Good day, and thank you for standing by. Welcome to the SVB Financial Group Q2 2021 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. I would now like to hand the conference over to your first speaker today, Meghan O'Leary, Head of Investor Relations. Thank you. Please go ahead. Thank you everyone for joining us today. Our President and CEO, Greg Becker, and our CFO, Dan Beck, are here to talk about our second quarter 2021 financial results, and will be joined by other members of our management team for the Q&A. Our current earnings release, highlights slides, and CEO letter have been filed with the SEC and are available on the investor relations section of our website. We'll be making forward-looking statements during this call, and actual results may differ materially. We encourage you to review the disclaimer in our earnings release dealing with forward-looking information, which applies equally to statements made in this call. In addition, some of our discussion may include references to non-GAAP financial measures. Information about those measures, including reconciliation to GAAP measures, may be found in our SEC filings and in our earnings release. Now I will turn the call over to our President and CEO, Greg Becker. Thanks, Meghan, and thank you all for joining us today. As you can see from our earnings announcement and slides, which we filed a few hours ago, we had another quarter of exceptional growth and profitability marked by continuing trends of outstanding balance sheet growth, strong net interest income, robust fee and market-related income, and solid credit. As a result of our outperformance, we once again increased our 2021 growth outlook. We were also thrilled to close our Boston Private acquisition on July 1st, and I'm sure you'll have lots of questions about that. In the meantime, to try to make modeling a little easier for all of you, we've included a high-level breakout of our expectations for the incremental impact on our 2021 outlook. When we start talking about our 2022 outlook next quarter, we'll wrap those impacts into our overall outlook, as we've always done with our private bank. Now, as is our practice, we'll go right into Q&A, and I'll ask the operator to open up the lines for questions. Thank you, sir. As a reminder to all participants, if you have a question, please press star one on your telephone keypad. Again, that's star one on your telephone keypad. However, if your question has been answered and you wish to remove yourself from the queue, please press the pound key. Please stand by while we compile the Q&A roster. Our first question is from the line of Steven Alexopoulos with JPMorgan. Your line is open. Hi, everybody. Hey, Stevne. Greg, I want to start with a big picture view. In all of the years you've been doing this, have you ever seen the business this strong, even dating back to the pre-dot-com period? The straight answer is no. Steven, you and I have talked about this a lot over the years, which goes back to the basis of our business and what our focus is. Being exclusively focused on technology and life sciences, and we've always said that market is what we believe is the best market to be into. Especially during the pandemic, what we thought was going to be an issue ended up really being a catalyst for growth in the innovation economy. It slowed down for a brief period of time. When there really weren't a lot of other alternatives from an investment perspective, money really flowed into the market. That was incredibly strong for the second half of 2020. Clearly, as you can see, for the first half of 2021, it has been exceptional. Really, technology and healthcare are really taking over really the growth from my standpoint from a global perspective. A lot of people are investing in that, and we're benefiting from that. Okay. That's helpful. If we look at the growth in total client funds, how should we think about this? How much is coming from new customers? We know new customers continue to go up each quarter. How much is just larger rounds in IPO proceeds? Basically, is off balance sheet just becoming a parking lot for IPO proceeds? Steven, I'll start answering it, then Mike may want to add to it. The growth in funds has actually been pretty balanced. The IPO market and public market activity has been more of a catalyst than it has been because it obviously picked up in the second quarter. That's a percentage, but it's not a huge percentage. Most of the growth has come from new financings from existing clients. Clearly, given that we added 1,700 new clients in the quarter, at the early stage mostly, that adds to it. The biggest driver is coming from existing clients raising increasingly larger rounds of financing. Okay. That's actually really helpful. Go ahead, Mike. Steven, maybe I'll just add a little bit of color there to what Greg's saying. When you think about new clients, go back to our new client acquisition engine. It's one of the best, obviously is the best out there. This quarter we hit record quarters as well too in terms of new client acquisition. The thing to keep in mind. A lot of those are new, and so it takes a couple of months for them actually really to start to ramp up