SVB Financial (SIVB) Q4 2022 Earnings Call Transcript

SVB Financial (SIVB.Q 100.00%)
Q4 2022 Earnings Call
Jan 19, 2023, 6:00 p.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Good day. My name is Emma, and I will be your conference operator today. At this time, I would like to welcome everyone to the SVB Financial Group Q4 2022 earnings conference call. [Operator instructions] Thank you.

Meghan O'Leary, head of investor relations, you may begin your conference.

Meghan O'Leary -- Head of Investor Relations

Thank you, Emma. And thank you, everyone, for joining us today. Our president and CEO, Greg Becker, and our CFO, Dan Beck, are here to talk about our fourth-quarter and full-year '22 financial results and our 2023 outlook. We'll be joined by other members of our management team for the Q&A.

Our current earnings release, highlight 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. And now, I will turn the call over to our president and CEO, Greg Becker.

Greg Becker -- President and Chief Executive Officer

Great. Thanks, Meghan. Thanks, everyone, for joining us today. Before we go into questions, I just want to briefly comment on kind of our business and the market environment.

You know, first, I think it's important to set kind of context. We continue to see strength in momentum in our business despite the broader market backdrop, which I'll talk about in a minute. We had healthy loan growth across the board, driven by global funds banking, technology, and private banking, mortgage lending. We had record core fee income from improved client investment fee margins.

We saw healthy investment banking revenue driven by biopharma deal activity, which was great to see. And we had more balance and client fund flows as client cash burn in the pace of VC investment declined, showed signs of moderation, which was obviously very important and welcomed. And we saw continued strong new client acquisition of approximately 1,600 clients in the quarter, which is higher than pre-COVID levels, which is notable. And credit remains solid, although our provision reflects higher net charge-offs for nonperforming loans, as well as our expectations for deteriorating economic conditions.

Now, the markets are still challenging, we admit that, and they're likely to remain, so, throughout 2023. We don't expect any dramatic change from where we are right now and, in fact, even a little bit more pressure in the first couple of quarters. So, in other words, again, not expecting a dramatic improvement. Global market volatility is significantly reduced, private and public investment and public -- there's almost -- you know, there's the longest time the window has been effectively shut.

And we don't really expect that to change until maybe, pretty big maybe, in the latter half of the year. And there's still a lot of uncertainty over the direction of rates and inflation in the broader economy. And we hear about it pretty much every day in the news and on media. So, what does it mean for us for '23? We expect these conditions will continue to put pressure on our growth in the first half of '23 with net interest income pressure, somewhat higher provision, although we still expect credit performance will remain good overall, and other headwinds that are going to come on a on a daily basis.

But in the second half, we expect continued momentum in the balance between venture investment and cash burn. And it doesn't -- this is important -- and it doesn't take much of improvement, in fact, no real improvement from where we are. On the deployment of dollars, it's more about the cash burn, which we, again, continue to believe is going to be pulled back. We expect to shift toward interest-bearing deposits to stabilize and could see an inflection point in net interest income and NIM in the second half of the year.

We believe that shift, combined with progressive paydowns in our investment securities portfolio, again, roughly 3 billion a quarter, will provide meaningful revenue tailwinds that build throughout the year. And we have enough visibility at this point to provide full-year 2023 outlook despite the market uncertainty, and those details are in our Q4 '22 earnings deck filed earlier today. We're prepared if those things don't improve, again, which is important, and even if the market challenges are prolonged or get worse. It's important to note, we have a high-quality, very liquid balance sheet, which I know there'll be lots of questions about; strong capital levels; a seasoned management team, which we experienced navigating challenging markets; and adding a lot of new people with deep experience as well; and a consistent focus on our long-term business strategy.

So, when you put all that together, we feel, clearly, better about the outlook than we did last quarter where there was more uncertainty. And we certainly believe that the innovation economy is the best place to be. And even if we're in this prolonged period of time for longer or even a little bit deeper, deeper, we know we're going to weather that fine. So, with that, I'm going to turn it back to the operator to open up to questions.

Questions & Answers:

Operator

Thank you. [Operator instructions] Your first question today comes from the line of Ebrahim Poonawala with Bank of America. Your line is now open.

Ebrahim Poonawala -- Bank of America Merrill Lynch -- Analyst

Thank you. Good afternoon.

Greg Becker -- President and Chief Executive Officer

Hey, Ebrahim.

Ebrahim Poonawala -- Bank of America Merrill Lynch -- Analyst

Hey, Greg. So, I guess -- I mean, I think it is good to see the 2023 guidance. And just wanted to follow up on what you just mentioned around having enough visibility to provide that guidance. It sounds like you're feeling better today.

And you look at Slide 10 in terms of the client fund outflows, obviously, cut in half quarter over quarter. If you don't mind, just give us a sense of just customer conversations that you are having with clients. What's adding to that visible -- what's added to that visibility today versus a few months ago? And I understand all the things that can go wrong, I think. But what are you seeing in terms of green shoots of improvement? I would love to start there.

Greg Becker -- President and Chief Executive Officer

Yeah, I'll I'll start, and I'm sure that Mike will want to add, you know, even more color to my comments. You know, Ebrahim, here's how I think about it. Where the clarity is coming from is a couple of places. One is, I would say, we were hoping we would have had seen more of this in the third quarter, and that's where, I would say, we're disappointed and that's why we didn't give guidance because it kind of didn't fit with what our expectations were and what we were hearing, which was the following.

Companies realize that it's hard to raise money and the level of venture capital deployment is coming down. And we expected a more dramatic decrease in burn rates. That really didn't happen in Q3. We saw, clearly, much more of that in Q4.

And I think you're going to see more of it in Q1. And it's -- you hear about it because when you're having conversations with companies, they're talking about, "Gosh, we hired a bunch in the last couple of years. And now, you know, we're going to pull back on some of that." So, we're going to cut back 10%, 15%, 20%, or whatever that is, and we're going to look to cut costs in other areas. And the only reason I don't think it happened as quickly as we thought it was going to is that companies had a lot more cash than they had in other cycles.

And so, that was just a prolonged period. So, we know that venture capital declined pretty significantly in the third quarter. It continued in the fourth quarter. But, again, what our expectations are is that you're actually going to see a little bit more of a decline in first -- the first two quarters and then start to see a little bit of improvement in the second half of the year.

So, our forecast isn't a rosier Q1 and Q2 with higher levels of venture capital deployment. In fact, it's the opposite, a little bit more of a decline. And then, you're going to see, again, this continuation of client burn or cash burn pullback. So, that's the narrative that all -- when we talk to clients.

And, again, not all kind of the same as you know. We have some that are still spending more money. They're raising money still and that's going to happen. But that narrative is shaping our outlook in the first kind of two periods, first half versus the second half.

