Q3 2023 First Citizens BancShares Earnings Call

October 26, 2023

Speaker 1: Yeah.

Speaker 1: transcript

Speaker 2: Hello everyone. The first personson's bank shares third quarter 2023 earnings conference call begin in two minutes time to allow all participants to get connected. If you would like to ask question and please press AR forli by one on Leon pad.

Operator: Hello everyone, the First Citizens BankShares third quarter 2023 earnings conference call will begin in two minutes time to allow all participants to get connected, if you would like to ask question and please press star followed by one on your telephone keypad.

Operator: Hello, everyone. The first citizens BancShares third quarter 2023 earnings conference call will begin in two minutes time to allow all participants to get connected, if you would like to ask a question please press star followed by 1 in the telephone keypad.

Speaker 3: The.

Speaker 3: transcript

[music].

Speaker 2: Ladies and gentlemen, Thank you for standing by and welcome to the first citizens. The bank shares third quarter 223 earnings conference call. At this time all participants are a listen only mode.

Operator: Ladies and gentlemen, Thank you for standing by and welcome to the First Citizens BankShares third quarter 2023 earnings conference call, at this time all participants are in listen-only mode, after the speaker's presentation, there will be a question-and-answer session. To ask a question during the session: the. Please press the followilli by 1, trying to think: add. If you require operator assistance during a program. Peace press starle L zero as a remark today's conference. I would now like to introduce the host office, called miss danna Hart, Senior Vice President of Investor Relations. You may begin.

Operator: Ladies and gentlemen, thank you for standing by and welcome to the First Citizens BancShares third quarter 2023, earnings conference call, at this time all participants are in a listen only mode, after the Speakers' presentation there will be a question and answer session, to ask a question during this session please press star followed by 1 on your telephone keypad, if you require operator assistance during the program, please press Star then Zero, as a reminder, today's conference is being recorded, I would now like to introduce the host of this conference call, Miss Deanna Hart, Senior Vice President of Investor Relations you may begin.

At this time all participants are in a listen only mode.

Speaker 2: After the spegest's presentation, there will be a question-and-answer ession.

After the Speakers' presentation, there'll be a question and answer session.

Operator: To ask a question during the session, please press star followed by 1 on your telephone keypad, if you require operator assistance during the program, please press star then zero, as a reminder, today's conference is being recorded I would now like to introduce the host of this conference call, miss Deanna Hart senior Vice president of investor relations, you may begin

Speaker 2: To ask a question during the session: the. Please press the followilli by 1, trying to think: add.

Operator: To ask a question during this session, please press star followed by 1 on your telephone keypad, if you require operator assistance during the program. Peace press star then zero, as a reminder today's conference is being recorded, I would now like to introduce the host of this conference call, miss Deanna Hart, Senior Vice President of Investor Relations, You may begin.

To ask a question during this session. Please press star followed by one no telephony chat.

Speaker 2: If you require operator assistance during a program. Peace press starle L zero as a remark today's conference.

If you require operator assistance during the program. Please press Star then does it right.

Deanna Hart: As a reminder, today's conference is being recorded. I would now like to introduce the host of this conference call, Ms. Deanna Hart, Senior Vice President of Investor Relations. You may begin.

As a reminder, today's conference is being recorded.

Speaker 2: I would now like to introduce the host office, called miss danna Hart, Senior Vice President of Investor Relations. You may begin.

I'd now like to introduce the highest office, it's cool Misty Ana Hart Senior Vice President of Investor Relations you may begin.

Craig Nix: Good morning everyone. Welcome to our third quarter earnings call. Our Chairman and Chief Executive Officer Frank Holding and Chief Financial Officer Craig Nix will provide third quarter business and financial updates today. During the call, we will reference our investor presentation, which you can find on our website. Our comments will include forward-looking statements, which are subject to risks and uncertainties that may cause our results to differ materially from expectations. We assume no obligation to update such statements. These risks are outlined for you on page 3. We will also reference non-GAAP financial measures. Reconciliations of these measures against the most directly comparable GAAP measures can be found in section 5 of the presentation. Finally, First Citizens is not responsible for and does not edit nor guarantee the accuracy of earnings transcripts provided by third parties. I will now turn it over to Frank.

Deanna Hart: Good morning everyone. Welcome to our third quarter earnings call. Our Chairman and Chief Executive Officer Frank Holding and Chief Financial Officer Craig Nix will provide third quarter business and financial updates today. During the call, we will reference our investor presentation, which you can find on our website. Our comments will include forward-looking statements, which are subject to risks and uncertainties that may cause our results to differ materially from expectations. We assume no obligation to update such statements.

Speaker 4: Good morning everyone. Welcome to our third quarter earnings. Call our Chairman and Chief Executive Officer, Frank holding, and Chief Financial Officer cragniick will provide third quarter business and financial update.

Deanna W. Hart: Good morning everyone, welcome to our third quarter earnings call, our Chairman and Chief Executive Officer, Frank Holding and Chief Financial Officer Craig Nix will provide third quarter business and financial update today, during the call we will reference our investor presentation which you can find on our website. Comments will include forward-looking statements, which are subject to risks and uncertainties that may cause our results to differ materially from expectations we assume. These risks are outlined for you on Page three we will also reference non-GAAP financial measures. Reconciliations of these measures against the most directly comparable GAAP measures can be found in section five of thepresent. Finally first citizens is not responsible for and does not edit nor guarantee the accuracy of earnings trainsteps provided by third parties. I will now turn it over to Frank.

Deanna W. Hart: Good morning everyone, welcome to our third quarter earnings call, our chairman and Chief Executive Officer, Frank Holding and Chief Financial Officer, Craig Nix will provide third quarter business and financial update today, during the call we will reference our investor presentation, which you can find on our website, our comments will include forward looking statements, which are subject to risks and uncertainties that may cause our results to differ materially from expectations, we assume no obligation to update such statements. These risks are outlined for you on page three. We'll also reference non-GAAP financial measures reconciliations of these measures against the most directly comparable GAAP measures can be found in section five of the presentation. Finally for citizens is not responsible for and does not edit nor guarantee the accuracy of earnings transcripts provided by third parties. Now I'll turn it over to Frank.

Speaker 4: During the call we will reference our investor presentation which you can bfind on our.

During the call we will reference our investor presentation, which you can find on our website.

Speaker 4: Comments will include forward-looking statements, which are subject to risks and uncertainties that may cause our results to differ materially from expectations we assume.

Deanna W. Hart: Our comments will include forward looking statements which are subject to risk and uncertainties that may cause our results to differ materially from expectations, we assume no obligations to update such statements, these risks are outlined for you on page 3, we will also reference Non-GAAP financial measures, reconciliations of these measures against the most directly comparable GAAP measures can be found in section 5 of the presentation. Finally

Our comments will include forward looking statements, which are subject to risks and uncertainties that may cause our results to differ materially from expectations, we assume no obligation to update such statements.

Deanna W. Hart: Our comments will include forward-looking statements, which are subject to risks and uncertainties that may cause our results to differ materially from expectations, we assume no obligation to update such statements, these risks are outlined for you on Page 3, we will also reference non-GAAP financial measures. Reconciliations of these measures against the most directly comparable GAAP measures can be found in section five of thepresent. Finally first citizens is not responsible for and does not edit nor guarantee the accuracy of earnings trainsteps provided by third parties. I will now turn it over to Frank.

Deanna W. Hart: Our comments will include forward-looking statements, which are subject to risks and uncertainties that may cause our results to differ materially from expectations, we assume no obligation to update such statements, these risks are outlined for you on Page 3, we will also reference non-GAAP financial measures, reconciliations of these measures against the most directly comparable GAAP measures can be found in section 5 of the presentation.

Deanna W. Hart: Finally, First Citizens is not responsible for and does not edit nor guarantee the accuracy of earnings transcripts provided by third parties, I will now turn over to Frank.

Deanna Hart: These risks are outlined for you on page 3. We will also reference non-GAAP financial measures. Reconciliations of these measures against the most directly comparable GAAP measures can be found in section 5 of the presentation. Finally, First Citizens is not responsible for and does not edit nor guarantee the accuracy of earnings transcripts provided by third parties. I will now turn it over to Frank.

Speaker 4: These risks are outlined for you on Page three we will also reference non-GAAP financial measures. Reconciliations of these measures against the most directly comparable GAAP measures can be found in section five of thepresent.

Deanna W. Hart: These risks are outlined for you on page three, We'll also reference non-GAAP financial measures, reconciliations of these measures against the most directly comparable GAAP measures can be found in section five of the presentation, finally First Citizens is not responsible for and does not edit nor guarantee the accuracy of earnings transcripts provided by third parties, I will turn it over to Frank.

These risks are outlined for you on page three.

We'll also reference non-GAAP financial measures reconciliations of these measures against the most directly comparable GAAP measures can be found in section five of the presentation.

Deanna W. Hart: Reconciliations of these measures against the most directly comparable GAAP measures can be found in section five of the presentation. Finally first citizens is not responsible for and does not edit nor guarantee the accuracy of earnings trainsteps provided by third parties. I will now turn it over to Frank.

Deanna W. Hart: Reconciliations of these measures against the most directly comparable GAAP measures can be found in section five of the presentation.

Speaker 4: Finally first citizens is not responsible for and does not edit nor guarantee the accuracy of earnings trainsteps provided by third parties. I will now turn it over to Frank.

Deanna W. Hart: Finally first citizens is not responsible for and does not edit nor guarantee the accuracy of earnings transcripts provided by third parties, I will now turn it over to Frank.

Finally for citizens is not responsible for and does not edit nor guarantee the accuracy of earnings transcripts provided by third parties.

Now I'll turn it over to Frank.

Frank B. Holding, Jr.: Thank you, Deanna, and good morning everyone. Starting on page 5, despite a volatile external market, we've delivered another solid quarter of financial results marked by strong revenue growth and disciplined expense management. Our focus continues to be on growing our core lines of business, maintaining our safety and stability through strong capital, credit, and liquidity risk management, and delivering long-term tangible book value growth to our shareholders. This morning, we reported earnings per share of $55.92, excluding items noted in the presentation on page 52. This exceeded our expectations and represented a 6% increase over the sequential quarter. Return metrics were also strong, improving over the sequential quarter despite an increase in credit reserves and capital levels. These return metrics were supported by a net interest margin that remained over 4% and an adjusted efficiency ratio of 46%.

Frank Holding Jr: Thank you, Deanna, and good morning everyone. Starting on page 5, despite a volatile external market, we've delivered another solid quarter of financial results marked by strong revenue growth and disciplined expense management. Our focus continues to be on growing our core lines of business, maintaining our safety and stability through strong capital, credit, and liquidity risk management, and delivering long-term tangible book value growth to our shareholders. This morning, we reported earnings per share of $55.92, excluding items noted in the presentation on page 52. This exceeded our expectations and represented a 6% increase over the sequential quarter.

Yeah.

Frank Brown Holding: Thank you Deanna and good morning everyone, starting on page five despite of volatile external market, We delivered another solid quarter of financial results marked by strong revenue growth and disciplined expense management, our focus continues to be on growing our core lines of business, maintaining our safety and stability through strong capital credit and liquidity risk management, and delivering long term tangible book value growth to our shareholders. This morning, we reported earnings per share of $55 92, excluding items noted in the presentation on page two. This exceeded our expectations and represented a 6% increase over the sequential quarter. Return metrics were also strong improving over the sequential quarter, despite an increase in credit reserves and capital levels. These return metrics were supported by a net interest margin that remains over 4% and adjusted efficiency ratio of 46%. Deposits continue to be a huge focus for us during the quarter with period end deposits up 14% on an annualized basis. 3% sequentially. In addition to deposit growth, our commercial and general bank segments posted solid loan growth. Our liquidity and capital positions remain strong and stable driven by our focus on core deposit gathering and a conservatively managed investment portfolio. We also remain focused on managing credit risk prudently. We did experience an increase in net charge offs this quarter with the majority of the charge offs related to investor dependent loans in the SME portfolio. While we continue to monitor this portfolio closely given some of the macro economic headwinds facing the innovation economy. We remain encouraged by the resiliency of our clients in the face of elevated inflation and rising interest rates. On page six we continue to make great progress in integrating STB and their initial stabilization efforts are complete. As a result of our continued focus on an outreach to our clients. We continue to see stabilization in loan and deposit balances during the quarter. We have materially completed a strategic assessment work currently. Currently we are leveraging the insights from this work to identify opportunities to grow our market position in the innovation economy. Finally, we remain focused on regulatory readiness.

Speaker 5: Starting on Page 5, despite a volatile external Mark.

Frank Brown Holding: Thank you Deanna and Good Morning everyone, starting on Page 5, despite a volatile external market, we've delivered another solid quarter of financial results, marked by strong revenue growth and disciplined expense management, our focus continues to be on growing our core lines of business, maintaining our safety and instability through strong capital, credit and liquidity risk management and delivering long term tangible value growth to our shareholders. This morning we reported earnings per share of $55- 92 cent, excluding items noted in the presentation on Page, gets two. This exceed our expectations and represented a 6% increase over the sequential quarter. Return metrics were also strong, improving over the sequential quarter, despite an increase in credit reserves and capital level. These return metrics were supported by a net interest margin that remained over 4% and adjusted efficiency ratio of 46%. Deposits continue to be a huge focus for us during the quarter, with period in deposits of 14% on an annualized basis or 3% sequentiial. In addition to deposit growth, our commercial and general bank segments posted solid loan growth. Our liquidity and capital positions remain strong and stable, driven by our focus on core deposit gathering and a conservatively managed investment portfolio. We also remain focused on managing credit risk cruent. Did experience an increase in net charge offs this quarter, with the majority of the charge offs related to Investor dependent loans in the's B D portfolio. While we continue to monitor this portfolio closely, given some of the macroeconomic headwinds facing the innovation economy, we remain encouraged by the resiliency of our clients in the face of elevated inflation and rising interest rates. On Page six we continue to make great progress in integrating sscb and our initial stabilization efforts are complete. As a result of our continued focus on an outreach to our client. We continue to see stabilization in loan and deposit balances during the court. We have materially completed our strategic assessment work. Currently, we are leveraging the insights from this work to identify opportunities to grow our market position in an innovation account.

Starting on page five despite volatile external market.

Speaker 5: We've delivered another solid quarter of financial results, marked by strong revenue growth and disciplined expense man.

We delivered another solid quarter.

Financial results marked by strong revenue growth and disciplined expense management.

Speaker 5: Our focus continues to be on growing our core lines of business, maintaining our safety and instability through strong capital, credit and liquidity risk man.

Our focus continues to be on growing our core lines of business, maintaining our safety and stability through strong capital credit and liquidity risk management.

Speaker 5: Delivering long term tangi value growth, our shareyl.

And delivering long term tangible book value growth to our.

Frank Brown Holding: This morning, we reported earnings per share of $55.92 dollars, excluding items noted in the presentation on page two, this exceeded our expectations and represented a 6% increase over the sequential quarter, return metrics were also strong improving over the sequential quarter, despite an increase in credit reserves and capital levels, these return metrics were supported by a net interest margin that remains over 4% and adjusted efficiency ratio of 46%. Deposits continue to be a huge focus for us during the quarter with period end deposits up 14% on an annualized basis. 3% sequentially. In addition to deposit growth, our commercial and general bank segments posted solid loan growth. Our liquidity and capital positions remain strong and stable driven by our focus on core deposit gathering and a conservatively managed investment portfolio. We also remain focused on managing credit risk prudently. We did experience an increase in net charge offs this quarter with the majority of the charge offs related to investor dependent loans in the SME portfolio. While we continue to monitor this portfolio closely given some of the macro economic headwinds facing the innovation economy. We remain encouraged by the resiliency of our clients in the face of elevated inflation and rising interest rates. On page six we continue to make great progress in integrating STB and their initial stabilization efforts are complete. As a result of our continued focus on an outreach to our clients. We continue to see stabilization in loan and deposit balances during the quarter. We have materially completed a strategic assessment work currently. Currently we are leveraging the insights from this work to identify opportunities to grow our market position in the innovation economy. Finally, we remain focused on regulatory readiness.

Frank Brown Holding: This morning we reported earnings per share of $55.92 dollars, excluding items noted in the presentation on page 52, this exceeded our expectations and represented a 6% increase over the sequential quarter, return metrics were also strong, improving over the sequential quarter, despite an increase in credit reserves and capital levels. These return metrics were suported by a net interest margin

Speaker 5: This morning we reported earnings per share of $55- 92 cent, excluding items noted in the presentation on Page, gets two.

Frank Brown Holding: This morning we reported earnings per share of $55.92 dollars, excluding items noted in the presentation on page 52, This exceed our expectations and represented a 6% increase over the sequential quarter, return metrics were also strong, improving over the sequential quarter, despite an increase in credit reserves and capital levels, these return metrics were supported by a net interest margin that remained over 4% and an adjusted efficiency ratio of 46%. Deposits continue to be a huge focus for us during the quarter, with period in deposits of 14% on an annualized basis or 3% sequentiial. In addition to deposit growth, our commercial and general bank segments posted solid loan growth. Our liquidity and capital positions remain strong and stable, driven by our focus on core deposit gathering and a conservatively managed investment portfolio. We also remain focused on managing credit risk cruent. Did experience an increase in net charge offs this quarter, with the majority of the charge offs related to Investor dependent loans in the's B D portfolio. While we continue to monitor this portfolio closely, given some of the macroeconomic headwinds facing the innovation economy, we remain encouraged by the resiliency of our clients in the face of elevated inflation and rising interest rates. On Page six we continue to make great progress in integrating sscb and our initial stabilization efforts are complete. As a result of our continued focus on an outreach to our client. We continue to see stabilization in loan and deposit balances during the court. We have materially completed our strategic assessment work. Currently, we are leveraging the insights from this work to identify opportunities to grow our market position in an innovation account.

Frank Brown Holding: These return metrics were supported by a net interest margin that remained over 4% and an adjusted efficiency ratio of 46%, deposits continued to be a huge focus for us during the quarter with period-in deposits of 14% on annualized basis or 3% sequentially, in addition to deposit growth, our commercial and general bank segments posted solid loan growth. Our liquidity

Frank Brown Holding: Our liquidity and capital positions remained strong and stable driven by our focus on core deposit gathering and a conservatively managed investment portfolio, we also remained focused on managing credit risk prudently, we did experienced an increase in net charge-offs this quarter, with the majority of the charge-offs related to investor dependent loans in the SVB portfolio while we continue to manage this portfolio closely given some of the macroeconomic headwinds facing the innovation economy, we remain encouraged by the resiliency of our clients in the face of elevated inflation and rising interest rates. On page 6

Frank Brown Holding: On page 6, we continue to make great progress in integrating SVB and our initial stabilization efforts are complete, as a result of our continued focus on an outreach to our clients, we continue to see stabilization in loan and deposits balances during the quarter. We have materially completed our strategic assessment work, currently we are leveraging the insights from this work to identify opportunities to grow our market position in the innovation economy. Finally we remain

Frank Brown Holding: Our liquidity and capital positions remained strong and stable driven by our focus on core deposit gathering and a conservatively managed investment portfolio,

Frank Brown Holding: We also remained focused on managing credit risk prudently, we did experienced an increase in net charge-offs this quarter, with the majority of the charge-offs related to investor dependent loans in the SVB portfolio while we continue to manage this portfolio closely given some of the macroeconomic headwinds facing the innovation economy, we remain encouraged by the resiliency of our clients in the face of elevated inflation and rising interest rates.

Frank Brown Holding: Finally we remain focused on regulatory readiness through our large bank program and a dedicated team of leaders and associates who are ensuring we have a framework to meet high end regulatory expectations and ensure sound businesses practices for our financial institutions. On page 7

Frank Brown Holding: On page 7, our strategic priorities have not changed and are included here for your reference, on page 8 we provided tangible examples of supporting our clients in the innovation economy, we remain excited by the green shoots we are seeing as new and returning businesses coms to SVB six months post acquisition. For example

Frank Brown Holding: For example, during the third quarter, Global Fund Banking originations increased by 18% compared to the sequential quarter, and it's pipeline has grown over 70%, we are committed to building on and investing in the SVB business to preserve long term client relationships and to generate new business with founders, entrepreneurs, innovation leaders and venture capital and private equity clients. During the quarter

Frank Brown Holding: During the quarter, our commitment was exemplified when we launched a nation-wide "Yes, SVB" campaign, to increase awareness that SVB is open for business and that we remain dedicated in supporting the innovation economy, we are also investing in new capabilities, including the continued roll out of SVB Go, an online digital banking platform to support our client's needs by facilitating easier interactions, simple, secure and intuitive, the platform is designed for how our founder's and innovation leaders run their businesses rather than how banks operate. Looking forward

Frank Brown Holding: During the quarter, our commitment was exemplified when we launched a nation-wide "Yes, SVB" campaign, to increase awareness that SVB is open for business and that we remain dedicated in supporting the innovation economy, we are also investing in new capabilities, including the continued roll out of "SVB Go" an online digital banking platform to support our client's needs by facilitating easier interactions, simple, secure and intuitive, the platform is designed for how our founder's and innovation leaders run their businesses rather than how banks operate.

Frank Brown Holding: Looking forward we acknowledge the headwinds, we acknowledge headwinds facing the innovation economy, the muted fund raising and investment phase, coupled with limited exit opportunities, continues to put pressure on innovation companies across all sectors and stages of development, this is resulting in some bulking charge-offs which Craig will speak to in more detail during his comments. Historically

Frank Brown Holding: Looking forward we acknowledge the headwinds, we acknowledge headwinds facing the innovation economy, the muted fund raising and investment pace, coupled with limited exit opportunities, continues to put pressure on innovation companies across all sectors and stages of development, this is resulting in some bulking charge-offs which Craig will speak to in more detail during his comments.

Frank Brown Holding: Historically, 12 to 18 months into a down cycle VC investments reaches a floor

Shareholders.

This morning, we reported earnings per share of $55 92, excluding items noted in the presentation on page two.

Speaker 5: This exceed our expectations and represented a 6% increase over the sequential quarter.

This exceeded our expectations and represented a 6% increase over the sequential quarter.

Frank Holding Jr: Return metrics were also strong, improving over the sequential quarter despite an increase in credit reserves and capital levels. These return metrics were supported by a net interest margin that remained over 4% and an adjusted efficiency ratio of 46%.

Speaker 5: Return metrics were also strong, improving over the sequential quarter, despite an increase in credit reserves and capital level.

Return metrics were also strong improving over the sequential quarter, despite an increase in credit reserves and capital levels.

Speaker 5: These return metrics were supported by a net interest margin that remained over 4% and adjusted efficiency ratio of 46%.

These return metrics were supported by a net interest margin that remains over 4% and adjusted efficiency ratio of 46%.

Frank Brown Holding: Deposits continue to be a huge focus for us during the quarter with period end deposits up 14% on an annualized basis or 3% sequentially, in addition to deposit growth our commercial and general bank segments posted solid loan growth, our liquidity and capital positions remain strong and stable-driven by our focus on core deposit gathering and a conservatively managed investment portfolio, We also remain focused on managing credit risk prudently. We did experience an increase in net charge offs this quarter with the majority of the charge offs related to investor dependent loans in the SME portfolio. While we continue to monitor this portfolio closely given some of the macro economic headwinds facing the innovation economy. We remain encouraged by the resiliency of our clients in the face of elevated inflation and rising interest rates. On page six we continue to make great progress in integrating STB and their initial stabilization efforts are complete. As a result of our continued focus on an outreach to our clients. We continue to see stabilization in loan and deposit balances during the quarter. We have materially completed a strategic assessment work currently. Currently we are leveraging the insights from this work to identify opportunities to grow our market position in the innovation economy. Finally, we remain focused on regulatory readiness.

Frank Brown Holding: Deposits continue to be a huge focus for us during the quarter, with period-in deposits of 14% on an annualized basis or 3% sequentially, in addition to deposit growth, our commercial and general bank segments posted solid loan growth, our liquidity and capital positions remain strong and stable-driven by our focus on core deposit gathering and a conservatively managed investment portfolio. We also remain focused on managing credit risk cruent. Did experience an increase in net charge offs this quarter, with the majority of the charge offs related to Investor dependent loans in the's B D portfolio. While we continue to monitor this portfolio closely, given some of the macroeconomic headwinds facing the innovation economy, we remain encouraged by the resiliency of our clients in the face of elevated inflation and rising interest rates. On Page six we continue to make great progress in integrating sscb and our initial stabilization efforts are complete. As a result of our continued focus on an outreach to our client. We continue to see stabilization in loan and deposit balances during the court. We have materially completed our strategic assessment work. Currently, we are leveraging the insights from this work to identify opportunities to grow our market position in an innovation account.

Frank B. Holding, Jr.: Deposits continued to be a huge focus for us during the quarter, with period-end deposits up 14% on an annualized basis or 3% sequentially. In addition to deposit growth, our commercial and general bank segments posted solid loan growth. Our liquidity and capital positions remained strong and stable, driven by our focus on core deposit gathering and a conservatively managed investment portfolio. We also remain focused on managing credit risk prudently. We did experience an increase in net charge-offs this quarter, with the majority of the charge-offs related to investor-dependent loans in the SVB portfolio. While we continue to monitor this portfolio closely, given some of the macroeconomic headwinds facing the innovation economy, we remain encouraged by the resiliency of our clients in the face of elevated inflation and rising interest rates.

Frank Holding Jr: Deposits continued to be a huge focus for us during the quarter, with period-end deposits up 14% on an annualized basis or 3% sequentially. In addition to deposit growth, our commercial and general bank segments posted solid loan growth. Our liquidity and capital positions remained strong and stable, driven by our focus on core deposit gathering and a conservatively managed investment portfolio. We also remain focused on managing credit risk prudently. We did experience an increase in net charge-offs this quarter, with the majority of the charge-offs related to investor-dependent loans in the SVB portfolio. While we continue to monitor this portfolio closely, given some of the macroeconomic headwinds facing the innovation economy, we remain encouraged by the resiliency of our clients in the face of elevated inflation and rising interest rates.

Speaker 5: Deposits continue to be a huge focus for us during the quarter, with period in deposits of 14% on an annualized basis or 3% sequentiial.

Deposits continue to be a huge focus for us during the quarter with period end deposits up 14% on an annualized basis.

3% sequentially.

Speaker 5: In addition to deposit growth, our commercial and general bank segments posted solid loan growth.

In addition to deposit growth, our commercial and general bank segments posted solid loan growth.

Speaker 5: Our liquidity and capital positions remain strong and stable, driven by our focus on core deposit gathering and a conservatively managed investment portfolio.

Our liquidity and capital positions remain strong and stable driven by our focus on core deposit gathering and a conservatively managed investment portfolio.

Frank Brown Holding: We also remain focused on managing credit risk prudently, we did experienced an increase in net charge-offs this quarter, with the majority of the charge-offs related to investor dependent loans in the SBV portfolio, while we continue to monitor this portfolio closely, given some of the macroeconomic headwinds facing the innovation economy, we remain encouraged by the resiliency of our clients in the face of elevated inflation and rising interest rates. On Page six we continue to make great progress in integrating sscb and our initial stabilization efforts are complete. As a result of our continued focus on an outreach to our client. We continue to see stabilization in loan and deposit balances during the court. We have materially completed our strategic assessment work. Currently, we are leveraging the insights from this work to identify opportunities to grow our market position in an innovation account.

Frank Brown Holding: We did experience an increase in net charge-offs this quarter with the majority of the charge-offs related to investor dependent loans in the SVB portfolio, while we continue to monitor this portfolio closely, given some of the macro economic headwinds facing the innovation economy, we remain encouraged by the resiliency of our clients in the face of elevated inflation and rising interest rates. On page six we continue to make great progress in integrating STB and their initial stabilization efforts are complete. As a result of our continued focus on an outreach to our clients. We continue to see stabilization in loan and deposit balances during the quarter. We have materially completed a strategic assessment work currently. Currently we are leveraging the insights from this work to identify opportunities to grow our market position in the innovation economy. Finally, we remain focused on regulatory readiness.

Speaker 5: We also remain focused on managing credit risk cruent.

We also remain focused on managing credit risk prudently.

Speaker 5: Did experience an increase in net charge offs this quarter, with the majority of the charge offs related to Investor dependent loans in the's B D portfolio.

We did experience an increase in net charge offs this quarter with the majority of the charge offs related to investor dependent loans in the SME portfolio.

Speaker 5: While we continue to monitor this portfolio closely, given some of the macroeconomic headwinds facing the innovation economy, we remain encouraged by the resiliency of our clients in the face of elevated inflation and rising interest rates.

While we continue to monitor this portfolio closely given some of the macro economic headwinds facing the innovation economy. We remain encouraged by the resiliency of our clients in the face of elevated inflation and rising interest rates.

Frank Brown Holding: On Page 6, we continue to make great progress in integrating SVB and our initial stabilization efforts are complete, as a result of our continued focus on an outreach to our clients, we continue to see stabilization in loan and deposit balances during the quarter, we have materially completed our strategic assessment work, currently we are leveraging the insights from this work to identify opportunities to grow our market position in an innovation economy. Finally we remain focused on regulatory reent. Through our large bank program and a dedicated team of leaders and associates, are ensuring we have a framework to meet heightened regulatory expectations and ensure sound business practices for largegest- large financialists.

Frank B. Holding, Jr.: On page 6, we continue to make great progress in integrating SVB, and our initial stabilization efforts are complete. As a result of our continued focus on and outreach to our clients, we continue to see stabilization in loan and deposit balances during the quarter. We have materially completed our strategic assessment work. Currently, we are leveraging the insights from this work to identify opportunities to grow our market position in an innovation economy. Finally, we remain focused on regulatory readiness. Through our large bank program and a dedicated team of leaders and associates, we are ensuring we have a framework to meet heightened regulatory expectations and ensure sound business practices for large financial institutions. On page 7, our strategic priorities have not changed and are included here for your reference. On page 8, we provided tangible examples of supporting our clients in the innovation economy.

Frank Holding Jr: On page 6, we continue to make great progress in integrating SVB, and our initial stabilization efforts are complete. As a result of our continued focus on and outreach to our clients, we continue to see stabilization in loan and deposit balances during the quarter. We have materially completed our strategic assessment work. Currently, we are leveraging the insights from this work to identify opportunities to grow our market position in an innovation economy. Finally, we remain focused on regulatory readiness.

