SVB Financial (SIVBQ) 22 Oct 212021 Q3 Earnings call transcript

Company Profile

Participants

Meghan O’Leary	Head, Investor Relations
Greg Becker	President and Chief Executive Officer
Dan Beck	Chief Financial Officer
Mike Descheneaux	President, Silicon Valley Bank
Ebrahim Poonawala	Bank of America
Casey Haire	Jefferies
Ken Zerbe	Morgan Stanley
Steven Alexopoulos	JPMorgan
Bill Carcache	Wolfe Research
Chris McGratty	KBW
John Pancari	Evercore ISI
Jared Shaw	Wells Fargo Securities

Call transcript

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Operator

Ladies and gentlemen, thank you for standing by and welcome to the SVB Financial Group Third Quarter 2021 Earnings Call. [Operator Instructions] Thank you. I would now like to turn the conference over to Meghan O’Leary, Head of Investor Relations.

Meghan O’Leary

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

Our President and CEO, Greg Becker and our CFO, Dan Beck, are here to talk about our third quarter 2021 financial results and will be joined by other members of our management team for the Q&A.

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

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

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

Greg Becker

be exceptional market-related you quarter solid strong here about another Thanks, sheet and strong robust growth talk fee with and income us and Meghan everyone to for to of thanks marked interest income, growth, joining balance and by profitability net continued great today. credit. It’s

slides which section Our of and Relations earnings CEO our Investor this release, we afternoon, available the letter, presentation website. on are filed

that start out want this the I our for raised third to Q&A, year. growth call time we the XXXX Before outlook we

for additional introduced the the the improved lines business. we additional investments further questions. while are XXXX preliminary also which operator strong this for up income generated drive will investment And operating leverage. and than increased in outlook, interest as with balance will net to offset growth will We as that, more making I open ask growth We larger well acceleration calls sheet investments our key the of continued our believe our by

Operator

America. your Bank comes first of the you. Ebrahim Poonawala The from for of questions. Instructions] [Operator Your floor question Thank now is line at open

Ebrahim Poonawala

Hey, good afternoon.

Greg Becker

Hey, Ebrahim.

Ebrahim Poonawala

that in SVB bank, happening being what’s give built is balance your letter questions. unpack components markets tied to the sounded larger and purely outlook I of us mentioned global between a how us much optimism Greg, investment preliminary One, extent, two your is can much in those more on about that than To of larger guess of that your any outlook? outlook the just years. a for and terms XXXX informs extremely that stronger presence? and in breakdown how you Two sheet, bullish you

Greg Becker

Yes, it’s question, great a Ebrahim.

So we it what of I’d and we this the down have momentum in on Clearly, finish based have that XXXX to a creates the break expect we given lot far guidance into way. that year would the had so growth XXXX.

income, balance benefit wealth, there and the momentum to So growth sheet, of headcount, and the of carries clearly making that all of the investment core we a huge are banking is expansion private amount in fee the banking forward. investments

kind a that in is certainly economy – It’s perform the private that maybe compelling just all accelerated four these a of continue bank, of this, hard more it serve point businesses: ever I is we firsthand. fathom we pace see of that and am to clients. although well, two, there to so the we tailwind, now, than convinced one. working it’s And more And commercial Number we are view. that strategy pillar third we our markets pace. this causing I nothing quite category incredibly that of expect the couple seeing years, that investment SVB number not to innovation out together the that right at at laid stay will bank, hearing last the have the the for Capital is over that am bank, is

compelling who teams on exclusively player those being innovation of and just in the capabilities, broad hearing And focused set Our market only that the of all are that. product just kind economy. really has having four the becomes

of three rolling that those of combination a into it’s us XXXX. – kind really optimistic Ebrahim, view giving it’s So, things, that’s

Ebrahim Poonawala

When the I to at get about a loan how Private it. growth you are Got looks grow here. thinking for your I And just where book the about assets how thinking loan really Boston separate what that under you you question to trying are loan look how year, guidance, that you of mix and just and am next guidance do do think contribution, looking you XXXX? fee in guess growth – management out

Greg Becker

guess comments been the Yes, it making I want add really – about XX X. we last to Dan And We the I part really, days, acquisition may closed and it’s – just well. really right. up that is syncing are has days all to July early these most some will start important we the as teams. I sure

wouldn’t call assume them you right we much out, I have what We found, because team as so of technology to will up. validation is say do but the actually is to would so has a things. I found people was I you other is know, surprises, really I many what before positive tell lot plans in the play the both sync only – on of place, and closed there you But deal – going can and have what

again, the we was say because opportunity to the and bring be and Boston side truly to side up is, So the would the I me your caused what back from private going is the the is Private first believed am, to And a that opportunity on commercial bullish. that case, And that we on excitement, teams spades. shown was what in to banking basically saying has The banking incredible. always wanted so question energy platform I reason the great. the

exactly comment a going and very about lot that to to – that But we would will expect more you we yet. like as are are early, feeling know where what things and guidance headed. Dan, you… levels definitely give to if say under do management when usually be but I of and we details should more. forecast numbers we you we for one there, XXXX, what we got we be I don’t but good it’s our will haven’t We those we get are our assets across to that see release but a place So, it’s January

Ebrahim Poonawala

remind ahead, Understood. – And go yes, us sorry.