their deposit flow taking. Think about it as like an engine that you start to feed it here, and then that gives good flow whether it's three, four, five, six months down the road. Going back to what Greg was talking about earlier on in terms of this unprecedented flow of activity, you're seeing, again, as you know, the dry powder is just sensational. What you're also seeing is people crossing over and more going into the VC. They're seeing the great returns. You see the SPAC phenomenon as well, that's starting to pick back up again. I know it dropped down in April. You have the non-traditional investors, the corporate venturing ones, the sovereign wealth funds. There's just a lot of funds going in. Going back to what Greg was saying as well too is this acceleration phenomenon because of COVID. You have a lot of good ideas and business models that are being formed. You have a lot of good talent that's being attracted to the market. No doubt the tailwinds are incredibly strong here right now. Okay. You had a second part to your question though, Steven, which is where is it going? When you have such a low rate environment, you will recall this just from not too long ago when rates were back at a very, very low level. Because there's really nothing or very little yield you can get off balance sheet, you end up in this spot where it's kind of split between on and off balance sheet, and it's about 50/50, and it was that way not that long ago. When rates start to pick up, more of that starts to move off balance sheet. Right now, and again, for the foreseeable future, we're going to be in this low rate environment. I think it's a good gauge to expect where they're going to be. Yeah. Greg, just a final question on that point. Maybe this is for Dan. Why has the expected fee income benefit from higher rates picked up so much on the off-balance sheet compared to last quarter? It looks like it's almost double. Thanks. Dan, you go ahead. Yep. Yeah, go ahead. Steven, if you take a step back and you think about what's been happening, repo rates have actually been negative throughout the quarter. As a result, that's been eating some of the existing spread in the off-balance sheet client funds. One positive development during the quarter is that the interest on excess reserves has increased. We should see a small improvement going into next quarter and at least a bottoming of the reduction in margin in client fund fee income. That's the driver, and I think we've hit the bottom. Okay. Great. Thanks for taking my questions. Yep. The next question is from the line of Ebrahim Poonawala with Bank of America. Your line is open. Good afternoon. I guess, Dan, just to round out Steven's question on the off-balance sheet deposits. You mentioned the 9 basis points- 11 basis points in your slides for the first 25 basis points hike. Is that at this point contractual where we should expect that if rates go up, the first 9 basis points or 11 basis points reset will happen immediately? Yeah. That's the structure of those products. Depends on the competitive situation. There may be some blend where you give up a basis point or so, but contractually, once we get that 25 basis points, that's uncertain Got it. I guess throughout your letter, Greg, and in the slide deck, you talk about accelerated investments. I was wondering if you can give a little bit more color around these investments and payoffs, both in terms of what you're seeing at Leerink and building out the investment bank there, and then in terms of your plans with Boston Private over the next year. Yeah. Ebrahim, I'll jump in on that. What we tried to do is describe on slide 12 just a breakdown of all the different areas where we see investments, and so it's a pretty broad portfolio. You asked specifically about two areas. One is investment banking. I would say a couple things about that. One is the existing business is doing exceptionally well. They're moving up the league tables. They're getting incredible accolades, and I would say they are definitely a world-class investment bank in the life sciences area. We basically said, and we've said this from the day that we brought Leerink onto the platform, that we didn't want to just stay in healthcare. We wanted to actually build it out across other areas. Healthcare services and health tech, which we brought Barry Blake and a bunch of other people. Again, building out healthcare services into a world-class team. Now, I've said this many times over the last 12 months, building out our technology investment banking side. We're, I would say, expect to hear announcements from us formally in middle of August or around the middle of August to give you a lot more clarity on that. There's no question we believe this is a big opportunity. It really stems from the core business, which is the commercial bank and how deep those relationships are, the market share that we have, the relationships we have with those clients. It's just a natural fit to then leverage into technology investment banking. That's going to be broad. It's going to be sponsor finance being a big driver of it. It's going to be traditional M&A. It's also going to be ECM. We expect all those businesses to be