Speaker 5: On Page six we continue to make great progress in integrating sscb and our initial stabilization efforts are complete.

On page six we continue to make great progress in integrating STB and their initial stabilization efforts are complete.

Frank Brown Holding: As a result of our continued focus on an outreach to our clients, We continue to see stabilization in loan and deposit balances during the quarter, we have materially completed a strategic assessment work, currently we are leveraging the insights from this work to identify opportunities to grow our market position innovation economy. Finally, we remain focused on regulatory readiness.

Speaker 5: As a result of our continued focus on an outreach to our client.

As a result of our continued focus on an outreach to our clients.

Speaker 5: We continue to see stabilization in loan and deposit balances during the court.

We continue to see stabilization in loan and deposit balances during the quarter.

Speaker 5: We have materially completed our strategic assessment work. Currently, we are leveraging the insights from this work to identify opportunities to grow our market position in an innovation account.

We have materially completed a strategic assessment work currently.

Currently we are leveraging the insights from this work to identify opportunities to grow our market position in the innovation economy.

Speaker 5: Finally we remain focused on regulatory reent.

Frank Brown Holding: Finally we remain focused on regulatory reent. Through our large bank program and a dedicated team of leaders and associates, are ensuring we have a framework to meet heightened regulatory expectations and ensure sound business practices for largegest- large financialists. On Page 7: our strategic priorities have not changed and are included here for your reference.

Frank Brown Holding: Finally we remain focused on regulatory readiness through our large bank program and a dedicated team of leaders and associates, are ensuring we have a framework to meet heightened regulatory expectations and ensure sound business practices for largest, large financial institutions.

Finally, we remain focused on regulatory readiness.

Frank Brown Holding: Finally, we remain focused on regulatory readiness through our large bank program and a dedicated team of leaders and associates are ensuring we have a framework to meet heightened regulatory expectations and ensure sound business practices for largest, for large financial institutions, on page seven, our strategic priorities have not changed and are included here for your reference. On page eight. We provided tangible examples of supporting our clients in the innovation economy. We remain excited by the Green shoots we're seeing as new and returning business comes to SBB six months post acquisition. For example, during the third quarter Global fund banking originations increased by 18% compared to the sequential quarter. And its pipeline has grown over 70%. We are committed to building on and investing in the STP business to preserve long term client relationships and to generate new business with founders entrepreneur. <unk> leaders and venture capital and private equity clients. During the quarter, our commitment was exemplified when we launched a nationwide. Yes S. B B campaign to increase awareness that SCB is open for business and that we remain dedicated to supporting the innovation economy. We are also investing in new capabilities, including the rollout. The continued rollout of STB go and online digital banking platform to support our clients' needs by facilitating easier interactions simple secure and intuitive. <unk> is designed for how our founders and innovation leaders run their businesses rather than how banks operate. Looking forward, we acknowledge the headwinds we acknowledged headwinds facing the innovation economy. The muted fund raising and investment pace, coupled with limb. Limited exit opportunities continues to put pressure on innovation companies across all sectors and stages of development. This is resulting in some bulky charge offs, which Craig will speak to in more detail during his comments. Historically, well to 18 months into a down cycle VC investment reaches a floor. After which valuations normalize and VC firms come back into the market. While U S. VC firms investment levels May continue to fall in the near term. We believe the long term outlook remains positive primarily related to a tailwind that remain intact. Despite the most recent dislocation.

Frank Holding Jr: Through our large bank program and a dedicated team of leaders and associates, we are ensuring we have a framework to meet heightened regulatory expectations and ensure sound business practices for large financial institutions. On page 7, our strategic priorities have not changed and are included here for your reference. On page 8, we provided tangible examples of supporting our clients in the innovation economy.

Speaker 5: Through our large bank program and a dedicated team of leaders and associates, are ensuring we have a framework to meet heightened regulatory expectations and ensure sound business practices for largegest- large financialists.

Through our large bank program and a dedicated team of leaders and associates are ensuring we have a framework to meet heightened regulatory expectations and ensure sound business practices for largest large financial institutions.

Speaker 5: On Page 7: our strategic priorities have not changed and are included here for your reference.

Frank Brown Holding: On Page 7, our strategic priorities have not changed and are included here for your reference, on page 8 we provided tangible examples of supporting our clients in the innovation economy, we remain excited by the green shoots we're seeing as new and returning business comes to SVB six months post acquisition. For example, during the third quarter, global fund banking originations increased by 18% compared to the sequential quarter, and its pipeline has grown over seventy. We are committed to building on and investing in the's DB business to preserve a long-term client relationships and to generate new business with founders entrepreneurs, innovation leaders and venture capital and private equityst. During the quarter. Our commitment was exemplified when we launched a nationwide yes's B B campaign, the increase awareness that's B B is open for business and that we remain dedicated to supporting the innovation account. We are also investing in new capabilities, including the rollout- the continued rollout- of's B B go, an online digital banking platform to support our clients' needs by facilitating easier interact. Simple secure and intuitive. The platform is designed for how our founders and innovation leaders run their businesses, rather than how banks operate.

On page seven our strategic priorities have not changed and are included here for your reference.

On page eight.

Speaker 5: We provided tangible examples of supporting our clients in the innovation economy.

Frank Brown Holding: On page eight, We provided tangible examples of supporting our clients in the innovation economy, We remain excited by the green shoots we're seeing as new and returning business comes to SVB, six months post acquisition, for example, during the third quarter Global fund banking originations increased by 18% compared to the sequential quarter and it's pipeline has grown over 70%, We are committed to building on and investing in the SVB business to preserve long term client relationships and to generate new business with founders, entrepreneurs, innovation leaders and venture capital and private equity clients. During the quarter, our commitment was exemplified when we launched a nationwide. Yes S. B B campaign to increase awareness that SCB is open for business and that we remain dedicated to supporting the innovation economy. We are also investing in new capabilities, including the rollout. The continued rollout of STB go and online digital banking platform to support our clients' needs by facilitating easier interactions simple secure and intuitive. <unk> is designed for how our founders and innovation leaders run their businesses rather than how banks operate. Looking forward, we acknowledge the headwinds we acknowledged headwinds facing the innovation economy. The muted fund raising and investment pace, coupled with limb. Limited exit opportunities continues to put pressure on innovation companies across all sectors and stages of development. This is resulting in some bulky charge offs, which Craig will speak to in more detail during his comments. Historically, well to 18 months into a down cycle VC investment reaches a floor. After which valuations normalize and VC firms come back into the market. While U S. VC firms investment levels May continue to fall in the near term. We believe the long term outlook remains positive primarily related to a tailwind that remain intact. Despite the most recent dislocation.

We provided tangible examples of supporting our clients in the innovation economy.

Frank B. Holding, Jr.: We remain excited by the green shoots we're seeing as new and returning business comes to SVB six months post-acquisition. For example, during Q3, Global Fund Banking originations increased by 18% compared to the sequential quarter, and its pipeline has grown over 70%. We are committed to building on and investing in the SVB business to preserve long-term client relationships and to generate new business with founders, entrepreneurs, innovation leaders, and venture capital and private equity clients. During the quarter, our commitment was exemplified when we launched a nationwide YES SVB campaign to increase awareness that SVB is open for business and that we remain dedicated to supporting the innovation economy. We are also investing in new capabilities, including the continued rollout of SVB Go, an online digital banking platform to support our clients' needs by facilitating easier interactions.

Frank Holding Jr: We remain excited by the green shoots we're seeing as new and returning business comes to SVB six months post-acquisition. For example, during Q3, Global Fund Banking originations increased by 18% compared to the sequential quarter, and its pipeline has grown over 70%. We are committed to building on and investing in the SVB business to preserve long-term client relationships and to generate new business with founders, entrepreneurs, innovation leaders, and venture capital and private equity clients.

Operator: Hello everyone, the First Citizens BancShares third quarter, 2023, earning a conference call beginning in two minutes time to allow all participants to get connected. If you would like to ask a question, please press star for the by-one on the telephone keypad, very, very, very, very, very, very,[inaudible] very, very, very, very, very, very, very, very, very, very, very, very, very, very, very, very, very, very, very,[inaudible] We have seen no obligation to update substatements. These risks are outlined for you on page three. We will also reference non-gap financial measures. Reconciliation of these measures against the most directly comparable gap measures can be found in section five of the presentation.

Speaker 5: We remain excited by the green shoots we're seeing as new and returning business comes to sspb six months post acquisition.

We remain excited by the Green shoots we're seeing as new and returning business comes to SBB six months post acquisition.

Speaker 5: For example, during the third quarter, global fund banking originations increased by 18% compared to the sequential quarter, and its pipeline has grown over seventy.

Frank Brown Holding: For example, during the third quarter global fund banking originations increased by 18% compared to the sequential quarter, and it's pipeline has grown over 70%, we are committed to building on and investing in the SVB business to preserve a long-term client relationships and to generate new business with founders, entrepreneurs, innovation leaders and venture capital and private equity clients. During the quarter. Our commitment was exemplified when we launched a nationwide yes's B B campaign, the increase awareness that's B B is open for business and that we remain dedicated to supporting the innovation account. We are also investing in new capabilities, including the rollout- the continued rollout- of's B B go, an online digital banking platform to support our clients' needs by facilitating easier interact. Simple secure and intuitive. The platform is designed for how our founders and innovation leaders run their businesses, rather than how banks operate.

For example, during the third quarter Global fund banking originations increased by 18% compared to the sequential quarter.

And its pipeline has grown over 70%.

Speaker 5: We are committed to building on and investing in the's DB business to preserve a long-term client relationships and to generate new business with founders entrepreneurs, innovation leaders and venture capital and private equityst.

We are committed to building on and investing in the STP business to preserve long term client relationships and to generate new business with founders entrepreneur.

<unk> leaders and venture capital and private equity clients.

Frank Holding Jr: During the quarter, our commitment was exemplified when we launched a nationwide YES SVB campaign to increase awareness that SVB is open for business and that we remain dedicated to supporting the innovation economy. We are also investing in new capabilities, including the continued rollout of SVB Go, an online digital banking platform to support our clients' needs by facilitating easier interactions.

Frank Brown Holding: During the quarter our commitment was exemplified when we launched a nationwide "Yes, SVB" campaign, to increase awareness that SVB is open for business and that we remain dedicated to supporting the innovation economy. We are also investing in new capabilities, including the rollout, the continued rollout, of "SVB Go", an online digital banking platform to support our client's needs by facilitating easier interactions, simple, secure and intuitive, the platform is designed for how our founders and innovation leaders run their businesses, rather than how banks operate. Looking forward. We acknowledge the headwinds. We acknowledge headwinds facing the innovation tocoun.

Speaker 5: During the quarter. Our commitment was exemplified when we launched a nationwide yes's B B campaign, the increase awareness that's B B is open for business and that we remain dedicated to supporting the innovation account.

During the quarter, our commitment was exemplified when we launched a nationwide.

Frank Brown Holding: During the quarter our commitment was exemplified when we launched a nationwide "YES, SVB" campaign to increase awareness that SVB is open for business and that we remain dedicated to supporting the innovation economy, We are also investing in new capabilities including the rollout, the continued rollout of "SVB Go" an online digital banking platform to support our clients' needs by facilitating easier interactions, simple, secure and intuitive. <unk> is designed for how our founders and innovation leaders run their businesses rather than how banks operate. Looking forward, we acknowledge the headwinds we acknowledged headwinds facing the innovation economy. The muted fund raising and investment pace, coupled with limb. Limited exit opportunities continues to put pressure on innovation companies across all sectors and stages of development. This is resulting in some bulky charge offs, which Craig will speak to in more detail during his comments. Historically, well to 18 months into a down cycle VC investment reaches a floor. After which valuations normalize and VC firms come back into the market. While U S. VC firms investment levels May continue to fall in the near term. We believe the long term outlook remains positive primarily related to a tailwind that remain intact. Despite the most recent dislocation.

Yes S. B B campaign to increase awareness that SCB is open for business and that we remain dedicated to supporting the innovation economy.

Speaker 5: We are also investing in new capabilities, including the rollout- the continued rollout- of's B B go, an online digital banking platform to support our clients' needs by facilitating easier interact.

We are also investing in new capabilities, including the rollout. The continued rollout of STB go and online digital banking platform to support our clients' needs by facilitating easier interactions simple secure and intuitive.

Frank B. Holding, Jr.: Simple, secure, and intuitive, the platform is designed for how our founders and innovation leaders run their businesses rather than how banks operate. Looking forward, we acknowledge the headwinds facing the innovation economy. The muted fundraising and investment pace, coupled with limited exit opportunities, continues to put pressure on innovation companies across all sectors and stages of development. This is resulting in some bulky charge-offs, which Craig will speak to in more detail during his comments. Historically, 12 to 18 months into a down cycle, VC investment reaches a floor, after which valuations normalize and VC firms come back into the market. While US VC firms' investment levels may continue to fall in the near term, we believe the long-term outlook remains positive, primarily related to tailwinds that remain intact despite the most recent dislocation.

Frank Holding Jr: Simple, secure, and intuitive, the platform is designed for how our founders and innovation leaders run their businesses rather than how banks operate. Looking forward, we acknowledge the headwinds facing the innovation economy. The muted fundraising and investment pace, coupled with limited exit opportunities, continues to put pressure on innovation companies across all sectors and stages of development. This is resulting in some bulky charge-offs, which Craig will speak to in more detail during his comments. Historically, 12 to 18 months into a down cycle, VC investment reaches a floor, after which valuations normalize and VC firms come back into the market. While US VC firms' investment levels may continue to fall in the near term, we believe the long-term outlook remains positive, primarily related to tailwinds that remain intact despite the most recent dislocation.

Speaker 5: Simple secure and intuitive. The platform is designed for how our founders and innovation leaders run their businesses, rather than how banks operate.

Frank Brown Holding: The platform is designed for how our founders and innovation leaders run their businesses rather than how banks operate. Looking forward, we acknowledge the headwinds we acknowledged headwinds facing the innovation economy. The muted fund raising and investment pace, coupled with limb. Limited exit opportunities continues to put pressure on innovation companies across all sectors and stages of development. This is resulting in some bulky charge offs, which Craig will speak to in more detail during his comments. Historically, well to 18 months into a down cycle VC investment reaches a floor. After which valuations normalize and VC firms come back into the market. While U S. VC firms investment levels May continue to fall in the near term. We believe the long term outlook remains positive primarily related to a tailwind that remain intact. Despite the most recent dislocation.

Frank Brown Holding: The platform is designed for how our founders and innovation leaders run their businesses rather than how banks operate.

<unk> is designed for how our founders and innovation leaders run their businesses rather than how banks operate.

Frank Brown Holding: Looking forward, we acknowledge the headwinds, we acknowledge headwinds facing the innovation economy, the muted fundraising and investment pace, coupled with limited exit opportunities, continues to put pressure on innovation companies across all sectors and stages of development, this is resulting in some bulky charge-offs, which Craig will speak to in more detail during his comments. Historically well to 18 months into a down cycle, D C investment reaches a floor, after which valuations normalize and B C firms come back into the market. While U's B- C firms, investment levels may continue to fall in the near term. We believe the long term outlook remains positive, primarily related to tailwinds that remain intact despite the most recent dislocation. The innovation economy is stronger than in past cycles, as it grew to at two point four times the rate of the overall U's economy, between two point zero zero two million and twenty one. And the COVID-19 pandemic has only accelerated digital adopt. Further the innovation economy was three point five times larger in 2020 than in two thousand. While we do not believe we are likely to see 2021 levels of valuation and investment for some time, if ever. We know that there is substantial dry powder waiting to be invested which gives us confidence in the long-term prospects of the innovation that. Now turning to Page 9, we have exciting news in our wealth division. Since 2013, we've focused on our wealth management capabilities and have made significant progress, growing organic. As a result, our private banking, brokerage and trust services have become a significant revenue source for us, and we've recently expanded our reach beyond our legacy markets in the Carolinas to California. The's B B acquisition provided complelimentary expansion in terms of geographic. An accelerated entrance into attractive markets. We were already charged. The opportunities extend beyond our footprint however we're focused on maintaining the great client relationships fostered by's the private.

Frank Brown Holding: Looking forward, we acknowledge the headwinds, we acknowledged headwinds facing the innovation economy, the muted fund raising and investment pace, coupled with limited exit opportunities, continues to put pressure on innovation companies across all sectors and stages of development, this is resulting in some bulky charge-offs, which Craig will speak to in more detail during his comments. Historically, well to 18 months into a down cycle VC investment reaches a floor. After which valuations normalize and VC firms come back into the market. While U S. VC firms investment levels May continue to fall in the near term. We believe the long term outlook remains positive primarily related to a tailwind that remain intact. Despite the most recent dislocation.

Speaker 5: Looking forward. We acknowledge the headwinds. We acknowledge headwinds facing the innovation tocoun.

Looking forward, we acknowledge the headwinds we acknowledged headwinds facing the innovation economy.

Speaker 5: The muted fundraising and investment pace, coupled with limited exit opportunities, continues to put pressure on innovation companies across all sectors and stages of develop.

The muted fund raising and investment pace, coupled with limb.

Limited exit opportunities continues to put pressure on innovation companies across all sectors and stages of development.

Speaker 5: This is resulting in some bulky charartoffs, which Craig will speak to in more detail during his comments.

This is resulting in some bulky charge offs, which Craig will speak to in more detail during his comments.

Frank Brown Holding: Historically well to 18 months into a down cycle, VC investment reaches a floor, after which valuations normalize and VC firms come back into the market, while U.S. VC firms investment levels may continue to fall in the near term, we believe the long term outlook remains positive, primarily related to tailwinds that remain intact despite the most recent dislocation. The innovation economy is stronger than in past cycles, as it grew to at two point four times the rate of the overall U's economy, between two point zero zero two million and twenty one. And the COVID-19 pandemic has only accelerated digital adopt. Further the innovation economy was three point five times larger in 2020 than in two thousand. While we do not believe we are likely to see 2021 levels of valuation and investment for some time, if ever. We know that there is substantial dry powder waiting to be invested which gives us confidence in the long-term prospects of the innovation that. Now turning to Page 9, we have exciting news in our wealth division. Since 2013, we've focused on our wealth management capabilities and have made significant progress, growing organic. As a result, our private banking, brokerage and trust services have become a significant revenue source for us, and we've recently expanded our reach beyond our legacy markets in the Carolinas to California. The's B B acquisition provided complelimentary expansion in terms of geographic. An accelerated entrance into attractive markets. We were already charged. The opportunities extend beyond our footprint however we're focused on maintaining the great client relationships fostered by's the private.

Speaker 5: Historically well to 18 months into a down cycle, D C investment reaches a floor, after which valuations normalize and B C firms come back into the market.

Frank Brown Holding: Historically, well to 18 months into a down cycle VC investment reaches a floor, after which valuations normalize and VC firms come back into the market. While U.S. VC firms investment levels may continue to fall in the near term, We believe the long term outlook remains positive primarily related to a tailwind that remain intact despite the most recent dislocation. The innovation economy is stronger than in past cycles as it grew at two four times the rate of the overall U S economy between 202021.

Historically, well to 18 months into a down cycle VC investment reaches a floor.

After which valuations normalize and VC firms come back into the market.

Speaker 5: While U's B- C firms, investment levels may continue to fall in the near term. We believe the long term outlook remains positive, primarily related to tailwinds that remain intact despite the most recent dislocation.

While U S. VC firms investment levels May continue to fall in the near term. We believe the long term outlook remains positive primarily related to a tailwind that remain intact. Despite the most recent dislocation.

Frank Brown Holding: The innovation economy is stronger than in past cycles, as it grew at 2.4 times the rate of the overall U.S. economy between 2000 and 2021, and the COVID-19 pandemic has only accelerated digital adoption, further the innovation economy was 3.5 times larger in 2020 than in 2000. While we do not believe we are likely to see 2021 levels of valuation and investment for some time, if ever. We know that there is substantial dry powder waiting to be invested which gives us confidence in the long-term prospects of the innovation that. Now turning to Page 9, we have exciting news in our wealth division. Since 2013, we've focused on our wealth management capabilities and have made significant progress, growing organic. As a result, our private banking, brokerage and trust services have become a significant revenue source for us, and we've recently expanded our reach beyond our legacy markets in the Carolinas to California. The's B B acquisition provided complelimentary expansion in terms of geographic. An accelerated entrance into attractive markets. We were already charged. The opportunities extend beyond our footprint however we're focused on maintaining the great client relationships fostered by's the private.

Frank B. Holding, Jr.: The innovation economy is stronger than in past cycles as it grew at 2.4 times the rate of the overall US economy between 2000 and 2021, and the COVID-19 pandemic has only accelerated digital adoption. Further, the innovation economy was 3.5 times larger in 2020 than in 2000. While we do not believe we are likely to see 2021 levels of valuation and investment for some time, if ever, we know that there is substantial dry powder waiting to be invested, which gives us confidence in the long-term prospects of the innovation economy. Now turning to page 9, we have exciting news in our wealth division. Since 2013, we've focused on our wealth management capabilities and have made significant progress growing organically.

Frank Holding Jr: The innovation economy is stronger than in past cycles as it grew at 2.4 times the rate of the overall US economy between 2000 and 2021, and the COVID-19 pandemic has only accelerated digital adoption. Further, the innovation economy was 3.5 times larger in 2020 than in 2000. While we do not believe we are likely to see 2021 levels of valuation and investment for some time, if ever, we know that there is substantial dry powder waiting to be invested, which gives us confidence in the long-term prospects of the innovation economy. Now turning to page 9, we have exciting news in our wealth division. Since 2013, we've focused on our wealth management capabilities and have made significant progress growing organically.

Speaker 5: The innovation economy is stronger than in past cycles, as it grew to at two point four times the rate of the overall U's economy, between two point zero zero two million and twenty one.

Frank Brown Holding: The innovation economy is stronger than in past cycles as it grew at 2.4 times the rate of the overall U.S. economy between 2000 and 2021 and the COVID-19 pandemic has only accelerated digital adoption, further, the innovation economy was 3.5 times larger in 2020 than in 2000, while we do not believe we're likely to see 2021 levels of valuation and investment for some time, if ever, We know that there is substantial dry powder waiting to be invested, which gives us confidence in the long term prospects of the innovation economy. Now turning to page nine we have exciting news in our wealth division since 2013, we've focused on our wealth management capabilities and have made significant progress growing organically. As a result, our private banking brokerage and trust services have become a significant revenue source for us and we've recently expanded our reach beyond our legacy markets in the Carolinas to California and the northeast. The STB acquisition provided complementary expansion in terms of geographic distribution and accelerated entrants into attractive markets, we were already targeting. The opportunities extend beyond our footprint. However, we're focused on maintaining the great client relationships fostered by S B private and. And deepening those relationships with our registered branch associates and digital platforms, serving institutional mass affluent and high net worth clients. Moving forward, we believe these complementary capabilities will accelerate the growth of our wealth franchise. We remain focused on executing against our core strategic priorities, which are the building blocks for long term sustainable value generation. The core of everything we do. I'd like to thank all of our associates for their strong commitment to serving our customers clients and communities. Do you I am confident we are well positioned to continue delivering strong results and long term value to our shareholders and stakeholders.

The innovation economy is stronger than in past cycles as it grew at two four times the rate of the overall U S economy between 202021.

Speaker 5: And the COVID-19 pandemic has only accelerated digital adopt.

And the COVID-19 pandemic has only accelerated digital adoption.

Speaker 5: Further the innovation economy was three point five times larger in 2020 than in two thousand.

Further the innovation economy was three five times larger in 2020 than in 2000.

Frank Brown Holding: While we do not believe we are likely to see 2021 levels of valuation and investment for some time, if ever, we know that there is substantial dry powder waiting to be invested, which gives us confidence in the long-term prospects of the innovation economy. Now turning to Page 9, we have exciting news in our wealth division. Since 2013, we've focused on our wealth management capabilities and have made significant progress, growing organic. As a result, our private banking, brokerage and trust services have become a significant revenue source for us, and we've recently expanded our reach beyond our legacy markets in the Carolinas to California. The's B B acquisition provided complelimentary expansion in terms of geographic. An accelerated entrance into attractive markets. We were already charged. The opportunities extend beyond our footprint however we're focused on maintaining the great client relationships fostered by's the private.

Speaker 5: While we do not believe we are likely to see 2021 levels of valuation and investment for some time, if ever.

While we do not believe we're likely to see 2021 levels of valuation and investment for some time if ever.

Speaker 5: We know that there is substantial dry powder waiting to be invested which gives us confidence in the long-term prospects of the innovation that.

We know that there is substantial dry powder waiting to be invested which gives us confidence in the long term prospects of the innovation economy.

Frank Brown Holding: Now turning to Page 9, we have exciting news in our wealth division, since 2013, we've focused on our wealth management capabilities and have made significant progress, growing organically, as a result, our private banking, brokerage and trust services have become a significant revenue source for us, and we've recently expanded our reach beyond our legacy markets in the Carolinas to California and the Northeast. The's B B acquisition provided complelimentary expansion in terms of geographic. An accelerated entrance into attractive markets. We were already charged. The opportunities extend beyond our footprint however we're focused on maintaining the great client relationships fostered by's the private. Deepening those relationships with our registered branch associates and digital platforms serving institutional mass, affluent and high networth client. Moving forward. We believe these complementary capabilities will accelerate the growth of our wealth franchise. We remain focused on executing against our core strategic priorities, which are the building blocks for long term sustainable value generation and are at the core of everything we do. I'd like to think of all of our associates for their strong commitment to serving our customers, clients and communities. Thanks to you, I'm confident we are well positioned to continue delivering strong results and long-term value to our shareholders and stakeholders.

Frank Brown Holding: Now turning to page nine we have exciting news in our wealth division, since 2013, we've focused on our wealth management capabilities and have made significant progress growing organically, as a result, our private banking, brokerage and trust services have become a significant revenue source for us and we've recently expanded our reach beyond our legacy markets in the Carolinas to California and the northeast. The SVB acquisition provided complementary expansion in terms of geographic distribution and accelerated entrants into attractive markets, we were already targeting. The opportunities extend beyond our footprint. However, we're focused on maintaining the great client relationships fostered by S B private and. And deepening those relationships with our registered branch associates and digital platforms, serving institutional mass affluent and high net worth clients. Moving forward, we believe these complementary capabilities will accelerate the growth of our wealth franchise. We remain focused on executing against our core strategic priorities, which are the building blocks for long term sustainable value generation. The core of everything we do. I'd like to thank all of our associates for their strong commitment to serving our customers clients and communities. Do you I am confident we are well positioned to continue delivering strong results and long term value to our shareholders and stakeholders.

Speaker 5: Now turning to Page 9, we have exciting news in our wealth division. Since 2013, we've focused on our wealth management capabilities and have made significant progress, growing organic.

Now turning to page nine we have exciting news in our wealth division since 2013, we've focused on our wealth management capabilities and have made significant progress growing organically.

Frank B. Holding, Jr.: As a result, our private banking, brokerage, and trust services have become a significant revenue source for us, and we've recently expanded our reach beyond our legacy markets in the Carolinas to California and the Northeast. The SVB acquisition provided complementary expansion in terms of geographic distribution and accelerated entrance into attractive markets we were already targeting. The opportunities extend beyond our footprint, however. We're focused on maintaining the great client relationships fostered by SVB Private and deepening those relationships with our registered branch associates and digital platforms serving institutional, mass affluent, and high net worth clients. Moving forward, we believe these complementary capabilities will accelerate the growth of our wealth franchise. We remain focused on executing against our core strategic priorities, which are the building blocks for long-term sustainable value generation and are at the core of everything we do.

Frank Holding Jr: As a result, our private banking, brokerage, and trust services have become a significant revenue source for us, and we've recently expanded our reach beyond our legacy markets in the Carolinas to California and the Northeast. The SVB acquisition provided complementary expansion in terms of geographic distribution and accelerated entrance into attractive markets we were already targeting. The opportunities extend beyond our footprint, however. We're focused on maintaining the great client relationships fostered by SVB Private and deepening those relationships with our registered branch associates and digital platforms serving institutional, mass affluent, and high net worth clients.

Speaker 5: As a result, our private banking, brokerage and trust services have become a significant revenue source for us, and we've recently expanded our reach beyond our legacy markets in the Carolinas to California.

As a result, our private banking brokerage and trust services have become a significant revenue source for us and we've recently expanded our reach beyond our legacy markets in the Carolinas to California and the northeast.

Operator: Finally, First Citizens is not responsible for and does not edit nor guarantee the accuracy of earnings and transcripts provided by third parties.

Speaker 5: The's B B acquisition provided complelimentary expansion in terms of geographic.

Frank Brown Holding: The SVB acquisition provided complimentary expansion in terms of geographic distribution, and accelerated entrance into attractive markets we were already targeting, the opportunities extend beyond our footprint however we're focused on maintaining the great client relationships fostered by SVB private and deepening those relationships with our registered branch associates and digital platforms serving institutional mass-affluent and high net worth clients. Moving forward. We believe these complementary capabilities will accelerate the growth of our wealth franchise. We remain focused on executing against our core strategic priorities, which are the building blocks for long term sustainable value generation and are at the core of everything we do. I'd like to think of all of our associates for their strong commitment to serving our customers, clients and communities. Thanks to you, I'm confident we are well positioned to continue delivering strong results and long-term value to our shareholders and stakeholders.

Frank Brown Holding: The SVB acquisition provided complementary expansion in terms of geographic distribution and accelerated entrants into attractive markets we were already targeting, the opportunities extend beyond our footprint, however, we're focused on maintaining the great client relationships fostered by SVB private and deepening those relationships with our registered branch associates and digital platforms serving institutional, mass affluent and high net worth clients. Moving forward, we believe these complementary capabilities will accelerate the growth of our wealth franchise. We remain focused on executing against our core strategic priorities, which are the building blocks for long term sustainable value generation. The core of everything we do. I'd like to thank all of our associates for their strong commitment to serving our customers clients and communities. Do you I am confident we are well positioned to continue delivering strong results and long term value to our shareholders and stakeholders.

The STB acquisition provided complementary expansion in terms of geographic distribution and accelerated entrants into attractive markets, we were already targeting.

Speaker 5: An accelerated entrance into attractive markets. We were already charged.

Deanna Hart: I will now turn it over to Frank. Thank you, Deanna.