Greg Becker

I to anything Dan had add said that? to if just

Dan Beck

The positive only to momentum. thing Yes. we seeing is are other some add

in will the materials. see You it

We the XX advisers the the have off based already to since added closing the start of of good a deal, attractiveness so on platform.

Greg into, clearly of private equity, the a mortgage from lending perspective funds of level in stock a more that’s start the So we get we to here in some about banking, think fact. private part as And guidance and to talk won’t the a out lending the detailed of positive you more as start see a see I that will to January, more building global get bank, private will as shoots but guidance. growth green a growth, to mentioned,

Ebrahim Poonawala

all of conversion And just you infrastructure for won? timeline get board what’s the remind tech kind systems when us, and on Dan, the

Dan Beck

vast Yes. conversions occur of to that in are systems Ebrahim, the majority occur the XXXX. need to going

the So, call it, the into terms be majority let’s of in QX QX transition. will done, vast

the You will opportunity need businesses, have our we some to the manage stragglers, is but QX across the enterprise, target. things more the manage that to

Ebrahim Poonawala

like ability, market to in your restrict to Dan, would of go really you how terms that billion to opportunity? penetrate does that $XXX And

Dan Beck

to the understand how step opportunities take allows do us need, we it manage to way. understand No, I to those the actually and back it and to best a that information are think in to going

Greg platforms working, are then mentioned, we can and build through out are right with So, the scale it. we now working as that, that to

progress So, that us think of gets making that I objective. towards don’t in way the

Greg Becker

that that Boston the on one part, part, add Yes. And that on strong were let to those pleasantly side would at technology surprised how I is that to just actually add was Private. I of technology think areas me the we because

slow And all. at down us actually doesn’t it so

systems we clients will In Private the in – And adding are fact, we legacy as they new on the the to be client-facing systems that market. them that added, engage systems. actually, are Boston main

feel really to actually the enhance it’s ability but I not slow I believe under the going fact, down our clients So, it’s add to us and going to good, platform.

Ebrahim Poonawala

for Thanks taking my Okay. questions.

Greg Becker

Yes.

Operator

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

Casey Haire

at about on expecting deposit an to layer afternoon, are seen ‘XX you’ve is A obviously growth Good this past if thanks. am wondering relative distributions, it’s very which happened at just guide, which question you what with that the distribution billion quarter, I is end, ‘XX, and guys. like something year, end quarter $XX year conservative Yes, year. this in or outsized it of this year? banner a year – the after like looks the the I a

Greg Becker

start. to it. Hey, I to want Greg. or will add I Casey, would am Mike Dan it’s sure

just we seen be say our assumption have that quarter. would quarter-over-quarter. the have been is $XX but that I tempered outlook we is main of what from growth a going the it, part to roughly this what a And it’s we year that is it’s incredible adding says part that billion a So, reasonable that’s believe

And not indicates so anything really are we that. that seeing

Our that with bullish. said kind pace overly I teams back own have continue from we are and seems would of – just still sat that aggressive. say standpoint pace But our

brought back And range the that our a just from described to deposit so outlook, we you growth.

Sure, able to preliminary as a upside is clearly cross there but guidance confidence color there we be Now, we lot And is give a high we in it’s would in upside? that. and in than have will more we we or prior are – of if else see distributions little that the years year. an of be maybe bit anomaly. a there And anything will levels seen higher have other you

to if see to Mike Dan anything will that? wants or add I So,

Mike Descheneaux

here. Yes, Greg, this is Mike Descheneaux

two we So, execute. are when it, as was of well kind macro doing it the can you Greg as down features into to what break describing areas,

And look still we strong. flows in. the mean, of extraordinarily the at fundamentals come pictures, funds so the are when I see you macro

out The from amount deployed continues the trillion sizes growing there, to of into tremendous the funds are of accounts, sources. powder BCs the amount multiple $X amount $X space You of see billion, that’s the money. grow it’s $X.X dry money trillion, some being