So, Mike, turn it over to you to add any color to that.

Mike Descheneaux -- President, Silicon Valley Bank

Sure. Great. Thanks. Thanks a lot, Greg.

You know, Ebrahim, there's a few data points, I think, where investors are going to start to get even more clarity, right, when we think about inflation reports and whether or not the raising rates are having an impact on inflation. You know, we just had a January 12 report, and we had the February 14th inflation report coming up. So, we're starting to see that rates are starting to have an impact on inflation. I think that's really important for investors looking for clarity what's happening.

The COVID impact of the zero-COVID policy in China, like, we're starting to see that go through China. And we'll know here in January or February about whether or not that actually has gone through. And then, supply chains can start to come out again, having impact on inflation. The energy impact in Europe, we're going to get to that and see some more data points about the impact of inflation.

But perhaps, most importantly, is the valuations, right? I think you have the auditors that are in at the various companies here that are looking at the valuations, and you're going to start to get these audit reports that start to come out, and there'll be some valuation adjustments between the companies who have been holding off in terms of readjusting evaluations. So, I think that's really helpful. When -- and so, right now, obviously, the investors are still holding off on investments. They're slowing the pace, but there's still a lot of good companies out there.

There's still a lot of opportunities. They're still investing in early stage, but they have to prioritize their investments here, and they know they're probably going to have to hold on to these investments a little bit longer than anticipated because there's just not a whole lot of excess, as you know. There's just no IPO. There's not a whole lot going on out there.

But again, I think, you know, there's obviously a lot of dry powder. I think that's very helpful. Now, when you shift to the lens of the entrepreneur, you know, as Greg mentioned, they have had a lot of cash. They've been sitting on that.

But we are starting to see where they are resetting their spend levels, right? The layoffs, you're starting to see that in news, which, you know, there's the good news and the bad news. Obviously, the bad news is the layoffs. But the good news is they're really starting to focus on their cash burn because they know they need to hold on to their cash for a lot longer. Advertising spends have been coming down over the last several months.

And so, that's been a big thing that we're seeing here. So, they're all getting back to focusing on client acquisition costs and profitability. So, again, growth that's just for a growth's sake is no longer the thing to do. So, economics do absolutely matter.

So, they've been very -- I would say, very focus on valuations. They've been holding off in terms of taking more investment, but eventually, their cash starts to run out. Eventually, they start to reset their expectations on valuations. And so, we believe we're starting to see some of that breakthrough.

And again, I think, over the next couple of months, I think that's when you would start to see, as Greg described, a little bit more stabilization there and perhaps as a platform here for the second half of the year to start to see some of those shoots that you were talking about.

Ebrahim Poonawala -- Bank of America Merrill Lynch -- Analyst

Understood. And I guess maybe a separate question for Dan. When you think about, from a balance sheet management perspective on the asset side, available for sale securities, about $25 billion, $26 billion. Give us a sense, is there any view of like pulling forward some of those maturities and locking in higher interest rates today, given, one, the curve was already inverted? Who knows where it might be six months from now? Just give us the thought process around any piecemeal restructuring of the AFS book that we should think about.

Dan Beck -- Chief Financial Officer

Yeah, Ebrahim, good question. In the quarter, for example, we did a billion-dollar sale out of the Treasury portfolio for AFS, to be very clear. And the rationale behind that, as we look at the payback period on that sale, was roughly nine months. So, that's really the way for us to look at, you know, from a tangible book value perspective, that payback period and opportunity.

So, I wouldn't say there's any desire for a wholesale, you know, change in the available for sale portfolio. But, you know, periodically and with an opportunistic lens on payback period, we can do these small sales that, you know, to some degree, can be offset by warrant gains and things along those lines. So, I think -- thinking about it from a tangible book value perspective, but at the same time, you know, looking opportunistically at payback period.

Ebrahim Poonawala -- Bank of America Merrill Lynch -- Analyst

Got it. Thanks for taking my questions.

Greg Becker -- President and Chief Executive Officer

Yep.

Operator

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

Casey Haire -- Jefferies -- Analyst

Yeah. Thanks. Good evening, everyone. Couple of questions on Slide 12.

First off, so, the noninterest-bearing mix, the high 30s by fourth-quarter '23, that's obviously very difficult to sort of handicap. You know, just what's giving you confidence around that number?

Dan Beck -- Chief Financial Officer

Yeah, Casey. It's Dan. I'll start. Mike might want to add as well.

There are two things that we're looking at that, you know, give us a little bit more confidence on where that noninterest-bearing next is going to bottom out. First and foremost, the teams have spent, you know, a lot more time getting into the detail across our different segments on, you know, where operating dollars lie versus excess dollars in these deposit accounts. So, exactly how much, you know, from a deposit perspective is available to be transferred. Now, that analysis is never perfect, but it allows us to start to get a sense of where we think that noninterest-bearing piece is going to lie.

And then, secondly, when we take a big step back -- and we've talked about this before -- and we look at the total client funds of the company, and you start to think about noninterest-bearing bottoming out in the high 30% range and looking at the fact the total client fund is closer to $340 billion range, that high 30s is really when you compare it to other banks that don't have off-balance-sheet in that mid-teens to high teens range, which we think, you know, relative to our whole historical experience, is a bottom and is a low. So, we've got the individual assessment that we've done, plus just our historical experience on where that would bottom out in comparison to the peer banks. Now, it's not perfect for sure, and we're encouraged by the slowdown and the pace of that change here in the fourth quarter, and we expect that to continue throughout 2023.

Casey Haire -- Jefferies -- Analyst

Very good. Thank you. And then, in the letter, you guys talk about you don't need to see VC deployment return to 2021 levels, which were, obviously, very strong. Can you just provide some color as to why that is? Because that comes up a lot, because that was such, obviously, a monster year for deposits.

And, you know, it's, obviously, you know, flowing out now. And so, it makes sense to push back that it's going to be very hard to replace what was a banner year.

Dan Beck -- Chief Financial Officer

Yeah, Casey, I'll just go to the results of the fourth quarter as an indicator of why that statement makes sense. We're looking at venture deployment in the quarter, you know, 35 billion or so. So, think of that as kind of an annualized run rate, you know, 120 billion to 140 billion of venture deployment in the quarter from a balance sheet perspective on balance sheet. While we did see a decline in deposits, it was much lower than what we saw in the third quarter.

And the reason for that gets to what Greg mentioned, as well as Mike, where we're seeing that lower level of cash burn. So, even on a much slower venture deployment number, so, call it, in the mid $30 billion range, we started to see that on balance sheet deposit when we look at cash burn versus, you know, the inflows get to a much more normalized level. So, that, I think, is an indicator with cash burn continuing to slow based on what Mike and Greg just said that we can get back without going to the 2021 deployment level to not just the deposit of being at the same level, but the potential for deposit growth.

