SVB Financial (SIVBQ) 19 Jan 232022 Q4 Earnings call transcript

Good day. My name is Emma, and I will be your conference operator today. At this time, I would like to welcome everyone to SVB Financial Group Q4 2022 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. Instructions]. [Operator you. Thank

of Head you begin may Meghan Investor conference. your O'Leary, Relations,

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

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

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

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

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

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

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

go Before on and environment. into briefly the market our comment want kind of to business we I just questions,

investment income important global about which driven banking set We healthy think revenue activity, the fee investment to we improved it's see. our from loan technology, pharma saw market across despite we banking I'll core funds, foreign and momentum by record client healthy driven margins, and great lending, to see minute. I private kind mortgage in by had banking, was business When deal fee a we of broader which the board backdrop, continue in First, a to talk context. strength growth had

new well the loans of and which of obviously net conditions. is as showed investment more client VC strong quarter, we had for client balanced deteriorating important our and reflects non-performing as And economic fund signs than clients we in which higher provision in acquisition of which cash burn charge-offs solid, And very notable. continued levels, flows XXXX in remains our the pace saw And moderation, welcomed. was as expectations higher declined pre-COVID is credit although approximately client

are we and remain markets fact, a still now. in where We so dramatic from are the pressure Now, little we likely bit admit in don't right first they're expect throughout change even the And couple more to challenging, any XXXX. that quarters.

again, So a other in words, not improvement. expecting dramatic

year. and expect market to private really public there's in it on maybe And and direction day broader And change big investment. shut. time a of public don't there's window Global we much a almost, is significantly there's has a and that been until media. latter put And hear volatility inflation In that over longest still pretty of effectively the reduced we maybe uncertainty the the in the every the lot half of about rates economy. in news

for for will pressure, what performance still growth basis. daily balance So our half expect We on income as other XX? higher pressure we and continue interest headwinds these kind investment important, of it mean it in momentum expect first take second with burn. does are good net improvement. of a in cash on conditions we But doesn't put doesn't XX although remain and credit it continued we'll us provision, somewhat to expect of overall, and and And that venture much the come half, between the

dollars. pullback. improvement burn to to the believe cash about deployment where of more which for to are a real It's In we be is we continue continue again the fact, going no on

that year. And despite the the investment enough in with We QX the those the again will portfolio our provide second towards during earnings half year. quarter, interest to to the downs visibility stabilize NIM full a believe expect XXXX this shift 'XX inflection point an see at and billion shift and interest bearing income X and roughly deposits could point we filed progressive net securities of revenue details uncertainty combined provide deck outlook We in pay in build have throughout market today. meaningful our that year tailwinds earlier

lot which of be deep as people with management seasoned experienced team a which which We're and important capital adding And those business don't lots our note about challenging if even get or focus a consistent are we have there'll levels. And very experience A market strategy. well. we prepared things know liquid quality, a challenges improve, the worse, is questions markets of balance again, navigating on important. long-term prolonged it's strong if to high sheet I new

So when you where we better put the And and best or place fine. in We And the be. prolonged if did that a there longer, bit was of deeper than deeper. is even we're we're believe outlook certainly for little to uncertainty. period this even going the that to time, weather know about all more economy quarter clearly that together, we we innovation feel last

So it with going I'm to questions. open to to that, up turn the back operator to

Instructions]. [Operator you. Thank

America. Bank Your first question Poonawala of line today comes from of Ebrahim the with

line open. is Your now

It the guess, better And think cut you just outflows like in XX slide look enough follow wanted to you're XXXX around good on to mentioned client at I today. sounds was mean, and obviously, of up I terms visibility it what half fund, quarter-over-quarter. you having the guidance So the feeling to that in provide just see guidance.

wrong, versus are us you to just green with added in If but terms Would improvement? you that don't things a And to are the mind, seeing of clients. there. today think, conversations I visibility of understand can customer shoots of love What's all months you sense start ago? having the what this three give go I that

guidance, that's where we're would add here's following. is, that's what is because our hoping we about kind a And with say, we more which start. quarter. the expectations Yes, were it couple hearing, Mike want third places. coming to were fit And comments. of say even didn't clarity give more of I that disappointed. is think would sure And seen and One was what I'm had will to didn't have from we I'll I Ebrahim, we this where the I color my would how in the were why

when of Companies on of in raise that. hired And to dramatic going conversations couple deployment it now of QX to clearly much gosh, more you of having years. a realized hear it, the in the rates, that you're you're happen we companies, in And I that about burn they're last decrease with And capital money, expected We venture coming a because talking going we're level think we about, is that saw see in it's hard more to bunch some pull QX. down. really in didn't back more and QX.

is. happened than whatever as or cut thought So cycles. we're back it cut think as look is more costs to we had they was areas. a And other don't had that to And XX%, to in going XX%, other going companies quickly I we're to, going it only in XX%, cash that reason lot