– increase go then acquisition that what of And into clients. it the to just changed. continue not bring you and we some And is on seeing those client time count for accumulating are have things so on, funded you them here, deck happens those to our takes effect. numbers when mean, at get execution us if record that So I the look front, you have we

have billion, an kind you been we mean in as just I we there at that we So, growth really, $XX place. as implied high growing too. you, is just says, quarter can all will grow if sensational I such well, terms tell the fundamentals I really I pace. am of with happy a extraordinary are what believe But But $XX that’s billion per of what think in Greg

nothing again, fundamentally has So our changed outlook. in

Casey Haire

what of curious, XX, deployment what on around just yields you Slide And assuming liquidity you is are the I kind – the reinvestment how guys from am looks bps just to the rate I number to-date week? guys the last XX is XXX Thanks. wondering on up rates? level. kind are and purchase XX-year new like what the expecting Great. am backdrop up that of

Dan Beck

curve Yes, Casey, based were XXX. it’s Dan. reinvestment on at Those rates forward

obviously from off So there. we you sold are right,

way I the part to the think X X-year to it the curve. is look of at in

every, of annualized annualized point For income. should basis, on let’s percentage we an points get it, XX call net basis interest about another

XX a So, net seen that’s sell-off since that’s basis part of in if basis of X we have September XX, range. pre-tax see X-year that kind a so just curve income, interest thumb of increased percentage the point a by about of rule if XX to you that points, point

Again, sustained. that’s how the and upside guidance. see we’ll annualized to that’s is Now

Casey Haire

so guys X% ratio forever. rule the have management, bank great. thumb. at lived Tier Okay, me, one capital of at leverage X% for Last X Good to you

What to guys at capital – have any – and get floor you forward? level you billion be confidence live do bigger that that what’s that to mark. continue will hit As $XXX going able your you

Dan Beck

Casey. Yes,

testing capital stress we As at We our X X, Category would to bank. Category requirements anticipate. I targets on fashioned those we based of think look the capital planning what original and

is, we – on structure investment of we in half credit So, more have degree, look then securities sheet Number to half and sheet, we then some lending, two, the I quality at is losses. a balance think that based already being amount test of translated credit the if just how the got substantial stress risk lower the built we into that. the number overall had high one have than the balance

Category to that see leverage of perspective. as pressure Category So, we target X, into incremental Tier a part don’t capital a moving from X the X

Casey Haire

Great. Thanks.

Greg Becker

Thanks, Casey.

Operator

Ken comes Zerbe Your next question of Morgan Stanley. from

Ken Zerbe

Great. strong. Alright. Definitely question, was Thanks. no guidance incredibly your

where side. downside the it the So, guidance, the where If is as don’t could volatility we if things other right, things to you just the I your like see kudos that, areas to do will go most be definitely potential go what for like but let’s factors biggest give planned? flip over risk

Greg Becker

I Ken this Again, Greg. start. is will

– capital biggest the that’s see. effect dramatic of think occurring, I a just would valuations have disruption venture flows things flow and ripple and probably where that slowdown, some the you

at point see values, values investment credit quality could that maybe challenged. You drop, warrant

So, really see an true economic if a economic that’s you – driver. the biggest change,

market. I momentum the risk, let’s people is you every that’s the you year, COVID the that, great South both one crisis describing what at in even innovation seen, even return but And last to temporary of to the are it’s in and are America international, be saw was a slowdown, also saw risk. – have to the and we opportunity in, at was when slowdown, in the And UK when and you we Asia, back pushed you is gosh, as jump the around did the an come ‘XX kind you Europe the in fast. go of such United in market want go or want so in ‘XX if it of a looked at and Mike valuations economy about downturn, are hesitant that I now me, to to it are quick beginning innovation incredibly a to and the that say, you Now, I or States in because what job out there and the and even so is these The to talk it’s things there are against but place economy. that was a when there

– a but there the on see we to is basis. is risk that that there offset that’s tailwinds So many so that risk, things certainly daily are

Ken Zerbe

agree. separate tailwinds I Yes, just understood. maybe very Definitely guess the I are Understood. positive. question. a

XX% going In of a coming terms and of, into I guys And you to expenses, let’s going of expense sure years am to in Is is trying new of presumably, or next is that are that to of job you say having, feels there so in excess revenues just imply I vastly because function business, I there makes revenue opportunities sort sense? I say, verticals have am am it for revenue to that slowing not your say, business. still growth, additional the – to great done understood but a growing outpaces over growth a why investing you opportunities is expense want reinvest I expense in make the lot don’t the growth growth. couple the reinvesting like of growth grow invest not if the business, or it to Thanks.

