We're going to get started now. Joining us for the first time, we are excited to welcome Silicon Valley Bank to the conference. Silicon Valley Bank is the bank to the innovation economy, helping guide companies from the incubation stage through becoming a public company and, in many instances, well beyond that. It's done an outstanding job building out its product offering beyond commercial banking into areas such as SVB Securities and private banking. While activity in private markets has slowed this year, Silicon Valley is well positioned to capitalize on both the cyclical return of activity as well as the secular growth in this area. Joining us from the bank, we're excited to have CFO Dan Beck. Dan is going to make a few opening comments before we dive into Q&A. Awesome. Great to see you, everybody. Ryan, thanks for hosting us. And I'll keep the opening comments brief because I know we've got a bunch of questions. But stepping back, what we continue to see, and you just mentioned it, Ryan, slower private market funding makes this the most opportune time for us to actually make the deepest relationships that we have with our clients. So this is a really important time as we look at commercial banking. We look at the opportunity to be able to extend runway for those clients that make those relationships for the next five to 10 years. So we've got a lot to talk about. We can talk about how all those businesses come together. And I'm sure we might get a balance sheet question here or there to address. But I think we'll have fun with that today. Absolutely. So before we get into the, I'll say, the more cyclical or environmental stuff, and before we get into the op environment, since this is your first time presenting at the conference, maybe let's start off with a high-level overview of the four key businesses, why you believe you're well positioned to succeed, and maybe just what makes Silicon Valley unique from other banks. Yeah. To keep it quick, the commercial bank is the core of our operations. Think about being able to support the earliest stage client all the way through not just the IPO or secondary market, but beyond that as we've grown from a much smaller organization to a much larger bank to be able to support those clients with a host of the services that they're going to need throughout their entire life cycle. As we've grown, we've seen this importance to be able to provide capital markets capabilities. Think about those clients that naturally, either through IPO, through M&A, or effectively convertible debt activity, have a need for investment banking. And then the entrepreneurs themselves. Think of them in the earliest of stages. Many of them don't have great W-2 revenue. They've got a lot of private stock. Being able to help an entrepreneur with their personal needs, think about a mortgage, think about private stock lending to trust services, and then ultimately tax and wealth on a go-forward basis. Being able to deepen with them as we have on the commercial banking side. And last but not least, our SVB Capital business is a provider of fund of funds, some of the best venture capital funds effectively on the planet. Those venture capital funds, we give access to endowments, pension funds, and things along those lines. And also then think of how all that comes together for the ability to be able to provide access to these private market, private companies, and effectively private equity stakes. So all of this coming together: commercial banking, private equity, the venture economy, and being able to support an entrepreneur in all aspects of what they need as they're trying to invent and change the world. Great. Appreciate the overview. Maybe a major part of your client funds growth is driven by private fundraising and VC investment into these clients. You mentioned some stuff. Can you just talk about the overall environment and what is driving the outflows you've experienced? Any part of the portfolio seeing more declines than others? Yeah. So just stepping back from an environment perspective, if we look at the end of 2020 and into 2021, it was an exceptional environment for private market, both fundraising and deployment. In those quarters, we were seeing anywhere between $70-$100 billion a quarter of funds deployed. And we capture roughly 50%, as that's our market share in the venture markets of that funding. As we've gone through the rest of 2022, we've started to see that slow. And in the last quarter, saw deployment in the $40 billion range. Q4 is off about 10% from there. But these are still healthy fund deployment levels. And the thing to really pay attention to is the $500 billion worth of dry powder that are out there on the venture capital side. And that doesn't include, obviously, dry powder in the private equity and the private equity market. So there's a substantial amount of that dry powder that is effectively waiting for deployment. I'm sure we're going to get into this. We can talk about what's happening. We gave an update yesterday on trends that we're seeing for the balance sheet in Q4. But embedded within those trends, as we've been talking about, as clients effectively look at a much more uncertain fundraising environment for 2023, they've been working to slow their cash burn. And we are starting to see that in the results. And through the end of November, are seeing much more on-balance sheet deposit stability without bringing as much off-balance sheet to on-balance sheet funds on. So we're starting to see some of those impacts already, even with a declining fundraising environment in the quarter. So a lot in there that I want to unpack. So you talked about $500 billion of VC dry powder. I think there's over $2 trillion on the PE side. Maybe just talk about how you're being impacted by a slowdown in exit activity and investments by VCs. And as you and Greg and the team are out talking, what is their outlook for the innovation economy? And And where do they see investment levels over the next period of time? Yeah. It's really interesting. I think the current thoughts on exit activity for primary capital for a venture-backed IPO is out into the future. We don't see that, at least for another couple of quarters. And that