SVB Financial (SIVBQ) 23 Jan 202019 Q4 Earnings call transcript

Welcome to the SVB Financial Group Q4 2019 Earnings Call. My name is Adriane, 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 this conference is being recorded.

call Meghan the Investor Head turn Relations. now over O'Leary, to of I’ll may O'Leary, begin. Meghan you

Adriane. thank you, Thank And today. joining us you everyone for

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

letter of Our current Relations available section our on site are earnings release and and the slides summary svb.com. Web CEO at Investor

call be and made review which results disclaimer dealing making materially. forward-looking encourage will in to release in this We during We differ actual statements earnings statements applies call. equally information may you the this with to forward-looking our

measures in may may our some In including references our addition, to those discussion include be and GAAP release. SEC measures earnings non-GAAP in our financial filings found to of reconciliation measures. about Information

call will Becker. I turn now, And to the Greg CEO, President and over

joining and as review and we us Great. as thanks review as well year Thanks full XXXX. the outlook for Meg today for XXXX XXXX QX our results

We had of fourth share earnings per healthy net an $X.XX $XXX XX%. we are and to quarter of ROE income excellent of pleased report, million,

stakeholder at to scripted we and these details started to just open are have but remarks to do in results not call presentation the Our questions. XXXX letter of through end as going go the by

turn to operator the back to will Q&A. it that, the I So with start

Thank you.

Instructions] session. our Morgan from Q&A will question [Operator Zerbe And Stanley. now the begin We from Ken first comes

line open. Your is

global, expecting can XX I'm place maybe to like think what break sort good a number know to out wanted this Great. charges, there as grow understand help up, were comp, I Thanks. I just in bit off like that was stuff. little have, of to a nature of some just banking charges? start much evening and is in of higher to with your one-time the start people such infrastructure how was is growth guess, much figure initiative then, But than is, your that versus type just I expense your how unusual business non-recurring of us think like other quarter. clearly of you like the and I I everyone. investments you there you sort million the trying of Good most expenses, sort software digital can impairments

is start this and to might in. will Dan. I others want jump Ken,

So, issued looking preliminary off first haven't as look in moved our at total, overall, last just quarter. of we that we guidance at we expenses XXXX expense

the look to the XXXX. single in we’re in the those as expenses expecting be $XXX for still digits And for to we $XXX million first million high we So at quarter, expenses are range.

there baseline $XX right, you of we all driven and increase to mostly revenue from that wanted in that saw QX start that talk close as to Leerink about are performance. expenses, we first very just strong So, then the million was our quarter

the around continue We organization. items are impairment. also related development and as really finally, some platforms items the software modernize compensation our to had and well delivery as of digital and are driving further the one-time we And transform our and to that like technology said then, business

the message more talking with our investing that that initiatives. So franchise scalability about that consistent have and is we spend in digital been in

exceptional the the XX in growth it, increased spend is So, one-time revenue then and that this million at really $XX more look you if comp quarter for related business. XX around

$XX what I Are digit the higher does high $XX to be a it you this expecting. single clear million, same we little and quarter And million quarter, though, don’t Okay. That bit. but last than was that includes, because guidance the not last just this next it base know help were base your you to than higher? expenses imply expected higher trying base the higher I because was is the shouldn’t but expense year what say that the expense or total quarter is the way that next than, implying total now quarter year

the it. range expense we there's about if So within room give think you it,

say think that's on slightly -- to materially don't true. guidance it's from this increased increased. to But So I has guidance. that last on year it a

you. Got

Okay. And then I go if just may, sorry, last question ahead.