And was just that prolonged period. a so

year. in going little bit that start and we then are, what bit capital third So our more in a pretty little fourth decline see quarter a half But see quarters, to you're venture that the know declined expectations the improvement continued the actually to quarter. a significantly is the in of again, two second first in

the of decline. burn capital venture forecast to a with higher more deployment, rosier QX client pullback. of it's little levels QX of this then burn you're see, So isn't a opposite, or fact, going our again, And in and bit a continuation cash

that again, is clients, -- that narrative money two And we all the you outlook and first happen, the still are money. as same, still. the to half. narrative have more to when in the our that's some They're not half second that's we kind talk that versus shaping periods of going spending that's first clients are So all but raising know,

color to to it over Mike, them. you So to turn any add

inflation. had there's Great. about I just coming not a XX Thanks Greg. Ebrahim, we reports inflation on impact going had We to report XX January whether even inflation are and data having rates get a points, we more Sure. When right. investors are and February an think a the few start we're clarity, to up. or think the report, rising lot

are see rates So starting inflation. we're impact an have to on to starting that

out, for on that's of clarity for to China again, actually policy COVID about we'll know and We're I end China. impact is the February starting whether that in really investors supply looking impact zero to what's here come go and January, gone then having through start happening, the can chains of COVID inflation. important think that not through or see

audit the various companies you The in at to companies Europe, valuations. the most to off right? with of been energy I here some perhaps start see to readjusting that more have of reports data who that But that auditors start and to inflation. in the some importantly, valuations, think holding are going you're between at be about come we're And looking valuation. there'll points terms up. And that in have valuation the are the is the going the adjustments these impact get impact

I So think really helpful. that's

of that's a going a the investors out right prioritize little to in lot again, there's There's holding still stage. good longer bit whole investments anticipated, they still on going lot off probably exits so a whole know. to there's the I investments. their I still just think, slowing as very know a obviously have helpful. They're companies are And not of of still lot There's lot there's pace there. investing here. to opportunities. think early there's no hold than And now, these obviously, out they're there. you just they But on investments powder, lot a not a on of IPOs, But dry because They're have but to

the of because where sitting for which really been their the hold lens starting are a are right. on had is, news news. levels, you're to coming bad lot down good there's have the lot resetting spends they're longer. when starting that Advertising news, they see the they you The to the burn, know on layoffs, several that, to and the to they But They've of starting their on to Greg shift focus news bad months. need see as have news cash. Obviously, a spin is last been cash to the layoff. their Now, over they cash in entrepreneur, but good the mentioned, we

big a we're thing been that's so seeing that here. And

to they're all on profitability. acquisition costs client focusing back getting and So

or again, just to no is the sake for So longer thing do. growth growth

matter. do absolutely economics So

holding So say, reset taking to they out, more been of eventually, valuations, the eventually their very, start to focused in terms on valuations. expectations but starts would very cash on run been they've they've I off investments,

here some we're I couple would next when And the platform some starting of we a the to as over think perhaps and see I start to as breaks of believe second Greg year you about. there, stabilization to of half again, to see that's shoots And for of see that so talking months, more that bit little those through. a think describing the start were you

given of us restructuring and think in process higher any maybe And sheet a now? any $XX it that about inverted? about? book Understood. Who AFS available be about, separate a question view billion, for guess of management forward pulling give asset should from a we there billion. today, COVID Just us one, the is When for might piecemeal balance securities, I some those maturities the where perspective, sense, knows on $XX like six a Give locking is we Dan. the months already sale thought interest side, from around of think rates

Good Abraham. payback portfolio roughly nine for the was out we did look at quarter, the AFS clear. period on is, the that Treasury rationale months. of the billion example, And be In sale that sale very Yes, to dollars behind we for question.

the for really and at, a that's that payback tangible value book to So way us period from perspective, look opportunity.

But say along opportunistic any some -- an in things wouldn't the on we can period, warrant to lens those and can be a portfolio. for periodically sale do these payback lines. small wholesale for I degree desire So change by that gains available sales with there's offset

tangible book a perspective, the but same payback at from opportunistically it looking about thinking time, at value period. So

taking my for Thanks questions. Got it.

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

Your now line open. is

on Slide XX. of questions Couple

non-interest-bearing the fourth by so high mix, off, handicap. very difficult to First sort quarter 'XX. That's XXs of obviously

Just what's giving you confidence around that number.

Mike more little us wants mix on well. going start. is it's two are Casey, bit to non-interest-bearing give that I'll Dan, bottom-out. we're looking that as There things add confidence where a at to that Yes,

across detail the on and lot have foremost, First our the excess time lie a dollars spent dollars these more teams in versus into deposit where segments different accounts. getting operating

how be exactly available much So deposit perspective from a is transferred. to

that non-interest-bearing get to never of where we to start is going Now that analysis lie. piece is but a allows perfect think sense to

you then of before. look And to bottoming big think this the the that the client a secondly, banks a total other you high fact is total when out range. funds balance take at experience a the high to bottom at to And we've company, which when route close high-teens and it historical And the in client is back, about XX% we mid-teens non-interest-bearing step have $XXX funds range, no talked off is about compare and that start relative XXs sheet in really that, billion that you when our think is to we to don't low. looking range,

we've comparison peer that our just we've assessment got individual where would the historical bottom-out, in plus So that on done experience, to banks.

continue the to fourth encouraged throughout the we're And slowdown it's pace perfect that expect in change of XXXX. we the and sure. Now, that here quarter. for by not And

letter thank returned levels, for some good, to need very such up see VC And you deposits. is? flowing that about, you guys obviously don't that obviously And now. year you the out which Very why to XXXX monster strong. provide Because obviously was lot, because it's talk color in deployment as then comes a a to that Can were you.

the And what back it's so makes push that a year? very replace to banner be to going sense, it hard was

XXX perspective I'll XXX the We're why indicator that an quarter, deployment of of annualized an venture or in to go a Casey. that quarter, fourth billion billion so as of just the XX run with think quarter sheet from on in billion of statement results sense. looking kind deployment balance makes the venture is at the balance sheet. Yes, to

quarter. level for decline that burn. that the what did Greg much we see to third cash lower mentioned, And was as seeing we gets we're lower well the While in where it deposits, Mike, in than what reason as of saw the

we much it burn a slower cash inflows mid deposit venture more get balance level. the the versus much on range, billion in look call on we sheet number, to even when that So started deployment $XX see a to at normalized

an back of level, deployment cash we to just to same think XXXX Mike at I but based Greg can what potential the burn growth. the is on said, without that for indicator deposit not to level, going that So with the slow being continuing deposit and get just

Got you.