built out and be built out later this year. Now from a return perspective, we expect that we're going to be continuing to make money this year on investment banking. Next year, as those revenues start to pick back up or pick up from both our core business, the healthcare business, technology, and healthcare services, that we would expect that to see very nice growth. What could it look like? I think we would expect, although it's early, that on the low end, maybe roughly $100 million of additional revenue from the new initiatives, up to maybe $150 million. Again, it's very early, and the market is really going to dictate that along with how fast the teams get up to speed. More to come on the investment banking side. Your second question was on private banking. I just would go back to the slide that really is about our strategy, and that's really on slide 11, which really lays out where we're headed as a company and how important that is. In 11, you can see that, again, the strength of Silicon Valley Bank is really the catalyst to then take clients and introductions to the private bank, to SVB Leerink, and to SVB Capital. The private bank with the closing of Boston Private, we've dramatically upsized what our capabilities are. We were just having a conversation today at our board meeting where really we have the entire product set now. The entire product set to take care of our clients. It's the first time in our history. We expect nice growth in that business. That growth is built into our forecast for the balance of 2021. Next quarter, as we always do, we'll then take those forecasts and then start to give you a first-hand look of what we expect in 2022. More to come in the next many days. Got it. Just one quick one on the NASDAQ Private Market investment. Is that a client acquisition tool or is that one where you further enhance your relationship with the existing clients? I'm just wondering your thought process around that investment. Yeah. They're both true. If you were to say, what's the primary driver? The primary driver is helping the commercial banking clients. That's the primary driver. We've said this all along. We want to be the one-stop shop. We want to be able to take care of our clients' needs no matter what those are. When you think about the length of time companies are staying private, they're staying private longer. One of the catalysts to allow companies to stay private longer is making sure that employees and investors have liquidity, have access to liquidity. We believe NASDAQ Private Market and the consortium that's being built is going to be a great solution for that. Very excited it to be a solution for our clients. As we've laid out in some of the other investments that we've made, we've kind of highlighted other groups that will benefit. The private bank will benefit because they're going to have more liquidity being generated from these individuals who are clients of ours. SVB Leerink will be able to provide investors to that platform who will then look to purchase the stock of the private companies who are looking to sell or the individuals. Again, we believe it's for our clients, but it services the whole platform. Got it. Thanks for taking my questions. Yep. The next question is from the line of Ken Zerbe with Morgan Stanley. Your line is open. Hi. Great. Thank you. Hi, Ken. Good morning, or good evening. Maybe start off with the guidance. In terms of the expenses, I think you're now looking for a mid-30s growth rate. I haven't run all the numbers quite yet, but it feels like the jump up in expenses or the expense outlook seems a little higher than the revenue increases, like the NII and the core fee increases. Was that intentional in terms of like I'm just trying to figure out if there's additional investments being made beyond what you originally thought maybe three months ago. I'll start, Ken, and then I know Dan will get into a lot more detail. What I would look at is the pre-integration of Boston Private. One of the things we did, as I said in my opening comments, is breaking the expense identity, two different areas. Part of this is incentive compensation, so for paying for performance. Part of this relates to investing in the business. Those are the two biggest things. The third one is the investment we're making in investment banking, and we expect to make in investment banking, specifically in the technology investment banking area. That's how I would break it down. We try to give that detail on slide 33, where you kind of have those different sections. To give you more detail, I'll turn it over to Dan. Ken, generally speaking, it should be pretty close to offsetting. If you look at our annual guidance, we increased that outlook by 10%, and that excludes Boston Private and those integration costs. Greg kind of went through where those areas are. There's clearly a lot going on in expenses. For this quarter, we're going to at least give a little bit more detail on Q3 and Q4, just so everybody's on the same page. In Q3, our expenses will likely be in a range of $725 million-$750 million. That includes Boston Private, but excludes the restructuring charges. That'll drop back into the $720 million-$740 million