Speaker 5: The opportunities extend beyond our footprint however we're focused on maintaining the great client relationships fostered by's the private.

Frank Holding: Good morning, everyone.

The opportunities extend beyond our footprint. However, we're focused on maintaining the great client relationships fostered by S B private and.

Frank Holding: Starting on page five, despite a volatile external market, we've delivered another solid quarter of financial results marked by strong revenue growth and discipline expense management. Our focus continues to be on growing our core lines of business, maintaining our safety and stability through strong capital credit and liquidity risk management, and delivering long-term tangible value growth to our shareholders. This morning, we reported earnings per share of $55.92 excluding items noted in the presentation on page 52.

Speaker 5: Deepening those relationships with our registered branch associates and digital platforms serving institutional mass, affluent and high networth client.

And deepening those relationships with our registered branch associates and digital platforms, serving institutional mass affluent and high net worth clients.

Frank Brown Holding: Moving forward, we believe these complementary capabilities will accelerate the growth of our wealth franchise, we remain focused on executing against our core strategic priorities, which are the building blocks for long term sustainable value generation and are at the core of everything we do. I'd like to think of all of our associates for their strong commitment to serving our customers, clients and communities. Thanks to you, I'm confident we are well positioned to continue delivering strong results and long-term value to our shareholders and stakeholders.

Frank Holding Jr: Moving forward, we believe these complementary capabilities will accelerate the growth of our wealth franchise. We remain focused on executing against our core strategic priorities, which are the building blocks for long-term sustainable value generation and are at the core of everything we do.

Frank Brown Holding: Moving forward, we believe these complementary capabilities will accelerate the growth of our wealth franchise. We remain focused on executing against our core strategic priorities, which are the building blocks for long term sustainable value generation. The core of everything we do. I'd like to thank all of our associates for their strong commitment to serving our customers clients and communities. Do you I am confident we are well positioned to continue delivering strong results and long term value to our shareholders and stakeholders.

Frank Brown Holding: Moving forward, we believe these complementary capabilities will accelerate the growth of our wealth franchise.

Speaker 5: Moving forward. We believe these complementary capabilities will accelerate the growth of our wealth franchise.

Moving forward, we believe these complementary capabilities will accelerate the growth of our wealth franchise.

Frank Brown Holding: We remain focused on executing against our core strategic priorities, which are the building blocks for long term sustainable value generation and they're at the core of everything we do, I'd like to thank all of our associates for their strong commitment to serving our customers, clients and communities, thanks to you I am confident we are well positioned to continue delivering strong results and long term value to our shareholders and stakeholders. In conclusion,

Speaker 5: We remain focused on executing against our core strategic priorities, which are the building blocks for long term sustainable value generation and are at the core of everything we do. I'd like to think of all of our associates for their strong commitment to serving our customers, clients and communities.

We remain focused on executing against our core strategic priorities, which are the building blocks for long term sustainable value generation.

Frank Brown Holding: I'd like to thank to all of our associates for their strong commitment to serving our customers, clients and communities, thanks to you, I'm confident we are well positioned to continue delivering strong results and long-term value to our shareholders and stakeholders. I'd like to address the recent tragic and carrible attacks and put on the innocent people have been is.

The core of everything we do.

Frank B. Holding, Jr.: I'd like to thank all of our associates for their strong commitment to serving our customers, clients, and communities. Thanks to you, I'm confident we are well positioned to continue delivering strong results and long-term value to our shareholders and stakeholders. In conclusion, I'd like to address the recent tragic and horrible attacks inflicted on the innocent people in Israel. We are saddened by these events and wish for peace in the region and for the future security of everyone, and especially our clients, associates, and their families. I'll now turn it over to Craig to provide an update on our third quarter financial results. Craig?

Frank Holding Jr: I'd like to thank all of our associates for their strong commitment to serving our customers, clients, and communities. Thanks to you, I'm confident we are well positioned to continue delivering strong results and long-term value to our shareholders and stakeholders. In conclusion, I'd like to address the recent tragic and horrible attacks inflicted on the innocent people in Israel. We are saddened by these events and wish for peace in the region and for the future security of everyone, and especially our clients, associates, and their families. I'll now turn it over to Craig to provide an update on our third quarter financial results. Craig?

I'd like to thank all of our associates for their strong commitment to serving our customers clients and communities.

Frank Holding: This exceeded our expectations and represented a 6% increase over the sequential quarter. Return metrics were also strong, improving over the sequential quarter despite an increase in credit reserves and capital levels. These return metrics were supported by a net interest margin that remained over 4% and adjusted efficiency ratio of 46%. Deposits continue to be a huge focus for us during the quarter with period end deposits of 14% on annualized basis or 3% sequentially.

Speaker 5: Thanks to you, I'm confident we are well positioned to continue delivering strong results and long-term value to our shareholders and stakeholders.

Do you I am confident we are well positioned to continue delivering strong results and long term value to our shareholders and stakeholders.

Frank Brown Holding: In conclusion, I'd like to address the recent tragic and horrible attacks inflicted on the innocent people in Israel, we are saddened by these events and wish for peace in the region and for the future security of everyone and especially our clients, associates and their families. I'll now turn it over to Craig to provide an update on our third quarter financial results- gregig.

In conclusion.

Frank Brown Holding: In conclusion, I'd like to address the recent tragic and horrible attacks inflicted on the innocent people in Israel, We are saddened by these events and wish for peace in the region and for the future security of everyone, and especially our clients associates and their families, I'll now turn it over to Craig to provide an update on our third quarter financial results, Craig.

Speaker 5: I'd like to address the recent tragic and carrible attacks and put on the innocent people have been is.

I'd like to address the recent tragic and horrible attacks and looked at all the innocent people in Israel.

Speaker 5: We are saddened by these events and wish for peace in the Re.

We are saddened by these events and wish for peace in the region.

Speaker 5: And for the future security of everyone and especially our clients associates and their.

Until the future security of everyone, and especially our clients associates and their families.

Frank Brown Holding: I'll now turn it over to Craig to provide an update on our third quarter financial results, Craig.

Speaker 5: I'll now turn it over to Craig to provide an update on our third quarter financial results- gregig.

I'll now turn it over to Craig to provide an update on our third quarter financial results Greg.

Frank Holding: In addition to deposit growth, our commercial and general bank segments posted solid loan growth. Our liquidity and capital positions remain strong and stable driven by our focus on core deposit gathering and a conservatively managed investment portfolio. We also remain focused on managing credit risk crudently. We did experience an increase in net charge off this quarter with the majority of the charge off related to investor dependent loans in the SBB portfolio. While we continue to monitor this portfolio closely given some of the macro economic headwinds facing the innovation economy, we remain encouraged by the resiliency of our clients in the face of elevated inflation and rising interest rates.

Craig Nix: Okay. Thank you, Frank, and thank all of you for joining us today. I'm going to anchor my comments on our third quarter financial results to the takeaways outlined on page 11. For your reference, pages 12 through 32 provide more detail supporting those results. As Frank just said, our return metrics were once again strong in the third quarter. ROE and ROA adjusted for notable items were 16.77% and 1.55% respectively, both exceeding our expectations. Our return metrics were supported by a 1.5% sequential increase in net interest income and a 5.9% sequential decline in expenses. Net interest income performance was the result of increased accretion income as well as the impact of higher rates increasing our loan and investment yields. The cost of deposits increased by 44 basis points over the prior quarter to 2.12%, representing a cycle-to-date data of 37%.

Speaker 6: ok Thank you Frank, and thank all of you for joining us today.

Craig Lockwood Nix: Thank you Frank, and thank all of you for joining us today, I'm going to anchor my comments on our third quarter financial results to the takeaways outlined on page 11, for your reference, pages 12 through 32 provide more detail supporting those results. Frank just said, our return metrics were once again strong in the third quarter. Roe and ROA, adjusted for notable items, were 17% and 2% respectively, both exceeding our expectation. Our return metrics were supported by a 2% sequential increase in net aninterest income and a 6% sequential decline in exptense. Net interest income performance was the result of increased accretion income, as well as the impact of higher rates increasing our loan and investment yield. The Co for deposits increased by 44 basis points over the prior quarter to 2%, representing a cycle to date bea of 37%. Despite the rise deposit costs, our quarterly NIM of continued strength, coming in at 407, down three basis points from the link quarter but up 65 basis points from the same quarter a year ago. The modest decline in NIM during the quarter was driven by higher deposit balances, as well as a higher rate pate on deposits and lower average loans. Partially offset by higher yield on earning assets and the elimination of hf LV borrowing. To the sell off in the longer to intermediate part of the yield curve. We allocated $5 billion of our ex Hi cash in the short duration U's treasury and agency mortgage backed securities during the quarter to mitigate some of our sensitivity to falling rate. Given our exen cash position, we expect that to continue in the fourth quarter. We do not expect these purchases to have a material impact on baseline earnings as the investment rates are in line with interest we earn on cash reserve.

Craig Lockwood Nix: Thank you Frank and thank all of you for joining us today, I'm Gonna anchor my comments on our third quarter financial results to the takeaways outlined on page 11, for your reference pages 12 through 32 provide more detail supporting those results, as Frank just said, our return metrics were once again strong in the third quarter, ROE and ROA adjusted for notable items were 16.77% and 15.5% respectively, both exceeding our expectations. Our return metrics are supported by one 5% sequential increase in net interest income and a five 9% sequential decline in expenses. Net interest income performance was the result of increased accretion income as well as the impact of higher rates, increasing our loan and investment yields. Cost of deposits increased by 44 basis points over the prior quarter to $2, one 2% representing a cycle to date beta of 37%. Despite the rise in deposit costs are quarterly NIM. It showed continued strength coming in at 47. Down three basis points from the linked quarter. But up 65 basis points from the same quarter a year ago. Modest decline during the quarter. And by higher deposit balances as well as a higher rate paid on deposits and lower average lines. Partially offset by higher yield on earning assets and the elimination of Hs <unk> borrowings. With the sell off in the longer to intermediate part of the yield curve. <unk> $5 billion of our excess cash and the short duration U S Treasury and agency mortgage backed securities during the quarter to mitigate some of our sensitivity to falling rates. Given our excess cash position, we expect that to continue in the fourth quarter we. We do not expect these purchases to have a material impact on baseline earnings as the investment rates are in line with interest we earn on cash reserves. Adjusted noninterest income increased modestly by 1% sequentially. Of note during the quarter was our rail business, which turned in another strong quarter with utilization rates above 98% and positive repricing trends.

Speaker 6: I'm going to anchor my comments on our third quarter financial results to the takeaways outlined on Page Le.

I'm Gonna anchor my comments on our third quarter financial results to the takeaways outlined on page 11.

Speaker 6: For your reference. Pages 12 through 32 provide more detail supporting those results.

For your reference pages 12 through 32 provide more detail supporting those resolve.

Craig Lockwood Nix: As Frank just said, our return metrics were once again strong in the third quarter, ROE and ROA, adjusted for notable items, were 16.77% and 1.55% respectively, both exceeding our expectations, our return metrics were supported by a 1.5% sequential increase in net interest income and a 5.9% sequential decline in expenses. Net interest income performance was the result of increased accretion income, as well as the impact of higher rates increasing our loan and investment yield. The Co for deposits increased by 44 basis points over the prior quarter to 2%, representing a cycle to date bea of 37%. Despite the rise deposit costs, our quarterly NIM of continued strength, coming in at 407, down three basis points from the link quarter but up 65 basis points from the same quarter a year ago. The modest decline in NIM during the quarter was driven by higher deposit balances, as well as a higher rate pate on deposits and lower average loans. Partially offset by higher yield on earning assets and the elimination of hf LV borrowing. To the sell off in the longer to intermediate part of the yield curve. We allocated $5 billion of our ex Hi cash in the short duration U's treasury and agency mortgage backed securities during the quarter to mitigate some of our sensitivity to falling rate. Given our exen cash position, we expect that to continue in the fourth quarter. We do not expect these purchases to have a material impact on baseline earnings as the investment rates are in line with interest we earn on cash reserve.

Speaker 6: Frank just said, our return metrics were once again strong in the third quarter. Roe and ROA, adjusted for notable items, were 17% and 2% respectively, both exceeding our expectation.

Hey, Frank it's Ed.

Our return metrics were once again strong in the third quarter.

Adjusted for notable items.

16, 77% and 155% respectively, both exceeding our expectations.

Craig Lockwood Nix: Our return metrics are supported by 1.5% sequential increase in net interest income and a 5.9% sequential decline in expenses. Net interest income performance was the result of increased accretion income as well as the impact of higher rates, increasing our loan and investment yields. Cost of deposits increased by 44 basis points over the prior quarter to $2, one 2% representing a cycle to date beta of 37%. Despite the rise in deposit costs are quarterly NIM. It showed continued strength coming in at 47. Down three basis points from the linked quarter. But up 65 basis points from the same quarter a year ago. Modest decline during the quarter. And by higher deposit balances as well as a higher rate paid on deposits and lower average lines. Partially offset by higher yield on earning assets and the elimination of Hs <unk> borrowings. With the sell off in the longer to intermediate part of the yield curve. <unk> $5 billion of our excess cash and the short duration U S Treasury and agency mortgage backed securities during the quarter to mitigate some of our sensitivity to falling rates. Given our excess cash position, we expect that to continue in the fourth quarter we. We do not expect these purchases to have a material impact on baseline earnings as the investment rates are in line with interest we earn on cash reserves. Adjusted noninterest income increased modestly by 1% sequentially. Of note during the quarter was our rail business, which turned in another strong quarter with utilization rates above 98% and positive repricing trends.

Craig Lockwood Nix: Our return metrics are supported by 1.5% sequential increase in net interest income and a 5.9% sequential decline in expenses.

Speaker 6: Our return metrics were supported by a 2% sequential increase in net aninterest income and a 6% sequential decline in exptense.

Our return metrics are supported by one 5% sequential increase in net interest income and a five 9% sequential decline in expenses.

Craig Lockwood Nix: Net interest income performance was the result of increased accretion income, as well as the impact of higher rates increasing our loan and investment yields, the cost of deposits increased by 44 basis points over the prior quarter to 2.12% representing a cycle to date beta of 37%, despite the rise in deposit costs our quarterly NIM showed continued strength coming in at 407 down three basis points from the linked quarter but up 65 basis points from the same quarter a year ago. Modest decline during the quarter. And by higher deposit balances as well as a higher rate paid on deposits and lower average lines. Partially offset by higher yield on earning assets and the elimination of Hs <unk> borrowings. With the sell off in the longer to intermediate part of the yield curve. <unk> $5 billion of our excess cash and the short duration U S Treasury and agency mortgage backed securities during the quarter to mitigate some of our sensitivity to falling rates. Given our excess cash position, we expect that to continue in the fourth quarter we. We do not expect these purchases to have a material impact on baseline earnings as the investment rates are in line with interest we earn on cash reserves. Adjusted noninterest income increased modestly by 1% sequentially. Of note during the quarter was our rail business, which turned in another strong quarter with utilization rates above 98% and positive repricing trends.

Frank Holding: On page 6, we continue to make great progress in integrating SBB and our initial stabilization efforts are complete. As a result of our continued focus on and outreach to our clients, we continue to see stabilization in loan and deposit balances during the quarter. We have materially completed our strategic assessment work. Currently, we are leveraging the insights from this work to identify opportunities to grow our market position in an innovation economy.

Speaker 6: Net interest income performance was the result of increased accretion income, as well as the impact of higher rates increasing our loan and investment yield.

Net interest income performance was the result of increased accretion income as well as the impact of higher rates, increasing our loan and investment yields.

Craig Lockwood Nix: The cost for deposits increased by 44 basis points over the prior quarter to 2.12%, representing a cycle to date beta of 37%, despite the rise in deposit costs, our quarterly NIM showed continued strength coming in at 407, down three basis points from the link quarter, but up 65 basis points from the same quarter a year ago. The modest decline in NIM during the quarter was driven by higher deposit balances, as well as a higher rate pate on deposits and lower average loans. Partially offset by higher yield on earning assets and the elimination of hf LV borrowing. To the sell off in the longer to intermediate part of the yield curve. We allocated $5 billion of our ex Hi cash in the short duration U's treasury and agency mortgage backed securities during the quarter to mitigate some of our sensitivity to falling rate. Given our exen cash position, we expect that to continue in the fourth quarter. We do not expect these purchases to have a material impact on baseline earnings as the investment rates are in line with interest we earn on cash reserve.

Speaker 6: The Co for deposits increased by 44 basis points over the prior quarter to 2%, representing a cycle to date bea of 37%.

Cost of deposits increased by 44 basis points over the prior quarter to $2, one 2% representing a cycle to date beta of 37%.

Craig Nix: Despite the rise in deposit costs, our quarterly NIM showed continued strength coming in at 407, down 3 basis points from the linked quarter but up 65 basis points from the same quarter a year ago. The modest decline in NIM during the quarter was driven by higher deposit balances, as well as a higher rate paid on deposits, and lower average loans, partially offset by higher yield on earning assets and the elimination of HFLB borrowings. With the sell-off in the longer to intermediate part of the yield curve, we allocated $5 billion of our excess cash in the short-duration US Treasury, and agency mortgage-backed securities during the quarter to mitigate some of our sensitivity to falling rates. Given our excess cash position, we expect that to continue in Q4.

Speaker 6: Despite the rise deposit costs, our quarterly NIM of continued strength, coming in at 407, down three basis points from the link quarter but up 65 basis points from the same quarter a year ago. The modest decline in NIM during the quarter was driven by higher deposit balances, as well as a higher rate pate on deposits and lower average loans.

Despite the rise in deposit costs are quarterly NIM. It showed continued strength coming in at 47.

Craig Lockwood Nix: The modest decline in NIM during the quarter was driven by higher deposit balances, as well as a higher rate pay on deposits and lower average loans, partially offset by higher yield on earning assets and the elimination of HFLB borrowing, with the sell-off in the longer to intermediate part of the yield curve, we allocated $5 billion dollars of our ex Hi cash in the short duration U's treasury and agency mortgage backed securities during the quarter to mitigate some of our sensitivity to falling rate. Given our exen cash position, we expect that to continue in the fourth quarter. We do not expect these purchases to have a material impact on baseline earnings as the investment rates are in line with interest we earn on cash reserve.

Down three basis points from the linked quarter.

Frank Holding: Finally, we remain focused on regulatory readiness through our large bank program and a dedicated team of leaders and associates are ensuring we have a framework to meet heightened regulatory expectations and ensure sound business practices for large financial institutes.

Craig Lockwood Nix: A modest decline in NIM during the quarter is driven by higher deposit balances as well as a higher rate paid on deposits and lower average lines, partially offset by higher yield on earning assets and the elimination of FHLB borrowings, with the sell-off in the longer to intermediate part of the yield curve, We allocated $5 billion dollars of our excess cash in the short duration U.S. Treasury and agency mortgage backed securities during the quarter to mitigate some of our sensitivity to falling rates. Given our excess cash position, we expect that to continue in the fourth quarter we. We do not expect these purchases to have a material impact on baseline earnings as the investment rates are in line with interest we earn on cash reserves. Adjusted noninterest income increased modestly by 1% sequentially. Of note during the quarter was our rail business, which turned in another strong quarter with utilization rates above 98% and positive repricing trends.

But up 65 basis points from the same quarter a year ago.

Modest decline during the quarter.

And by higher deposit balances as well as a higher rate paid on deposits and lower average lines.

Speaker 6: Partially offset by higher yield on earning assets and the elimination of hf LV borrowing.

Partially offset by higher yield on earning assets and the elimination of Hs <unk> borrowings.

Frank Holding: On page 7, our strategic priorities have not changed and are included here for your reference. On page 8, we provided tangible examples of supporting our clients in the innovation economy. We remain excited by the green shoots we're seeing as new and returning business comes to SBB six months post acquisition. For example, during the third quarter, Global Fund Banking Originations increased by 18% compared to the sequential quarter and its pipeline has grown over 70%.

Speaker 6: To the sell off in the longer to intermediate part of the yield curve. We allocated $5 billion of our ex Hi cash in the short duration U's treasury and agency mortgage backed securities during the quarter to mitigate some of our sensitivity to falling rate.

With the sell off in the longer to intermediate part of the yield curve.

<unk> $5 billion of our excess cash and the short duration U S Treasury and agency mortgage backed securities during the quarter to mitigate some of our sensitivity to falling rates.

Craig Lockwood Nix: Given our excess cash position, we expect that to continue in the fourth quarter, we do not expect these purchases to have a material impact on baseline earnings, as the investment rates are in line with interest we earn on cash reserves, adjusted non-interest income increased modestly by 1% sequentially, our note during the quarter was our rail business, which turned in another strong quarter with utilization rates above 98% and positive repricing trends, we have a well diversified fleet with high capacity and efficiency, positioning our portfolio well for any future downturn in the economy. We're also focused on growing and expanding our fee based business in areas, such as payments and wealth management as Frank alluded to just now.

Speaker 6: Given our exen cash position, we expect that to continue in the fourth quarter. We do not expect these purchases to have a material impact on baseline earnings as the investment rates are in line with interest we earn on cash reserve.

Given our excess cash position, we expect that to continue in the fourth quarter we.

Craig Nix: We do not expect these purchases to have a material impact on baseline earnings as the investment rates are in line with interest we earn on cash reserves. Adjusted non-interest income increased modestly by 1% sequentially. Of note, during the quarter was our rail business, which turned in another strong quarter with utilization rates above 98% and positive repricing trends. We have a well-diversified fleet with high capacity and efficiency, positioning our portfolio well for any future downturn in the economy. We are also focused on growing and expanding our fee-based business in areas such as payments and wealth management, as Frank alluded to just a moment ago. We have been working recently to expand SVB's real-time payment network, which will allow our clients to send and receive payments instantly.

We do not expect these purchases to have a material impact on baseline earnings as the investment rates are in line with interest we earn on cash reserves.

Speaker 6: Adjusted noninterest income increased modestly about 1% sequentially. Of note during the quarter was our rail business which turned in another strong quarter with utilization rates above 98% and positive repricing trend.

Adjusted noninterest income increased modestly by 1% sequentially.

Frank Holding: We are committed to building on and investing in the SBB business to preserve long-term client relationships and to generate new business with founders, entrepreneurs, innovation leaders, and venture capital and private equity clients. During the quarter, our commitment was exemplified when we launched a nationwide yes SBB campaign to increase awareness that SBB is open for business and that we remain dedicated to supporting the innovation economy. We are also investing in new capabilities including the rollout, the continued rollout of SBB GO, an online digital banking platform to support our clients needs by facilitating easier interactions, simple, secure, and intuitive.

Of note during the quarter was our rail business, which turned in another strong quarter with utilization rates above 98% and positive repricing trends.

Speaker 6: We have a well diversified fleet with high capacity inefficiency, positioning our portfolio well for any future downturn in the economy.

We have a well diversified fleet with high capacity and efficiency positioning our portfolio well for any future downturn in the economy.

Craig Lockwood Nix: We're also focused on growing and expanding our fee based business in areas such as payments and wealth management as Frank alluded to just a moment ago, We have been working recently to expand SVB real time payment network, which will allow our clients to send and receive payments instantly, We are also working to offer instant settlement for merchants using payment facilitators and instant loan funding and disbursement, including early wage access. We are excited about the opportunity to accelerate SBB capability and building payment function and are happy to be in a position to invest in opportunities such as these. Adjusted noninterest expense declined by $71 million or about five 9% sequentially. Over 85% of the reduction related to synergies arising from the Sdd acquisition. We also saw declines in our marketing cost, which as you may recall from previous calls had been primarily associated with growing deposits in the direct bank. Grew deposits in this channel about $6 $4 billion during the quarter, while spending less in advertising with efficiency, we'll add that new clients from previous periods continuing to increase balances. Strong strong expense management and discipline will remain a significant focus for us moving forward. Putting all of this together. We achieved an adjusted efficiency ratio of 46%, which was an improvement of approximately 4% over the prior quarter. Third quarter adjusted PBT NR. <unk> grew by eight 6% over the linked quarter. About the diversification and growth of our net revenue streams as well as disciplined expense management. Now moving to the balance sheet. Loans were up by $187 million over the second quarter the. General and commercial banking segments grew by approximately $1 billion of needs, while the SCV segment experienced a decline of just under $2 billion.

Speaker 6: We are also focused on growing and expanding our sea-based business in areas such as payment and wealth management, as Frank alluded to just a moment ago.

We're also focused on growing and expanding our fee based business in areas, such as payments and wealth management as Frank alluded to just now.

A moment ago.

Speaker 6: We have been working recently to expand SB's realtime payment network, which will allow our clients to send and receive payments instantly. We are also working to offer instant settlement for merchants using payment facilitators and instant loan funding and disbursement, including early wage access.

We have been working recently to expand SBB real time payment network, which will allow our clients to send and receive payments instantly.

Craig Nix: We are also working to offer instant settlement for merchants using payment facilitators and instant loan funding and disbursements, including early wage access. We are excited about the opportunity to accelerate SVB's capability in billing payments functions and are happy to be in a position to invest in opportunities such as these. Adjusted non-interest expense declined by $71 million or by 5.9% sequentially, over 85% of the reduction related to synergies arising from the SVB acquisition. We also saw declines in our marketing costs, which, as you may recall from previous calls, have been primarily associated with growing deposits in the direct bank. We grew deposits in this channel by $6.4 billion during the quarter while spending less on advertising, with efficiency led by new clients from previous periods continuing to increase balances. Strong expense management and discipline will remain a significant focus for us moving forward.

We are also working to offer instant settlement for merchants using payment facilitators and instant loan funding and disbursement, including early wage access.

Frank Holding: The platform is designed for how our founders and innovation leaders run their businesses rather than how banks operate. Looking forward, we acknowledge the headwinds, we acknowledge headwinds facing the innovation economy. The muted fundraising and investment pace coupled with limited exit opportunities continues to put pressure on innovation companies across all sectors and stages of development. This is resulting in some bulky chargeoffs which Craig will speak to in more detail during his comments.

Speaker 6: We are excited about the opportunity to accelerate SD's capability and buildilling payments functions and are happy to be in a position to invest an opportunity such as these.

We are excited about the opportunity to accelerate SBB capability and building payment function and are happy to be in a position to invest in opportunities such as these.

Craig Lockwood Nix: We are excited about the opportunity to accelerate SVB capability and billing payment function and are happy to be in a position to invest in opportunities such as these, adjusted non-interest expense declined by $71 million dollars or by 5.9% sequentially, over 85% of the reduction related to synergies arising from the SVB acquisition, We also saw declines in our marketing cost, which as you may recall from previous calls had been primarily associated with growing deposits in the direct bank. Grew deposits in this channel about $6 $4 billion during the quarter, while spending less in advertising with efficiency, we'll add that new clients from previous periods continuing to increase balances. Strong strong expense management and discipline will remain a significant focus for us moving forward. Putting all of this together. We achieved an adjusted efficiency ratio of 46%, which was an improvement of approximately 4% over the prior quarter. Third quarter adjusted PBT NR. <unk> grew by eight 6% over the linked quarter. About the diversification and growth of our net revenue streams as well as disciplined expense management. Now moving to the balance sheet. Loans were up by $187 million over the second quarter the. General and commercial banking segments grew by approximately $1 billion of needs, while the SCV segment experienced a decline of just under $2 billion.

Speaker 6: Adjusted noninterest expense declined by $71 million, or by 6% sequentially. Over 85% of the reduction related to synergies arising from the's B D acquisition. We also saw declines in our marketing costs, which is, you may recall from previous calls, have been primarily associated with growing deposits in the direct bank.

Adjusted noninterest expense declined by $71 million or about five 9% sequentially.

Over 85% of the reduction related to synergies arising from the Sdd acquisition. We also saw declines in our marketing cost, which as you may recall from previous calls had been primarily associated with growing deposits in the direct bank.

Craig Nix: We grew deposits in this channel by $6.4 billion during the quarter while spending less on advertising, with efficiency led by new clients from previous periods continuing to increase balances. Strong expense management and discipline will remain a significant focus for us moving forward.

Frank Holding: Historically, well to 18 months into a down cycle, DC investment reaches a 4, after which valuations normalize and DC firms come back into the market. While USVC firms investment levels may continue to fall in the near term, we believe the long-term outlook remains positive, primarily related to tailwinds that remain intact despite the most recent dislocation. The innovation economy is stronger than in past cycles as it grew at 2.4 times the rate of the overall US economy between 2000 and 2021 and the COVID-19 pandemic has only accelerated digital adoption.

Speaker 6: We grew deposits in this channel by $6.4 billion during the quarter, while spending less than advertising with a citizency led by new clients from previous periods. Continuing to increase balances strongest, strong expense management and discipline will remain a significant focus for us moving forward.

Grew deposits in this channel about $6 $4 billion during the quarter, while spending less in advertising with efficiency, we'll add that new clients from previous periods continuing to increase balances.

Craig Lockwood Nix: We grew deposits in this channel about $6.4 billion dollars during the quarter, while spending less in advertising with efficiency led by new clients from previous periods continuing to increase balances, strong expense management and discipline will remain a significant focus for us moving forward. Putting all of this together. We achieved an adjusted efficiency ratio of 46%, which was an improvement of approximately 4% over the prior quarter. Third quarter adjusted PBT NR. <unk> grew by eight 6% over the linked quarter. About the diversification and growth of our net revenue streams as well as disciplined expense management. Now moving to the balance sheet. Loans were up by $187 million over the second quarter the. General and commercial banking segments grew by approximately $1 billion of needs, while the SCV segment experienced a decline of just under $2 billion.

Strong strong expense management and discipline will remain a significant focus for us moving forward.

Craig Nix: Putting all of this together, we achieved an adjusted efficiency ratio of 46%, which was an improvement of approximately 4% over the prior quarter. Our Q3 adjusted PP&R grew by 8.6% over the linked quarter, driven by the diversification and growth of our net revenue streams as well as disciplined expense management. Now moving to the balance sheet. Loans were up by $187 million over the Q2. The general and commercial banking segments grew by approximately $1 billion each, while the SVB segment experienced a decline of just under $2 billion. In the general bank, growth was concentrated in small business and commercial loans in our branch network. We are excited to continue to build long-term customer relationships in the general bank and are pleased to see our investments in digital, call center, and branch technology over the past several years pay off.