Greg Becker

on say a not growing that’s me I time as calls to. let XX and Ken, may I’ve heard I’d been at take be stab I So, as think like somebody straight them ever have your the expenses fast it. earnings But first that

here, to they look is and there where is investments are couple XX I breaking is Slide down expense say the you talk XX at at across and can in Slide we of the slides look and a want about growth. there platform, investing what this it’s As and we

play out certainly of those that And than start you, if have roll I going and feel as But clearly, the I see you team look know what so year, to – we the more with those if next money maybe we’re putting opportunities. better good because to we agree investments see, into lots and I at would we even into about as numbers numbers. we good say agrees

operating a that as to go always for to and the approach leverage? you that us same the take level will What’s What’s of do. we’ve that investment job we we’re So And growth? trying good right done XXXX. into would expect balance we as historically,

don’t we in more to And to be growth our the portfolio. if about have the we so revenue what continue forecast, better feel investment the if add even the we and than or surprised good and outlook

Ken Zerbe

Alright. much. Thank very you

Greg Becker

Thanks. Yes.

Operator

of next question JPMorgan. Steven Your from comes Alexopoulos

Steven Alexopoulos

Hi, everyone.

Greg Becker

Hey, Steve.

Steven Alexopoulos

one them. guidance? Not wanted of What guidance. assuming it’s things year as does flush picture dollars type investment X this you, call mean see sense horse do it a we still I to the it’s Because to of Y the year, clear not that I get know for financial me. of to with dead much Is a you trying the better results. But more from that VC are out if normal than continue $XXX billion, dollars on that? Greg, What to beat But big view, outlook? situation that a ‘XX thing preliminary a not with equals I’m

Greg Becker

Yes.

would Dan half you to really I quarters. to want as we’ve may add. incredibly XXXX there, say, second Prior Mike just outside I say I know, been It’s incredible how truly strong was would seen last the growth, growth. the or going where five and we’ve ‘XX Here’s would of just XXXX, describe and it, to, had and start had,

the in I next outlook what somewhere the view we have is for is being So year two. between

faster but So and could went Mike be from you’d the not the as quite than this reasons you an a historically see described pace. average why at same And at fast it would through pace see year. as what

to higher that if it I quarter, little deposits it’s of see tempered so client growth. $XX could venture sense in a you would total funds this be, and the or accelerate, flows. incredibly been stays say, capital billion We’re pace strong. trying of at Again, And clearly

the temper. just our – pace period I ball growth would that that on belief will that exceptional could based says I continue wouldn’t say call it how So just of long a conservatism. at and crystal it is it what

Steven Alexopoulos

Okay.

in preliminary now fairly assuming you we’re what So with way, guide. seeing said material a right another step down are the

Greg Becker

Yes.

question and at quarters, go look earlier billion range is and XX%. roughly growth last if an back it’s rate, the at was that articulated about think comment now in a $XX that or we were you I deposit several

if we in at is clearly, see going forecast. to upside what stay there the So the a be we to pace you material are,

but just haven’t to, it X growth indefinite goes Mike stays I an what Usually, to X is it so pace. seen a I’ve of and hoping and certainly cause say time. So pace that rarely long a for time back we others that it of that that and rate, or belief this would then this anything it’s is us would the I’d say period at more quarters doing – stays been at normalized

Steven Alexopoulos

Okay.

Dan Beck

you thing in point amount. look Steve. mean like fundraising, numbers capital it’s kind Maybe one capital this venture Okay. QX. billion massive is in think something at did, deployed to look $XX When in billion quarter. I huge just exits, to It’s just one consider, I $XXX really out right, the QX coming some of at in of what, a here, the of excess important fundraising. digest The about

a $XX are year-to-date, It’s – We’re already at already year. DCs a is exceeding. billion which at full record for

to that Just record already the already has the months we exceeded have. date X

we the war and are to earlier, about are – sources get of going so talked certainly and going chest the we fundamentals So to there, again, when coming are the there. those – at look capital they – deployed, going

moment levels at here think at extraordinary I again, revert should I back we’re as to again, it So for meet, Greg sure. because, we’re being still very but again, this said, mean, sensible

Steven Alexopoulos

Yes.

generate or potential does sustainable a NII in CEO you say balance outlook? doesn’t growth growth can the you tons sustainable the from better. regarding sheet make more bank. where the a It this strong, NII help balance line reached a How typically, sheet growth without rates, the it create at the has larger Greg, letter size Okay.