range in Q4, again, including Boston Private and excluding the restructuring. Q3 is going to be elevated because that's the quarter that we expect to recognize a significant amount of the tech investment banking team hires. That at least should give you a sense of where that run rate is, Q3 and Q4. When we look at the integration and the integration of restructuring costs, we think that's going to be roughly about $100 million pre-tax in 2021, with roughly 80%-90% of that coming through in Q3. Back to your original question, largely speaking, excluding the restructuring costs. We should come pretty close to offsetting the increase in the investment within the guidance. Got it. Understood. Okay. The revenue or the associated revenue of the technology investment banking piece, is that also in these numbers, or does that really start to pick up more next year? There's a little bit, Ken, in the expectations for the second half of the year, but it's a de minimis number. If it comes, if it happens, it'll be upside, which is a possibility in the second half of the year. Again, if all things play out, the team will be hitting the ground in August, and then we've got work to do to start to generate revenue. That's why I try to give some idea of a range, and this is a very high-level range of what 2022 could look like from a generation from both technology investment banking and healthcare services investment banking revenue. Got it. Okay. If I could just ask one final question. In terms of securities, obviously I saw you added, I don't know, $18 billion more to your securities portfolio this quarter. Can you just talk about what you're investing in? Is it including duration of that? I'm just wondering how it splits out. Thank you. Yeah. The vast majority of what we're adding, we're adding agency-issued mortgage-backed, commercial mortgage-backed securities, as well as some municipal bonds in the quarter. We added a small amount of corporates as well. Generally speaking, that's where we're adding duration-wise. In the quarter, we spent most of the time adding out in that kind of four to five-year duration in those products. That's where you're seeing the pickup, at least in the yield. And we also had a good quarter just in the acquisition in municipal bonds. When we're acquiring, we put about $2 billion to work in the available for sale portfolio. We're buying much shorter-dated treasury securities. Obviously, not picking up a ton there from a yield perspective, but just making sure that we're continuing to build out that highly liquid part of the investment securities book. All in, looking ahead, Ken, when we put money to work, we think that purchase yields on an all-in 120 basis points-130 basis points based on today's environment. with a substantial or the vast majority of the purchases we're making in our held to maturity. Think that three to five-year duration just based on today's rates. All right. Perfect. Thank you very much. Thanks, Ken. The next question is from Jennifer Demba with Truist Securities. Your line is open. Thank you. Good evening. Hi, Jennifer. Hi. Congratulations on a great quarter. My question is on Boston Private. Greg, can you remind us of the retention packages you may have put in place for key employees there? Just want to make sure that that operation can hit the ground running when you guys want it to. It's a great question. We did have retention packages putting in place, and it was in the, I'll call it $30 million-$40 million range. There's many ways to think about retention. One is rolling over the incentive options and things like that are part of that continue to vest and would be in the money given the appreciation in the stock price, the other retention. The third part is, again, the reason for the acquisition of Boston Private, as we've said many times, it wasn't about cost savings as the primary objective or even a secondary objective. It was building on what they had and adding it to what we had in our private bank to kind of build something unique. If you were to sit down and talk to the employees that are coming over, they want to be part of this platform. There's a high level of excitement. I think the number that I saw, I think from an employee retention perspective so far I think was 98% coming over. I feel really good about it. I even feel better about it as we closed and we're getting together and talking and spending more time together and engaging clients. Very optimistic that our cultures fit, the people are feeling good, and that we're going to keep this talented group of people on both our private bank that existed before and Boston Private together for the long run. Greg, is there any scenario where you could see more, another bank acquisition for SVB? Is there something else that could fit for you? Jennifer, I didn't think there was one to start with. We've talked about that over the years. The fact that Boston Private was something that we had talked about for many years and it came true, that's one of maybe the only one that could fit. You never say never, but it is incredibly unlikely and certainly not anything in the short run. If we were to do additional things over time, that would be