Casey Haire -- Jefferies -- Analyst

Got you. OK. Just last one for me. The premium amortization that you guys talk about for the first quarter here, you have it down a little bit.

But it's predicated on a 3.75 tenure, which is, you know, 10-year, obviously, a little bit lower today. With, you know, incremental pressure on that number if the10-year finish is 50 bps lower. Can you just provide some color on the premium amortization? Because this does create a lot of, I think, confusion.

Dan Beck -- Chief Financial Officer

Yeah. So, we would still anticipate the premium amortization to decline here in the first quarter. And the reason for that is that mortgage spreads continue to come in. Now, after the first quarter, to the extent that we continue to see the 10-year come down, we do have the sensitivity to an increase in premium amortization from that quarter.

But just from the fourth quarter to the first quarter, consider that it's going to continue to come down just because of the decrease in mortgage spreads in the quarter.

Casey Haire -- Jefferies -- Analyst

OK. Thank you.

Dan Beck -- Chief Financial Officer

Yep.

Operator

Your next question comes from the line of Steven Alexopoulos with J.P. Morgan. Your line is now open.

Steve Alexopoulos -- JPMorgan Chase and Company -- Analyst

Hi, everyone.

Greg Becker -- President and Chief Executive Officer

Hi, Steve. 

Steve Alexopoulos -- JPMorgan Chase and Company -- Analyst

So, to follow up, with the pace of cash burn now slowing, has the amount of cash on hand and the burn levels, are those both of what you guys would consider a normal level right now, or those each still elevated?

Greg Becker -- President and Chief Executive Officer

Yeah, it's Greg. I'll start. Trying to say what normal is is really difficult for a variety of different ways. When you go back -- and the one thing, if you go back, you know, five or six seven years and try to say, well, was that more of a normal period? Our portfolio -- you know, we have a lot more mature companies in the portfolio to think about.

They tend to keep a lot more cash, and so, we don't have quite the same level of experience. I think, you know, toward the end of this year, my sense is like we're going to get more to, what I'll call, more of a normal cash balance level because you're going to see the cash burn rates are still be elevated from the first half. They're going to be reducing, but they'll still be higher. And so, we'll get to this more, I'll call, normal level.

And I think, again, when you get to '24, you know, we expect a modest increase in venture capital deployment. But one more thing that gets factored in is which has been zero for almost all the '22 and ended the first part of '23. And most of '23, we don't expect a big impact is private market -- or public markets. And, you know, again, this the longest time that there haven't really been any IPOs.

And, you know, as we spend more time with our late-stage clients, there is many of them that are doing really well. And when that market opens up, you know, we certainly believe that we're going to be in a really good position to do two things: one, help them go public, number one; and number two, be the beneficiaries of that cash when it comes in. And so, all those things are factored in, which makes it just hard to predict exactly how it will "settle out" to a normal level.

Steve Alexopoulos -- JPMorgan Chase and Company -- Analyst

OK. That's fair. And I know it's not one for one, but very roughly, what type of year would you need from a VC investment level to get to this 2023 guidance? Like, what is this roughly based on?

Greg Becker -- President and Chief Executive Officer

Yeah, I'll start, and Dan and Mike may want to add. And I tried to kind of give a little bit of color to my opening comments, but the way to think about it is that we still expect, in the first half of '23, that you're going to see kind of a 10% to 20% roughly decline in venture capital. And then, you're going to kind of pick back up in the -- from these low points in the first half and pick up but not a lot. So, you're probably looking at -- again, if you annualize the fourth quarter, you're at about 144 billion.

I think we're in that, you know, roughly 130 billion-ish for the year. Again, rough estimates because you factor everything in. You've got to think about burn rates and everything else. But the point is that the run rate for the fourth quarter, our forecast for '23 is actually slightly lower than that.

When you aggregate it, it's just more front-end loaded the negative, and we'll see a little bit of a benefit in the second half.

Dan Beck -- Chief Financial Officer

Yeah. Just to add to what Greg is saying, it doesn't increase very much in the back half. So, we're, in no way, shape, or form, being aggressive, thinking that the market is going to come back with significant amounts of deployment the back half of the year. So, you're not talking about a material shift in Q3 and Q4 in investment levels.

But what we do see in Q3 and Q4 with the guidance that we're going to see a slowdown in the decline in noninterest-bearing deposits, plus the securities paydown each quarter that you kind of -- you get to a normalization of net interest income and margin right around the midpoint of the year and then can start to see some growth into the fourth quarter, just with those factors alone. Sort of small increase in venture deployment, a stabilization in the noninterest-bearing levels that happens toward the back of 2023, plus the securities paydown starts to build momentum for net interest income.

Steve Alexopoulos -- JPMorgan Chase and Company -- Analyst

Got it. OK. And finally, just to clarify. You mentioned high 30% as the bottom.

You said this a couple of times, a bottom in the noninterest-bearing mix. But then, I thought you said that deposits might bottom the midpoint of the year, then grow in the second half. So, do you actually expect noninterest-bearing deposits to bottom below the high 30s in the first half of the year and then grow to the high 30% level? Thanks.

Dan Beck -- Chief Financial Officer

Now, Steve, the expectation is that we're going to continue to see some mix shift noninterest-bearing into interest-bearing really throughout all of 2023. And we would expect, as we get into the fourth quarter, that that's where we're really going to see that bottom out from a noninterest-bearing to total deposit perspective. At the same time, what we can see in the back half of 2023 is, with a small increase in venture deployment and the slowdown in cash burn that we expect to continue, an improvement -- small improvement in the overall deposit levels. So, they're really two different things.

Steve Alexopoulos -- JPMorgan Chase and Company -- Analyst

OK. But it's in interest-bearing deposits where you're looking for that benefit in the second half.

Dan Beck -- Chief Financial Officer

That's right.

Steve Alexopoulos -- JPMorgan Chase and Company -- Analyst

Yeah. OK. Thanks for taking my questions.

Greg Becker -- President and Chief Executive Officer

Yeah. Thanks, Steve.

Operator

Your next question comes from the line of Brody Preston with UBS. Your line is now open.

Brody Preston -- UBS -- Analyst

Yeah. Hi. Good evening, everybody. How are you?

Greg Becker -- President and Chief Executive Officer

Hey, Brody.

Brody Preston -- UBS -- Analyst

Hey. I just wanted to maybe just follow up on the line of questioning on the noninterest-bearing. You know, I just wanted to get a sense for is there, like, a natural kind of level of noninterest-bearing deposits, you know, from an account level perspective that need to be, you know, these companies need to keep on hand. You know, I just ask just because you guys have actually done a pretty good job actually maintaining account growth over the last couple of quarters.

And so, I just wanted to get a sense for, you know, if noninterest-bearing account levels, you know, if there's an average account level where these things kind of naturally bottom out.

