SVB Financial (SIVBQ) 23 Apr 212021 Q1 Earnings call transcript

Good day, and thank you for standing by. Welcome to the SVB Financial Group Q1 2021 Earnings Call. [Operator Instructions]. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Ms. of Head the O'Leary, Investor Relations. Meghan ahead. go Please

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

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

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

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

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

slides, you and our quarter for and great we're increasing and of growth see we filed ago, from had XXXX. earnings our quarter exceptional announcement few in a our was history can best it profitability, SVB a and As outlook hours notably which

credit and stable was gains, and outstanding continued QX strong revenue, outstanding warrant core by income, marked fees incredible investment Our net SVB performance balance sheet interest growth, solid Leerink overall.

going ask up lines. the we'd like right open to So the operator and go Q&A, to to into I'm

[Operator Instructions].

line first Zerbe our Morgan Ken Stanley. have from the of We question from

exactly an things looking the held-to-maturity of very increase just period that talk was seems. securities. fantastic overly a this in I'm you to about why materials was held on was to It me cash But you're -- end about this available the excess actually It into it through you. with No, for you agree out up surprised would $XX I in portfolio. one of basis, not like And investing can the maturity is versus are of stood I some looks I in? the securities large what investing billion. guess like -- that Greg, quarter, sale?

one. Ken, take this I'll it's Dan.

incremental liquidity end year obviously, through are we the in through view range. we've liquidity comfortable think work able X-year the of to how growth much quarter. of remains market, the category, that put coming in in conditions the last that money incredible duration Based to being and the X- overall some the and just seen of held-to-maturity continuing so liquidity to in and So longer the market on

duration. is us X-year maturity, of much shorter One a being in along to we're the the duration, that something available-for-sale lines things do able of also that targeting that with about gives a comfort think our

risk, frees type So the need that based helps we trends that market, putting the comprehensive other comfortable and us income in of on see liquidity work. up reduce But it. for the money we're also that us to the continue of to liquidity that to we the stability the extent

of We X- in? X-year range. maturity backs a agency to in agency continue investing we to are This in also that is agency CMOs what Now mix invest well as securities. as mortgage

Got it.

put a security just this assume you in tough think know a and even But portfolio, pre-announcement the of And answer. fantastic to not certainly despite not both everyone you several that wondering, you ourselves gains at continues continues? term that probably Street the caught Okay. quarter we there any portfolio. just after at up to That helps. you this able amazing flipped for investment quarter in when again, have ago. next that after reason your growth near assume little or just and little I is that has the the Because this that growth, over to level gains sort a But of surprised like, the the quarter, is have flat while then warrant going And If of rest of been may I'm of quarters? to bit gains, I visibility. be that want just terms question the should been guys least look level

M&A. and obviously, -- This strong also by Ken. forecast. as not start, market warrant now, mean, the could are still was to to of expect guess ways. by balance had quarter offerings, that Absolutely, and but not but may Obviously, driven that Dan extraordinary. to the I'll repeated. be just warrants the drives gains was not gains gains the And right is is mean well, to QX driven we Clearly, We've do have some is Greg. it quarter What It's we're Last in at this many public and our incredibly are, extraordinary we it's benefiting IPOs, pace going had. continue just I I many, for we that, want Do certainly in securities many, you then say expect IPOs. to unlikely. being the have this that that happen, year? highlighted, I quarter it's from just add. before would that's extent been but -- we the and securities as

written hires one interested through and skills. acquisitions fit special just Greg, what set for are just can teams hiring you kind acquisitions? remarks, the through team of last of elaborate looking through you growing in. I in either your targeted Can you or in question with that terms if skill mentioned in business And were you Understood.

and X is we point integration as everything areas. the this to post-Boston Private it and goes -- was deal closing, related will assuming mainly One go. realistically expect specific Yes. That

cultural perspective. fit wealth at targeted fit looking into either both our and So management a from market teams that strategy

technology looking So for that's second the banking. area this is a at. talked investment we'd area, that while, one about And we've be quite in

Barry and you've that on in bringing announcements -- health the quarter a past Blake health team med that, this services, we hires. made executed we leading care seen about those So with digital

in So call investment that things second it's would wealth an are, of areas many platform, banking. and team-based approach. in X targeted Outside happen a technology across isn't the one, really space, I what could but But in would the be mostly the that, example. other one it hires that

Next is Ebrahim Poonawala from America. Bank of

AOCI I the guess just, understand follow guess, on the, quarter. Dan, I swing the Is up repositioning book. move? in given quickly the complete, wanted securities to like I of the this big that

get an terms against of Can higher just and rates AOCI sheet? as balance protecting points And you the is into book Going you about the XX just that? how where you're informs in managing forward, if we have large hit? move another basis don't how XX-year, protected liquidity talk

about sorry -- Ebrahim that.

higher potential the So yes, certainly positioning Ebrahim, this rates. point at we're for for

So on to continue to to billion to do that, in mitigate against to rate close more swaps put we the of that on impact $XX going further we're of worth protect available-for-sale potential the And quarter, portfolio. movement.