market remains uncertain. So why is that important? That's really important because that level in valuation is an important input in understanding what private stakes in companies are effectively worth. And with that, that creates some friction to the fundraising environment. So what we continue to see, Ryan, are that companies don't want to take a down round in this type of environment. They look at an uncertain IPO environment. And as I was mentioning before, trying to figure out how to slow that level of cash burn so that they can make it to a much more clear environment on a go-forward basis. So what's happening on the ground is that these companies are, and we can talk about how this downturn looks relative to 2000 and other downturns that have been there, effectively creating, driving net new businesses and are good business models in the main. And they're trying to figure out how to extend that runway and looking to us for venture debt solutions to be able to look forward on a go-forward basis. So something that you reference is that you're starting to see the slowdown in cash burn. And cash burn is not something that historically we spent lots of time talking about, but it's obviously been front and center given what it means for deposit balances. And can you maybe just explain to everyone why we saw such high cash burn? And now that you're starting to see it slow, maybe any updated expectations of where that could head over time? Yeah. I think if we go back to Q3, I've been saying this in a lot of investor meetings. I don't think it would make sense to just annualize. But I think you see that in the update that we did from a deposit perspective for Q4, what we saw in Q3. So I'll kind of unpack what we saw happen in Q3 and how we expect that to move in the future. So first and foremost, Fed funds started to move to a rate where it really started to matter for companies to effectively take advantage of higher interest options. So we've got our on-balance sheet deposit products, our off-balance sheet products as well. We saw faster migration, similar to what we saw back in 2017 and 2018, of those deposits off the balance sheet. At the same time, you had companies that had higher levels, and I am going to talk about non-interest-bearing to interest-bearing, I promise, higher levels of non-interest-bearing deposits. They, instead of replenishing them with the conveyor belt of off-balance-sheet funds, effectively just let their operating accounts decrease. You take that and a 40% decline in the level of venture deployment, you end up with pretty significant movement from a deposit perspective. Getting to question cash burn, sorry, you are in a spot where companies are exiting facilities, exiting employees who used to have elevated levels of cash burn at the same time. Those trends, we all expect to continue and see that, of course, in Q4 and expect that to continue into 2023. But the pace of that, as access to the public markets, as venture deployment is slower, should slow down, and companies should be managing down that cash burn level. Now, when you think about the liquidity position of clients today relative to pre-pandemic, when you, and I know every client is different, how long do you think they can hold out before they can access public markets or primary? You mentioned before that there's an unwillingness to take a down round, but I'm sure at some point in time, that's going to change. What's the time frame as you look across the portfolio? First and foremost, we think about the money that was raised back in late 2020 and 2021. Companies were raising, normally, companies would go out and raise a year's worth of cash and the like. They were able to, at strong valuation, raise two years, three years' worth of cash liquidity. Plus, at the same time, we've got companies with better business models that are cash-flowing at the same time. Companies have more runway today, for sure, than what they've had in previous periods. Now, when we say that, the other thing to pay attention to is that when the fundraising environment is harder to predict, companies have to pay a lot more attention to how much runway they have. So normally, and this is an overgeneralization, but companies that in good times can manage cash below 12 months when it's very clear what valuations are and what fundraising looks like. But in this environment, between 12-15 months' worth of cash, you have to start to think about what you're going to do. What you're going to do. And if you think about money that was raised at the end of 2020 and into 2021, we're starting to tick every quarter closer to that moment where they're going to have to think about what to do next. And again, if we talk to venture capital generally, really optimistic bunch. But as you think of that, they look at the money that's been raised, and that was raised over the last two years. So there's a lot of desire to deploy that. And they're really sorting through their portfolios, their numbers of companies to figure out where they're going to put that money to work. So all of that is what's brewing in the market. I'm a relatively simple guy, so I appreciate the one slide update. Not a lot to have to parse through. But you made the comment about seeing more balance sheet stability. Can we maybe just spend a minute on the update in terms of what you're seeing on the deposit side? I think the high end of the NII range came down a little bit. Margin came down a couple of basis points. Can you maybe just unpack what you're seeing within the Q4 and what led to some of these puts and takes in terms of the changes? Yeah. We talked about it. The most important thing for us was looking at what was happening from a cash burn perspective, and that has started to slow within the quarter, so we exited Q3 with $176 billion worth of deposits and on average are in the $174.5 billion range for the quarter and pretty close to that for the period end as of the end of November. And again, underpinning that is slower cash burn by clients, even in this environment where deployment in venture's down roughly 10%. So obviously, there's still a lot of time between here and the year end, and our deposits do move pretty fast, but that stability