Okay.

bp the little on which because bit have that color if it's confusion. Just is, the a I you a today. lower a talked that last a you of, lower, first about tenure, think little on you some create down With quarter on incremental one this number, can provide pressure amortization here, premium tenure, memorization the tenure guys me, But predicated for the for obviously premium does it finishes XX lot bit. just XXX

Yes.

come quarter. anticipate the reason still mortgage here would we And that is the for the premium to first continue amortization that spreads to So decline in in.

premium an it's continue down Now, to mortgage come that consider after increase in the first we from continue to to the have in going sensitivity in quarter, but quarter, to spreads the just because the extent the quarter, see quarter the do from amortization the we that fourth quarter. to come decrease just down, XX-year of first to the that

comes next Alexopoulos line with from Your the Steven question JPMorgan. of

line now is Your open.

[ph] right what So [the are and would of you follow now with of normal now those levels cash those cash slowing, burn consider to words] each has still up the hand a the pace on both burn amount guys elevated? level the or

you more the to well, years a of six, period? I'll mature is a more ways. go of It's portfolio, five one back we difficult and a back, say really go Yes. Our different thing what normal portfolio. normal Greg. start. lot to have is in is, try seven say and companies or for that variety you Trying When the

So you tend about a going they lot keep to to think more cash.

have don't experience. quite so level we same of And the

cash reducing, you're they'll the of the to still towards be cash balance like, from a to burn are think this more going the going I first my elevated I'll but going half, normal to end rates year, be because see be more is they're call sense what still get level, of higher. we're to

And so been hadn't and again, XX, to I I'll first thing factored this that the to at we'll have of that increase get one they all almost level. longest this in for public a call is, modest big more normal get when private you any really think, 'XX it's And, zero capital deployment. in market venture And which been of part gets more again, expect unexpected And But most 'XX. have for IPOs. we has been time impact 'XX is or markets.

our them one, believe two, with go well. do number opens when of beneficiaries And that number And that as that doing in. help a good we be are spend things, of up, more really to that when time two be them position really clients, one, comes many to going we're late-stage we in it there's that cash market the certainly public, and

those just “settle which normal so predict it's hard will, are to things it, all how in, to factored it makes a level”. And exactly out

Okay. very is level? type not need it's guidance? roughly, That's Like investment roughly year what one-for-one, would To to know from this based And XXXX but I a this VC on? fair. what get of you

that in that or add. going of pick capital. points 'XX, in XX%, Yes. a expect not in see we about up roughly the I those to -- XX% from decline comments, you're kind to may of kind it my up the And half. you're the low of in back to Mike in And little to a to give venture way opening going of pick first and lot. a kind then, first still I'll that to of tried start want the but is Dan think color half bit

is about think got roughly quarter, I run burn just annualize And of lower rate the point billion, slightly you than the aggregate because that end the the again, So in everything bit think actually Again, about you factor the you're year. it, But at that, it's second probably see benefit for looking in a little we're for you're everything our rates fourth estimates, more and at, is forecast you the XXX you XXX for we'll billion-ish a loaded negative. fourth the 'XX quarter, if when to in, front that, rough half. else.

the doesn't in increase is add just it back to saying Steve Yes. much what half. very Greg

So form come market thinking significant back of to year. half aggressive, we're going of in being the with the way amounts that no the is or shape, deployment, back

talking that not plus then QX you're alone. QX, So each what you just that quarter, fourth net But a the investment we midpoint to normalization with in the interest pay we're the kind quarter get non-interest around QX of And bearing about decline down shift the in can slowdown the deposits, you QX -- and guidance those material the going margin, to see in the with in and some and into in growth see of to securities year, start do levels. right of income see factors

the venture income. in in starts levels build a of that increase securities small deployment, interest non-interest-bearing to So XXXX the plus net stabilization pay for happened down towards momentum back the

Got it.

Okay.

clarify, mentioned Finally, just high to you XX%.

mix, then the second this and I bottom of said midpoint thought grow you a the of half. then bottom, in might year the times the the that bottom As deposits but the you said in couple non-interest-bearing

XXs expect the in you to half that actually high year below and the first XX% bearing So of Thanks. deposits then bottom interest grow the high the if level? to

non-interest bearing as to all expect out some to quarter that to Steve. fourth see get And expectation perspective. bearing total throughout into would the is XXXX. we're from we're into going shift, non-interest we that's really really bottom a deposit where The to see that going of bearing No, mix interest continue we

the time, to XXXX cash in the improvement can we deployment expect half and with bubble. At the increase in we burn the continue back venture same in slowdown what a small is see in deposit overall of that small and

things. really So they different two are

an it's benefit But in for where half? that Okay. deposits looking you're second interest-bearing the

