SVB Financial (SIVBQ) 22 Jul 222022 Q2 Earnings call transcript

Ladies and gentlemen, thank you for standing by. My name is Brent, and I will be your conference operator today. At this time, I would like to welcome everyone to the SVB Financial Group Q2 2022 Earnings Call. All lines have been placed on mute to prevent any background noise. After the speaker’s remarks, there will be a question-and-answer session. you. Thank Instructions] [Operator my Head turn of now to call Meghan O'Leary, Investor pleasure is today's to over It Relations. Please go ahead.

Thank for joining be thank you We're this phone and delay to some bit a you, sorry little afternoon. had issues us Brent, today. we everyone

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

slides CEO section on letter highlight website. filed release, the SEC available been earnings are with the current Our and of have and Relations Investor our

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

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

Thanks, Meghan, everyone and today. joining us thanks for

the the Before how in before jump seen positioned market a greater few the thoughts navigate economy into economy few and of changes been everyone. innovation lot and share degree. a has and just it questions, regarding about the to markets we want it up open sentiment we a we've impacted again to even to we're I Obviously, months the to in last

all VC doesn't with revalued many reflect we've or and pace tightening, a any lowered meaningfully facts, is over the innovation of has the normal that geopolitical that of increased Fed IPO to environment our Based we've lot these the And market, uncertainty, several the necessary private change way. and cycle we've certainly years. talked and PE our nearly conflict The challenging that. our This current though what the have on a of public view last record persistence near-term environment and in part about XXXX these and inflation, seen challenges. of our experiencing opportunity closed outlook unprecedented and investment companies. markets COVID slowed of you we're economic pressured markets We

levels really in question For to a normalize. PE and us, when growth, invest it's they'll markets innovation and digital it's powder economic and we if recover. once healthcare have just all accelerated. not all And more our dry of have so Plus, and record and VC of every drives activity we more believe adoption happening day will valuations know firms do

clients' our a Our time In and the clients important made comments in I've to than strengthened in before the well. before. are sheets recovered has any many today positioned stronger and the to than quickly innovation we're down last better seen. history a also over today economy is as way two markets It’s ever note Again, that significantly to clients in years turn. we've never Record positioned our than past support times. before investment VC our have better in weather balance larger

We have a balance liquidity with strong capital. and quality high ample sheet,

every powerful needs meet and clients' We a have stage. our set strategy capabilities the of right at to

are executing commitment and stood in maybe in institution. important are our knowledge environment, These our clients, the with as of depth differentiators We relationships for through multiple when and on have strongest We've And our clients experienced a cycles. enjoyable who great we competitors the our today's are and our our effectiveness most or managing apart before history from qualities serving clients with although today's has the These partnership develop especially been we times continue that our always are environment. as here times team, one to in best equipped an and we've not and advisors. strategy. really better our show

forward the questions looking you. up to So answering your and please operator, that, Thank lines. with open

from comes question with Alexopoulos first Your Steve JPMorgan. Instructions] [Operator

Your is open. line

everyone. Hi,

Hey, Steve.

at start, sheet the the which balances Are high can for you hold first to of so organic remain that basis? from deposit like gap? just you sheet, move the and on the flat organically Do deposit end flat balance looks balances like through basically pretty I’d year. side now guidance, an the the off period rest on balances XX% you to assuming you fill least down go balance for on think

the turn To going just put you I'll to at give a to flattening I'll more more then little five Greg. context in QX in in for a When to a it’s of in start declining then Steve, Dan and catalyst QX. deposits little and quarters know, but that's QX, look of add saw last you growth rapid you peaked seen flows and four over Yes, detail. venture some in this bigger out capital it or detail. I’m we QX, we've granular biggest the of kind quarterly and decline It us.

obviously invest lot we what's expectation don't there's companies is deposits as factor burn. cash much that's -- raise another the is that one driver spend that's a talking to of and much going and interesting So money. as money, of And and But about time haven't they're flow. spent when

sort we accelerate. had bit lag. answer and the those when of and accelerated actually quarters saw bit the burn about you question estate, getting a slow with six rate following. rates companies we well, why the real is -- of it's from all out you've a to you believe the last for messaging continued is, and the rate you're have and so to down. now rate over little And investors, rates, year, the be things, to severance, investment little came the And hearing XX-months, got actually the burn increases of And so with of you last start But was got a down burn would this, start burn that now there the a It’s the slow lag, actually out burn you is is estate that real happening?

quarter cash highest we quarter burn seen. This that the had was

So created things the when softness this that's the in really those and decline you put what quarter. together,

So give it little granular little more that the our detail, a a detail. plus turn you we've to Dan color, more now that over I'll assumptions give to made you in more of outlook, to

quarter. talking public as And but effectively for Steve. was shut the Yes, about Greg markets,

we So about of the from market. worth inflow billion public $X had

of that QX putting ’XX Just that into $XX perspective, billion. was

So we're pretty off significantly.