I but single within that was say, range. going to high still digits

Understood.

maybe question Leerink, then of very in had saw the to And Okay. quarter. you're say just by the I'm than good I I thought XX less compensation a for million, Leerink. they they terms obviously be going us -- but last expense

more us XX understand of incentive Like, earning of a their there's, just fully disconnect goal big And you're to it a I make that what dynamics million. XX it the around plan seems what there's of than like seems because versus the I part million, trying they're think help by I'm as please the in understand compensation. them. between paying bit jump like sure

Yes.

performance at what or XXXX delivered. this an through more be profit operating delivered of or at quarter What lower third expenses the an there they that what So, investment look operating comp let's would was is earned the operating banks. you'd is them in the We was at an end see other you're that than if gross a come quarter with that ratio call expectation and seeing financial at margin perspective margin. look the you consistent it XX% from

in actual the So and incentive in fourth quarter. fourth increased delivery quarter compensation because of those expectations the the improved

much. very you Thank Great. Okay.

question Ebrahim of America. Poonawala And from Bank from our next comes

line Your open. is

Dan, expenses. first Hey follow-up guys, one just on quick the

So of to you or and take midpoint gets billion expense X.X to you the range, XXXX for X.X% first growth. quarter that a you the the gave the XXX if XXX annualize for

to are of range for that XX XXXX? that lower safe or we be So or in going sequentially most of assume is to it all --

we earnings So communicated the this presentation. in

higher the compensation in also quarter, So seasonal costs. related first have we

that So the is in second comes quarter that the second cost the decreased the off and expectation is in quarter.

So that's right to way it. think the about

XXXX shouldn't guidance on understood. much I anticipate as we expenses we of I just a saw based in guess guess up And it. Got ratcheting Okay. in as

our That's right. That's guidance.

This prior is a talked caveat The is as that, only about we've years. is Greg. exception just performance-based in

bank's actually either meaningful overall SVB performance, way. in exceeds extent the So to performance Leerink's forecast a the

You digital the talked up could at we in year, over it investment the we're from may the again you, platform, take range in again, an compensation, outlook investments take incentive et cetera. we we may, right there. And see I'd we've with some some right in about. given perspective, now, point that But say

it. Got

implies of In or loan some the conservative being that growth you growth terms expect XXXX, deceleration do the loan XXXX, it a when you just part had amounts outlook you just on payoffs at you early growth is of loan dollar in seasonality of meaningful look your guidance your year? in of terms that

it. I'll This may start and to add want Marc is Greg. to and Dan

a that, possibility strong especially in decline period the there did most really the a we when end, in fourth you of that's quarter. is from So look So and Right? quarter that capital at lending. have first call will

in So a in to quarter higher you out get back again way than to it next in it that where stays, expectations level. the category. If [indiscernible] be first range if going it the plays stays sticks, we're

it's be lending as it kept But again, and same we because it sticky. not mostly call may capital the

first the just see So, how and watch plays quarter I guess out.

growth? could sense investments. as in get your sheet little would point this love how of it. people, of us like, think expansion translate investments, we Got to into the a just growth, XXXX does X bit Like Greg And on global function a to tremendous all a a stronger faster, revenue of you expect guidance timeframe to should we balance you sense If X beyond your a technology. investments what give of as just about year made

Yes.

So Dan to I'm to has few Mike said. the start, sure add I piggyback is that going to some going I'm on of things will things. want a And

our I to are would where to get improve products our incredibly service. I think And as isn't our about digital high when broadly marks think we where we need So the platform. and institution, people, give continue better us for an I speaking

a okay have to platform. have platform. need better We digital digital much an actually We

to investing that. business expect expect investment heavily you'll to in more in So or that you we're should see and us see,

early digital be -- digital to the releasing an second in expect We enhanced quarter. stage platform

there's so And there. lot a in investment of

using both globally. product But whether and is as and competition expand the domestically card a In we to also that side, to almost category every attention product you on in, of to back paying have addition, FX part as the that that way platform, if opportunities the push seeing we're we're the market look in the or investing it's that as well. we're on well, of at that

at at looking And we want it also fee defensive continue we're core our both a a So grow perspective an healthy pace. and to perspective. to offense income from

grows it a that's put margin continue but high. it isn't invest you the On at pace, and into And side we more to a as people business your money where higher globally.

long-term the You're for really growth. investing

it's the product global it's business. both So and

so think that's it, let a but Mike add And kind more. about to way of one I'll

Sure. think around I way of think are is client Yes, a the going lot the it efforts about our to experience.

