SVB Financial (SIVBQ) 22 Jan 212020 Q4 Earnings call transcript

Ladies and gentlemen, thank you for standing by, and welcome to the SVB Financial Group Fourth Quarter 2020 Earnings Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions] Now I’d like to hand the conference over to your speaker today, Ms. Meghan O’Leary, SVB Head of Investor Relations. ahead. go Please

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

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

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

may Information our over financial to And to earnings discussion include now our including found reconciliation our will In references about call CEO, measures, measures, filings turn addition, measures. to may be Greg SEC release. Becker. President I GAAP and in of non-GAAP those in some and our the

and all for you thank of joining today. us Meghan, Thanks,

an that see today we investment net driven credit. outsized gains, robust income from revenue continued pressure was liquidity, from banking materials guidance and another and low continued our had stable sheet year. It despite filed above the fee by outstanding client quarter earlier strong rates, growth, core outstanding interest to can balance warrant outstanding You with we finish income, strong investment an

and We broader are pleased with and our continued the the of resilience innovation economy. health clients

move open operator to Q&A, the to we’d I’ll the right so into like lines. ask up Now

Bank of come will question Ebrahim America. first of ahead. Your Poonawala Instructions] [Operator Absolutely. Please go from

pretty not at well, equity strong stocks you bit a letter I’m with looks in why common capital given of whole growth I outlook. both sort capital trading levels needed. the Who why afternoon. to terms bank, the capital as like remind just given at that capacity bank and currency to little advantage that take to market level, not Good Please core sounds Dan, not And some today. So give to at looking the can some coming healthcare what you it of like, do the issues the glad of give us leave of in adjust us of of your downstream then? why the if and wanted knows but volatile? me start the if

Yes, I’ll Greg may to Ebrahim. want and follow start on.

we bank Tier level, created look some look we balances be As X the the have cheapest same least senior at able the X leverage the well growth that way to and And the it’s at at issuance in if in leverage. look we’ve capital to Tier past the in capital that recent preferred debt. we to done time downstream in is the really that and we it a through at where fund way reduction at as the as

to history a have We doing flexibility recent it. and we’ve able the be to got that do of

able to allows, the the be that. for we manage X Tier I at especially leverage think us ratio that So flexibility as to look

amounts In holding capacity remains we of the at terms look that of the there. company, at the liquidity

leverage sitting $XXX to bank support close the that’s in We’re $XXX now to Tier the order after roughly right million million X to downstreaming ratio.

leverage So to ratio. debt, to we X% we’ve through believe that that senior flexibility preferred, the through manage got X% to

the use kind way? why of are how just Got revenue investment business not outlook faster? more strong time we normally I and right make the hard expense it. it growth. in a in your you and digit you looking is and give stronger, but that Or know momentum terms perfect just investments outlook. grow wondering I of investments at given growth on guess expense you make build growth to moving expense opportunity? now is, back And pulling of other kind the even and maxing you it’s a I’m low-single Are this

we this a and the those of higher in start it. Ebrahim, how positives is of being There about incredible Hey SVB they’re one end Greg. just I’ll a drove think couple year and through things walk that will and is ratio. clearly expenses payout Leerink with and XXXX negatives Dan at components, the of the results higher

look at number. that’s and you So big say, a that

an We up pull down on little a number. big it’s a back donating that all bit for real fees so things, a those had estate and that leases impact if the the have other some that when you expenses. forecast on revenue the looked – So were PPP, but pretty at will right add on were you actually

So if nice built-in actually do normalized for growth have XXXX. you that, we all a

So having in investing the places that the we’re in same we’re past.

part bank it We’re actually on the the making at last have And we’re infrastructure. in those will increasing end. and is, expenses performance the a the look SVB or Leerink if be I investments higher outperforms would of the say, make if you thing the if one

to did capacity invest we’re year. business investing last do and in more in there the we So have than we

feel about have level give the And that to good want in any additional you you color. Dan, we there, so but

just fourth was in Real be expense. Yes. for And the if expenses estate million. additional was you $XX $XX year, in at the of million fourth another Greg, wise. quarter, only incremental just the million that the of color in look the over the We numbers incremental $XX quarter, performance donation. PPP would had

looks much And the I an but investment that’s think expense pace much point, Greg’s on key. perspective digits our from investment of So number. the bigger to yes, year-over-year really high-single traditional you that operating along strip a of guide when lines levels all the low, more out,

are We heavily clearly in it’s there. investing opportunities

Yes, thank you…

the pick Ebrahim, at you numbers places XX Slide on at Yes, where if look the that, may can up. look you

accelerate decide we investments. some may So strategic to

Boston the integration have Private We planning.

regulatory from have moving We to a LFI side.

be to could it higher. So in cause we there things are do there that

into had to In the Leerink again, the SVB exceeds said, I addition that as forecast. expectations built we

pay things are to all attention to. those So

you. thank Yes,

Yes.