basis. consistent think we're about Those a investments on on at what look accelerated markets, roughly quarterly that's XX% seeing with venture. with rates we're as certainly are the fairly down Greg a you private burn in If up and basis I in quarter-over-quarter talked

public assuming stay in markets that QX market XX% QX at as a of and $X when billion decline, So decline that public and sequential at effectively go stay forward well slow that the shut, basis billion on those basis, as in assuming sequential elevated at effectively of -- look a quarter for we investment to we're slightly, but see guidance on effectively I a levels. factors rate between $X anywhere of looking burn deposit

of to So forecast those we've that considerations. all tried elements takes build a into

a see market, we if improves, start bit, improve to investment the to can relative Now markets upside have. what public public we

numbers. slow, could market investments put And the so pressure on you've that additional public said

the side, we and of we’ve decline Dan as -- Steve, build to just to the add to in that private again a -- on over few quarters. a Just said, continuation next

change of change, So a a of much that's in cash we a really and little maybe one aspect bit haven't burn rate. shown

if so three, to you they're our the assumptions one So those any any you see you downside got of see in some those kind of, variables, three rate, and of one you see upside you from actually given could as some improvement well. could softness conversely, if on our forecast those

July And I Steve the ended quarter, July the balances there flat effectively would if on so relatively some we thing, staying early at to results. say least is where second were consistency deposit the last at I seeing look

could down capital color curious what Bank can they implies was. I or second call get why it in growth would half. PE pretty -- the rest active If stress? guided And loan capital that give VC lending, growth least expectations week, That's dialed the the flattish in if consistent I'm earlier the deposit with call guidance, on VCs on that's down more through similar firms this? it year, during side. the now really slow of their end color for you period periods aren't typically on where Okay. good but more pretty somewhat the to Signature I And at ask of

what we sciences growth, going Steve, that of were Mike we start add. is forecasting. will Yes, and actually and the better expect I'll drivers be than to tech The life loan to see actually originally then

rates. really about in And it's to obvious rates. going mortgages think for slowness call, the around then You're really you on about the see more the reasons capital utilization

And built clearly so we down. pulled into do have it, but growth that growth we it's

valuations. come while markets You're even find to have has not kind valuations cyclical. back. companies for that private have conclusion a to come may to that to somewhat, right need doesn't calls call on that slowed, -- PE still markets but Capital have And They Venture is recalibrated though I'll lower takes conclusion of or mark-to-market, are reset mark-to-market. to come to are the to and It opportunities companies it little not that public the

softness. bit little a seeing we're that So of

new I'm out, I last balance of signed could the We've either would but that business changes that second that you highest if Global one the correct quarter sheets if upside. There's the signed. creates factor term and wrong, and or sign deals pick valuations incredibly to say see start Banking, new Funds here strong of sheets those or term stability again, Now in Mike, highest up up. that ups I and of me in had think, was

final also is this about increased. capacity. has but think loan relationships, creates loans it's So our balance larger calls, as creates would our growth sheet piece take not to additional grown, new say that the only say, sizes also That of I would when opportunities. also has ability of And capital I you it

of certainly that some have. uncertainty, give the built as So that market would causing the in. the outlook we there's to I is upside say be definitely But plays market kind us out, the could

then Thank Okay. the you, question. final and

us Thanks. right, the which than like is walk the periods, detailed that are bit investments of losses, other those Page which at Can declines can strategic seen $XXX we equities that look in calling so X%. investment we Securities? you're typically of which if And fund-to-fund million SVB is more X% out? on over So and in public three you're really through understand a a better, X%, the to other you bit we've buckets, seven, held

Steve. Yes,

hedged a buckets got liquid included fund got public private against So the numbers. equity just got And within that's we've we've breaking those investment the exposures, losses those adjustments into so then exposures. the three valuation we've

So of that's investment, while exposures. is of up portion majority portfolio this made made of our of warrant public investment the up the private small a there's portfolio and

in During we book the close saw that's million declines quarter mark-to-market. and that to valuation marked effectively of $XX

or equity importantly Last through about time the is the with that an or warrant quarter. to effectively that over included the so the losses. We So about worth our on somewhat least is of warrants hedged of see that's There these we to law we've quarter. privates. million, for flat. investment, reserve that million And public the in other there. so correlated investments effectively makes illiquid the portfolios mark-to-market that downward in markets, but illiquid so adjustment Probably that in was $XX given captured are losses close offset updates not effectively of valuation held the $XX portfolio, adjustments and took there investment if that XX% those the and are income, valuations, fund a the more investments to

you you’re $XX at securities. and back looking private If losses public really on the illiquid that out million the