So mentioned held we're target do rest duration if we're able the while protected, that our cut pretty take that duration. to to dollars a to you of to time, quickly, here in in look Ken, at being more maturity more long in at half investment going where as I taking our same book, the

let's able risk. new anywhere that still at XXX So OCI to net-net, money to against be between, going invest it, while and call we're protecting XXX

for X-year be be So all of to was we're able that it in it much than early more isolate it, to not in but first will duration the quarter. going protected

is get to we X that bps, higher of that to tied continue until it look to $XX going just soon. liquidity, Because kind does And which that, anytime you're Dan, to comfortable in like doesn't And something grow liquidity that billion slow cash inflow with? the was the earning is rates?

lot the quarter. of work Ebrahim, put to we a in money

in to can $XX just see that's in the if billion purchases, quarter. close you held-to-maturity So the up

liquidity So sitting still to But growth with in we're certainly lot certainly the there's in money putting a of the deposit continued cash. work. still quarter,

Now is $X that in throughout $X XXX continuing maturity to strategically the available-for-sale OCI to Again, XXX. to into talked to we invest as rest at well shorter of to that it of And we'll year to the that against billion that range. our risk. part investing positioning net-net, before, category held about as billion the as to about down intent work progressively, be protect

I around again Private $XXX Boston the Greg, the you Got acquisition. just it. highlighted once question guess one separate billion And client opportunity.

in how adding how of growing Just closes, private significantly? give us a How fee magnitude see of mortgage the the and of much give a look we we deal opportunity loans it timing quickly the for start on revenue us banking do Do banking you strategy? should sort see to private the bringing Private sense share? that? see Just the side? of Boston market on once terms in do that can where in we the of sense balance we sheet And the

of things. is One couple still early. that, we're A look, Yes.

We things are and the on getting approvals across very, very the board. closed getting and focused integration all

going So that's the going talking will making of and making on expect deal, opportunities the strategy lot and come the long from to number the that discussions, teams what's those work, about what's to as close focused the for sure bank. take. be we're thing. the happen spending to. at We're referrals obviously, deal got and what's our we optimistic. time just one to close will that But We're -- talking how we're we've sure that like go-to-market right we are the when let's of second looking about a But how and as part it commercial -- right assume a going it the

and Private is. expect in are that which to where from see we Boston mortgages, where expand You'll we clearly

and we again, come, well. the final more look in the there's economy. lending reasons share we'll fee rolling that So lending. the in to is one plan. not announcement high as call, to individuals the around approach We How yet opportunity, that's assuming obviously wealth. fast that's a goes the to clearly, of net specialty one income everything that But kind then focused these wealth And big earnings date and that out of get take next innovation key area. closer close, and expand will That's Ebrahim, the we're ready to worth at

it. years on completing CEO. Got Congrats XX as

Thanks, Ebrahim. you. Thank

next JPMorgan. have the of from from line question We our Steven Alexopoulos

And Greg, CEO comments. years XX I'll the on Ebrahim's seat. echo in Congrats

you. Thank

those $XXX guys a this about where took to, infrastructure seem pretty given Could for today? example, believe that good. when But current how when the large of funds billion $XXX crazy over, Hard might billion, had along like $XX to go the to company client funds question, you client you're the lines, infrastructure? they've It's you moved your go and now could we billion. but of think you with

add. Dan Well, may I'll static. been has as It's start. infrastructure want to the not so if

started over seen and add do we've capabilities, it, once and add kind the seeing it. every XX reinforce of to risk months, to last institution, started down to infrastructure growth getting ready perspective. continue I'll large for call The from we look We thinking we we improving about technology quarter board start to infrastructure, management that to across our a the really, it, double on financial more LFI,

a we quite given have So the gotten growth for been this months. over while. XX on has what It's seen just have we been working that accelerated last the

billion were And if have you say, we we're $XXX no, today, why we on what now so is that, right making -- could which But investments. we to answer is probably not. know it's get the to

