SVB Financial (SIVBQ) 22 Apr 222022 Q1 Earnings call transcript

Company Profile

Participants

Meghan O'Leary	Head of Investor Relations
Greg Becker	President & Chief Executive Officer
Dan Beck	Chief Financial Officer
Marc Cadieux	Chief Credit Officer
Mike Descheneaux	President, Silicon Valley Bank
Manan Gosalia	Morgan Stanley
Ebrahim Poonawala	Bank of America
Casey Haire	Jefferies
Bill Carcache	Wolfe Research
Jared Shaw	Wells Fargo Securities
Steven Alexopoulos	JPMorgan
Chris McGratty	KBW
Brian Foran	Autonomous Research
Andrew Liesch	Piper Sandler
Jennifer Demba	Truist Securities
John Pancari	Evercore ISI
Chris Kotowski	Oppenheimer
Jon Arfstrom	RBC Capital Markets

Call transcript

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Operator

Ladies and gentlemen, thank you for standing by. And welcome to the SVB Financial Group Q1 2022 Earnings Call. All lines have been placed on mute to prevent any background noise. After the speaker’s remarks, there will be a question-and-answer session. [Operator Instructions] Thank you. Investor may of your Head O'Leary, Relations, begin you conference. Meghan

Meghan O'Leary

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

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

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

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

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

Greg Becker

thanks raising us feedback our rolling be positive getting healthy core revenue Meghan, quarter entire sheet and outlook a great strategies if business our this higher to by brand and who's meaningful driven that Thanks, around our done introducing rates. plays reporting lift today. off that. power profitability, four out growth we're excited the hats significant upside, really our of income, loan new of have highlights out. revenue team, we're strong Based and forward rate job so for solid excellent really for Also, a curve be to marketing to which really the and momentum, growth, fee balance an Great. our from pleased XXXX earnings We're everybody and and on joining outlook

get So all them. we of to we to and sure you want know we make questions have

So I'll lines. to the open operator the up ask

Operator

from of with the first [Operator Manan comes line Gosalia Instructions] Your question Morgan Stanley.

open. is line Your

Manan Gosalia

on quick afternoon. NII Hi. the – guide. just I a was confirmation Good

include additional March have so the hike in hikes correct? eight the rate the the includes that not and forward long improvement end we that rate Is does far. just So the curve? in It

Dan Beck

include Yeah. Beck. funds. Hi. This additional does Dan increases Fed any It in is not

Manan Gosalia

it. Got

takes So think get sensitivity as but the can impact you've year? rate additional how I do puts deck, eight the forward for and you deposit help given in we growth us hikes that curve through the if and loan the metrics just this us would your guidance know, in well? the

Dan Beck

Yeah.

lot better think net sensitivity variables. think just income. of I that about in are there interest I a it's Obviously,

basis interest core in in with million $XX $XXX have expectation of And million and the that fee fee with worth another annualized you $XXX fund client growth do would income. XX points see the we income, assumptions every $XX annualized. subsequent now to additional So there net to or million million increase

So that's the set to that's balance way the the it. sheet. takes in curve And us look what's the the of of rate think a That increases best and at dynamics of assumptions. into good we ahead for forward consideration

Manan Gosalia

higher? general, with there in the you're how more should on about and from any is that know what you and But think well. like confidence rate the to Got the seeing just expectations growth given, even guidance there tech on loan seeing growth gives as color just guide that your upside clients moving both care demand strong it. the And health we banking I the you're fund

Greg Becker

want Yes, and this is may Mike Greg. add. I'll start to

the about about it and then on side. on also the bank think I think commercial bank private side it

believe what start there's which venture in So, seeing some see the capital rates is out be we're play those banking to of now levels. we're we if on going you softness to commercial side, the seeing kind

we to opposite life science see get may see the the And a side equity and we a tech And stimulation side. is bit harder on loan what on of high be rates growth the up. little so as do pick

upside. So do And there's they that don't dry going on some we lot much has deals, velocity private powder equity be venture a to and as to There that it. believe of we continue rates of may an some there. in certainly have the believe capital, are but softness impact around

to So, that's is neutral I say would positive.

they at bank pick back pick start seen mortgages up side, think rates On and to I there. the accelerate private softness seen they XX-year see some should slowness expect get and to all we've that there. higher, are clearly, If already looking rates continue up, to some we if banks

to loan rate the -- forward curve why So, the over least think way it's XXXX. out at that's forecast go-forward on basis a if the of plays about -- one the balance I think with

Mike Descheneaux

pipelines, close This or sciences is at the Mike the are high. would QX. the And is thing in in and did life in only I near the then strength to tech pipelines the Descheneaux. you add lending when about we see future all-time look And

are still pipelines. strength seeing we So, in some the

Manan Gosalia

helpful. Very you. Thank

Greg Becker

Yes.