Okay, got it.

there you aren't come to Dan many But yet. rounds right? public that So will is because you're that marked down, down, what is them said your saying you guys anticipating that not it down Greg privates

what on evaluation we Based market, happening public in adjustment. the Yes. was took

decline, to down those but you rounds the that the marked to through see next or we one trickle through further in extent adjustments, could we've effectively that really could public continue Now that two markets believe quarters.

quarters that gotten I you've down you’ve seen over certainly stocks the public this standpoint, in least last that for we've of week, hope of the more into floor how we've the And couple guarantees, of opposed approached advantage just of is is to quickly portfolio. to in securities just the and stability but pile to as public of the think rapid a decline weeks, valuations kind kind And to flavor last there stocks. is one tech seeing And with Steve, kind more believe row. from No I hopefully tech in part, get maybe a bunch of the my at floor. a is I

it. Got

for all thanks Okay, color. the

Steve. Thanks, Yes.

Your Ebrahim Poonawala next question the line of from America. with is of Bank

Your open. line is

good Hey, afternoon.

Hey, Ebrahim.

Greg. Hey,

risk? Just a I your bounce tough. growth. you I I'm just sell really could have on guess out, appreciate follow-up you the we loan the and comments about downside on as growth, cycles in, of take the based weeks, but on One, made visibility deposit Should like taking is a what's had how love loan you confident want month-over-month. pointed deposits comment get step guidance? event have seen how last means, sense terms off. revision probability much to deposits the in on of it as Stocks we Would I that of a and low just a means degree about could see downward being a environments macro you've over previous you feel to two the wondering what flat you factored back, likelihood this another given

to again as make from I have to decline a view. to that in think described and then we Venture build and going is own What there reasonable That's into your you're said. two going in we reinforce dollars standpoint, of the of we built ask quarters what I Venture sense have we likely flows built have he what you it to I think is a believe right? factors of your assumption it going Dan mean, Yes. in Ebrahim, different see point Does that that Capital in, that Capital additional kind that we and what is assumption. few I'm in, is

XX% quarter burn, compared actually we've second of kind was than that on to more seen the XX-months or higher We cash ago. of average highest quarter Again, to now. that, part almost off, from burn. an and temper this flat XX% is that going was The cash believe the and quarterly kind right

And so assumption our we talk we've very reasonable to heard also realistic believe that everything is clients. a and given

read the market. views have factors that Venture You've together, had When about the two Capital’s the you read, we've in all really that about outlook. those creates put

going is to that cloudy. would say, that Now hit level. -- level confidence a confidence The that is mark perfectly that bit have you I we're little

or could our see that -- drivers yes, you could lower? it's the, build our answer So it assumptions is see our could forecast it and possible. that forecast. drivers it being being build or could you drive higher of, into what the giving certainly but and you We're The kind the factors kind all we feel of outcome about are that the you drive up put the are good the down, it that what

certainly Good thing so our talk completely and we're through. only market companies seeing that in The is this add, it's not are that we play is in I'll stopped. the fundraising getting market as channel Greg, to others grounds, checks

sequential seeing some funding down and a assumes clients relative we're what rate QX. in XX% see burn. the showing the environment to that lot So that of seems consistent just deal from this we're at That least and trying we depends in down. of the again, it will conversations market. lower slow investing another private at to in slow hearing from cash coming venture pretty levels And And QX decline so on burn with a really all it not our flow others we're they're that is still albeit zero

expect of lending, growth, billion, lending of $X forward. to are the going So in a come going magnitude order loan guidance see worth factors in. where that's billion On quarter we $X.X to those confidence

amounts mean that feels stopped work. that time like Mike to, to where that that to in term or So continue of shape Without doesn't any back we're it's waiting substantial we're commitments put And private equity said, sheets. market way, form. really moment, and as to we for middle money question, see

feeling we at assumptions the least around and color that's the that about how So have it. we're

much is the their that, deal call private Blackstone on slowing $X that to equity. about asked had on fund And because earnings dependent on how volume $X.X I And billion, down. you of billion Dan banking, talk

So you growth versus else? much banking-driven fund wondering I'm is that expect just that how everything of

fund's up. is growth that that least in of just, perspective out majority is of seeing the from contribution we're out because pick banking. that of deals. portfolio. But still majority those in more The were Yes. the growth portfolio, in we at of an equity of and banking crowded size coming past that fund healthcare, But there still the is because from technology we're coming the And

just ahead, you’re go And well, -- going Yes. --

Just Mike Descheneaux. this Ebrahim, is --

pile the of Dan Just and pipelines the was we that time. history. one thing similarly on on first And both with levels the all is to strongest the healthcare in to and sheets saying. quarter or already right mentioned add there tech at and the look term and second for issued are up they in at what Funds term When signed in sheets Global terms Banking, highest Greg