products, was clients, you just our good about credit early when stage loan with clients all really friction have So about whether Greg whether that deposit about eliminating talking it's what onboarding applications, or the interfaces, making it's it's or think the experience. banking for onboarding user whether card and sure it's a

more more with time, also clients out helps out be with reaching scale. At to helps reach get It is you penetration. that out the same does to also able and what and

many you making because the small user as do require products in well know, they So they sure too. Again, segments, areas types different that's easier, you loyalty lot are making products. investment that at many of the experiences products global of deposit different doing like well stages too. again, see very us frictionless that cards different heavy and client's those have many all experience, rewards, different payments or the areas types with different ways serve our what of world more to life FX needs all programs, a business areas, as have we us we as payments different in On on

and for expanding needs. So our solutions clients' our we've been investing

to that. well. It's of think the essentially it going to digitization And moving continue so you're summarize our to and again, clients. I see experience that But pretty more with Greg

taking my questions. for Thanks

next question comes your JPMorgan. And from Alexopoulos from Steven

Your line is open.

a I with start question. with picture first everybody. Hi, big to want

as you other IPO I look we're the economy there to get struggling industry, When thinking if clients, of maybe in in right? not pure are that? about now multiple. in down like startup in anything type or trying of Uber a to and market divergence performance tech today I'm an were tech the and wide what raise tech think funds Lyft. companies or companies a like look really at seeing pure at your rounds then XXXX, that pretty old So that I But, companies was

try high the a I questions we down to the want are significant would that's what my it's Yes, bit for difficult as differentiated, to these companies impact. they I'll is I Steve, Mark, versus what we distinguish have model path maybe call basis think valuations? that not that regarding say impact hardcore to at would two something I least companies the the But I or a clear have add. get is the true. of whether didn't that one think business profitability. seen from growth it's valuations business think So more trend, and a our anything as think ones valuation start of was regular I'll Mike following And and that the standpoint, tech on positive way. actually and rapid little market also for those there I innovation. have reason. the Do work of I are the had didn't some coming to that think I that the get model be

you let's and our thing to a for to companies on. causes It more actually of is say, and and look to look the would bias, again, seen Because public see profitability, would evaluation, of if of think have that I we were type back I sustainability massive bubbleish which created have work trajectory take and business the fundamental happening. we my headed valuations continuation path, and that think head started a if -- a path we're gone at kind down to continue more actually this healthy

it at bit little look out air what market. I a could be over-hyped so of taking of an And as

get bit little to a it's valuations. So, harder

to profitability. have better right any But wouldn't it's change dramatic have You now. say I do a

quite been Yes. heavy rounds out well. amounts there the down And and any I seeing haven't either opposite. as

rounds. I about year think, down I'm a this probably a that about and round talk. saw much hearing of half lot ago, we a not really But down current year, around time,

thanks Okay. on And That's for helpful. -- then that.

quarter you'll the in XXXX. back stock How of back buy think authorization left you didn't and buy you have buybacks, the On that? do million for much XXX you

the this more ability the say to capital a exchange helpful. the stock common issuance but preferred equity hard expensive in really It's as and one the tier the of is whereas optimize We total, to have now -- some result.

say to what exactly there's the will an we of authorization. would of some but use the hard amount, expectation do So in that terms we

deposits Okay. looking average. Thanks. the at you And at of XX% XXXX? in trending bearing I the mix about do interest are finally, if that total see then Dan deposit look mix, where now

Yes.

full I basis, think average. on a we'll the mid full low year year sixties average in be to

deposit environment, that think rate I us call XXXX to bearing interest mix perspectives the continuing sixties the is continue. how trend. bearing in the you going trend it's let's it is could to a -- continue see towards think this I And generally to to more lower non-interest going from leave in

In bearing. offering balance Is Are in attractive get what sheet and more this just product? driving terms you of what's rates the clients interest the quarter that? than strong can that growth off

No.

in If you look you've sheet. taken towards saw couple movement at a our the especially off increase over rates, the client of balance last liquidity overall years, with material a

positioning doing balance the on you're at a on of who want Mike perspective is sheet products Now that some be deposit the And product a plus product. from to to that a rate. and about what talked balance more we're folks sheet attract features competitive seeing

about moving product and it's the it. So with the forward just the not rates. we're about how product, It's positioning

in Steve making line keeping if essentially because you're the the in out sure that right makes market, harder. market it a of going to market say a we're it would that I obviously with now, lot

range is really, the So certainly helpful. again, market really being

know significant fighting a amount are there's for going you If it. on that of liquidity people and just there

our fair getting than we're So no more doubt share.