Greg Becker -- President and Chief Executive Officer

Yeah, Brody, it's Greg, I'm going to start at a high level, and Dan or Mike may want to add some color commentary to it. The challenge of the answer to your question is that there is not any more an average client, because it really depends upon early stage, mid-stage, late stage, publicly traded, all those things. Here's one way to think about it again, why, again, Dan made the comment about kind of this bottoming out. And it was said, but I'll repeat.

When you look at that high 30s kind of bottoming out of the noninterest-bearing accounts, you have to think about it and look at the totality of all the total client funds. Right now, we're at about a 24% of the -- you know, all -- total client funds. But if you factor in this high 30s as a bottom, you're going to be in that mid to high teens against that total client funds. We believe, historically, that would be low.

And when you factor in all the types of clients and that seems with all the data and information we have to be where we would be bottoming out. Obviously, it can change, our assumptions can be wrong, but that's the analysis that we've done. So, think about it in the mid to high teens of total client funds, not just this 23%, 24%, you know, kind of at the end of the year. I don't know, Dan or Mike, if you guys would add anything to that.

Dan Beck -- Chief Financial Officer

Yeah, Greg. It really gets back to the same thing. If you look at most commercial banks, you do think of total noninterest-bearing deposits even in these rate cycles being in the high teens, you know, becomes a low watermark on noninterest-bearing. And that's effectively where that on balance sheet high 30% noninterest-bearing range turns out to be if you consider the totality of client loans.

So, that's one marker, plus, like I said, the analysis that we do internally. So, I think, when we look at those things, yes, it's subject to change that -- then, at the same time, it gives us confidence in the outlook.

Operator

Your next question comes from the line of Jared Shaw with Wells Fargo. Your line is now open.

Jared Shaw -- Wells Fargo Securities -- Analyst

Yes, thank you.

Greg Becker -- President and Chief Executive Officer

Hey, Jared.

Jared Shaw -- Wells Fargo Securities -- Analyst

Just shifting just a little bit over to the loan side and the growth you saw in lending. We've talked about, you know, clients favor debt over capital here. Have you changed underwriting, or have you seen any better terms on loans that are being originated now versus, you know, earlier in the cycle for these early and mid-stage companies?

Greg Becker -- President and Chief Executive Officer

Yes. This is Greg. I'll start, and Marc and Mike probably both will want to share a perspective on that. You know, it's -- the growth has been, again, in the three years that we talked about, it's the technology side of the portfolio.

It's been in the global funds banking and then a little bit with the mortgages as well. And on the technology side, we've seen probably some of the best growth we've had in, you know, many, many, many years, clearly, on an absolute dollar volume basis and even on a percentage basis. And that's one -- it's just kind of a simple discussion. We were competing -- and we've said this in many conference calls -- we're competing as much with equity dollars than anything else.

These companies, you'd sit back and go, "We would love to lend money to you because of all the great fundamentals you have." But they just raised $200 million, so why would they want to borrow $20 million, $30 million? And so, obviously, it's gotten harder. Not that they couldn't raise money, it's they're choosing not to because of the valuation that they would like to see. Those are great opportunities for us. So, the team's doing a great job of winning really some great, great business in the technology side.

In global funds banking, you've got -- again, we've been doing this longer than anybody else, so we've got a great experience. That's the term sheets. And the new business is still in very, very strong demand, and we've seen some people pull out of the market. And so, that allows us to, you know, in some cases, get a little bit higher margin.

But I would say it's as much getting -- making sure we have the highest-quality clients that we're bringing on board to the platform. So, it's still competitive, but we're able to bring in some great clients and we're able to see some nice outstandings in this environment. So, I don't know, Marc or --

Marc Cadieux -- Chief Credit Officer

So, I'll just comment specifically on underwriting. That was part of your question. Generally speaking, we try to keep our underwriting standards consistent. And what that will mean, generally, in times when the environment is getting worse, is fewer clients clearing the bar.

At the same time, as Greg mentioned, that has been offset by more demand. And so, we are continuing to see some great opportunities to grow loans really across the segments, including the core tech and healthcare. Mike, anything you want to add?

Mike Descheneaux -- President, Silicon Valley Bank

Yeah. The only thing I would add is, I mean, clearly we're very cognizant of the economic environment that we're operating in. So, when we're looking at underwriting, we're very conscientious of business models that are relying on the consumer [Inaudible] The consumer might be hit with inflation. Starting to think about interest rates and how they might impact the business models, as well as their amount of financing.

So, all these things are coming into factor. But as Marc said, right, we're very consistent on our underwriting standards, which have served us well for many, many years.

Jared Shaw -- Wells Fargo Securities -- Analyst

OK. Thanks again. I guess, corollary to that, you look at the credit expectations and the growth in the allowance. You know, it looks like, you know, inside 30.

You're nearly at peak stage losses or very close to it for coverage. How much higher do you think we can see the allowance as a ratio and go with some of your broader credit expectation backdrop for normalizing losses?

Marc Cadieux -- Chief Credit Officer

So, it's Marc. I'll start. Dan or others may wish to chime in. So, certainly, there is a fair bit of reserve build, as you pointed out, in '22.

Could the reserve go higher in '23? You know, as I think you probably know, economic forecasts can drive the reserve as it did for us this particular quarter. That's one factor. We could, as we've noted, see higher levels of nonperforming loans that could drive higher specific reserves. And so, there is that potential for the reserve to go higher, again, recognizing that we have a fair bit of reserve build behind us in '22.

Jared Shaw -- Wells Fargo Securities -- Analyst

OK. Thank you.

Operator

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

Bill Carcache -- Wolfe Research -- Analyst

Thank you. Good afternoon. I wanted to follow up on the reopening of IPO markets being a clear positive for the business. From a timing perspective, would you expect that reopening to coincide with the Fed pause, or are we more likely to need to see rate cuts? Just curious for your high-level thoughts there.

Greg Becker -- President and Chief Executive Officer

Yeah. I wish I had our SVB securities team on the line right now. They're -- but as we talked about it, you know, I think we don't have a lot of expectations for things, you know, in '23, with a few exceptions, right? I think, my view, when you start to see the top-off of rates. And so, I don't think they need to go down.

I think they need to be stable at whatever level they're at. And I think just some confidence that that's where we're going to hold and we're not going to see a potential for another spike. So, that's one data point. Second data point is, I mentioned this earlier, when I've been spending more time with some of our later-stage clients that are -- they have a lot of the metrics that we would say they are in a position when the market opens up to go public.

And I think there's -- when that stable -- stability happens, you're going to see some go out and test the waters. We need them to test the waters. And so, I think could that happen in, you know, late Q3, Q4? The answer's yes. So, I think if we see a -- you know, maybe a couple more rate hikes of 25 basis points in a quarter or a little more than a quarter of flattening, do I think that the market could open up for a few IPOs? The answer is yes.