Now time backdrop talking to them about. it does to pretty volumes and increasing But Greg the feel for take gets are positioned. down, some back draw we macroeconomic deliver this where was been the good have certainly about to that come to we

And piece just to one it. Got visibility. last tied

guess, in as the You just one terms quarter, portfolios million to it reserved should us growth where early is and credit into look took the visibility still losses? perspective of stage of we this And give on a a tied expect losses the year? losses, $XX half charge I on the off back we

word, a in yes. And Cadieux. Marc it's Ebrahim, Hi

change access or what's dependent is function was of in charge abrupt what clients investor I sort effectively to capital of a deterioration failing speedier that we think reflect So M&A. unreserved saw that offs the the --

And the to a that to you options investor previously. get so quarter. out repay would liquidity on company support enough was second in Relative trying ago, if company already had yourself availed get second sold more quarter us. or same the had for low of have were different year perhaps and a to to still That in

second The this of your back question, to half I goes year. the think to answer

touched already we've high level a as of think I there's uncertainty. on,

pretty charge pretty already, would unreserved beginning are and assigned charge $XX think charge number low. As the still offs The offs remain right, of very of I individual acknowledge offs mentioned assigned, still at the million, but you low.

of this back about in think a And I quarter depends have. that where so higher the and lot playing year, be thinking really half the second into companies it the well will the on or average these of that whether environment persists doesn't, liquidity as

higher And see M&A to so it if again half see degree happens, function could what predict, of of think dependent those we'll and I to diminished, hard charge some access be again of in back the we the largely investor but year. capital a offs it’s will then remain

questions. Got Thanks it. for taking my

Yes.

next line is Gosalia from Stanley. Your Morgan of question the with Manan

is line open. Your

there to how have company, appreciate at much decline really general vary M&A all I money? and But Hi, raise on they companies or before opportunities. would Appreciate deposit how get guess a burn sense have they've to and to balances could comments just before accelerated. look but the go of and that they do out environment to good have raise portfolio that by wanted the afternoon. I they you think rate the I much they runway have money

protects margin. client to going quality protects been Marc cash liquidity and that And is the Companies it well. The in burn it is previous credit in slow talked about good from start add. more total calls. Greg, history they've overall It’s and -- answered on can wide dependent. by very from this standpoint again which you things, with the ever we your than and earnings funds question, standpoint my that news flushed so the and money of to company are two a flow it's want part helps project as it's I'll So still

of And back see just we important, mix, is I the a Because to and two about. what a and coming Capital see go time so about think powder. lot said, the publicly and from could important with I Dan spent a the of my there so is it there talked that a so money patient, while decline outlook, good There is, we about quarters, in in many is next view now And it's and understand talked in privately think much of corrected. money is continue Venture be what new bit closed. balance that news yes, rate. but again, which to there to valuations talking money good it new at our have burn And my is lot wait may we out I clip. you starting and it -- we XX% there when what companies is standpoint funds they have little in the dry I healthy deployed being we're a out be will

with we've have perspective not on about past worried are what lot -- average. companies to balances flushed lower view, when relative my they about not the cash, a on it in from So seen they're a cash worried credit

It’s just add that, point of Marc reference. Cadieux, a historical to I'll

And higher had offs. quarters, and is investor half that of elevated races companies then, the liquidity a XXXX, started so ’XX the the of strong two part off them short. first and But patch all get to I was year where these early again. experience back charge the some stage yes, average half pressure it build that see have we more dependent the level ’XX thinking we If We front think right? back XXXX, in of might that today, of about spring them to same saw through

it will a seeing all mitigating really be I potential particularly that to being the higher average things equal, pressure. think companies good of of is lived. if level And we're what yes, long so under longer, it's then if more now, factor But not is liquidity terribly

deck. risk management then you And about proactive Thanks. the separately, That's interest great in rate just color. talk

detail so how protecting rates basis more moving hikes Because you the additional the that? do curve? the from in the or coming of to upside rate of going And quarters? clearly against more points lower. want on much You're reduce Any we in that have that's to on solid some focused now XXX

higher we do we're can ’XX basis positioned dampening the to upside Yes. XXX look sensitivity think before 'XX XX% This well same point rates. done still below at is back is start But to Dan, time the to the shop. to parallel at what I and time, we've this in for frame for asset

progressively attention So to we'll view that paying what's in the forward curve.

we now, have can couple further. to sensitivity manage at help embed that that protect the and downside. receive some rates our And lending X.X% we agreement. So should that to think down Right that floors We'll to we're percentage go. swaps asset fixed sitting to and we continuing in a do still through points

Great. Thank you.