great. my for Thanks questions. taking Okay,

SunTrust. next question comes the Demba from And from Jennifer

open. Your line is

outperformance you. of next on Hi, Can 'XX feel really in 'XX in evening. years? fourth in do Good What question the the Thank and are opportunities a you the quarter just of gone you Leerink. well? like expand on what's still couple

This Yes. Greg. look I at is XXXX.

our very the and little revenue would look And first that part the I it being exceeded, perspective, it's of than number fit our of but the together, there. for always it hoped being Leerink one. SVB from a exist actually team strong it would a to as would the But expectations maybe And year importantly, come slightly characterize advertised has I So year standpoint was from at would year. better we organization. cultural a I contribution a exceed more and say how as a even good expected

about So really, feel I good that. really

really the from cultural at as part healthcare positive bankers bankers again, commercial the Then to deals is because the bankers at And investment introduced science partnership health with that to collaboration are that at introduced of the deals it being Leerink. the fit life last care I look SVB Leerink connection SVB and team. bankers. commercial a banking commercial the being our and the is very the cultural a I between seamless that And a commercial very, at that look are sign. and look and

Now, No. working see what optimistic But me gives perfectly was it XXXX? forward outlook in in going for that XXXX. an I

market market the in about solid increase share of what bit, the we go going you to think but is they share have, steady, a target the little a in market revenue mostly they function is a market part happens of So share market after. the capital hold markets, it's when it think and maybe the

the be hope, better. even my anticipation is anything will if that collaboration my So

even bank over stronger commercial XXXX on side will the life science see XXXX. so an the And

want the would good I being very, as it say thanks I such year. just a And for at very really just characterize to Leerink So to team SVB partners. great

our those when add on when insight our Jennifer, really that and knowledge discussion just well the Leerink a -- back It brings the it Greg clients. to makes that completely team and maybe, of value you're in and And we best different for clients, insight table, about brings class. their adding having is, level that knowledge level is to with the discussions look to

been there's inside great quite even their from depth as our a think lot well here surprised knowledge. I with of -- receptivity been at SVB, So as just clients of

technology point fan banking? investment do At what you into and sectors the

great a It's question. Yes.

think life with start I sciences, part for by the are different most two I in that the that. there to What's interesting markets. is, mean you What space. at technology I'll look

small when players, at good the capital markets is firms. have a economics economic you really really They do for close bullish job. very, Leerink bracket SVB the in then, solid and the bracket incredibly some as You to look really, differentiation the have and have everything And middle being you bullish firms. you very And else. right

market is, everyone looked and the side end is technology you up the then at In really where we've that else. with bullish brackets

And so And leaves me of have gotten advisory the technology. it's I'm from capital for to M&A what know, increased standpoint, see has that Well, us jumping advisory. know to in the that I markets you sure is and dramatically. into my business firms that number in technology hard

very that's competitive space. a So

on had that, before sponsor do So would finance commercial technology. buyouts technology in in that we for be the to that we confident banking or would synergies business something and we in side on have an could we advisory capitalize

looking So that's at. what we're

work any area making platform. really it across movement that the can sure that that before We're we make in we make

but it So on will nothing we is if advisory it side. it'll now, something do at, to the be but looking we're something right be, share probably

Thanks the color. for Great.

next our Chris from McGratty comes question And KBW. from

is Your line open.

credit interested eye or well. sectors might overall It's just some thoughts Greg, you Maybe maybe performing keeping question that of kind portfolios on. Great, be an in on quality. thanks. of a very

as to to the area question. expert is turn going Marc he and over to I'm Chris, answer a he's dying in that Yes.