But let me, again, take one more -- make one more point. Even when it opens up, it's not going to be a flood. It'll be a trickle because it'll be the ones that have the highest potential to go public. And people are going to wait to see how they perform.

So, I would say, yes, maybe in the late third quarter, fourth quarter, you'll see an opening, but it's going to be a slow-paced opening when that happens.

The only thing I'd add to it, Greg, is we saw it in the fourth quarter on the biopharma side in particular, good deal flow, good deal activity there. As that -- if you think about that business, that's the normal flow of fundraising activity for those types of clients. So, we're not expecting, you know, a substantially strong year on the biopharma side, but I think that can become more constant and is embedded within our guidance expectations for 2023.

Bill Carcache -- Wolfe Research -- Analyst

That's helpful. Thank you. Separately, how would you characterize the current willingness of companies to take down funding rounds? And how would you say that compares to the appetite for dry powder deployment? Just curious if you think we're, in any way, getting closer to those two sides coming together.

Greg Becker -- President and Chief Executive Officer

Yeah, It's Greg. I'll start. It's exactly what you would expect. You know, we've seen this movie before, and you've got companies that are -- you can see this in the venture capital data that was released in the fourth quarter, late-stage rounds, there were a lot fewer of them.

The valuation actually didn't drop a whole lot. And the reason for that is that, you know, investors looked at this as an opportunity to go in on a flat round in some of the highest profile companies that had actually done really well since their last round. But they can still get in at what they would say is a decent valuation. Then, you have another group of companies that are -- they're basically saying, " Hey, I'm going to take the lower valuation.

I'm going to get it over with." Those are fewer. But we're going to see more of it over the course of '23. And then, the final one is what I'll call the in-between. It's the structured deal where it is -- you know, it looks like it's the same round valuation as the last round.

But they have preferences and things like that that you would say -- when you really look through it, isn't keeping it at the same valuation. There's structure involved. And all those things are happening. But you're going to see more -- my view, more down rounds occur in '23.

You'll see some more structured deals. So, all three of those scenarios I played out, you're just going to see more activity happening. And again, as we talked about earlier, more in the second half of the year than in the first half the year.

Bill Carcache -- Wolfe Research -- Analyst

That's very helpful. Thank you. If I could squeeze in one last one. Really wanted to follow up on your commentary around the noninterest-bearing deposit mix.

I'm sorry to keep coming to that question about stabilizing in the high 30% range. But the question is sort of around this broad concern around the banking system in general that, you know, we're hearing from a lot of investors that we could see the mix of noninterest-bearing deposits revert to pre-GFC levels. But when we look to the previous year, your mix of noninterest-bearing deposits was in the mid to high 60% range, which is around where you were pre-COVID. So, I appreciate your commentary around looking at noninterest-bearing in relation to total client funds.

But maybe like a broader question is, do you envision a scenario where we can sort of get back to that mid to high 60% noninterest-bearing mix as we look beyond some of these more near-term liquidity pressures that you're dealing with?

Greg Becker -- President and Chief Executive Officer

Yeah, as people would say, hope is not a strategy. So, while it would be great to be there, there certainly is nothing in our forecast that would say we're getting back to that at all. And so, you know, do we -- is there a scenario that we would see an uptick from the bottom that we think will happen later this year? The answer is yes. And we haven't come out with a guidance on what that would look like, but it's going to be well below our historical level of noninterest deposits.

I don't know, Dan, what you would add to it?

Dan Beck -- Chief Financial Officer

Yeah. So, the other way to think about it is, you know, if you go back to the history pre-global financial crisis, just the size of the overall balance sheet, the types of companies that we bank are very, very different. And I think, as a result of that change in client mix, you know, we're not going to get back to those levels of noninterest-bearing deposits. That doesn't mean that we don't have the quality of the deposit franchise.

It's just a different mix of clients, you know, now versus then with, you know, close to $215 billion balance sheet.

Greg Becker -- President and Chief Executive Officer

And maybe the only thing I would add on to it, Dan, thinking more about it is, you know, there's kind of -- it's the way you're describing it, it's either -- it's market interest bearing or it's zero. And I think you could see scenarios -- and Mike has done a great job of this -- is looking at different products and solutions. So, you're going to see a whole different level on the interest-bearing deposits of different yields based on the profile of clients. So, I think you have to understand that, yes, interest-bearing is going to be a higher percentage, but the spread of yields on that will be -- vary.

Bill Carcache -- Wolfe Research -- Analyst

So, that's super helpful. Thank you for taking my questions.

Greg Becker -- President and Chief Executive Officer

Yup.

Operator

Your next question comes from the line of John Pancari with Evercore. Your line is now open.

John Pancari -- Evercore ISI -- Analyst

Good afternoon.

Greg Becker -- President and Chief Executive Officer

Hey, John.

John Pancari -- Evercore ISI -- Analyst

On the off-balance-sheet funds balance, I think it's about 168 billion as of the end of the year. Can you just update us again how much of that is available or you're able to bring on-balance-sheet and how much of that you expect to be used under your -- under -- you know, that's baked into your guidance here? And any other dynamics in terms of that could be impacting that balance? Thanks.

Dan Beck -- Chief Financial Officer

Yeah, John. It's Dan. And we had talked about it in the past, you know, that we believe that there's still access. You know, obviously, doing the right things for our clients.

So, roughly half of that off-balance-sheet balance. So, you know, sitting where we are, that still leaves, you know, a sizable opportunity across what's classified as sweep and what's classified as repo. So, that's a substantial opportunity for us. In terms of how much we're including in the forecast, we're still expecting to see some of that move onto the balance sheet.

But the pace of that is expected to continue to slow into 2023. And that's all included in our net interest income guidance and the interest-bearing deposit data guidance.

John Pancari -- Evercore ISI -- Analyst

OK. Got it. Got it. All right.

And then, any actions considered for your available-for-sale securities portfolio at this point?

Dan Beck -- Chief Financial Officer

Yeah. John, it's Dan again. Very clear that we're only talking about available for sale in the quarter. We did opportunistically sell a billion worth of Treasury securities at a very short payback period with no limited impact to tangible book value, considering that we also had some warrant gains in the quarter.

So, I think what you're going to see from us is less of a broad review across available for sale and actions there, but you'll see us opportunistically where the rate environment, the payback period makes sense. And, you know, also protecting tangible book value, we take some of those actions to effectively, you know, accelerate the paydowns of that book. Again, that's opportunistic. That's for net interest income generation purposes more than anything else.

And again, we did a billion of that in the quarter.

John Pancari -- Evercore ISI -- Analyst

Right. So -- but nothing immediately planned beyond that billion. But not right now.