Your from go of of question line comes next Steven Please JPMorgan. the Alexopoulos ahead.

Hi everyone.

Steve. Hey,

I with Greg would question. start picture big like to first a

the the the look growth market in it incredible economy at this we sense So that company, how share your significant innovation taking XXXX here? from you if grew? much Are represented is

Steve, and to gone think things done PE I the Slide can I’ll markets haven’t contributed look two Yes, execute. One It’s your I strong. describe capital have markets incredibly as been exactly through the know, that question all that where and have question. at markets the it we and the split we look analysis of start. we when our way you then no the to activity, to what say you between about ability – you and the serve to to that is public the growth you There’s of venture at activity, X, try that serve those level out

with you at We the a So based I with in. more build market science say that’s because the life being so SVB do that benefit platform, would able that sciences about look capabilities, of think when I from we and But get Leerink. kind healthcare on we’re we’re to life our can that company. healthcare to on what success having doing of the been our have out the tailwind also we’ve

So our market is share going up.

point keeping more in with deals the improved. market is market companies things stage, so three best of share. the with our fact have And at increasing we companies. highest of quality All share our I what the working look final the later doing we’re and the in stage would winning that can market and later than having the or is have we’re syndications quality You those share, past in say

you and All to think And that those combined that about we so when presence execution. you that the really global add about are things have.

had delivering what that is So expect incredibly XXXX, a to we then in seen of secondly, the strong delivered as the that market. that you we’ve what certainly in execution we the and and see improvement combination well. we’re share And an results – we’ve XXXX

That’s Okay. I company years reach Greg, $XX client it look helpful. billion. the to at XX took funds, total if

momentum? grew that by in you just amount could that here, wrong this right? than What XXXX. more could worries What You derail go

the come to valuations least the and into down lens, private high, trickling a and public what’s markets. answer profitability, I’ll strong, where market got the I’ll are is are, you’ve When right. question about that’s risks that Well, my I very think back at so

few are so not places rates investment difficult, dollars Real that and have deployed money low. there’s money around seeing globally very that for flow, You to you’re investments because that, really is that right. deployed, there. would other so income be uncertainty estate places Fixed much be historically would

So you look tech those It’s from. you the life growth innovation is coming see sciences. things both and economy and where at

that’s So driving it. what’s

valuations and in into it? Well, if take valuations healthcare will derail markets that and companies sudden hit could substantially slowdown a what private all IPO dramatically So of tech and a markets. trickledown dropped public

to that investment continue. of and strategy the part of SVB banking piece is believe final places for happen, that that Growth bank, now said, few pillars will I four markets. I all that to And the these commercial be in because I as deployed. being bank, then the Now driven about money And believe expect our happen? why kind that Capital very I private there is don’t are are won’t strategy.

to And it’s long So in I I market believe a the perspective, a while place little market may best it run is healthy. that certainly from the believe soften bit, the invest.

about see a there slowdown think possibility. the And volatility could short run. or in you’re so more be run that’s don’t medium to in I the It’s going a clearly term, long

in could warrant final question, tangible book gains. XX% almost I helpful. roughly investment look XXXX you value million Okay. in If I $XXX grew held by That’s at one if ask so

XXXX. times If larger Like this gains a good wasn’t positioning IPO’s, because material guys is front, gains, you you warrant Thanks. are have in And going accelerated, winners? you a year look what than What Are X.X book growth value. guys attributable better observed the these it driver on at of it to? right. better is but the for rate of investment those the that to was you

yes. Yes,

think that I back quality One ways companies. the a asked higher different Steve. the question were or winning companies going quality in you in So the first about is, to few of

are So best companies. average returns And improving. our the or know, company, top below to the with compared that average companies as if being is you the outsized greatly companies in best market by driven you’re the are share

