Craig Nix: Yes. We look at it sort of — I mean, if we do an asset test as of 12/31/23, with Basel III, it’s around 12%. If we do an asset test with Basel III at [ex loss] share, it’s around 11%. So that range of 11% to 12% sort of asset debt, that’s at 12/31/23 leaves us well above our target ranges. And then obviously, as time goes on, we’re accreting earnings at about 36 basis points a quarter and risk-weighted assets, we’re taking at 27. So we look — it’s going to continue — our capital position is going to continue to build. So we do think that share repurchases are going to — we feel confident about share repurchases, not only rate accreting capital, but just the absolute levels of capital, our capacity to handle our balance sheet growth, SVB integration efforts and our positioning with respect to Basel III, all give us confidence in a very purposed plan.
And you’re right, I really can’t speak to the size of that until we get through our internal stress testing, which is being conducted now as part of our capital plan. We do expect the timing subject to necessary internal and regulatory approvals to be in the second half of this year. So I hope that’s helpful, but we are looking at definitely target that our capital ratios are well above our target ranges, looking at it in a myriad of different ways.
Operator: The next question today is a follow-up question from Steven Alexopoulos from JP Morgan.
Steven Alexopoulos : So the market is pretty happy with the news of buybacks coming back in the second half. My question is, so given the tangible book value growth, such a key focus for the senior team, at this valuation, I’m sure you’d love to be buying back the stock today. But at what valuation do buybacks become less attractive, right? I mean if the stock is trading, Mark delivers what we think at SVB, just saying it’s 1.5% or something like that. This year, do you still buy back in the second half? Like where is like the line of the sand where you don’t find buybacks as attractive?
Craig Nix: Well, we look at it just like we would any other acquisitions. So there are a myriad of payback periods and tangible dilution payback periods that we look at. I’m not going to get into our modeling on it. But we certainly scrutinize repurchases just like we would scrutinize purchasing another bank in the open market. Tom, do you have anything else? Tom is responsible for some of the modeling we do there. But I think that’s generally — I don’t think I left anything out there.
Tom Eklund: No, I think that’s exactly right. I mean we bought back above tangible value in the past and it really has to do with sort of what our earnings trajectory looks like and sort of what other opportunities are out there. So yes, it varies, but it’s not like there’s a firm feeling.
Steven Alexopoulos : Got it. Okay. Just one other one. On the NII guide, do you guys include the expected cost of this $8 billion to $11 billion debt issuance? Is that in there? Or if you issue, will that then impact the NII guide?
Craig Nix: It’s in there, but the issuance this year would be muted, so it won’t have a significant impact on this year’s NIM. But going forward, it will based on where our costs are today and what the costs are anticipated on that will probably be a headwind moving forward.
Operator: The next question today is a follow-up question from Brody Preston from UBS.
Brody Preston : I just had a couple of clarifying questions that I wanted to ask. The first one was just on the innovation C&I and cash flow dependent portfolio. As I said earlier, that was up $1 billion in balances. Was there any like movement from like the growth stage portfolio there? Was that kind of like true growth within that portfolio? And if so, do you happen to kind of have a read on what the industry verticals were that drove that growth?
Craig Nix: Mark, do you have any insights on that? I don’t have that right in front of me here.
Unidentified Company Representative: Yes. So for the SVB portion of the portfolio, the cash flow dependent growth would have been largely centered in sponsor finance and our project finance portfolios and where we’ve continued in sponsor to have some elevated criticized but on the new loan production. And generally speaking, these are loans that fund pretty close to inception. We’re seeing really nice opportunities there, notwithstanding the broader backdrop. Hope that’s helpful.
Brody Preston : Okay. Great. That’s helpful. And Craig, do you have what the unfunded commitment balances for the bank were at 12/31?
Craig Nix: Not on hand. We’ll take that offline.