Dan Beck -- Chief Financial Officer

No. And again, anything we're talking about is within available for sale and it's opportunistic and, you know, protective of tangible book value.

John Pancari -- Evercore ISI -- Analyst

Got it. Got it. OK, Thanks. And then, separately, on the credit front, just because fulfilled a fair amount of incomings from investors regarding potentially underappreciated credit risk in your story, is there -- where are you seeing stress materializing? You know, that -- learning that you expect, you know, the losses to materialize and go against some of the reserve build that you've already put up, one of the most noteworthy areas where you're beginning to see some of that stress?

Marc Cadieux -- Chief Credit Officer

Hi, it's Marc. I'll start. Dan or Mike may wish to contribute. But it is consistent with our historical experience.

It's the early stage, venture-backed, investor-dependent cohort where we have and would expect to continue to see the most stress.

John Pancari -- Evercore ISI -- Analyst

OK, thanks. And lastly, for me, it's just the capital markets, investment banking pipeline. Can you just comment there what you're seeing? Sorry if you've already touched on it, but just wondered if you can talk a little bit about what you're seeing there in terms of deal opportunities as you look out into 2023.

Greg Becker -- President and Chief Executive Officer

Yeah, it's Greg. We don't -- we haven't talked about pipeline. We did give guidance on what we expect, you know, the outlook to be from a revenue perspective, which is an uptick from where we saw it in, you know, '22. And maybe just kind of walk through, like, why would we show an improvement.

You know, if you're called back, you've got -- there's kind of three parts -- well, actually, four parts of the business. You get the biopharma business, which is really what we brought on board, an incredible franchise with learning partners. And then, we added healthcare services, we added technology, and they had -- the team had sales and trading and they had research. But now, then, with the addition of MoffettNathanson, you have to look at the entire platform.

So, now, you've got M&A capability, full ECM capability across all three verticals. You have strong sales and trading. And you have, actually, I would say, you know, your incredible research when you look across the entire platform. So, you have a full-stack platform, and it's actually, you know -- people are in the saddles and they're productive.

And so, even though the market's going to be a challenge, we look across that whole portfolio of opportunities and actually feel very good. I feel very good about the team, the strategy, and their ability to execute. This is going to be a tough year. Our outlook shows it's going to be a tough year, but I'm actually really excited about, you know, '24 and '25 and having that team be on the platform longer and really, I think, take advantage of an improving market at some point.

But, you know, it's going to be a tough market, but still an uptick in revenue from what we saw in '22.

John Pancari -- Evercore ISI -- Analyst

Got it. OK. Thanks, Greg. Appreciate it.

Greg Becker -- President and Chief Executive Officer

Yep.

Operator

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

Jennifer Demba -- Truist Securities -- Analyst

Thank you. Good afternoon.

Greg Becker -- President and Chief Executive Officer

Hey, Jennifer.

Jennifer Demba -- Truist Securities -- Analyst

Question on credit quality. I know you have a very small commercial real estate portfolio, but I wonder if you could just kind of give us a characterization of what's in there and if you have any concerns about any piece of it. I know it's really small, but a lot of banks have been talking about concern about commercial real estate, you know, in a tough environment.

Marc Cadieux -- Chief Credit Officer

Hi, it's Marc. And that is the segment that certainly bears watching, particularly if there is a recession in the offing. But generally speaking, as you pointed out, it's 3% of total loans. It's really well diversified across several different categories.

And probably what's most important, it is that it's on average, well, margins relative to the underlying real estate collateral. So, that was certainly going back to the Boston Private acquisition. It was a portfolio we were more concerned about, in part because it was -- we were in the depths of COVID at the time, and it has continued to really outperform my expectations.

Jennifer Demba -- Truist Securities -- Analyst

But is there any office exposure in that?

Marc Cadieux -- Chief Credit Officer

There is some office exposure. It is not a enormous part of that 3%, but significant, and, again, so far, has continued to outperform expectations.

Jennifer Demba -- Truist Securities -- Analyst

Thank you.

Marc Cadieux -- Chief Credit Officer

You're welcome.

Operator

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

Chris Kotowski -- Oppenheimer and Company -- Analyst

Yeah. Good evening. Thank you. It's a question, I guess mainly for Dan.

And I hear you and I understand exactly why you're saying the only, you know, securities restructuring would be in the available-for-sale portfolio. But I wonder, as you're looking at that held to maturities portfolio, I'm looking at your average balance sheet, you know, looks like in the $85 billion taxable held to maturities portfolio, I wonder just if you can highlight a few of the dynamics of the runoff there. And the first thing I'd say is I noticed, like, the yield went down from, like, 1 92 to 1 72 from the third quarter to the fourth quarter. Presumably, that's the $50 million of amortization, but I'm wondering what's the goal forward.

I mean, was the third quarter a $50 million good guy, or is the fourth quarter a $50 million bad guy? I guess that's the first thing. You know, should we expect something, like, with a 1 70 handle or 1 90 handle? And then, secondly, I guess I'm wondering, you know, I mean, from the disclosures in the 10-Q, it looks like that had a very long maturities profile. Is there, like, any significant runoff that was kind of on a natural basis to take that portfolio over, say, 3% yield handle at any time in the next, you know, 12 to 24 months?

Dan Beck -- Chief Financial Officer

Yeah, it's Dan, I think, first and foremost, the payoff profile there, you know, we're getting off of that book anywhere between $2 billion to $3 billion a quarter. So, think $12 billion annualized rundown in that portfolio. And those assumptions were -- you know, where tenure rates were, you know, just a couple of weeks ago. So, we now think about 10-year, 3 30, 3 40.

You can pick up some paydown acceleration associated with that. Well, we'll see how material that becomes and where, you know, the 10-year ultimately land. So, I think you're going to continue to see, you know, some improvement. But in this kind of $2 billion to $3 billion quarter of, you know, like a clock, just continues to pay down with the opportunity to accelerate if 10-year rates come down from there.

When we think about yields themselves, I think, you know, as we look at, you know, Q1, we're still talking about, you know, in the high 170 to the mid 180 range in that book. And a lot of that, you know, really comes down to where premium amortization comes in for the portfolio. So, those are really the factors. Watch the 10-year yield to the extent that that continues to come down.

You could see an acceleration of, you know, payments on that book, which, you know, obviously, just make, you know, things go faster there and get us closer to that inflection point of NII and NIM sooner if that were to occur.

Chris Kotowski -- Oppenheimer and Company -- Analyst

OK. Thank you. That's it for me.

Dan Beck -- Chief Financial Officer

Thank you.

Operator

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

Andrew Liesch -- Piper Sandler -- Analyst

Thanks, everyone, for taking the questions. Just curious, if you look at the investor-dependent cohort right now, how much cash runway do they have? Obviously, they've been trying to slow their cash burn, and it sounds like they've been successful at doing that. But how does their cash position stand looking out for the next year or so?