Greg Becker

The maybe what’s the Yes, and that balance of a it. that’s it’s sheet, and question, have worded. rate driving been should growth great

balance just a rate So lift low static and not to of not seen, or it net created for growth what’s balance environment, if the that’s you you’re XXXX your you’re get is to grow sheet of seen. I out is we’ve – sheet that rate But point, income, going have a the environment, doesn’t size going lot a in think flat it. the acceleration into point the it and we’ve the tailwind interest of massive of

It’s it So should that it’s combination. been the the really way – really is worded. have

we and is and this, certainly basis we what how slide about pretax it is, will goes the XX% the NII deck in in what balance and million, ask a increases. be each on that talks increased but do sheet modeled didn’t have. now we’re first we that large through increase between the also go loaded will increase. actually some right point, rate balance annualized in for I for addition Now the the from is that But believe point is XX in every fee – generated balance an is really at of that somewhere if expect at additional is see answer million which and look XX, basis to can there in $XXX some way excited you that, we increases with And and again, income about sheet through basis you sheet have XX $XXX core we $XXX spring Slide increase, funds point the million rate

million $XXX again, XXX revenue you point growth – million. yes, So $XXX of to $XXX or could roughly million to million $XXX roughly increase, sorry, I’m see basis

second increase sheet clearly rate is spring this, balance So normalize the happens, the but when after loaded.

continue we’re more rate So when bullish see environment, that increases. NII we to can a some to grow we’re happy low-rate start but in even do we

Steven Alexopoulos

EPS at to saw question, rate the growth in XXXX. XX% was a definitely think reintroduce in the that attention, long-term in caught letter, I your Final that motivation Okay. this CEO inclusion including that of some last the point? environment targets What low we

Greg Becker

Well, Steven. has a lot changed,

and we the long-term give of at we about different looked we’re sheet, looked over pillars kind some we the the with guidance. I at go building run. these And four to where we where as driving kind what sat think at how looked and with the of balance long think we to of are one wanted wanted things back we of rates, together, are back to is of that things kind of to size bunch a

put knew the years quarters. back driving wanted were say we bring what run, focused were is very of is them quarter the why long we that or we everybody the do think next was we we I on And over over that’s What to to next few and ago. what just headed it time headed long-term. so where the to in place felt kind everyone to, we’re

Steven Alexopoulos

Fair for question. taking enough. Okay. Thanks the

Greg Becker

I – to something Dan Dan think want one. add that on

Dan Beck

the Yes, the important profitability net had think to sheet, Steven, over other the growing income as that balance interest thing a we’re long-term. larger is we really about reinforce we wanted fact to is

Leerink, You as sheet see the environment the the size going the SVB well as Boston there. of addition even both return generate and of and balance in rate at higher believe investments environment. strong a in scale businesses in We a continue that Private to rate flat to the that’s

just to growth, we was it and So is the thought profitable us. reinforce time important strong growth to

Steven Alexopoulos

the Dan. Okay. Thanks for follow-up,

Operator

Carcache question next Research. Wolfe of comes from Bill Your

Bill Carcache

growth profitability my taking or income you clarification I question. the well, you include curious that? about wanted contemplate long-term also Do only ROE laid and targets ask do those they a for how core to targets think as fee income Thank on everyone. that to financial for Hi, non-core fee out.

Dan Beck

to continue management, warrant private really part some we That of story. in that doing reason really I go all non-core Leerink, the gains SVB revenues, Yes, we see we’re investment items. for bank and that in of what ahead, a forward incorporates think benefits as of is Bill, of this our and are the including the is wealth plus Dan. some move And the

So on more measure it’s be basis. to meant inclusive a a go-forward

Bill Carcache

Completely separate That’s topic. helpful Understood. a clarification.

addressing add your think an that announcements, the there stickiness frame partnership? of incremental we revenue the Or notable On that key opportunity? service enhances as Platt that also the And a can relationship? value clients? should What’s what you you’re for pain just of through client points is the

Mike Descheneaux

connect partnership that. there flat with This Mike service SES. And really really, utilization the right? is or It’s the of to use Again, the clients I’ll of important. to enables everything, into be bit a arrangement our little Descheneaux. it connecting and is able us so take

together, Now with very capture revenue later, then very, once to work will able and some very, still early. of but with, Platt. again, that ability opportunities can to certainly But information build you’re we do very our that proud partner that again, we are there

Bill Carcache

guess the to an the I that their see extension that, we umbrella? Just And team? if payment see Would as investment you guys under well. of more be addition banking that in space expand as area sort technology of participate through maybe Understood. you we that’s could can of expect curious broadly the into an

Greg Becker

way strategic around they have the which think team, Greg, Mike, an under is So about it, and our this product is entire plan I very payments, it’s broad-based.

