Christopher Marinac: Great. Okay. And then just final thing for me is, did the unfunded commitment reserve change at all? Or was that stable in the quarter?
Craig Nix: It was fairly stable. It declined like $12 million to $15 million range.
Operator: [Operator Instructions] Our next question is from Brody Preston from UBS.
Brody Preston: I think I’m last, which is good because I am with a handful of questions. wanted to ask if you have to go through CCAR in 2024 and how much more in expenses do you think you need to build for the enhanced regulation?
Craig Nix: The expenses are baked in. We have the resources, although we’re constantly hiring talent. So the numbers we talk about in terms of run rate include heightened expenses to meet the regulatory standards.
Brody Preston: Okay. And do you have to go through CCAR in ’24?
Craig Nix: So ’24, we have to submit a capital plan to the Fed. So we’re subject to the capital plan rules. ’25, we become CCAR — a CCAR bank, but given our category 4 size, we will not submit CCAR until 2026.
Brody Preston: Got it. On the loss share agreement, do you have a dollar amount on the estimated like total amount covered by the loss share? And then for the $97 million NCOs, do you recover any of that from the loss share?
Craig Nix: It’s — Robert’s telling me, it’s $64 billion.
Robert Hawley: Around $64 billion.
Craig Nix: The first loss tranche is $5 billion and we don’t anticipate losses nearing that. So we don’t anticipate reimbursements from the FDIC for charge offs.
Brody Preston: Got it. And what drove the extra $52 million of NCOs from SVB above the $45 million that you ID’d last quarter? Like was that even on the cusp of being okay, but you decided to move on from something?
Craig Nix: In terms of our charge-offs, yes.
Brody Preston: Yes, yes. Just the additional — you called out $97 million of SVB related NCOs. Last quarter, you had flagged $45 million specifically in the deck. I was just wondering what drove you to move on from the other $52 million.
Craig Nix: We didn’t decompose the $11 million delta. So the SVB charge offs were $96 million, we reserved for $85 million. The other $11 million would be in the general reserve.
Brody Preston: Yes. I was talking more to the — you had called out $45 million specifically that you had reserved for last quarter that was planning on being charged off, but you charged off $85 million that you had reserved for this quarter. I was just wondering what the — like if there was any reason for that.
Craig Nix: $45 million was a large single charge-off. But we had $85 million reserved against the — the $97 million that charged off during the quarter.
Brody Preston: Got it. Okay. And then just on the SVB deposit base, the noninterest-bearing levels, I was wondering how those have how those changed since May you gave the [331] but the overall deposit balances were flattish since May. So I just wanted more insight on the mix since that May 5 date that you gave in the last quarter’s deck.
Craig Nix: Are you talking SVB?
Brody Preston: Yes, specific to SVB.
Craig Nix: The noninterest — so I don’t have that information sitting in front of me. But in terms of noninterest-bearing, we started at $35 billion on SVB. And at the end of the quarter, we were at $21 billion.
Brody Preston: Got it. Okay. Do you even have the overall spot. Do you have the spot interest-bearing deposit costs at quarter end, Craig?
Craig Nix: I’m looking it up. Well right now. We were — our cost of deposits at the end of the second quarter was 1.68%.
Brody Preston: I just — I also wanted to ask on the off-balance sheet client funds. What drove the decline from the $79 billion that you had in April? And I guess how did that trend through June and now through July? And then also the fee rate looks a little bit lower than legacy SVB was. So I wanted to better understand what was driving that.
Craig Nix: The balances we included in the presentation, so I’m flipping to those, off-balance sheet client funds came in at $88 billion, and ended the quarter at $70 billion.
Brody Preston: Yes. I was just wondering if you had any insight as to what drove them lower from the April level.
Peter Bristow: This is Peter. Again, this is sort of what I talked about, the overall sort of reflection of what’s going on in the space in terms of venture capital investment. You’re not seeing a lot of inflows there. We are — the fact that we have the [60 or 70] of off balance sheet has been fairly consistent — and I think it’s a really good reflection of the fact that a lot of those clients are still here and still choosing us for their business. They’re just moving more off balance sheet as opposed to end of the bank. So to me, it’s a sign of strength.