inorganic. That could be around the private bank where it's looking at some RIAs. I would look at those almost more as acqui-hires as opposed to anything material. We feel really good about the platform we have right now in all four businesses, and so that just isn't likely. The final point is when you look at our core business and the growth that we have. Acquisitions, at least right now, don't need to be a key part of our growth. I think we're doing okay on our own. Thanks so much. Yep, absolutely. The next question is from Bill Carcache with Wolfe Research. Your line is open. Hi, thank you. I wanted to ask if you guys could give a little bit of additional color on some of the biggest changes you expect to face when you eventually become a Category III bank? I'll start at a high level, and I know Dan for sure will want to add some commentary on it. When you head to a Category III, Dan will get into the capital and the liquidity and what are the requirements around that. I just would say overall, the bar is raised across all facets of risk controls. This isn't a surprise to us. We certainly expected to be crossing LFI status. We had working groups and plans that were building around that. Now, it became faster than we expected at the end. We were certainly preparing for it. The two biggest areas that we need to be ready for and are getting ready for, and working hard at it, is in just overall risk and controls. Dan, do you want to add more context to that, specifically in liquidity and capital? Yeah. You picked the two areas, Greg, that will be a focus under both Level 4 and Level 3. Under Level 3, we'll be exposed to stress testing and supervisory assessment on an annualized basis. I think, looking at the other requirements of the liquidity requirements, and having to be able to process liquidity ratios on a daily basis and the systems required for that, are going to be a big part of the effort on a go-forward basis. As I step back and I just look at the fundamental financial ratios over time, we'll come to grips with 100% of what they look like. Looking at our balance sheet and looking at our capital structure, I don't see significant changes in the liquidity that we hold and the securities that we hold. I think we'll go to serv us a long way as a Category 4 and a Category 3 institution going forward. I think the majority of the list is around risk practices, systems, and things along those lines. We've embedded those costs in our guidance year when we look at where we are in 2021. Very helpful. Thank you. Last one from me. My other questions were covered. Can you speak to how you guys have positioned the securities portfolio? How you're thinking about incremental hedges and just overall positioning for whatever ultimately direction rates end up taking? Yeah. It's Dan. I think as we look at the investment securities portfolio, a much bigger part of the bank's balance sheet today than it was 12 months ago. We've been positioning and really haven't changed the thought about it since last quarter, to continue to buy excess liquidity in safe agency mortgage backs, CMBS, and municipal bonds, and that, let's call it for three- to five-year duration. To continue to invest in shorter Treasury securities and shorter securities and available for sale. That allows for us to continue to put money to work in as good of a yield as we can possibly get. At the same time, protect the available for sale portfolio and the OCI risk there from a capital perspective. That's really the strategy that's going to translate, at least based on how rates look today at purchases in the, 120 basis points-130 basis points for the remainder of the year. Let's hope to see that we see some improvement in rates from here. At today's we think 120 basis points-130 basis points makes sense. Thank you for taking my questions. The next question is from the line of Chris McGratty. You're with KBW. Your line is open. Greg, afternoon. Hey, Chris. Greg, I'm looking at slide 13 just on Boston Private. Come back to that for a moment. Yeah, appreciating the deal was certainly more strategic than financial. You referenced the $400 billion opportunity over time in the market. I guess I'm interested. I covered Boston Private for years, and one of the challenges was flows. I'm kind of interested in how your Rolodex of customers can help turn that tide and perhaps bring that revenue recognition sooner. Thanks. Yeah. It's a great question, Chris. We spent a lot of time on that as we did our evaluation. One of the things that I look at that Anthony and his team and all the people he brought on board, plus the existing team to me, it wasn't a question of capabilities. It was actually, as you said, it's a question of where you're going after. What is your target market? As I think about Boston Private, their target market, generally speaking, was the same target market that most Traditional private banking groups were going after, and that's a competitive space. What we bring to the table is a wealth creation group of individuals that is like no other one. When you take care of them at a very early time in their wealth creation cycle, and you add value to them, and you spend time understanding specifically