Thanks for asking question. the

Marc Having answer that and of quality bear notice adverse you So always that, emerging the the while no now particular your we segment very segments portfolio yes, see. the credit, the the to can portfolio. than strong no the as it's stage watching said and that and is dependent of is our in early sector particularly trends closest is that quite a investor reflective there's question for

Given investor that market factors, that et quickly depending cetera. on can change sentiment,

question. Greg, Okay, great. term And one longer a kind more, maybe of

capital speak efforts the a had the diversification the might can I couple their of about private tremendous. You've to in you've past there that be way you in with success Maybe lot talked is growth business. years? call of next The over banking. Thanks. think

FX, came client the the technology of having group lending avenues, has then of of Yes. exceptional the headwinds obviously clearly income, And part sciences has cards, life gets I about liquidity from capital Chris, a the from tech lending, growth overall. one the have of been success I though in focus clients, life And banks thing about from you standpoint, growth. the and seen or side deposits client the to liquidity the When speaking think biggest is exists that was loan the three the question income, platform, fee and that call overall about growth. exceptional core broadly that lending. amount lot on And ask of even because about everyone market, about liquidity, When to majority portfolio, commitments, science lending focus perspective, those it you fee from a driver business, headlines client they and think but really would that on liquidity us, think core your loan bringing it I the want but new the adding business. the bringing guess I just is and more characterize for overall

argue a diversified regarding private do what would growth is I that have So we headline more services. story than the actually equity lending in

organic And also You've a make is far brought very got and as on in which about opportunities out. I think the as it both looking we building inorganic is well. global, part am wealth objectives I side. you private then bank. to as move that. of need bullish That private bigger, XXXX, at for we're bank. And bolder But up

during And up that of may course so come XXXX. the

kind private So all growth the when services, business I private whole for those me about tech, it life think trajectory, the the optimism combined of future. gives banking that equity sciences, is

Great. Thank you.

from And your Tenner question from Gary next comes Davidson. DA

line Your is open.

what I'm lower preliminary to a Want Thanks. change ask guide growth now. of It maybe some guideline dynamic the to bit to on the your on on of fee negative client core bit income Good looks like more afternoon. a be in it's modest client if XXXX. a funds about looks investment last versus impact sheet, a in quarter. balance just fees the little little bringing wondering

might changed of liquidity anticipated. add. had XXXX and change take guide, client This solid a earlier. Greg XXXX we in have continue Dan. That of the the the to start if we the and at is than stronger was between Mike I'll that of is perspective, But environment that that Yes. mentioned to Overall, fact expect the something dynamic the XXXX. change our even because to performance rate look Mike we funds related from just the growth majority a

in more we're And on the exited So bullish XXXX. just change the how related to guide is the still we environment.

question the for kind where of modestly stabilization asset below wondering, repricing a ships more quarter guide as additional of up. over And additional kind terms of from towards rate fourth course a year earning first some the down ended mix margin, question, I'm the is of of the just then lower quarter Thanks. this next is assets? more from in one step the a then and or it quarter of a yielding bleed changes XXXX maybe fourth

Yes.

but on more going of of that. continued deposits to side at the some going deposit continue the you're same That's remixing to to from portfolio bearing a to rate time see to perspective. and the But obviously stabilization to growth, a is the see pressure source to going are be to margin. you you interest how I continue at think if look a XXXX of of progress going

expect And XXXX. some of margins to push factors on been side continue those for included think our those competitive the equation. will have pressure all to the also that I overall of in the already are the But factors lending two continue year. guide We lower through

you. Thank

question next Chiaverini from Wedbush. comes David from the And

Your line is open.

were answered. questions My thanks. Hi,

Wells Thank next from comes you. Shaw And Fargo. our question from Jared

just evening. on circling It's back Leerink. good Hi,

income of separation core the the fee guide. With

So, we Leerink right expect rate that shouldn't given we the that it growth see to in the slows at XXXX. think about way Is here? what

the on growth year-over-year growth rates us with Leerink So since first rate revenue factored what basis that there the that been is the what's consistent at year we with of side a growth expected on into in the There's transaction. when the had equation. we the that's is And guide. for we was the looked see them

the thing entirely said at would what It's I more, driven. you add more for is, it's see gains. me, comparable, it's it's Jared, more but what market to warrant analogous not to and only least Dan security in

the markets same, market its what of So a a the if M&A capital what function of is their are the share for part and keep they healthcare.

a And so, to that very see some you're very, year yes, is if market, more next built a they're this upside, have or growth we've revenue. they're lower in, year going strong to softening if and but going year very, got

business. end announced or we to last going at acquisition of the the 'XX, And the we at is said so when first market it the tied year Leerink be beginning of more of a of

that not what should factor in, expect. you when you that's so And

to efficiency Leerink, or what's when I comp? guess? excluding relationship Okay. expense guess, ratio, And revenues as growth a the we typical at look there. then, Leerink For What's we at I the look incentive

Yes.