And so Platt. partnerships you’ll see like additional

good You’ll for see built partnerships. And delivering are really in-house that additional that really on and without capabilities our I clients. focused feel about

innovation. of to be the but are for payments the on. On all standpoint what I think probably, investment side, to across able they be add to distinct going focused they team? it’s as banking of Yes, they technology categories really they investment Will banking, very broad-based we will, add our in more value are capabilities,

– investment is another. near-term categories area through is side. Slide category, have announcements we in it be in technology As you can different fin-tech the in banking one the capabilities. expect investment some goes But have one product making while kind banking and the see business, then And we XX, of the we on on the payments to

Bill Carcache

see. I

is you the they Okay. I Or still helpful. at that joined are or – could frame some conservative hired they as have this one bankers guess on And how for That’s maybe you new Greg, of final And follow-up them point? very are already investment me. the Have platform – a soon leave? maybe, in garden hit little – be you that the ground a contemplate, the revenue should of versus Just they aggressive to after to platform ramp that on how million and Leerink they’ll impactful $XXX the of to platform? running giving be does taking... $XXX incremental new million joined able how time terms you’re

Greg Becker

yes. I’ll one. the to go and first back question with start – Maybe the I’ll first second Maybe then

far as we the the the we XXXX. as So for that good about feel talked numbers deck about in guidance

numbers, a team, we You biotech clearly out it’s ECM have combination M&A a those significant of healthcare see a world-class and building in uplift and capabilities.

world-class health in services banking a and running. banking have innovation now and We even building they a of out are are team, more hitting so ground healthcare team investment and have tech team or technology the world-class investment

the XX the the year-to-date, XX and technology mandates. bankers are Leerink had we which and services platform doubling investment SVB winning have on platform, and We of is they and investment on bankers already healthcare tech health hired effectively number

Now they those some a while until IPOs, mandates, green it take up the closes. from as M&A and for you signing know, a especially of even little on for something

we will but will some that year. this So happen see but outlook to start next the very about XXXX, feel good for into rolling year,

As research, we expect and XX somewhere we be additional in equity will adding next technology, markets, we capital XX fin-tech, year, etcetera. between equity hires that still said,

So of year. call we this to are the by and But end adds still I’ll looking year as or year, will incremental next year next to last add doing what we be it. more to we’ve done opposed what

already well outlook. good are. some feel the where about good being we I’ve client and they of just calls been and landing new about the bankers, investment received, on really deals really some feel incredibly So with are

Bill Carcache

my you That’s taking super helpful questions. for color. Thank

Greg Becker

Yes.

Operator

Your next Chris McGratty of from KBW. comes question

Chris McGratty

good Hi, afternoon.

Greg Becker

Chris. Hi,

Chris McGratty

$XX the relative XXXX? are the what guidance out, your that the of sheet, assumptions roughly on Regarding you’ve fee to laid quarter off-balance sheet growth a billion within balance your

Greg Becker

cover do want to that? Dan, you

Dan Beck

liquidity sheet. of and I overall But we ending we off the don’t been going think it, what let’s the to balance balance sheet seeing roughly, sheet. Hey, of is growth up the on Yes. liquidity the guide XX% of then call terms have in Chris, off-balance liquidity rest so

we assumption. don’t So But guide think client good a that’s I around again, the sheet specifically funds. the off-balance pretty to margins,

Chris McGratty

though. in momentum be that the follow-up August. would Okay. downstream the capital the the raise That’s with in Maybe regarding that just you’ve helpful, the capital guys you occurred How given? the quarter, are given about thinking levels earnings, guide in

Dan Beck

guidance preliminary the in perspective forecast the and next Tier said, being leverage about is out shape come sitting into we at good the in growth Chris, exiting heading there – from always That quarter Yes, quarter. at the so year. bank, we do X the a X.X% solid have feeling

equity we’ve So raise. to a as in to go preferred, common leverage. Tier did to is we be be support able to senior equity able to after go to growth support done common X back to What back previous the raises debt those quarter,

So a that feel to the raise look third back good the capital we and preferred, to go the and growth common extent position. that did, to do bolster can look senior we to extent need equity potentially the continues in that quarter, the market obviously, to to we

we’re that’s it. So the about way thinking

Chris McGratty

Great. Dan. Very Thanks, helpful.

Dan Beck

Chris. Thanks,

Operator

Pancari next from ISI. of Your question comes Evercore John

John Pancari

Good afternoon.

Greg Becker

Hi, John.