Operator

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

Your line open. is

Ebrahim Poonawala

afternoon. good Hey

Greg Becker

evening. good Hey,

Ebrahim Poonawala

picture, First the a it was means us a quarter. it's just mark-to-market, fairly a big -- Give question obviously, been quarter. maybe Greg strong during lot happened

and out. that to XX% early And been that VCP better think in in of and tougher for -- downside we watch? of markets, along. investment? ecosystem, Just another have sense When late if appetite wait I that would the moving tougher. get is give you still talk sell-off the things us get guidance a impact sentiment folks VCP most sentiment? like stages risk has still negatively people it IPOs Give stand like been where stage I feared us your sort a of is what think to I play than would sense

Greg Becker

in five about Yes. apart. Ebrahim pick it questions I'll try that’s there. to

in engaging can funds just we private with it me then I the and we're what talk Let happened equity talk as and the to quarter. ball is partners. I'll start And capital just kind as general about when or of sentiment again then with what crystal much there client venture

if Venture isn't US the about quarter flow, equity. if funds, venture got you obviously, think than capital a in capital of of just carryover quarter first year. funds numbers, the you've of private more in end technology in softness care the international, there's in health the healthy so -- venture saw an sources from -- the and public and part was then relatively that capital, four So, generally We which is but flat.

later-stage in decent. that know a really That And decline So, we've flows XX% public there expect you was you were in fundraising. as biggest the the was so healthcare. in down pretty and got is roughly pronounced would public, most healthcare. great practice The

lot softness in flow was International was little from a little equity see did capital markets public funds a a equity we of so And Private transactions. soft. soft.

new time early perspective of when as is I quarter you you had highest and of one note, get an I highest came stage or what of roughly And of can But market. My spend to all in so soft, And strong. will X,XXX in second to flow lot do view there of at really maybe in continued right? right, a that My that numbers activity. look be which where some more a venture and you on the total from up venture clients from. a is that's We that you the kind will as to in that you than the public think modest like incredibly activity amount a and when on positive had. numbers in incredible is that -- parts the you funds. of But third out. client capital think that is play market market it our hear One we've the it's gives kind in if important the the growth there sense flow look a there's where really that that just continue capital levels have teams kind there's add great I of the probably of likely

And private strong. And there's later-stage activity far We're is going it's going incredibly seeing just deal still be markets a we off, lending just or feeling public are activity. pipeline for think bit to think discovery strong. I out that of I new year I market. balance clients until activity, don't in positive good. level while. kind personally there's the so the the the finds to recalibrate -- even Pipeline think, view we then call level going be the to what because into soft don't for it's it's softness the higher I at markets later-stage the a volatility little going Series good. saw in a through Look I People of be for think right quarters start-up to A, But my there's just be momentum. the of if little quarter price think The a I in general, that strong balance. two deal I'll of are think bringing levels is maybe And a these lot of

environment relatively here a this be Again So thing. about wants and I'm optimistic good actually still always long-term innovations that at where we're it's that. the we dealing in talked to with money that's

Dan Beck

sense off-balance funds did think Greg, up add what some products also them to the for one client also factors we mentioned have that it work open move made as within really we Ebrahim the in have put not the to to clients quarter back to we for started on quarter those we balance to thing allowed that do about Greg to where to only one to the us – thing sorry, of sheet sheet.

the be from help us to short-term to So it's so for able environment perspective. in just another a that's especially strong liquidity lever rate

XX% from perspective. to So be probably good of with of range able and a manage. still to end flexibility levers the lots that again all But guidance that be lower in we'll growth

Ebrahim Poonawala

the beta the to then. we the or to just will us shift assume you hike XX mix Fed deposit I follow basis quickly beta may the basis get in one we XX% deposits with balance that it And how kick about for XX% start up in sheet. Do for June. May, interest-bearing to Talk if do point take points XX if what a And on points piece seeing time?

Dan Beck

Yes, Ebrahim.

assumptions using of I get for to our kick that deposit to going timing hike here take like it's see going looks least, XX% to see guidance. think beta time May. we're interest us a net it's time basis we're bit income little betas of to in still at for point it Obviously, XX to I our going in. think a to the take the

see deposit to progression full we'll that going beta. think play XX% it's to I out, to So, get and that be a

And range. movement curve non-interest-bearing into to interest-bearing we out, accounts. a all think that forward migrate of terms where from of non-interest-bearing that's were probably that's range hike. interest-bearing, XX And are if XX-ish the we'll to basis from point of XX% play into in the In sensitivity to percent factored our I rate the up

So, hopefully color enough that gives there. you

Ebrahim Poonawala

helpful. is both. my questions. for Thanks Thanks That taking

Greg Becker

Yeah. Absolutely.

Operator

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

line open. Your is

Casey Haire

Good everyone. Thanks. afternoon,

Greg Becker

Hi, Casey.

Casey Haire

dig on guide. you on sheet to help from the guys to money taking I deposit balance wanted looks in off-balance letter, In growth to the be sheet. referenced liquidity from solutions, which the

that growth guide in curious then, much that Just your quarter? lever a of sustaining as for how XXXX? And was how much deposit -- contemplated for this is the

Dan Beck

Dan. Yeah. is Casey, this

what As quarterly we part let's from a was average a basis, the, at look $X basis. on quarter billion we it, range of call the an so in it smaller saw

we're liquidity we're seeing terms organic in that on growth In full factored of perspective. relying some what We year, from only a along growth from activity. traditional not with the

So where of this at we help we've tool a clients effectively can environment all at the for a is tool that and the And that got front rate utilize us really time. looked flexibility. really same in as

Casey Haire

you slows what what's for something distributions made a that is quarter? up that, of the we in quarter? or also picks the the headwind And outlook forward? good. very that Is that saw first significant And -- going mention the was Okay, in that down

Dan Beck

was most behind it one quarter for in of for at is year. are least first think of us distribution, Casey, fourth we first the Traditionally, the the quarter. factors that quarters so quarter, the biggest

Mike Descheneaux

much is the deal don't so right add mentioned, Mike deal coming exits And activity This the one distribution think slow as as talked and we dollars coming thing in. down The would Greg IPO, creates you have about to in. you so is new you when think in slowdown about activity in money about I Descheneaux. earlier

area. that's And a amount in and these up, of fair so is is going challenges getting particular distribution headwinds with that what

Casey Haire

last guys just guide On to take And great. talked you clarify. Okay, is not me that just one XX, about rate further higher. going for hikes your slide to expense