Number companies two gains set. the one. So those our is product ability helps drive best be number to to the in

there’s longer. think upside or done we aren’t derived being early four financing, from different These about So across was the the now an stage, board, and you that benefits deals stage, can that it’s in debt, team on has participate done ways realized. the were late have, and again, gains the it’s five were of of years it’s years product you mezzanine breadth where excellent if And ago it’s variety acquisition year. where three from coming deals a gains it’s that delivering And years, that. job these of done those being are this set

And we’re we so we’re the from think again, offering. companies, in standpoint, products taking we the of ones about new that think number about that

up amount that Capital, allow to We’re solutions positions the to trying have can we putting new of interest expect us over a certainly realize those funds management, direct to and those we to time. build to while work then under you hard funds that time. done continue and new a SVB new on substantial. that raising of to with equity benefits, also as period in carried had that the And is we’re as to products, funds, over And while fund come the other finally, money take continue

will So loans just we’ll making the those some we volatility, see question, of economy. it last in and about investments feel the but return good the the certainly like long-term innovation

questions. Thanks my a taking remarkable year. was It Okay. for

Great. Thanks, Steve.

comes question Ken Please of line Next the from ahead. Morgan Stanley. Zerbe of go

case? sustainable it your maybe about, all Great, a it talk deposit why the of this tens up terms lot keep growth cash such to thanks. And meaningful and been just costs, is, upcoming the or for growth there. deposit Can then I the expectation like, there’s billions the of of you deposit from I there’s just year growth. of you step like of Can But some you help the question your how that had everything, dollars that’s just outlook stimulus grow. understand us out level and a feels Hi. guess, of of outlook in continues still I that additional get in implies just first here. Thanks. is like just that looks

burn we which Descheneaux start have that. share I’ll under may is what have performing. burn we to is higher valuations, Yes. increase, him Mike it. it or with just market the really And that it had the substantial and don’t And said ones those are right, a companies with are may and is believe I’ll Steve, while higher want rates add increased, to Dan and when their because that the driving at able almost start money thus to to were raise impact. either I rates repeating companies will

starting to optimistic So we’re remain teams, the have But the have talk part of will early finished but venture look point our Year, And as they public markets, I is we New year we remained into how capitalists, if play robust. and do it. we talk about XXXX you to built we growth of in it where know we out. the as at

a releases the again, to at, They’ve had I’ve deals is heard was is strong. the levels year. the what technology from If has that market how incredible And doing. That gauge activity number already their this is they’re well press can and their you SVB banks way referenced. Leerink in investment and offerings pipeline public that the of look incredibly

the add So pace, can you see in we believe the it’s it anything the the do at we probably quarter. to as not continue, that? to going same at we or same want to healthy. But saw as fourth at be momentum pace Dan that still guys far certainly will Mike, maybe not least

hop Yes. Greg. I’ll there, in

at a don’t the same flows. I think the continuation fourth end, said if quarter it deposit you we of right expect

overall XXXX, with look clearly is incremental with market, additional the we’re equity the for of in venture investments going liquidity at that – balance a liquidity our more looking market. the balance market. a And been at something forecast in we’re think lower the the especially sheets has and I liquidity space, in as going its there off COVID than environment, but closer and to to the the that fact that’s the the in sheet. added since to We guidance didn’t we on were to XXXX. find just see rate that’s capital, the We private that way is in identical

when guide. I those rates jumping invested that with will off We it all lower when in is of in point think to things, look back And this a plentiful we compare So liquidity. where and be space. think look and the this there’s XXXX, we we at were that think at we reasonable

is top on add just Maybe this here. Descheneaux of that, Ken, Mike

of Just and it’s dry powder over looking out stepping back worldwide. that’s X there, amount the at trillion

and compressed you investment COVID opening to also might’ve up So amount when lot there’s to a significant of accelerated innovation then it’s creating basically dollars that And And it be taken about what’s technology and of is and years more it’s couple done, wanting willing accelerated in think are new been actually deployed. and of now a deploy. opportunity. here and a that has

over pretty Greg that Dan, saying, the good pretty So disruptive. it’s of or feel here confident of quarters are with something that all going the we continue why next the to things that’s combination and myself couple

Thanks. And to And which the my but day and multi-part was Got short, question, is that so might quickly get target you new level? still it, one CECL you then is of a drop reserve back in target think ACL your meaningful that given second What the your do sort very How quarter? question. this ratio? good okay.

you quarter reserves? make sure reserve Marc that… where CECL to question. away. want the QX just your compared So Cadieux asking Is I It’s right to of Are understand is our first

