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New words:
circumstance, converted, curtailment, customary, deciding, Department, elapse, exhausted, issuer, multiplying, occurrence, product, pursuant, satisfaction, stopped, SVB, unavailable, undiscounted, Urban
Removed:
accuracy, aggregating, August, beneficial, bifurcated, captioned, certainty, clarify, combat, compete, conduct, conform, continued, contraction, create, deficiency, delay, delaying, deny, depreciation, disclose, disrupted, disruption, distancing, easing, efficiency, eliminate, expose, faced, February, finance, found, governmental, guaranty, harm, heightened, hinder, hiring, immaterial, incentive, integration, KLS, largest, leasehold, leasing, length, magnitude, merged, negatively, Occupancy, operate, originating, package, posed, practical, predicted, prescribed, Professional, public, reduce, Refer, referenced, relate, remove, reorganized, reputation, responsive, rollforward, scope, scrutiny, selling, September, set, structure, suffer, supplemental, trusted, unclear, workforce, worsening
Financial report summary
?Risks
- RISKS RELATED TO THE COVID-19 PANDEMIC
- The COVID-19 pandemic, and the measures taken to control its spread, will continue to adversely impact our employees, customers, business operations and financial results, and the ultimate impact will depend on future developments, which are highly uncertain and cannot be predicted.
- Our participation in the PPP may expose us to reputational harm, increased litigation risk, as well as the risk that the SBA may not fund some or all of the guarantees associated with PPP loans, which could result in these loans being charged-off.
- RISKS RELATED TO OUR BUSINESS AND INDUSTRY
- We may be unable to attract and retain highly qualified employees.
- If we acquire or seek to acquire other companies in the future, our business may be negatively impacted by certain risks inherent in such acquisitions.
- Our business may be adversely affected if we fail to adapt our products and services to evolving industry standards and consumer preferences.
- We face significant and increasing competition in the financial services industry.
- Our ability to attract and retain clients and employees, and to maintain relationships with vendors, third-party service providers and others, could be adversely affected if our reputation is harmed.
- We may incur significant losses as a result of ineffective risk management processes and strategies.
- We may not be able to successfully implement future information technology system enhancements, which could adversely affect our business operations and profitability.
- We face continuing and growing security risks to our information base, including the information we maintain relating to our customers.
- We rely on other companies to provide key components of our business infrastructure.
- Climate change, severe weather, natural disasters, acts of terrorism and other external events could harm our business.
- Our business may be negatively impacted by changes in economic and market conditions.
- Prepayments of loans may negatively impact our banking business.
- The soundness of other financial institutions could adversely affect us.
- Our cost of funds for banking operations may increase as a result of general economic conditions, interest rates and competitive pressures.
- Fluctuations in interest rates may negatively impact our banking business.
- Potential downgrades of U.S. government securities by one or more of the credit ratings agencies could have an adverse effect on our operations, earnings and financial condition.
- Our Allowance for loan losses may not be adequate to cover actual loan losses, and an increase in the Allowance for loan losses will adversely affect our earnings.
- Our loan portfolio includes Commercial loans, Commercial real estate loans, and Construction and land loans, which are generally riskier than other types of loans.
- Environmental liability associated with Commercial lending could result in losses.
- We may be required to repurchase mortgage loans or indemnify buyers against losses in some circumstances, which could harm liquidity, results of operations, and financial condition.
- Our financial statements are based in part on assumptions and estimates, which, if wrong, could cause unexpected losses in the future.
- Changes in accounting standards can be difficult to predict and can materially impact how we record and report our financial condition and results of operations.
- Goodwill and other intangible asset impairment would negatively affect our results of operations and financial condition.
- Changes in tax law and differences in interpretation of tax laws and regulations may adversely impact our financial statements.
- We are a holding company and depend on our subsidiaries for dividends.
- We are subject to liquidity risk, which could negatively affect our funding levels.
- Uncertainty about the future of London Interbank Offered Rate ("LIBOR") may adversely affect our business.
- We are subject to capital and liquidity standards that require banks and bank holding companies to maintain more and higher quality capital and greater liquidity than has historically been the case.
- Future capital offerings may adversely affect the market price of our common stock.
- The market price and trading volume of our common stock may be volatile.
- Anti-takeover provisions could negatively impact our shareholders.
- RISKS RELATED TO OUR REGULATORY ENVIRONMENT
- Our business is highly regulated, and changes in the laws and regulations that apply to us could have an adverse impact on our business.
- We are subject to numerous laws designed to protect consumers, including the Community Reinvestment Act and fair lending laws, and any failure to comply with these laws could lead to a wide variety of sanctions.
- We may become subject to enforcement actions even though noncompliance was inadvertent or unintentional.
- We face significant legal risks, both from regulatory investigations and proceedings and from private actions brought against us.
- RISKS RELATED TO OUR PROPOSED MERGER
- Because the market price of SVB common stock may fluctuate, you cannot be certain of the precise value of the stock portion of the merger consideration you may receive in the merger.
- The market price for SVB common stock may be affected by factors different from those that historically have affected our common stock.
- Our shareholders will have a reduced ownership and voting interest after the merger and will exercise less influence over management.
- The Merger Agreement limits our ability to pursue alternatives to the merger.
- The Merger Agreement may be terminated in accordance with its terms and the merger may not be completed.
- Failure to complete the merger could negatively impact our stock price and our future business and financial results.
- The COVID-19 pandemic may delay or adversely affect the completion of the merger.
- Regulatory approvals may not be received, may take longer than expected or may impose conditions that are not presently anticipated or cannot be met.
- We will be subject to business uncertainties and contractual restrictions while the merger is pending, which could adversely affect our business.
- Our directors and executive officers may have interests in the merger that are different from, or in addition to, the interests of our shareholders.
- The shares of SVB common stock to be received by our shareholders as a result of the merger will have rights different from the shares of our common stock.
Management Discussion
- Net income. The Company recorded Net income from continuing operations for the year ended December 31, 2020 of $45.2 million, compared to Net income from continuing operations of $80.4 million and $81.9 million in 2019 and 2018, respectively. Net income attributable to the Company, which includes income from both continuing and discontinued operations, if any, less Net income attributable to noncontrolling interests, for the year ended December 31, 2020 was $45.2 million, compared to income of $80.0 million and $80.4 million in 2019 and 2018, respectively.
- The Company recognized Diluted earnings per share from continuing operations for the year ended December 31, 2020 of $0.55 per share, compared to $0.97 per share and $0.90 per share in 2019 and 2018, respectively. Diluted earnings per share attributable to common shareholders, which includes both continuing and discontinued operations, if any, for the year ended December 31, 2020 was $0.55 per share, compared to earnings of $0.97 per share and $0.92 per share in 2019 and 2018, respectively. Net income from continuing operations in 2020 and 2019 was positively impacted by decreases in the redemption value of certain redeemable noncontrolling interests, which increased income available to common shareholders. Net income from continuing operations in 2018 was partially offset by dividends paid on preferred stock, net of a decrease in the redemption value of certain redeemable noncontrolling interests. See Part II. Item 8. “Financial Statements and Supplementary Data - Note 16: Earnings Per Share” for further detail on the charges made to arrive at income attributable to common shareholders.