Speaker 6: Putting all of this together, we achieved an adjusted efficiency ratio of 46%, which was an improvement of approximately 4% over the prior quarter. Our third quarter, adjusted PT and R grew by 9% over the linked quarter, driven by a diversification and growth of our net revenue streams, as well as disciplined expense management.

Putting all of this together.

Craig Lockwood Nix: Putting all of this together, We achieved an adjusted efficiency ratio of 46%, which was an improvement of approximately 4% over the prior quarter, our third quarter adjusted PPNR grew by 8.6% over the linked quarter, given by the diversification and growth of our net revenue streams as well as disciplined expense management. now moving to the balance sheet. Loans were up by $187 million over the second quarter the. General and commercial banking segments grew by approximately $1 billion of needs, while the SCV segment experienced a decline of just under $2 billion.

We achieved an adjusted efficiency ratio of 46%, which was an improvement of approximately 4% over the prior quarter.

Frank Holding: Further, the innovation economy was 3.5 times larger in 2020 than in 2000. While we do not believe we are likely to see 2021 levels of valuation and investment for some time, if ever, we know that there is substantial drive power waiting to be invested, which gives us confidence in the long-term prospects of the innovation to come.

Third quarter adjusted PBT NR.

<unk> grew by eight 6% over the linked quarter.

About the diversification and growth of our net revenue streams as well as disciplined expense management.

Craig Lockwood Nix: Now moving to the balance sheet, loans were up by $187 million dollars over the second quarter, the general and commercial banking segments grew by approximately $1 billion dollars each, while the SVB segment experienced a decline of just under $2 billion dollars, in the general Bank, growth was concentrated in small business and commercial lines and and branch network, We're excited to continue to build long term customer relationships in the general Bank and are pleased to see our investment in digital call center and branch technology over the past several years pay off. Further our product breadth has benefited from the CIP and SBB transactions, providing us with better ability to fulfill products based on the preferences of our clients and customers. And the commercial bank segment growth was driven by strong production in our industry verticals, including energy healthcare and TMT as well as seasonal increases in factoring as clients build up inventory ahead of the holiday season. While origination volumes remained strong in our industry verticals. They were down from the sequential quarter with a balance sheet benefited from a decline in prepayments. The decline in SCV segment lines was due to three major factors first approximately half of the decline was the result of the expected wind down of our foreign exposure. Recall that we did not purchase any foreign entities as part of the acquisition. So we have been in the process of exiting these markets. Lower new loan fundings as the private market investment landscape continues to face headwinds, resulting in. In a difficult exit environment, lower fund raising numbers and fewer deals and third expected repayments. While foreign exposure had a significant impact on our third quarter loan balances, we do not anticipate it being a meaningful issue going forward as the majority of the exposure has been unwound at this point. We are also encouraged by trends in the technology and healthcare banking business. This business our client attrition early early on as a result of the March crisis. However, we have been pleased to see both new and returning business comeback to this group, resulting from the initiatives we've undertaken. Since the acquisition. Deposits increased by $5 $1 billion over the linked quarter, driven by $6 $4 billion of growth in our direct bank. Bank now accounts for 35 billion, 24% of our deposit base. While this channel is higher costs compare TV traditional branch network, 92% of the deposits are insured and the increase in imbalances allowed us to reduce our wholesale funding reliance as we were able to pay off more expensive. <unk> debt in the third quarter. We are pleased that the deposit growth, we had experienced allowed us to work our loan to deposit ratio down to 91% from Ono from almost 99% at the time of the acquisition.

Now moving to the balance sheet.

Speaker 6: Loans were up by $187 million over the second quarter. The general and commercial banking segments grew by approximately $1 billion each, while the fscb segment experienced a decline of just under $2 billion.

Loans were up by $187 million over the second quarter the.

General and commercial banking segments grew by approximately $1 billion of needs, while the SCV segment experienced a decline of just under $2 billion.

Speaker 6: Between the general bank. Growth was concentrated in small business and commercial loans in our branch network.

And the general Bank growth was concentrated in small business and commercial lines and our branch network.

Speaker 6: We are excited to continue to build a long-term customer relationships in the general bank and are pleased to see our investment in digital call center and branch technology over the past several years pay off further our product breadth have benefited from the CIT and sbd transactions providing us with better ability to fulfill products based on the preferences of our clients and.

We're excited to continue to build long term customer relationships in the general Bank and are pleased to see our investment in digital call Center and branch technology over the past several years pay off.

Frank Holding: Now turning to page 9, we have exciting news in our Wealth Division. Since 2013, we have focused on our Wealth Management capabilities and have made significant progress growing organically. As a result, our private banking, brokerage, and trust services have become a significant revenue source for us, and we have recently expanded our reach beyond our legacy markets in the Carolinas to California and the Northeast. The SBB acquisition provided complimentary expansion in terms of geographic distribution and accelerated entrance into attractive markets we were already targeting.

Craig Nix: Further, our product breadth has benefited from the CIT and SVB transactions, providing us with better ability to fulfill products based on the preferences of our clients and customers. In the commercial bank segment, growth was driven by strong production in our industry verticals, including energy, healthcare, and TMT, as well as seasonal increases in factoring as clients built out inventory ahead of the holiday season. While origination volumes remained strong in our industry verticals, they were down from the sequential quarter, but the balance sheet benefited from a decline in prepayments. The decline in SVB segment loans was due to three major factors. First, approximately half of the decline was the result of the expected wind-down of our foreign exposure. Recall that we did not purchase any foreign entities as part of the acquisition, so we have been in the process of exiting these markets.

Further our product breadth has benefited from the CIP and SBB transactions, providing us with better ability to fulfill products based on the preferences of our clients and customers.

Craig Lockwood Nix: Further, our product breadth has benefited from the CIP and SVB transactions, providing us with better ability to fulfill products based on the preferences of our clients and customers, in the commercial bank segment, growth was driven by strong production in our industry verticals, including energy, healthcare and TMT, as well as seasonal increases in factoring as clients build up inventory ahead of the holiday season. While origination volumes remained strong in our industry verticals. They were down from the sequential quarter with a balance sheet benefited from a decline in prepayments. The decline in SCV segment lines was due to three major factors first approximately half of the decline was the result of the expected wind down of our foreign exposure. Recall that we did not purchase any foreign entities as part of the acquisition. So we have been in the process of exiting these markets. Lower new loan fundings as the private market investment landscape continues to face headwinds, resulting in. In a difficult exit environment, lower fund raising numbers and fewer deals and third expected repayments. While foreign exposure had a significant impact on our third quarter loan balances, we do not anticipate it being a meaningful issue going forward as the majority of the exposure has been unwound at this point. We are also encouraged by trends in the technology and healthcare banking business. This business our client attrition early early on as a result of the March crisis. However, we have been pleased to see both new and returning business comeback to this group, resulting from the initiatives we've undertaken. Since the acquisition. Deposits increased by $5 $1 billion over the linked quarter, driven by $6 $4 billion of growth in our direct bank. Bank now accounts for 35 billion, 24% of our deposit base. While this channel is higher costs compare TV traditional branch network, 92% of the deposits are insured and the increase in imbalances allowed us to reduce our wholesale funding reliance as we were able to pay off more expensive. <unk> debt in the third quarter. We are pleased that the deposit growth, we had experienced allowed us to work our loan to deposit ratio down to 91% from Ono from almost 99% at the time of the acquisition.

Speaker 6: In the commercial bank segment closse was driven by strong rededuction in our industry verticals, including energy, health care and TMT, as well as seasonal increases in factoring as clients built out inventory ahead of the holiday season.

And the commercial bank segment growth was driven by strong production in our industry verticals, including energy healthcare and TMT as well as seasonal increases in factoring as clients build up inventory ahead of the holiday season.

Speaker 6: While origination volumes remain strong in our industry verticals.

While origination volumes remained strong in our industry verticals.

Craig Lockwood Nix: While origination volumes remained strong in our industry verticals, they were down from the sequential quarter with a balance sheet benefited from a decline in prepayments, the decline in SVB segment lines was due to three major factors; first approximately half of the decline was the result of the expected wind down of our foreign exposure, recall that we did not purchase any foreign entities as part of the acquisition so we have been in the process of exiting these markets. Lower new loan fundings as the private market investment landscape continues to face headwinds, resulting in. In a difficult exit environment, lower fund raising numbers and fewer deals and third expected repayments. While foreign exposure had a significant impact on our third quarter loan balances, we do not anticipate it being a meaningful issue going forward as the majority of the exposure has been unwound at this point. We are also encouraged by trends in the technology and healthcare banking business. This business our client attrition early early on as a result of the March crisis. However, we have been pleased to see both new and returning business comeback to this group, resulting from the initiatives we've undertaken. Since the acquisition. Deposits increased by $5 $1 billion over the linked quarter, driven by $6 $4 billion of growth in our direct bank. Bank now accounts for 35 billion, 24% of our deposit base. While this channel is higher costs compare TV traditional branch network, 92% of the deposits are insured and the increase in imbalances allowed us to reduce our wholesale funding reliance as we were able to pay off more expensive. <unk> debt in the third quarter. We are pleased that the deposit growth, we had experienced allowed us to work our loan to deposit ratio down to 91% from Ono from almost 99% at the time of the acquisition.

Frank Holding: The opportunities extend beyond our footprint, however. We are focused on maintaining the great current relationships fostered by SBB private and deepening those relationships with our registered branch associates and digital platforms serving institutional, massive fluent, and high net worth clients. Moving forward, we believe these complimentary capabilities will accelerate the growth of our Wealth franchise. We remain focused on executing against our core strategic priorities, which are the building blocks for long-term, sustainable value generation, and are at the core of everything we do.

Speaker 6: They were down from the sequental quarder, but the balance sheet benefited from a decline in prepay.

They were down from the sequential quarter with a balance sheet benefited from a decline in prepayments.

Speaker 6: The decline in fbd segment loans was due to three major factors. First approximately half of the decline was the result of the expected wind down of our foreign exposed.

The decline in SCV segment lines was due to three major factors first approximately half of the decline was the result of the expected wind down of our foreign exposure.

Speaker 6: Recall that we did not purchase any foreign entities as part of the acquisition, So we have been in the process of exiting these markets. Second, lower new loan funding as the private market investment landscape continues to face headwinds resulting, and in a difficult exit environment, lower fund raising numbers and fewer deals. And third, expected repay.

Recall that we did not purchase any foreign entities as part of the acquisition. So we have been in the process of exiting these markets.

Craig Nix: Second, lower new loan fundings as the private market investment landscape continues to face headwinds resulting in a difficult exit environment, lower fundraising numbers, and fewer deals. And third, expected repayments. While foreign exposure had a significant impact on our third quarter loan balances, we do not anticipate it being a meaningful issue going forward as the majority of the exposure has been unwound at this point. We are also encouraged by trends in the technology and healthcare banking business. This business saw client attrition early on as a result of the March crisis. However, we have been pleased to see both new and returning business come back to this group, resulting from the initiatives we have undertaken since the acquisition. Deposits increased by $5.1 billion over the linked quarter, driven by $6.4 billion of growth in our direct bank.

Lower new loan fundings as the private market investment landscape continues to face headwinds, resulting in.

Craig Lockwood Nix: Second, lower new loan fundings as the private market investment landscape continues to face headwinds, resulting in a difficult exit environment, lower fund raising numbers and fewer deals and third expected repayments, while foreign exposure had a significant impact on our third quarter loan balances, we do not anticipate it being a meaningful issue going forward as the majority of the exposure has been unwound at this point. We are also encouraged by trends in the technology and healthcare banking business. This business our client attrition early early on as a result of the March crisis. However, we have been pleased to see both new and returning business comeback to this group, resulting from the initiatives we've undertaken. Since the acquisition. Deposits increased by $5 $1 billion over the linked quarter, driven by $6 $4 billion of growth in our direct bank. Bank now accounts for 35 billion, 24% of our deposit base. While this channel is higher costs compare TV traditional branch network, 92% of the deposits are insured and the increase in imbalances allowed us to reduce our wholesale funding reliance as we were able to pay off more expensive. <unk> debt in the third quarter. We are pleased that the deposit growth, we had experienced allowed us to work our loan to deposit ratio down to 91% from Ono from almost 99% at the time of the acquisition.

In a difficult exit environment, lower fund raising numbers and fewer deals and third expected repayments.

Frank Holding: I'd like to thank all of our associates for their strong commitment to serving our customers, clients, and communities. Thanks to you, I'm confident we are well positioned to continue delivering strong results and long-term value to our shareholders and stakeholders.

Speaker 6: While foreign exposure had a significant impact on our third quarter loan balances, we do not anticipate that being a meaningful issue going forward, as a majority of the exposure has been unwound at this point.

While foreign exposure had a significant impact on our third quarter loan balances, we do not anticipate it being a meaningful issue going forward as the majority of the exposure has been unwound at this point.

Craig Lockwood Nix: We are also encouraged by trends in the technology and healthcare banking business, this business our client attrition early early on as a result of the March crisis, however, we have been pleased to see both new and returning business comeback to this group, resulting from the initiatives we've undertaken cince the acquisition. Deposits increased by $5 $1 billion over the linked quarter, driven by $6 $4 billion of growth in our direct bank. Bank now accounts for 35 billion, 24% of our deposit base. While this channel is higher costs compare TV traditional branch network, 92% of the deposits are insured and the increase in imbalances allowed us to reduce our wholesale funding reliance as we were able to pay off more expensive. <unk> debt in the third quarter. We are pleased that the deposit growth, we had experienced allowed us to work our loan to deposit ratio down to 91% from Ono from almost 99% at the time of the acquisition.

Speaker 6: We are also encouraged by trend and the technology and health care banking business. This business saw client attrition early, early on as a result of the March cris. However, we have been pleased to see both mir returning business come back to this group, resulting from the initiatives we have undertaking since the acquisition.

Frank Holding: In conclusion, I'd like to address the recent tragic and horrible attacks inflicted on the innocent people in Israel. We are saddened by these events and wish for peace in the region and for the future security of everyone and especially our clients, associates, and their families.

We are also encouraged by trends in the technology and healthcare banking business. This business our client attrition early early on as a result of the March crisis. However, we have been pleased to see both new and returning business comeback to this group, resulting from the initiatives we've undertaken.

Since the acquisition.

Craig Lockwood Nix: Deposits increased by $5.1 billion over the linked quarter, driven by $6.4 billion dollars of growth in our direct bank, the direct bank now accounts for 35 billion, 24% of our deposit base, while this channel is higher costs compare TV traditional branch network, 92% of the deposits are insured and the increase in imbalances allowed us to reduce our wholesale funding reliance as we were able to pay off more expensive. FHLB debt in the third quarter, we are pleased that the deposit growth, we had experienced allowed us to work our loan to deposit ratio down to 91% from almost 99% at the time of the acquisition. Moving to credit quality, our metrics remained within our risk appetite, but we continue to see deterioration in a few portfolios that we are diligently monitoring to quickly identify and address problems that may arise,

Speaker 6: Deposits increased by five point one billion over the wink quarter, driven by $6.4 billion a growth in our direct ban. The grant bank now accounts for 35.000000024 billion% of our deposit base.

Deanna Hart: I'll now turn it over to Craig to provide an update on our third quarter financial results. Craig? Okay.

Deposits increased by $5 $1 billion over the linked quarter, driven by $6 $4 billion of growth in our direct bank.

Craig Nix: The direct bank now accounts for $35 billion, 24% of our deposit base. While this channel is higher cost compared to the traditional branch network, 92% of the deposits are insured, and the increase in imbalances allowed us to reduce our wholesale funding reliance as we were able to pay off more expensive FHLB debt in Q3. We are pleased that the deposit growth we have experienced allowed us to work our loan-to-deposit ratio down to 91%, from almost 99% at the time of the acquisition. Moving to credit quality, our metrics remain within our risk appetite, but we continue to see deterioration in a few portfolios that we are diligently monitoring to quickly identify and address problems that may arise. The non-accrual loan ratio decreased by two basis points to 0.68%, with total non-accrual loans decreasing moderately to $899 million.

Craig Nix: Thank you, Frank, and thank all of you for joining us today. I'm going to anchor my comments on our third quarter financial results to the takeaways outlined on page 11 for your reference pages 12 through 32, providing more detail supporting those results. As Frank just said, our return metrics will once again strong in the third quarter. ROE and ROA adjusted for notable items were 16.77% and 1.55% respectively both exceeding our expectations.

Bank now accounts for 35 billion, 24% of our deposit base. While this channel is higher costs compare TV traditional branch network, 92% of the deposits are insured and the increase in imbalances allowed us to reduce our wholesale funding reliance as we were able to pay off more expensive.

Speaker 6: While this channel is higher costs compared to just to the traditional branch network, 92% of deposits are insured and the increase in imbalances allowed us to reduce our wholesale funding reliance, as we were able to pay off more expensive fh L B debt in the third quarter.

<unk> debt in the third quarter.

Speaker 6: We are pleased that the deposit growth we have experienced allowed us to work our loan to deposit ratio down to 91%, from from almost 99% at the time of the acquisition.

We are pleased that the deposit growth, we had experienced allowed us to work our loan to deposit ratio down to 91% from Ono from almost 99% at the time of the acquisition.

Craig Nix: Our return metrics were supported by a 1.5% sequential increase in net interest income and a 5.9% sequential decline in expense. Net Interest Income Performance was the result of increased accretion income as well as the impact of higher rates increasing our loan and investment yields. The cost of the positive increase by 44 basis points over the prior quarter to 2.12 percent, representing a cycle-to-date beta of 37 percent. Despite the rise in the positive costs, our quarterly numbers showed continued strength coming in at 407, down three basis points from the link quarter, but up 65 basis points from the same quarter a year ago.

Speaker 6: Moving the credit quality. Our metric remained within our risk appetite, but we continue to see deterioration and a few portfolios that we are diligently monitoring to quickly identify and address problems that may arrive.

Moving to credit quality, our metrics remained within our risk appetite, but we continue to see deterioration in a few portfolios that we are diligently monitoring to quickly identify and address problems that may arise.

Craig Lockwood Nix: Moving to credit quality, our metrics remained within our risk appetite but we continue to see deterioration in a few portfolios that we are diligently monitoring to quickly identify and address problems that may arise, the non-accrual loan ratio decreased by two basis points to .68% with total non-accrual loans decreasing moderately to $899 million dollars, the decrease was driven by net charge offs outpacing loans migrating into non accrual status during the quarter. The net charge off ratio increased by six basis points during the quarter to 53 basis points. Of the $176 million and net charge offs during the quarter $100 million was in the SCV segment of which $56 million was previously reserved. With the CEB segment net charge offs were concentrated in investor attendant, the charge offs totaling $88 million in the third quarter compared to $49 million last quarter. At quarter end, the portfolio totaled $5 7 billion or 10% of SBB segment loans with $1 7 billion in early stage comp companies, the highest risk category, representing 3% of SBB segment lines. We are carrying and ACL. On the investor dependent portfolio of $250 million of four or $4, 40% of total lines and a purchase accounting discount of $288 million or five 9% equating to $538 million or 951% loss absorbing capacity on these lives. Within the commercial bank segment net charge offs were concentrated in the general office and small ticket equipment leasing portfolios. As we have been signaling for a number of quarters, we continue to see stress in our general office portfolio in the commercial bank, which totaled $1 1 billion at the end of the third quarter. This portfolio is concentrated in class B reposition bridge lines and is where we have seen deterioration in the past dues criticized assets and charge offs. Kerry and ACL on these lines of 712% compared to 4% on the overall general office portfolio. We have completed target reviews across our business segments to assess credits and remaining vigilant on our entire portfolio to identify areas of risks early on. We have historically performed well in challenging economic cycle due to our thoughtful approach to managing risk. Measured underwriting practices customer selection and long term relationship development. We believe our disciplined credit and risk management approach, we will continue to support us as we navigate the most recent economic cycle.

Speaker 6: The nonaccrual loan ratio decreased by two basis points to 1%, the total nonaccrual loans decreasing moderately to $899 million.

The nonaccrual loan ratio decreased by two basis points to six 8% with total non accrual loans decreasing moderately to $899 million.

Craig Nix: The decrease was driven by net charge-offs outpacing loans migrating into non-accrual status during the quarter. The net charge-off ratio increased by 6 basis points during the quarter to 53 basis points. Of the $176 million in net charge-offs during the quarter, $100 million was in the SVB segment, of which $56 million was previously reserved. With the SVB segment, net charge-offs were concentrated in investor-dependent loans, with charge-offs totaling $88 million in the third quarter compared to $49 million last quarter. At quarter end, this portfolio totaled $5.7 billion or 10% of SVB segment loans, with $1.7 billion in early-stage companies, the highest risk category, representing 3% of SVB segment loans. We are carrying an ACL on the investor-dependent portfolio of $250 million or 4.42% of total loans and a purchase accounting discount of $288 million or 5.09%, equating to $538 million or 9.51% loss-absorbing capacity on these loans.

Speaker 6: The decrease was driven by net charge-offs outpacing loans migrating into nonaccrual status during the qut.

The decrease was driven by net charge offs outpacing loans migrating into non accrual status during the quarter.

Craig Lockwood Nix: The net charge-off ratio increased by 6 basis points during the quarter to 53 basis points, of the $176 million and net charge offs during the quarter $100 million was in the SVB segment of which $56 million was previously reserved, with the SVB segment net charge-offs were concentrated in investor attendant lines with charge-offs totaling $88 million in the third quarter compared to $49 million last quarter. At quarter end, the portfolio totaled $5 7 billion or 10% of SBB segment loans with $1 7 billion in early stage comp companies, the highest risk category, representing 3% of SBB segment lines. We are carrying and ACL. On the investor dependent portfolio of $250 million of four or $4, 40% of total lines and a purchase accounting discount of $288 million or five 9% equating to $538 million or 951% loss absorbing capacity on these lives. Within the commercial bank segment net charge offs were concentrated in the general office and small ticket equipment leasing portfolios. As we have been signaling for a number of quarters, we continue to see stress in our general office portfolio in the commercial bank, which totaled $1 1 billion at the end of the third quarter. This portfolio is concentrated in class B reposition bridge lines and is where we have seen deterioration in the past dues criticized assets and charge offs. Kerry and ACL on these lines of 712% compared to 4% on the overall general office portfolio. We have completed target reviews across our business segments to assess credits and remaining vigilant on our entire portfolio to identify areas of risks early on. We have historically performed well in challenging economic cycle due to our thoughtful approach to managing risk. Measured underwriting practices customer selection and long term relationship development. We believe our disciplined credit and risk management approach, we will continue to support us as we navigate the most recent economic cycle.

Speaker 6: The net charge-off ratio increased by six basis points during the quarter to 53 basis.

The net charge off ratio increased by six basis points during the quarter to 53 basis points.

Speaker 6: Of the 176 million a net charge delta in the quarter, one million was in the SVB stagment, of which 56 million was previously reserved.

Of the $176 million and net charge offs during the quarter $100 million was in the SCV segment of which $56 million was previously reserved.

Craig Nix: The modest decline in the number in the quarter was driven by higher deposit balances as well as a higher rate paid on deposits and lower average loans, partially offset by higher yield on earning assets and the elimination of HSLB borrowings. With the fell off in the longer-to-intermediate part of the yield curve, we allocated $5 billion of our exit cash in the short-neurational U.S. Treasury and agency mortgage bank securities during the quarter to mitigate some of our sensitivity to following rates.

Speaker 6: With the SEB segment, net charge offs were concentrated an investor dependent loans, the charge off in 88 million in the third quarter compared to 49 million last quarter. At quarter end the portfolio total $5.7 billion or 10% of B segment loans, with one point seven billion in early stage companies, the highest risk category, representing 3% of SB's segment loans we were carrying.

With the CEB segment net charge offs were concentrated in investor attendant, the charge offs totaling $88 million in the third quarter compared to $49 million last quarter.

At quarter end, the portfolio totaled $5 7 billion or 10% of SBB segment loans with $1 7 billion in early stage comp companies, the highest risk category, representing 3% of SBB segment lines.

Craig Lockwood Nix: At quarter end, the portfolio totaled $5.7 billion or 10% of SVB segment loans with $1.7 billion in early stage companies, the highest risk category, representing 3% of SVB segment loans, We are carrying an ACL on the investor dependent portfolio of $250 million of four ,or $4.42% of total lines and a purchase accounting discount of $288 million or 5.09% equating to $538 million or 9.51% loss absorbing capacity on these loans. Within the commercial bank segment net charge offs were concentrated in the general office and small ticket equipment leasing portfolios. As we have been signaling for a number of quarters, we continue to see stress in our general office portfolio in the commercial bank, which totaled $1 1 billion at the end of the third quarter. This portfolio is concentrated in class B reposition bridge lines and is where we have seen deterioration in the past dues criticized assets and charge offs. Kerry and ACL on these lines of 712% compared to 4% on the overall general office portfolio. We have completed target reviews across our business segments to assess credits and remaining vigilant on our entire portfolio to identify areas of risks early on. We have historically performed well in challenging economic cycle due to our thoughtful approach to managing risk. Measured underwriting practices customer selection and long term relationship development. We believe our disciplined credit and risk management approach, we will continue to support us as we navigate the most recent economic cycle.

Craig Nix: We are carrying an ACL on the investor-dependent portfolio of $250 million or 4.42% of total loans and a purchase accounting discount of $288 million or 5.09%, equating to $538 million or 9.51% loss-absorbing capacity on these loans.

Craig Nix: Given our exit cash position, we expect that to continue in the fourth quarter. We do not expect these purchases to have a material impact on baseline earnings as the investment rates are in line with interest we earn on cash reserves. Adjusted non-interest income increased modestly by 1 percent sequentially, but note during the quarter was our real business which turned in another strong quarter with utilization rates above 98 percent and positive repricing trends.

We are carrying and ACL.

Speaker 6: On the Investor dependent portfolio of $25 million. A four 4- four point 4, two percent of do loines and a purchase accounting discount of 288 million are five point zer 9%, equating to 538 million, or nine point five, one percent loss abdoororbing capacity on these LO.

On the investor dependent portfolio of $250 million of four or $4, 40% of total lines and a purchase accounting discount of $288 million or five 9% equating to $538 million or 951% loss absorbing capacity on these lives.

Craig Lockwood Nix: Within the commercial bank segment net charge-offs were concentrated in the general office and small ticket equipment leasing portfolios, as we have been signaling for a number of quarters, we continue to see stress in our general office portfolio in the commercial bank, which totaled $1.1 billion at the end of the third quarter, this portfolio is concentrated in class B reposition bridge lines and is where we have seen deterioration in the past dues, criticized assets and charge offs. We are carrying an ACL on these lines of 712% compared to 4% on the overall general office portfolio. We have completed target reviews across our business segments to assess credits and remaining vigilant on our entire portfolio to identify areas of risks early on. We have historically performed well in challenging economic cycle due to our thoughtful approach to managing risk. Measured underwriting practices customer selection and long term relationship development. We believe our disciplined credit and risk management approach, we will continue to support us as we navigate the most recent economic cycle.

Craig Nix: Within the commercial bank segment, net charge-offs were concentrated in the general office and small-ticket equipment leasing portfolios. As we have been signaling for a number of quarters, we continue to see stress in our general office portfolio in the commercial bank, which totaled $1.1 billion at the end of Q3. This portfolio is concentrated in Class B repositioned bridge loans and is where we have seen deterioration in past-due, criticized assets, and charge-offs. We are carrying an ACL on these loans of 7.12% compared to 4% on the overall general office portfolio. We have completed target reviews across our business segments to assess credits and are remaining vigilant on our entire portfolio to identify areas of risk early on. We have historically performed well in challenging economic cycles due to our thoughtful approach to managing risk, measured underwriting practices, customer selection, and long-term relationship development.

Speaker 6: Within the commercial bank segment, net charge offs were concentrated in the general office and small picket equipment leasing portfolio.

Within the commercial bank segment net charge offs were concentrated in the general office and small ticket equipment leasing portfolios.

Craig Nix: We have a well-diverse 5-sleep with high capacity and efficiency, positioning our portfolio well for any future downturn in the economy. We are also focused on growing and expanding our fee-based business in areas such as payments and wealth management as frankly alluded to just a moment ago. We have been working recently to expand SBB's real-time payment network which will allow our clients to send and receive payments instantly. We are also working to offer instant settlement from merchants using payment facilitators and instant loan funding and disbursement including early wage access.

Speaker 6: We have been signaling for a number of quarters. We continue to see stress in our general office portfolio in the commercial bank, which totaled $1.1 billion at the end of the third quarter.

As we have been signaling for a number of quarters, we continue to see stress in our general office portfolio in the commercial bank, which totaled $1 1 billion at the end of the third quarter.

Speaker 6: This portfolio is concentrated and Class B reposition. Bridge ws is where we have seen deterioration and passed D criticized assets and charge.

This portfolio is concentrated in class B reposition bridge lines and is where we have seen deterioration in the past dues criticized assets and charge offs.

Speaker 6: We are carrying an ACL on these lines of 7% compared to 4% on the overall general office portfolio.

Craig Lockwood Nix: We are carrying an ACL on these lines of 7.12% compared to 4% on the overall general office portfolio, We have completed target reviews across our business segments to assess credits and are remaining vigilant on our entire portfolio to identify areas of risks early on, We have historically performed well in challenging economic cycles due to our thoughtful approach to managing risks, measured underwriting practices, customer selection and long term relationship development, We believe our disciplined credit and risk management approach will continue to support us as we navigate the most recent economic cycle. Our ACL increased three basis points to one 6%.

Kerry and ACL on these lines of 712% compared to 4% on the overall general office portfolio.

Craig Nix: We have completed target reviews across our business segments to assess credits and are remaining vigilant on our entire portfolio to identify areas of risk early on. We have historically performed well in challenging economic cycles due to our thoughtful approach to managing risk, measured underwriting practices, customer selection, and long-term relationship development.

Speaker 6: We have completed target reviews across our business segment to assess credits and are remaining vigilant on our entire portfolio to identify areas of risk early all.

We have completed target reviews across our business segments to assess credits and remaining vigilant on our entire portfolio to identify areas of risks early on.

Craig Nix: We are excited about the opportunity to accelerate SBB's capability and billing payment functions and are happy to be in a position to invest an opportunity such as these. Adjusted non-interest expense declined by 71 million dollars or by 5.9 percent sequentially. Over 85 percent of the reduction related to synergies arising from the SBB acquisition. We also saw the clients in our marketing cost which as you may recall from previous calls had been primarily associated with growing deposits in the direct bank.

