look we be these for shown And this I to talk look we to first at dividends, year. this at deploy sense our can priority end opportunities then as actions, see makes that. or

any guess I Okay, digits. still you And base one, at think, I notes, just included think number great. assume color is on expenses, expenses, Investor kind my I'm Thanks. of single in high be then an the and I talked would your looking that XXXX about great. maybe case that I Leerink, Day,

digits, the yes at single is target for that's High for plan least XXXX.

somewhat perspective. was Leerink As a happening development market from that by latter driven expenses of were activity a it their relates to almost wholly that what's

look I'd I as bank where piece. the So we're that targeting think operations at

Okay, thanks.

Yes.

question from comes your next And open. with Aaron your is Aaron, Sandler O'Neill. line Deer

everyone. good afternoon Hi,

Hi Aaron.

I expenses last year, Sticking year activities. lot early the with level this guys these suggested end you of investment of guess the subject were guidance and expense higher through a for the undertaking of

Now What's changed brought down? bringing expense guide. that that down you've that's

scheme it's our first small the in of so change a brand Yes, expenses. pretty

a number invest rate continues environment. as facing flat especially to priority we’re Our one

downward rate somebody environment. been And saying had a

us absolutely growth, be For to able to we to continue invest. our continue need to

from So walking what investment. away isn't doing we're here

for priority just this we that had us for push is out. as lower natural on of And forward. also environment. of as outcome we professional services to to rate spend some sense Some one invest us a Again, the number just drive opportunities for made growth

you in kind the Okay. environment. and back that through environment previously rate and deposit we last And sheet side guess, what's then balance what going the saw I sheet capital the deposits was going when have. better balance about talked But to and we understand to the year continuing on of trends discussion, the the I leverage

get cash I interest invested, so during reducing but that more And book guys you got on historically more the getting focused goal that you mean of rather wouldn't not you've served securities margin. that sensitivity? and invested. your the the be two help And the were would liquidity serve assets to better income balance net much than a lot you’ve quarter, reduced And sheet, on by

the deposits happened those nicely talking fourth the what we us were securities during balance as lot deploying what at to the first the have into gives I investment is at quarter. the opportunity and that with quite dynamics quarter Sales we position then the of here that a of related so the about it just to second deploy really exited quarter borrowing the of of purposes the and grown say of this we been funds. Yes, quarter. cash end Since we're end first can’t quarter.

out coming out really you'll higher or of strong that. So is in growth of year just the see the deposits. is cash the of a function the quarter But balance

Okay. the and correctly XXX-ish mishear a on did clarity of say earlier to I that? half through be And then range hear you expect the today. margin just coming to the I comments year, you'd of your to growing down one back

is That correct.

Okay.

would that from think We there. that, into be second and XXXs out rang growing quarter although

then that's part or of questions. And of Okay. my Alright, of reinvestment reflective for you anyway, that kind that thank okay. taking

D.A. Gary from next your like comes Davidson. Gary, question Tenner is your with And line open.

Thanks. Good afternoon.

Hi Garry.

health what's made continues to the Hey. monitor in what back Valley's earlier a benefit? raised would I to reflected of wanted this venture industry for you comment I that's was to capital into the how larger positioning that and being to long-term? Greg, it funds translate your in go number of but the that lower And The also think of the happen quarter. idea a) means: industry, – – Silicon b) sense that as a

track seed not kind family were information. they But more And create from way late go at of stage that all today. money to when seed this as private does we and actually were happen all of institutional define great financings. the that at the a the the PitchBook We comes I rounds, look the to having all database up it’s from that Yes, you seed look from. discussion and players other it we can seed friends, and use question. number And financings

at bigger going beyond. companies. The of that the rounds down seed seed look actually the are you number the data, when and so more numbers that's And

is case, concentrated, could it's into. portfolio see going we – So a in though own share market highly is which this where larger fair because money our sources funding more My or the our up rounds. amount there and out coming belief there's be

a And X,XXX in so early we a that in again, we haven't level. stage. activity we another change the brought in our stage really seen much of clients new in early And portfolio

not captured. from coming in that seed it So there's implied money areas that being are

upside. our of other look into brought where more to be a I we're can we there and funnel expand to lot going think places at is, to And that to the a me, excuse lot organization, see we upside continue come. believe honestly, So, that as startups quite

I growth particularly of technology – QX, it's definitely when healthy we That definitely category actually in on-balance it’s at our look Well sheet in would predominance clients. the our deposits. was emerging called say the the

looking we that prospects is describing. and great again, it's in healthy future view It actually area. So good is the

of think, side to some quarter SVB and guidance revenue Alright, contemplated And quarter in provided thank on things. of that sort on And $X.XX annualized last think middle slow the $X.XX. of basis. I range this then that revenue you The particularly right Leerink, combined I dollars you. in secondly, the of was trading quarter on first a commission just

So things was than stronger investment of expected the banking two so fee the side. trading or side more

Yes, this on is what I'll we say that they're track Greg, start. I would with expected.

overall on including As closed SVB Leerink, fee income, Dan we said, the time core the we it haven't changed we we guidance. the last What gave for we're but in year. when up revenue came the guidance

haven't changed we said, Dan as so that. And

despite that up ended I government we up would making up, the actually their quarter end they shutdown bad think up was ended the a the first occurred their what government our they when shutdown. numbers believe quarter actually numbers is and being hit comment

positive. we said, a as big very, that view we So very as

on they track the net-net shutdown. So out net are despite all it when you government