I of guys guess should securities? expense ceiling be really high XXs what mean, terms in -- be growth outperformance I So this that unless higher? could else you drive a fee or could

Greg Becker

Dan and I'll Yeah. Greg. Casey, it's will add. start

As increases, they're we're real expense we're really and from we're some some growth if about perspective. that we build going -- saw we just last we or to feel that that the that investment significant said numbers And quarter there putting investments. in good of rate out an

basically And out we we so going why XXs. to that, have said kind that's cap high at the weren't of

it. biggest either is for with the And caveat be And institution overall. pay performance we'll course, Of it's that's caveat the SVB one. securities, the will

so I guess overall up that, expense be performance having for mean would more And pay because part out you it the is is end we would that and think stronger. even that go the if my all to we happy, above most

Dan Beck

And thing Casey just one that. to add to

out if we guidance forward from interest a rate play to relative that performance do were curve perspective. would about expense think you if income what to increases, satisfies So the performance

to So what range incorporates that, that on be clear contemplated. the would about be just just range guidance pay-for-performance wanted sensitivity

Casey Haire

you. Thank it. Got

Greg Becker

Yes.

Operator

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

Your line is open.

Bill Carcache

Hi. thoughts my Good how would push you love taking your a scenario afternoon. where inflation – tame hear how to recession that is at how questions. impact into on how about I your the And outlook. the to Fed would ask a Thank – outlook? level, high wanted to economy the forced to for

Greg Becker

bit start. This kind the separation. units Yeah. a I'll I to I four Greg. important because is talk it's we think about have them now, little of business And think in

in the side, to it's lots been clients note They're strong they with So, better are than positioned that, important liquidity. have bank position. ever really the of on

lending we a higher a clients wouldn't portfolio. lending smaller to our as perspective quality And loan the don't – we from of on that, from so continue rate book in based risk we percentage change material aren't think again, expect the perspective side. any in a the And have the credit sensitive on historical commercial fact

increases, on a not if we rates rate about change know, be we're see to working rate and sensitive. talking of that as team you we're decline, ensuring much going the it's team that sure we're protected and potential to when can be as but you're just that. I declines to having not really rate as they're for a there. that going of confidence I Dan much funny So – seen you we're there. But protected And can and amount have prepared being rate the Dan have as see the that if are Obviously, way are think make we huge we

SVB, Silicon the that's at So bank Valley Bank. commercial

depends softness similar starting you significant On about the about think private now as there probably what starts you because pick would that prices basis next word And potentially? is rates if stride is that feel It so the pipeline and economy. do is long stimulate there bank go probably and such Could it. M&A good feel when with it's I Securities, ECM. a believe, down SVB the – I talk upside from But forth. really up. are side, you'd down could years the hit the upon few over we're really again, we to happens M&A, important growth where to price that on team security goes see, we note end they their about to small strong a in

would into there from an going it also fund still capital in well. like looks I as think, interest in And there's That finance. leveraged our side. at flowing be look SVB can You have money upside to

team better the to to than net downturns. ever it was sheet balance interest much is So income in balance protect prior sheet been. the I economic The levers different in is finance has think place protect, puts the than

going Sure. be XX be Dan, more hit certainly, So XX, to in muted will a than add you is my if an impact? But there normally view be, years to it would you what would ago. it? five, recession

Dan Beck

Yeah.

just at environment, client that the flexibility. from putting the everything right of toolkit lower the customers obviously have if sheet clients scenarios. teams again plus in are liquidity products that in of we liquidity you us looking solutions including the a previous think more It's place, gives doing downturn I and Greg think a part about potentially just had for off-balance total pool thing different said,

Bill Carcache

follow remained the really that. sort of could contained, relatively not build on helpful. environment you'd little side experienced reflect you I a the relatively is uncertainty, actual reserves losses we to to contained reserves? add Even or sort If lead of remain expected up to the of That's that aggressively, greater of just could still the would to credit to of would level you sort within credit if and range, your that see more fact having you that a expect bit losses

Marc Cadieux

us. depend may economic saw sort would Cadieux to front start. credit forecast the in build, trigger I'll seeing of of driven degree hopefully add. today in economic Dan, a deterioration But speak scenario I the reserve early higher. Marc it you the we a it's scenario, to So by anything Recalling whether in would the downturn the is the on of of reserve innings on the recession quality, of reserve probably think would forecasts, certainly that add? COVID, in wish take irrespective of like not Dan that likely a

Dan Beck

No, I that's Marc. right think

Bill Carcache

comments if where impressive then it's I we've the to the buyback a impact proactive regulatory may around banks, rate capacity. aside I in the quarter capital in And direct many ones setting sort of seen final management a in larger mean, squeeze where scenario, risk that up like and your interest follow on this there's and

purposes. recognize hits. OCI And to of tangible it, others two on of seen there's headwinds don't no impact sort category for outside are regulatory with buyback the okay they've of capital earnings. because that and value or XX% been capacity or capital regulatory XX%, have We've that Some book one

like And to made you but SIVB's that the high they of guess you speak to that level so haven't tangible seems that to on a hold value book that? kind to you guys And focus. maybe as is been really you? important It strategy hedging I book tangible on extent just as protecting has focused important? could you value, love something speak how I that is -- your you hear

Dan Beck

area flexibility really ourselves where movements That's to and to manage we level significant with it. reducing We is that. Yeah. like flexibility high sensitivity ensure provide that have to we like another associated this by

that in perspective again, capital, year, have to last not it's from the would manage able especially be played amount liquidity higher counted a to to regulatory all-in. important still we of for a came strength So not environment which being been now though with out, it's think even protect what capital that's able rate

environment So for that today shift we're about how about protect against is downside to to what the sustain in starting as risk And thinking Greg rate we're able today to be about, how things. that's we're think and flexibility. we environment thinking seeing the rate higher talking through even manage was the to

yes So and important flexibility. make to sure just that got yes, it's we've continuing

Bill Carcache

questions. helpful. my you for again That's Thank very taking

Dan Beck

Yeah.