So XX% margins. at we margin, generally operating to XX% operating look overall their targeting they're

the think effectively it. to about that's So way

bit maybe view of business and any your Greg, overall. about And a are international trade of Thanks. great. and Okay, how international a you the little impact just then potential viewing business the could side the settlement talk how sort

Yes.

or in XXXX. hear nice actually important really international U.K., had EMEA, from about again it I'll Brexit we then activity in Canada There change may in And and all business that and growth discussions lot can China. look of have significantly news -- the China from the have came of break three venture lot from. XXXX. wasn't see of dropped maybe what impact you to has a as The in capital well. in a But very really call in didn't We I the you down them you impact the we or in drop where think So then U.K., business, lot of there. see the a any at impact of distinguish didn't kind China. we Asia into It two capital of buckets that drop what was venture it's where it the

were our more of Western and One capital is model funds venture And funds. type Those that's firms, where U.S. concentration familiar either funds government more a style the which putting that with, call capital money like almost venture into is, are is I'll gone venture there there. setting supported RMB our up where government one are shop of is. the other what or

change change, bit in we so a saw of We really And see but little much change. didn't much not XXXX.

a I think businesses. the only expect healthy thing. expectations number -- so And those I only think across number one that we had deal one, positives really from we fact two Brexit is phase is good China, clarified, in a growth all have the which And, trade I

being a year. at So look very it more good was I helpful. But XXXX as just

color. the for Thanks

next the Stafford question comes Tyler from And from Stephens.

open. is line Your

call protecting we've and seen comfortable feel call position, taking Hey, about share some the outlook just or capital how that margin how you this fourth question. the the continued competition you within there. in good mentioned business, How business? newer impacting capital guys. you you market insulated positioned within Can Thanks share the segment? is your entrance just growing I and Greg, around your Greg quarter competition the or guess feel evening market within earlier obviously the Dan, for and about

what and want know been have believe, may do. we compression start am. business. in I I some closer for even growth he's a margin to There's to Mike but I it Yes. we that add will premium as great still had I than We've

premium that the that several And the why would so we in expect we're really space. to we why would believe, in we a the question It's do, leaders be you get in, know factors. where like, which position is or or

is the the equity one geography. all capital that global So fact and the kind that venture private we're platform the only really covers of across global

at Asia, the and a which U.S. out that then is big look specifically U.K. whether market, So but you the of taking big, it's whether it's can Europe,

that three, products the And number have any Number this covering our the is one. market than third we to thing number institution, So client and all people two, market. more services other specifically service. tailored are

what not And were way, us, I things. for the same Mike of all objectives equity what's feels need that and services what other to It double to the things to of a outlook is, the And know down are we be even we firms if provide so more my we kind know it's firms venture say, one is I thing. can private I those that that on one-stop show. and capital

about we're out I So good build that's positioning and now. XXXX feel in the very looking market in our XXXX. But what to right

Thanks. any of new yields maybe I origination book And current vein, Dan, sheet the what can would out balance commentary yield portfolio the of along guess same helpful. capital be call that thanks. Okay, is and the you on share, about

right. All

So it's Marc, I'll take one. that

really the with the of only and pretty bleeding are recent that where interest it gave haven't falls you. portfolio consistent is So X% I is X% averages on terms low just originations average and in yield in high

just then Marc to follow up. maybe And

as no originations? would material margin that pricing your that within in change So expectation be of