right. That's

Brody with of question comes Preston the line UBS. from next Your

line is now open. Your

in non-interest-bearing from up there sense job just perspective actually just level wanted kind need just wanted I account account get of on questioning to pretty level asked of of like non-interest growth the I couple of bearing. be maybe deposits, a these that maintaining an hand. to line just follow is a just for, companies a to the of actually have because keep on quarters. I to over done need guys you last -- a natural good

just account wanted if level to sense there's bottom I account of where if things levels, And average these naturally for, an kind out. a so get non-interest-bearing

your going early really an Greg, things. publicly The it's is color commentary at and average Brody, or Dan, answer stage, high some to mid traded, start because all not I'm to it. may any to the level, late depends want is Yes. of that challenge a Mike those stage, upon more client, add stage, question there it

at you're to about kind said, in in that of one that going accounts, out. against of comment it you have repeat. all the think this XX% XXs, total high non-interest-bearing Right think about as bottoming now if was out it all mid to bottoming XXs, to look Dan of we're Here's totality you and high funds. kind total It made way to look you the about that a about at but bottom, of be funds. this client When of a client again, But why, client again, at teens factor funds. high total the the I'll

analysis we've low. and that all with it factor be bottoming of all you be information, out. our can And Obviously, that when done. seems to We believe wrong, we assumptions have we'd would that clients, change, can types be historically, but that's data the that where be in the the

the at don't or of the total if of to of XX% I just teens high think add year. would guys client the Dan, you in not funds, know, XX%, it Mike, that? end to this about So mid kind anything

back same gets really the Yes., Greg, to it thing.

watermark these think even that rates, non-interest be teens, to being a where in bearing. the low of sheet, become consider cycles high look on at totality on out that's most you funds. effectively commercial in the of you XX% client range non-interest-bearing you total non-interest-bearing balance high deposits, And turns If banks, if

So that's internally. marker the that we like one said, analysis plus, Greg do

at in So yes, the to things, those when change think it's gives the we time, I outlook. same look subject it confidence at us that

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

line Your is open. now

You're capital little earlier to you loans over cycle changed you companies? [restricting] side [ph] clients just being talking that a any early here. bit loan over growth now in, saw better they for the going you versus and Have favoring seen on to and in are are debt and be originated the about underwriting? the Or mid-stage have these terms

to but and seen companies of just little Yes. technology years they to side, many, the been because sit and many, both the you the go, anything much else. and $XXX side three I'll with a we about, you'd Mike volume and the that. growth calls. discussion. best has the we've an back the clearly conference were the It's growth that's we've share again, we mortgages probably to that technology kind a banking, start this and We're lend We of you want funds on in Greg. of million. This in the global even Marc absolute talked the years, will been, portfolio. on some great perspective it's we've It's as well. on on many it's in on raised one, a And bit dollars money and simple said price basis. And basis, love as then had and a have, just with of competing, competing fundamentals dollar would These equity many all percentage is

$XX want $XX would So million. million, they borrow why to

it's Not And that it's raise us. like valuation, that to choosing the great are for money, they because that those so they're opportunities not harder. gotten they couldn't of obviously, to would see,

side. doing So anybody longer than you've of again, on this global technology business really the we've doing a banking, else. funds is great the some In got, great, great job winning, been the team

out the market. sheets, That's business in experience. people strong great we've still and new a got we've very is the seen the pull demand term some very, and So of

so -- say the little margin. in making on bringing clients getting that And board sure to, a I'd have us some cases But quality we as to that get higher highest bit we're the much allows platform. it's

we're outstandings still it's competitive. But able to we're in able environment. bring clients, to and some see So nice in this great some

Mike? know, don't I So Marc or

Generally been specifically mentioned, keep we comment, that standards question. that time, At So when what environment underwriting your in that to fewer on of the I'll by consistent. underwriting will getting the Greg same try speaking, as is was the clients part generally, our just more is And mean offset bar. clearing times worse has demand.

want And are the so across you add. Mike we segments, some healthcare. really to grow core to and continuing loans, to anything opportunities great the see including tech

environment operating in. would The that clearly, only Yes. the economic thing I add is, mean, I we're very of cognizant we're

or on conscientious of models starting inflation, might with to and are the consumer financing. looking business their interest might we're about business we're models when the relying hit impact very rates the that consumer as at of So be well, amount how they underwriting, think as

we're So consistent served which very as right, underwriting standards, many, has said, into for or these are coming things factor. many well us Marc But all years.

much think ratio that and at of credit backdrop Okay, or coverage. thanks. normalizing of losses? see How very your I do guess to expectation allowances sort with we the corollary you you broader higher for peak it for go allowance -- are close looks the stage look can losses the inside then, you're of And at credit, XX a like, growth the expectations in nearly

I'll in. may Mark, others chime Dan wish That's start, or to

reserves 'XX, higher pointed So certainly, because there's build, the a you fair go in out bit of in reserve 'XX. as

it as forecasts drive reserve the I As quarter. particular can this know, think probably you economic for did us,

we've loans So higher that's that as of one noted, higher see could factor. drive We specific reserves. levels could, non-performing

recognizing we is reserve of again, there the that in XXXX. that have so for higher, to And a behind us bit fair built go potential reserves

comes question from Bill Carcache next Research. Your the of line with Wolfe

Your now open. is line

to to coincide thoughts see From Just likely IPO positive being cuts? markets timing the Are reopening for perspective, you a Fed to need we a for the with that pause? curious wanted clear to more on up would your reopening high-level I rate follow business. of expect a there?