what they need, we believe we're going to be able to add a lot of deal flow to the wealth team and the private banking team that exists now in the combined teams. That's what we have to prove out. I would tell you, we did a lot of research. We talked to a lot of our clients on what they were looking for, and there was definitely a very high receptivity to it. Now we got to prove that out. Even though it's been early, it's only been a few weeks. I would tell you the energy, the excitement, and the quality of people that are on board and part of this combined private bank, I'm very bullish on. That was the investment thesis or the acquisition thesis, and it's up to us now to prove it out. That's great color. Thanks, Greg. Yep. Once again, ladies and gentlemen, if you have a question, please press star one on your telephone keypad. Again, it's star one on your telephone keypad. Our next question is from the line of John Pancari with Evercore ISI. Your line is open. Good afternoon. Hey, John. Just one quick clarification on your tech investment banking announcements that is expected. Just to confirm, that is organic, right? In terms of hiring or team hiring or primarily organic, you are not talking about an acquisition? Yeah, it's all people. It'll all be people. Okay. Got it. Okay. Just wanted to confirm. Secondly, this is a little bit higher level, but want to get your thought on the impact to your bank, to your business, more specifically from an inflationary environment. We saw inflation expectations ratchet higher earlier on in the quarter, tech sector took a hit, your stock took a hit with it in general. The questions came in about how SVB would be impacted. Aside from a positive from a higher rate environment and potential Fed action, given your asset sensitivity. Can you discuss your view of what the negatives would be to your business in an inflationary environment? Would the biggest negatives be the impact of loan growth from the pullback in business volume in the tech sector? Would warranting be a bigger factor or credit? Wanted to get your take on this. John, I appreciate the question. I also don't want to dismiss the first part, the positive part of the question, which is we would benefit significantly from increasing rates, and we've got several slides in the deck that actually show the net interest income expansion as well as the fee-based expansion because of the size of the portfolio and the additional basis points we would get on those funds. I don't want to move past that too quickly. Where could there be risk? To me, 1 of the areas is in securities and warrants. You could see risk there. You could see a slowdown in the pace of investment, which has been very rapid as people start to think there may be an alternative to investing in high growth stocks. Here's why I think it could happen, but at least I think the benefits are going to greatly outweigh the negatives. I think one of the things that this last 18 months has showed is that, again, I repeat this many times, the innovation space is the place to be. Although when you look at the amount of money that's gone into venture capital this year, over $180 billion in the 1st half. It is a massive number, and it's a big number compared to where it has been. When you think about that number relative to the global market and fund flows. It's still a small number. I still believe that while there will be bumps along the way, that the venture capital and fund flow into innovation is still going to be up and to the right. As we get bigger, we can support companies longer, and that target market or that available market will only get bigger, and it's only getting bigger. The second part then is on the warrants and securities gains and things like that. As we've said, that's a volatile number. You do have to pay attention to IPOs, you do have to pay attention to M&A. I actually think if you saw IPOs start to slow down, I believe you're going to start to see more M&A. What's nice about having a business that on the investment banking side that does both M&A and ECM is that if ECM starts to be slow, M&A hopefully will pick up or we expect it to pick up. Those are things to pay attention to, but I don't believe they'll be as significant if it's just in some level of inflation. I guess I'm going to give my final, my bias, which is if we do see inflation, I actually think it's going to be modest. I don't think it's going to be something that would be a fundamental change that would cause the market to get overly spooked. Again, something to pay attention to, and that's just my own opinion. No, it's very helpful, Greg. Thank you. Lastly, your Capital Call portfolio. I know originally it was heavily concentrated in tech and life science. It's become much more diversified as you've grown, I believe, by industry. Can you just update us on the industry concentrations within the portfolio or just some way to help us with the diversification? I'll give credit to our investor relations team, Meghan and Anna because the information is included in the deck, and I wouldn't expect you to have gone through it so quickly. Take a look at slide 44. We actually break that down into great detail. By