and that level of cash burn clearly encouraging to us and consistent with what we would start to expect in an environment where folks are anticipating prolonged, slow access to funding. If you think about the rest of the update from an NII perspective, we brought down the top end of the range. Really two factors there. One, we've talked about this in the past. If you think about our mortgage securities portfolio, there's some premium that sits on there. With the 10-year dropping, our expectations at Q3 earnings with the 10-year would be at about 4%. It's 3.50%. You're seeing roughly half of that coming through because of a catch-up on premium amortization. The other half is just higher deposit balances and some higher deposit costs. If we think about the non-interest bearing to interest bearing component, which I'm sure we're going to get to, we're actually trending towards the higher end of that 45%-50% range. And beta, we're still looking through the cycle at 65, 65%. Got it. Appreciate the in-depth update. So maybe when you think about this, the bank came into the cycle was thought of as being highly rate-sensitive. The environment shifted. You're now liability-sensitive. Maybe just talk about some of the drivers that changed along the way, how you're now managing ALM now that we're having a little bit more stability, and what do you think this all means for margin NII over the course of the rest of the rising rate cycle? Yeah. If you take a big step back, the rate sensitivity in an environment where we've seen this much of a fast movement of short-term rates coupled with the material slowdown in deployment and the imbalance between cash burn is driving this need to effectively use more of our off-balance sheet deposits onto the balance sheet. So as I mentioned before, we're actually seeing the slowdown in the pace of bringing those deposits from off to on the balance sheet. That doesn't mean that's going to be forever. We still have access to them. I think that's really important. But again, cash burn has been slower. If we start to think about going into 2023, and even with deployment levels in that $40 billion a quarter range, with slower levels of cash burn, we could actually see net new funding start to come to the bank over the next couple of quarters. As that happens, we've got the option on those off-balance sheet funds that we brought onto the balance sheet with 30 days' notice to effectively change the allocation and take some of that higher-cost funding off of the balance sheet. I mentioned this in the last earnings call. Our organic cost of the money market on the balance sheet was sitting roughly 90 basis points versus the money that we're bringing from off the balance sheet to on, which is in the high 3% range. So with the movement in liquidity, when that starts to occur, we start to drive some of those dollars back off the balance sheet and recapture some of that asset sensitivity. So the coupling of very fast rate cycle, plus this recalibration in the venture market, driving where we are today, but it's not a one-way door. We've created these asset liability management products that allow for us to recapture some of that benefit. So to kind of put it all together, even if we remain at a similar level of investment, if cash burn continues to slow, we could bring less sources onto the balance sheet. We could even start pushing some off, and that'll then start to improve the - so while everybody else is becoming liability-sensitive, we're more neutral, you guys are going to have improving assets. That's where we would start to see some of the opportunity. Now, those dollars, to be very clear, they would not be free. We would expect in a higher-for-longer rate environment, still have to pay. But the amount that we're paying for them would not be as expensive as those dollars that we're using from off-balance sheet. And you talked about a 65% deposit beta. In a higher-for-longer environment, if you think about it, first, maybe you could just talk about what is driving the higher beta versus prior cycles. And if we remain in this kind of environment, do you see downside risks or expectations for the deposit beta? Yeah. I think in this environment where cash burn has been exceeding the amount of deployment, using those off-balance sheet funds, which are much more sensitive from a beta perspective, is really the difference from what we saw in previous cycles. Assuming that we get back to balance, that is something that would allow for us, as we were talking about, to potentially recapture some of that asset sensitivity and to stabilize the beta. Of course, there's always the potential that cash burn continues and venture deployment is lower. In that case, that could lead to higher betas in the future. But those are the tools that we have at our disposal. It sounds like non-interest-bearing deposits for the quarter are tracking better. I think your non-interest-bearing peaked at about $125 billion. They're down $20 billion. It sounds like they'll be a little bit above $80 billion this quarter, which is still double where they were pre-pandemic. If you think about all the things that we just talked about, clients with liquidity and the like, and what would it take for them, not just for the short period of time, for them to stabilize? Do you have any visibility on where these could be headed over time? Yeah. I think that number one, the expectation in this higher-for-longer rate environment is that we're going to continue to see pressure on those non-interest-bearing deposits. So I think that's a trend that's going to continue. I think the difference is the pace at which that is going to move. Now, clearly, clients that have been sensitized to this rate environment, think about being an entrepreneur trying to extend your runway. Well, of course, one of the things you're going to do is to take your non-interest-bearing deposits and try to optimize that as much as possible. Now, with rates where they are, those clients that clearly are the most sensitive have already started making those changes. I think as you go through the next couple of quarters, those clients will have firmly optimized the amount that they've got in their non-interest-bearing