I team Securities our a we now. a I I don't line the Yes. exceptions, [indiscernible]. few close for right. wish as to things, They're lot But in expectations with had think have of right on SVB we about 'XX, talked it,

I think to the see I rates, so they when of top start to go think off view my you down. need and don't

they to going And whatever confidence for level stable a we're some to potential another at. see to they're just need think think where I be hold not that's going we're at I spike. and

one data point. that's So

point Second I've is, a with the of have are say spending as metrics that they go position that I up happens, this that a market -- they We in go to opens test the stage there's time would more think when going need them And waters. the I earlier, see data to of are clients stability test mentioned later our lot we out some some been to you're public. when waters. and the

happen yes. QX, the I And is that think answer so in late could QX,

that a of answer's the open see and maybe rate if more a a a quarter the a little points than XX couple Do hikes up I for think at flattening. few could IPOs, think I So yes. market quarter we basis more

to to Because ones one are when to be public, going it see go that how more not to the up, be highest it's potential people point, they flood, it'll trickle. a wait have the perform. going make Again, and opens a even be it'll

late be see say, quarter and in I the quarter, opening, yes, an fourth but a it's third So that to you'll happens. going slow-paced when opening would maybe

deal flow, activity the that and deal flow biopharma in has only that's of thing that activity quarter add in those we there, about the is, I'd to it, types of think you particular, it good on if business, the clients. The fourth good normal Greg side, saw for fund-raising

not within So we're expecting, more XXXX. for the side. as become strong a biopharma on can I And constant. think our that expectations substantially guidance But year embedded

getting closer think willingness to sides That's dry funding in Just current two the Separately, any that deployment? for how coming appetite those characterize of you to powder And Thank compares companies down helpful. if curious, how way you you. say the rounds? take you we're together? would would to

is, and same like for We've where call are, I'll Yes, in -- capital were look you've you'd actually group the but can take rounds, in at companies what released what final looks the going companies preferences 'XX. start. lot. this of what valuation, they quarter. I'm it a that, a get that saying, it companies are really valuation, another drop flat the at see to valuation on of are really get have this well And a there isn't movie one it's with, that in a you investors lower lot And It's actually the And say of but looked it's highest but like would there's they that the venture keeping at fourth since still profile them, Greg. you before. it, and whole to it would of And have going structure reason last done that the as didn't there we're that valuation. going round, was had to deal round, is it got the between, of more seen decent you expect. the fewer their things involved. the is, the I'll the as they're to then round over round, an in you valuation some same those it data I'm hey, is course basically say, and last they in see when structure opportunity fewer. the that Late-stage go it's it the that can exactly over But through this

rounds things All structured see going see some 'XX, deals. more more in happening my you're occur are down but view, you'll to more those

to those second So the out, again, first year, the And are half year. played half we see just all you're more going of scenarios three talked the in the activity than earlier, more about of happening. as of

around of deposits non-interest-bearing That's deposit general levels. sort that of one see I this non-interest-bearing could sorry I'm about is up XX% question on to concern one. very high question a Thank the mix. pre follow the the that system revert If helpful. GFC mix around from the to investors squeeze of that But banking we're range. broad we lot in hearing keep your to around you. the in wanted to last coming could commentary stabilizing Really

high But your the look which to range, XX% pre-GST is era, when you around was we in non-interest-bearing to deposits the mid mix were where of pre-COVID.

looking So high that around of of look to mix sort to But dealing non-interest-bearing XX% back funds. total client where pressures beyond scenario is, that relation broader a we to these at commentary liquidity we near-term get your more mid as appreciate question in bearing envision you're I with? non-interest some maybe like do you can a

Yes.

not say, people As would strategy. a hope is

to would say forecasts getting to is certainly that nothing it be great while there. in our that at would be all. There So back we're

look there is that add historical we from we The this come answer is But bottom know, out uptick level think below haven't happen yes. we to year? would non-interest I with well the And see to And what it. scenario so, that we be it's later that do would of will a deposits. guidance like. our you going on a an what -- Dan

Yes.

think clients, is, back other I back that size versus a don't deposits. The That in those mix, sheet. not pre-global non-interest-bearing a balance we levels bank $XXX of now of the go that very crisis, going we types sheet, change And financial you the as billion way it's to the very, think client to companies the with overall quality are that deposit different. just result just of mix different to franchise, get to the mean close about history of we're of the doesn't to then of it of when balance have

said, and -- describing, more add this a to kind great is, way looking different you're you team Dan interest can only thing the either at think solutions. job, products and it's what Mike And the bearing, And would of zero. is it's about I I there's, maybe market done have its or thinking on -- And scenarios. it see

going profile clients. the yields the of different interest-bearing based on to So level deposits see of different you're whole on a

have you is but think going will I be So to be understand spread a the on higher that that, of bearing that interest varied. yields percentage, yes. to

That's my super helpful. for questions. you Thank taking

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

now is line open. Your

be end think of any and here. available? of year. on much On terms you funds balance your to sheet sheet how could Can balance? the about again, that under Or used how impacting And you're that into I dynamics Thanks. your of be that other of bring of is expect -- guidance balance, to us that's the baked in it's you just as the billion, XXX that able update off-balance much

we sweep. balance, sizable it where talked we access, repo. what's half right the believe what's that sheet clients, the still opportunity about in And classified still Dan. it's to off for John, sitting as so, roughly as that are, have past, balance obviously doing leaves, a there's classified that things that across we And of

that's opportunity So substantial a for us.

beta income we're and terms including sheet, we're move forecast, in to In to the still expected all the interest-bearing And of of guidance how interest to slow our deposit XXXX. see in that the much guidance. of is included that's to on pace into but the net balance continue some that expecting

securities actions Okay. Got point? for considered this portfolio it. then available All for And sale at any right. your

only a at limited short talking quarter, in It's opportunistically tangible we're of quarter. available clear very securities book impacts a period warrant John. worth did Dan to sale. the gains that also the for that about considering billion value Treasury some we we with sell Yes, In again. payback Very had

see us accelerate But a the we some to review pay Again, makes sale billion anything And a for of us payback take across book. tangible and period quarter. where in of than that that's think that's you'll also downs I we income less to value, see opportunistic, for protecting effectively those more environment, going did So the of there. rate sense. generation purposes, opportunistically the again, from interest available actions book broad what of the you're actions that net is else. And

Right.