Operator

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

open. is line Your

Jared Shaw

Hey good afternoon, evening.

Greg Becker

Hey Jared.

Jared Shaw

cuts see is of actually thought maybe -- how guess, some a what your you of have you loan and you to due was this -- see the shift lending sector? growth lending if to Did support off. And care those companies? that this Did some quarter? happen you I among option in you into that and have much do the quarter of I health projection tech the the interesting increase rate did said, utilization equity it companies

Mike Descheneaux

all. much Descheneaux. not rates This increase the did is Mike Yeah, utilization at

growth. bit huge So little or this quarter, It of it's in really been significant certainly stable. up a driver but pretty not the not was

Dan Beck

of driven is capital forecast there, a the primarily lending in But the call a And seeing Dan. on by there Jared, technology, from life and it. basis, again, forward-looking pipeline is this growth new lending what business and driving that's increase is we're care sciences. There's health a exposure. On lot still small

versus usage and capital call commitment a from lending from new global perspective. banking utilization less equity we're what funds private So seeing

Jared Shaw

Thanks. Okay.

disconcern of look where that effect a have I private lending. there. detrimental need was negative XXXX, higher were there's equity before rates $XXX a has rates that guess, quarter, you seem things when we in investments to with, the venture really call impact and demand? for But GPs, investor think healthy at From of do everything Fed think we your been at and would lot concern During capital capital I meaningfully or need a to pretty really what on get on funds call the capital conversations level

Greg Becker

Yeah. when by you say it's that down as in talked I far that just higher out Mike forward And can't very, it's This would see dry lot would The enough give to is I that funds powder helpful. opportunity It's in equity add. time And of much Fed that the to those need referenced just to I'll really may it's much there's slows powder very be is -- out. and it it mean money plays innovation, far amount away dry of if what incredibly year to rates there's that exists pick later bit rates hard start-up last it's that were exists strong. may you out that fund impact. want that a strong. And start, Greg. there. put predict. is, the activity enough And but the and -- I away But dry maybe if this there up, have the about, curve work. didn't private an powder is little a We Fed again, an they so venture, very, I

Jared Shaw

that. Thanks. All color, good asset just though. right. positioning. on moves then great Congratulations And liability I finally, That's guess on some

or and that million continuing more see Is floating or in unwinding necessarily? second thought to of hedges received any $X to $X that billion still there here. there's -- I'm quarter referenced sorry, shift You not of

Dan Beck

think, we're of higher still, a Dan. Yes. always Jared, short be from there's mean moving of I I going lot here. it's to rates but risk opportunistic,

to really hedging be the that just think for why execute to some optionality to gain keeping with, there liquidity, makes to such begin sense book to we that's we strategy to protection if and able able and large access about us. a have provide securities being So of

So no an we now. right move, plans in what from If opportunistic, on we'll right start happens may to be front perspective. us a rates keep eye rate but of

Jared Shaw

Great. you. Thank

Greg Becker

Yes.

Operator

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

Your line is open

Steven Alexopoulos

everybody/ Hi,

Greg Becker

Hi, Steve.

Steven Alexopoulos

to Wanted start.

So if I in all you still was quarter. the at more given more quarter, look powder, VC which the the first on quarter that market given they IPO a up, we it dry spent you've money broadly, lot referenced an saw dried the also but investment saw than raise unusual but first the sidelines, VCs

raise mountain investing that So much hearing partners down. didn't is the your a slowdown either in of that And you coming? or even dry from are to what you quarter. powder a tough pretty hearing money are in they're come able VC Greg, fundraising so

Greg Becker

Steve, and Yes. are you that I -- going a as said, there's around. agree, lot different things there's of

really don't was have funds, ever was are or their two. in to harder it's are note, the easy, the let's say, meaning certainly it's long not don't first funds pretty the enough time but by it's but significantly. distribution you I -- fund funds first-time lot II of money raised the important distributed, say Fund II, having equally record smaller the know Fund upsizing have it's The if the that it So funds, a fund -- a notable that And track it was ones funds, was that raised raising, that one, anyone long, funds funds that would a easier. the underneath, the strong the or that

some are headwinds there that. so with And

the is strong. So you're the getting but a bit dry of from firms stalwart mixed little incredibly powder a more message,

bifurcation, And have a fund employing that have strategies. are programs. a -- different, the strategies They a have have late-stage you I'd funds so they programs. I'd niche fed seeing, very large say the large you're They that now large, say, are meaning

really that having in both are you more stage or and the I ones more oriented. are don't track So after. ones me-too very said, a they the that there And have that of they're a have what niche very a don't successful harder the record differentiated a markets call the but strategy. are ones time funds long much I'll a, have approach, Then going they're diversified that are have

all from this, think, benefit it. So -- close personally, it. connections There's we have continue very and And in of are from that I want obviously, to benefited the have going been proven. to you funds still but those a to it. that into come deep clearly to wants staying the areas into to lot money know funds venture, come strongest to have But they're the they are

going for funds a And more and so be to up I be to think record. the be long a it's around for continue been headwind that of -- time tailwind track going that emerging to funds, it's have a the built have great a