industry, technology is roughly 36%, and you work your way around. The next largest one would be debt funds. You have life sciences, consumer. It's a very broad swath of industry segments that we're part of. Part of it is because the LPs are similar that go after this market, and the team has done such a great job in approaching the market, strengthening credit underwriting, adding more value. That's really been a great fuel of growth. Thanks for clarifying that. Sorry. One last one on that. What was that mix? What was the technology mix? Let's go like five years ago. Is it 36% current? What was it five years ago? I don't have that off the top of my head. If I were to speculate, I'd probably say you were probably closer to 45% or maybe 50%. Okay. All right. Thank you for taking my questions. Appreciate it. Absolutely. Have a great day. The last question is from the line of David Chiaverini with Wedbush Securities. Your line is open. Hi. Thanks. I had a question on capital. Can you comment on the pro forma impact on your leverage ratio from the Boston Private acquisition? As a follow-up, could you comment on your capital raising needs in light of your strong growth? Yeah. This is Dan. I'll start with the second question first and then get to Boston Private's impact. When we think about capital, we really think about two things, and one, you saw it in the quarter, just the continued strong profitability that we're generating north of 20% from an ROE perspective. We're certainly with the strong growth clearing that cost of capital. Second, support strong balance sheet growth going forward. This exceptional growth that we've seen over the last three to four quarters continues to put pressure on the ratio that we pay attention to the most, which is our Tier 1 leverage ratio at the bank. If you think about it, holding that client liquidity for us is absolutely key. We've been talking about it all day about the profitability and the growth. For us to deepen with our clients holding those deposits is really the key to our long-term profitability. In the quarter from a capital markets transaction perspective, we raised additional capital through preferred and senior debt, and that really helped support that Tier 1 leverage ratio. The markets have been open to us, and those transactions have been providing very low cost of regulatory capital to allow us to continue that excellent growth. Overall, we're really confident with our capital ratios. The risk-based measures at 12% at the quarter end are in really good shape. Considering the substantial liquidity and low-risk securities that we have on the balance sheet, we're really confident with the capital levels overall. That said, we're a growth company, and if growth continues at the pace or rate that we've seen over the last four quarters, all options would be open to us. We think that would be a good thing that that growth continues. We'd do what we need to do to support that growth. On to your second question on Boston Private. We determined at the deal that it was an accretive transaction from a capital perspective, and it is playing out that way. It is going to provide not a significant amount of support, but it is going to be accretive to Tier 1 leverage as well as to the core capital ratio based on their capitalization and ultimately where the purchase accounting played out. It'll be a small improvement slightly accretive to the overall capital position. Great. Thanks very much. That concludes the Q&A session. I will now turn the call back to Greg Becker for closing remarks. Thanks, Paul. Just want to thank everyone for joining us today. We're obviously pleased with our results. Even more pleased to welcome our new colleagues from Boston Private to SVB. Private banking and wealth management is obviously a critical area of focus for us. One of the four key pillars of our strategy along with commercial banking, investment banking, and SVB Capital. We certainly believe that what you're going to hear more and more about on a quarterly basis is how we pull all four of these pillars together to build an incredible story for our clients. We're focused on strong execution and being the best partner possible to our clients while doing the right thing for our employees. That really informs how we're approaching our return to office and the future of work at SVB with thinking about our employees and making sure they're safe and taking care of them. We're doing return to office trials right now. The future of work at SVB is going to be one that is going to be flexible. We've listened to our employees. We've listened to our clients. We believe that a flexible work environment is going to be the best thing for them and the best for our clients, and quite honestly, be a competitive advantage for us. As always, I want to call out and thank our incredible team. I'm so proud of what they've done, how they've done it, doing it virtually for the last 18 months, and looks like a few more months to go. For our amazing clients for giving us a great reason to come to work every day, albeit virtually. Thanks a lot and have a great day. Thank you for joining today's conference call. You may now disconnect. Stay safe and well.