Because you X, was that back is which certainly. the little right, have was you of normally what the day thinking, were get Yes. usually, But related where And COVID which about you suspect. yes. like, guys. sort kind than a of is It’s of just for sort guys out other obviously level like, on banks less pandemic Like, actually, guess asking I’m is it quote if all of why issues, of we’ve kind XXX for eventually. – targeting January most your ratio it wasn’t looking of knew right think at that are back what SIVB? reserve not to CECL it obviously XXX CECL right wasn’t I going is we lower. is one, the we probably the something kind before banks to I or a that’s I probably I into level is XXX. reserves, was where and It talked

Thank you. That’s helpful.

significant So the so certainly, see expected. the reserve what significant we like many half provision as you year the right? against kickoff, year, others We of added in first build

what happen, to expected everybody forecasts were think suggesting would economic I happen.

the you As economic in QX. a improve see QX reserve forecast methodology key the of are driver that and CECL

come down. those You reserves of see some

reserve, XXXX. points Then we basis funded pre-COVID. the and consistent fourth would continue compares basis so points of apples-to-apples, and that of going not to think fourth were than we that portfolio XXXX too we the improve our pre-COVID, where that, yet. things quarter to continue the like our was And with and quite Having economy is that’s at composition quarter get there were XX presumption accurately. higher to others, reserve pretty terms we where just still said credit, at in the be And have stable I to, in to if the were back we end

All Great, thank you. right.

Next go Please of ahead. Truist question Jennifer the Securities. of will from line Demba come

Thank you. evening. Good

Hey Jennifer.

Leerink like right been performer obviously How them? pipeline has you. Leerink And for for the great for conservative what does now for your is XXXX? guidance look

I darn the how about that releases at think giving at And first you’re of is, again, weeks this Greg. think pretty least say, the it’s through going look few press way year, press the doing releases out. Jennifer, see again, robust. But just my best they’re are to the I from When would the gauge standpoint. about they’re pipeline, Hey is hard to to

what’s easy. have that, isn’t first team going again, year or to half leadership of indication. a happen balance would than here. year. to But number the good of going the So I of I the expecting Predicting talk as forecasting about we it’s feeling the we think lower we were to a SVB good in Leerink what say be about

would just and is just say in strong. that the in market, the the of it see again, put I healthcare question should activity that are healthcare already that numbers level markets the are. be context year play was about would the we to the accurate high on I of And last a story. you So for report see robustness levels where of no end year, last the forecast year, in activity there’s January definition, question has the we’re anyone the encourage seeing continued for public that by very of the we Clearly, out if year to But going we period best sector.

is equity XXXX. so and expected would we you’re to years, a predict going record hard it maybe back to that And is some really predict see that back to have forward reasons of pull because impossible of really to that to in

So possible, companies and their of do Could balance biotech but or more. sheet, of worth now some It’s years cash out go unlikely. on have these four public they companies. three

So basis at kind we on I you’ll a again, would say, have are in see team. that range. weekly as the of you levels it what activity forecast the look to being that able But is by published there that the in we expect be

Thanks so much.

John Evercore question ahead. Pancari, line from [Operator the go Your of Please Instructions] ISI. comes next

Hey John,

implies the off guidance compression believe of level X.XX% NIM down fourth well. guide your amount quarter. on X.XX% from to coming the fair prior as for And from just I the X.XX% a it’s your Well, of

color is other you’re that. little walk could if through? you liquidity a that Just or what’s Thanks. driving to of that wanted bit Is about there going factors get

that. take downs well John, driven securities compression largely NIM Yes. investment is just by deployment, pay continued and the I’ll The as in the the guidance the liquidity it’s portfolio. as Dan.

getting investment on $X.X a $X of billion worth billion So about quarterly portfolio. downs basis, in the to we’re pay securities

deposit NIM rest that those factors, the stay lending, at we that look cash at next side and and we If the of expect between year, the at through. look compression cash throughout we of of look deployment the to we the are equation, So the these other you’re roughly balances see going all flat. come incremental

to might overall, point good really securities pay mostly reduction going in downs mix. You this basis But NII. because lower rates to work see loan up portfolio, a a XX improvement the it’s to and investment of perspective, from in at obviously just lending liquidity translating

on okay. this competitive you the a that now That’s talk clearly it then from of separately, – perspective lending be Mike, update by the Got I And might it, on if Greg, I see lending. in are business, us front, the mean, you banks question or more the want just of perhaps call we guess, – could a for when but see backdrop active capital if lot about other of helpful. you to can

on hear So then thoughts that of in stand areas. areas. we’d Thanks. as as a front, your love your you other well maybe to lending And where fee your some assessment on other competitive and general

start. more Greg. want This And add detail. is then know to Yes. I’ll I Michael worth

thinking of couple market. a it’s One competitive it. of a – first of all, is ways Here’s about