Speaker 6: We have historically performed well in challenging economic cycle due to our thoughtful approach to managing risk, measured underwriting practices, customer selection and long-term relationship develop.

We have historically performed well in challenging economic cycle due to our thoughtful approach to managing risk.

Measured underwriting practices customer selection and long term relationship development.

Craig Nix: We believe our disciplined, credit, and risk management approach will continue to support us as we navigate the most recent economic cycle. Our ACL increased 3 basis points to 1.26%, driven by modest deterioration in the macroeconomic forecast and in the large balanced commercial real estate portfolio, which includes general office. These increases were partially offset by lower specific reserves and lower loan balances in the SVB segment. The ACL provided 2.0 times coverage of annualized quarterly net charge-offs and covered non-accrual loans 1.9 times. Moving to capital, our CET1 ratio decreased by 15 basis points sequentially, ending the quarter at 13.23%, well above our internal target range of 9% to 10%. Strong earnings generation added 50 basis points of capital during the quarter, offset by a decline in the loss-share benefit of 63 basis points.

Speaker 6: We believe our disciplined credit and risk management approach will continue to support us as we navigate the most recent economic cycle.

We believe our disciplined credit and risk management approach, we will continue to support us as we navigate the most recent economic cycle.

Speaker 6: Our APL increased three basis points to 1%.

Our ACL increased three basis points to one 6%.

Craig Lockwood Nix: Our ACL increased three basis points to 1.6% driven by modest deterioration in the macroeconomic forecast and in the large balance commercial real estate portfolio, which includes general office, these increases were partially offset by lower specific reserves and lower loan balances in the SVB segment the ACL provided two point times coverage of annualized quarterly net charge-offs and covered non accrual loans 1.9 times. Moving to capital our CET, one ratio decreased about 15 basis points sequentially ending the quarter at 13, 3% well above our internal target range of 9% to 10%. Strong earnings generation added 50 basis points of capital during the quarter offset by a decline in the loss share benefit of 63 basis points. We continue to operate at capital levels, well above our target ranges on all of our risk based capital ratios. Before closing with our fourth quarter outlook I want to comment on pending regulation, specifically around capital and long term debt. We continue to assess the proposed regulations and the potential impacts on our operations. I mentioned on the last call. We have established a team whose mandate is to develop plans to ensure operational ready readiness for these regulations. Although we don't have the precise impacts so our capital ratios at this time. We do know capital requirements will increase. On the long term debt front, we expect we will need to raise. Between eight and $11 billion to satisfy these requirements. While we have not traditionally leverage the debt capital markets to raise funding, we believe our strong and stable capital and liquidity positions will allow us to be flexible as we enter the market in 2024. As we mentioned last quarter, we will continue to pause share repurchases and we will consider reinstating them. When we submit our capital plan in 2024 and better understand the full impact of these proposed regulations. Our quarters on page 34 by discussing our fourth quarter outlook. We anticipate further declines in the global fund banking business.

Craig Nix: We grew deposits in this channel by 6.4 billion dollars during the quarter while spending less and advertising with efficiency led by new clients from previous periods continuing to increase balances. Strong expense management and discipline will remain a significant focus for us moving forward. Putting all of this together, we achieved an adjusted efficiency ratio of 46%, which was an improvement of approximately 4% over the prior quarter. Our third quarter adjusted PP&R, agreed by 8.6% over the linked quarter, given about the diversification and growth of our net revenue streams, as well as discipline and expense management.

Speaker 6: Driven by modest deterioration in the macroeconomic forecast in the large balanced commercial real estate portfolio which includes general.

Driven by modest deterioration in the macroeconomic forecast and in the large balance commercial real estate portfolio, which includes general office.

Speaker 6: These increases were partially offset by lower specific reserves and lower loan balances. In the SBV segment, the ACL provided two point ton coverage of annualized quarterly net charge-offs and covered nonaccrual loans one point nine.

These increases were partially offset by lower specific reserves and lower loan balances in the SBB segment. The ACL provided two times coverage of annualized quarterly net charge offs and covered non accrual loans one nine times.

Craig Lockwood Nix: Moving to capital our CET1 ratio decreased about 15 basis points sequentially ending the quarter at 13.23% well above our internal target range of 9% to 10%, strong earnings generation added 50 basis points of capital during the quarter, offset by a decline in the loss share benefit of 63 basis points, We continue to operate at capital levels well above our target ranges on all of our risk based capital ratios. Before closing with our fourth quarter outlook I want to comment on pending regulation, specifically around capital and long term debt. We continue to assess the proposed regulations and the potential impacts on our operations. I mentioned on the last call. We have established a team whose mandate is to develop plans to ensure operational ready readiness for these regulations. Although we don't have the precise impacts so our capital ratios at this time. We do know capital requirements will increase. On the long term debt front, we expect we will need to raise. Between eight and $11 billion to satisfy these requirements. While we have not traditionally leverage the debt capital markets to raise funding, we believe our strong and stable capital and liquidity positions will allow us to be flexible as we enter the market in 2024. As we mentioned last quarter, we will continue to pause share repurchases and we will consider reinstating them. When we submit our capital plan in 2024 and better understand the full impact of these proposed regulations. Our quarters on page 34 by discussing our fourth quarter outlook. We anticipate further declines in the global fund banking business.

Speaker 6: Moving the capital. Our CD Q1 ratio decreased up 15 basis points sequentally, end the quarter at 13%, well above our internal target range of nine to 10%.

Moving to capital our CET, one ratio decreased about 15 basis points sequentially ending the quarter at 13, 3% well above our internal target range of 9% to 10%.

Speaker 6: Strong earnings generation added 50 basis points of capital during the quarter, offset by decline in the law share benefit of 63 BIS.

Strong earnings generation added 50 basis points of capital during the quarter offset by a decline in the loss share benefit of 63 basis points.

Craig Nix: Now moving to the balance sheet, loans were up by $187 million over the second quarter. The General and Commercial Banking segments grew by approximately $1 billion each while the SBB segment experienced a decline of just under $2 billion. When the General Bank growth was concentrated in small business and commercial loans in our branch network, we were excited to continue to build long-term customer relationships in the General Bank and are pleased to see our investment in digital, call center, and branch technology over the past several years pay off.

Craig Nix: We continue to operate at capital levels well above our target ranges on all of our risk-based capital ratios. Before closing with our Q4 outlook, I want to comment on pending regulation, specifically around capital and long-term debt. We continue to assess the proposed regulations and the potential impacts on our operations. As I mentioned on the last call, we have established a team whose mandate is to develop plans to ensure operational readiness for these regulations. Although we don't have the precise impacts to our capital ratios at this time, we do know capital requirements will increase. On the long-term debt front, we expect we will need to raise between $8 and 11 billion to satisfy these requirements.

Speaker 6: We continue to operate at capital levels well above our target ranges on all of our risk-based capital ratio.

We continue to operate at capital levels, well above our target ranges on all of our risk based capital ratios.

Craig Lockwood Nix: Before closing with our fourth quarter outlook I want to comment on pending regulation, specifically around capital and long term debt. We continue to assess the proposed regulations and the potential impacts on our operations as I mentioned on the last call, We have established a team whose mandate is to develop plans to ensure operational readiness for these regulations. Although we don't have the precise impacts of our capital ratios at this time, We do know capital requirements will increase. On the long term debt front, we expect we will need to raise. Between eight and $11 billion to satisfy these requirements. While we have not traditionally leverage the debt capital markets to raise funding, we believe our strong and stable capital and liquidity positions will allow us to be flexible as we enter the market in 2024. As we mentioned last quarter, we will continue to pause share repurchases and we will consider reinstating them. When we submit our capital plan in 2024 and better understand the full impact of these proposed regulations. Our quarters on page 34 by discussing our fourth quarter outlook. We anticipate further declines in the global fund banking business.

Speaker 6: Before closing with our fourth quarter outlook, I want to comment on pending regulation, specifically around capital and long-term debt.

Before closing with our fourth quarter outlook I want to comment on pending regulation, specifically around capital and long term debt.

Speaker 6: We continue to assess the proposed regulations and the potential impacts on our operations.

We continue to assess the proposed regulations and the potential impacts on our operations.

Speaker 6: As I mentioned on the last call, we have established a team whose mandate is to develop plans to ensure operational ready readiness for these regulations.

I mentioned on the last call. We have established a team whose mandate is to develop plans to ensure operational ready readiness for these regulations.

Craig Nix: Further, our product breadth has benefited from the CIT and SBB transactions providing us with better ability to fulfill products based on the preferences of our clients and customers. In the Commercial Bank segment, close was driven by strong reduction in our industry verticals, including energy, healthcare, and TMT, as well as seasonal increases in factoring as clients built out inventory ahead of the holiday season. While origination volumes remained strong in our industry verticals, they were down from the sequential quarter, but the balance sheet benefited from the decline in prepayments.

Speaker 6: Although we don't have the precise impact to our capital ratios at this time we do no capital.

Although we don't have the precise impacts so our capital ratios at this time.

Craig Lockwood Nix: On the long term debt front, we expect we will need to raise between 8 and $11 billion dollars to satisfy these requirements, while we have not traditionally leveraged the debt capital markets to raise funding, we believe our strong and stable capital and liquidity positions will allow us to be flexible as we enter the market in 2024. As we mentioned last quarter, we will continue to pause share repurchases and we will consider reinstating them. When we submit our capital plan in 2024 and better understand the full impact of these proposed regulations. Our quarters on page 34 by discussing our fourth quarter outlook. We anticipate further declines in the global fund banking business.

Craig Lockwood Nix: On the long term debt front, we expect we will need to raise between 8 and $11 billion dollars to satisfy these requirements, while we have not traditionally leveraged the debt capital markets to raise funding, we believe our strong and stable capital and liquidity positions will allow us to be flexible as we enter the market in 2024, as we mentioned last quarter, we will continue to pause share repurchases and we'll consider reinstating them when we submit our capital plan in 2024 and better understand the full impact of these proposed regulations.

Craig Lockwood Nix: On the long term debt front, we expect we will need to raise between 8 and $11 billion dollars to satisfy these requirements,

We do know capital requirements will increase.

Speaker 6: On the long term debt front, we expect we will needet to raise.

On the long term debt front, we expect we will need to raise.

Speaker 6: Between eight and $11 billion to satisfy these requiredments.

Between eight and $11 billion to satisfy these requirements.

Craig Lockwood Nix: While we have not traditionally leveraged the debt capital markets to raise funding, we believe our strong and stable capital and liquidity positions will allow us to be flexible as we enter the market in 2024, as we mentioned last quarter, we will continue to pause share repurchases and we'll consider reinstating them when we submit our capital plan in 2024 and better understand the full impact of these proposed regulations.

Craig Nix: While we have not traditionally leveraged the debt capital markets to raise funding, we believe our strong and stable capital and liquidity positions will allow us to be flexible as we enter the market in 2024. As we mentioned last quarter, we will continue to pause share repurchases and will consider reinstating them when we submit our capital plan in 2024 and better understand the full impacts of these proposed regulations. I will close on page 34 by discussing our Q4 outlook. We anticipate further declines in the Global Fund Banking business from lower levels of venture capital investment, lower capital deployment, and the final stages of intentional rundown of select portfolios that were located internationally at the time of the merger. We also anticipate a modest decline in our tech and life sciences business as marketing activity continues to be depressed.

Speaker 6: While we have not traditionally leveraged the debt capital marke to raise funding we believe our strongest stable capital and liquidity positions will allow us to be flexible as we enter the market in 2020 four.

While we have not traditionally leverage the debt capital markets to raise funding, we believe our strong and stable capital and liquidity positions will allow us to be flexible as we enter the market in 2024.

Craig Lockwood Nix: As we mentioned last quarter, we will continue to pause share repurchases and we'll consider reinstating them when we submit our capital plan in 2024 and better understand the full impact of these proposed regulations, our quarters on page 34 by discussing our fourth quarter outlook. We anticipate further declines in the global fund banking business. From lower levels of venture capital investment lower capital deployment in the final stages of intense. Intentional rundown of select portfolios that were located internationally at the time of the merger. We also anticipate a modest decline in our tech and life Sciences. Life Sciences business as marketing activity continues to be depressed. We expect SBB loan balances to be in the mid $50 billion range by year end down from 57 billion at the end of the third quarter. We expect that SBB declines will largely be offset by mid single digit percentage growth in the general Bank segment, driven by continued momentum in our branch network as well as growth in our equipment finance line of business. Despite clients feeling pressure from the elevated rate environment, we still have great momentum in our branch network, where we continue to emphasize full banking relationship. We have invested significantly in our equipment finance sales platform and those efforts are continuing to pay off with increased efficiency and balance sheet growth. We do expect slight loan declines this quarter in our industry verticals, mainly related to timing and some of the larger loans in our pipeline pull through pull through in the third quarter and we expect some payoffs to be pushed through to the fourth quarter.

Speaker 6: As we mentioned last quarter, we will continue to pause sherry repurchases and we'will consider reinstating them when we submit our capital plan in 2024 and better understand the full impacts of these proposed regulations.

As we mentioned last quarter, we will continue to pause share repurchases and we will consider reinstating them. When we submit our capital plan in 2024 and better understand the full impact of these proposed regulations.

Craig Nix: The decline in SBB segment lines was due to three major factors. First, approximately half of the decline was the result of the expected wind down of our foreign exposure. We call that we did not purchase any foreign entities as part of the acquisition, so we have been in the process of exiting these markets. Second, lower loan fundings as the private market investment landscape continues to face headwinds resulting in a difficult exit environment, lower fund raising numbers, and fewer details.

Craig Nix: Third, expected repayments. While foreign exposure had a significant impact on our third quarter loan balances, we do not anticipate it being a meaningful issue going forward as a majority of the exposure has been unwound at this point. We are also encouraged by trends in the technology and self-care banking business. This business, a client attrition early on as a result of the March crisis. However, we have been pleased to see both near-returning business come back to this group, resulting from the initiatives we have undertaken since the acquisition.

Craig Lockwood Nix: Our report is on page 34 by discussing our fourth quarter outlook, We anticipate further declines in the global fund banking business, from lower levels of venture capital investment, lower capital deployment and the final stages of intentional rundown of select portfolios that were located internationally at the time of the merger, We also anticipate a modest decline in our tech and life Sciences business as marketing activity continues to be depressed. We expect SBB loan balances to be in the mid $50 billion range by year end down from 57 billion at the end of the third quarter. We expect that SBB declines will largely be offset by mid single digit percentage growth in the general Bank segment, driven by continued momentum in our branch network as well as growth in our equipment finance line of business. Despite clients feeling pressure from the elevated rate environment, we still have great momentum in our branch network, where we continue to emphasize full banking relationship. We have invested significantly in our equipment finance sales platform and those efforts are continuing to pay off with increased efficiency and balance sheet growth. We do expect slight loan declines this quarter in our industry verticals, mainly related to timing and some of the larger loans in our pipeline pull through pull through in the third quarter and we expect some payoffs to be pushed through to the fourth quarter.

Speaker 6: I will quhotois on Page 34 by discussing our fourth quarter outlook.

Our quarters on page 34 by discussing our fourth quarter outlook.

Speaker 6: We anticipate further declines in the global fund banking business.

We anticipate further declines in the global fund banking business.

Speaker 6: From lower levels of venture capital investment, lower capital deployment and the final stages of intentional rundown of select portfolios that wererote located internationally at the time of the merder.

From lower levels of venture capital investment lower capital deployment in the final stages of intense.

Intentional rundown of select portfolios that were located internationally at the time of the merger.

Speaker 6: We also anticipate a modest decline in our tech and life sciences life sciences business, as marketing activity continues to be depressed. As a result, we expect SB loan balancesto the in the mid $5 billion range by year end, downound from 57 billion at the end of the third quarter.

We also anticipate a modest decline in our tech and life Sciences.

Life Sciences business as marketing activity continues to be depressed.

Craig Lockwood Nix: As a result, we expect SVB loan balances to be in the mid $50 billion dollars range by year end, down from $57 billion at the end of the third quarter, We expect that SVB declines will largely be offset by mid single digit percentage growth in the general Bank segment, driven by continued momentum in our branch network as well as growth in our equipment finance line of business. Despite clients feeling pressure from the elevated rate environment, we still have great momentum in our branch network, where we continue to emphasize full banking relationship. We have invested significantly in our equipment finance sales platform and those efforts are continuing to pay off with increased efficiency and balance sheet growth. We do expect slight loan declines this quarter in our industry verticals, mainly related to timing and some of the larger loans in our pipeline pull through pull through in the third quarter and we expect some payoffs to be pushed through to the fourth quarter.

Craig Nix: As a result, we expect SVB loan balances to be in the mid-$50 billion range by year-end, down from $57 billion at the end of the third quarter. We expect that SVB declines will largely be offset by mid-single-digit percentage growth in the general bank segment, driven by continued momentum in our branch network, as well as growth in our equipment finance line of business. Despite clients feeling pressure from the elevated rate environment, we still have great momentum in our branch network where we continue to emphasize full banking relationships. We have invested significantly in our equipment finance sales platform, and those efforts are continuing to pay off with increased efficiency and balance sheet growth.

We expect SBB loan balances to be in the mid $50 billion range by year end down from 57 billion at the end of the third quarter.

Speaker 6: We expect that SB declines will largely be offset by mid-single-digit percentage growth in the general bank segment, driven by continued momentum in our branch network as well as growth in our equipment finance line of business.

We expect that SBB declines will largely be offset by mid single digit percentage growth in the general Bank segment, driven by continued momentum in our branch network as well as growth in our equipment finance line of business.

Craig Lockwood Nix: Despite clients feeling pressure from the elevated rate environment, we still have great momentum in our branch network, where we continue to emphasize full banking relationship, we have invested significantly in our equipment finance sales platform and those efforts are continuing to pay off with increased efficiency and balance sheet growth, We do expect slight loan declines this quarter in our industry verticals, mainly related to timing and some of the larger loans in our pipeline pull through, pull through in the third quarter and we expect some payoffs to be pushed through to the fourth quarter. On deposits, we expect a low to mid single digit percentage point decline in the fourth quarter,

Speaker 6: Despite clients feeling pressure from the elevated rate environment, we still have great momentum in our branch network where we continue to emphasize full banking relationations.

Despite clients feeling pressure from the elevated rate environment, we still have great momentum in our branch network, where we continue to emphasize full banking relationship.

Speaker 6: We have invested significantly in our equipment finance sales platform, and those efforts are continuing to pay off with increased efficiency and balance sheet growth.

Craig Nix: The deposits increased by $5.1 billion over the link quarter, driven by $6.4 billion of growth in our direct bank. The direct bank now accounts for $35 billion, 24% of our deposit base. While this channel is higher cost compared to the traditional branch network, 92% of the deposits are insured and the increase in imbalance has allowed us to reduce our wholesale funding reliance, as we were able to pay off more expenses with FHLB debt in the third quarter.

We have invested significantly in our equipment finance sales platform and those efforts are continuing to pay off with increased efficiency and balance sheet growth.

Craig Nix: We do expect slight loan declines this quarter in our industry verticals, mainly related to timing, as some of the larger loans in our pipeline pull through in Q3, and we expect some payoffs to be pushed through to Q4. On deposits, we expect a low to mid-single-digit percentage point decline in Q4, primarily related to a decline in SVB deposits. We had sizable deposit growth in Q2 and Q3 and were able to retire more costly short-term FHLB borrowings, which coupled with low expected loan growth reduces our need to raise deposit balances at the same rates we did during the last quarters. While we're encouraged by the stabilization of SVB deposits since April, we anticipate that SVB clients will continue to experience a level of cash burn that exceeds funds sourced from fundraising.

Speaker 6: We do expect flight loan declines this quarter and our industry vertical mainly related to timing and some of the larger loans in our pipeline pull through, pull through in the third quarter and we expect some payoffs to be pushed through the fourth quarter.

We do expect slight loan declines this quarter in our industry verticals, mainly related to timing and some of the larger loans in our pipeline pull through pull through in the third quarter and we expect some payoffs to be pushed through to the fourth quarter.

Speaker 6: On deposits, we expect a low to mid single digit percentage point decline in the fourth quarter, primarily related to a decline in's B B deposits. We had sizable deposit growth in the second third quarters and were Re able to retire more costly short term F H, L B borrowings which, coupled with low expected loan growth, reduces our need to raise deposit ballot at the same rates we did during the last quarter.

On deposits, we expect a low to mid single digit percentage point decline in the fourth quarter.

Craig Lockwood Nix: On deposits, we expect a low to mid single digit percentage point decline in the fourth quarter, primarily related to a decline in SVB deposits, we had sizable deposit growth in the second third quarters and were able to retire more costly short term FHLB borrowings, which coupled with low expected loan growth reduces our need to raise deposit balances at the same rates we did during the last quarters. <unk>. While we're encouraged by the stabilization of SBB deposits since April we anticipate that SBB clients will continue to experience a level of cash burn. Seed funds source from fund raising it's worth noting that we expect broader market VC funding to remain subdued in the range of 30% to 35 billion for the fourth quarter of 2023, which is significantly down from prior years and in line with the muted activity we've seen throughout the first three quarters of 2023. Consequently, we are projecting an approximate $5 billion decline in SPD SBB deposits in the fourth quarter. This estimate could be conservative as the FCB team is laser focused on obtaining and winning back balances, which could partially offset some natural run off. Our interest rate forecast, followed the implied forward curve. The forecast one more quarter point rate hike in the fourth quarter with the fed funds rate ending the year at 575%. While we expect the absolute level of margin and net interest income to remain elevated we do expect them to begin to decline in the coming quarters. We expect this to occur as the accretion from some of the shoulder portfolios, we acquired such as global fund banking fully accrued and we experienced continued pressure. On deposit pricing. The impact of lower accretion and higher deposit costs will be partially offset by higher loan and investment yields. We anticipate our full cycle beta increasing to approximately 43% up from our previous estimate of 39% primarily due to the higher absolute data at this point in the rate cycle as well as the strong growth we've experienced in the direct bank. On adjusted Noninterest income after a strong third quarter, we see a slight retreat to the $430 million to $450 million range, primarily due to the lagged impact of lower SCB off balance sheet funds. And less overall innovation economy market activity, leading to lower client investment fees international fees and other service charges as well as slightly lower net rental income on operating leases due to higher expected maintenance expense in the fourth quarter. We expect continued growth in our wealth and merchant fee income lines of business.

Craig Nix: We are pleased that the deposit growth we have experienced allowed us to work our loan to deposit ratio down to 91 percent from almost 99 percent at the time of the acquisition. Moving to credit quality, our metric remains within our risk appetite that we continue to see deterioration and a few portfolios that we are diligently monitoring to quickly identify and address problems that may arise. The non-accrual loan ratio decreased by two basis points to 0.68 percent, the total non-accrual loan is decreasing moderately to 899 million dollars.

Primarily related to a decline in SBB deposits, we had sizable deposit growth in the second third quarters and were able to retire more costly short term <unk> borrowings, which coupled with low expected loan growth reduces our need to raise deposit balances at the same rates, we did during the last quarter.

<unk>.

Speaker 6: While we're encouraged by the stabilization of's B B deposits since April , we anticipate that's B B clients will continue to experience a level of cash burn that exceeds fund source from fundraising. It's worth noting that we expect broader market D C funding to remain subdued in the range of 30 30- five billion for fourth quarter of 2023, which is significantly down from prior years and in line with the muted activity we have seen throughout the first three quarters of 2023.

Craig Lockwood Nix: While we're encouraged by the stabilization of SVB deposits since April, we anticipate that SVB clients will continue to experience a level of cash burn that exceeds funds source from fund raising, it's worth noting that we expect broader market VC funding to remain subdued in the range of 30% to 35 billion for the fourth quarter of 2023, which is significantly down from prior years and in line with the muted activity we've seen throughout the first three quarters of 2023. Consequently, we are projecting an approximate $5 billion decline in SPD SBB deposits in the fourth quarter. This estimate could be conservative as the FCB team is laser focused on obtaining and winning back balances, which could partially offset some natural run off. Our interest rate forecast, followed the implied forward curve. The forecast one more quarter point rate hike in the fourth quarter with the fed funds rate ending the year at 575%. While we expect the absolute level of margin and net interest income to remain elevated we do expect them to begin to decline in the coming quarters. We expect this to occur as the accretion from some of the shoulder portfolios, we acquired such as global fund banking fully accrued and we experienced continued pressure. On deposit pricing. The impact of lower accretion and higher deposit costs will be partially offset by higher loan and investment yields. We anticipate our full cycle beta increasing to approximately 43% up from our previous estimate of 39% primarily due to the higher absolute data at this point in the rate cycle as well as the strong growth we've experienced in the direct bank. On adjusted Noninterest income after a strong third quarter, we see a slight retreat to the $430 million to $450 million range, primarily due to the lagged impact of lower SCB off balance sheet funds. And less overall innovation economy market activity, leading to lower client investment fees international fees and other service charges as well as slightly lower net rental income on operating leases due to higher expected maintenance expense in the fourth quarter. We expect continued growth in our wealth and merchant fee income lines of business.

While we're encouraged by the stabilization of SBB deposits since April we anticipate that SBB clients will continue to experience a level of cash burn.

Seed funds source from fund raising it's worth noting that we expect broader market VC funding to remain subdued in the range of 30% to 35 billion for the fourth quarter of 2023, which is significantly down from prior years and in line with the muted activity we've seen throughout the first three quarters of 2023.

Craig Nix: It's worth noting that we expect broader market VC funding to remain subdued in the range of $30 to 35 billion for Q4 2023, which is significantly down from prior years and in line with the muted activity we have seen throughout Q1, Q2, and Q3 of 2023. Consequently, we're projecting an approximate $5 billion decline in SVB deposits in the fourth quarter. This estimate could be conservative as the SVB team is laser-focused on obtaining and winning back balances, which could partially offset some natural runoff. Our interest rate forecast follows the implied forward curve. We forecast one more quarter-point rate hike in the fourth quarter, with the Fed funds rate ending the year at 5.75%. While we expect the absolute level of margin and net interest income to remain elevated, we do expect them to begin to decline in the coming quarters.

Craig Nix: The decrease is driven by net charge offs outpatient loans migrating into non-accrual status during the quarter. The net charge off ratio increased by six basis points during the quarter to 53 basis points. Of the 176 million and net charge offs during the quarter, 100 million was in the SVB segment of which 56 million was previously reserved. With the SVB segment, net charge offs were concentrated and investor-dependent loans, the charge offs were in 88 million and the third quarter compared to 49 million last quarter.

Speaker 6: Consequently, we're projecting an approximate $5 billion decline in's B's B deposits in the fourth quarter. This estimate could be conservative as the B D team is laser focused on obtaining and winning back balances which could partially offset some natural runoff.

Consequently, we are projecting an approximate $5 billion decline in SPD SBB deposits in the fourth quarter. This estimate could be conservative as the FCB team is laser focused on obtaining and winning back balances, which could partially offset some natural run off.

Craig Lockwood Nix: Consequently we are projecting an approximate $5 billion decline in SVB deposits in the fourth quarter, this estimate could be conservative as the SVB team is laser focused on obtaining and winning back balances, which could partially offset some natural run off. Our interest rate forecast, followed the implied forward curve. The forecast one more quarter point rate hike in the fourth quarter with the fed funds rate ending the year at 575%. While we expect the absolute level of margin and net interest income to remain elevated we do expect them to begin to decline in the coming quarters. We expect this to occur as the accretion from some of the shoulder portfolios, we acquired such as global fund banking fully accrued and we experienced continued pressure. On deposit pricing. The impact of lower accretion and higher deposit costs will be partially offset by higher loan and investment yields. We anticipate our full cycle beta increasing to approximately 43% up from our previous estimate of 39% primarily due to the higher absolute data at this point in the rate cycle as well as the strong growth we've experienced in the direct bank. On adjusted Noninterest income after a strong third quarter, we see a slight retreat to the $430 million to $450 million range, primarily due to the lagged impact of lower SCB off balance sheet funds. And less overall innovation economy market activity, leading to lower client investment fees international fees and other service charges as well as slightly lower net rental income on operating leases due to higher expected maintenance expense in the fourth quarter. We expect continued growth in our wealth and merchant fee income lines of business.

Speaker 6: Our interest rate forecasts followalways be implied for curve.

Craig Lockwood Nix: Our interest rate forecast, followed the implied forward curve, the forecast one more quarter point rate hike in the fourth quarter with the fed funds rate ending the year at 5.75%, while we expect the absolute level of margin and net interest income to remain elevated, we do expect them to begin to decline in the coming quarters, We expect this to occur as the accretion from some of the shorter portfolios we acquired, such as global fund banking, fully accrued and we experienced continued pressure on deposit pricing. The impact of lower accretion and higher deposit costs will be partially offset by higher loan and investment yields. We anticipate our full cycle beta increasing to approximately 43% up from our previous estimate of 39% primarily due to the higher absolute data at this point in the rate cycle as well as the strong growth we've experienced in the direct bank. On adjusted Noninterest income after a strong third quarter, we see a slight retreat to the $430 million to $450 million range, primarily due to the lagged impact of lower SCB off balance sheet funds. And less overall innovation economy market activity, leading to lower client investment fees international fees and other service charges as well as slightly lower net rental income on operating leases due to higher expected maintenance expense in the fourth quarter. We expect continued growth in our wealth and merchant fee income lines of business.

Our interest rate forecast, followed the implied forward curve.

Speaker 6: We forecast one more quarter point rate hiike in the fourth quarter with a Fed Fed funds rate the the year at 6%.

Craig Nix: At quarter end, this portfolio total of $5.7 billion or 10 percent of SVB segment loans with 1.7 billion and early stage companies, the highest risk category representing 3 percent of SVB segment loans. We are carrying an ACL on the investor-dependent portfolio of $250 million or 4.42 percent of total loan and a purchase accounting discount of 288 million or 5.09 percent, equating to 538 million or 9.51 percent loss of door being capacity on these loans.

The forecast one more quarter point rate hike in the fourth quarter with the fed funds rate ending the year at 575%.

Speaker 6: While we expect the absolute level of margin and net interest income to remain elevated, we do expect them to begin to decline in the coming quarters. We expect this to occur as the accretion from some of the shorter portfolios we acquired, such as global fund banking, fully accrete and we experience continued pressure on deposit price.