Yes.

is question with Haire next Your line Casey Jefferies. from of the

line Your open. is

thanks. Yes, evening everyone. Good

correctly, is a match know expect you you I going understanding the funding you NII flowing you on forward? So growth, down. bond billion deposit loan question if expect guide guys do enough but the outflows? Because loan $X quarter, growth? And cash the to a through you fund that and some assuming what to I'm have the deposits book for are

about securities the Yes. of cash Dan. $X roughly investor investment worth there's off quarters. portfolio the coming it's it of talked Casey, billion We presentation, flow

and helps to we've deposits manage talked that foundation the solid of the from at to the least opportunities borrowings shore we've us off least provides that outstanding So And have wholesale and had the that, have to flows. on start. some then drive balance we On about sheet top past, we at in balance flow. cash periodic short-term to liquidity effectively sheet up as just

cash have options the considered continue we flow. have. that that some So to to guide the are all those options in those NII are manage we And the of

of does But Okay. color lays broader great guys to XX%. point way obviously bit Very so scenario that conservative good. for your Moody's could that Slide Regionally, things how innovation shrinkage like that's And guys different, there are to what are been the change, there That a you a you, indicators you to? downside any then pretty that as like is better garden it what and for GDP understanding way speaks the how a thus far? my little you of So and macro, tech like a XX have aggressive unemployment X.X% out mean reserve of good peak to question or markets? X.X%, have variety. we for that has policy gives -- waited

Yes.

Marc. recession. number aren't it's customers would to investor for portfolio a companies speaking, broadly aside putting to I be product the to degrees that years. speaking, rest have in is So dependent differing And here sell what or service segments generally to particularly say a the The impacted would portfolio, going of by our of that and some the varying

portfolio that consumer on There And our of segments extension, the And think are the first so are I facing, depend could stress that's thing. I sensitivity in unemployment. of see consumer think there. by there spending, is some some

going and I'm to sure asking. you're I'm make stop So question the answering

address. that's Yes. easy That's I No, it’s not to great. know, great.

add something? want to You

it's Casey, Dan.

is, close our highest through change the in a this do cycle of loss kind to of it cycle relative talked X%. portfolio dependent I segments, what highest COVID, risky losses. very about the think another of this the stage around more book seen have on to in rates life with rate stress way to get you we scenario Moody's look the you've reserve at early we in us And onset reserved that the investor at the economic know, X%. are Well,

riskiest that's reserve where a of our seeing from on kind So heading segment.

hopefully scenario. little So trying helps are to bit a a that point more in out negative how for covered we

buybacks upcoming. of, bit? me the capital balance sheet of growth on place just balance one front. Last little climbing Obviously, a you. ratios capital from in running with next with lot being kind the Got are if sheet, considered in the not Wondering share

how obviously next always we're the of out. couple Casey, open see actions. to Yes. We'll play quarters capital

off seen dry the folks that’s amount in with pretty folks this You've and spot we've been comes have our out comfortable to sidelines, Once rapidly. are that get where powder business we there a here that valuation of returns growth before.

ready of plays capital next So out all we quarters, but options the of over for to that, perspective. got this if we'll couple a from consider obviously, be our

Thank Great. you.

with is Your line the of next from Securities. Wells Shaw Fargo Jared question

line Your is open.

Hey, good afternoon.

Hey, Jared.

we should Just looking the this XX% calling beta I and you the XX% at was be to looks growth? -- like. basically mean, can growth up this I we going XX we thinking betas, initial now you about deposit moderate it get % it to got quarter, there quarter cycle. additional through from the out clearly that here? jump Is are up next you How to pretty beta are quickly see or think

I this you if to still through did XX going on it remainder that this the cycle. quarter, Jared, basis projecting of bit moderate in the we Yes. sheet June the see around we look basis that is We're off that balance right flow And XX points points. think at quarter a forecast our for XX to year. beta throughout think really is

quarter. are within deposits those So the some beta higher more significantly the that increase priced

important rate So and dictate to that the beta them obviously, But points clients' most and that market paying a importantly basis our we'll we market XX through still range. think their within deposits that is deposits to cycle us. we're for conditions retaining

compression looking the And to competitive spread market? at Okay. accelerating? about continue a obviously, And we from how growth be be should loan that thinking outlook, here? then Thanks. Should it's

through think yield start some around be as XX% we loan If as it we the of there could around we're forward. get I XX%, to floors, you're and in talking XX% or see beta, go now terms you right of

competitive and pretty And to still I good there. right go on it still again, out as data. loan we good position pretty we're in here So back are But a think the pipelines full again, now. is

Yes. the Is pricing. pricing new future loan something the additional new continuing and I see on about spreads compression? growth -- guess with that to

ahead. go Yes,

Jared, it's Dan.