Dan Beck

volatility system makes difficult. that the the it with that's certainly, mean, in I

as in, And like on. an eye in -- well on. large quarter. as this having the they're a we're of But there. also as It's QX, close eye agreed in you and Steve, still these to an funds work. But something the to keep dollars deals to trillion the something keep dry said, Greg Greg as just $X.X out closing are powder is definitely something have probably in get a it's that lot mentioned, as it's of so, they come put first right, kind lot of And large XXXX, to of

Steven Alexopoulos

Yes.

don't us the in private drill Okay. bit still slow equity just It the off tell trailed into seeing there. bucket you bit, down I Could you're activity That's where bit. capital in capital quarter-over-quarter, a active? went up I looks a and wanted more a like where If down I the call look it what's capital helpful. calls growth it's XQ. in the call little sign maybe to and other know

Dan Beck

about like talking Steve? you segments, just Are particular

Steven Alexopoulos

Yes. Within calls. private equity capital

Dan Beck

strong. quarter. sector particular you We was was was was in in -- And February little healthy, in the down a nothing that it board slowed really pick to I kind back there's of or bit time. to really there quarter that would across say, -- had the can really then in up It's started starting an I March. interesting, tell a It funky. but that this first to down particular no point that we any well outlier so up bit, at

Steven Alexopoulos

first XXXX, tend Thanks. really question. you a CEO a agree the comment the regarding the $XX we these But, will backdrop, pullback describing? is, Okay. see short-lived. are be of it's how probably quarter, Greg, that that still finally, this bit first to you potential it that a of But all given invested this that today in capital letter, worse than billion not what little if with fact pullback you're And of then, the just would that. in kind? much of factors exact there I expect the VC hit and in any we about possible And think we which any is conceptual period quarter to living are saw in

Greg Becker

Yes. I confidence he but I beside General would to that. going love and I'm exactly Counsel, absolute what's with says our do you tell to can't happen, sitting

market, have, with -- have to going to possible. -- softness. Steve, with to that two quarter the valuation. -- think round, the if right right going healthy be that's still talked stage I back earlier. to extra I says My very an about am through public there's right? to It's out wait ball, I would would healthy out get commented. -- relative to companies trying what's information that valuation a or I higher the markets are to for well, be to Early I what that that the we're say question it's I going going we I But there follow some figure that reasons is, now the raise So just all is and crystal

there very just So all was be that a when together, this put I first is that you believe I do to -- because still softness, and healthy. as a not add lower-case very, just I've s, said, S, capital you going quarter with

able come and It's kind softness XX that for softness it's lower-case to in to -- a way share more So it. XX me the days, be days, will a and simplest probably again, quarter. days, that's XX next of a lot upper-case the next out we'll versus describe

Steven Alexopoulos

Okay. Thanks for taking my questions.

Greg Becker

Absolutely.

Operator

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

line open. is Your

Chris McGratty

Great.

timing we a quarter. just this of QX, Just in a thought is better down warrants. environment, of step Greg, the more than because bit QX a one the I if it's in on stay quick this little arguably

Greg Becker

Yean.

a First of Number two, very, does up what make really your thousands on portfolio anybody portfolio, number portfolio. one. of securities have in you got all, diversified that companies your

one factor. that's so, And

and is, make warrants, that. right? factor parts, So most portfolio, second We always multiple securities the some quarter, we try there's, to information used you're the up recent the that. The obviously, that parts get, right, get can't we the and from in

lag there a there, bit little information So value that a is we that. as of gather try to to

could a You in have funds some in quarter there lag fund funds it our the also it's a that of cases. lag there be some where to in

I to would be So softness, the play out. The some the first crystal is could there the But so quarter yes. I quarter? a the higher second to answer or that's ball. -- expectation in quarter think reasonable And that's softness relative third

to the domestically, globally, the is there's big as as of expect. be as portfolio to about view diversification go characterize right many probably great, that's my diversified volatility back it be, far now could won't portfolio -- may the people it's where As the a such trying I part how that

Dan Beck

Hey Chris, it's Dan.

fixed to million. close attention did to gains thing income one securities have $XX pay in Just the to, we also quarter,

that well. So that's as in number

the companies backing horizons the to So funds, investment Greg, and number certainly just continue thinking experience to XXXX. of time the with out, see diversification compared I the of thousands But of that and investments. those you softness there, of different number just in do the factor especially agree the about

from quarter-over-quarter does significant really declines. we the protect So

Chris McGratty

due could, more are Okay, limited OCI levels pretty stable, capital the the mentions of hit I to if on one updated levels. just great. maybe capital And there, thoughts

Greg Becker

looking Take back, range. think capital senior opportunistically Chris, a target from quarter you again, where at when and bank. it, but leverage you that perspective. We X% past, a the ended of the between our we're a then, from part at Yeah. obviously common constrained, X the Tier look debt the in if managed at range take about capital we've to certainly step -- lower there equity X%, on within preferred how preferences,

a potential senior on continue look add the manage go-forward to considering type to that market, for here. transactions preferred to Just the debt, we basis

Chris McGratty

right? have And you capital also some the ability move to down,

Greg Becker

That's correct. Yeah.

the that continue Tier cash X the bank. of good We manage ratio can holding company bank sitting to at have at to a amount we use leverage

Chris McGratty

Great. Thanks, Greg.

Greg Becker

Yeah.

Operator

comes question next Your from Research. the Brian line Autonomous Foran with of

line Your is open.