So that. evidenced as market a this where come feel from. as it’s the where looking. comfortable they’re for let’s with that at. their clearly, acknowledge are we’ll been – our place in But and looking a long been results, by banks our that And we’re market time has can performance people has way leaning people are – growth that more asking And

we it whole Why and job? and Mike it is and ways So his commercial perspective a lot exceptional team so think things. better. One of compete is bank what to that? to you And we exceptional one-stop about a It have there’s an answer and against – that a and shopping our can is Is doing I clients go more that earlier provide question. in make from it’s but it Well, place? you we an that across needs tried and would either not doing. job, the strategically, okay there’s said, an of to all doing just even can what improve just do

we’re doing acquisition the bank but look can that Capital, with it’s we the that at to making, lend and clients. have Group the capabilities new in capabilities we’re investments what just the WestRiver to also those with and debt expands not capacity they it’s our commercial SVB You money did

You’ve an The And they they’ve have SVB got team job. its done not as banquet, investment unbelievable the is resting done done. as and Leerink, have well morals. they on

We’re shortly looking at capabilities, be technology banking. on bringing about new which teams, we’ll announcing thinking and new investment

think So is And banking we can again, clients why to that’s back those value those differentiation. clients in them. to on on that’s I for with exceptional an about the our areas all all and it in if private able and expanding to our focused help acquisition competitive being strategy. And we’re add Again, Right, that goes Boston four wealth. executing areas. finally Private, of job their needs. the so of And and do

in to So some to the it building going we’re But our clients. that getting competitive out we’ve competitive? we And it’s said, time. Absolutely. platform. is I to shown started to be over I’ve just turn over differentiator add I’ll biggest color. be, Mike full honest, can And additional that as think the deliver for

Sure, Greg.

You made to about well. things, as think a few just John

You specifically. Banking mentioned Funds Global

we basically The a here for the had record business. saw the team you in is quarter As platform best the this in quarter, team.

of then, about sheet tech don’t the talk the And as a well franchise and we in of well West the in Group that teams acquisition life as our the there’s No a about River sciences, continued and the capabilities competition for But they off to to is extraordinary think extraordinarily form is, too, activities comes doubt. incredibly well do debt front funds us but deposits are mentioned well. like of too funds doing lot from of balance strong. of to, the well as opportunities you well Greg our When but And a too. extends there. shifting well as lot lot, start debt as so

not Our really to early getting essentially it’s also as great are it’s another but just continues and acquisitions that the And we’re the quality QX too. in record progress the that only we at states making well accelerator improve. client stage, quarter

have acquisition do kind very in then expansion really you too, bit upon touch little the things the really as the years. to relevant a that being areas, to a just deliver lot feel and of back of to couple about we is capabilities we So And gets our set last of And But to fee which that good it we our client mentioned well over right very key. on product clients, been maybe of of that clients. we’ve just the our the as well too. focused and

the Again, items And acquire that as bit and lot well too, just but quarter. of get to so, and be well, to of back London fee them here putting And in well again, board or as see another a to you as is hands as clients had back we’re when that our levels, expand too, saw I we and our whether some certainly we in back COVID with know but continues card clients to volume equity lot as some private we’re well as get the on of that our starting as starting well. well. significantly record income of a on hit travel, and global some took excluding of the come come of the reach set enhancements as they as side as Asia some product as strong. during well a too, FX COVID, we extend it’s Again, our of it

pretty feel in front the good where competitive look at we and we’re terms for So of more come. to

taking know that was question. All a lot. a my you of right. I one. to both pretty Thanks Well, for thanks broad

Thanks. problem. No

Carcache come will question Our ahead. next Please from go line the of Bill Wolfe of Research.