So, nothing but beyond immediately but [indiscernible]? billion planned that

is available value. sale, and again, anything No, of tangible for and we're protective and it's within talking book about opportunistic,

it. Got

expect story. materialize Okay. learning where the reserve seeing front, on you of you've to Thanks. in And credit incoming appreciating go investors regarding where Is under and they'll that materializing stress your separately, there, feel the risk potentially against already losses buildings, amount are credit put fair of you in from the worth then, because just up. some

you're One areas most that of the where beginning some of see to stress. noteworthy

or venture the continue with investor early-stage I'll our is we contribute. dependent see Mike It's experience. to Yes. and backed to to Marc. But it start. may Dan historical most cohort consistent wish It's expect the where have stressed. would

investment just markets And me, it's thanks. capital the for banking Okay, pipeline. then, lastly,

if you've If in on here are deal But comment you of what little wondering if opportunities, could already you there you're a what saying, just it. sorry, talk just as out XXXX? you seeing into touched about can you look bit terms

talked Yes. in revenue we just about an kind the guidance did an saw we walk we It's what Greg. expect to it we would perspective, from And We -- don't like, show 'XX. from maybe improvement. haven't give where is a uptick why of be outlook pipeline, to we on which

kind there's of the got, you've parts back, called you're If three of four business. -- actually parts

we now then, we limited services, and -- which the had And trading look franchise board, team biopharma added an healthcare When is to they they But business, MoffettNathanson, of the incredible you got with research. platform. technology. partners. had at added and brought what really You addition on the have we the sales with had entire

you've you incredible would a And the people full in saddles trading. have all now across ECM I capability platform, and are full sales you you they're M&A verticals, you across capability, got the three So when productive. look and strong And platform. actually, so have actually, entire stack research it's say have

feel of we about team, that though across be portfolio even challenge, actually execute. good. whole good and market look very the so the is their strategy going And feel very to the I to opportunities ability a and

really to take improving tough platform point. But a we in what But and outlook really be it's year. be a saw shows, about from having our 'XX. actually going a it's 'XX excited at an team be to that advantage an some be tough in uptick This the is 'XX. market market, I'm year, on And tough longer to going revenue but still going of and

it. Appreciate Greg. Okay. Thanks,

Securities. the from with comes question Demba of Your Jennifer line next Truist

open. Your line is now

you I Question us quality. estate what's a just there. I know real I give of in have if it. any you of talking really could about characterization about And you have a estate on have lot But it's about environment? a very But commercial commercial small if portfolio. concern credit know a small. real any piece kind in of wonder tougher of banks concerns been

a important, it's there across is real And segment it's relative it's different Hi, probably on speaking, that bears underlying particularly the categories. to estate you average, of margins, well several it's if But recession X% out, watching, offing. most diversified is that collateral. pointed what's is total as in Marc. And generally reasonably a the well certainly loan,

certainly of And back to in my depths was the going a because in COVID It was and more has we acquisition. part so was outperform it it concerned we expectations. time, the that to portfolio Boston were -- the really about, Private at were continued

Great. Is there any exposure in there? office

but continued X% it significant expectations. exposure, office There not an has is to far so of enormous outperform is some part again, that

Your next question comes the Kotowski of from Oppenheimer. with Chris line

Your line open. is now

to say amortization. quarter. Presumably wondering, But something the is handle? fourth you quarter like down question, a why XXX noticed for go But and expect It's I just handle sale the the bad guy, if was the what's forward? from, the the or XXX of know, I restructuring there's evening. And million looking like I available would And the I for few highlight I'm mainly from hold I sheet, balance or Good like the Thank the with the $XX quarter you're quarter thing portfolio. I'm at looking guess, first guess? saying XXX to Dan. a first I fourth yield exactly run-off I'd understand that that's in of wonder be thing, good Yes. the average I third held guy third is, $XX I of went the securities wonder, there. should to portfolio. a hear you're million mean, as we like million, maturities only the the dynamics to you maturities a billion That's portfolio, $XX taxable a at can XXX $XX your you. you

the a X% that to I take next, looks it significant had over, secondly, XX-Q, then, from say, profile. guess portfolio very basis, disclosures XX natural long the a of runoff like that would And yield that has the anytime kind on any I wondering, like maturities months? there handle Is in XX I'm in mean,

It's Yes. Dan.

that I $X book, think, quarter. getting there, profile $X off first and foremost, billion we're to between payoff anywhere the a billion,

were So think just portfolio. those And a $XX billion, rates ago. assumptions were in down annualized, of run where XX-year that couple weeks

pay land. So with we We'll that. ultimately pick and tenure, the now acceleration XXX, about up see some think can XX-year associated down you becomes how where XXX, material that

think I accelerate opportunity with rates But $X from billion come billion, pay going of So down just if the improvement. to to continues there. down in to you're see XX-year to some like clock this to continue kind $X quarter a

look the at We in and XXXs the we premium to think book, down that where a in that as of think, portfolio. in mid-XXX themselves, high we're range, I still amortization QX, the to talking yields really about comes lot for about comes

to were see you the could closer obviously, book, an just the sooner, faster if continues that So, those are on point inflection to the there things really that factors, of NIM of payments extent down, XX-year yield, acceleration to make which and faster, that us get that and to come watch go that NII occur.

it That's for me. Okay. Thank you.