Okay perfect.

is question Long David, with David Raymond your comes next your open. And from James. line

moving what The newer everyone. on to a extent this in sheet afternoon In bit you're same maybe can environment, still off-balance off-balance quarters. that the we've rate you deposits? higher, Good earning the still not prior saw yield expand sheet

Mike this Descheneaux. So is

one that bit came yields on were of basis points. of off-balance the So the north other Predominant see growth in tick QX. basis a you little up the XX amount a did fees in which our sweep account, point

So bit are again see just and a doubt. on coming yes, the definitely from. it you again, of mix no where volumes there, a lot the improvement depends of little some But slight

Alright, great. Appreciate Mike. Thanks it.

next Tyler Stephens. Stafford open. question your your with And line Tyler comes from is

the for this want guide expense the I to start correctly. thanks on to understanding want and make just afternoon I I question. sure good and Hey, am just taking

to guidance the you're you excluding maintaining the lowered Leerink Leerink. expense the mid-XXs low including expense So but teens, guidance

So to still are if grow expenses the guidance total you mid-XXs? actually are expense expected lowering

much total Yes, their that's of the size the is way number. at bigger to it look and expenses, Leerink with obviously a

exactly down when end the So with on to get would this the levels at bank’s taking of including lower total at how sense focus a Leerink look that expense much be range, of it number of at we change and day range. expense that we're the the bigger end

driving what's change, number at all the So the there the be is in the at bank first end lower range. majority of a that the change. look would But that's of

The what is lower mid-XXs range the of saying? you're end

Yes.

Okay.

with So lower no even of that at the coming impact then guide, NII in is financial still from just there's the range, end right? net lower that

core combination get you that, of we're the plus the is to net fees impact. on and of expenses What increase neutral saying the reduction positive the largely

back the to And by for earlier just going or your XXXX? year that then XX basis point expectation is that. clarifying cost, of for thanks comments of that Alright, one for deposit end is full the Okay. the Dan

full is That average year expectation.

Okay, thanks.

Chiaverini line open. your with Wedbush next David, from question David comes is your And Securities.

business what so public based you've for of they do couple the and wondering, pipeline VC-backed that thanks. I the entered with you retain Hi, was of mature companies IPO markets? decades ramping up, seen the past after matter, over to tend the on

a perspective, ago this lower year But the of if a because percentage back what every from would to end. go you Yes, capabilities, can decade is from retained capability. our balance decade we so on continues do it I I'll Greg. say last the sheet can or syndication start. actually we over we what a do the improve

the were year, as the number we one. of We last middle syndicated were number at in market look done. you far as If deals

we of loans roughly So syndicated did $X year. billion last

our capabilities that at just look are very different. you when So

can than with scale was. ability a clients retained our up is lot better Yeah it a we more. our lot So

very That's much. me. Thanks it for

Yes.

is open. And your your from comes with Brock line question UBS. Brock, Vandervliet next

Okay Good evening. great.

wondering were that going could with some that, you I up also up? deposits square On the in if that slowing stepped was deposits, very Asia you those your commentary about which saw Europe foreign you could beyond and and around just rates the they talk strongly. about

it in $XXX on-balance this average was deposits, in our so just terms division would [indiscernible] million if of bit in you on up around around from the little say up about is $XXX foreign Asia probably sheet, So or the maybe EMEA and I a talk balance. million

was there what So if you're growth to. strong overseas referring that's some definitely

around something the quarters drivers was that gone rate two to to then material. to on pretty And sense Is XXX this since from likely the really think, quarter. stabilize? trying of I'm they get deposits? are Is have that, what foreign those, in there just I a nothing it

maybe Yes, I think an – you talking apple a about guys banana here. and

referring different you're which or to is sweep what than those particularly say Asia deposits EMEA think different offices in I is things. foreign and

So a bit little it’s different.

for that'll might to Dan want difference explain the be perhaps helpful go and so And you. if

Sure.

and our just foreign the different asset are our bank's from out deposits directly sheet. fit size, balance that offices they’re Those on of the deposit sweep

in in why rate And quarters? two Okay. step large the up

that One rates from changes the quarter. in we implemented that additional were and of is that there the reasons sourcing were fourth deposits in some population for that we

one sheet of in the increased deposits. on-balance So it was the areas of

by both? the back NIM rates at investment securities in driven and Okay, funding just that mainly in step redeploying of or the is that or guide it to by thanks. terms lower a down clarify QX, adding driven is also bit here, And of

of there It of money largely investment to impact some that some also work. is deposits, security back putting but

those it's happening things more largely but much on a what's So deposits. based with really combination of

you. Thank great. Okay,

Yes.

call to no turn the are like this to questions there would And more over at Greg Becker. time. I

everyone you. joining us. for thank Great, Well thanks

seeing to level growth that outlook of in really lot we the a for considering still our was – Just the with on positive see the funds to strength it business. first with sum Again of happy client a of kind down to and momentum to of for at rate environment, up, performance and Even see the saw. growth and we we're continue flat quarter the opportunities prospect XXXX. the see remain great

which take first lucky work want for feel clients we always seriously. greatly them fortunate success incredibly very their partnership, appreciate. and our We And with their and As to trust clients thank to and care of important and a SVB special to also our dedication our clients. place what and place our us makes work is is to a special incredibly employees, overall their take to

So and with that I night. wonderful a thank all of Thanks. you have

and conference. for Ladies you. Thank this you gentlemen, participating. concludes today's Thank

disconnect. now may You