While we expect the absolute level of margin and net interest income to remain elevated we do expect them to begin to decline in the coming quarters. We expect this to occur as the accretion from some of the shoulder portfolios, we acquired such as global fund banking fully accrued and we experienced continued pressure.

Craig Nix: We expect this to occur as the accretion from some of the shorter portfolios we acquired, such as Global Fund Banking, fully accretes, and we experience continued pressure on deposit pricing. The impact of lower accretion and higher deposit costs will be partially offset by higher loan and investment yields. We anticipate our full cycle beta increasing to approximately 43%, up from our previous estimate of 39%, primarily due to the higher absolute betas at this point in the rate cycle, as well as the strong growth we've experienced in the direct bank.

On deposit pricing.

Speaker 6: The impact of lower accretion and higher deposit costs will be partially offset by higher loan and investment.

The impact of lower accretion and higher deposit costs will be partially offset by higher loan and investment yields.

Craig Lockwood Nix: The impact of lower accretion and higher deposit costs will be partially offset by higher loan and investment yields, We anticipate our full cycle beta increasing to approximately 43% up from our previous estimate of 39% primarily due to the higher absolute data at this point in the rate cycle, as well as the strong growth we've experienced in the direct bank. On adjusted Noninterest income after a strong third quarter, we see a slight retreat to the $430 million to $450 million range, primarily due to the lagged impact of lower SCB off balance sheet funds. And less overall innovation economy market activity, leading to lower client investment fees international fees and other service charges as well as slightly lower net rental income on operating leases due to higher expected maintenance expense in the fourth quarter. We expect continued growth in our wealth and merchant fee income lines of business.

Speaker 6: We anticipate our full cycle beta increasing to approximately 43%, up from our previous estimate of 39%, primarily due to the higher absolute beas at this point in the rate cycle, as well as the strong growth we've experienced in the direct bank.

We anticipate our full cycle beta increasing to approximately 43% up from our previous estimate of 39% primarily due to the higher absolute data at this point in the rate cycle as well as the strong growth we've experienced in the direct bank.

Craig Nix: Within the commercial bank segment, net charge offs were concentrated in the general office and small ticket equipment leasing portfolios. As we have been signaling for a number of quarters, we continue to see stress and our general office portfolio in the commercial bank, which totaled $1.1 billion at the end of the third quarter. This portfolio is concentrated in class B reposition bridge lines and is where we have seen deterioration in the past due to criticize assets and charge offs.

Craig Nix: On adjusted non-interest income, after a strong third quarter, we see a slight retreat to the $430 million to $450 million range, primarily due to the lagged impact of lower SVB off-balance sheet funds and less overall innovation economy market activity, leading to lower client investment fees, international fees, and other service charges, as well as slightly lower net rental income on operating wages due to higher expected maintenance expense in the fourth quarter. We expect continued growth in our wealth and merchant fee income lines of business. On adjusted non-interest expense, we expect to be flat to slightly down compared to the third quarter. Continued acquisition synergies will be partially offset by slightly higher expected consulting and project costs related to strategic priorities, as well as our continued investment in large bank programs and initiatives.

Speaker 6: On adjusted noninterest income, after a strong third quarter, we see a slight retreat to the 43 million to $45 million range, primarily due to the laged impact of lower SB off balance sheet fund.

On adjusted Noninterest income after a strong third quarter, we see a slight retreat to the $430 million to $450 million range, primarily due to the lagged impact of lower SCB off balance sheet funds.

Craig Lockwood Nix: On adjusted Non-interest income, after a strong third quarter, we see a slight retreat to the $430 million to $450 million dollars range, primarily due to the lagged impact of lower SVB off balance sheet funds and less overall innovation economy market activity, leading to lower client investment fees, international fees and other service charges as well as slightly lower net rental income on operating leases due to higher expected maintenance expense in the fourth quarter, we expect continued growth in our wealth and merchant fee income lines of business. On adjusted noninterest expense.

Speaker 6: And less overall innovation economy market activity, leading to lower client investment fees, international fees and other service charges, as well as slightly lower net renal income on operating leaces due to higher expected maintenance expense in the fourth quarter.

And less overall innovation economy market activity, leading to lower client investment fees international fees and other service charges as well as slightly lower net rental income on operating leases due to higher expected maintenance expense in the fourth quarter.

Craig Nix: We are carrying an ACL on these lines of 7.12 percent compared to 4 percent on the overall general office portfolio. We have completed target reviews across our business segment to assess credit and our remaining vigilant on our entire portfolio to identify areas of risk early on. We have historically performed well in challenging economic cycles due to our thoughtful approach to managing risk, measure underwriting practices, customer selection, and long term relationship development.

Speaker 6: We expect continued growth in our wealth and merchgencyfee income lines of business.

We expect continued growth in our wealth and merchant fee income lines of business.

Okay.

Speaker 6: When adjusted noninterest exexpense, we expect to be slap to slightly down compared to the third quarter. Continued acquisition synergies will be partially offset by slightly higher expected consulting and project costs related to strategic priorities, as well as our continued investment in large bank programs and initiat.iative.

On adjusted noninterest expense.

Craig Lockwood Nix: On adjusted non-interest expense, We expect to be flat to slightly down compared to the third quarter, continued acquisition synergies will be partially offset by slightly higher expected consulting and project costs related to strategic priorities as well as our continued investment in large bank programs and initiatives, some of these professional consulting and project costs were lower in the second third quarters, as we assessed and re-prioritized areas of focus heading into 2024. We anticipate by year end that we will be more than halfway to our 25% to 30% synergies go on SCB to $6 billion pre merger expense base. We anticipate materially all synergies to be reflected in the run rate by the end of 2024. It's worth noting we do expect a one time $30 million FDIC assessment to be recognized in the fourth quarter and will be paid out over eight quarters, which is not included in the adjusted total the timing of this will be dependent upon when the rule is finalized meaning it could potentially move into <unk>. 24. We expect annualized net charge offs in the range of 50 to 60 basis points in the fourth quarter at or above the level, we saw in the third quarter. This would bring our full year net charge off ratio to the mid 40 basis points range. This is an upward revision to our previous estimate and is primarily the result of higher than expected charge offs. In our Investor dependent General office CRE in the commercial bank and small ticket equipment leasing portfolios. In closing we are aware that we are in a time of change and dislocation in the banking industry. We believe we are well positioned to successfully navigate macroeconomic headwinds as well as the changing regulatory landscape. As we have done so many times before. These changes present us with opportunities and we are committed to serving our clients through all market conditions, while continuing to deliver long term value to our shareholders. Our solid capital and liquidity levels, not only position us well for changes, resulting from the proposed changes in regulatory requirements, but also provide us flexibility to be proactive instead of reactive during this uncertain backdrop. We are confident in. In the long term outlook for our business. Our business flows are good in our risk management practices are strong and we are. Focused on maintaining expense discipline, while continue continuing to invest in the future. We have an established track record of successful integration efforts, which we look forward to continuing with SBB. I will now turn it over to the operator for instructions for the question and answer portion of the call.

We expect to be flat to slightly down compared to the third quarter continued acquisition synergies will be partially offset by slightly higher expected consulting and project costs related to strategic priorities as well as our continued investment in large bank programs and initiatives.

Craig Nix: We believe our disciplines, credit, and risk management approach will continue to support us as we navigate the most recent economic cycle. Our ACL increased three basis points to 1.26 percent, driven by modest deterioration in the macroeconomic forecast and in the large balance commercial real estate portfolios, which includes general office. These increases were partially offset by lower specific reserves and lower loan balances in the SBB segment. The ACL provided two point times coverage of annualized quarterly net charge-off and covered non-a-cooled loans 1.9 times.

Craig Nix: Some of these professional consulting and project costs were lower in Q2 and Q3 as we assessed and reprioritized areas of focus heading into 2024. We anticipate by year-end that we will be more than halfway to our 25% to 30% synergies goal on SVB's $2.6 billion pre-merger expense base. We anticipate materially all synergies to be reflected in the run rate by the end of 2024. It's worth noting, we do expect a one-time $30 million FDIC assessment to be recognized in Q4 that will be paid out over eight quarters, which is not included in the adjusted total. The timing of this will be dependent upon when the rule is finalized, meaning it could potentially move into 2024.

Speaker 6: Some of these professional consulting and project calls were lower in the second third quarters as we assessed and reprioritized areas of focus heading into 2020 four.

Some of these professional consulting and project costs were lower in the second third quarters, as we assessed and re prioritized areas of focus heading into 2024.

Craig Lockwood Nix: We anticipate by year end that we will be more than halfway to our 25% to 30% synergies go on SVB $2.6 billion dollars pre-merger expense base, We anticipate materially all synergies to be reflected in the run rate by the end of 2024, it's worth noting we do expect a one time $30 million FDIC assessment to be recognized in the fourth quarter and will be paid out over 8 quarters, which is not included in the adjusted total, the timing of this will be dependent upon when the rule is finalized meaning it could potentially move into 2024. We expect annualized net charge offs in the range of 50 to 60 basis points in the fourth quarter at or above the level, we saw in the third quarter. This would bring our full year net charge off ratio to the mid 40 basis points range. This is an upward revision to our previous estimate and is primarily the result of higher than expected charge offs. In our Investor dependent General office CRE in the commercial bank and small ticket equipment leasing portfolios. In closing we are aware that we are in a time of change and dislocation in the banking industry. We believe we are well positioned to successfully navigate macroeconomic headwinds as well as the changing regulatory landscape. As we have done so many times before. These changes present us with opportunities and we are committed to serving our clients through all market conditions, while continuing to deliver long term value to our shareholders. Our solid capital and liquidity levels, not only position us well for changes, resulting from the proposed changes in regulatory requirements, but also provide us flexibility to be proactive instead of reactive during this uncertain backdrop. We are confident in. In the long term outlook for our business. Our business flows are good in our risk management practices are strong and we are. Focused on maintaining expense discipline, while continue continuing to invest in the future. We have an established track record of successful integration efforts, which we look forward to continuing with SBB. I will now turn it over to the operator for instructions for the question and answer portion of the call.

Speaker 6: We anticipate by year-end that we will be more than halfway to our 25 to 30% synergies goal on SVB $2.6 billion. three merger expense base.

We anticipate by year end that we will be more than halfway to our 25% to 30% synergies go on SCB to $6 billion pre merger expense base.

Speaker 6: We anticipate in materially all synergies to be reflected in the run rate by the end of 2020 four.

We anticipate materially all synergies to be reflected in the run rate by the end of 2024.

Speaker 6: If worth moing. We do expect a one time $3 million F B I, C assessment to be recognized in the fourth quarter. That will be paid out over eight quarters, which is not included in the adjusted total. The timing of this will be dependent upon when the rule is finalized, meaning it could potentially move in the 2020 four.

It's worth noting we do expect a one time $30 million FDIC assessment to be recognized in the fourth quarter and will be paid out over eight quarters, which is not included in the adjusted total the timing of this will be dependent upon when the rule is finalized meaning it could potentially move into <unk>.

Craig Nix: Moving to capital, our CNP-1 ratio decreased by 15 basis points sequentially ending the quarter at 13.23 percent, well above our internal target range of 9 to 10 percent. Strong earnings generation added 50 basis points of capital during the quarter all set by a decline in the law-share benefit of 63 basis points. We continue to operate at capital levels well above our target ranges on all of our risk-based capital ratios.

Craig Lockwood Nix: We expect annualized net charge-offs, in the range of 50 to 60 basis points in the fourth quarter, at or above the level we saw in the third quarter, this would bring the full year net charge-off ratio to the mid 40 basis points range, this is an upward revision to our previous estimate and is primarily the result of higher than expected charge-offs in our Investor dependent General office CRE in the commercial bank and small ticket equipment leasing portfolios. In closing we are aware that we are in a time of change and dislocation in the banking industry. We believe we are well positioned to successfully navigate macroeconomic headwinds as well as the changing regulatory landscape. As we have done so many times before. These changes present us with opportunities and we are committed to serving our clients through all market conditions, while continuing to deliver long term value to our shareholders. Our solid capital and liquidity levels, not only position us well for changes, resulting from the proposed changes in regulatory requirements, but also provide us flexibility to be proactive instead of reactive during this uncertain backdrop. We are confident in. In the long term outlook for our business. Our business flows are good in our risk management practices are strong and we are. Focused on maintaining expense discipline, while continue continuing to invest in the future. We have an established track record of successful integration efforts, which we look forward to continuing with SBB. I will now turn it over to the operator for instructions for the question and answer portion of the call.

24.

Craig Nix: We expect annualized net charge-offs in the range of 50 to 60 basis points in Q4 at or above the level we saw in Q3. This would bring the full-year net charge-off ratio to the mid-40 basis points range. This is an upward revision to our previous estimate and is primarily the result of higher-than-expected charge-offs in our investor-dependent general office CRE in the commercial bank and small-ticket equipment leasing portfolios. In closing, we are aware that we are in a time of change and dislocation in the banking industry. We believe we are well positioned to successfully navigate macroeconomic headwinds as well as the changing regulatory landscape, just as we have done so many times before. These changes present us with opportunities, and we are committed to serving our clients through all market conditions while continuing to deliver long-term value to our shareholders.

Speaker 6: We expect annualized net charge-offs in the range of 50 to 60 basis points in the fourth quarter, at for above the level we saw in the third quarter.

We expect annualized net charge offs in the range of 50 to 60 basis points in the fourth quarter at or above the level, we saw in the third quarter.

Speaker 6: This will bring the full year net charge-off ratio to the mid- 40 basis points range. This is an upward revision to our previous estimate and is primarily the result of higher than-expected charge-offs and our Investor dependment. General office CRE in the commercial bank and small ticket equipment leasing portfolios.

This would bring our full year net charge off ratio to the mid 40 basis points range. This is an upward revision to our previous estimate and is primarily the result of higher than expected charge offs.

Craig Nix: Before closing with our fourth quarter outlook, I want to comment on pending regulation specifically around capital and long-term debt. We continue to assess the proposed regulations and the potential impacts on our operations. As I mentioned on the last call, we have established a team whose mandate is to develop plans to ensure operational readiness for these regulations. Although we don't have the precise impacts to our capital ratios at this time, we do know capital requirements will increase.

In our Investor dependent General office CRE in the commercial bank and small ticket equipment leasing portfolios.

Craig Nix: On the long-term debt front, we expect we will meet the raise between $8 and $11 billion to satisfy these requirements. While we have not traditionally leveraged the debt capital market to raise funding, we believe our strong, unstable capital and liquidity provisions will allow us to be flexible as we enter the market in 2024. As we mentioned last quarter, we will continue to pause sherry purchases and will consider reinstating them when we submit our capital plan in 2024 and better understand the full impact of these proposed regulations.

Craig Lockwood Nix: In closing, we are aware that we're in a time of change and dislocation in the banking industry, We believe we are well positioned to successfully navigate macroeconomic headwinds as well as the changing regulatory landscape, just as we have done so many times before, these changes present us with opportunities and we are committed to serving our clients through all market conditions, while continuing to deliver long term value to our shareholders. Our solid capital and liquidity levels, not only position us well for changes, resulting from the proposed changes in regulatory requirements, but also provide us flexibility to be proactive instead of reactive during this uncertain backdrop. We are confident in. In the long term outlook for our business. Our business flows are good in our risk management practices are strong and we are. Focused on maintaining expense discipline, while continue continuing to invest in the future. We have an established track record of successful integration efforts, which we look forward to continuing with SBB. I will now turn it over to the operator for instructions for the question and answer portion of the call.

Speaker 6: In closing. We are aware that we are in a time of change and dislocation in the banking industry. We believe we are well positioned to successfully navigate macroeconomic headwinds as well as the changing regulatory landscape, as we have done swimming times before.

In closing we are aware that we are in a time of change and dislocation in the banking industry. We believe we are well positioned to successfully navigate macroeconomic headwinds as well as the changing regulatory landscape.

As we have done so many times before.

Speaker 6: These changes present us with opportunities and we are committed to serving our clients to all market conditions, while continuing to deliver long-term value to our shareholders.

These changes present us with opportunities and we are committed to serving our clients through all market conditions, while continuing to deliver long term value to our shareholders.

Craig Nix: Our solid capital and liquidity levels not only position us well for changes resulting from the proposed changes in regulatory requirements but also provide us flexibility to be proactive instead of reactive during this uncertain backdrop. We are confident in the long-term outlook for our business. Our business flows are good, and our risk management practices are strong. We are focused on maintaining expense discipline while continuing to invest in the future. We have an established track record of successful integration efforts, which we look forward to continuing with SVB. I will now turn it over to the operator for instructions for the question-and-answer portion of the call.

Craig Lockwood Nix: Our solid capital and liquidity levels, not only position as well for changes resulting from the proposed changes in regulatory requirements, but also provide us flexibility to be proactive instead of reactive during this uncertain backdrop, We are confident in the long term outlook for our business, our business flows are good in our risk management practices are strong. we are. Focused on maintaining expense discipline, while continue continuing to invest in the future. We have an established track record of successful integration efforts, which we look forward to continuing with SBB. I will now turn it over to the operator for instructions for the question and answer portion of the call.

Speaker 6: Our solid capital and liquidity levels not only position us wellalth for changes resulting from the proposed changes- the regulatory requirements- but also provide us flexibility to be proactive instead of reactive during this uncertain facdum.

Our solid capital and liquidity levels, not only position us well for changes, resulting from the proposed changes in regulatory requirements, but also provide us flexibility to be proactive instead of reactive during this uncertain backdrop.

Speaker 6: We are confident in the long term outlook for our business. Our business flows are good and our risk management practices are strong, and we are focused on maintaining expense discipline while continue continuing to invest in the future.

We are confident in.

In the long term outlook for our business. Our business flows are good in our risk management practices are strong and we are.

Craig Lockwood Nix: We are focused on maintaining expense discipline, while continue continuing to invest in the future, We have an established track record of successful integration efforts, which we look forward to continuing with SVB, I will now turn it over to the operator for instructions for the question and answer portion of the call.

Focused on maintaining expense discipline, while continue continuing to invest in the future.

Craig Nix: I will close on page 34 by discussing our fourth quarter outlook. We anticipate further declines in the Global Fund Banking Business from lower levels of venture capital investment, lower capital deployment and the final stages of intentional run-down of select portfolios that were located internationally at the time of the merger. We also anticipate a modest decline in our tech and life sciences business as marketing activity continues to be depressed. As a result, we expect SBB loan balances to be in the mid $50 billion range by year end down from $57 billion at the end of the third quarter.

Speaker 6: We have an established track record of successful integration efforts, which we look forward to continuing with SB.

We have an established track record of successful integration efforts, which we look forward to continuing with SBB.

Speaker 6: I will now turn it over to the operator for instructions for the question and answer portion of the call.

I will now turn it over to the operator for instructions for the question and answer portion of the call.

Operator: Thank you. Ladies and gentlemen, if you have a question or comment at this time, please press star followed by one on your touch-tone telephone. As a courtesy to others on the call, we ask that you please limit yourself to one question and one follow-up, and then return to the call queue if you have additional questions. If your question has been answered and you wish to remove yourself from the queue, please press star followed by two. We'll pause for one moment to compile our Q&A roster. Our first question today goes to Stephen Scouten of Piper Sandler. Stephen, please go ahead. Your line is open.

Speaker 2: Ladies and gentlemen, if you have a question or comment at that time, please press star, followed by 1, not in your touch tone telephone as aoccurred C to others on the call. We ask that you please limit yourself to one question and one follow up and then return to the call que if you have additional question.

Operator: Thank you ladies and gentlemen, if you have a question or comment at this time, please press star followed by one in your touch-tone telephone, as a courtesy to others on the call We ask that you please limit yourself to one question and one follow up and then return to the call queue If you have additional questions, if your question has been answered and you wish to remove yourself from the queue. please press star followed by 2, our portal one moment to compile all Q&A roster. Our first question today go to Stephen Scouten of Piper Sandler Steven. Please go ahead. Your line is open.

As a courtesy to others on the call. We ask that you. Please limit yourself to one question and one follow up and then return to the call queue. If you have additional questions. Thank.

Speaker 2: ao question has been answered and you wish to remove yourself from the queue, Please PRI stafarf for by two report one moment. compilile out qan a roster.

Your question has been answered and English major how from the queue. Please press star followed by.

Craig Nix: We expect that SBB declines will largely be offset by mid single-digit percentage growth in the general bank, SIGMAT driven by continued momentum in our branch network as well as growth in our equipment finance line of business. Despite client-sealing pressure from the elevated rate environment, we still have great momentum in our branch network where we continue to emphasize full banking relationships. We have a benefit significantly in our equipment finance sales platform and those efforts are continuing to pay off with increased efficiency and balance sheet growth.

Proposal, one amendment compile our Q&A roster.

Yeah.

Speaker 2: Our first question is: veag as you, it's steph sglutin or pipersandler even. Please go. heheadgeline is AP.

Our first question today go to Stephen Scouten of Piper Sandler Steven. Please go ahead. Your line is open.

Operator: Our first question today goes to Stephen Scouten of Piper Sandler Steven. Please go ahead. Your line is open.

Craig Nix: Yeah, thanks a lot. Good morning, everyone. Craig, you gave some really good color, and Frank, you gave some good anecdotal thoughts around the SVB stabilization, but I'm wondering how you guys think about that into 2024. Do you think we can start to see outright stability there as opposed to just the decline in the runoff, and how do you think about that book of business as we look into next year?

Stephen Scouten: Yeah, thanks a lot. Good morning, everyone. Craig, you gave some really good color, and Frank, you gave some good anecdotal thoughts around the SVB stabilization, but I'm wondering how you guys think about that into 2024. Do you think we can start to see outright stability there as opposed to just the decline in the runoff, and how do you think about that book of business as we look into next year?

Speaker 7: Thank more everyone. Could you get some really good color and Frank? You get some good anecdle thoughts around the SB stabilization. But I'm wondering how you guys think about that. In 2024 do you think we can start to see, you know, outright stability there, as opposed to just the declining, the decline in the runoff? And how do you think about you know, that book of business that we look in the next year?

Stephen Kendall Scouten: Yes, Thanks, a lot and good morning, everyone, Craig you gave some really good color and Frank you gave some good anecdotal thoughts around the SVB stabilization, but I'm wondering how you guys think about that into 2024, do you think we can start to see outright stability there as opposed to just the declining, the decline and the runoff and how do you think about that book of business as we look into next year. Mark Martin would you can weigh in on that please.

Craig you gave some really good color and thank you gave some good anecdotal thoughts around the SBB stabilization, but I'm wondering how you guys think about that into 2020 or do you think we can start to see.

Outright stability there as opposed to just the declining the decline and the runoff and how do you think about that book of business as we look into next year.

Craig Nix: We do expect slight loan declines this quarter and our industry verticals mainly related to timing. And some of the larger loans in our pipeline pull through in the third quarter and we expect some payoffs to be pushed through the fourth quarter. On the positive, we expect a load to mid-single-digit percentage point to climb in the fourth quarter primarily related to a decline in FVB deposits. We had sizeable deposit growth in the second, third quarters and were able to retire more costly short-term FHLB borrowing which coupled with load-spected loan growth reduces our need to raise the positive value through the same rates we did during the last two quarters.

Frank B. Holding, Jr.: Mark, would you weigh in on that, please?

Frank Holding Jr: Mark, would you weigh in on that, please?

Craig Lockwood Nix: Mark, would you weigh in on that please.

Mark Martin would you can weigh in on that please.

Okay.

Speaker 8: Certainly this is. This is Mark aderand.

Craig Nix: Certainly. This is Mark Adger, and noting that we have not provided any preliminary guidance for 2024 in this call, they're, I think, reflective of the stabilization that you see, the hope, right, that that turns the corner in 2024. At the same time, we need to recognize that we're still going through the valuation reset that Frank alluded to, and we expect that that could continue into 2024 and continue to be a headwind. And so, again, that's probably in part why we are not providing preliminary guidance yet beyond the fourth quarter. And so I'll stop there. I hope that was responsive.

Marc Cadieux: Certainly. This is Mark Adger, and noting that we have not provided any preliminary guidance for 2024 in this call, they're, I think, reflective of the stabilization that you see, the hope, right, that that turns the corner in 2024. At the same time, we need to recognize that we're still going through the valuation reset that Frank alluded to, and we expect that that could continue into 2024 and continue to be a headwind. And so, again, that's probably in part why we are not providing preliminary guidance yet beyond the fourth quarter. And so I'll stop there. I hope that was responsive.

Marc Cadieux: Certainly this is a this is Marc Cadieux and noting that we have not provided any preliminary guidance for 2024 in this call, there, I think reflective of the stabilization that you see, the hope that that turns the corner in '24 at the same time, we need to recognize that we're still going through a devaluation reset that Frank alluded to and we expect that that could continue into 2024 and continue to be a headwind and so, again that's probably in part why we are not providing preliminary guidance yet beyond the fourth quarter and so I'll stop there I hope that was responsive. Got it makes sense, Okay, and then you guys noted the elevated charge offs some of the. Small ticket leasing. Office I appreciate all the detail around the reserves related to the SBB portfolio, but as you look forward do you see. Okay.

Marc Cadieux: Certainly this is a this is Marc Cadieux and noting that we have not provided any preliminary guidance for 2024 in this call, there, I think reflective of the stabilization that you see, the hope that that turns the corner in '24 at the same time, we need to recognize that we're still going through a devaluation reset that Frank alluded to and we expect that that could continue into 2024 and continue to be a headwind so, again that's probably in part why we are not providing preliminary guidance yet beyond the fourth quarter and so I'll stop there I hope that was responsive.

Speaker 8: Noting that we have not provided any preliminary guidance for 2024 in this call.

Noting that we have.

Not provided any preliminary guidance for 2024 and this call.

Speaker 8: There I think reflective of the stabilization that you see the hope right that that turns the corner in two y four at the same time we need to recognize that we're still going through a the valuation reset that Frank alluded to and we expect that that could continue into 2020 four and continue to be a headwind and so.

Third I think reflective of the stabilization that you see the hope that that turns the corner in 24 at the same time, we need to recognize that we're still.

Going through a.

The valuation reset that Frank alluded to and we expect that that could continue into 2024 and continue to be a headwind and so.

Craig Nix: While we're encouraged by the stabilization of FVB deposits since April, we anticipate that FVB clients will continue to experience the level of cash burn that exceeds funds sourced from fund raising. It's worth noting that we expect broader market DC funding to remain subdued in the range of 30-35 billion for the fourth quarter of 2023 which is significantly down from prior years. And then line with the needed activity we have seen throughout the first three quarters of 2023.

Speaker 8: Again that's probably in part why we are not providing preliminary guidance yet beyond the fourth quarter, and so I'll stop there. I hope that was response.

Again, that's probably in part why we are not providing preliminary guidance yet beyond the fourth quarter and so I'll stop there I hope that was responsive.

Stephen Kendall Scouten: Got it makes sense there, Okay and then you guys noted the elevated charge-offs some of the small ticket leasing office I appreciate all the detail around the reserves related to the SVB portfolio, but as you look forward do you see things worsening at all or is it more, I know you Noted Macroeconomic trends change when You're seasonal modeling how is how is that going to potentially drive reserves moving forward as you see it today.

Stephen Scouten: Got it. Makes sense there. Okay. And then you guys noted the elevated charge-offs, some of the small-ticket leasing office. I appreciate all the detail around the reserves related to the SVB portfolio. But as you look forward, do you see things worsening at all, or is it more? I know you noted macroeconomic trends changing when you were CECL modeling. How is that going to potentially drive reserves moving forward as you see it today?

Speaker 7: Got it makes sense there, okay. And then you guys noted the the elevated charge off some of the small ticket leasing office and appreciate all the detail around the reserves related to the fbv portfolio. But you know you look forward, do you see?

Got it makes sense, Okay, and then you guys noted the elevated charge offs some of the.

Small ticket leasing.

Craig Nix: Consequently, we're projecting an approximate $5 billion to climb in FVB deposits in the fourth quarter. This estimate could be conservative as the FVB team is laser focused on obtaining and winning back balances which could partially offset some natural run-offs. Our interest rate forecast follows the implied forward curve. We forecast one more quarter point rate hike in the fourth quarter with the FED funds rate in the year at 5.75%. While we expect the absolute level of margin and net interest income to remain elevated, we do expect in the beginning to decline in the coming quarters.

Office I appreciate all the detail around the reserves related to the SBB portfolio, but as you look forward do you see.

Okay.

Speaker 5: thingss worsening at all, or is it more? Know you noted macroeconomic trends changing when you seasonal modeling? How is how? Is that going to potentially drive reserves? Maybe for it, if you see.

Things worsening at all or is it more I know you.

Noted.

Macroeconomic trends change and when Youre seasonal modeling how is how is that going to potentially drive reserves moving forward as you see it today.

Frank B. Holding, Jr.: Well, I think right now we consider ourselves to be adequately reserved, and actually, our reserves are very strong on all three of those areas. When you look at general office and particularly in the commercial bank, you look at the equipment finance, and then you look at the innovation loans or the investor-dependent loans, we feel like our reserves are strong there. We're close to 2x covered if you look at those in the aggregate. So we believe our reserves are strong, but we do think for a couple of quarters out that charge-offs will remain a little bit elevated in those areas. Andy, I don't know if you have anything you'd like to add to any of that, or Randy?

Frank Holding Jr: Well, I think right now we consider ourselves to be adequately reserved, and actually, our reserves are very strong on all three of those areas. When you look at general office and particularly in the commercial bank, you look at the equipment finance, and then you look at the innovation loans or the investor-dependent loans, we feel like our reserves are strong there. We're close to 2x covered if you look at those in the aggregate. So we believe our reserves are strong, but we do think for a couple of quarters out that charge-offs will remain a little bit elevated in those areas. Andy, I don't know if you have anything you'd like to add to any of that, or Randy?

Speaker 6: Well I think right now we consider ourselves to be.

Craig Lockwood Nix: Well I think right now we consider ourselves to be adequately reserved and actually our reserves are very strong on all three all three of those areas, when you look at general office and particularly in the commercial Bank you look at the equipment Finance and then you look at the innovation loans, the investor dependent lines, We feel like our reserves are strong there we're close to two times covered if you look at that as in the aggregate, so we believe our reserves are strong, but we do think for a couple of quarters out that charge-offs will remain a little bit elevated in those areas, Andy I don't know if you have anything you'd like to add to any of that or a range. No I think thats right. Lee will continue to work through the office portfolio. And that's going to take some time throughout 2024 and. We would hope to see some improvement in equipment finance portfolio, but to Craig's point, we will see continue to see elevated charge offs in those areas into 2020. That's why you see us raising our. Net charge off guidance to 50 to 60 from 35 to 45. Yeah makes sense, okay. Thanks for the color I appreciate it thanks for the call.