But margin as Well, All at I'm whole I already competition of pressure range that. yes, room left think we lot a will there's go. about, some to margin. see the talking not right. take some We'll mentioned, from

last its to continued we've into Tyler, Based seen the quarters in Dan. we've margin our now, on And declines over six what forecast. factor those

is So that that are into guidance. already, our those baked expectations already

Thanks for Appreciate clarifying, Dan. it.

our from John comes Evercore. Pancari And next question from

open. Your line is

Good afternoon.

is is questioning, pressure, competitive from Thanks. weighing the capital that where the seeing are margin business outside perspective? that's portfolios pricing you're on lines of capital the call your primary the other On line of call area

is in across literally not it's the call the Yes. This market It is It business. capital Greg. is there out competitive lending. and just

still board. yes, have non-banks; single have seeing our exceptionally rate compete definitely banks, to And -- surprised one, you're win it, that been share strong. know not high; guess see by target it the But we because really seeing market. Our to exceptional day. is exceptionally you're I it we the Other every I is we across shouldn't from number market really to market has that. I'm we surprised by growth. want And be institutions

people got looking low are so rates, You've yield. for and

coming There hasn't a think this finally downturn maybe a little it'll for have interesting see people on Mike is growth. smart deals, in see when bit about And are call from with covenant that credit you years, we I this perspective pricing. over low on focus talked has doing And to be a decade. downturn. the And as covenant been no we one do a deals want to and where a of

there if road. going there's end to was So don't where we're we competitive, that places being in being a it's but of just the bump go we think kind well we're aggressive, won't because just a situations

So our competitive. combat of And pencil. We're to every yes, it's it's hand day. sharpening hand kind

compression Those too. time too, it our other we're as terms have really margin that though the in good improving margins, characterize as deliver I -- from the we same this of are how products client on we making well right? would at experience But, up well

you with the in fees. to continue we as some particularly margin and solutions add it quite as okay I'm up long to declines, make solutions our clients the provide for So where

or different at doing the poised those to you you move with who's you access are to greater to of And examples deepen in need firms could larger and now? who get and Like firms look Thanks. VCs, business what order to ways of Would to and be upstream on products equity steal that enhance types offering? PE that from? profitability that, relationship business Mike, the to your private as products products that different you

and large the continue by are As private and after. in the market us the United large in there's largest you still the world, go largest know, is player equity massive a to global to share for though market even we player, States,

in firms, not all all. them. sized after opportunity we market I'm you've of so about large yes, can worried got got firms, So you've of go so terms mid at But sized

investment what we client have a really exchange as piece. specific terms as In well of FX seen is product, foreign

been I'll the business an some solutions, equity, in So of XX% funds. clients. we've great world. FX, clients. like example, service the per private Right? off-balance-sheet for about years, FX our And that our to our insight, give for growing an year last over great you five educate to Continue provide We great

large in that a And continue area. win so we mandate to

too, both lot on the client around deposits piece and as Similarly sheet Again, on that investment off a well of funds. off. the

can on would picking a I and you margin that why business the scalable that's up it's very say as we then where So is are imagine.

there's growth The to it's that, I there's fair and growth. growth. lending. to What share actually I of equity thing by on add is, becoming market the seeing as mean that historically only haven't private market more a now actually used you're there's And firms capital number market that common that do would is, call

share a from taking realizing for solution this really So them LPs. you're is and away actually they're good not just anyone. for just It's their

growth having having you're you're market also share, the market in market seeing in both in product overall. share you're growth So and growth having us

that And the growth. that's been from really standpoint, of drivers the so

thing helpful. also Got one That's theme. on the Got Okay. Then it. last it. same

reversing of and reverses terms space is space itself? around intensity, the you the on more In terms do the it stepping growing calls more competitive a mean, in, see impact of really and that what it just as lines I capital mean, in really say or is this you given I as particularly would entrance the is. pricing it?

that see from a This I perspective. market whole competitiveness is don't lot a changing Greg.