Brian Foran

Oh, Hi.

takes. You gave the was of who puts kind your XXXX today think some what you of But and say about one of style all biggest and for over are growth, pocket worried of kind the is you like recognizing Dan people your both done for again for business clients? the is it the I all, concerns and in difference mind then and the versus air XXXX your but would

Greg Becker

it's the that day and I'll then. lot may I'd gives calls lot is to is start, reinforce of is add of differences. There's time. is it. want to things what and the different But continue Greg. continue top to a on over to to Dan the meetings of be an I interesting to is very say going compared comparison. innovation then to what back balance on What earnings every the internally was fact sheet right and me up economy This that a it comfort

looks crystal innovation a XXXX, view that if you also severe good portfolio, is on again, so see is constructed, of the feel say good the a my there economy now, that it very our way we'll softness, more like the that little Maybe on is I faster And softness could that get based a in that sheet shouldn't on that. be that. I than And constructed that -- more is two again, more if loan something way feel or that But to have overreact pace back will start short-lived. it's balance ball just our same my quarter we It trajectory we'll about and it change. would I strength.

Brian Foran

question. Great. Thanks for taking my

Greg Becker

Yes. Absolutely Brain.

Operator

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

open. is line Your

Andrew Liesch

question. taking for Thanks Hi. my

international at Page growth this income Just looking XX the of loan the fee and international growth. slide deck, core just

region? any the curious what And for what's Just of those? driving both outlook was that particular

Greg Becker

exchange. predominantly of securities Those fee some fees been investment foreign client key also would going seeing On have the be be the side, you're Investments strong. FX, drivers. to

Dan Beck

Yes. average This balances. is the also

the seeing significant really had through really forward and into from of year year you're we or balance end of So the activity the first levels coming last those continuation carry year, the last end last quarter. of

there. good So growth

Andrew Liesch

into And as it. first year? is how the that so turning progress we Got move the far

Dan Beck

and mentioned, a in growth first market. the things quarter, all are think in Greg in as was So we perspective, softer just from look, that I different international liquidity as not and the

last So growth, clearly softer still than but year. we that the levels saw

Andrew Liesch

it. Got

the taking for Thanks questions. Okay.

Dan Beck

Yes.

Operator

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

Your open. line is

Jennifer Demba

the my to how Two acquisition Thank feel to I'm you internal is your gone questions. second Thanks. Boston the more how evening. you. you bank? versus in Good hiring plan far? much need has as Private question curious investment do just thus do And

Greg Becker

Yes, Jennifer, the with question bank. start private let me on the

I people when board new team off, Private. brought when breadth bringing about we of capabilities. quality, in the at When you on we SVB on the at board, have First of hires good feel you platform the on look now we're very the look the look you

I opportunity is not from standpoint, So as at least good, if than the stronger thought. originally my

would part things capacity. is say, the underestimated I probably I'll my where of One say on,

brought teams leveraged. fully when already you their right, on of so when And Boston Private think are we board, their advisers,

would time a with what for we volatility everything more and you'd say want. clients, we lot so hoped -- of exactly I spending which is market with people But probably else, look, And are capacity.

look on great that the focus And in good. look with the our I the we're board on when pipeline and getting fourth about our am then people middle quarter, that. incredibly I is feeling feel already. from on of having on we feedback very that's talent. really negotiating and are the capability, you So people positive. also part is, the what the last attracting about that's And board in in We've got to at a brought market the and positive this come that we're team where you when clients And

about thought. than originally underestimation on I about but and So, the part my the say stronger feeling is opportunity capacity, would potential the

been technology finance, market, feedback brought additional start securities. Partners, SUV Yes, want pipeline, pause on on, let's the health cetera leveraged the do, added. team question with we people that that the to with in of board, and the extraordinary. have we've that. feel we first Leerink some we from hiring I And and positive is team wins, then the about on acquired we just Well, on platform the I original the incredibly deal Second both services, that care that but people to have on that et fact just brought

Now, your feel if follow-up you about quarter soft? it, let question first well, answer so was good may be, why it. me So

the has from that business softness been fourth equity, now anyone think decline has XX% capital quarter. capital market right clearly markets I a the in would market, that IPO markets the exceptionally agree soft, capital

to up opportunities market open we're companies for signing signing Positive, starts still and positive? up what's and the when deals. public go to We're new So is up M&A strong.

combine again, of the bank that about when strength bullish have capabilities. bank under the team commercial And you we feel the very the private about investment so our And and very They're leadership, people. the I concept bullish our into of 'XX is, Mike's of why cetera. and we 'XX, together one hear this that's as very voices, working positive all bank, SVB of about in probably very, think the 'XX, et you really while balance

Operator

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

Your line is open.

John Pancari

afternoon. Good

Greg Becker

John. Hey

John Pancari

mean dry in buffering farm want a as what be, in where look benefit -- just the but could full your I year how I and risk of the little different a little slowing guess way. softening question included flows the now also in seeing I where ask to and at hear powder in how of guidance around right terms you bit incremental flows you I the is that's flows. you're expectation?