I market. our as in into at got. there's growth think little There's factored rest beta are. the we've just on in income we're net still and range that's origination but spreads the I And on compression XX% bit in loan you're what that year, where new seeing of look factored based it, all we the a of think for interest

Okay, great. Thank you.

Yes.

line the John Evercore Pancari of from is next Your with question ISI.

open. is line Your

Good afternoon.

Hey John.

you quarters. that in expectation charge you quarter. charge could On it perhaps the I see clarify maybe expectation you then you saw expectations off concentration I quarter see greatest second by the I know portfolio you pressure -- decrease versus for where portfolio, the look specifically stage. loss considering? the Can what would rising for be innovation guess your question, for Ebrahim's -- guess can we you Thanks. the outlook? say do bit coming just help and as early -- also you offs little second and the the and from growth but you And a at had stage where the mentioned would in your in

X% is total but to speaking, But in here. again, most would of urge higher dramatically probably it's offs high just any I a as roughly try of come want have see potentially charge the because it's going we here. here. wouldn't there, larger to Yes, expect early and offs have losses And predict point were future resist instructive where would we fewer, losses. And say downturn a prolonged expect has quite Marc. to is investor seen mid and particular extent historically that, the percentage the stop to then charge severity, -- down to is generally history In uncertainty generally [indiscernible] dependent. dependent segment I investor and then the really the we to to would related a loans highest stage make That see I'm later portfolio the And now. stage to to after

it. Got

the portfolio, about correct? the X% if of you areas in of the growth stage early amount flows to your piece, look content the at higher would So

go allowance you early back to see if you stage slide to credit the to XX, at X.XX% dependent, And almost levels to earlier for by that the the up of and breakdown referenced XXXX, alluded XXXX as for were earlier, Dan segment. Correct. loss investor that segment

the portfolio. John, total But the historically. stage we're rates as what loan And that's only X% loss of investor about, you highest the dependent think as I early to referring about mean, is

it. book? then you're could bank how on portfolio, credit that compensation frequency Got maybe stock-based Thanks, potential got I just and of -- talk and the you about everything, Yes, questions Mike. just out exposure so severity there viewing Right. within getting it. And given regarding private some

reflective and again Marc of it's have say, we I'd reserve the Bank. on Private

to credit point, by importantly, some and time, be a from these We It mortgage mortgages well continue wealthy to expect fairly diminished tend loan large very the strong margined at is quality standpoint. most your portfolio there clients, be value there. to same but employed. pretty may income, to And a gainfully

pretty in giving seeing feel but certainly cause of for there segments time. this being not bulk quarter concern that portfolio about There so too, our second are the us the confident other that. at anything And that's

it. Got

you drivers? terms Okay, income, core on that thanks, your for terms the to increasing How could of mid-XXs. fee growth guidance Maybe break expectation? core fee the Marc. of -- us does by in the And out unpack that that then in businesses your the

first new it's we client acquisition. really client John, we Dan. foremost, and at activity, see Yes. to when I'll continue strong start, look new

the the we So at the the guidance, income. for from fee coming increase continued fund vast is drivers majority foundation When for in that's of look client kind of transaction activity. that

very basis X balance to we've points sheet off basis from gone client very close on So the to XX points funds. quickly,

in as balances X Now funds points, and basis points $XXX X it basis you're with spread. to points not what XX with Fed is. see just already basis portfolio we'll has additional the incorporated in guidance of another That is the the seeing worth forecast, at every transpired

upside Could there get from rate So hikes. additional we is there.

taking for Thanks right. All my question. great. Okay,

Thanks, John. Yes.

of the Your with KBW. Chris next question line McGratty comes from

Your line is open.

forecast off I moved remind total Dan within assumptions, Thanks. the can balance I'm What your trying me on or size are what you it for like the growth. off funds And this client quarter? guess, updated your deposit trends, sheet Great. to then Greg, the gauge for balance you on sheet?

funds So the at banking from we when balance look to sheet, the bit a Dan. $XX the Chris, sheet the at it clients on off higher balance the we balance quarter. of of because close sheet our billion it's total order it, funds move funds off off But to rates. generally gets within sheet for also magnitude, we balance funds flowing global When from on little we saw had something complicated, look from

in have that bring stands and fourth the and third but makes quarter, us from sense of a the is it extent perspective tempered expectation that there to balance that the we the effectively more sheet. ready onto pricing for Now to those funds

moved than you would maybe reverse then in would be protected walk And on sooner be I you book. guys or to assume a to where lot scenario great. that? me held Can to if be And through my Okay, a your portfolio you have others that? there'd the mark maturities bond follow-up allowed so, a

in no doing have or we balance we're the the a overall take that. liquidity we Chris, sheet, of no to really intention so solid position, just Yes, intention look as of If expectation do a it.