and But on building see capabilities supporting opportunity, over in, on to, expenses. going again, and the all And the guidance that opportunity Part the and time, our upped you is we're market important. we've what growth. is those our of clearly, market what are areas substantial. both XX, infrastructure, investing there's that Slide are out So

it run. growth. right support can this on to infrastructure we're that's getting innovation go be It's a The you economy, it's certainly to betting market, domestically I'm capture long doing to -- day. attention to been the huge read up and betting every And to broad being everything that we given can our -- the this it may You continuing high. globally, bigger we're the and to has and able both over while never volatile, guys be

given statement actually Is essentially business. deposits? saw the financial the on you're in that to overseas I in helpful. that new a U.K. institution compliance cross going language Is Okay. guys now That's the threshold your large now regulatory thinking you coming? that

yes, Steve. there's Well, it, -- pieces to two there's

cross you obviously, So one move LFI. $XXX domestically, you into billion, when is

make perspective years be compliant that to and we doing over it you Dan And thought definitions. were will saw the And for obviously there's then you hit done U.K., that all requirements of certain it to definition going can sure we we're the so better than there's that. thresholds that you those We've substantial have very we you we and is In when quarters revenue. low a coming the have globally, perspective things that preparing one definition. done year, and to. a the we've in revenue also that and have give next on faster -- started we're more with amount that And on deposits or is thresholds. that But smaller of we different companies, are size but requirements. companies There's as know, LFI both other actually last

And so you that threshold. contributes still that crossing to

So a is as we also capabilities. path a our the head that subsidiarization down create to building U.K., in

is growth. we we have have of LFI so And support the all infrastructure the and in U.K., which longer-term domestically, our subsidiarization building to

supported the business had this bit on clearly Greg, helpful. And But weaker recently, -- a of about client bit IPO a any It's immediate then, little impact back a the have to That's market's -- right? Is I Okay. the markets across results have challenge. board. know been flows? what having your exit

obviously, incredibly way been flows, that it think Client that way. stay strong. we've very usually indefinitely. have when said the gets doesn't prior Well, market in it stay as strong, quarters, I doesn't And

of so see still in strong. would know expected to the as do I and think us have market. starting is little this slowdown of you people well, We're But a and pipeline, -- some all And other many that. bit incredibly the

to. We capital my expect view may healthy the could of pick And expect it it market, then so Steve, M&A, be Probably. market the bumpy? to M&A. the Could will be we the It balance part up the But would is it other of still be for probably than more the year. be exit markets. and

growing and greater down, about see think it slows and liquidity coming from portfolio. it That's And capital loan rounds life technology We're we markets we'll business capital now perspective, markets. from markets, when right and an usually is else. So happens. science the anything in public equity the exit competing if what maybe growth private as M&A are we much with as large

would And loan outstanding. so show that pickup in some a slowdown in expectedly

goes, whichever those advantage feel we opportunities. way take positioned to we're of So it well

you're more in. Is balances I the client reason crowding one that Greg, are if sneak despite could that out seeing the not new grow the adds early-stage accelerating?

in actually saw about this nice life stage the whole right? portfolio, Well, outstandings and -- last the thinking early quarter so sciences. in We growth in tech

the And team is doing great job. so a

are crowded incredibly an incredibly at job. rates The strong. is win our They're absolutely. strong. is fact, In up The pipeline doing amazing truly Is being answer it liquidity?

there lower question, relative of It's rapid early-stage no in is that to desire portfolio. X%. total becomes It's it's one growing. growing such lending lending, still rest a that a down it been maybe other loan at the point the of drive So maybe seen, in to the just percentage overall the to portfolio of this our pace driving loan is and more growth percentage And segments. is the you've is slowdown those

it's strong matter it's a being of so just out there. matter and -- liquidity incredibly growth, a it's our of And

from Wolfe Research. have next question from our Bill We Carcache

accelerating either loans that in changes? the exceptional assets your as internationally of across curious opportunity broader base? There of your on how higher-yielding how of lot remix ahead see is you an across growth? on has just pent-up continued dynamics there are look against backdrop, to you been mean pent-up earning a today, to dynamics we focus the vaccinations. results customer the hear thoughts economic more that your potentially but impact to demand or demand the these Can of And back to discuss your this I economy U.S.