deposits. Anything that's excess will be in interest-bearing. The thing that I've been talking about with investors is to think about our non-interest-bearing deposits a little bit differently than how you would a more standard commercial bank. The total amount of off-balance-sheet and on-balance-sheet funding is roughly $350 billion. When you look at in Q3, the percentage of non-interest-bearing deposits to that total amount, that's roughly 27%. If you look across most standard commercial banks, they're in that 20-ish% range for operating accounts. So the pressure we're looking at, at least in our view, is not from 40% to 20%. It's looking at this 27% and seeing how that is going to migrate down over the next couple of quarters. It's good news that the deposits are stabilizing and getting closer. Obviously, there's been discussion in the investor community that if there's pressure on the funding, you may need to sell securities in the held to maturity portfolio. Can you maybe put to rest why you don't see this as a risk for the company and why you have capacity on the balance sheet? Yeah. Part of it obviously comes from actions that clients are taking. And you already see some of that. Of course, we're hopeful that that trend continues throughout the year and into 2023. But as I've been told, hope is not a strategy. So as you think about what else we have in terms of access to funding, you've got the ability to be able to utilize, as we have, this off-balance sheet set of dollars. When you think of our off-balance sheet access to those clients, we've been progressively moving clients into a product that allows us to allocate these dollars. So there's roughly $90 billion of that liquidity that sits off the balance sheet that effectively one customer at a time, we've been giving access to that product, again, that you can switch on and off the balance sheet, doing the right things for customers at all times. That's one. That's a pretty big pool. Then you look from there at the ability to be able to use borrowings against our investment securities portfolio. That's the vast majority high credit quality treasuries, agency securities that you can pledge not only to the Federal Home Loan Bank, but in terms of repo and the like. So you've got about $70 billion worth of additional capacity there before you even get to the available for sale book, which, by the way, is $30 billion. It's available for sale. Right. So if you kind of add all that together, there's $176 billion worth of deposits. You add those three things together, I think we can manage through. Of course, there will be margin pressure as we manage through that. But don't forget, those securities pay down $2-$3 billion a quarter. And that is also helpful from an NII perspective on a go-forward basis. And our treasuries available for sale portfolio is laddered. So half of that is a treasury portfolio where you start to see more material maturities out in 2023, 2024. And with every quarter that passes, you get the ability to potentially, with small gains and losses associated with them, take some of that. So there are a lot of opportunities. And we've designed the balance sheet to be able to sustain pretty significant stress. So we talked a lot about VC. When I think about loan growth had been running over 25%. But obviously, there's been price discovery going on in the PE community, which, given fund banking, drives a lot of loan growth. Maybe just talk about what you're hearing or seeing from PE in terms of willingness to deploy in this uncertain environment. And do you think we're getting closer to price discovery from an investing perspective? And what do you think that could mean for loan growth? Yeah. A lot of those same factors that we're seeing in venture, we're seeing in private equity as well for net new large deal deployment. That doesn't mean the market is stopped for sure, but it's much, much slower. We are seeing more private equity funds utilizing their access to capital to recapitalize existing companies and things along those lines. So that has been something that's actually kept those balances relatively stable. And we did see a nice increase there in the last quarter. So I think we're going to continue to see that type of trend, certainly for Q4. And while we have a record level of new term sheets, as people load up for the ability to be able to put that money back to work, I think it will be a bit slower until you get through that price discovery. So let's talk a little bit about credit. Your performance has been solid. Losses have been running about 10 basis points. But given all the uncertainty in the VC community, can you maybe just spend a little bit of time talking about some of the higher risk portfolios, such as the early stage or growth, given there's a view that I think the view is that you're lending to a lot of these startups as opposed to providing them with banking services? And what are the portfolios that you're monitoring most closely right now? Yeah. I think we touched on private equity lending and just real quick on the venture side. This becomes, as I mentioned at the onset, one of the most interesting times for us. In the midst of companies that look at debt even at a higher cost, that versus the dilution that they would have to take for a down round or for funding becomes a pretty easy trade. So our teams are quite busy with a significant number of clients that may be Series A, Series B, and beyond that are trying to either draw a commitment or effectively take down some extension from a runway perspective. So then getting to your question on credit, if we're in a spot, and we talked about a potential for a slower deployment environment, capital markets that still are more bumpy in 2023, if that were to continue over the next two to three quarters, we'd probably start to see some pickup in the levels of charge-offs in that most vulnerable segment for us, which is the investor-dependent early stage part of the portfolio. So that, as we've talked about several times, is now 2% of the overall lending book. And think about that as 1% of total assets. From a loss perspective, back 2008, which is the last, I'd say, material slowdown in the markets, total loss rate through