Greg Becker

will then it. This color Dan more I about think around you give and it. start, I'll Yes, is how

that's right we we another -- argue quarter, they look in continue. pace back going uptick about several for start what clearly softness now, capital of the than first the the think in the I closed. that kind to we kind could at to are opening which markets saw money more see you up just it's in market talked months And and some then flowing of about, at

So, now. are that's we where right from long not leap a

about range the So, of deposits we forecast. that in that we where that's And lower of or that in when have think you the what we forecast. have end are range that

a range I differently, right? out to the and big I wouldn't the than range pretty go said taking have likely, it it if forecast think another plays probably -- -- what we -- more that's we'd up. ball range. lower that time kind go So, how hard end go obviously, the positive, combining a the what step is, we're That's how So, with we of crystal more and above of seeing about

into below see the now. that are big a you of pretty You'd if numbers I next first funds pickup about, capital, the international that. saw have that to right worse, range public, talked range on the could venture in from us equity and we where down from you tick quarter were go other below Conversely, flow side, see private the

or to So, you it that could just outlook? range? outlook, of to the what go cause what's color below give more a built into above kind And of little the

Dan Beck

of add Greg, the be I off thing able ability serve to we only as some sheet stands drive to on needs that, to that support balance to sheet, and the Greg the scenario where enter would a short-term environment is able that thing out. to is, the management clients' of The again, liquidity just rate we balance be that part laid it another to money the consider

flexibility. So, as more more have have we well. do We options do

John Pancari

it. Got

negative? letter don't indicate for know can help Thanks gains CEO frame on even us you warrant maybe that. I don't know your investment warrants. turn gains if potential times in moderation? get these in your then you like though could we a moderate Okay. from here, this guide I questions guys then could that turn that? I And of separately, that How And that warrant think about gains typically And you ton negative. for out could could

talk Thanks. So, you could about that?

Greg Becker

Yes.

way could don't quite based details too a in because, meaningful predict honestly, and give to on we ranges. don't give it guide. don't we We We hard just be it's around So, off market.

of could look, a that this you we that in decline little a negative there's that's the But bit investments, you bit of see reason talked little could be wanted There's on about see to in a question to a and lag additional call. And we and we some So, a you could clearly color that yes, don't give could and is could. possible. answer through the be actually decline It's warrants there. to more right? was, go specific The your guide. number? possibility the a So, obviously there, there softness say, earlier

I is XX%, levels And when guidance we so if securities the answer at where is it be. said The And and level a strong confidence on would our do again, like negative? the it give go to you with no. because quite some expect to what expect direction, pretty this would confidence our like softness. The comfort But, this level, below zone. be confidence honestly, I clearly said Do why is we have to XX%. we'd we we don't that's if our confidence, warrants look guidance,

Mike Descheneaux

does market? IPO or John, really drive going I the clearly, does going How determine exit markets, those as to it's mean, the be. you to know, But how what numbers are

take and you you a think exit on the go. are IPO So markets do to where view going to

Dan Beck

are the here got the granularity investment this I'll thing Again, really warrant market. is vast of the last portfolio the that what the the John, fact in we've private and say, Dan. majority in matters,

If about funds. you've think you it, XXX got

that close to individual thousands time. companies X,XXX investments made over are of have You and

number in companies. lot investments a diversification the of and of of those the timing there's So,

you that reduction that to prolonged sustained have see a of and in come to -- quite to have those private investments. through So, really start value all

So gives little of extra bit a color. that hopefully, you

John Pancari

what areas the new your in into you're CEO right talk expense business. Dan. Thanks, And by indicated making like money increased largest letter, putting does. still now? just that Can of in investment that about the No, you're lastly, the partly you outlook also is you the investments are influenced that Greg,

Greg Becker

increase in we've When think -- headcount had going growth capacity. It management you well. risk to bank, as about a is a there. investment X lot and It's Category of really areas And to Yeah. It's it it's is a across digital. of that around in clearly, different the lot board. the there's

that at that really talked the one keep these look it's really we clients. just to areas four that look we -- pressing to opportunity our and as for as just future. across investment our support deliver additional with years so, it's our not of to revenue again, every And on that, over plus And all this ability functions. we've building for at the we the today, building those businesses, opportunities have for And is about

about it really So every in goes the what our that investments. almost sheet deck board. in and the It's are significant the through It's talks is. across area and highest, the

Dan Beck

make thing across as as bringing have only the to the franchise about sure as today. well, the what and we all new is, I'd to John, are Greg talent making continuing people retain that we investments the add said we it's in incredible platform well strategically onto that people

franchise. of of be So, the the we've also all investments, as part got of those to really, great it people continues that the core

John Pancari

Got Dan. right. it. All Thanks

Operator

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

is line Your open.

Chris Kotowski

curve, Is long go and in just premium let XX days, to on as delta it amortization that therefore I make XX, just properly, and sure because you Thank guided in to of end amortization? the minimis premium those like was And in January million, simple level? you. $XXX in first the understood at evening. to a I wanted the XXX%. went if just the dynamic Good as de the came it NIM the quarter the

Dan Beck

amortization We looking were sensitive like Dan. X% slowed a to to is combination rates get XX-year starting and materially premium highly It's down. at This X%, now rates. slowdown XX-year substantial with of, XX-year what happened close premium below that the of you to amortization that's the in said, from

incredible from higher the big reinvestment so just with perspective. rates helped saw securities on also that? from quarter there NIM improvement in Secondly, You reinvest this investment to a able in portfolio, the quarter short-term being a much

plus together better the some of of short-term things yield. the of the a benefits on cash, kind quarter get all you add So, to in those

Chris Kotowski

days. change It's in a quite XX dramatic Okay.

function a the thing X.X extended other is show about that was portfolio to the was press the your the of in The years. portfolio, new the maturities rates I wondering securities it extending a the release, you Was of held-to-maturity function mainly X.X or years in movement about of you added? that of year, that duration a

Dan Beck

got extension, was in which function good it proportion you've the really of duration of there a a No, mortgage sitting securities held-to-maturity the especially in book.