Dan Beck -- Chief Financial Officer

Yeah. So, we track remaining months' liquidity, we call it -- otherwise referred to as runway. And the majority of that portfolio, at last check, still had over a year's worth of cash on hand.

Andrew Liesch -- Piper Sandler -- Analyst

Got it. All right. That's helpful. And then, just shifting gears on the funding side, when investment activity does come back and client funds come in, how do you expect the mix to trend with respect to deposits versus off-balance-sheet funds?

Dan Beck -- Chief Financial Officer

Yeah. This is Dan. I think, you know, based on, you know, a potential recovery in venture deployment, again, we don't have, you know, a substantial pickup at all in the earnings guidance for 2023. But imagining that we do start to see a pickup pick up there, I think we're going to continue to direct those funds on the balance sheet.

We think about the composition of those funds as they come in. They'll likely be less expensive than what we've got from the off-balance-sheet or on-balance-sheet product. So, over time, to the extent that that accumulates, we'll look at, you know, over time, shifting more of those expenses deposits. That's one of the benefits of that product is that it's not a one-way door.

We have the ability to shift it off-balance-sheet to accelerate the improvement in net interest income and net interest margin. So, I think, will for -- you know, if you think of the switch and how we toggle the switch, the switch will be continued toggled on the balance sheet, you know, as we drive some of those higher-costing deposits off the balance sheet. Let me be very clear, we don't expect this to come in. It's all noninterest-bearing.

It'll certainly be more heavily weighted to interest-bearing in this higher-for-longer environment, but still be cheaper than those off-balance-sheet client funds.

Andrew Liesch -- Piper Sandler -- Analyst

Got it. That covers my question. Thanks so much.

Dan Beck -- Chief Financial Officer

Yup.

Operator

Your next question comes from the line of David Smith with Autonomous Research. Your line is open.

David Smith -- Autonomous Research -- Analyst

Hi. On the capital call line and global fund banking, could you just say a little bit about how much of the growth was driven by new lines commitments versus any change in utilization?

Greg Becker -- President and Chief Executive Officer

So, as far as the new client business, I mean, most of it was from utilization, the change -- from an outstanding perspective. So, we did have some new -- obviously, new client fundings. But, you know -- so, you know, I'd say it varies from quarter to quarter. So, it's probably not anything to make a -- have a dramatic change.

So, I don't know, Dan, if you would add anything to it.

Dan Beck -- Chief Financial Officer

Yeah. I think when we look at the quarter, from a funded perspective, we did have growth in capital call. And at the same time, that was off of lower utilization. So, you've got some net new clients in there.

I think more notable is the increase in the amount of term sheets and net new unfunded commitments, which, you know, over the next six to 9 to 12 months, are really going to be a tailwind for us from a loan growth perspective. I think that's most notable, also drove an element of the provision increase in the quarter.

David Smith -- Autonomous Research -- Analyst

OK. Just to be clear, lines were up, but utilization was down slightly. But on net, the outstandings were higher.

Dan Beck -- Chief Financial Officer

That's right.

David Smith -- Autonomous Research -- Analyst

OK. And just unpacking the SVB securities outlook a little bit more. It was largely biopharma driven in the fourth quarter, as I understand it. What kind of tech recovery is contemplated in the guide for 2023?

Greg Becker -- President and Chief Executive Officer

Very little. Very little. You know, again, as I said, now having the full platform and people in the saddle for longer, and deeper relationships being built, it's really just able to pick up some market share. You know, we don't -- we just don't have a lot of new activity in there.

David Smith -- Autonomous Research -- Analyst

OK. Is it fair to call it still largely a biopharma story for next year?

Greg Becker -- President and Chief Executive Officer

No. I think it's clearly, you're going to see more of a mix. Biopharma will do fine, but it's -- you know, it's M&A. And technology, it's M&A, and healthcare services.

So, M&A is going to be the bigger part. So, here's what I would describe it. Biopharma is probably going to be still be a mix of ECM and M&A. Technology, healthcare services is going to be more driven for the year with M&A.

And maybe toward the end of the year, you start to see a little bit of a pickup in ECM in the technology side.

David Smith -- Autonomous Research -- Analyst

OK. Thank you.

Greg Becker -- President and Chief Executive Officer

Yep.

Operator

Your next question comes from the line of Christopher McGratty with KBW. Your line is now open.

Chris McGratty -- Keefe, Bruyette and Woods -- Analyst

Oh, great. Greg, your balance sheet, historically, has been, you know, one of the more asset sensitive. We're going through a period of, you know, really big rate increases. So, you've moved to the other side.

If we look at the forward curve, which begins the price and cuts -- and I know your guidance doesn't factor in cuts -- how do we think the margin will perform if the Fed funds rate gets cut? You know, as we look into next year, should the balance sheet, you know, flip to being, you know, liability sensitive in that respect?

Dan Beck -- Chief Financial Officer

Yeah, Chris. It's Dan, I think if you look at our disclosure of what we're talking about for potential rate increases, you start to see that -- which is factored at least to -- the next couple of increases are factored into our guidance. You start to see that we could be liability sensitive associated with that. So, in the case that the Fed starts to decrease rates -- and, again, we don't have any of that baked into our estimates -- that could start to be a bit more of a tailwind from an NII perspective, reducing the overall pricing on some of those more expensive deposits faster than what we have incorporated in our model.

So, I think you can look to the asset sensitivity disclosure and look to, you know, the same potential for a reduction to the extent that rates come down.

Greg Becker -- President and Chief Executive Officer

And maybe, Chris, just to add on, because, I think, you've kind of had two questions. One is maybe short term and long term. And I think, you know, when we settle out to find out kind of that kind of normalization, and then, when you see -- let's say you got back to whatever that normal floor is or a flattening of rates at some point, some lower level. And then, at that point, I think, if you saw some rate increases, modest ones, you know, I think we'd be back into the, you know, more asset-sensitive side.

I think it's just right now, and you said it, we saw such a rapid increase in rates, which we've never seen before. And that's what kind of made the biggest change, in addition to this kind of construction of the balance sheet. Those two things caused it to be kind of out of historical norm. And it's going to take a little while for us to get back to that place where we can eventually get back to a base level, although a less level of asset sensitivity.

Chris McGratty -- Keefe, Bruyette and Woods -- Analyst

That's great. Thank you for that. If I could just follow it up. One of your competitors last week talked about deferring costs into the out-years given the environment .

Appreciating the low single-digit guide for expenses this year, were certain projects just pushed to next year, or is there -- I know you talked about hiring slowing, but is there a natural ramp that comes back into the expense growth rate once environments get all the better?