Speaker 6: Adequately reserve and actually our reserves are very strong on all the Pulp three of those areas. When you look at general office and in particular in the commercial bank, you look at the equipment finance and then you look at the innovation loans, the Investor dependent loans. We feel like our reserves are strong there. We're close to two times covered. If you look at those are the aggregate.

Adequately reserved.

Actually our reserves are very strong on all three all three of those areas. When you look at general office and particularly in the commercial Bank you look at the equipment Finance and then you look at the innovation loans, the investor dependent lines.

Craig Nix: We expect this to occur as the accretion from some of the shoulder portfolios we acquired, such as global fund banking, fully accrete and the experience continued pressure on deposit pricing. The impact of lower accretion and higher deposit costs will be partially offset the higher loan and investment yields. We anticipate our full cycle beta increasing to approximately 43% up from our previous estimate of 39%. Primarily due to the higher absolute data at this point in the rate cycle as well as the strong growth we've experienced in the direct bank.

We feel like our reserves are.

Strong there were close to two times covered if you look at that as in the aggregate.

Speaker 6: So we believe our reserve is strong, but we we do think for a couple of quarters out that charge-offser will remain a little bit elevated in those areas and the eness. If you have anything we'd like to add to you that, or arrign the.

So we believe our reserves are strong, but we do think for a couple of quarters out that charge offs will remain.

A little bit elevated.

In those areas.

Andy I don't know if you have anything you'd like to add to any of that or a range.

Marc Cadieux: No, I think that's right. Certainly, we'll continue to work through the office portfolio, and that's going to take some time throughout 2024. And we would hope to see some improvement in the equipment finance portfolio. But to Craig's point, we will continue to see elevated charge-offs in those areas into 2024.

Randy Martin: No, I think that's right. Certainly, we'll continue to work through the office portfolio, and that's going to take some time throughout 2024. And we would hope to see some improvement in the equipment finance portfolio. But to Craig's point, we will continue to see elevated charge-offs in those areas into 2024.

Speaker 8: No I think that's right. Certainly we'll continue to work through the office portfolio and that's going to take some time throughout one and coming four and we would hope to see someof.

No I think thats right.

Andy: No I think thats right, certainly we'll continue to work through the office portfolio and that's going to take some time throughout 2024 and We would hope to see some improvement in equipment finance portfolio, but to Craig's point, we will see continue to see elevated charge offs in those areas into 2024. That's why you see us raising our. Net charge off guidance to 50 to 60 from 35 to 45. Yeah makes sense, okay. Thanks for the color I appreciate it thanks for the call.

Lee will continue to work through the office portfolio.

And that's going to take some time throughout 2024 and.

Craig Nix: On adjusted non interest income after a strong third quarter, we see a slight retreat to the $430 million to $450 million range. Primarily due to the lag, the impact of lower FED off-balance cheap funds and less overall innovation economy market activity, leading to lower client investment fees, international fees and other service charges, as well as slightly lower rental income on operating races, be the higher expected maintenance expense in the fourth quarter.

We would hope to see some improvement in equipment finance portfolio, but to Craig's point, we will see continue to see elevated charge offs in those areas into 2020.

Speaker 9: Folio, but the Craig's point we will see continue to be elevated.

Frank B. Holding, Jr.: This is why you see us raising our net charge-off guidance to 50 to 60 from 35 to 45.

Frank Holding Jr: This is why you see us raising our net charge-off guidance to 50 to 60 from 35 to 45.

Speaker 6: And that is why you see us raising our net charge-off guid to 50 to 60, from 35 to fourty.

That's why you see us raising our.

Craig Lockwood Nix: That's why you see us raising our net charge-off guidance to 50 to 60 from 35 to 45. Yeah makes sense, okay. Thanks for the color I appreciate it thanks for the call.

Craig Lockwood Nix: That's why you see us raising our net charge-off guidance to 50 to 60 from 35 to 45.

Net charge off guidance to 50 to 60 from 35 to 45.

Stephen Kendall Scouten: Yeah makes sense, okay. Thanks for the color I appreciate.

Craig Nix: Yep. Makes sense. Okay. Thanks for the call, everyone. Appreciate it.

Stephen Scouten: Yep. Makes sense. Okay. Thanks for the call, everyone. Appreciate it.

Speaker 7: Yeah make some ok. thanks for the color one for itthank Thank.

Yeah makes sense, okay. Thanks for the color I appreciate it thanks for the call.

[Analyst 1]: Thanks for the call, everyone.

Stephen Scouten: Thanks for the call, everyone.

Frank B. Holding, Jr.: Yep. Thank you.

Frank Holding Jr: Yep. Thank you.

Operator: Thanks, Stephen. Thank you. And the next question goes to Brady Gailey of KBW. Brady, please go ahead. Your line is open.

Deanna Hart: Thanks, Stephen.

Operator: Thank you. And the next question goes to Brady Gailey of KBW. Brady, please go ahead. Your line is open.

Multiple: Thank you Steven.

Speaker 2: Thank you, and then next question go to Brady. gay or KB W Brady, Please go ahead. yourline is AP.

Operator: Thank you and the next question goes to Brady Gailey of KBW, Brady Please go ahead. Your line is open.

Craig Nix: We expect continued growth in our wealth and merchant fee income lines of business. On adjusted non-interest experience, we expect to be slapped slightly down compared to the third quarter. Continuous acquisition synergies will be partially offset by slightly higher expected consulting and project calls related to strategic priorities as well as our continued investment in large bank programs and initiatives. Some of these professional consulting and project calls will lower in the second third quarters as we assess and reprioritize areas of focus heading into 2024.

Brody Preston: Thank you. Good morning, guys. Yeah, good morning. I wanted to start just with the possible share buyback in 2024. I know you mentioned you need to wait and submit your 2024 capital plan. Just remind us of the timing of that. I think in prior years, that's been around July.

Brady Gailey: Thank you. Good morning, guys. Yeah, good morning. I wanted to start just with the possible share buyback in 2024. I know you mentioned you need to wait and submit your 2024 capital plan. Just remind us of the timing of that. I think in prior years, that's been around July.

Speaker 5: Thank you. Good going to guys. I wanted to start with the morning. Possible share buyback in twenty.

Brady Gailey: Thank you, good morning guys, I wanted to start with the possible share buyback in 2024, I know you need to wait to submit your 2024 capital plan, just remind us of the timing of that I think in prior years that's been around. Around July.

I wanted to start with the good morning possible share buyback in 2000.

Speaker 5: You want to start to put the possible share buyback in andtwentthousand and 24. I know you mention you need to wait and submit your two thousand and 24 capital plan. To just remind us of the timing of that, I think in prior years that's been around around July .

Yes. Good morning, I wanted to start just with the possible share buyback in 2024, I know you mentioned and you need to wait and submit your 2024 capital plan just remind us of the timing of that I think in prior years that's been around.

Around July.

Frank B. Holding, Jr.: Yeah, we certainly will consider a share repurchase plan as part of our capital plan in 2024. If that should be included and approved, it would commence in the second half of 2024, consistent with prior plans.

Frank Holding Jr: Yeah, we certainly will consider a share repurchase plan as part of our capital plan in 2024. If that should be included and approved, it would commence in the second half of 2024, consistent with prior plans.

Okay.

Speaker 6: Yes if we certainly will consider a share repurchase plan as part as part of our capital plan in 2024 and if that should be included and approved, it would commence in the second half of 2024, consistent with prior.

Craig Lockwood Nix: Yes, if we if we, we certainly will consider a share repurchase plan as part as part of our capital plan in 2024, and if that should be included and approved, it would commence in the second half of 2024, consistent with prior plans. Okay. And then on the. NII guidance. It's down around 7%. Linked quarter. So that would suggest there is some NIM decline as well in the fourth quarter is that more a function of.

Craig Nix: We anticipate by year end that we would be more than halfway to our 25 to 30 percent synergies goal on SBB's $2.6 billion pre-merger expense base. We anticipate materially all synergies to be reflected in the run rate by the end of 2024. It's worth noting we do expect a one-time $30 million FDIC assessment to be recognized in the fourth quarter. It will be paid out over eight quarters which is not included in the adjusted total.

<unk> with prior plans.

Brody Preston: Okay. And then on the NII guidance, it's down around 7% linked quarters. That would suggest there's some NIM decline as well in the fourth quarter. Is that more a function of accretable yield declining, which I think you hinted at a couple of minutes ago, or is that more a function of the core net interest margin declining, or is it a little bit of both?

Brady Gailey: Okay. And then on the NII guidance, it's down around 7% linked quarters. That would suggest there's some NIM decline as well in the fourth quarter. Is that more a function of accretable yield declining, which I think you hinted at a couple of minutes ago, or is that more a function of the core net interest margin declining, or is it a little bit of both?

Speaker 5: And then on the NI guidance, it's down around.

Craig Lockwood Nix: Okay and then on the NII guidance, It's down around 7% linked quarter, so that would suggest there is some NIM decline as well in the fourth quarter, is that more a function of accreatable yield declining, which I think you hinted at a couple of minutes ago or is that more a function of the core net interest margin declining or is it a little bit of both. If you isolate it. Ex accretion in the fourth quarter, we expect NIM to decline by one basis point. So we have some stabilization there with accretion we're expecting expecting it to decline by 19 basis points. So it's. It is an accretion issue. Both on net interest income in dollars and on the margin.

Brady Gailey: Okay and then on the NII guidance, It's down around 7% linked quarter, so that would suggest there is some NIM decline as well in the fourth quarter, is that more a function of accreatable yield declining, which I think you hinted at a couple of minutes ago or is that more a function of the core net interest margin declining or is it a little bit of both.

Brady Gailey: Okay. And then on the. NII guidance. It's down around 7%. Linked quarter. So that would suggest there is some NIM decline as well in the fourth quarter is that more a function of.

And then on the.

NII guidance.

It's down around 7%.

Speaker 6: Link quarters. That would suggest's some NIM decline as well in the fourth quarter. Is that more a function of accretable yield declining, which I think you hit at a couple minutes ago, or is that more a function of the core net interest margin declining, or is it? You know a little bit of me if you isolated ex accretion? In the fourth quarter we expect NIM to decline by one basis point.

Linked quarter. So that would suggest there is some NIM decline as well in the fourth quarter is that more a function of.

<unk> yield declining, which I think you hinted at a couple of minutes ago or is that more a function of the core net interest margin declining or is it a little bit.

Craig Nix: The timing of this will be dependent upon when the rule is finalized meaning it could potentially move into 2024. We expect annualized net charge-offs in the range of 50 to 60 basis points in the fourth quarter, at or above the level we saw in the third quarter. This will bring the four-year net charge-off ratio to the mid-40 basis points range. This is an upward revision to our previous estimate and is primarily the result of higher than expected charge-offs in our investor-dependent general office CRE in the commercial bank and small ticket equipment leasing portfolios.

Frank B. Holding, Jr.: Yeah, if you isolate it, ex-accretion in the fourth quarter, we expect NIM to decline by 1 basis point. So we have some stabilization there. With accretion, we're expecting it to decline by 19 basis points. So it is an accretion issue, both on net interest income in dollars and on the margin.

Frank Holding Jr: Yeah, if you isolate it, ex-accretion in the fourth quarter, we expect NIM to decline by 1 basis point. So we have some stabilization there. With accretion, we're expecting it to decline by 19 basis points. So it is an accretion issue, both on net interest income in dollars and on the margin.

Craig Lockwood Nix: If you isolate it ex-accretion in the fourth quarter we expect NIM to decline by one basis point, So we have some stabilization there, with accretion we're expecting expecting it to decline by 19 basis points so it is an accretion issue both on net interest income in dollars and on the margin. Okay, and then I appreciate the <unk> expense guidance, it looks like youre going to get more cost saves out of us. As we look into 2024, so how do you think about <unk>. <unk> next year, you'll have some cost saves, but you also have some legacy expense creep I guess could you potentially keep expenses flattish next year. Right now if we're looking we're not providing 2020 for guidance, but just directionally I think flattish to low single digits. Percentage increase. Going into 'twenty four.

If you isolate it.

Ex accretion in the fourth quarter, we expect NIM to decline by one basis point. So we have some stabilization there with accretion we're expecting expecting it to decline by 19 basis points. So it's.

Speaker 6: So we have some stabilization there. With cretion, we're expecting expecting it to decline by 19 basis points, So it's it is an accretion issue.

It is an accretion issue.

Speaker 6: Both on net net interest income in dollars and on the market.

Both on net interest income in dollars and on the margin.

Brody Preston: Okay. And then I appreciate the Q4 expense guidance. Feels like you're going to get more cost saves out of SVB as we look into 2024. So how do you think about expenses next year? You'll have some cost saves, but you'll also have some legacy expense creep. Could you potentially keep expenses flattish next year?

Brady Gailey: Okay. And then I appreciate the Q4 expense guidance. Feels like you're going to get more cost saves out of SVB as we look into 2024. So how do you think about expenses next year? You'll have some cost saves, but you'll also have some legacy expense creep. Could you potentially keep expenses flattish next year?

Craig Lockwood Nix: Okay, and then, I appreciate the 4thQ expense guidance, it looks like you're going to get more cost saves out of us as we look into 2024, so how do you think about expenses next year, you'll have some cost saves, but you also have some legacy expense creep I guess could you potentially keep expenses flattish next year. Right now if we're looking we're not providing 2020 for guidance, but just directionally I think flattish to low single digits. Percentage increase. Going into 'twenty four.

Speaker 5: Fact and then I appreciate the more Q expense guidance feel was like you're going to get more coayves out of siifty as we look into 2024. So how do you think about expenses next year? And you'll have some coays, but you also have some legacy expense creep like. Could you potentially keep expenses flattish next year?

Okay, and then I appreciate the <unk> expense guidance, it looks like youre going to get more cost saves out of us.

Craig Nix: In closing, we are aware that we are in a time of change and dislocation in the banking industry. We believe we are well positioned to successfully navigate macroeconomic end rounds as well as the changing regulatory landscape just as we have done so many times before. These changes present us with opportunity and we are committed to serving our clients through all market conditions while continuing to deliver long-term value to our shareholders. Our solid capital and liquidity level is not only positioned as well for changes resulting from the proposed changes in regulatory requirements but also provided flexibility to be proactive instead of reactive during this uncertain backdrop.

As we look into 2024, so how do you think about <unk>.

<unk> next year, you'll have some cost saves, but you also have some legacy expense creep I guess could you potentially keep expenses flattish next year.

Speaker 9: Right now, if we're looking, we're not providing 2024 guidance, but is directly, I think, flattish to low single digit percentage increase going into the twenty-four.

Frank B. Holding, Jr.: Right now, we're not providing 2024 guidance, but just directly, I think flattish to low single-digit percentage increase going into 2024.

Frank Holding Jr: Right now, we're not providing 2024 guidance, but just directly, I think flattish to low single-digit percentage increase going into 2024.

Right now if we're looking we're not providing 2020 for guidance, but just directionally I think flattish to low single digits.

Percentage increase.

Going into 'twenty four.

Brody Preston: Okay, great. Thanks for all the color, guys.

Brady Gailey: Okay, great. Thanks for all the color, guys.

Okay, great. Thanks for all the color guys.

[Analyst 1]: Okay, great. Thanks for all the color, guys.

Brady Gailey: Okay, great. Thanks for all the color, guys.

Frank B. Holding, Jr.: Yep. Thank you.

Frank Holding Jr: Yep. Thank you.

Hello.

Thank you.

Operator: Thank you. And the next question goes to Stephen Alexopoulos of JP Morgan. Stephen, please go ahead. Your line is open.

Craig Nix: We are confident in the long-term outlook for our business. Our business flows are good and our risk management practices are strong. We are focused on maintaining the expense of one while continuing to invest in the future. We have an established track record of successful integration efforts which we look forward to continuing with SBB.

Speaker 7: Thank you, and the next question to Stephen akopuullo of dapy Morgan Stephen, Please go. Headline is openin. Thank morning everybody.

Thank you and the next question Betsy Steven at Peters of Jpmorgan. Steven. Please go ahead. Your line is open.

Marc Cadieux: Hey, good morning, everybody.

Steven Alexopoulos: Hey, good morning, everybody.

Hey, good morning, everybody.

Frank B. Holding, Jr.: Good morning.

Frank Holding Jr: Good morning.

Marc Cadieux: To start on the SVB side and regarding the new campaign, the SVB, so what's the feedback so far from customers? And could you address that maybe from the VC side, what you're hearing from VC firms, and then what you're hearing from the startups? And is this yet translating into you guys seeing net new operating account growth at the account level, not the balance level?

Steven Alexopoulos: To start on the SVB side and regarding the new campaign, the SVB, so what's the feedback so far from customers? And could you address that maybe from the VC side, what you're hearing from VC firms, and then what you're hearing from the startups? And is this yet translating into you guys seeing net new operating account growth at the account level, not the balance level?

Good morning to start on the SP.

On the <unk> side regarding the new campaign the SCB. So what's the feedback so far from customers and could you address that maybe from the BDC side, what year for VC firms than what you are hearing from the startups and does this translate into you guys seeing net new operators.

Speaker 9: backso far from customers and could you address that baby from the V C side, where you're from C firms now what you're hearing from the startups and is, if yet, translating into you guys see net new operating account growth.

Operator: I will now turn it over to the operator for instructions for the question and answer portion of the call. Thank you, ladies and gentlemen. If you have a question or comment at the time, please press star, fill it by one on your touch tone telephone. As a courtesy to others on the call, we ask that you please limit yourself to one question and one follow-up. And then return to the call queue if you have additional questions. It's a question has been answered and you wish to remove yourself from the queue. Please press star, fill it by 2. We'll pause for one moment to compile our Q&A roster.

Operating account growth at the account level not the balanced level.

Frank B. Holding, Jr.: Mark, I'm going to let you handle that one. I know we have picked up some new clients.

Frank Holding Jr: Mark, I'm going to let you handle that one. I know we have picked up some new clients.

Speaker 6: Mark I will, if you handle Latin. I know we have picked up some new clients.

Mark I'll, let you handle that one I know we have picked up some new clients.

Craig Nix: We have indeed. Steve, good morning. It's Mark. We had in the quarter, I believe the stat was 600+ new clients, which means starting with one solution or another. Then I believe we're almost up to 50 new in the last couple of quarters, what I would call broad-based new wins, including their operating accounts, operating business. So I think going back to your original point, the ad campaign, but as much or more so, the very laser-focused calling effort, reactivation effort, calling on new clients, etc., we think is ultimately turning around that perception that there's a void and very much reinforcing that SVB is here and open for business. Again, I think part of your question was about feedback. Overall, the feedback, including the ad campaign, has been really very positive on the whole. So I'll stop there.

Marc Cadieux: We have indeed. Steve, good morning. It's Mark. We had in the quarter, I believe the stat was 600+ new clients, which means starting with one solution or another. Then I believe we're almost up to 50 new in the last couple of quarters, what I would call broad-based new wins, including their operating accounts, operating business. So I think going back to your original point, the ad campaign, but as much or more so, the very laser-focused calling effort, reactivation effort, calling on new clients, etc., we think is ultimately turning around that perception that there's a void and very much reinforcing that SVB is here and open for business. Again, I think part of your question was about feedback. Overall, the feedback, including the ad campaign, has been really very positive on the whole. So I'll stop there.

Thanks.

Speaker 8: We have indeed SEP, good morning smart. And we had in the quarter I believe that that was, 600 plus new clients, which means you starting with one solution or another, and then I believe we're almost up to.

We have indeed, Steve good morning, it's Martin.

And.

We had in the quarter.

Believe the Stat was 600 plus new clients.

<unk> means yes, starting with one solution or another and then I believe we're almost up to.

Steven at Scooton: Our first question today goes to Steven at Scooton of Piper Sandler. Steven, please go ahead. Your line is open. Thanks a lot. Good morning, everyone. Craig, you gave some really good color and thank you. You gave some good anecdotal thoughts around the SBB stabilization. But I wonder how you guys think about that in the 2024? Do you think we can start to see, you know, outright stability there as opposed to just declining the decline in the runoff? And how do you think about, you know, that book of business that we looking to next year? Mark, would you, Mark, would you be waiting on that point? Certainly.

Speaker 8: 50 new in the last couple of quarters. That what I would call broad-based.

50, new in the last couple of quarters that what I would call broad based.

Speaker 8: New wins including their operating accounts operating business and so I think going back to your original point the ad campaign but.

New wins, including their operating accounts operating business and so I think going back to your original point the AD campaign, but.

Speaker 8: As much or more so the very laser focused calling effort, reactivation effort, calling a new client, etc. We think is.

As much or more so the very laser focused calling effort reactivation effort, calling on new clients et cetera, We think is.

Speaker 8: Ultimately Turning, turning around that perception that there's a void and very much reinforcing that's B? B is here and open for business. And and again, I think part of your question was about feedback and overall the feedback, including the ad campaign, has been really very positive on the whole, and I'll stop.

Ultimately.

Turning turning around that perception that theres, a avoid and very much reinforcing that SPD is here and open for business and again I think.

Part of your question was about feedback and overall the feedback including the AD campaign.

Been really very positive on the whole and so I'll stop there.

Mark Adger: This is Mark Adger and noting that we have not provided any preliminary guidance for 2024 in this call. I think reflective of the stabilization that you see, the hope that that turns the corner in 24. At the same time, we need to recognize that we're still going through a evaluation reset that Frank alluded to and we expect that that could continue into 2024 and continue to be a headwind. And so again, that's probably in part why we are not providing preliminary guidance yet beyond the fourth quarter. And so I'll stop there. I hope that was responses. Yeah, that makes sense there. Okay.

Marc Cadieux: Okay. That's helpful. Mark, I saw the news of Jennifer Goldstein rejoining the company. Congrats on that. She's a superstar in life sciences and the healthcare space. Is that a one-off, or are you guys starting to see former SVB employees reengaging to come back to the company?

Steven Alexopoulos: Okay. That's helpful. Mark, I saw the news of Jennifer Goldstein rejoining the company. Congrats on that. She's a superstar in life sciences and the healthcare space. Is that a one-off, or are you guys starting to see former SVB employees reengaging to come back to the company?

Okay.

That's helpful. Mark is sort of the news of Jennifer Goldsby rejoining the company Congrats on that Jesus Superstar in life Sciences in the health care space.

Speaker 10: Mark So the news of Jennifer goldste rejoining the company ratz that she's.

Speaker 10: What is that? A one offer? You guys are starting to see former's bbe employees.

One offer you guys starting to see former SBB employees.

Re engaging to come back to the company.

Craig Nix: So I will start on that. Others may wish to comment. Jennifer was certainly a very high-profile rehire, recognizing she was coming back from the SVB capital entity. And having said that, not the only former SVBer to rejoin, with the key point there being that I believe the others that we've had in the new hire mix were SVBers, legacy SVBers that had departed several years ago as opposed to since the events of March. And so that, too, is encouraging to see some of our former colleagues look at what we have going on here so far in our first two quarters of togetherness and vote with their feet to come join us. Again, Jennifer being the most high-profile of those, which we are so, so excited to see her return.

Marc Cadieux: So I will start on that. Others may wish to comment. Jennifer was certainly a very high-profile rehire, recognizing she was coming back from the SVB capital entity. And having said that, not the only former SVBer to rejoin, with the key point there being that I believe the others that we've had in the new hire mix were SVBers, legacy SVBers that had departed several years ago as opposed to since the events of March. And so that, too, is encouraging to see some of our former colleagues look at what we have going on here so far in our first two quarters of togetherness and vote with their feet to come join us. Again, Jennifer being the most high-profile of those, which we are so, so excited to see her return.

Speaker 8: So I will start on that others say wish to comment Jennifer was certainly a very high profile reher recognize she was coming back from the sub capital entity and.

So I will start on that others may wish to comment Jennifer was certainly a very high profile rehire recognized she was coming back from the SCB capital entity.

Yes.

Speaker 8: Having said that, not the only former SP here to rejoin with the, the key point there being that I believe the others that we've had in the new higher mix were.

Having said that not the only <unk>.

<unk> <unk> to rejoin with the key point, there being that I believe the others that we've had and the new higher mix work.

Speaker 7: S beers, legacy's B beers that had departed several years ago as opposed to SEN the events of March, and so that Q is encouraging to see some of our former colleagues look at what we have going going on here so far in our first two quarters of togetherness and and both where their feet to come join us again. Jennifer being the most high profile of those which we are so, so excited to see her return got it great. Maybe this one follow.

SB beers legacy SV beers that had departed several years ago as opposed to since the events of March and so that too is encouraging to see some of our former colleagues.

Craig Nix: And then you guys noted the elevated charge off some of the small ticket leasing office and appreciate all the detail around the reserves related to the SBB portfolio. But, you know, as you look forward, do you see things worsening at all or is it more, I know you noted macroeconomic trends changing when you're Cecil modeling? How is that going to potentially drive reserves needed for it at UCS? Well, I think right now we consider ourselves to be adequately reserved and actually our reserves are very strong on all three of those areas.

Look at what we have going going on here so far in our first two quarters of together and SM and both with their feet to come join US again, Jennifer being the most high profile of those which we are so excited to see her return.

Marc Cadieux: Got it. And Craig, maybe just one follow-up in your response to the question on expenses, maybe flat to low single-digit increase for 2024. So how should we think about the efficiency ratio wherever you guys end up in Q4? Do you see that improving fairly materially in 2024?

Steven Alexopoulos: Got it. And Craig, maybe just one follow-up in your response to the question on expenses, maybe flat to low single-digit increase for 2024. So how should we think about the efficiency ratio wherever you guys end up in Q4? Do you see that improving fairly materially in 2024?

Got it okay.

Hey, Greg maybe just one follow up in your response to the question on expenses, maybe flat to low single digit increase for 2024.

Should we think about the efficiency ratio wherever you guys end up in the fourth quarter do you see that improving fairly materially in 2024.

Speaker 11: transcript

Craig Nix: When you look at general office and particularly in the commercial bank, you look at the equipment finance and then you look at the innovation loans, the investor dependent loans. We feel like our reserves are strong there. We're close to two times covered if you look at those in the aggregate. So we believe our reserves are strong that we do think for a couple of quarters out that charge also will remain a little bit elevated in those areas.

Frank B. Holding, Jr.: Well, what's going to happen is the accretion is going to offset some of the decrease or stabilization in expense. So what I would say in Q4, you might see it migrate up to the high 40s, low 50s. And then next year, I think you'd see it in that same range per quarter. So I would go with, I think, high 40s, low 50s for the next five quarters. And that's really a function of just declining accretion income, outpacing expenses.

Craig Nix: Well, what's going to happen is the accretion is going to offset some of the decrease or stabilization in expense. So what I would say in Q4, you might see it migrate up to the high 40s, low 50s. And then next year, I think you'd see it in that same range per quarter. So I would go with, I think, high 40s, low 50s for the next five quarters. And that's really a function of just declining accretion income, outpacing expenses.

Speaker 6: Well what's going to happen is the accretion is going to offst some of the decrease or stabilization and expense. So what I would say? In the fourth quarter you might see it mriculate up to the high 40, low fifty.

Well, what's going to happen is the accretion is going to offset some of them.

The decrease or stabilization in expense, so what I would say in the fourth quarter, you might see it matriculate up to the high Fourteens low 50.

Speaker 6: And then next year. I think you'd see it in that same range per quarter. So I would go with, I would think, Lou high forty's L, fifty's for the next five quarter.

And then next year I think you'd see it in that same range.

Per quarter. So I would go with I would think low high <unk> low <unk> for the next five quarters.

Craig Nix: Andy, I don't know if you have anything you'd like to add to any of that or remain the, you know, I think that's right. Certainly we'll continue to work through the office portfolio and that's going to take some time throughout 2024. We would hope to see some improvement in the equipment finance portfolio, but to Craig's point, we will continue to be elevating charge off in those areas into 20-20. And that is why we see us raising our net charge off out of the 50 to 60 from 35 to 45. Yeah, make some. Okay, thanks for the color, everyone. Appreciate it. Thanks for the color. Yeah, thank you. Thank you.

Speaker 6: That's really a function of just declining accretion income.

And that's really a function of just declining.

Accretion income.

Marc Cadieux: Yeah, from a Q4 business perspective, so. Yeah. There's a lot of high numbers.

Steven Alexopoulos: Yeah, from a Q4 business perspective, so. Yeah. There's a lot of high numbers.

Yes.

Okay.

Speaker 6: So really satisfied with an efficiency ratio in the lowy fifty's to forty.

Yes.

Frank B. Holding, Jr.: But we're really satisfied with an efficiency ratio in the low 50s, high 40s.

Craig Nix: But we're really satisfied with an efficiency ratio in the low 50s, high 40s.

We will be ready.

Satisfies a the efficiency ratio in the low 50 540.

Marc Cadieux: Okay. Thanks for taking my questions.

Steven Alexopoulos: Okay. Thanks for taking my questions.

Okay. Thanks for taking my questions.

Frank B. Holding, Jr.: Thanks for taking my questions. Thank you.

Steven Alexopoulos: Thanks for taking my questions.

Frank Holding Jr: Thank you.

Operator: Thanks, Steve. Thank you. The next question goes to Christopher Marinac of KBW. Christopher, please go ahead. Your line is open.

Deanna Hart: Thanks, Steve.

Operator: Thank you. The next question goes to Christopher Marinac of KBW. Christopher, please go ahead. Your line is open.

Okay. Thank you Abe.

Speaker 2: Thank you. The next question go to Christopher Marinac of I? U B B A. christoprher, Please ahead AP.

Thank you. The next question does secrets that Mara <unk> <unk>.

Christopher Please go ahead your line is open.

Christopher Marinac: Hey, good morning. I wanted to ask a question about being able to raise your loan yields related to deposit balances, and if they were to sort of go below certain levels. Are you able to do that, and is there still more push on loan yields as we move into the next few quarters?