you. Okay. Thank

next Vilas of line question UBS. from comes the Abraham Your with

Your line is open.

the Thanks the everyone. is Hey all for very color call helpful. market on today

of about market down? can they on still Are So out in committed I how uncomfortable the they’re abundance their that's as that you're marked hear getting it now? exposures right be as the public accounts. gets actually but portfolio of side is powder bank Just up dry you much presumably from have particularly all, LP this you moving what there. thinking things But private may their in at hearing discuss capital,

they're and you what even concern and balances. the made time spent my Greg, And equity more about look the real Clearly, private time time. right getting that Mike in and where food the This hearing the time of more start, at at -- even markets the with but limited -- standpoint he's they their having know any I'm returns not downs return position for they're give over at Yes. write I'll it's they about they -- is dollars have From Capital. chain top has I now, they're or still hearing. will partners they the recently to over seeing have color Venture

So missed lot concerned in at who firms that and ‘XX, over that was that's of the market on ‘XX, bad it they they decade. last looked because trajectory turned number the out one. in money a didn't down Number market two, investment XXXX, back the and a were incredibly have

been in say, for an to to in now. what that haven't And come back interest people the market great right seeing so a we're wow, time

Now so what they it. that's part are saying, of

you answer cycle are there's the saying a as for is, we far Second so can is, not go, formations? well, we raised in expect they are. of there is, about economy and has part about part partners surprisingly. Mike, answer any, doing the zero, around if worried down worried my funds we've last -- that. don't pace your of see very But any, as partners. are limited much quickly you The from lot new slow firms question And is is you view defaults very we the underlying about is as optimistic somewhat not what yes, if any and it didn't any they're innovation seen that What the Speakers] [Multiple would limited

data shows Just, recently, June XX. of $X.XX you here that, think the end mean, what coming powder out if saw trillion you the I of at dry

deploying mind areas. in valuations amount a sector, pensions you so and I'm some terms lot private and saying, that the bit certainly to the the keep of one so valuations down. of and in little interest So effect, public in The because of endowments though significant there's a of thing have have called do overweighted look, market more in denominator are come public

a has And anecdotal maybe but let's so down is about, some there hey, bit, not interest commentary waned. my slow little

strong so other just create But may so time they of be and tax for drop bit could the it's And economic during the companies. strong demand, dollars little some cycles, coming down, areas. terms tend dollars the great buying and they interest saving a again, in these of be with of clearly to states

But bit So a down the I maybe don't them still Greg bit. as see going for again opportunities slow said, little tremendous slowing it’s that just just a forward. pace down,

got it. helpful. very That's Okay.

the are sciences capital the it here a portfolio, you put as second gets quarters underwriting ago changes for from like companies. life on a as access guys equity, that to more of these sheets? all environment those as as some couple opportunity Can back sounds that you here looking talk little at of bit Has changed term though challenging out the at box about an out? from just you Just

wish start, may Marc. I'll add. to Mike It's

provider services our so every cycle matter point we of be to And hard clients the to are. try consistent where dependable predictable, very, historically we very speaking, at the in no

or sector in very as we you seeing. so deals we are are originate. new at interested much from take would the And segment to we're same being obviously new differ segment. that about clients time, the expect, on we sector, And which loan thoughtful we And demand to might

new. thoughtful is degree given environment so changes as we a add? us consistent. around nothing lean well what strive to what as for We the that will and served be And -- of opportunities far long, a to you how time. to would to and that's be when But in course long but to Mike, again that practice has

having handle on inflation? a of watching rate continue Do we're are those things to that lean there's they So are of at some sure you watching. were it's Yes, think point, in that opportunity different pricing? things going to there VCs interest in which and I lean increases increase of what power, support. absorb some about, to they the when help our discussions have how I a the some on. clients ones the the mean, rates. clients interest least for in to pricing great there -- they're we're those Can and are going with making for for company think some us good few But the of backdrop, Marc’s things we're on So increases? looking the particularly things does the

you all That's Thank Great. had. guys. I

Thanks.

Andrew the of Your from Jaffray. Piper comes line next with question Liesch

is line open. Your

Thanks the for questions. taking

going? guide we get expenses that where like backing of and chart, the looks to ramp the year? do up it's half the investments curious And big second here, a merger on question expense expense in pretty just Just how the it guide? are I'm these a from

it's Yes, Greg.

You that know, we investing initiatives have lot obviously still of we're a in.