John Pancari

I if that could see dynamics behind etcetera. because in targets, slowing could with that. assumptions some higher of financial credit to and environment, in us wanted be like the balance the different rate could help be growth looking higher that you We knowing costs certainly, environment On there maybe at. an warrant we’re looking We gains, could long-term sheet sheet be possibly a balance other at that at lower just looking

if little see bit? that to a Thanks. could you wanted maybe help So, just unpack

Dan Beck

Dan. annual ahead. These the long are when these John, for be able we’ve not the franchise guidance are And over returns. produce to these the as of obviously we at Yes, a look time year just, period more targets, Yes. sitting speaking, generally it’s these in again, seen

think we Boston in support acquired what we as rate. businesses Private same the the Management to And you less think been the EPS when extent earnings see rate continue the the bank to core So to fee the the able growth grow a liquidity some investment of growth, when environment income. market, higher as traditionally in to returns and we Private in at and we time, these we’ve Banking to of alternative well continue and have have Wealth

sheet ahead, the got we the because growth and think looking clients the strong across the have to wealth earnings of and bank, additional bank. we management of generate balance capabilities power investment in we’ve that to that private to higher the growth rate growth been able as be target tools to support as profitable support to able ROE to in terms in continue be well So these a scenario and past able EPS these

obviously are the – forecasted over that we business are So, the generally are thinking These not these long-term. targets. how about speaking,

John Pancari

it. Got

expense, to you or and And is expense can tied increase comp versus example? Thanks hiring, size comp for then warrant linked quarter, related – the up this fee help Dan. performance the growth in on quarter the Okay. the better increase of and performance the that much core headcount us possibly how

Dan Beck

Yes.

we and In Leerink adding these terms initiative to And XX% of in continue of comps, and from two incentive-driven into pieces. group is the warrants. investment the compensation great it I think bankers being the there. range rest both you additional could in invest break side, then on the to banking call technology, better One, let’s XX% performance add it,

they So, two up would say the of largest I make really increase. components the

John Pancari

Got it.

the in certainly And the business in as longer the is terms in what now? long-term you ROE? returns that and term? out the what efficiency expecting business ratio opportunity that forecasting see is you business Okay, are then that you banking alright. are are there, what business, Thanks. seeing the are you the And long-term investment of building then for And

Dan Beck

question. a Yes, John, good it’s

think we I the markets. that team, versus what technology in investment and revenue doing world-class that’s advisory at the comes adding as we services margin more the over long-term business equity healthcare shift to about capital And been you have some starting with think adding opportunities. better to banking, look

kind about the perspective. the to And for that’s a pretax it how evolve advisory way long-term So, that in business thinking about profit than I pretax continues this will thinking business. of think a more on good business, less the More ROE basis is think and place see Leerink. look XX%, think over we with range maybe of addition the I bit the and from to an XX% to of it a to for

Greg Becker

Thanks. This is Greg.

is Dan all add it. gave is what just building pieces so it, to – of me I and the Let What But and standalone power the is here, on together. important think metrics. business when work this we are the you

an will give I example. you So,

banking and additional in bank. longer, clients to investment existing So, that healthcare, technology, also sciences activity technology for generates clients it capabilities banking and private life the more having client the investment allows value us to to add retain

we I businesses you is But right. are – excited run really you together, me, are over each work we me it’s a work see basis the they these all of to And mean and on is that’s long standalone businesses certainly where it’s well. are seeing of about really all what one are – all power when seeing is the we it, think doing exciting. so when They together. when but it’s building, early, four those going of And what gets

and and are businesses institution economy. on long focused are only the real together me We to are where the four how run. that the that innovation exclusively these over And upside they has is working see the potential that you the is well

John Pancari

competition? of more recent I competitive of Got it. on too compare changing? dynamics just been Alright. landscape deeper – bigger maybe question that you new now, now if Great. you more change maybe money any have you guess the are are where dynamics And are competitive in players the business you digging in are have in competition. years look it’s you one ago or into Thanks. from terms – or not ago, long seeing the they are the centers? mean the help I if is us at and how can you even changes call I entrants seeing then new versus lending, you your what versus understand how and X capital seeing

Greg Becker

Yes, it. am to is is I Michael the how yes. think – – about confident The and to I will start want – I the answer it short add answer is will

when guys across is you – actually so been are seeing will doing clients. reason to add have all is market. just the them been have competition I value going little building against defense, And What why out play our And I asked question how But I we four work to back And together, these kind answered pushing build how businesses of hard more increase is moat? you with. that building this here which create in That’s We of part is bit our differently, the the which not compete hard capabilities have. have different them the to of all all and competitive areas. and to have is, are I main they go offense a scalable that are answered you and I this franchise been to to on to we protect with. but out what

also message compete realizing in getting competition. only the to call as requirement. think money, we competitive. I earlier that, Now, there it’s our has been transformation, which a is is every and day, important deliver. still more spending stronger. are never a And And But We really on about digital that’s more ability wake to we talked earlier, up

more We in continuing go, position are have on, our add teams investment. to I been. still would efficient. are a why we believe definitely, you to is best to spending more money Mike, the have we competitive we that are that? long But anything again, ever we And become helping which way accelerate