So premium that comes reduction of also in a of as amortization part all that.

purchases. and securities net versus mortgage held yes, maturity So to new

Chris Kotowski

XXX a like long there's difference I or maturities, book that? end over basis portfolio two-thirds XX-K, is into XX that extension if another years. maturities on mean contractual of risk something XXX like get your roughly knowing that huge duration we held-to-maturity at what the or of has between the the looking and it's on your of curve And like points

Greg Becker

a question. good it's Yes,

the seeing extension the of you're extension out with playing perspective. already a think book risk, they I rates the you're where seeing from duration are,

Going quarter. That's to extension with. most the held move from we in to of material will effectively much here overall not those X% and close that the we but risk, the begin duration as seen in maturity to higher here had bonds by some have had to the getting That's XX-year, end as the we've sensitivity. where the sitting why impact

here, significant through will risk some lot a that extension because see not but we as played already. from You of

Chris Kotowski

me. That's you for Okay. much. it so Great. Thank

Greg Becker

Great.

Operator

of question with line comes Brock the next Vandervliet UBS. Your from

open. line Your is

Unidentified Analyst

to [ph] for on taking again. everyone. on-balance just the wanted Hey, conversation revisit Thanks Brock. flexibility sheet, sheet Abraham for This is I Yvette the question. off-balance

$X How assumptions? beta the on I mentioned about from that deposit fit think beta you your you broader those for and into decided off billion QX. in are thinking deposit came

Greg Becker

in than XX% Yes. deposits The will – be beta. but the see what portfolio, fits what's likely deposit into deposit total, and as we higher said, I of overall, the through we important. cycle, think the of The is in rest there this beta from the still, some

end through look that. at inside corporate So might a for perspective, the if But with that beta. quite think And a in you portfolio total, clients, segmentation, well deposit of higher. again, seeing guidance larger cycle, from fitting I be up you XX% these bit

Unidentified Analyst

those Okay. behavior are able you you about think other are Great. to later-stage Thanks. of how and That's what deposits you deposit about companies guys segments? of talk helpful. percentage to And from hold relative just the

Dan Beck

considers as overall into them gave we So in the the interest-bearing to I total We of have don't earlier that from consideration incorporated those that sitting metrics XX% with migration, But also time, think we the that those And off at to percentages, same expect look – takes mentioned forward the hand. some could range, clients. the later-stage the that in got I the move non-interest-bearing. into curve that through the -- tightening we deposit beta at clients. also cycle we beta XX% the And XX% that later-stage last think there. that deposit we've

Unidentified Analyst

everyone. Thanks, helpful. Very

Greg Becker

Yes.

Operator

the Your line comes of next Markets. question Jon RBC Capital with Arfstrom from

open. Your line is

Jon Arfstrom

in. for squeezing me Thanks Hi.

Greg Becker

Yeah.

Jon Arfstrom

levels different and XXXX margin go saw can't longer-term X.X%, reason to in funds so around question a back levels? back any we XXXX, have Anything that your from XXXX Just would of to prevent happening? the margin for you. that philosophical If go Fed what

Dan Beck

this John, is Yeah, Dan.

that portfolio obviously back higher mix the And different. the than perspective, XXXX. lending XXXX. still securities is a take call of much cash portfolio of from where level from investment The structure really the were that's in the think we add have look, different capital we balance I you a to larger,

that So a even had the when rate up is margin look comparable terminal getting you at lower. those end if you to you environment factors,

a interest Now the you can math perspective. from balance size do what start of on income the sheet, net obviously, to at means the with the same time, that

that while core opportunity last be sustainable able income what to cycle. So is net margin to clearly tightening had stronger growth is the the interest lower, during we much than drive

Jon Arfstrom

much. Okay. very Thank you

Greg Becker

Yes.

Operator

That CEO, for have is call back closing I'll comments. to questions. we Greg all the the Becker, for time turn

Greg Becker

joining have a day for today. I know, to I late you and of us any you. in everyone digest. have East Thank the analysts it's people guys the thank just had on the lot Great. things Coast to want for different

for you us. thank So joining

couple volatility, with we We we've momentum a of the a very last call and the do we've from that on lot market experienced We obviously meaningful positive again talked are to and service today. all-in platform growth as to about ahead, strong four if the delivering this, business of, and have on the hikes additional our that pipeline rate there and units, the strategic call. kind strong even all for talked all clients. about about prospects priorities, year years, the pillar lot future said, upside, of in are on And a invest our about we're we continuing

continue with extremely again, me, to about volatility. even the that to the with excited So be market, market

employees do want for work all the thank As always, I every day. they single to our incredible that

I've been it's great spending open offices getting market rewarding. people me, just spending been time has a markets other For in in as the our spending of up out more New more time I York in and and more spending quarter teams and Israel, been and so time was time with

and the energy excitement. up now Our are opened offices and

and thanks aspect important incredible being working to that for also we really events clients we one. that innovation incredibly want a business Dunbar as things for them has our just want with thank the have is translating shout I gather that Chair, at out Dunbar. SVB us. since into Chairman, an retiring see. about gather and an to that to member XXXX, And hard want period, do And to well spending the is The I Roger his great for mentorship because in they're chapter And final thank the huge you it's of doing every adviser him been And in we as think having to friendship that Roger and together time. our I personally, leadership. with their me the and I team the Matthews, XXXX as just that is is give excitement as of people Roger of meetings stepping and exciting, certainly again, and So our appreciate energy Board energy people know best into our wish together for have to people Obviously, who's about together helm I last just all what Kay his and time clients member performed a since Chairman, new done and last Board today. so think banks as also -- other XXXX. decade, just and that life. with as later the XXXX that time about really decade as And he's a welcome he’s next Chair us. to over appreciate better the period role for for the excitement institutions,

to his thank want everyone really again, I a that, new the role. service want welcome, and everyone, So for And with you. thank wonderful Thank Kay, to and have Roger I to day. Chair

Operator

conference concludes you call. participating. for today's This Thank

may You disconnect. now

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