Greg Becker -- President and Chief Executive Officer

Yeah. There's -- I'll talk about, Chris, philosophically how we've operated from an expense perspective, you know, over years and cycles, and then, more specifically about the guidance that you give. And then, Dan can add comments to it. You know, we've said this, when you go back and look at the pace of investment we made in digital and infrastructure and a whole variety of risk management, a lot of different things, looked at it and said, "Look, when -- Marc, when times are better, we were earning more money." We're going to kind of accelerate that investment level because we have an insatiable appetite for investment because of our target market and the market overall, and where it's where it's growing, and how large it is.

And so, when you have times like this, that's just a more challenging, more uncertain market or more headwinds, you're going to take a look and you're going to say you're going to basically prioritize and you're going to kind of optimize what you have. So, does that mean slowing down some projects? Yeah, it does. Does it mean potentially pushing things out into future years? It does. But we have that prioritized list.

And, you know, as things start to improve, we're going to start to, you know, put more money behind those projects. We have, in the deck, where we're making the investment focus, our prioritized list. So, it's more in the private banking wealth management kind of go-to-market strategy. Secondly, in the commercial bank, you know, kind of focus there, and digital enhancements.

Third is this one SVB collaboration, just making sure that we're working across the entire platform. And that's just really important to make sure that we leverage our investments, leverage our acquisitions, and really take care of our clients, deliver for our clients in a meaningful way. And then, the last one is risk management, which, again, we continue to enhance as we are in this LFI status. And both expectations and just our own needs are increased.

And so, that's how we think about prioritization and so forth. So, Dan, what would you add to that?

Dan Beck -- Chief Financial Officer

Yeah, I think, as long as it's clear we're going to continue to invest here, even in a more challenged 2023, across the elements that Greg mentioned, that's key, I think, for us to emphasize. Where we're able to optimize that spend also, as we're looking at changing the mix between professional services and cheaper full-time employees, that's just another way for us to get optimization from a cost perspective. And we're doing that, and that also helps us from a sustainability perspective. And then, I think the last part of your question is, you know, to the extent that the environment improves, are we going to go back, you know, to that more traditional higher expense run rate? And I think that's going to be a balance.

And I think, you know, for us, the overall return, the profitability of the franchises is continuously important. And so, we'll have to continue to balance those investments, you know, as our profitability returns to more normal levels.

Chris McGratty -- Keefe, Bruyette and Woods -- Analyst

That's great. That's great color. Thanks. And maybe just the last one.

I know the environment's uncertain, but thoughts on a buyback over time given the valuation?

Dan Beck -- Chief Financial Officer

Yeah, Chris, and I think we've said this in the past, where we're always going to remain open to looking at our options from a capital perspective. You know, obviously, 2023, we're not expecting a lot in terms of, you know, major acceleration in deployment. But to the extent that deployment, you know, does come back and does come back quickly, you can start to see, you know, the balance sheet increase. And again, no more pressure from a Tier 1 leverage perspective.

So, we certainly don't have that now, but it's something that we need to continue to be cognizant of. So, I think, as we look ahead, we're just going to continue to keep our options open. But again, you know, I think growth over the medium and the long term is the thing that we need to prepare for.

Chris McGratty -- Keefe, Bruyette and Woods -- Analyst

Great. Thanks for all the color. Appreciate it.

Greg Becker -- President and Chief Executive Officer

Yep. Thanks, Chris.

Dan Beck -- Chief Financial Officer

Thanks, Chris.

Operator

There are no further questions at this time. I turn the call back over to Greg Becker for final remarks.

Greg Becker -- President and Chief Executive Officer

Great. Thanks. Thanks, everyone, for joining us today. You know, we tried to give as much detail.

You know -- and again, I give a huge amount of credit to our IR team to put together a lot of information, a lot of detail on kind of what we're seeing, the outlook, what are the key drivers. And so, I think that's really helpful. And I think, again, just to reiterate, when you go back and look at fourth quarter, you know, there is a lot of really healthy signs, whether it's, you know, loan growth, core fee income growth, you know, nice growth in investment banking, and probably, maybe most importantly, this kind of stabilization of this inflow of venture with, you know, pulling back or slowing down of cash burn. So, that was great to see.

That being said, look, the market's still very, very choppy. There's still a lot of uncertainty out there, which is why we gave guidance in two ways. One is the annual guidance, and the second one is the quarterly guidance, to make sure that, you know, you kind of really have a good sense of how we're feeling about the quarter. We talked about what it means for SVB.

And, again, just to go back, we think the first half is going to be bumpy. We expect that you're going to see venture capital decline in the first, you know, half of '22, and then kind of '23, and then stabilize and start to improve. So, our expectations are not for a big improvement from where we are right now. And that's just the outlook we think is realistic.

And, you know, could there be some upside? You know, certainly, there could be some upside, but that's not what we have in our plan. And especially if it gets worse, as we went through and you can see in the deck, we have ample resources of liquidity and other ways to make sure we're taking care of our clients and still being there for them when they need it. So, that's kind of our view. Again, thanks, you guys, for joining.

As always, I want to thank our clients. It's one of my favorite parts of what I get to do is spending time with our clients and just hearing their stories about what they're doing and that they're still excited. And yeah, they're making hard decisions, but they are well positioned. And quite honestly, I think, markets like this, in many ways, as much as we like, we don't enjoy it.

It's actually healthy because it allows us those companies to run more efficiently, run more effective and position themselves for growth. And then, finally, thanks to all of our employees. Can't thank them enough for what they've been doing to support our clients, what they're doing to support each other. It's a tough market, and so, keeping that positive attitude and client-centric mentality is super important.

So, we appreciate that. So, thanks, everybody. Thanks for joining us, and have a great day. Thank you.

Operator

This concludes today's conference call. Thank you for attending. You may now disconnect.

Duration: 0 minutes

Call participants:

Meghan O'Leary -- Head of Investor Relations

Greg Becker -- President and Chief Executive Officer

Ebrahim Poonawala -- Bank of America Merrill Lynch -- Analyst

Mike Descheneaux -- President, Silicon Valley Bank

Dan Beck -- Chief Financial Officer

Casey Haire -- Jefferies -- Analyst

Steve Alexopoulos -- JPMorgan Chase and Company -- Analyst

Brody Preston -- UBS -- Analyst

Jared Shaw -- Wells Fargo Securities -- Analyst

Marc Cadieux -- Chief Credit Officer

Bill Carcache -- Wolfe Research -- Analyst

John Pancari -- Evercore ISI -- Analyst

Jennifer Demba -- Truist Securities -- Analyst

Chris Kotowski -- Oppenheimer and Company -- Analyst

Andrew Liesch -- Piper Sandler -- Analyst

David Smith -- Autonomous Research -- Analyst

Chris McGratty -- Keefe, Bruyette and Woods -- Analyst

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