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

Your line open. is now

right that. sell cash the for cash you'd the year next at much their if sounds cohort they've cash does successful how how that so? been to burn. been position they have? their stand trying curious like or look do they've dependent runway But And Obviously, doing investor now, looking out at Just

Yes.

at we hand. of So majority months worth and of last had as track referred it year's liquidity on the otherwise to a over we portfolio remaining runway, still of cash call that check,

That's And Got gears. just shifting right. it. then All helpful.

mix does to do the in. sheet off respect the investment funds? come funding and deposits funds How trend with client versus come balance activity side, to expect On you when back,

Dan. is This Yes.

a what guidance for start see on pickup do substantial those based we're sheet We to we on don't that think, in sheet. from think expensive But I likely think the a all to they the a continue going earnings I pickup have to we product. they'll the again, on got deployment, than about balance potential imagining we've recovery those at and venture be there, funds the in, off-balance direct of balance sheet come to funds as less XXXX. composition

over income we'll ability net those door, benefits the extent time, is at shifting balance that expensive interest net look it's the margin. accelerate time, a of the sheet one off product to that that shift that have that to of So deposits. to one-way more the not of and interest That's improvement we over accumulates, in

toggle I continued -- the the sheet. the for of will think we'll toggled switch how So on we the balance be you switch, if switch think and

don't we environment, As funds. we costing longer client be but some still more sheet drive sheet. be deposits bearing be interest clear, to weighted the all off-balance of heavily cheaper to this bearing balance off higher come And expect those to certainly for this very than in in is non-interest higher it'll those

Got Thanks much. it. That was so my question.

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

open. Your now line is

change little much how versus On of driven utilization? the could and call fund any global in was just about lending bit commitments lines growth the new capital a by say you banking, of

an outstanding was from the the mean, far I client most from new perspective. as business, change utilization, it of So, as

client did quarter-to-quarter. I'd so, we new fundings. new, obviously But So varies have it some from say

-- not change. have a it's dramatic anything to So probably a make

if Dan, add to it? you would So, anything

Yes.

we I think quarter time, did growth off look a from capital call. in the at lower was that we And perspective, have of same at funded when the utilization.

So net in you've clients new there. got some

really and is notable to tailwind of a us net unfunded are new in commitments, to be amount the more over sheets a XX growth think nine months, going term perspective. next six from for which I the the to increase loan

an the quarter. the increase provision that's think most drove also element I of in notable

Okay.

slightly, was So but be higher? just outstandings down were utilization but to up clear, lines to on were net

That's right.

kind the recovery Okay. is largely of as contemplated What was more. quarter, And just I SVB tech biopharma understand fourth in driven outlook for It unpacking in guide the a it. the XXXX? Securities bit little

a and of to -- the Again, said, up saddle able little, platform now, for in some being lot market little. just as in Very full there. longer and just I have We don't having activity new really deeper the pick it's very share. people relationships built,

Is Okay. to year? largely a biopharma for it still next story fair it call

No.

clearly it's mix. services. more think I going technology. do M&A fine, in a M&A to It's in it's but of healthcare will Biopharm see

So M&A bigger part. is going be to the

for describe probably here's how is going of technology to ECM going end Biopharm start in it. the year, a to year services bit ECM pickup maybe to be in see to a the I more side. So be Technology little of you towards be of driven still with the M&A. in And and M&A. a is mix healthcare the

Thank you. Okay.

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

now is open. Your line

sheet been going balance we're one Greg, your historically through big increases. rate really the asset period more sensitive, has of a of

that know cuts, pricing begins I As to factor we flipped So If rate liability we next doesn't year, cut? funds look will margin perform you've forward think other the sheet and respect? if the sensitive side. do the into balance at the How the the in guidance in look which gets should Fed being curve, your to moved we cuts.

Yes, Chris. This Dan. is

couple with what the see I that. which increases our we're start increases, disclosure you think are if that is see start factored we you look at associated next about guidance, factored our sensitive that could to for at liability of be least into rate you talking that to potential

the the have of that some pricing start case faster rates, to an that incorporated could deposits our a don't tailwind So in than and any that baked estimates, we starts NII on have from more expensive be to the decrease a in what Fed of of more again, we model. overall reducing those into perspective, our bit

extent can you look the potential down. same the So for rates I come to that think to look asset disclosure reduction a and the sensitivity to

kind of normalization. back Chris point, at back and maybe whatever and out just of of saw And two out to kind you say, assets I think, points normal I that some you've is, let's of that if at modest flattening more to And when when we find you questions. add-on, level. then think sensitive to side. And some be lower into One we'd that you I ones, short-term or think long-term. I see, settle got increases, is because then And had the rate think floor rates maybe kind

of a addition you said kind I think it, kind we can eventually two to of right seen a the to saw in in little out to of construction never we've things, cause it's while made where be kind And get it's the it rates, which And biggest of asset just change, going sheet. of we level, level for take what that and before. place back norm. balance of a historical now, to such rapid increase that's although Those to this back get us less base to sensitivity.