Greg. Thanks. hoping on your inside an give afternoon, bit Good could view was a client new us growth. of I you

have guys you talked during the what of added client how you clients the some about? number from result were give as you Broadly us a expect wins quarter. that CEO new letter, X,XXX trending. how’s existing client speaking similar that This about referrals look wins hold And from been existing to trends quarter your percentage in those on clients? you you of at? Can new growth of And clients do came referrals color those

is start. Bill to near been the guess been and my with I’ll has at has consistent levels. quarters Michael add Yes. record want few The trend last And to of it. X,XXX

thrilled have. So that we growth we the client of are with level new

understanding kind break two a it of peeling and I’d ways. coming it’s from. where down more that different bit Now the onion into little

be have equity probability round can we absolutely are an just These coach? of what about we done to, you How of they working a you add round can team. have impressive value be First mentor? sure start-up what is, highest you these building they’re being the them give advice working to on is all, the banking so can exceptional financing. are of is they’re companies you that increase the companies. all formed, what making – How as And of their say, team like about How that me and with of there. backed. how a have next first to companies are our success. it’s capital And And it’s what potential pre-venture to getting

of is really really together quality is team the – that of is think quality the team I do the that results. the is the that So driving to quality coming the

me set. that happens backed uptick in but wins. excited, a mid-state, companies honestly and had it clients. we’ve for later which early we of the stage last said them is venture what couple I’ll gets of way across new call that those an product it’s X,XXX incredible So how our stage goes in in earlier, the come what wins quarters, even team, more And together seen to to an just what I also back is quite we’ve even big portion again, mid deliver only But

X,XXX I a certainly the there’s see companies it. slowed continue? X,XXX. while do to the of a of so me, certainly so it number Again, perspective. And at exist reason me I of high levels very how that clients what expect see that’s excites as companies the think least And I from the would The will quality activity But forth. and level. quality a that to down to is is in markets, no that going that we that function be

that number know really if to feeling just you the anything about So have quality. good add good don’t it. and feeling to I really about Mike,

No Greg, Thank you very covered you. it well.

if I about Separately, steepening securities end of discuss if impact portfolios you the both greatest? on the where rates the Thank long could helpful. curve is of super curve and ask could That’s gearing you. loan and to the you’re and

if I you’re know coming Dan, don’t through.

off is I to take from fault. forgot mute. it my This

to at if It’s are the the have, part the So we and in curve. most paying we’re the we intermediate curve. where today attention of look where we

the let’s call that of that the look the where absent investment to you it And work. at we’re So at to we’re securities to generating year putting we’re look loans the liquidity three five year. that’s work, if putting

rate asset movements. see least So curve sensitive to that’s term. point, where obviously expecting if we short we short at funds. in remain at through a the asset those we’ll start see steepening pushed XXXX, fed aren’t But – benefits change in to sensitivity in this really still Obviously,

So in we’re putting where three benefits portfolio could steepening the securities attention work to what five-year guidance. have curve paying the we’re we there range. that and to to to That’s incremental investment to any provide really

lending Do would And similar So Understood. of that could we the the continue last follow saw of you zero to low the security rates. portfolio some level more in out get the would cycle, growth [ph] get repricing sort steepening. a as drip your loan the you current dollar up end to do you and curve overwhelms on see reserve. And pressure drip side your in decline cycle assuming the But to and described. then remains if book let yields just short pose I What dynamics the rate to be really on obviously securities yields. just headwind on playing some side, side longer headwind that see you exceptional no back the that? throughout be lending investment

The on portfolio tied to side since resets rate is Yes, really majority really lending occurred. of primary. and of The the there that the first it majority variable the is is have loan tied. time

being this pretty been obviously and some really stability. through loan mortgage exception there the activity of portfolio and majority and we seeing the decent book The that’s the point. priced only So good have all yield new at

is securities investment $X reinvested The billion yields. next good obviously you’ll are to range. overall over think seeing decline at that’s being portfolio I feel is where the overall to So quarter a rates. basis when average And we at another I on in story pay five at today’s basis, point Maybe in that – $X.X downs we loans on year. an XX see look billion money XX the

being of let’s XXX that’s So range. this, to call in XXX it, reinvested type

continue the years another And of investment the book going take, price the overall a all just through. yield to going to be that’s from the portfolio the of to look couple perspective. way duration drag at So on to that’s

way it. that’s think So the to about

repricing and done. the We’re expect the year. new still the interest guidance of and for we’ve And reflected the not activity NIM purchases into all the net income that we

that. exceptional growth thank my questions. Understood. But taking It’s to the nice overwhelm to have you for

Thank you.

call further There I’ll Greg now questions remarks. back over to are time. the for closing this no turn Becker at Mr.

Great. Thanks.

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joining. conference today’s Thank concludes you This call. for

You may disconnect. now