that. Valley Descheneaux, in some want of strong to our Silicon are strong and Greg. Yes. and some everyone's Marc the the see believe think market may much I overall? impact lending very, talking and I us? really add President, We Mike different than you that that our that. And think going you're big economy, if reposition does don't change our be second on consumer that is impact demand, point Bank from don't to consumer-facing to headed I as that, very I Clearly, portfolio? or seeing direction I Cadieux I'll is pent-up very it's industries -- I'll Bill, see view clients are GDP that guess have to that's that said, Mike, benefit and right will there Will it of -- mute. don't half commentary. from have the that going think believe of to the in growth. of start be Do in that clearly about healthy are on change much an We us don't allow a it. for there. Mike going this Marc are of about a to going for driving loan a it's we're just e-commerce, I lot create kind How healthy. hearing now. of Yes, you a portfolio. see year with the I

hear Okay. now, Can me Greg? you

Yes.

I'll it there. innovative will Obviously, tech serve see think I piece again, a pickup. the But necessarily we certainly and travel think boats of here. huge ripple forward. certainly, think think pent-up loans. the will some the companies portfolio. about Marc of Clearly, go potential I industries, you there's I there the that and mean lift jump center you that. you think, some that excellent that of and think real And that when a effect not I'll pull-through could hospitality terms on the start, factor, areas, in ad those things loan it's think of we when and different few be of ahead. could going is demand, had the I on Clearly, and is I

fees, When people more So the income. kind to moving on traveling and to opening and going see of to more fee start to spending of we pent-up Moving card start economy, demand, the see credit you're around. right?

credit of So we as well. from FX activity should activity benefit card potentially as the the some deal well potentially as

move to start more well, of deals international. to people since in start that maybe some As there's again, as Maybe activity. they'll limitations people -- groups so cross-border deals holding been deal travel there certain do are around, on been too, of back terms

certainly think I cross-border that could So up deal open some activity.

demand to pent-up positive think economy, again, opening net-net overall. a the I So the the of is us

This is Marc.

think here. to waterfront there. I covered add the and Nothing Greg further Mike

you deposit Separately, call the out helpful do in of today? the being as That's on greater How of stickiness mentioned being super particular you'd versus that Greg, your color. cognizant you today balance deposits risk there view sheet anything history? Is of of outflows. the risk

X short Other that go more you But question a of that that so and had and to go of haven't than through historically. a the the this seen. And size history, pace have we time, It's was a cycles, that, back funds been little seen back all year we in of the and do of bit, during a period So from that dropped only that question right. look client quarter. XXXX, growth the up this one what growth through deck, 'XX. 'XX the to in and where answer to other we bit. minor the way than little Chart But we've answer drop help to tried dramatic, no. is if is we've has been and at We

basis to view market answering economy a It markets. other and deposits is and if is really to most, to domestically really the you sheet market balance other that, how outpace in turn, said back not liquidity look -- going started be. on do place So be innovation this which globally. my this I'll be soften. to the innovation quarters? to is the or continue just And go questions, a some and funds. to maybe in I if is at And will drive a deposits, all, could few few there in about what in quarterly But softness market Possibly

from so we're upward optimistic standpoint, And about the very that still trajectory.

Dan, liquidity to investment your assets? described, earning take Dan. is versus XX% saw could reached Understood. into that one back of willing look securities earning to portfolio on the If more the XXXX quarter. you've peak guys mix securities guys you you how average where a are assets you for deploy XX% finished average constraint one We last in as there of your of in relative as this to high I squeeze any

is how at can then example, potential go? first by high So when portfolio that growing policy? bond all For tax would more your liquidity see interested a decision municipal to be influenced higher you on changes in in is that do that we And rate? tax deploy

Yes. for Thanks the question.

the of liquidity continued progressively put $X a And we flexibility that same to of look portfolio that just to be into the time, of creates deployment off. work able deploy us every and practice our investment to of to see think that at work. you And continue now take I continuously a liquidity, quarter our lot billion securities. at is close it as cash past flow think see for to to I and us you coming cash excess the continue excess to objective put to

coming terms put got that would sale, extent can we understanding of billion it. that enough is short-term $X that excess we've liquidity into In available we'd portfolio. to hard take practice do the At to about go, that have that work, time, think we we've I don't again, what the certainly have one. liquidity, we same and that portfolio. in that off continue liquidity the we we That's flow a of for how to dip of need limit And got cash to AFS, of do

available for doing and in in duration portfolio. the certainly and and protecting both available-for-sale at we've with on short the sale, So we're longer held to the investing term what maturity we're in least we're got what