Speaker 9: Take your morning but want to ask a question about being able to raise your loan yields related to deposit balances and if they were to sort of go below certain levels. Are you able to do that? Is there still more push on loan yields as we move in the next few quarters?

Hey, good morning, I wanted to ask a question about being able to raise your loan yields related to deposit balances and if they were to sort of go below certain levels are you able to do that or is there still more push on loan.

Brady Galey: And the next question goes to Brady Galey of KBW Brady. Please go ahead. Your line is open. Thank you. Good morning, guys.

Yields as we move into the next few quarters.

Brady Galey: I wanted to start with the morning possible share by back in 20. Yeah, good morning. I wanted to start just with the possible share by back in 2024. I know you mentioned you need to wait and submit your 2024 capital plan. Just remind us of the timing of that I think in prior years that's been around around July. Yeah, if we if we we certainly will consider a charity purchase plan as part is part of our capital plan in 2024.

Okay.

Speaker 12: That is your question around the yield or the balance of. You're saying: push on loan yield and we continue to price loans in access of where we're pricing thedeprits and are you?

Frank B. Holding, Jr.: Is your question around the yields or the balances? You're saying push on loan yields? I mean, we continue to price loans in excess of where we're pricing deposits. And.

Frank Holding Jr: Is your question around the yields or the balances? You're saying push on loan yields? I mean, we continue to price loans in excess of where we're pricing deposits. And.

Okay.

Your question around the yields or the balance of you, saying push on loan yields I mean, we continue to thrive.

Loans in excess of where we're pricing deposit.

And.

Ah.

Christopher Marinac: Are you talking about spreads?

Frank Holding Jr: Are you talking about spreads?

Are you talking about spreads.

Craig Nix: Well, Craig, I'm talking more about, I guess, in your loan contracts with new loans, my impression is that there's the ability to kind of push yields higher if compensating balances go below certain levels. It's sort of an enforcement to get more deposits, but also kind of have better pricing if customers start to pull the funds.

Christopher Marinac: Well, Craig, I'm talking more about, I guess, in your loan contracts with new loans, my impression is that there's the ability to kind of push yields higher if compensating balances go below certain levels. It's sort of an enforcement to get more deposits, but also kind of have better pricing if customers start to pull the funds.

Speaker 9: I'm talking more about. I guess you know in your loan contracts with new loans that my impression is that there is a ability to kind of push yields higher if compensating balances go below certain levels. It's sort of a enforcement to get more depositsa but also kind of have better pricing at customers. You start to pull funds.

Well, Craig I am talking more about I guess in your loan contracts with new loans.

My impression is that there is the ability to kind of push yields higher if compensating balances go below certain levels of sort of a enforcement to get more deposits, but also kind of have better pricing if customers are to pull funds.

Brady Galey: And if that should be included and approved, it would commence in the second half of 2024. Consistent with prior plans. Okay, and then on the NII guidance, it's down around 70% link quarters that that would suggest there's some them decline as well on the fourth quarter. Is that more a function of a credible yield declining, which I think you hinted at a couple of minutes ago, or is that more a function of the core net interest margin?

Operator: Answer.

Frank Holding Jr: Answer.

Okay.

Frank B. Holding, Jr.: Go ahead. I think what you're referring to is on the SVB side, and we've not pushed any on the deposits to come back and to push those loan yields higher. I think in general, there's obviously opportunities as market rates continue to increase to reprice loans higher. The main opportunity for us right now is obviously in the fixed-rate loan book where we reprice approximately 20 to 25% a year up on an ongoing basis. And we expect to continue to see that momentum going into next year.

Craig Nix: Go ahead. I think what you're referring to is on the SVB side, and we've not pushed any on the deposits to come back and to push those loan yields higher. I think in general, there's obviously opportunities as market rates continue to increase to reprice loans higher. The main opportunity for us right now is obviously in the fixed-rate loan book where we reprice approximately 20 to 25% a year up on an ongoing basis. And we expect to continue to see that momentum going into next year.

Okay.

Speaker 12: I think what you're referring to is on the hv side and we've not push any on the posits to come back and push those loan years higher. I think in general there's obviously opportunities as market rates can continue to increase the reprice LO higher.

I think what you're referring to is on the SUV side and we've not pushed any on the pockets to come.

Come back and to push those loan yields higher I think in general there is obviously opportunity.

Market rates can continue to increase the reprice loans higher.

Speaker 12: The main opportunity for us right now is obbably the fixed rate number book where we reprise approximately two point zero two five thousand% a year up on an ongoing basis and we expect to continue to see that momentum going into next year.

Main opportunity for US right now is obviously in the fixed rate loan book, where we repriced approximately 20% to 25% a year up on an ongoing basis and we expect to continue to see that momentum going into next year.

Brady Galey: Or is it a little bit of a if you if you if you isolated ex accretion in the fourth quarter, we expect them to decline by one basis point. So we have some stabilization there with accretion, we're expecting it to decline by 19 basis points. So it is an accretion issue, both on net net interest income and dollars and on the margin. Okay, and then you know, I appreciate the more Q expense guidance, it was like you're going to get more cost saves out of civ B as we look into 2024.

Christopher Marinac: Got it. Great. And then any other general thoughts about kind of where your adversely rated credits may go next year? Would you think that they change and deteriorate, or would you see them kind of stable from here?

Speaker 9: Got it great. And then any other general thoughts about kind of where your adversely rated credits may go next year. Would you think that they change in deteriorate, or would you see them kind of stable from?

Got it great and then any other.

General thoughts about kind of where your adversely rated credits May go next year would you think that they change and deteriorate or would you see them kind of stable from here.

Okay.

Frank B. Holding, Jr.: That's the trends in adversely classified loans. How do we expect that to go next year?

Frank Holding Jr: That's the trends in adversely classified loans. How do we expect that to go next year?

Speaker 9: Hey that's not true in adversely classified lines how we expect that to go. The atmosphere So obviously with the inflation pressures and elevated interest rates we are seeing migration- we would continue to see that to some degree. And obviously the areas that we are our most challenger, the ones to Craig, is reference, which is certainly office, and the small ticket equipment finance.

Hey, that's not trained in adversely classified loans, we would expect that to go next year. So obviously with inflation pressures and elevated interest rates, we are seeing migration.

Christopher Marinac: Oh, yeah. So obviously, with the inflation pressures and elevated interest rates, we are seeing migration. We would continue to see that to some degree. Obviously, the areas that are most challenged are the ones Craig has referenced, which is certainly office and small-ticket equipment finance. Great. That's very helpful. Thank you very much for the information this morning.

Frank Holding Jr: Oh, yeah. So obviously, with the inflation pressures and elevated interest rates, we are seeing migration. We would continue to see that to some degree. Obviously, the areas that are most challenged are the ones Craig has referenced, which is certainly office and small-ticket equipment finance. Great. That's very helpful. Thank you very much for the information this morning.

Brady Galey: So how do you think about expenses next year, you'll have some cost says, but you also have some legacy expense creep like could could you potentially keep expenses flatish next year? Right now for looking, we're not providing 2024 guidance, but just directly, I think flatish to low single digits percentage increase going in the 24. Okay, great. Thanks for all the color guys. Thank you.

We will continue to see that to some degree.

And obviously the areas.

That we are most challenging the ones Craig has referenced which is certainly office and.

Small ticket equipment finance.

Okay.

Great. That's very helpful. Thank you very much for the information this morning.

Frank B. Holding, Jr.: Thank you.

Christopher Marinac: Thank you.

Speaker 13: transcript

Thank you.

Operator: Thank you. And as a reminder, if you would like to ask a question, please press star followed by 1 on your telephone keypad. And our next question goes to Brian Foran of Autonomous. Brian, please go ahead. Your line is open.

Yes.

Speaker 2: Thanks for, and as a reminder, if you would like to ask a question, please press staff. Follow by 100 televen he pad.

Thank you and as a reminder, if you would like to ask a question. Please press star followed by one on your telephone keypad.

Speaker 2: And our next question goes to Brian foreign of Autonomous Brian Please go headgeline is.

And our next question issue, Brian Foran of Autonomous. Please go ahead. Your line is open.

Stephen Axopoulos: Thank you, and the next question goes to Stephen Axopoulos of JP Morgan. Stephen, please go ahead, Ryan is open. [inaudible] Good morning. Good morning. [inaudible] Good morning. Good morning. [inaudible] and then next year, I think you'd see it in that same range per quarter.

Brian Foran: Oh, hi. I just wanted to clarify on the expenses. Recognizing it's not a formal 2024 guide, but just to make sure I'm using the right base, when you say flat to low single digit as potentially an outcome, is that relative to the full year, $4.12 to 4.15 billion, or is that relative to 4Q annualized, which I guess would be about $4.5 billion?

Okay.

Speaker 9: Oh I just wanted to clarify on the expenses recognizing it's not like a four twenty four guys, but just to make sure I'm using the right base when you say fllat to the low single digit as potentially of an outcome, is that relative to the full year at four point 1, two to four 1, five billion here? Is that relative to four Q annualized, which I guess would be about four point five?

Oh, Hi, I just wanted to clarify on the expenses recognizing it's not like a formal 'twenty four guide, but just to make sure I'm using the right base when you see flat to low single digit.

It's potentially an outcome is that relative to the full year at 412 to one 5 billion or is that relative to.

<unk> annualized, which I guess would be about $4 5 billion.

Frank B. Holding, Jr.: Brian, the way I'm looking at it, since we were not merged in Q1, I'm comparing the three quarters of 2023 to the three quarters of 2024 where we're comparable. That's what I'm saying is flat to low single digits up.

Frank Holding Jr: Brian, the way I'm looking at it, since we were not merged in Q1, I'm comparing the three quarters of 2023 to the three quarters of 2024 where we're comparable. That's what I'm saying is flat to low single digits up.

Speaker 6: Brian , the way I'm looking at it, since we were not merged in the first quarter, I'm comparing the three quarters of twenty three to the three quarters of 24. where we're comparable, and that's what I'm saying- is flat to you know, one low single digits off.

Brian the way I am looking at it since we were not merged in the first quarter and comparing that three quarters of 'twenty three.

Two to three quarters of 24, where were we.

Comparable and that's what I'm, saying is.

Flat.

Low single digits up.

Brian Foran: Okay. So the 9 months where the two companies are together, whatever that means.

Speaker 6: Okay the nine months where the two companies are together, the obviously look year over year. We're going to, we're going to be up because we the first quarter's se B first ciz weren't, we weren'tt.

Okay.

The nine months, where the two companies who together.

Frank B. Holding, Jr.: We obviously looked year-over-year. We're going to be up. We're going to be up because Q1, SVB, First Citizens, we weren't merged. So you're going to see you could see a double-digit percentage increase year-over-year given Q1.

Frank Holding Jr: We obviously looked year-over-year. We're going to be up. We're going to be up because Q1, SVB, First Citizens, we weren't merged. So you're going to see you could see a double-digit percentage increase year-over-year given Q1.

Obviously look year over year, we're going to be up we're going to be up because the first quarter FCB for systems Werent, we werent.

Speaker 6: Merge So you're going to see you could see a double digits percentage increase year-over-year, given the first quarter.

Mers, so youre going to see you could see a double digit percentage increase year over year, given that the first quarter.

Brian Foran: Okay. That's helpful. I initially plugged it in relative to the full year and had you guys making like $250 per share and maybe got a little too excited. So I appreciate the clarification. That was it.

Speaker 7: Okay that's all. I initially plugged it in relative to the full year and, as you guys, making like $250 per share and maybe got a little too exc. So I appreciate T but not nation. How would this?

Okay. That's helpful. I initially plugged in and relative to the full year.

Have you guys, making like $250 per share and maybe got a little too. So I appreciate that.

Yes.

Frank B. Holding, Jr.: Gotcha.

Frank Holding Jr: Gotcha.

Yes.

Got you.

Operator: Thank you. And our next question goes to Brody Preston of UBS. Brody, please go ahead. Your line is open.

Speaker 14: Thank you, and our next question goes to brodie Preston or BS. brodie, Please goglad, your line is AP. Good morning.

Thank you and our next question does Brody Preston of UBS. Please go ahead. Your line is open.

Okay.

Brody Preston: Hey, good morning, everyone. I wanted to start, just maybe, on credit. Craig, I just wanted to better understand the charge-offs within the SVB book. I think last quarter, you had one that you had called out, and then you had a couple others that you kind of cleaned up. These seem to be clustered in the innovation portfolio. And so I guess I wanted to ask, was this more of a cleanup quarter as well? And I say that just because the charge-off rate on that portfolio seems to be or this quarter, at least, was running close to what SIVB experienced back during the GFC. So I just assumed that there was some cleanup charge-offs there that you had marks against.

Hey, good morning, everyone.

Okay.

I wanted to start just maybe on <unk>.

Speaker 15: I I just wanted to better understand the charge off in the sv B book. You know, I think last quarter you had one that you had called out and then you had a couple of others that you kind of cleaned up. You know these.

Got it.

Alright, guys I, just wanted to better understand.

The charge offs in the SPV book I think last quarter, you had one that you had called out and then you had a couple of others that you're kind of cleaned up.

These seem to be clustered.

Speaker 15: Clustered in the innovation the innovation portfolio and sorry I guess I wanted to ask was this more of a cleanup quarter as well and I say that just because the.

Clustered in the innovation.

The innovation portfolio and sorry, I guess I wanted to ask was this more of a cleanup quarter as well.

And I say that just because the Ah.

Speaker 15: A charge off rate on that portfolio seems to me, for this quarter at least, was running close to what should be experien fac in the G F, C. So I just assume that there was some clean up charge offs there, that you had marx Mark.

Charge off rate on that portfolio seems to be this quarter or at least was running close to what <unk> experienced factor on the Dfc. So just assume that there was some cleanup charge offs. There that you had marks remarks again.

Frank B. Holding, Jr.: I wouldn't characterize it that way. Again, approximately $56 million of the $100 million was reserved for. So we did anticipate the charge-offs. We got into 35 to 45. Charge-offs came in higher than we expected at 53 basis points for the quarter. But I would not characterize it as this was a cleanup quarter or that last quarter was. I think we expect the charge-offs to remain elevated at least through the first half of next year and consistent with these numbers. And then we'll see what happens in the second half. Again, we're not giving guidance today going forward. But no, I would not characterize it as a cleanup.

Frank Holding Jr: I wouldn't characterize it that way. Again, approximately $56 million of the $100 million was reserved for. So we did anticipate the charge-offs. We got into 35 to 45. Charge-offs came in higher than we expected at 53 basis points for the quarter. But I would not characterize it as this was a cleanup quarter or that last quarter was. I think we expect the charge-offs to remain elevated at least through the first half of next year and consistent with these numbers. And then we'll see what happens in the second half. Again, we're not giving guidance today going forward. But no, I would not characterize it as a cleanup.

Speaker 6: I wouldn't I wouldn't characterize it that way again approximately 56 million of the hundred was reserved for.

No I wouldn't I wouldn't characterize it that way.

Again, approximately $56 million or 100 was reserved for.

Speaker 6: So the did. We didn't anticipate the charge-off, they were just we guided. The 35, 45 charge-offs came in higher than we expected.

We did anticipate charge offs. They were just guided to 35 45 charge offs came in higher than we expected.

Speaker 6: 53 basis points for a quarter. But I would not characterize it as this was a cleanup quarter or that last quarter was. I think we expect the charge offs to remain elevated at least through the first half of next year consistent with these moments, and then we'll see what happens in second half. Again, we're not giting to guideanceus today going forward but now would not characterize.

At 53 basis points for the quarter, but I would not characterize it as this was a clean up quarter or that last quarter was I think we expect charge offs to remain elevated at least through the first half of next year.

Consistent with these numbers and then we'll see what happens in the second half again, we're not giving guidance today going forward.

But no I would not characterize it as a cleanup.

Brody Preston: Got it. Do you happen to know what the mark you have against the innovation book is?

Speaker 15: Go do you have to know what the remark you have against the animvation book is?

Got it do you happen to know what the.

Mark you have again the.

Innovation buckets.

Okay.

Frank B. Holding, Jr.: We have a 4. Our allowance on the innovation portfolio is 4.42%. We also have a purchase accounting discount of 5.09%. So that's a 9.51% loss-absorbing capacity, which gives us 2.1 times coverage on that portfolio, which we believe is conservative and strong.

Frank Holding Jr: We have a 4. Our allowance on the innovation portfolio is 4.42%. We also have a purchase accounting discount of 5.09%. So that's a 9.51% loss-absorbing capacity, which gives us 2.1 times coverage on that portfolio, which we believe is conservative and strong.

Speaker 6: We have a, we have a 4, we have Act. Our allowance on the innovation portfolio is four point 4, two percent. We also have a purchase accounting discount of five point or 9%. So that's a nine point five. One percent loss of burbby capacity which gives us two point one X coverage on that portfolio. If we believe is.

We have a we have a board.

We haven't.

Allowance on the innovation portfolio is 442%. We also have a purchase accounting discount of five 9%. So that's a 951% loss absorbing capacity, which gives us two one times coverage on that portfolio.

Stephen Axopoulos: So I would think low high 40s, low 50s for the next five quarters. And that's really a function of just declining creation and come. Yeah. We're really satisfied with an efficiency ratio in the low 50s. Thanks for taking my questions.

Operator: Thank you.

Which we believe is.

Conservative and strong.

Brody Preston: Got it. And then I just wanted to ask one last one on the non-interest-bearing deposit trends. It looked like the SIVB book started to stabilize a bit, but still came down. But the NIBs were quite a bit stronger than I guess I would have originally thought just relative to the guidance you'd given before. So I wanted to ask, was there good NIB, was there NIB growth in the commercial or the consumer banks at all that kind of helped offset some of the cash outflows from the SIVB client base?

Speaker 15: Got it. And then I just wanted to ask one last one on the non interest bearing deposit trend.

Got it and then I just wanted to ask one last one.

The noninterest bearing deposit trends.

Speaker 15: It looked like you know, the this ID be book started to stabilize a bit but still came down.

It looked like.

B book started.

Stabilize a bit.

But still came down.

Christopher Maranac: In the next question, go to Christopher Maranac of I2BBA.

Speaker 15: But the N I B is reorted it stronger than I guess I would have really thought, just relative to the the guide into given before. But I want of ask there: good N I B, was there NI growth in you know, the commercial or the consumer banks at all that kind of helped offset some of the cash flow, the cash outflows from the City? Client.

<unk> are quite a bit stronger than I guess I would've originally thought just relative to the guidance you had given before.

Craig Nix: Christopher, please go ahead. You're 98 pin. Hey, good morning. I wanted to ask a question about being able to raise your loan yields related to deposit balances and if they would have sort of go below certain levels. Are you able to do that? Is there still more push on loan yields as we move into the next few quarters? It's your question around the yield or the balance of the same push on loan yields and we continue to try loans and access of where we're pricing the profit.

Craig Nix: And are you talking about spread? Well, Craig, I'm talking more about, I guess, you know, in your loan contracts with new loans that my impression is that there's the ability to kind of push yield higher if compensating balances go below certain levels. It's sort of a enforcement to get more deposits, but also kind of have better pricing if customers start to pull funds. I think what you're referring to is on the SVB side and we've not pushed any on the profit to come back and to push those loan yields higher.

I wanted to ask was there good niv was their NII growth.

The commercial or the consumer banks at all that kind of helped to offset some of the cash flow the cash outflows from the SMB client base.

Yes.

Frank B. Holding, Jr.: Well, if you look just from last quarter, non-interest-bearing deposits actually declined, but it did not decline at the rate we anticipated. So we did have a decline in those, and it was about $1.4 billion. But we had projected a decline that was a little larger. So that's why we would have you might have come up with a lower mix of non-interest-bearing to total deposits. And we did drop from 30% to 28% in the quarter. I mean, 32% to 30%. We expect to drop to about 28% in Q4 if our deposit projections hold.

Frank Holding Jr: Well, if you look just from last quarter, non-interest-bearing deposits actually declined, but it did not decline at the rate we anticipated. So we did have a decline in those, and it was about $1.4 billion. But we had projected a decline that was a little larger. So that's why we would have you might have come up with a lower mix of non-interest-bearing to total deposits. And we did drop from 30% to 28% in the quarter. I mean, 32% to 30%. We expect to drop to about 28% in Q4 if our deposit projections hold.

Okay.

Speaker 6: If you look just from last quarter, non interest-bearing.

Well, if you look just from last quarter noninterest.

Noninterest bearing.

Speaker 6: Deposits actually declined it did not decline at the rate we anticipated So we did have we did T have a decline in those from and it was about $1.4 billion so.

Deposits actually declined they did not decline at the rate we anticipated. So we did have we did have a decline in days from and it was about $1 $4 billion.

So.

Speaker 6: But we had projected a decline that was a little larger. So that's why you would have might have come up with a lower mix of noninterest-bearing to pedertal deposit.

We had projected a decline that was a little larger so that's why we would do.

You might have come out with a lower mix of noninterest bearing to total deposits.

Speaker 6: And we did drop from 30% to 28% in the quarter number 30 two percent to 30% we expect to drop to about 28% in the fourth quarter if our deposit projeions to.

And we did drop from 30% to 28%.

In the quarter with 32% that 30%, we expect to drop to about 28% in the fourth quarter, our deposit projections hold.

Brody Preston: Got it. And do you think that 28% is getting close to a bottom?

Speaker 15: Got in. Do you think that 28% is getting close to a bottom?

Got it and do you think that 28% getting close to a bottom.

Frank B. Holding, Jr.: I think there's more room for it to fall, especially if rates are higher for longer. Potentially into the mid-20s time. You want to mention something?

Frank Holding Jr: I think there's more room for it to fall, especially if rates are higher for longer. Potentially into the mid-20s time. You want to mention something?

Speaker 12: I think we have. There's more room. Important, the fall given up if we-'re, especially if for ates are higher for longer, potentially into to the mid twenty's timem. You want to miss time I was just going to mention. I mean, obviously it's a priority as we go to market together these noninteresting deposits. I think as you look at the third quarter and in the core bank.

I think we have.

And important to fall given that.

Essentially if rates are higher for longer.

Craig Nix: I think in general there's obviously opportunities that market rates can continue to increase the reprized loan higher. You know, main opportunity for us right now is obviously in the fixed rate loan book where we will provide the approximate rate 20, 25 percent a year up on an ongoing basis and we expect to continue to see that momentum going into next year.

Potentially into the mid Twenty's, Tom you want to emphasize that I was just going to mentioned I mean, obviously, it's a priority as we go to market together. These noninterest bearing deposits I think as you look at the third quarter and in the core bank.

[Company Representative] (First Citizens BancShares): I was just going to mention, I mean, obviously, it's a priority as we go to market to gather these non-interest-bearing deposits. I think as you look at the Q3 and in the core bank, it's actually really strong if you sort of neutralize for the impact you typically see as corporates make cash tax payments in September. So overall, I think the underlying trends look pretty good.

Craig Nix: I was just going to mention, I mean, obviously, it's a priority as we go to market to gather these non-interest-bearing deposits. I think as you look at the Q3 and in the core bank, it's actually really strong if you sort of neutralize for the impact you typically see as corporates make cash tax payments in September. So overall, I think the underlying trends look pretty good.

Speaker 7: It's actually really strong if you sort of neutralize for the impact they typically see. Ask corporates make cash tax payment in September . Overall think the underlying trends that look pretty good. H Thank you.

That's actually a really strong team sort of neutralized the impact we typically see as corporates make cash.

Craig Nix: Got it. Great. And then any other general thoughts about kind of where your adversely rated credits may go next year would you think that they change in the tear rate or would you see them kind of stable from here? That's not true in the adversely classified loans. How will we expect that to go? Yeah, next year. So obviously with the inflation pressures and elevated interest rates, we are seeing migration. We would continue to see that to some degree and obviously the areas that we are most challenging, the ones Craig has referenced which is certainly office and the small ticket equipment. Great. That's very helpful. Thank you very much for the information this morning. Thank you.

Cash.

Next payment in September.

Overall, I think the underlying trends.

Look pretty good.

Brody Preston: Got it. Thank you very much for taking my questions, everyone. I appreciate it.

Got it. Thank you very much for taking my questions and Ron I appreciate it.

Operator: Thanks, Freddie.

Deanna Hart: Thanks, Freddie.

Frank B. Holding, Jr.: Thank you, Brady.

Frank Holding Jr: Thank you, Brady.

Thanks, Brian.

Operator: Thank you. I'm not showing any further questions at this time. I'd like to turn the call back over to our host, Deanna Hart, for any closing remarks.

Speaker 2: Thank you. I'm not showing any further questions at this time. I'd like to turn the call back over to our host, bianna Hart, for any closing roommark.

Thank you I'm not showing any further questions at this time I'd like to turn the call back over to our highest danaher.

Caitlin.

Deanna Hart: Thank you. Thank you, everyone, for joining our quarterly earnings call today. We appreciate your ongoing interest in our company. If you have further questions or need additional information, please feel free to reach out to the investor relations team through our website. We hope you have a great day.

Okay.

Speaker 4: Thank you and thank everyone for joining our quarterly earnings call today. We appreciate your ongoing interest in our company and if you have further questions or need additional information, please feel free to reach out to the Investor Relations team through our website. We have we have a great day.

Thank you and thank everyone for joining our quarterly earnings call. Today. We appreciate your ongoing interest in our company and if you have further questions or need additional information. Please feel free to reach out to the Investor Relations came through our website. We hope you have a great day.

Okay.

Operator: Ladies and gentlemen, this concludes today's conference call. You may now disconnect. Have a wonderful day. Ladies and gentlemen.

Speaker 2: Ladies and gentlemen, that this includde today's conference call. You may now disconnect. Have a wonderful day.

Ladies and gentlemen. This concludes today's conference call. You may now disconnect have a wonderful day.

Okay.

Ladies and gentlemen.

Operator: Thanks for an as a reminder, if you would like to ask a question, please press the star, fill it by one on the telephone keypad.

Brian Foren: And our next question goes to Brian Foren of Autonomous. Brian, please go ahead, your line is open. Oh, hi, I just wanted to clarify on the expenses, recognizing it's not like a formal 24 guide, but just to make sure I'm using the right base. When you say flat to the low single digit as potentially an outcome, is that relative to the full year at 4.12 to 4.15 billion? Or is that relative to 4Q annualized, which I guess would be about 4.5 billion?

Brian Foren: Brian, the way I'm looking at it, since we were not merged in the first quarter, I'm comparing the three quarters of 23 to the three quarters of 24, where we're comparable. And that's what I'm saying is flat to, you know, low single digits up. Okay, so the nine months where the two companies are together. Obviously, look year over year, we're going to be up, we're going to be up because we, the first quarter, SAB versus, we weren't merged. So you're going to see, you could see a double digit percentage increase year over year given the first quarter.

Brian Foren: Okay, that's all. I initially plugged it in relative to the full year and has you guys making like $250 per share and maybe got a little too excited. So I appreciate you. That would be it. Gotcha.

Brody Preston: Thank you, and on next question, those who Brody Preston or VBS Brody, please go ahead, your line is open. Hey, good morning, everyone. I wanted to start just maybe on credit. I just wanted to better understand the charge us within the SAB book, you know, I think last quarter, you had one that you had called out. And then you had a couple others that you kind of cleaned up. You know, these seem to be clustered in the innovation.

Brody Preston: The innovation portfolio and sorry, I guess I wanted to ask is this more of a cleanup quarter as well. And I say that just because the charge operate on that portfolio seems to be, or this quarter, at least was running close to what should be experienced back during the GFC. So I just assumed that there was some cleanup charge off there that you had marks marks again. No, I didn't, I wouldn't care for either that way.

Brody Preston: Again, approximately 56 million of the hundred was reserved for. So we did, we did anticipate the charge off they would just, we got it to 35, 45 charge off came in higher than expected. At 53 basis points for the quarter, but that I would not characterize it as just as a cleanup quarter or that last quarter was. I think we expect the charge off to remain elevated at least through the first half of next year. And it consistent with these numbers, and then we'll see what happens in the second half. Again, we're not getting guidance today going forward, but no, we're not characterizing the cleanup.

Craig Nix: Got it. Do you have to know what the mark you have against the innovation book is? We have a four. We have our allowance on the innovation portfolio is 4.42 percent. We also have a purchase accounting discount of 5.09 percent. So that's a 9.51 percent loss of building capacity which gives us 2.1 times coverage on that portfolio. If we believe it's conservative and strong.

Craig Nix: We got it.

Brody Preston: And then I just wanted to ask one last one on the non-interest bearing deposit trend. It looked like, you know, the said the book started to stabilize a bit but still came down. But the NIVs were quite a bit stronger. Then I guess I would have really thought just relative to the guidance you had given before. So I wanted to ask was there good NIV growth was there NIV growth in, you know, the commercial or the consumer banks at all that kind of helped offset some of the cash outflows from the city client base?

Brody Preston: Well, if you look just from last quarter, non-interest bearing deposits actually declined. They did not decline at the rate we anticipated. So we did have, we did have a decline in those from, and it was about $1.4 billion. So we had projected a decline that was a little larger. So that's why we knew that might have come up with a lower mix of non-interest bearing to total deposits. And we did drop from 30 to 28 percent in the quarter. Now, with 32 percent to 30 percent, we expected drop to about 28 percent in the fourth quarter by the positive projection toll.

Craig Nix: Got it. Do you think that 28 percent is getting close to a bottom? I think we have more running for at the fall given that if we're especially for h or higher for longer. Potentially into the mid 20s, Tom, you want to miss it? I was just going to mention, I mean, obviously it's the priority as we go to market together. These non-interest bearing deposits, I think as you look at the third quarter in the core bank, it's actually really strong if you sort of neutralize for the impact you typically see as corporate make cash tax payments in September. So overall, I think the underlying trends look pretty good.

Tom: Got it.

Brody Preston: Thank you very much for taking my question. Thank you.

Deanna Hart: I'm not showing any further questions at this time. I'd like to turn the call back over to our host, Beanna Hart for any closing remarks. Thank you. And thank everyone for joining our quarterly earnings fall today. We appreciate your own ongoing interest in our company. And if you have further questions or need additional information, please feel free to reach out to the Investor Relations team through our website. We hope you have a great day.

Operator: Ladies and gentlemen, this concludes today's conference call. You may now disconnect. Have a wonderful day.

Q3 2023 First Citizens BancShares Earnings Call

Request a DemoDemo

FCN

First Citizens BancShares

Earnings