the cycle was roughly 6% in that book. And as of last quarter, we had roughly 4.5% reserve against that as we've been building reserves, thinking we could be in a tougher environment there. Credit, as you saw in our guide for Q3, was stable. And we actually took down the charge-off guidance. But with every quarter that proceeds in this type of environment, that's the most vulnerable segment. By the way, that's where we get the warrants that I'm sure we're going to be talking about two, three, five years from now. Or in two minutes. As some exciting opportunities. I shouldn't read ahead, for sure. So I think that's a really valuable and important part. We've been lending larger as well. So there's the chance of seeing a more episodic, later stage, at a more balance sheet dependent type of credit go into nonperforming and non-accrual. But the expectation is that there's more there to work with as they potentially charge off. But that's the way to think about it from a credit perspective. That more risky segment has just become a much smaller part of the lending book. And it's been surrounded by a shock absorber of lending, private equity, capital call, and mortgage of very low credit content. So I have three more questions I want to get through here. First, maybe let's just talk a little bit about fee income. So you've been building out SVB Securities. Maybe just talk about how you see that progressing over the intermediate term. And I'll wrap into that. The warrant investment gains, as you highlighted, were solid contributors during the pandemic. They've obviously come under pressure. Can you just remind us of your exposures, maybe flesh out a bit further on what parts of the portfolio represent risk in the coming quarters? Yeah, so first of all, in terms of total core fee income, you're taking a look, especially in client funds, that growth has been quite strong, and our clients, as we continue to see good client flows and a lot of activity, they very quickly become active in cards, very active from an FX perspective, so that's been a strong growth part of the business. SVB Securities has been doing well in this environment, shifting the mix of their business from mostly equity capital markets on life sciences to a mix of M&A across healthcare technology on top of this life science practice, so even in this environment, they're still producing numbers much higher than when we looked at them just a couple of years ago, but more important than those numbers is the combination of that business with our commercial banking operation. If you think about a client that's grown from an early stage company that is looking to go either through an IPO or dealing with a more challenging environment, being able to provide that type of guidance and advice and to be able to anecdotally be in a pitch to be able to say, not only can we take you public, but we can give you access to new ideas and companies that might be interesting to you for an acquisition that is unparalleled across the industry. That, I think, is a great market for us and a good growth opportunity. To your question on warrants and investments, clearly Q4 and into Q1, companies are going to be revaluing themselves just as part of their normal process. We talked about in previous quarters, we would expect on a basis of about $600 million or so, 5%-10% worth of losses to accumulate between those quarters as companies go through this 409A valuation process at the end of the year as a part of their audit, which could also be helpful for them coming to grips as well from a valuation perspective. So Dan, if we look back over the last few years, you gave guidance at 3Q for the following year. But given all the uncertainty on all these topics that we've talked about, you chose to hold off and just provide guidance for the Q4. So given all the uncertainty that still exists, how are you thinking about approaching guidance for 2023? That's the first part of the question. And the second part of the question is, how do you think about continuing to invest in the business for a long, for playing the long game versus managing some of these near-term headwinds, liability sensitivity, and the like? Yeah. So, first and foremost, from a guidance perspective, we'll provide some form of guidance as we get into the Q1 here. Prerequisite condition to that is understanding the stability from a non-interest bearing, interest bearing. You see where that's landing for the quarter and just having a better sense of the overall operating trends. So as we're getting closer to the year, that will provide some guidance here in Q1. If we think about investment, one thing is clear. We've got all these opportunities across private banking, wealth management, that connection with the entrepreneur, not just through the commercial bank, but leaning in with them early on, investing in our private banking franchise. We just installed new leadership there that we're incredibly excited about. That is really important to us. Investing in the commercial bank to be able to take advantage of all of these opportunities that are effectively coming and looking for help in a weaker environment is important to us as well. So we're going to have to balance, though, that level of investment with where the profitability is. We're obviously conscious of that. For us, we spent a lot over the last couple of years in digital development, accelerating that digital development through the use of professional services, contractors, and the like. And as of last year, that was roughly about professional services alone, $400 million worth of cost. We think we can make a material cut there, at least in slowing down because we also accomplished a lot of that digital development. The same from a contractor perspective. We had close to 4,000 contractors at the organization helping to accelerate the delivery of a lot of these digital tools. I think we're going to be able, with the successful completion of that, also pull some of that back. So there are levers for us from an investment perspective where we balance investing with profitability, at least in the near term. Great. Well, the clock just hit zero, so we're out of time. So please join me in thanking Dan. Thank you.