$X.X the the And continued especially we that, how deployment, certainly Now this potential more for here have to reform room at with billion or close the at to book added at tax portfolio. bond grow look to we least a I so. to coming in coming point. question on year do your think we've municipal That's

back going We've do benefit us to room it. do So of of liquidity we're continue it, deploy. to coming to be to give quarter lot got the us a to to able every and that flexibility

our John ISI. Evercore have from next from question We Pancari

but On you pace about billion again, you $X.X incremental that, for I talk cash but the book around billion as just securities the of from liquidity just can investments incremental sorry clearly in into $X additions another well. to the question here? flow, the know you're putting mentioned

So we investments we should how think maybe portfolio? year the about the quarterly pace incremental into of the the through as go

this John, Dan. Yes, is

I is certainly it, out objective of healthy is look think the the billion the to the at And let's to position bring really of way which $X the the a our billion to by we year. down, to get time cash remain came in position. that we $X call quarter to range cash same, it, very end the

a to that work think the that I you'll us Based to progressively ability for deployment that that on in of So coming quarter. deposit We and on strong occurring first amount growth of deploy the And the you've substantial certainly back quarter, There going faster the obviously, had of first our seen to deposit remainder thought money forecast trends into than the be opportunistically the would. put we work we was to quarters. to a over was that. otherwise very the the we're able quarter. put more see year,

the answer here of on to -- we going based liquidity perfect forecast progressive first quarter. it's that no be I more think to saw but there's and the it, in So what

get duration Or would that current point? then is And less that in of take that it. X the progression to of time X.X-year towards you're duration, a that Got versus similar than the that the frame terms trying to longer? years

No. be quickly, to pretty or in legging that with We're do that would easier to derivative I portfolio. instruments That's do over the use to we'll able do going that than next purchases because to in so. say, progressive month here

of least in So as and March, we'll to quickly move duration $XX early pretty did able there worth up to billion to we'll shorter. to by be it -- be we shore on move be putting swaps at the able

see quickly. So you'll happen pretty that here

it. Got

give portfolio. loan book, the if capital on the Okay. you're can updated yields loan that And then you in the us to see new getting call want money just

And the take Marc too question. where It's Apologies Cadieux. just given for that. question call marketplace regrettably, about on I'll answer sits. compelled disclose to our in this the and current much decline I'm not competitive that to pricing to forces wanting

Okay. Understood.

John, included I we and is mortgage look tech of what all pricing, we think new care the well can take the income our of capital say the when just book on as health of interest lending, at year. yield as guidance for remainder net overall, within money margin call a are and the

of how the can't expect the but and we where So remainder the give progress that in are we specifics, you we to is included the year. for guidance

it. Got

sorry for your bit a just you've front, -- heels loan? what you a time just as that after the nothing little And pretty on quick the have quickly the that of of more fraud, origination the on needed But result the have of changes it changes to implemented? material two to us implement, just credit the type to be done approach implemented isolated? was since Or fraud multiple update of other surfaced questions. had what just it Now ones, then Good. you the of given Okay. can you was

It's Marc. may in. Yes. Others chime I'll to wish start.

think nailed of I it question. you the the end with

and it, done over And our that incident only for did years this that remind incident one the and that noted overall this have our Consistent and concluded fraud question, we've on is well call encountered. very this that XX would isolated review you in of else potential the portfolio been of everyone we've that as an we before, is call just -- belief time, that As during with doing the time. period loan incident. a period that, and is capital well lending of -- I we've think, I

come to through while look so like something everything is good in wake reinforce we the ultimately it's the at this, taken opportunity we have, course, to a do, And training we've of a of conclusion and And if extent and on to guard awareness that chime wish. be we of kind they need anybody thing. this else stop I'll in invite the really against that there is it. to of

All it's your should I expectations I the quarter. expectation your Can year the is maybe maybe and Okay. about ratio. we the on my first ratio, how here operating XX.X% for full what right. you give that are? And for us on long at one just efficiency term know last think promise

to clearly continue franchise. the to we best work to think We're I it for growth in way to makes look Yes. performance performance first to able of the company, us Leerink. drive as quarter, to John, a for banking the I invest are and as going to the excellent see across sense well SVB us it you think in activity at be that. put paying money is the absolutely the And

ratio. us You initiatives, our certainly higher in see and driving that's efficiency investing operating a

as to to look what going to within invest I end the hard here a continued work. ahead. certainly should It's is we're up we that say to happens operating Exactly We're that to again, is us money for makes investment look ratio to investment. well we Leerink the So with sense it what the upon what run gains as focus just continue company, But of think efficiency and long operating happens exactly so growth this for where dependent the higher on see more that's put as business. like. rest opportunity see efficiency because year, we'll growth because going the