You can me, infrastructure growth, from things, -- your we're happening excuse actually We're a lot headcount adding of fact digital look There's but in lowering the to support at what's standpoint investment. build. still of it is trajectory.

a But And so give give looking Dan, open I'll services, back at and professional racks from to at that looking little standpoint, more we're on we're that. you color. pulling

have look quarter, did like. if in the incentive for in overall trajectory, the foremost, expenses the around and considering year, pullback reductions the of the So some we expectations first compensation you at and expense our

in color look because when rate really quarter little reduction run around probably QX, at the expense put for So in that bit you're rate [XXX of we're we look area. in a just a expenses, lower range, for run just this little the to the I of bit at it. XXX] to When (ph)

we of dial And to So us. the to hit have We pace, opportunity some at -- opportunities the the able opportunity much invest professional we're and clearly balance focused services that that take But be of to know the on of expense investment absolutely we now to need management. rate advantage a management like. we investments. was on consultants in front growing accelerator sheet clearly and back higher with at when we revenue through

to to continue be So invest in just us. some ways front we slower opportunity to dial see those turning Again, must because period. in we investments able really us to though, that a of are for on this temper of

Understood. Thanks for taking the question.

You've covered everything else.

Thanks.

is David question next of Your the from Autonomous. Smith line with

open. is line Your

that Does go balance the sizes mean you historically how earlier global essentially on mid the banking? go focused space grown loans. could fund larger above can fund means spoke market sheet having You on? about mid that Hi, take you've the that can you in above market of you

start. I'll Greg, is This

interesting of always definitions mid I think market. there's

were headroom gives when I very even start things from a to our so higher firms. years to Then look the capability year go done can look where we I than up analysis, just if -- XX% selectively would ago you ago, more those with or and support looking together and PE ability when you think syndication can growth combine in you than firms. say compared highest our large there, So two even capacity have to we've two we you're more at that our syndicate, quality us that for at at we by

would you size, the it Now when there. returns argue, could large so a I becomes, to certain and do aren't

got can I again, grow of and add lots Mike, -- go we're you we've actually, to we headroom So would to very think what very, large firms. anything? two

increase here the strategies. think we benefit allows grow to they as that continue size bring on certain they is funds the us become I and funds even of more larger and new with funds, mentioned larger

going helpful that's think us for to So going I very forward. be

a been And front that economy. would any the it's within Great. your weakness from Are it uniform of for pretty and period has there in broadly, highlight? you in spots Or terms tough then, innovation view? bright the valuation investment been

positive I'm glad you asked a question.

time across lot, there there I best a out many So with go clients. there bright do. you the so what's spots been It are has is of lot. the part to And and we are spend mean, always get board. what a it you are so when amazing

and can in at in much health care much You look ad in is and so in clean there's things getting so the so every broad broadly there's digital area. tech It that's so speaking literally services health. and many things biotechnology tech, energy in excitement, many healthcare

it’s us innovation we incredible watching at -- reason hear ground optimistic these the such you spend we're companies economy, when the and the them talk long-term time an so about medium the of And to on and grow pace. get with about

that that I one at like times is of question, was doing up The the in are actually stands free you a because your is end, now, last where when other have better way above companies there it ones? end recalibration years. to amazing answer segment you things. Is not being is couple they're have area? And believe So the the lot really, of all one we right when money the there

as track back make think really to right and companies long-term. are on not decisions right just I and going get disciplined the the You're the for

as nobody much correction, as wants recalibration. say, a a you'd to So like

long it's going be to think actually I run. healthy the in

you. Thank Got it.

Yes.

further call at Mr. now There turn time. questions to are the over no this Becker. will I back Greg

Thank you. Great.

question, and The spent lot volatile And markets to going where But on. and going about market. a talking of time everyone are view what lot of the we we it's for a us. close the we and So and last with businesses the view we great what's good if and thank into next quarters way Securities has taken I’m the Obviously, where core which joining acquisition so positive. gone is outlook sit. Private, do even working why a client Clearly, four we the I businesses the you lot up do and about look headed think day down growth lot every the want can a given look strong to of and table many last context that on few support we've we've get businesses and and And behind uncertainty you so four time built. is optimistic and given together and this flows client right and we talked we're we where also you end all and fee, have, being this that when really, loan and at a that the it we our positives the team SEB look we is where so that, liquidity the we're as around they and of across infrastructure income the going year. enhancements that assume with have new again, pipeline, just now year and feel SEB There's really advice. all about being look such the balance those to having and

now amazing with with has up get their have right solutions and ability to front work Our us and the come them attention sit stronger. of companies in most to never been

with optimistic that may the tone, and do is of Huge they of Appreciate So market. the team, definitely this the and forward single clients support every have through us. clients. and great to our that their to side to with ones get an positive for challenges of look despite also in thanks us front working heavy working there day we the us our lifting they're with working them our be

joining So you. a Thank Have day. wonderful for us. thanks everyone to

Ladies call. and for you concludes participating. thank today's conference This gentlemen,

disconnect. now You may