risk lowers which by just already What this I margins to They're competing forced what compete non-banks spectrum growth. you're risk in more on want banks on to usually going lending. the does see focus earlier, of with kind is to want And spectrum. going that up follow compete Marc the for to low. lowering You is, and rate. be our said And lower people

basis points set, that is, And of. it's extra see most team at basis point an XX I So, companies whether product add. platform the provide want want points and does not and that's or want XX most thing say thing. some the certainty, we XX again, the value important The I I I want our basis exceptional that's important job we points something service, or

we're the value So as as but day. really we're I'll much pricing, this of differentiator doing the competitive the wrapper key that we the on end at add can -- on call the is

right, Greg. All it. Got thanks

question comes UBS. next Brock Vandervliet from the from And

question. mid footnotes deeper about, for a at there's the noticed going here. Thanks these loan of you or seasonality a types the coming whether bit I tied think about evening. the how call a strength the NII Good to kind going of was and just it's what lending there's lending fees. capital from, that, into loan forward. of looking little I we I'm and should the mention whether talk stage that's Could to fees

out quarter. healthcare fee the predict We the activity, Dan, it's is start are that life why on want we Marc really fees them loan did on quarter-to-quarter happen just see Traditionally, fees hard fees And them This pay see The generate of portfolios. in more noted those presentation. generally might to to prepayment Yes. off the largest science to I'll our are coming based lending this a have We seasonal. but and events. episodic And add. do stronger prepayment we and in largest aren't standard basis. that's a

going and I and I math your Okay, day how two we saw this myself, was this focused but great. is kind look on And more, at the that, more to Cecil, do should levels of trying impact affecting separately provisioning that regarding forward? the saw disclosure

want Marc, start. may I'll to it's So, add. Dan

there guidance. expecting XX to out, the of to stays be As million stable reserve in is the long expectation as one to we're $XX funded reflects noted an the that we $XX is the range that and within what important for range in the the slides, And we that that's economy of caveat XXX a the that expect from have so time on million. we And range.

it we'll And Okay. hold then provisioning, there. just

great. you. Okay, Thank

next question your [indiscernible]. comes from And

line Your open. is

a What around does but liquidity quarter this NIM. NIM you Dan, Thanks. follow of job guide, guide XXXX? still XX% of NIM base. up and Great. presume, very asset the trend the your A it's working down does that the quick in on did good how guys earning

cash the NIM putting at of it range. get been the quarters a as let's NIM to can, bit. that cash question. been consistently assumes $X We've The but as to to pressuring company. we balance time, of call We've which It's a last billion back that, money the to kind have guide the work we quickly billion targets same good over in, our we the been couple $X needs above has

embedded. And that, hopefully $X the expectation in it $X down range billion let's to and closer So manage is that of to that's call staying the to billion middle what's that.

And actually be you're that? now? billion Okay. process Well, gradual from would that a what, X.X

to velocity strong. I flows money mean, of day that that Yes. manage the is and back fund put work. we pretty The every

day every level. looking we're manage down So that to to

off, The roll expense leverage quarter. muted. side, is just second one XXX just expense Understood. first in just in follow taxes still from expenses some the back the quick more are whatever XXX quarter season, to going the one on And get seasonal sounds the is the quarter. those the to as the up. It growth looking It's growth to the pattern in that there's payroll second expense like

I'm wondering So the you do the expect where leverage expense in come second quarter. just from to

Yes.

expected the and it of to from spend professional related it's of Some is obviously components timing seasonal a of services. some

of So compensation largest aspect the was the those expenses. seasonal roll-off

Got it. Thank you.

comments. back question-and-answer closing our call brief Greg the Becker for concludes that And to now over session. turn I'll

QX look you really results decade. XXXX. the turning an at just a want QX incredible year Great, -- incredibly thank strong to was really actually thanks. decades year. is joining to we're at period quarter like for back us and new was just us. everyone even a it great our can The And, since I I look for for And was last

good and outlook. look about which probably at building XXXX got was we team that we and guidance, have people As we long-term overall is the the we outlook, what the we're obviously so out most positive of excited about feel

me gives optimism. that So

are them. and perspective us from team supporting day for us the at biggest earlier, a our clients investors mentioned course us of vision. I thank our group I to both of that long-term allowing the I that to our support incredible the people and support and want differentiator, also of an end values and The culture believe support who

you again, have and guys thanks Thank all joining for you. XXXX. incredible So an us

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

disconnect. may You now