for you that. great. I up. follow it could That's Thank just If

into a better? is expense year, expense you your to of that certain but given week talked the just back next hiring there growth is rate I environment, for guide pushed deferring year, there, Were or natural digit out slowing, know the little ramp this environments single the about about once talked into the get appreciating projects a competitors. comes One Last low costs year.

comments the operated I'll specifically add guidance can expense talk then more we've that management, and and risk digital philosophically and cycles. over variety to then, a about perspective the said this, how lot things. Chris back you gave, from different Yes. it. made And about at years an Dan whole a investment you we've and of go And in infrastructure, when pace of we of look

We're are target level. market it said, market accelerate have and investment of our of going money. kind earning is. at how insatiable large we're that looked to going investment, where an growing appetite and look, more and we because it's [indiscernible] it when We to and the for we better, are times overall, Because

more basically and you more what are challenging, times of going just to going going uncertain going have. market so more optimize you're and like that's to have take say, look, this, you you're prioritize, a And you're to kind you're when headwinds, a to

start Yes, list. to years? pushing to we potentially behind those out mean we're does into start it that more does. as mean put things So Does that improve, money It slowing things to have And prioritized future projects? some going projects. down it But does.

prioritized we're have investment the We our in making focus, list. deck the where

private So wealth going it's go-to-market more management banking, the strategy. to in

the in digital Secondly, commercial kind bank, focus of and there enhancements.

to that's sure making of platform. really that our acquisitions, investments, make important is one a that leverage sure clients the just working our meaningful Third across SVB we And leverage we're care our and way. collaboration, clients deliver really entire in this just for take our

LFI just is the needs management, then last we enhance, and in are risk expectations, own this to continue which status, And our we are one again, both and increased. as

And so think that's prioritization so forth. how about we and

to what you add that? Dan, would So

Yes.

a to long think challenged it's to able a cheaper, to as cost doing get that sustainability way more between we're clear, a the going and that for And that's key, another looking think, employees. to full-time for us continue mentioned us spend optimize that at elements the XXXX, I as professional in from here, services, emphasize, that I also, across just from we're invest optimization mix helps even we're changing perspective. Greg we're That's as and us also perspective. to

balance. important. I back, run is last be go part that a think return, the more higher profitability question us think the then I improves, the for to the going are overall And the franchise And to And that's going of environment think of rate. the continuously that your to is, to extent traditional we I expense

our more returns to those profitability So to investments, we'll have balance continue normal levels. to as

I the Thanks. That's thoughts just given over is a last the know valuation. on time uncertain, buyback but the maybe And great one, color. environment

Chris. Yes,

remain from in this our at said perspective. to we've options think we're past, I going a the looking always capital open to

lot expecting of terms a But not does we're leverage to quickly, acceleration that the Tier-X major in XXXX, to can in new balance you perspective. deployment no obviously start again, the sheet and from pressure deployment. And Now, come back extent back increase. see does a more come

don't something continue certainly of. we cognizant to we but need to that have it's that So now, be

look continue to no, to options I long-term for. But the think prepare So growth and keep open. need we're I we thing just we ahead, as is our again, that going think over medium to the

caller. Great. for it. Appreciate the Thanks all

remarks. the at back questions time, further call no this I are turn There for over Becker final to Greg

to the I Great, of us joining thanks. Thanks, what everyone, much of our IR the detail, on team tried as We seeing information, key and what together a we're a outlook, give for lot again, huge give a amount lot today. of detail drivers. of credit to kind to put are

of signs, you I go fourth And again, really whether I there's And in of this growth, to fee look slowing and this with of core it's most think of growth burn. stabilization or healthy a importantly, probably, a back growth, lot venture so investment inflow that's down nice really at just maybe income think, reiterate, kind helpful. loan banking. of back cash when pulling And quarter,

So see. great to that was

about lot why that That said, ways. make guidance in which and being is out the quarterly second the have sure the market one guidance is guidance really two look good a a kind is of annual One sense there, the quarter. we're to is we choppy, uncertainty gave the how you there's feeling of still of very still very,

what about be back, -- half first be is And go to think going it's SVB. bumpy. the to we it We for going again, just means to talked

in going start 'XX the and of you're and see We then and decline first 'XX, stabilized half then expect that improve. capital venture to kind of to

have ways and our there being ample and are worse, it can expectations big of sure went certainly deck, that's for some that's be we and from not through right And liquidity a plan. And not in if realistic. especially some we're clients improvement resources the of could upside, where is now. there make to be we upside, we outlook what So And need us. are other them gets see taking you still our the we we when have there as they care but think our in could just for

kind our that's So of view.

for guys joining. you thanks, Again,

allows they is It's As yes, for spending still I it, parts and I quite And think about actually run like always, And because I decisions. stories of as want making are don't But hearing they're markets more their to efficiently, they're well more companies get favorite hard those thank position positioned. our like doing. what just themselves and much they're with what ways, growth. we And honestly, It's as to do to excited. effective time clients. of our one it. in clients don't we run enjoy it this, many healthy my

of thanks to other enough And employees, what they're to market. and doing clients, our the have tough then, them at thank each all for doing to finally, support can't been look support what I they our

and And super is important. so that attitude mentality keeping positive client-centric

that. appreciate we So

and Thanks day. everybody. Thank thanks, for So great joining us a you. have

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