Mike Descheneaux

Greg. No,

it quite and about. you summed you think to as I nicely well, talked too, as alluded

have else bring this been at one tools all have there we the that and well, to we as capabilities I many clients, sector you years no for much. innovation now to to this capabilities expanded know, our as platform have And our is least around that the bank. so – are can We and mean there together too. bring many, the in all for clients, at we our out the see

attractive see us a debt up where So, as competition be again, all there have it’s possibilities and that, funds very for too, as area it’s yes, having lend, is too. only segments of lot opening extremely after well, competitive. even various you And a to But more well, said too. to people in go

been doubt, no have So well. those as proliferating

because terms these in size of big coming are we as as well more smaller of trying even up-market that well, know box Some too. into banks going they get to down are

only So, never than we equipped today get going better our it’s been before. have ever there. can have tell forward, been to going competitive from position. stronger But And we you it’s I again,

John Pancari

it. you, Thank Alright. Dan. a Greg. you, Got Thank Thanks lot.

Operator

comes of Fargo question next from Jared Shaw Securities. Your Instructions] Wells [Operator

Jared Shaw

insight very given the already. have you Hey us much for guys. Thanks

this incremental down? be still purchases we good should Are quarter. or from think How questions. deployment the cash of I couple pace we know are about a pretty or a And level, you thinking can maybe should Just at here? we come securities cash aggressive of

Dan Beck

still $XX have range. I materials. the to think $X opportunity billion got in a Dan. billion about the we talk target it’s in Jared, We

on we guidance. the got So, to to based money put the how continue included have opportunity in with liquidity quarter work ended and forecast and the obviously to deposit we

quarters. will have Obviously, So, couple with in as same what’s would guidance opportunity saw be the pace the the we of last rates, the on investment we what slower but imply rate to recent liquidity in for sheet do to balance that continue the the to a spot deploy continue sell-offs. to with the good us deposit in environment with guidance the and

Jared Shaw

bank? opportunity then crypto the view Okay. at positions ever through an Great. that or updated crypto? more be Is your Thanks. around space? to And thoughts against Private addition, any approach active consider, there or guess there in you looking Boston And additional any would thoughts lending the private I to

Greg Becker

in market on the obviously part, But start. is bar that and crypto is clients this pretty attention some space. that are it. will do more We spending getting Yes, the high. are Greg. Obviously, the is I have crypto and we involved on time more

you attention read it, companies. you certainly issues pay we about to compliance know and around As crypto

board how innovation on strategy out figuring And to is we invest And are game team our bring we on At we page market compliance. level we that how are team, in the same want on that. do time, do sure approach that to do that to – high and want are what and innovation so we we play. spending plan want and time at to bar for all that make are the any same ones clients that

getting we the imminent point, are to But we anything more are There market. announce. that. in it’s leaning in at in space at some to looking certainly isn’t going this the be attention certainly that So, given

Jared Shaw

much. so Thanks Great.

Operator

are Becker questions. time, over further there any no closing the turn this to Greg I will At or floor remarks. for back now additional

Greg Becker

Thanks. Great.

thank joining today. for So you, us everyone

continued opportunities really ahead. the obviously our and are about growth happy excited with We

tech commercial be proud are We are how what work bank, the we the businesses only investment especially the couldn’t four together, progress working just bank, integration together. the incredible the the the really is all on these so I doing about of board, but the biotech are from the execution, across healthcare team they not build-out, Private. teams team team, investment And in addition just and more of strategy real, making bank, in the Boston the seeing well, the how

certainly am tell. you I optimistic as can So,

As is we that a to innovation helping is at SVB, bring made of people allow all believe we on-board, successful. embracing economy that which we have incredibly clients continue and are of committed client-centric the keeping those culture culture the It’s to successful us to us successful be in the is what certainly going to to-date has part and what we future. be really

industry. been view, about clients in added taking employees, in have future we as of As businesses, thinking and always, thanks of I incredible And lot with you a has that exceptional. tell, their do want collaborating incredible can to an the colleagues and job collaboration our best such our They new the colleagues. my care in the different to and say

the you And have more of clearly, world. for continuation that that us clients, the their the growing of to So, I appreciate thanks story couldn’t guys all a then they building. companies us interesting, be pleased to wouldn’t they have the all of certainly give day. our and the been joining trust fact dedication that strategy and we And we inspiration most hear us wasn’t we in with fastest and partner all to today to entire for the us every with compelling, business

to So, wonderful Thank day. have and a everyone thanks you.

Operator

today’s concludes participation. you you. Thank Thank for your This call.

now may disconnect. You

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