Shaw Jared is Wells Securities. from Next Fargo

sheet in Maybe still great levels? could quarter, client the sheet, Obviously, strategy you but utilization capital that your of to extent I update capital either or you the off-balance you're the able preference for to TCE versus especially us this on did raise on-balance guess, have sequentially down. light just flows you

thoughts, So any I those is the direct what guess, and strategy to of flows? being able on success that

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

sense for to sense them. of much said options set makes is First that what product a past built and for client done broader the starts we've the we've it allowing in with make is all, that what in What clients choose year the client.

they're a the it kind and yields That balance we we is client around. that's to bit those by options product give at sheet. could And And a of very you where do looking forth? it's it quarter, off-balance past If look hard with that being are off and preferences last when have see are rates said, starts the little that but Clearly, But and a what some small given behavior third look in spreads possibility, our sheet for. be. that's the said change in that we to place can of to then way in so move making a we moving clients. secondly, we have, XX-XX we're zero. Then on sure of more set good just that's

client And product to boil down preference. set so does it and really

or Dan anything So add? Mike, to

exceptional in in leverage balance growth. What's profitability, it's Dan. under exceptional balance sheet Tier two the leverage growth and on and put to and think quarters, Greg, that growth from first When quarter the remains saw last X our ratio on capital, growth. we pressure Yes, you up. X I'll clear obviously the that support that we're deposit have the thinking we strong, the things. since on That the it about continues just at is could really to pressure profitability capital is ratios bank. and The strong see topic really One about is sheet. go X brought Jared been

because the of for the certainly inflows So you talking about, quarter as -- XX% Greg off-balance was are it client went sheet. and we see

certainly, the can balance off deposits help sheet we're for to the makes we buffer that where some of it clients, where impact. So sense and moving

helps growth capacity our support in up done Our we've ways quarter past. additional the the in free common to that this transaction also equity

preferred includes to leverage to markets to capital debt that X provides very the us to So do be the issuance support have that been to us open low-cost able transactions. to regulatory Tier continue growth. the And those and ratio,

about thinking our capital. look remain measures So risk-based capital way when And those all things, of at we're the strong. very we that's

XX.X%. at at holding closed at look the you company, If quarter the about CETX we

all capital. that's thinking about in, we're So how

that maybe the We Okay. guess you the me, I for at you potential higher just income that the impacting a see but the capital appetite maybe higher for taxes some and of versus market saw look when the how picture these potential companies? tax were -- potentially about higher traditional Then news changes today gains, proposed. funds for Great. bank for for a do funding also appetite lending broader heard finally question. the

having individuals, is any was This I capital to basis. add. I Greg. gains real on material that a and -- taxes you impact direct specifically see I'll start, related about and personally don't want Dan, to that may

the valuations effect the of to come going that back there's lots it weeks be and ripple what to to going indirectly, about that. soften of be is over So call next going market, few stock the down could is speculation to

just business. tell. think would impact say it's I basis, of a But our I don't a direct lot on see I early to to too

Next Chris is KBW. McGratty from

to you're country. I held on been kind changing rate taking doing Dan, the a how have sheet. we've you one guys and broadly combine balance duration, swaps of maturity actions with that and of the in most what profile with just speaking, wanted the are company? the asset-sensitive to heard the the you're But of obviously the adding banks few the questions the mean, you much the of All

on the sale available net-net, securities to remains extending in of actions X-year than quite remain What to for is asset-sensitive. the portfolio position you we years. can with the Chris, doing think that duration X in duration the But we're almost a investment held as Yes, And bit the taking X- less shortening barbell. maturity, that the and effect, we're overall in range that book the about into same. held-to-maturity of

based the on against X-year quarter-to-quarter Obviously, the the change what's position protect on all-in intent sudden So rates. to X- to not going the in But going but rate to movements you're portfolio. on the available-for-sale range in thinking is the with portfolio, all-in, that's fluctuate basis. total an of to

deck, And in that place benefit asset in sensitivity from still a from sensitivity a So if strong good we we've rate a perspective. we look still see our got we're we the slide included within it. movements, at to way the would that extent

Okay. lot of the compared this then outlook do credit banks heard reserve, day how given the we about to We've the Great. a quarter going And forward on on reserve one? you about end talk a you little the X reserve the And actions getting bit the obviously, guys day took have to given by back down worked last of your year. think year.

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